Had joined Coke: Greising, I’d Like the World to Buy a Coke, 1–4; Hays, 72; Allen, Secret Formula, 376. Native Cuba: For details of Goizueta’s early history, see Greising, 1–17; Hays, 69–72. Fortune in sugar: Greising, 7–8; Pendergrast, 328. Meant sleeping: Greising, 18. “Pure and wholesome”: Greising, 19.
Was shattered: Greising, 20–21. Was sworn in: “Castro Takes Oath as Premier of Cuba,” New York Times, Feb. 17, 1959. Soldiers stopped him: Hays, 74. To leave: Greising, 21–22; Hays, 74.
Landed in Miami: Hays 75; Greising, 23. “Shouldn’t work”: Greising, 18.
After coordinating: Greising, 28–29. Special assignment: Greising, 31; Hays, 77. Worked closely: Greising, 34–38.
Youngest vice president: Greising, 36. Senior vice president: Greising, 40–42. Vice chairmen: Pendergrast, 320; Greising, 48. “Vice squad”: Pendergrast, 320; Greising, 48. Was similar: Greising, 48, notes that the idea of naming six vice chairmen and thereby “creating a wide-open field of competitors for the top job,” was an idea that Austin borrowed from General Electric, where he served on the board. Guccis: Greising, 35. Tailored suits: Greising, 35; Oliver, The Real Coke, the Real Story, 68. Silk handkerchiefs: “He Put the Kick Back into Coke,” Fortune, Oct. 26, 1987. Sucking up: Greising, 43; Allen, Secret Formula, 377; Hays, 89. Padded his credentials: Greising, 15.
Bunch of areas: Allen, Secret Formula, 390; Greising, 74. Pepsi Challenge: Greenwald and Kahn, Competition Demystified, 181–199; Allen, Secret Formula, 368–369, 400–401; Hays, 111–112; Pendergrast, 312; Tedlow, Denial, 120–126; Louis and Yazijian, 368. Market share: Pepsi nabbed share, in particular, among younger consumers and at food stores. See Greenwald and Kahn, 186–189; Hays, 112; Pendergrast, 313; Tedlow, 124; Enrico and Kornbluth, The Other Guy Blinked, 25; “Coca-Cola Versus Pepsi-Cola” by Constance Lynn Irwin, Harvard Business School case study, revised June 21, 1989. Cash reserves: Allen, Secret Formula, 378. Stock price: Pendergrast, 321; Allen, Secret Formula, 384; Greising, 76. “Were paralyzed”: Allen, Secret Formula, 389. Also see Greising, 74.
“No confidence”: June 2, 1980, memo from Jones to Woodruff, RWP. Lost all patience: Allen, Secret Formula, 371–381; Pendergrast, 319–328. Behaving erratically: Allen, Secret Formula, 367–368, 380; Pendergrast, 320; Greising, 47. Drinking problem: Allen, Secret Formula, 368. Crippling combination: Allen, Secret Formula, 368.
Few gave: Allen, Secret Formula, 376. “Foreign national”: Louis and Yazijian, 370. Sipping vodka: Allen, Secret Formula, 377. Emerged as: Greising, 51–54; Allen, Secret Formula, 381–382; Isdell, Inside Coca-Cola, 59. “Most surprising”: “The Engineer Who Is Putting New Sparkle Into Coke,” Financial Times, Oct. 1, 1980. Goizueta was first made president and then, when Austin formally stepped down in March 1981, chairman and CEO. Pronounce his name: Hays, 90.
“No sacred cows”: Greising, 82; Hays, 93; Allen, Secret Formula, 391; Pendergrast, 336. “Has been said”: Closing remarks at employee presentation, May 8, 1981, RWP.
Three-year plans: Greising, 73; Hays, 93; Oliver, 69. “I want you”: Greising, 73. “Facts are facts”: Greising, 73; Oliver, 68.
“Got to believe”: Greising, 73. Company veteran: Keough had joined Coca-Cola in 1964 when it purchased Duncan Foods, where he was an executive. See “Secrets of Great Second Bananas,” Fortune, May 6, 1991.
“Spanish Inquisition”: Greising, 72; Oliver, 69; Hays, 93; Pendergrast, 335. “It would take”: Greising, 76.
“Develop entrepreneurs”: “Managing Change—Challenge of the ’80s,” remarks by Roberto C. Goizueta to the Georgia Bankers’ Association Marketing Conference, Feb. 12, 1981.
“Cats and dogs”: Allen, Secret Formula, 390. Columbia Pictures: Greising, 95–102; Allen, Secret Formula, 396–399. $90 million: Greising, 102; Allen, Secret Formula, 399; Pendergrast, 343. Half a billion: Greising, 178; “The Reel Thing: Coke’s Brief-Yet-Profitable Foray into Show Business,” Coca-Cola History corporate blog, June 24, 2013. Coke got out of the entertainment business after concluding that it was too much of a distraction and following a series of box-office flops. Runaway hit: Allen, Secret Formula, 399; Pendergrast, 342.
