Taxpayer Subsidized Downsizing in America

The business of quick and dirty layoffs has become a familiar feature in our culture. One  recent example involved a journalist who worked at a large news organization.  He was new to the company so he gratefully accepted the friendship of a well respected senior reporter. One Friday morning his mentor emailed him about a story idea and ended it by writing, “I’ll see you at the 10 AM meeting.” This prompted the following email exchange:

“What meeting? I didn't get the email.”

“I’ll forward it do you.”

Then a short time later: “Forget the email.  This meeting isn’t for you.  Don’t come to this meeting!”

This is how the newsroom learned that day of the layoffs.  Many senior journalists were let go along with a few younger reporters to avoid the appearance of age discrimination.  As these “redundant” employees filed from the meeting they were handed garbage bags for their personal effects and accompanied to their desks by hired chaperones.   It was all over in an hour.

Coolly calculated business decisions and pitiless firings toss employees off company books and onto government unemployment rolls somewhere in this country nearly every week.  No notices, no outplacement services, no severance pay and no extended benefits are required.  In many cases there is no effort to treat employees with the dignity or respect they deserve.

Apart from union contracts or employment agreements, American companies have no legal obligations to citizens being fired.  They need not assume any responsibility for the impact it has on an employee, their family or their community.  The only business costs of any significance are the premiums companies pay for government unemployment insurance.  This easy, low cost ability to fire workers is called “workforce efficiency” and the U.S. is among the most efficient in the world.  We ranks 12^th out of 144 nations according to  the study on global business competitiveness .

In most other advanced nations there are laws requiring companies to provide loyal employees with advanced layoff notices, severance pay and other benefits.  These structural costs for downsizing may make businesses a little less competitive, but it brings significant benefits.  It helps maintain a stable workforce and postpones government funded assistance to severed employees while they look for jobs.  Requiring larger companies to provide mandatory severance benefits helps the nations absorb minor bumps in the economy without adding to problems by throwing people out of work at the first sigh of trouble.  It also happens to be a humane way for citizens to treat one another.

Here in this country we treat our labor force as if it were a commodity to be bought and discarded at will.  In the end, big business lets taxpayers foot most of the costs for unemployment benefits and supplemental welfare services for people out of work.   At the same time the pro-business lobby pushes Congress for business tax breaks and budget cuts in the  programs that help the workers they leave behind.  Isn't it time we stopped bowing to the pro-business lobby and stand up for the American worker?