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Monday, September 22, 2008

Causes of the "Big Squeeze"

"The Big Squeeze" eloquently captures the plight on particular workers caught up in the machinery of our modern economy.  Along with these vignettes, Greenouse also sketches the broader trends that are driving the pressures being placed on workers.  I wanted to follow up on Noah's thoughtful post by talking about some of the potential causes for the squeezes being felt by many Americans.  While globalization and increased productivity are among the causes, I wanted to single out two others for further discussion here.

  • Violations of current law.  The workers chronicled in "The Big Squeeze" come from a variety of backgrounds and professions.  But almost all of them have suffered from some form of alleged illegality -- deleted hours, pressures not to join a union, and sex or disability discrimination.  Often, they are found in the midst of litigation -- after the case has been brought, but before a resolution has been reached.  I'd be curious to know more about the end of some of these stories.  Did litigation bring any assistance -- money for health care, reinstatement, a new start?  Or did it just stretch on, providing little if any help at the end of the process?  The tale of Kathy Saumier presents a mixed message in that regard.  Saumier was a worker at Landis Plastics who was fired for supporting the union.  She was reinstated to her position and was hailed as a fighter for workers' rights.  In addition, she and other workers reached a $782,000 settlement on sex discrimination charges.  However, she ultimately left the factory to work at a law firm, and Landis workers are not unionized.  Is Saumier an example of the law's success in vindicating worker rights or a tale of its impotence?  Or both?
  • The "shareholder primacy" norm.  As someone who studies both corporate law and labor and employment law, I appreciated Greenhouse's look at "shareholder primacy" as a potential cause of the deteriorating workplace.  In many ways, Greenhouse's narrative of the 20th century is the inverse of the traditional corporate law narrative.  Greenhouse discusses the "golden era" of the social contract, in which workers were taken care of by management.  In corporate law, however, this era is often described as one in which cocooned CEOs paid too little attention to the bottom line and, as a result, allowed ineffiiciencies to creep in across the board.  Greenhouse chronicles how in the 1980s the management policies of Jack Welch and "Chainsaw" Al Dunlap led managers to focus on shareholders and, by extension, share price as the ultimate measure of success.  To Greenhouse, this brought about the end of the social contract; to many corporate law scholars, this was the beginning of a new era of greater corporate efficiency.  Both narratives are, to some extent, correct.  But I wonder if last week's events will cause the pendulum to swing back the other way.

Posted by Matt Bodie on September 22, 2008 at 11:23 AM in Books | Permalink


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