“Racking my brain”: Dec. 6, 1984, letter from Goizueta to Woodruff, RWP. “Run very well”: April 30, 1984, note from Joseph W. Jones to Roberto Goizueta, RWP.
Nurse’s hand: Allen, Secret Formula, 408. In his will: Pendergrast, 350.
Was overwhelming: Oliver, 169–198; Pendergrast, 353–357; Allen, Secret Formula, 413–414; Greising, 131–132; Hays, 117–119. 400,000 phone calls: Hays, 121. Coca-Cola’s bottlers: Enrico and Kornbluth, 226; Greising, 132–133; Hays, 119–120. “Just blinked”: Oliver, 155; Greising, 128; Allen, Secret Formula, 411; Pendergrast, 351. Enrico’s open letter actually preempted Coke’s official rollout of New Coke. “The truth is”: Greising, 137; Allen, Secret Formula, 416; Oliver, 216; Pendergrast, 358. By early 1986: Allen, Secret Formula, 417. Also see “He Put the Kick Back into Coke,” Fortune, Oct. 26, 1987.
A 20 percent return: Greising, 108. “Seemed to change”: Interview transcript with Charlie Bottoms, MPRF. Forty years: Obituary for Charles Bottoms Jr., Atlanta Journal-Constitution, Oct. 14, 2010.
262–263 “It is easy”: Closing remarks at employee presentation, May 8, 1981, RWP.
By 1988: Coca-Cola’s 1988 annual report; Hays, 125, 146. “I wrestle”: Blanding, The Coke Machine, 48. Sounded different: Osterman, Securing Prosperity, 30–31. “First, last”: “Sidelights,” New York Times, April 3, 1959. “There are plenty”: “Why Shareholder Value?” by Roberto C. Goizueta, CEO Series, Issue No. 13, Center for the Study of American Business, Washington University, Feb. 1996.
Split its stock: Hays, 132–133. Bought back billions: Greising, 178–179. Became popular: “On Uneven Ground: How Corporate Governance Prioritizes Short-Term Speculative Investments, Impedes Productive Investments, and Jeopardizes Productivity Growth” by Christian E. Weller and Luke Reidenbach, Political Economy Research Institute, University of Massachusetts at Amherst, Working Paper No. 245, Jan. 2011. Hectored: Hays, 128–132. Blackballed: Hays, 131.
“The room”: Hays, 67.
Starting in: Berle and Means, The Modern Corporation and Private Property, 10–16. Also see Stout, The Shareholder Value Myth, 15.
“We are dealing”: Berle and Means, 115. Also see Mizruchi, 204.
“Should the corporate leaders”: Berle and Means, 311. Also quoted in part in Reich, Saving Capitalism, 119. Also see Stout, 17–18.
“Larger interests”: Berle and Means, 311.
“Social responsibility”: “The Social Responsibility of Business Is to Increase Its Profits” by Milton Friedman, New York Times Magazine, Sept. 13, 1970. Also see Fox, The Myth of the Rational Market, 223; Lynn, End of the Line, 225.
Cool rationality: Rodgers, Age of Fracture, 64; Khurana, From Higher Aims to Hired Hands, 310; “When Shareholder Capitalism Came to Town” by Steven Pearlstein, The American Prospect, April 19, 2014. “The proposition”: Rodgers, 63. Of scholars: Rodgers, 50–68; “Radical Shareholder Primacy” by David Millon, University of St. Thomas Law Journal, Vol. 10, No. 4, April 2013; Stout, 35. And law: Lynn, End of the Line, 227–228. His supply-siders: Rodgers, 68–74. “Something magic”: Rodgers, 41. This was from Reagan’s “Radio Address to the Nation on Taxes, the Tuition Tax Credit, and Interest Rates,” April 24, 1982.
Who understood: Khurana, 317. Also see Stout, 34; Fox, 225. Most cited: Martin, Fixing the Game, 11; Stout, 35.
“Tendency to appropriate”: “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure” by Michael C. Jensen and William H. Meckling, Journal of Financial Economics, Vol. 3, No. 4, Oct. 1976.
“Penalizes incompetent”: “Takeovers: Folklore and Science” by Michael C. Jensen, Harvard Business Review, Nov. 1984. With debt: “Eclipse of the Public Corporation” by Michael C. Jensen, Harvard Business Review, Sept./Oct. 1989. Also see Khurana, 319; “Corporate Governance and Merger Activity in the United States: Making Sense of the 1980s and 1990s” by Bengt Holmstrom and Steven N. Kaplan, The Journal of Economic Perspectives, Vol. 15, No. 2, Spring 2001.
Corporate raiders: See “Where, Oh Where, Have All the Corporate Raiders Gone?” New York Times, June 30, 1996. Also see Greenhouse, 88; Uchitelle, 139–141. “Far too much”: “Management and the World’s Work” by Peter F. Drucker, Harvard Business Review, Sept. 1988. “Buyouts inevitable”: “Reckoning With the Pension Fund Revolution” by Peter F. Drucker Harvard Business Review, March/April 1991.
