These executives seem to feel that need on a regular basis these days: In the tech industry alone, Leopold noted earlier this week, mass layoffs could cost 60,000 workers in 2023, “plus an additional 57,000 lost jobs so far this year.”
These types of layoffs typically receive little media or political attention. Why? Leopold's recently published new book, The War on Wall Street Workers: How Mass Layoffs and Greed are Destroying the Working Class and What to Do About Itexplores those essential questions and shatters the standard answers we get from America's leading corporate and political establishments.
These responses often portray mass layoffs as the inevitable price to pay “to participate fully” in a “vast, complex, and highly technological global economic system.” The explanation goes on to say that the ongoing “digital revolution” is driving “giant global corporations” to search for the cheapest labor costs around the world. To compete in this new economic world, we must follow suit. There is no other choice.
But Leopold wonders why technologically advanced countries “are much more dependent on international trade than the United States” — think Japan or Germany, for example. do not have Will we experience the same wave of massive layoffs that have plagued the U.S. economy?
Leopold goes on to show that the traditional rationale for mass layoffs simply doesn't hold up. The veteran labor analyst tells a more compelling story.
During the Cold War, leaders of America's established corporations felt they were under enormous “cultural and political pressure” to satisfy the U.S. narrative that capitalism could benefit the working class much more effectively than Soviet-bloc countries, according to Leopold's new book.
In the atmosphere of the Cold War, major American industries accepted the gains of mid-century unionization as a reality of economic life, and unions continued to negotiate contracts that greatly increased the economic security of working American families through the postwar decades.
But by the 1980s, world political dynamics had changed. The global “Communist threat” was no longer a serious threat to the capitalist world. During the Reagan era in the 1980s, Leopold writes, “the implicit contract that had entangled labor unions in the corporate order collapsed.” “Constraints” on corporate behavior began to crumble. Mass layoffs soon became “an increasingly common and highly profitable corporate tool.”
In this new economic environment, people across the political spectrum would accept and even celebrate the unlimited pursuit of ever greater profits and wealth as an “absolute good,” which they argued would create “incentives to take risks and innovate” and, in the process, “create more jobs and more income for all.”
In the real world, Leopold counters, this “absolute good” allows “the few to amass enormous wealth at the expense of the many.” Deregulation of Wall Street would accelerate this process. By eviscerating antitrust enforcement and condoning stock price manipulation, federal authorities opened the door to a massive wave of corporate mergers and acquisitions, and an equally massive wave of mass layoffs, under both Republican and Democratic administrations.
The CEOs of the companies that drove these giant waves at the expense of workers will be rewarded at levels never imagined by the global business community. When Dwight Eisenhower left the White House in 1961, America's top corporate executives were making 20 to 30 times what their workers were making. Joe Biden will enter the White House 60 years later with the top corporate CEOs making 20 to 30 times what their workers were making. 389 times the amount of money the average worker earned.
The Biden administration deserves credit for taking steps to reverse economic dynamics that enrich America's wealthiest citizens, but Leopold argues our country can do more to protect working families, and he lays out a comprehensive plan for what that more could and would mean.
Leopold's policy agenda ranges from banning corporate stock buybacks — a now-common tactic that boosts executive wealth at the expense of investing in workers and the physical environment they need to boost productivity — to eliminating stock-related subsidies that skyrocket CEO pay.
Leopold also said “major reforms are needed to prevent investors and corporations from buying companies with debt and then shoving that debt on them, often leading to ruin,” while investors walk away with huge profits.
“We need a real job-creation program that isn't just a Wall Street piggy bank to serve people suffering mass layoffs in hard-hit areas,” Leopold continued.
Leopold's corporate reform agenda includes many other proposals, such as tying federal contracts to corporate behavior. For example, what if the contracts the federal government signs with corporate contractors required the companies to negotiate with workers they want to fire?
What is the logic behind this no-compulsory-layoff approach?
“If corporations are going to take taxpayer money, they shouldn't be firing taxpayers,” Leopold says sarcastically.
Sam Pizzigati, an associate fellow at the Institute for Policy Research, is co-editor of Inequality.org. His recent books include: Basis for maximum wage and The rich don't always win: The forgotten victory over plutocracy that created the American middle class, 1900-1970.