Assault on the American Worker : Corporate Greed Is an Invitation to Government Intervention

The Rev. F. Forrester Church, minister of All Souls Unitarian Church in New York, wrote recently that the “tyranny of the profit motive”--the triumph of greed over compassion and ethics in corporate decision-making--shows signs of abating. Maybe, but again maybe not.

Church, though at pains not to overstate his case, noted that many companies have programs devoted to improving the quality of life for their employees. He cited the encouraging success of a consulting firm that helps companies relate corporate goals to human values.

Writing in the New York Times, Church said, “One can even hear lectures at the Harvard Business School on caring as ‘a human resource management strategy’.”

There is no question that a lot of companies are taking their responsibilities to the larger society, and to their own employees, very seriously. Many, perhaps most, large corporations provide employee benefit packages--health insurance, life insurance, dental care, pensions and profit-sharing--that are a credit to modern-day American capitalism.

Unfortunately, however, a lot of other firms are making systematic, seemingly legal assaults on the pay, job security and post-retirement livelihoods of the men and women who work for them.

On just about any day of the week you can pick up the newspaper and read about another airline, steel producer, bus company, supermarket chain or sundry other business that is demanding “concessions” from its employees in the form of reduced pay, benefits or both.

In many such cases workers are told bluntly that if they don’t go along (1) they will be replaced by people willing to work for less, (2) the company will move its operation to some other state or some other country, or (3) the company will declare bankruptcy in order to get out from under existing wage and benefit contracts.

In this atmosphere unionized production workers are under the greatest pressure. But workers everywhere, union or non-union, are fighting a losing battle just to maintain their standard of living.

The stated justification is foreign competition. And there is no question that in some industries, including autos and steel, labor costs did need squeezing if the American manufacturers were to have any hope of fighting back against imports.

However, the rollback in pay has occurred not just in industries that are beset by foreign competition but also in businesses in which imports are not a factor at all.It is hard to escape the conclusion that, in major part, what we are seeing is the biggest spree of union-busting in more than a half-century--that and plain old greed.

The growing tendency to raid employee pension funds is of special cause for concern.

Under the law, companies can terminate pension plans and convert “surplus” funds to other uses so long as they set aside enough money to pay the retirement benefits earned by employees to that date. Since 1980, more than 700 corporations have either closed down pension plans or applied for permission to do so.

Such “surpluses,” of course, may be more apparent than real; just as a rising stock market helped fatten the funds, a falling market could erase the paper gains and leave promised benefits in jeopardy.

When a pension fund is phased out, workers lose potential benefits that they would have earned in the future--a major consideration to an employee just a few years from retirement. And even where a company sets up a new retirement plan to replace the old one, the new plans are almost invariably inferior to those that they replace.

Under the U.S. system, any excesses committed by business tend to generate countervailing pressures from the federal government. The antitrust laws, child-labor laws, worker-safety statutes, bank-regulation and consumer-protection laws all represent efforts to keep the interplay of market forces within bounds considered acceptable by a democratic people.

Right now the checks and balances don’t seem to be working. The Reagan Administration is paying no visible political price for its insensitivity to the plight of workers who are caught in the cut-and-squeeze buzzsaw, or for its lack of interest in the excesses that are being committed by some elements of business.

All in all, however, a rude shock is in store for managers who think that the fading strength of unions will enable them to deal with workers in a free and un-fettered way.

A recent Harris Poll disclosed a startling undercurrent of dissatisfaction among professional employees and middle managers, as well as workers. This dissatisfaction already is being reflected in the courts and state legislatures.

Corporate lobbyists successfully blocked federal legislation last year that would have required companies to provide three months’ prior notice of any major layoffs or shutdowns. But three states have enacted restrictive measures of their own, and 19 others studied such legislation in 1985.

The courts in six states have declared broad limits on the power of employers to dismiss workers. To quote ex-Labor Secretary John T. Dunlop: “I think the notion that an employer can get out of bed and fire anybody for any old reason is repugnant to a society of employees, whether they are organized into unions or not.”

(A contributor to the Harvard Business Review, in response, advises companies to avoid “any clause, phrase or sentence that might be interpreted to mean that an employee will be discharged only for ‘just cause’.”)

To the intelligent business executive, however, the chasm of chasms is the un-certainty created by the Gramm-Rudman budget-balancing law.

Common sense tells you that Ronald Reagan, unwilling to accept big cuts in defense spending and unable to impose reductions on social programs, will finally opt for a much-needed tax increase. But to the degree that the social safety nets are indeed gutted, business is in trouble.

In both the United States and Western Europe, people have been willing to put up with high unemployment rates and wage squeezes precisely because of the cushion provided by unemployment compensation, government-subsidized medical care, veterans’ benefits and the like. But what if these safety nets are eroded--leaving the people without either corporate paternalism or government help?

Corporate executives shouldn’t be surprised if the answer is another swing of the pendulum toward excessive government interference. In their own interest they would be well advised to treat the greedier members of the business community as the wreckers that they really are.