“Reasons or excuses”: “Reckoning With the Pension Fund Revolution” by Peter F. Drucker Harvard Business Review, March/April 1991.
Nearly half: “The History and Mystery of Merger Waves: A U.K. and U.S. Perspective” by Sian Owen, School of Banking and Finance, University of New South Wales, Working Paper No. 2006–02, May 2006. Also see Bruner, Applied Mergers & Acquisitions, 74. Also see Mizruchi, 208–213; Useem, Executive Defense, 22–27. Bust-up takeovers: “The Merger Boom: An Overview” by Lynn E. Browne and Eric S. Rosengren, Federal Reserve Bank of Boston, Conference Series 31, Oct. 1987; “The Decline and Fall of the Conglomerate Firm in the 1980s: The Deinstitutionalization of an Organizational Form” by Gerald F. Davis, Kristina A. Diekmann, and Catherine H. Tinsley, American Sociological Review, Vol. 59, No. 4., Aug., 1994; Davis, Managed by the Markets, 85; Mizruchi, 208; Cappelli, 78; Davis, The Vanishing American Corporation, 57–59. Also see Weil, 36–37.
Like Boone Pickens: Khurana, 467. Talk and act: Stout, 24–25. Never mandated: Stout, 25–31; Dorff, Indispensable and Other Myths, 205–207; “Radical Shareholder Primacy” by David Millon, University of St. Thomas Law Journal, Vol. 10, No. 4, April 2013; Margaret M. Blair’s essay “Shareholder Value, Corporate Governance, and Corporate Performance” in Cornelius and Kogut, Corporate Governance and Capital Flows in a Global Economy, 64–65; “Unrealized Potential: Misconceptions About Corporate Purpose and New Opportunities for Business Education” by Miguel Padro, Aspen Institute Business and Society Program, May 28, 2014; “The Myth of Maximizing Shareholder Value” by Harold Meyerson, Washington Post, Feb. 11, 2014. Also see “Can a Corporation Have a Soul?” by Michael B. Dorff, The Atlantic, Oct. 20, 2016. “Under the sway”: Khurana, 304. Also see Davis, Managed by the Markets, 85–87; Hopper and Hopper, 180; Useem, Executive Defense, 1–18; Lynn, End of the Line, 209–210; Frank Dobbin and Jiwook Jung’s essay “The Misapplication of Mr. Michael Jensen: How Agency Theory Brought Down the Economy and Why It Might Again” in Lounsbury and Hirsch, Markets on Trial: The Economic Sociology of the U.S. Financial Crisis: Part B, 33–34.
“Corporations are chartered”: Khurana, 320. “Paramount duty”: Khurana, 321. Also see Hopper and Hopper, 179–180; “Maximizing Shareholder Value: The Goal That Changed Corporate America,” Washington Post, Aug. 26, 2013; “The American Corporation” by Ralph Gomory and Richard Sylla, Daedalus, Spring 2013.
“Was in tension”: “Capital Markets and Job Creation in the 21st Century” by Gerald Davis, Center for Effective Public Management, Brookings Institution, Dec. 2015. Also see Blair, The Deal Decade, 3; Rodgers, 80; Useem, Executive Defense, 11–12; Uchitelle, 133–135; “What Do We Know About the Labor Share and the Profit Share?” by Olivier Giovannoni, Levy Economics Institute of Bard College, Working Paper No. 804, May 2014; “Financialization & Equal Opportunity” by Wallace C. Turbeville, Demos, Feb. 2015; “On Uneven Ground: How Corporate Governance Prioritizes Short-Term Speculative Investments, Impedes Productive Investments, and Jeopardizes Productivity Growth” by Christian E. Weller and Luke Reidenbach, Political Economy Research Institute, University of Massachusetts at Amherst, Working Paper No. 245, Jan. 2011. For a vigorous defense of shareholder value, see “Analyse This: The Enduring Power of the Biggest Idea in Business,” The Economist, April 2, 2016.
Followed by layoffs: See Sanjai Bhagat, Andrei Shleifer, and Robert W. Vishny’s “Hostile Takeovers in the 1980s: The Return to Corporate Specialization” in Brookings Papers on Economic Activity, 1990. Institutional investor: Greenhouse, 88. Get ahead: Useem, Executive Defense, 21; Reich, Saving Capitalism, 121–122. Leaner and flatter: Useem, Executive Defense, 79–85, points, in particular, to the downsizing of central management at corporate headquarters. Interestingly, researchers have found mixed results in terms of the stock market’s reaction to corporate layoff announcements. One important study found declines in a company’s share price when cuts were attributed to financial problems, but positive effects when they were attributed to a broader restructuring. See Baumol, Blinder, and Wolff, 54; Useem, Executive Defense, 229; Cappelli, 79–83. “Important to distinguish”: Rappaport, Creating Shareholder Value, 9. Coining the term: Fox, 225.
