A.I.G. is, of course, back in the news — and how! Not that it was ever too far off the radar screen. Having received yet one more massive infusion of federal tax dollars, as everyone from here to hell now knows, the insurance giant handed out yet another round of lucrative bonuses. Over the last year, company management has doled out about $1 billion in such payments, roughly half to employees in the financial products subsidiary that concocted the type of high-risk, highly-leveraged deals in derivatives which helped send the company, and Wall Street, and most of the rest of us into steep decline last year.
Bonuses went to 418 employees, 73 “retention bonuses” of $1 million or more each to members of that subsidiary (including 11 who have left the firm) to help “unravel” the deals they created. How’s that for an A.I.G. mea culpa to the taxpayers and the newly unemployed who officially “own” 80% of the company (which might well be 80% of next to nothing)?
Meanwhile, there’s been a drumbeat of headlines about mass layoffs of public employees. In California, more than 26,000 public school teachers were given notice last Friday that they might not have jobs next year. An additional 15,000 school bus drivers, janitors, and administrators might be in the same boat. Unions turned members out across the state for “Pink Slip Friday” protests.
In Michigan, Pontiac’s school board voted to lay off every one of the district’s more than 600 employees. In both cases, officials claim that not all those who received notices will, in fact, be laid off, yet such notifications speak to the enormity of the problem that local and state governments face. Nobody, of course, asks schoolteachers and bus drivers to stay on (with lucrative bonuses) to unravel the crises they created. Oh, maybe that’s because, unlike A.I.G.’s traders, they didn’t do anything wrong.
The insurance giant isn’t the only company feeling its oats in bad times, however. As journalist Robert Eshelman suggests below, while mass layoffs are grabbing headlines — and for good reason — businesses may have opened up a new front in the war on labor, hiding behind horrific economic news the way an advancing army might use a smoke screen.
How big is the problem? Well, we just don’t know. As newspapers continue to disappear or scale back — the Washington Post recently did in its stand-alone business section — the reporters that remain on the economic beat may not be paying enough attention to a war against workers that lurks just below the surface of the headlines. Tom
The Secret War Against American Workers
The Unemployment Story No One Notices
By Robert S. Eshelman
Juanita Borden, 39 and jobless, patiently waits as her résumé methodically works its way, line by line, through a fax machine at a state-run job center in downtown Philadelphia. Lying open before her on a round conference table is a neatly organized folder. “This is my résumé and everywhere I’ve been faxing to. This is how I keep track of what day I’ve sent them on, so I can call and check back,” she says, leafing through pages of fax cover sheets. “I usually give five business days before I inquire whether or not they’ve received it and whether or not they’re interested.”
Juanita was fired last October, when her employer found out that her driver’s license — a job requirement — had expired. “It was only a matter of twenty-six dollars. I was under the impression that it expired in November of ’08, but it was actually November of ’07, and because I hadn’t been driving I wasn’t aware of it.” The one occasion on which she was required to drive, though, she couldn’t, and that was all her employer needed to fire her for failing to fulfill her employment responsibilities. She has since renewed her license and says with an air of futility, “I’d like to have my job back if they would give it to me.”
She hasn’t been asked back and, despite her persistent efforts, she hasn’t received a single call from a prospective employer either. “The good thing,” she says, remaining remarkably buoyant despite her misfortune, “is that usually when I interview I get the job. So… I’m hoping for an interview soon.” Until then, her carefully managed folder serves as a small measure of control over an otherwise steady drift into poverty and homelessness.
Juanita isn’t the only one at this job center on the precipice of acute need. And she isn’t alone in relating a story about being fired for what would seem to many a frivolous reason. Chris Topher, 25 and making his first visit here, was axed in March of last year. The telecommunications company he had been working for sent him packing when, as he tells it, he installed cable equipment a customer hadn’t ordered. It didn’t matter that the mistake was on the work order Chris was given. “It was the best job I had since I graduated high school and I’ve had a few: Turnpike Commission, working in a Senator’s office. I’ve had some nice jobs, but that one, I enjoyed it the most.”
And there was good reason to enjoy it. Chris pulled down $1,200-1,300 every two weeks in addition to receiving a full benefits package. He thought of contesting his termination, but at the time it looked like a long, uphill battle that he wasn’t eager to take on. It’s a fight that, in hindsight, he thinks he could have won and that his employer probably knew he would win as well. “And that’s why I believe I was approved by my employer for unemployment,” he says.
