America: Land of the Layoff

When you think about the “jobless recovery,” think about just how U.S. labor laws favor management and hurt workers.
I couldn’t ask for a more clear example than that of my old employer, Business Week. I worked there about 15 years and for a total of 18 at its owner, McGraw-Hill. The venerable, New York-based magazine is being sold to business news giant Bloomberg because it hasn’t made money in about a decade. I believe losses were something like $45 million last year. The sales price is no more than an embarrassing $5 million.
Like many print publications, BW got caught in the for-free Internet mess and changing demographics meaning that people who thirsted for business news to get ahead in the 1980s now are too old to care.
BW was by far the best experience of my 36-year journalism career. The people there were by far the smartest and most talented I have ever worked with. Although BW, like most print media, has gone through round after round of layoffs, when a potential sale was announced last summer, I started watching. My former colleagues started a private Website open to current and former staffers to monitor the news and give people who have faced layoffs before a chance to offer advice.
The bloodbath started last week. As many as 130 of about 400 staffers were canned, including some very talented individuals who have worked at the publication for three decades, have authored excellent books and are experts in specific fields.
The firings took a “Darkness at Noon” quality. You were summed by telephone (or called if you were in a different city than New York). When you entered the room with the Human Resources people and there was a Bloomber editor, it meant you were in. If not, you were out.
But something curious has happened. BW has many bureaus overseas (I managed the one in Moscow for six years in the 1980s and 1990s). Yet, there were very few layoffs in spots such as Europe and Asia.
Why? Stricter labor laws there protect workers from such firings. In Europe and Asia, workers are considered more valuable than they are in America. Somehow, legislators see a value in the expertise and commitment that workers have made to their employers. If there is a money-losing proposition, then it is largely the fault of management., not the workers who do what they are instructed. And, curiously, top managers of companies in Europe and Asia do not get the gigantic salaries that CEOs in America do.
This lesson is especially revealing given that any economic recovery will be largely jobless. Unemployment is 10 percent nationally, the largest number in years.
Virginia is especially unfriendly towards workers and always favors management. The right to work law makes it harder to keep workers from organizing. “Employment at will” lets managers fire workers without really giving valid reasons. Pro-business cheerleaders will claim that this anti-worker attitude makes Virginia especially business-friendly.
Nothing wrong with that except that it assumes that “business” is the exclusive realm of management. Real workers have nothing to do with it. They are merely widgets or commodities that can be tossed away at a whim.
I hate to see good people who have done nothing wrong catch the blame for top management’s mistakes. At least some of my friends working overseas have some protection.
Peter Galuszka

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6 responses to “America: Land of the Layoff”

  1. Anonymous Avatar

    Move to Detroit where unemployment is at 28%. They can't bury their dead and all the copper has been stripped from the vacant houses.

    I hear the workers there have really good protection in Detroit.

    It is time to kick the statists out of the Commonwealth.

    I'll buy your plane ticket for a signed legal agreement that you never return.

  2. Gooze Views Avatar
    Gooze Views

    Not going anywhere, Bud. Sticking up for workers is not "statist." That's your little Virginia fantasy.

    Peter Galuszka

  3. James A. Bacon Avatar
    James A. Bacon

    There's no question that many corporations make the "firing" experience unnecessarily brutal: Clean out your desk, leave the same day and don't come back, lawyers and security guards at the ready. Not only do employees lose their jobs, they feel devalued and humiliated.

    Firings weren't always handled that way. I wonder why the process has changed. Have corporate executives becomes more inhuman and less empathetic? Perhaps. Or have there been changes in the legal environment that prompts large, bureaucratic enterprises to impose impersonal, bureaucratic procedures in order to protect themselves from lawsuits?

    Are there any lawyers among our readers who can shed some light?

  4. Gooze Views Avatar
    Gooze Views

    You raise good points but I think there is a bigger one. The issue isn't really merely whether management is polite and concerned when they dump workers. The issue is why other countries seem to have a much higher regard for the rights of the worker.
    I was surprised, for example, when I had to manage people in Moscow who were Russians about just how much more they had in the way of legal rights than Americans did. Example: they had the right to something like five weeks of vacation (paid) and they could take it all at once. Imagine my surprise during my first summer there when some of my staff told me on July 30 that they'd see me in the second week in September. They'd be off at the dacha or the Black Sea. When I was scuba diving in the Bahamas and ran into some Germans, I asked how long they were staying (I could manage all of four days) and they said about three weeks.
    Americans may be very productive and have a relatively high standard of living, but they sure as well work hard for it. But our labor laws favor mmanagement, especially in Southern states such as Virginia.

    that's the real point.

  5. Anonymous Avatar

    I dunno.

    I spent some time working overseas with another company on a oint venture.

    These guys workd 35 hour a week, max. At the end of the day they packed up and left like robots: even in the middle of a meeting.

    There is a reason Americans have such high productivity: we work like idiots.


  6. Anonymous Avatar

    On second thought,there is another reason: we are able to take advantage of enormous government expenditures on infrastructure.


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