Received tender offers: Davis, Managed by the Markets, 85; Davis, The Vanishing American Corporation, 69. Also cited by Mizrachi, 210; Cappelli, 79. “Does not mean”: Foster and Kaplan, 139. Also see Lynn, End of the Line, 170–171.
Faster pace: “What Does Fortune 500 Turnover Mean?” by Dane Stangler and Sam Arbesman, Ewing Marion Kauffman Foundation, June 2012. Foster and Kaplan, 11–13, note a similar phenomenon with members of the S&P 500. Also see “The Biology of Corporate Survival” by Martin Reeves, Simon Levin, and Daichi Ueda, Harvard Business Review, Jan./Feb. 2016; “Die Another Day: What Leaders Can Do About the Shrinking Life Expectancy of Corporations,” bcg.perspectives, July 2, 2015. “Left behind”: Foster and Kaplan, 294. Had dropped: Useem, Executive Defense, 82. Also cited in Fraser, White-Collar Sweatshop, 117. Also see Lynn, End of the Line, 144; see Fraser, The Age of Acquiescence, 278; Bennett, The Death of the Organization Man, 15. It was common: Uchitelle, 134; Hatton, 63. “Used to be”: Greenhouse, 87.
Gadflies started: “U.S. Executive Compensation in Historical Perspective” by Harwell Wells, Legal Studies Research Paper Series, No. 2011–19, Temple University Beasley School of Law, 2011. Wells also references The Solid Gold Cadillac.
“I’m sorry”: Teichmann and Kaufman, The Solid Gold Cadillac, 8–9.
Highest earner: Compensation information for executives in 1956 is drawn from company proxy filings, as well as “The Big Money-Earners of ’56,” Business Week, May 25, 1957. Also see the statement on corporate salaries by US senator Patrick McNamara as published in the Congressional Record for June 3, 1957.
Remarkably steady: All the data in this paragraph are drawn from “Executive Compensation: A New View from a Long-Term Perspective, 1936–2005” by Carola Frydman and Raven E. Saks, National Bureau of Economic Research, Working Paper No. 14145, June 2008. Also cited by Dorff, 17–18.
Big reason: “Executive Compensation” by Kevin J. Murphy, Marshall School of Business University of Southern California, June 1999; Dorff, 6; Bebchuk and Fried, Pay Without Performance, 6. Was prevalent: “U.S. Executive Compensation in Historical Perspective” by Harwell Wells, Legal Studies Research Paper Series, No. 2011–19, Temple University Beasley School of Law, 2011. Also see “Stock Options: Are They Gold or Just Glitter?” Time, April 25, 1960. 90 percent: Dorff, 6. Also see Martin, 13. Congress changed: Stout, 53; “Killing Conscience: The Unintended Behavioral Consequences of ‘Pay for Performance’” by Lynn A. Stout, The Journal of Corporation Law, Vol. 39, No. 3, Spring 2014. 85 percent: Blair’s essay in Cornelius and Kogut, 61. She includes both stock-option gains and grants. Also cited by Stout, 53. Stiglitz, 116, uses 80 percent. Others (Dorff, 7; Mizruchi, 205; Martin, 121–122) use a much more modest figure, saying that stock options represented about half of CEO compensation at their peak in 2000. Also see “The Overpaid CEO” by Susan Holmberg and Mark Schmitt, Democracy, Fall 2014.
A 1,500 percent jump: Dorff, 6–7. “Despite the fact”: Dorff, 7. Also see Davis, Managed by the Markets, 87.
Were incentivized: Martin, 27–30; Blair’s essay in Cornelius and Kogut, 60-62; Dobbin and Jung’s essay in Lounsbury and Hirsch, 39–40, 55; Deal and Kennedy, The New Corporate Cultures, 57–62; Stiglitz, 126, 142. Stinted on: “Corporate Investment and Stock Market Listing: A Puzzle?” by John Asker, Joan Farre-Mensa, and Alexander Ljungqvist, Review of Financial Studies, Feb. 2015; “The Economic Implications of Corporate Financial Reporting” by John R. Grahama, Campbell R. Harveya, and Shiva Rajgopalc, National Bureau of Economic Research, Working Paper No. 10550, June 2004. Also see Lynn, End of the Line, 173, 244. Machinations: Martin, 28; Dorff, 145–146; Bebchuk and Fried, 184; “Companies Use IRS to Raise Bonuses With Earnings Goals,” Bloomberg, Sept. 12, 2013. Not nearly: “Is CEO Pay Too High and Are Incentives Too Low? A Wealth-Based Contracting Framework” by John E. Core and Wayne R. Guay, Perspectives, Academy of Management, Feb. 2010. Also see Dorff, 113–114; Stiglitz, 123; “Do CEOs Ever Lose? Fairness Perspective on the Allocation of Residuals Between CEOs and Shareholders” by Kalin Kolev, Robert M. Wiseman, and Luis R. Gomez-Mejia, Journal of Management, June 4, 2014. Reich (Saving Capitalism, 103–104) cites a study of 1,500 large corporations, which showed that “companies that were the most generous to their CEOs—and whose highly-paid CEOs received more of that compensation as stock options—did 15% worse than their peer companies, on average” in terms of returning value to shareholders. “Huge amounts”: Crystal, In Search of Excess, 40. Also see Bebchuk and Fried, 87–94.
