The Rise of Steady Work

Excerpted from
The Disposable American; Layoffs and Their Consequences
By Louis Uchitelle

When I was young, job security was tangible, so tangible that it could be conferred on people, and it was. My turn came in September 1957. I had been hired four months earlier by the Associated Press as a probationary reporter and sent to the New Haven, Connecticut, bureau to fill in for regulars away on vacation. I was told that if I did well that summer, I would be made permanent. Employers actually used that word in those days. Permanent meant paid vacations, health insurance, overtime pay, a pension plan, annual wage increases. Getting fired required acts of flagrant incompetence or laziness-not just one such act, but several. The word "layoff" seldom popped up in daily conversation and never with today's meaning. Dictionaries defined it as a temporary interruption in steady employment.

A union, the Newspaper Guild, negotiated my job security. In those days, 35 percent of the nation's workforce belonged to unions. But nonunion employers also encouraged tenure. Before working at the AP, I had broken in as a reporter at a small family-owned newspaper, the Daily Argus in Mount Vernon, New York, and while it offered neither health insurance nor a pension plan, nor formal guarantees of any sort, the message to me, over and over, was stay. Most of the fifteen or so editors and reporters had been employed for twenty years or more at the Argus or at one of the sister newspapers owned by the same family in neighboring towns in Westchester County.

They were wonderful teachers for a young man recently out of college, and they possessed a knowledge of the community that enriched the daily coverage. The city hall reporter had covered the various mayors and city council members for nearly thirty years, and though his prose was less than animated, the people of Mount Vernon knew on a daily basis, and accurately, what their elected officials were up to. The police reporter, who grew up in Mount Vernon, had attended high school with several of the top brass in the police department and also with two or three of the better-known thieves who, in the days before legal state lotteries, ran illegal numbers operations that the police periodically raided, and between raids permitted. The education reporter had been covering the public schools for nearly a decade, and in detailed stories that appeared two or three times a week, she gave the community valuable, evenhanded, informed coverage.

I left after two and a half years to join the AP, which represented for me a step up into big-time journalism. My former Argus colleagues did not consider AP journalism better than their own. There were always three or four slots on the Argus for beginners, who either tailed or moved on. That pattern of a few transients among a dozen skilled, experienced journalists well enough paid to be middle class endured until 1964, when the Gannett Company purchased the Argus and the seven other dailies in the chain and took them step by step into the age of cost-cutting, consolidation, and layoffs. The Argus itself is now gone, as is detailed daily coverage of local issues and events.

Without knowing it, I had entered the workforce in the final decades of a truly remarkable ninety-year period in American history. Over those decades, until the mid-1970s, job security in the United States rose to an extraordinary level, becoming standard practice. That was not true for poor people, many of them black, who were snick in insecure, low-wage jobs, if they could get work at all. Many women did not have access to steady work either. But the great majority of the nation's employees held long-term jobs as we entered the 1970s. If they switched, as I did, or quit, it was their choice. And then, having ingrained job stability in our lives to such an extent that most Americans felt invulnerable to layoffs, we dismantled a system that had taken so long to construct and had contributed so much to the nations prowess.

The layoffs started because a mainstay of job stability-robust economic growth-disappeared. The prosperity that had paid the bill diminished in the mid-1970s. Since then, the economy has grown, on average, at a noticeably slower pace than it did over the previous 120 years, even allowing for the Great Depression. During that long stretch of powerful expansion, employers gradually shifted from an attitude of indifference to their workers to commitment to them, and the workers returned the commitment, benefiting both sides. That was particularly the case in the aftermath of World War II, when the austerity and sacrifice of the war years gave way to a craving for the output of America's industries, not just among Americans but in Europe and Asia, too. There was not yet any competition. To satisfy this surge in demand, not only did companies hire more people, but each employee, new and old, produced more. A company with one hundred workers in 1953, for example, added ten more in 1954 and simultaneously the output of each worker rose from 1 item an hour in 1953 to 1.03 items the following year, and so on up the productivity' ladder year after year. Innovation and new technologies made this possible, as well as investment in new equipment, but so did the attachment that workers had to their companies. The steady improvement in productivity required ingenuity and energy on the part of the workers, and commitment. Job stability' fostered these qualities, and as productivity rose so did the loyalties that bound workers and employers to one another.

Peter F. Drucker, the management guru, recognized the importance of this loyalty in his classic work, The Practice of Management one of the first books to set forth guidelines for executives, and among the most influential. To raise output year after year, Drucker declared, the enterprise "must demand something much bigger than a fair day's labor. It must demand, over and above fairness, willing dedication. It cannot aim at acquiescence. It must aim at building aggressive esprit de corps." That only happens when workers feel secure in their jobs, Drucker said, conferring significant recognition on stable employment as an essential ingredient in the achievement of rising output per worker. Drucker cited IBM as compelling evidence. IBM had embraced stable employment early in the Depression, he noted, and the output of its workers had risen every year since then, even in years when "large wage increases could not prevent [output from] slipping in most other industries."

How far we had climbed in the space of a lifetime. "Job stability" - the long-term commitment of employers to workers and vice versa - barely existed as a concept in the late nineteenth century. Neither did "unemployment," for that matter, or "layoffs." Both occurred in abundance, of course. But they were thought to be the result of personal shortcomings, not flaws in the system. People lost their jobs because they were lazy, immoral, intellectually defective. Not until the 1890s did the recurring boom-to-bust-to-boom-to-bust business cycles bring public recognition that downturns in the economy, not personal shortcomings, had cost many workers their jobs. The evidence was unmistakable. Too many victims were obviously energetic, capable, hardworking people, eager to hold a job, but they were thrown into unemployment and poverty anyway. Faced with this evidence, prominent organizations like the New York Association for Improving the Condition of the Poor acknowledged, for the first time, that being out of work was in some cases "not due usually to moral or intellectual defects," but to "economic causes over which they [those who lost their jobs] could have no control." To capture this new awareness, the word "unemployment" came into use in the 1890s, although Alfred Marshall, the great British economist, called it "inconstancy of employment" in his classic work Principles of Economics. He still considered full employment the norm in a capitalist market system and anything less a temporary deviation.