Party of Idiocy Watch IV
Fire Richard Cohen. Fire Him Now

Louis Uchitelle's "The Disposable American: Layoffs and Their Consequences"

I review it:

'The Disposable American: Layoffs and Their Consequences,' by Louis Uchitelle - The New York Times Book Review - New York Times: Uchitelle's diagnosis... is convincing. But for this card-carrying economist, his desired prescription is not. I see no examples anywhere in the world of economies that have taken steps in the direction he desires without severe side-effects. In Western Europe, unions bargained fiercely for job security, and governments enacted "no firing without cause" laws, giving workers individually and collectively quasi-property rights in their jobs. Yet this did not lead to a happy labor market. Instead, high overall unemployment, extra-high long-term unemployment and extra-extra-high youth unemployment appear to be the consequences of attempts to ensure that managers and workers are in the same boat. Companies that know they cannot lay off groups of workers if demand goes sour are very likely to be companies that hesitate to hire groups of workers even when demand is strong.

Indeed, Uchitelle does not want to forbid all mass layoffs. "Some," he writes, "are inevitable as American companies adjust to the growing competition from abroad." His real wish is for managers to treat their workers as partners and fellow human beings, rather than as potentially obsolete and disposable parts in the corporate money-making machine. But when demand and industrial structure are shifting rapidly, there is a great deal of money to be made by treating workers as disposable parts rather than as partners.

Uchitelle wants the government to help. But the government's powers and competence are limited: it can do much more at cleaning up the mess afterward -- in the form of unemployment compensation, education support and job search assistance -- than it can at getting managers, directors and shareholders to "play nice" when the financial stakes are high.