None of this: See “Performance for Pay? The Relationship Between CEO Incentive Compensation and Future Stock Price Performance” by Michael J. Cooper, Huseyin Gulen, and P. Raghavendra Rau, Social Science Research Network, Oct. 1, 2014. Martin (30–31) notes: “Focusing executives on shareholder value maximization using stock-based compensation was supposed to give shareholders a better deal.… Yet, it simply hasn’t worked out that way. Total returns on the S&P 500 for the period from the end of the Great Depression (1933) to the end of 1976, the beginning of the shareholder-value era, were 7.5 percent (compound annual). From 1977 to the end of 2010, they were 6.5%—suggesting that shareholders have little to celebrate, despite having been made the clear priority.” Martin’s calculations are also cited by Stout, 53; “How the Cult of Shareholder Value Wrecked American Business” by Steven Pearlstein, Washington Post, Sept. 9, 2013; “When Shareholder Capitalism Came to Town” by Steven Pearlstein, The American Prospect, April 19, 2014; “The Dumbest Idea In The World: Maximizing Shareholder Value” by Steve Denning, Forbes, Nov. 28, 2011. Also see Dorff, 146–149; Stiglitz, 122–123; Bebchuk and Fried, 6–7. For a different view, see “Performance-Based Pay for Executives Still Works” by Alex Edmans, Harvard Business Review, Feb. 23, 2016. It is important to note that while Bebchuk and Fried have been sharp critics of how companies have implemented “pay for performance” systems, they don’t frown on these systems per se. As Cornell’s Lynn Stout writes: “Before the 2008 credit crisis, Harvard law professors Lucian Bebchuk and Jesse Fried were prominent advocates for tying executive pay to share price performance. Post-2008, after incentive pay was identified as contributing to excessive risk-taking in financial firms, Bebchuk and Fried now have shifted to emphasizing tying pay to ‘long-term’ stock performance” (“Killing Conscience: The Unintended Behavioral Consequences of ‘Pay for Performance’” by Lynn A. Stout, The Journal of Corporation Law, Vol. 39, No. 3, 2014). “Improving real-market”: Martin, 27–28. Also see “Where Companies With a Long-Term View Outperform Their Peers” by Dominic Barton, James Manyika, Tim Koller, Robert Palter, Jonathan Godsall, and Josh Zoffer, McKinsey Global Institute, Feb. 2017. Hit those numbers: See “The Misguided Practice of Earnings Guidance” by Peggy Hsieh, Timothy Koller, and S. R. Rajan, McKinsey & Co., March 2006. “Companies focus”: Martin, 34–35.
“Vilified by many”: “Why Shareholder Value?” by Roberto C. Goizueta, CEO Series, Issue No. 13, Center for the Study of American Business, Washington University, Feb. 1996. “Retirement funds”: Why Shareholder Value?” by Roberto C. Goizueta, CEO Series, Issue No. 13, Center for the Study of American Business, Washington University, Feb. 1996. Also see Pendergrast, 420. Become millionaires: Greising, 192.
Opened the spigot: Welch, 191–192; Tichy and Sherman, 42. “What a kick”: Welch, 192.
A thousand bucks: Greising, 189. The exact value was $976.
Would receive: “The Age of Customer Capitalism” by Roger L. Martin, Harvard Business Review, Jan./Feb. 2010; Hopper and Hopper, 153; “Special Tax Breaks Enrich Savings Of Many in the Ranks of Management,” New York Times, Oct. 13, 1996. Would question: Martin, “The Age of Customer Capitalism” by Roger L. Martin, Harvard Business Review, Jan./Feb. 2010. Yale’s Jeffrey Sonnenfeld also told the author in a 2012 email that Goizueta’s “leadership legacy… did not hold up well.” He cited, among other things, “the terrible decade of hobbled shareholder wealth and financial performance” after his death in 1997. “Acting shortsighted”: “Why Shareholder Value?” by Roberto C. Goizueta, CEO Series, Issue No. 13, Center for the Study of American Business, Washington University, Feb. 1996. Stock options: “Coke’s Chief Paid a Million Shares in ‘91,” New York Times, March 19, 1992; Hays, 145–146. Buried it: Coca-Cola’s March 6, 1992, proxy statement; Johnston, Perfectly Legal, 46; “Trying to Decode Proxies? Read Very, Very Carefully,” New York Times, April 13, 1992. Tax bill: After the uproar, Coca-Cola discontinued this policy. See Crystal, 152–153; Hays, 145; “CEO Pay: Coke Sends the Wrong Message,” Bloomberg, May 3, 1992.
