The New Economy

In the early 1990’s, IBM laid off 135,000 workers (this is a number that I remember but I can only find support online for 115,000, still a HUGE number to be laid off in less than two years).  Few to none of them were low-skill workers.  And the number was SO huge that it was 10 times the total number employed at the time by Microsoft, the company that more than any other was making IBM’s life miserable.

From the early 1980’s through the early 2000’s, General Electric under the leadership of “Neutron Jack” Welch laid off between 120,000 and 160,000 workers (internet research supplies varying numbers).

From the distant past, I dredge up these two cases to make the point that “The New Economy” (the economy that is less and less dependent upon human labor, or high-skilled American labor) is not merely the consequence of computer / internet-based productivity gains or globalization / out-sourcing manufacturing jobs.  These two and other early massive layoff events were often a consequence of “Mergers and Acquisitions.”  M&A was part of a new strategy to boost corporate Bottom Lines – by terminating workers who did not contribute directly or adequately to that goal.

The 1980’s was the first time in American history that major corporations routinely used massive layoffs as a major tool to goose their bottom line  (labor was the golden goose that kept on giving).

The ways that corporations have kept healthy these last 30 – 40 years have been Mergers and Acquisitions (and massive layoffs), Globalization and outsourcing of jobs (and massive layoffs) and an explosion in Technology-based productivity gains (resulting in massive layoffs).  I am not here trying to make the case that these layoffs were immoral or unjustified or even unnecessary for the company’s survival, given the reality of the competition.  In all these cases, an improved bottom line was the primary aim and the primary result.

I would like to make the point, however, that the rewards from the improved bottom lines all went to the CEO and major corporate shareholders; the working class, and that includes millions of white-collar workers – by its sacrifices, by the loss of their jobs – enabled and paid for these corporate successes.

So, I ask you: do the rules of Capitalism dictate that the rewards of M&A, and globalization, and technology should end up exclusively in the pockets of the well-heeled?  Do the rules of our democracy dictate that the rewards of M&A, and globalization, and technology should end up exclusively in the pockets of the well-heeled?  Do the rules of any kind of Justice or Fairness that you can imagine dictate that the rewards of M&A, and globalization, and technology should end up exclusively in the pockets of the well-heeled?

No?  Well, what are you going to do about it?