Still, by 2000 Fredo was pulling in more than $160,000 annually. And he thought he was in line for the top spot at steel-plant builder Voest-Alpine Industries Inc., where he had been chief financial officer for eight years, helping the company grow from 14 employees to 450.
"I called my fiancee and said, 'Dad's been downsized,' " remembered Fredo's son Stephen. "She said, 'Did the company go under?' "
Don Battaglia, a Pittsburgh computer consultant who has worked for Fredo, was equally incredulous. "I was convinced he'd be the guy who turned out the lights," Battaglia said.
The Fredos quickly made adjustments. They canceled plans to trade in their 1998 Chrysler sedan. They drew up a bare-bones budget for groceries, utilities, Christmas gifts and an occasional permanent for Donna's hair. They started collecting buy-one-get-one-free coupon books at the Walgreens pharmacy.
Meanwhile, Fredo pulled down his copy of the Iron and Steel Institute's industry directory. Before, whenever he needed a job, he landed one by writing to a few of the companies listed in the book and calling a couple of Pittsburgh employment agencies.
He assumed this time would be no different. Little did he realize how much the world of work had changed.
Employers Break a Bond
For most of the post-World War II era, Washington had a partner in helping to shield working families from risk: corporate America.
Businesses considered themselves duty-bound to provide stable jobs and strong ties to employees, cushioning workers against the vicissitudes of the economy.
Employers must find ways "of protecting the individual against the more damaging effects of inevitable change," Standard Oil of New Jersey President Eugene Holman said in the late 1940s. "So far as the management of my own company is concerned," he added, "we have formed the habit of thinking in terms of ... lifetime employment. That is our goal."
For decades, employers delivered on the promise of job security. "The workers of our parents' generation typically had one job, one skill, one career — often with one company," Bush said last month at the Republican National Convention.
Beyond that, businesses erected a bulwark against the risk of illness by raising the number of workers with employer-provided health insurance from 1.5 million before World War II to more than 150 million. They helped families deal with the economic costs of death by giving life insurance to 160 million of their employees, up from 9 million. And they offered seemingly ironclad protection against the insecurity of old age by boosting the number of workers with pensions from 4 million to 44 million.
But like the government's safety net, corporate America's began to fall apart in the late 1970s — shifting still more risk onto working families.
"For almost a century, business and government worked in tandem to expand the economic protections afforded working Americans through social insurance programs and career employment," said University of Pennsylvania economist Peter Cappelli. "In the last 25 years, we've stripped most of these away."