Been stagnant: “The Age of Customer Capitalism” by Roger L. Martin, Harvard Business Review, Jan./Feb. 2010. “In a drawer”: From a 2012 interview by the author with Keough. “Coca-Cola widows”: “Roberto C. Goizueta, Coca-Cola Chairman Noted for Company Turnaround, Dies at 65,” New York Times, Oct. 19, 1997. Interrupted his remarks: Hays, 147.
“Giving/getting compact”: Yankelovich, New Rules, 7.
“Culture of narcissism”: See Uchitelle, 129. “Have grown wary”: Yankelovich, 8. Managers were thirsting: See “The ‘Me Generation’ in the Executive Suite,” U.S. News & World Report, March 9, 1981. The article is based, in part, on Yankelovich’s research. “Crude individualism”: Uchitelle, 128–129. Also see “The Long Exception: Rethinking the Place of the New Deal in American History” by Jefferson Cowie and Nick Salvatore, International Labor and Working-Class History, Fall 2008.
“The logic”: From a 2010 interview by the author with Yankelovich. Also see “Exploring Business’s Social Contract: An Interview With Daniel Yankelovich,” The McKinsey Quarterly, No. 2, 2007. Also see Stiglitz, 14. 90-plus percent: In 2012, about 9 million US employees held stock options, according to the National Center for Employee Ownership, out of a total workforce of about 143 million. Also see Reich, Saving Capitalism, 92. Going up faster: “U.S. Executive Compensation in Historical Perspective” by Harwell Wells, Legal Studies Research Paper Series, No. 2011–19, Temple University Beasley School of Law, 2011. 20 times: Data on CEO-to-average-worker data are taken from “Top CEOs Make 300 Times More than Typical Workers” by Lawrence Mishel and Alyssa Davis, Economic Policy Institute, June 21, 2015. The 376-to-1 ratio in 2000 marked the greatest disparity ever. In 2014, the gap was 303-to-1. Also see “Supersize This: How CEO Pay Took Off While America’s Middle Class Struggled” by John Alexander Burton and Christian E. Weller, Center for American Progress, May 2005; Blair’s essay in Cornelius and Kogut, 61; Cappelli, 237–238; Reich, Saving Capitalism, 108. For a look at how public policy helped lead to “blank checks in the boardroom,” see Hacker and Pierson, 61–66. Exceedingly debatable: Dorff, 156. “Lucky dollars”: Dorff, 112; Bebchuk and Fried, 123; Piketty, 334–335.
In 1958: “‘Conable’s Problem’: Fight With IRS on Pensions,” Washington Post, July 3, 1978. Also see “Digest of Profit-Sharing, Savings, and Stock Purchase Plans,” Bulletin No. 1325, U.S. Department of Labor, April 1962. “Running dogs”: “‘Conable’s Problem’: Fight With IRS on Pensions,” Washington Post, July 3, 1978. Change the rules: See “401(k) Plans: A 25-Year Retrospective,” Investment Company Institute, Nov. 2006.
“No discussion”: “You Can Thank or Blame Richard Stanger for Writing 401(k),” InvestmentNews, Feb. 3, 2014. Also see Hacker, The Divided Welfare State, 165–166. “Person of the century”: See “Paving the Way: They Changed the Face of Investing,” Pensions & Investments, Dec. 27, 1999. Board meeting: These details and the quote from Conable are from Fleming, Window on Congress, 380–381.
Promote profit-sharing: “Profit-sharing is the wave of the future,” Conable said in a campaign ad touting his tussle with the Treasury, “because it increases the participation of the American working man and woman in the profit system.… It must been encouraged, not discouraged” (Catholic Courier-Journal, Oct. 30, 1974).
Expanded rapidly: Ellis, Munnell, and Eschtruth, Falling Short, 15–17. By organized labor: Sass, 139–142; Wooten, 34. About half: Ellis, Munnell, and Eschtruth, 17; “History of Pension Plans,” Employee Benefit Research Institute, March 1998; Wolman and Colamosca, The Great 401(k) Hoax, 48. No pension plan: “Pension Policy and Small Employers: At What Price Coverage?” by Emily S. Andrews, Employee Benefit Research Institute, 1989; Ferguson and Blackwell, 184. As a third: Wooten, 166. This figure is based on an analysis performed by A.S. Hansen, an actuarial consulting firm, in 1971. Some in the industry argued that this number was overly pessimistic because it incorrectly presupposed that workers wouldn’t move on and receive pensions from a different employer. Meanwhile, critics of the private pension system in the United States, such as liberal Republican senator Jacob Javits of New York, presented reports suggesting a far worse picture than Hansen offered. “Must be evident”: April 18, 1991, letter from Articolo to General Electric, HQP. One of hundreds: As reflected in HQP. Pensions vanish: Ferguson and Blackwell, 7; Ellis, Munnell, and Eschtruth, 17. “This myth”: From a 2013 interview by the author with Benna.