Under unemployment eligibility requirements, an employer must certify whether an employee committed a “fault” on the job and was therefore terminated. If an employer indicates that no fault was committed and the employee meets several other requirements, including being physically able to work, states grant an unemployment claim. In other words, Chris’s former employer granted him a small concession, while otherwise turning his life upside down amid the worst job market since 1983.
“Unemployment is the pits pretty much,” says Chris, whose unemployment compensation is significantly less than half what he made as a cable installer. Still, he’s better off than Juanita, who has applied for unemployment twice and been denied both times. She is now appealing, but her employer is conceding nothing. In a recent arbitration hearing, Juanita says, her former supervisor claimed that, if she had only told them about her expired license, they would have allowed her renewal time. If only.
Now, Juanita lives with her brother and his wife, but they, too, have financial problems. “My brother is working part time and it’s driving him crazy, because it’s causing money problems between him and his wife,” she explains. “And with me being there,” she hesitates, “…it’s a little constrained.”
Ratcheting Up the Fear
The mainstream media has generally sketched a picture of a labor market in which, under the pressure of an economic meltdown, workers succumb to two types of downsizing. In one, a fierce recession forces businesses, desperate to cut costs in terrible times, to lay off workers. They, in turn, face grim prospects for gainful employment elsewhere. In a kinder, gentler version of the same, employers, desperate to cut costs in terrible times, offer — or sometimes force workers to take — “furloughs,” salary cuts, union give-backs, four-day work weeks, or un-paid holidays rather than axing large numbers of them.
In this case, tough as it may be, workers benefit, retaining at least some of their income, while businesses wait out the recession. In both cases, businesses are largely depicted as unenthusiastic dispensers of pink-slips. Managers and bosses are just facing up to an unpalatable reality and unavoidable pressures imposed on them by the worst economic moment in recent memory.
A visit to a job center is hardly a scientific survey. The experiences of Juanita and Chris, along with those of other unemployed people I spent time with while in Philadelphia, may be purely anecdotal evidence. But they do raise questions about a subject of no small importance, and it’s not one you’re likely to read about in your daily paper — not yet anyway. If a deepening recession weighs down and threatens businesses, some of those businesses are undoubtedly also making convenient use of the times to do things they might have wanted to do, but were unable to do in better conditions.
In some cases, under the guise of “recession” pressure, they may be waging a secret war against their own workers, using even the most innocuous transgressions of work-place rules as the trigger for firings — and so, of course, putting the fear of god into those who remain. In this way, company payrolls are not only being reduced by mass layoffs, but workers are being squeezed for ever greater productivity in return for lower wages, worse hours, and less benefits. The weapon of choice is the specter of unemployment, a kind of death by a thousand (or a million) cuts.
Companies stand to gain a lot these days from such small-scale but decisive actions. After all, they reap a double benefit. Not only do they pare down the size of their payroll, often without needing — as in Juanita’s case — to consent to unemployment compensation, but they also contribute to a climate of intensifying fear. Workers who remain on the job are now not only on edge about lay-offs or scaled-back hours, but also know that a late return from a bathroom or lunch break might mean being shown the door, becoming another member of the legions of unemployed — now at 12.5 million and rising fast.
This dynamic is, of course, hardly new. Countless critics of working conditions have written about it since the dawn of the industrial age. But at the moment, even as the latest unemployment figures make screaming headlines, this is a subject that seldom comes up. Consider, though, that in December, Wal-Mart, the world’s largest retailer, settled 63 outstanding class-action lawsuits that alleged massive wage and hours violations. Fearing termination, Wal-Mart workers, according to their testimony in the lawsuits, labored through lunch breaks and past their scheduled hours for just above minimum wage pay, with little hope of getting enough hours to qualify for the company’s health benefits.
As a condition of the settlement, Wal-Mart will pay out as much as $640 million to those workers. If corporations were able to exert such coercive power when the unemployment rate was around 5%, what can they do in a job market in which 14.8% of the population can’t find adequate work?
In fact, the world’s largest retailer is one of the few American corporations doing well in dark times. While retail sales slid almost everywhere, the company’s same-store sales went up 5.1% in February (when compared with February 2008 sales). Yet, in that same month, it announced a move to “realign its corporate structure and reduce costs.” It cut 700 to 800 jobs at its Wal-Mart and Sam’s Club home offices, in effect acting no differently than any of the companies being battered by the deepening recession.
