With a weaker economy, slumping stock markets and tens of thousands of white-collar jobs slated for elimination, some people might pine for the latter part of the 1990s.
By Jenny Anderson
April 2001
Institutional Investor Magazine
With a weaker economy, slumping stock markets and tens of thousands of white-collar jobs slated for elimination, some people might pine for the latter part of the 1990s. Each year seemed to bring more growth, new equity market records and previously unheard-of employee perks. Just don’t ask Jill Andresky Fraser to share in your nostalgia.
Fraser, finance editor of Inc. magazine, argues in White-Collar Sweatshop: The Deterioration of Work and Its Rewards in Corporate America that the good old days weren’t all that special: They also included the rise of cost-cutting zealots looking to maximize shareholder value by threatening professional workers’ health, wealth, happiness and legal rights.
Some of the numbers Fraser presents are persuasive. Over the past 15 years - in the midst of the greatest bull market in history - the odds of getting laid off more than tripled, for example. Forty percent of those who lost their jobs between 1995 and 1997 earned less money when they were rehired, and one in four took a 20 percent-plus paycut to rejoin the workforce.
And there are some compelling personal stories gleaned from Fraser’s more than 100 interviews conducted in person and over the Internet. There’s Don, whom Fraser found in a Web chat room. He was a sales executive at a national heating and air-conditioning company who sent out 2,000 r,sum’s after he was laid off at 51. He received just two responses and now works as a salesclerk at Sears for $8.50 an hour while his wife cleans condominiums.
Fear of a similar fate, says Fraser, has prompted white-collar workers to accept longer hours, less money and fewer benefits. Male professionals, for instance, earned an average hourly wage of just 6 cents more in inflation-adjusted 1997 dollars than they did in 1973. The average annual increase in nonwage benefits (pensions and health care) has shrunk to only 0.2 percent since 1986: Between 1973 and 1979, that yearly increase was 4.9 percent.
“As layoffs, benefit cutbacks, and subtle forms of age discrimination have become ever more pervasive throughout the business world, long-term security for many people now seems to hang on the whim of the stock market, rather than on the strength of their careers,” Fraser writes.
Aside from creating a professional class focused almost exclusively and unhealthily on work, Fraser claims, frequent job cuts often don’t achieve their objectives: greater efficiency and higher stock prices. Eastman Kodak Co., she points out, laid off tens of thousands of workers in the 1980s and 1990s and still produced flat revenues, substantially smaller profits and a lower stock price.
Still, although she provides some interesting evidence, Fraser doesn’t quite make her case. Today U.S. corporations, despite some exceptions, are more productive and competitive than ever before. In fact, most of the world is now rushing to embrace the U.S. business model. That’s a far cry from the 1970s and ‘80s, when U.S. companies - and workers - were often ridiculed in places like Japan.
The drive for more efficiency has produced positive results for almost everyone. Though recession looms, unemployment rates remain near historical lows, job mobility is still strong, U.S. homeownership per capita has never been higher, and the roster of American millionaires (and billionaires) has never been longer. These facts make it hard to accept that white-collar workers labor in the “sweatshop” of Fraser’s title. Working at Microsoft Corp. or Merrill Lynch & Co. is exacting, but it’s not dangerous, nor does it condemn one to a mean existence.
To be sure, the push for efficiency has also produced some glaring inequities: Why did American CEOs’ median salary plus bonus rise 44.6 percent during the “cost-cutting” years of 1989 to 1997? Even a profit-hungry shareholder would have to wonder whether corporate cash and stock options might be put to more productive use.
The author rightly suggests that managers widen stock ownership and cap executive compensation. In addition, Fraser suggests that employees just say no to unreasonable requests: refuse to return calls past dinnertime, toss out the beeper after a certain hour or decline to use a home computer. These are solutions offered by workers, all still employed, who have managed to keep a balance between work and home life. Sometimes it pays to fight - IBM Corp. workers, sharing information over the Internet, defeated a cost-saving pension plan change, and temporary workers at Microsoft sued for denied benefits and won.
These options make more sense than the 35-hour work week and longer vacations that Fraser offers as remedies elsewhere in her book. After all, finding ways to rein in a hefty workload is more appealing than being out of work.