The 25 million: “Large Declines in Defined Benefit Plans Are Not Inevitable: The Experience of Canada, Ireland, the United Kingdom, and the United States” by John A. Turner and Gerard Hughes, Pensions Institute, April 2008. In 1975, about twenty-seven million people had defined-benefit plans and eleven million had defined-contribution plans. Typically equal: Zelinsky, The Origins of the Ownership Society, 1; Ghilarducci, 3.
You were sunk: See Hacker, The Great Risk Shift, 109–128; “The State of American Retirement” by Monique Morrissey, Economic Policy Institute, March 3, 2016; Ellis, Munnell, and Eschtruth, 47–56; Zelinsky, 8–15; Ghilarducci, 114–122; Lowenstein, 227; “Should the 401(k) Be Reformed or Replaced?” New York Times, Sept. 11, 2012. “Strike it rich”: Transcript of the conference “ERISA 20 Years Later—A Look Back, A Look Ahead,” Dec. 6, 1994, edited by Dallas L. Salisbury, president of the Employee Benefits Research Institute. “Screw your employees”: Ferguson and Blackwell, 174.
“Three-legged stool”: From a 2013 interview by the author with Benna. A pioneer: Benna is widely credited with being the “father of the 401(k),” but others were also working on the idea around the same time. See, for instance, “Toward a More Complete History: Johnson & Johnson’s 401(k) Nursery,” EBRI Notes, Employee Benefit Research Institute, Vol. 24, No. 12, Dec. 2003. Also see “History of 401(k) Plans: An Update,” Facts from EBRI, Employee Benefit Research Institute, Feb. 2005. By 1985: “Large Declines in Defined Benefit Plans Are Not Inevitable: The Experience of Canada, Ireland, the United Kingdom, and the United States” by John A. Turner and Gerard Hughes, Pensions Institute, April 2008. The authors cite Labor Department data. Ellis, Munnell, and Eschtruth (26–27), using other government data for their calculations, show the same trend unfolding, albeit more slowly. Hardly any: Ellis, Munnell, and Eschtruth, 24; Sass, 245. Became routine: Ellis, Munnell, and Eschtruth, 24; Ghilarducci, 92; “The Death Knell of Traditional Defined-Benefit Plans: Avoiding a Race to the 401(k) Bottom” by Janice Kay McClendon, Temple Law Review, Vol. 80, No. 3, Fall 2007. Replace them: In 2010, General Electric closed its defined-benefit pension plan for newly hired salaried employees and offered them 401(k)s instead. General Motors froze its defined-benefit plans for white-collar workers in 2006, and then ended its traditional pensions altogether in 2012, shifting about 19,000 US salaried workers hired before 2001 into 401(k)s. In 2009, Coca-Cola said it was shutting down its defined-benefit plans and moving all of its US employees to a “cash-balance plan.” And Kodak announced a similar move in 2014. Although cash-balance plans are technically part of the defined-benefit family, they are not as favorable to retirees as are traditional pensions because instead of getting a check for life, they get a lump sum. For an exploration of why cash-balance plans are advantageous for companies but not for workers, see Schultz, Retirement Heist, 33–38. Also see “Cash Balance Pension Plan Conversions: An Analysis of Motivations and Pension Costs” by Julia D’Souza, John Jacob, and Barbara Lougee, AAA 2009 Financial Accounting and Reporting Section Paper, Dec. 2012; Fraser, White-Collar Sweatshop, 73; “Information on Cash Balance Pension Plans,” General Accounting Office, Oct. 2005; “The Pros and Cons of Cash Balance Pension Plans,” Kiplinger’s Retirement Report, Oct. 2014; Hacker, The Divided Welfare State, 5–6.
Easily move: Ferguson and Blackwell, 172–173; Zelinsky, 37; Ellis, Munnell, and Eschtruth, 25. Employees who were leaving their company also had the option of cashing out of their 401(k) accounts, but if they were younger than fifty-nine years and six months, they would have to roll the money into an Individual Retirement Account or face taxes and a 10 percent penalty. For a well-argued counterpoint to the view that 401(k) plans make sense because of increased worker mobility, see Ghilarducci, 69–71. Often back-loaded: Zelinsky, 35–36. Also see Ghilarducci, 80.