Rodney Green, a soft-spoken 52-year-old, comes to the job center three times a week to search on-line job listings. He describes his decades-long drift from full-time employee with benefits to marginalized temp-worker with no benefits and, finally, to the category of unemployed for an extended period.
From the late 1970s until the early 1990s, he worked for Bell Telecommunications, where he earned a good salary and full benefits. Since Bell laid him off, he’s worked periodically as a forklift operator for various companies, getting temporary placements through an employment agency. Most recently, he earned $12 an hour working for a deli meat and artisanal cheese producer. No benefits were provided. A year’s work, he explained, would mean a week’s vacation, “but they don’t keep you that long. They lay you off or rotate you into another job before then.”
Today, as he’s discovered, even such temp jobs are becoming scarce. “In the eighties, it wasn’t as bad as it is now,” he comments from the unemployment heartland of what, in 2009, is a deeply de-industrialized Philadelphia. “The city had jobs, but then the jobs moved to the suburbs. Now they’re moving overseas. Back then, say, you applied for a job, maybe fifty others applied, too. Today, that same job, you’re going to have hundreds — I mean, a thousand for that one job. It’s hard. It’s depressing.”
For the past year and a half, Rodney has been collecting unemployment periodically, and in that time, he hasn’t landed a single interview. Recently, because the Bush administration finally acquiesced to grassroots and Congressional pressure to lengthen unemployment benefits, he received a thirteen-week extension, providing him a little cushion (unlike equally interview-less Juanita). “That helped me a lot. Times are hard right now. I hear there are over four million people collecting unemployment. That’s kind of high.”
If Juanita and Chris are casualties of the intensified war of attrition businesses are quietly waging on workers, Rodney represents a deeper unraveling of jobs and job security, thanks to a globalized economy in which the hard-pressed workers in this country are pitted against cheaper labor pools in Latin America, South Asia, China, and even the American South. In such a job environment, what is one to do?
Someone I interviewed prior to my job center visit described her reaction when she heard that her company had recently closed a plant in the Midwest: “The first thing I thought, and I felt bad for thinking it,” she recalled, somewhat sheepishly, “was that means more work for us — at least for the time being.”
Her comment speaks volumes, as does her request not to be identified. Who needs union busters, patrolling shop-stewards, or legions of high-paid lawyers fighting wage and hours claims when a worker is so anxious about job security that she responds positively to the laying off of those she imagines as potential competitors? When employees police their own behavior for fear of the axe — monitoring their time checking email or using the bathroom — bad times distinctly have an upside for management.
In this job environment, it’s easy to turn not just on others, but on yourself. Reflecting on what she will do without a job and unemployment benefits, Juanita wonders if the problem isn’t the economy, but the choices she made in life. “I left home when I was sixteen and lived in my own places, had my children, and got married,” she says nervously, continually folding and refolding a local newspaper. “I should have gone to school and did a lot more things to make myself more marketable earlier in life. Now I’m left having to start over again.”
A look at corporate opposition to the Employee Free Choice Act (EFCA), whose passage in Congress is a central demand of organized labor, offers a glimpse of how persistently companies seek to disadvantage their workers. EFCA would allow workers to form a union when a majority of them sign union cards in a given workplace. “Card check,” as it is frequently called, enables them to organize unions without the need for an election. In a November column surveying the business elite’s response to the Act, Wall Street Journal op-ed columnist Thomas Frank wrote: “Card check is about power. Management has it, workers don’t, and business doesn’t want that to change.”
In Frank’s estimation, the current struggle over EFCA is the latest incarnation of a constantly evolving struggle between workers and employers. For the under- or unemployed crowding into this center in Philadelphia, the current recession isn’t a time-out from the normal struggle, it’s more like a new open season for corporate attacks on them.
Right now, for Juanita, Chris, and others at this center, there are actually two wars going on, and only one of them seems to have caught the attention of labor and business reporters. The headlines about the first read: Desperate Companies Forced to Cut Jobs. But many here seem to be experiencing a second war in which businesses are using bad times to act in ways they couldn’t in the best of times.
Shouldn’t reporters be heading out in search of this one-sided, covert struggle? Isn’t it time for the second business war of our moment to make a few headlines of its own?
Robert S. Eshelman is an independent journalist and audio host at TomDispatch.com. His articles have appeared in the Nation, In These Times, and Abu Dhabi’s the National. He can be emailed at [email protected]
Copyright 2009 Robert S. Eshelman