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Christopher Caldwell, the author of last June's "The Southern Captivity of the GOP," on why Newt Gingrich couldn't save his party from its paralysis. Plus, Jack Beatty offers "A Modest Proposal" to Republicans in search of a unifying issue.
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More by Jack Beatty in Atlantic Unbound
Corporations are once again in a cycle of layoffs. Will the government do anything more than offer counseling?
by Jack Beatty
January 13, 1998
In March, 1996, The New York Times ran a seven-part series called "The Downsizing of America" which raised a rarely asked public-policy question: Should government do something about corporate layoffs, which in one way or another have touched nearly three quarters of American households during the 1980s and 1990s? An accompanying opinion survey of "economic insecurity" found that four out of five of those who had been downsized, and two thirds of all those sampled, said that yes, Congress should do something about layoffs and the loss of jobs. That question, and that demand, may soon arise again. Firms cut 575,000 jobs between January and November, 1998 -- the most since 1993. With big layoffs impending at companies like Boeing, Bankers Trust, and Johnson & Johnson, and an estimated 9,000 jobs at risk in the Exxon-Mobil merger, downsizing is back.
In 1996, political anger about downsizing seemed to building. Pat Buchanan introduced downsizing as a political issue in the Republican primary elections, saying, for example, in an Iowa speech:
"I was not discomfited by the shutdown of the government, but I was discomfited when I read that AT&T is laying off forty thousand workers just like that, and the fellow that did it makes $5 million a year, and AT&T stock soared as a consequence, and his stock went up five million."
While admitting his surprise that jobs had become an issue, Bob Dole deplored downsizing in a speech before the New Hampshire legislature, and later outlined "four freedoms of economic security." Dole's freedoms -- freedom from deficits and "unreasonable taxation," for example -- were Republican boilerplate; more significant was his language. The phrase "economic security" probably had not been used in presidential politics since the days of FDR ("four freedoms" was his phrase), and almost certainly never by a Republican. Running for reelection, Bill Clinton took up the issue, convening a White House conference on what his Secretary of Labor, Robert B. Reich, was calling "corporate responsibility." In late 1995 Reich had called for government action on downsizing, proposing to reshape the tax code to reward "good corporate citizens" who did not resort to mass layoffs but instead treated their employees as productive assets of the corporation. This idea, however, was too radical for the cautious Clinton Administration. With Buchanan defeated, Dole unable to respond to downsizing with traditional Republican nostrums, and Clinton unwilling to talk against his booming economy, downsizing faded from politics.
In a recent piece about the new downsizing, Louis Uchitelle, one of the reporters of the 1996 Times series, visited Indianapolis to talk with laid off television assembly workers, among whom he found resignation, not anger. He reported one bright spot, however: since 1996 Congress has gotten the message that the public wants government to do something about downsizing. So today federal subsidies support counseling to ease the pain of downsized workers like those in Indianapolis.
Is therapy the best government can do to respond to corporate layoffs? Reich's idea of encouraging corporate citizenship through the tax code sounds like creeping Bolshevism today, so far has the rhetoric of the possible narrowed. However, it remains on the progressive agenda, one of the measures needed to democratize the prosperity of an economy in which 97 percent of the increase in household income, since 1979, has gone to the top 20 percent of earners.
National health insurance is another necessary measure. Campaigning for President in 1992 Bill Clinton identified one major thing government could do about economic insecurity: guarantee laid-off workers health insurance, the loss of which is one of the worst results of being downsized in America. Since 1992, the ranks of the uninsured have grown to more than 40 million, and the new downsizing will swell their numbers further.
Economic insecurity should be the subject of politics, not psychology. In the new century of global markets, job-eliminating technologies, and restless capital, let's hope it will be.
Discuss this topic in the Politics & Society conference of Post & Riposte.
More by Jack Beatty in Atlantic Unbound
Jack Beatty is a senior editor at The Atlantic Monthly and the author of The World According to Peter Drucker (1997) and The Rascal King: The Life and Times of James Michael Curley (1992).
Copyright © 1999 by The Atlantic Monthly Company. All rights reserved.