Tuesday, September 23, 2008

Greenhouse on the Big Squeeze and Some More Employment Numbers

Bigsqueeze Well, as mentioned in a previous post, there is an on-line book club discussion at PrawfsBlawg, organized by Matt Bodie (Saint Louis), about Steve Greenhouse's new book: The Big Squeeze: Tough Times for the American Worker.

Yesterday, Steve himself responded to the comments made by the other participants in the book club. Here's a taste:

For starters, I want to say that when I researched and wrote my book, The Big Squeeze, I saw that workers were suffering not just from one squeeze, but from several squeezes. There is of course an economic/financial squeeze with wages stagnating and health and pension benefits getting worse. Then there is a time squeeze with Americans working 1,804 hours a year on average -- 135 hours or nearly three-and-a-half fulltime weeks more than the typical British worker, 240 hours or six fulltime weeks more than the typical French worker and nine fulltime weeks more than the typical German worker.  (Those of you who answer work emails at 11 p.m. know what I'm talking about.) The United States is the only industrial nation without laws guaranteeing workers paid vacation, paid sick day and paid maternity leave. (In the 27 countries of the European Union, workers are guaranteed at least four weeks vacation.)

For lack of a better phrase, workers also face a squeeze over dignity and respect. To a shocking degree, many "respectable" companies treat their workers with a surprising lack of decency or dignity. I think of the company that fired a computer engineer on the very day that his eight-and-a-half-year-old daughter was visiting on Take Your Daughter to Work Day. And I also think of the booklet that Northwest Airlines distributed to laid-off workers, giving them pointers on how to make ends meet. The booklet was called, "101 Ways to Save Money,' and among the tips it gave were "Borrow a dress for a big night out," "Shop at auctions or pawn shops for jewelry," and "Don't be shy about pulling something you like out of the trash."

Then there's another type of squeeze that I found quite surprising and appalling: the frequency with which many companies break the law in how they treat -- and cheat -- their workers. Perhaps I'm naive, but I was shocked at how prevalent such lawbreaking was.  Or perhaps because I went to law school (N.Y.U. Class of '82), I drank the Kool-aid and thought that corporate managers would actually behave better and  would try very hard to comply with the law . . . .

I write about all this because I'm surprised at how broken many of the nation's workplaces seem to be . . . .

After I finished writing my book, I kept wondering, Why do so many corporate managers break the law? Why do they show so much contempt for the law and for their workers? Yes, they often face tremendous pressures to keep their payroll costs to a minimum. But I always thought, evidently naively, that that the desire to follow the law would serve as a powerful brake on managers breaking the law and cheating employees.  What exactly, I often wonder, are the managers of today and tomorrow learning in the ethics classes and human resources classes that they take in business school?

Of course not all managers are breaking laws and certainly not all managers are going to business or HR school (and therefore may be inadvertently breaking the law).  But it seems to me that Steve is suggesting  that there is large group of corporate managers that know the law and break it anyway. Does the shareholder-primacy norm mean that sometimes they must break employment law to meet the directive of corporate law - maximize shareholder wealth?  Or is it a malaise in the workplace culture of the United States, born from the endless hours that Americans spend on, and at, work.

I do not pretend to know the answer to some a complex question. However, this is the current the economic picture (as painted by the Bureau of Labor Statistics):

In August, employers took 1,772 mass layoff actions, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Each action involved at least 50 persons from a single employer; the number of workers involved totaled 173,955, on a seasonally adjusted basis. Layoff events reached a program high for the month of August (with data available back to 1995), and associated initial claimants reached its highest level for the month since 2001.

In such an environment, can we be surprised that managers look out for themselves and care less about the welfare of their subordinates? And doesn't this type of workplace atmosphere lend itself to cutting corners?



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