Step in and pay: Ferguson and Blackwell, 108–109; Lowenstein, 45. A portion: The maximum pension benefit guaranteed by the PBGC is set by law and adjusted annually. No more disasters: Ferguson and Blackwell, 7; Wooten, 78–79; Ellis, Munnell, and Eschtruth, 17–18; Greenhouse, 283; Lowenstein, 45. Also see Hacker, The Divided Welfare State, 147–153. Assume responsibility: As of 2015, the PBGC paid for monthly retirement benefits, up to a guaranteed maximum, for nearly 826,000 retirees in 4,800 single-employer and multiemployer pension plans that couldn’t pay promised benefits. The PBGC was responsible for the current and future pensions of about 1.5 million people—a figure that includes those who hadn’t yet retired and participants in multiemployer plans receiving financial assistance. Insurance premium: The size of the premium is determined according to the number of workers and retirees covered by a plan. Hassle and expense: Zelinksy, 42–45. Also see “A History of Good Intentions Gone Awry,” Pensions & Investments, Sept. 6, 1999.
A third to half: Sass (246) says that after employers pay the operating expenses and a partial match, the typical 401(k) costs about 2 percent to 3 percent of payroll. A traditional pension plan often costs 7 percent to 8 percent of payroll, “plus the hefty financial risk.” Also see Wolman and Colamosca, 155; Ghilarducci, 125; Greenhouse, 278. If they cut: Schultz, 54–57; “401(k): A Flood of Plans, Assets,” Pensions & Investments, Oct. 19, 1998. Also see Lowenstein, 56–58. “Newfound tricks”: Schultz, 4. Hundreds of: Schultz, 57. Many of these companies, she notes, cut their pensions by switching to less generous “cash-balance plans,” which are defined-benefit plans but share some characteristics with 401(k)s. On this, see Schultz, 33–38.
Any better: Ellis, Munnell, and Eschtruth, 3, 17. Meanwhile, for employees with lower incomes, things actually got much worse: Many of them were excluded from 401(k) plans because doing so helped higher-paid workers take fuller advantage of IRS rules and maximize their own benefits. See Schultz, 140–142; Ghilarducci, 36. Numerous pitfalls: Greenhouse, 286–288. Less than $400: Ellis, Munnell, and Eschtruth, 3. Also see Lowenstein, 55; “The Champions of the 401(k) Lament the Revolution They Started,” Wall Street Journal, Jan. 2, 2017. Had fallen: “How Older Women Are Reshaping U.S. Job Market,” Wall Street Journal, Feb. 22, 2016. Also see Lowenstein, 28. Keep working: Ghilarducci, 219–227; Lowenstein, 28; Greenhouse, 277–278. For a poignant journalistic account of this phenomenon, see “The End of Retirement” by Jessica Bruder, Harper’s, Aug. 2014.
“Comports so well”: Zelinsky, 30. He reiterates this point throughout the book. Big unions: Ghilarducci, 232–234. Group solidarity: Zelinsky, 33; Ghilarducci, 242. “Collective solution”: Transcript of the conference “ERISA 20 Years Later—A Look Back, A Look Ahead,” Dec. 6, 1994, edited by Dallas L. Salisbury, president of the Employee Benefits Research Institute. “Do-it-yourself”: Ghilarducci, 110. Prized self-reliance: For a fascinating exploration of this idea, see the preface to the 1996 edition of Bellah, Madsen, Sullivan, Swidler, and Tipton, Habits of the Heart.
“No layoffs”: “He Put the Kick Back into Coke,” Fortune, Oct. 26, 1987. Greising (239) notes that there would be a relatively small layoff, of 200 employees, in 1988—the only mass reduction in headcount under Goizueta.
Fired dozens: Greising, 230; Pendergrast, 336.
More than 150: Harrigan, Managing Maturing Businesses, 68. She reports that in 1988, there were 185 independent bottlers in the Coke system, down from 365 a decade before. His approach: Greising, 63–64, 141. “Refranchising”: Greising, 141. To a minimum: Greising, 148. Was presented: Greising, 140–149. In the South: This was JTL Corp. In the West: This was BCI Holdings, a division of Beatrice Cos.
Overloaded with debt: Greising, 147; Pendergrast, 369. For the answer: Greising, 149; Pendergrast, 369–370. Really in charge: From a 2012 interview by the author with Brian Dyson, the first president of Coca-Cola Enterprises; Greising, 149–150; Pendergrast 369. Could now dump: Greising, 149. Depreciating assets: From a 2011 interview by the author with former Coca-Cola executive Jack Bergstrand. Lots of soda concentrate: Hays, 152–156. Send dividends: Greising, 150. Money machine: Hays, 157. CCE’s initial public offering was, however, not as successful as Goizueta had hoped it would be. See “Coke Bottler’s Reception on Wall St. Disappoints,” New York Times, Nov. 22, 1986; Greising, 152–154; Pendergrast, 369–370. For a critical look at how the “49% solution” played out over the longer term, see “The Real Thing: Bottling Plan Taps Coke’s Profits,” CFO Magazine, April 1, 2000. “Has margins”: From a 2013 interview by the author with Ted Highberger, Bergstrand’s colleague at Coca-Cola.
More than 1,000: “Coke in Bitter Legal Fight Over Cost of Sweetener,” New York Times, Sept. 22, 1989. “Moving fast”: From a 2012 interview by the author with Casey.
“I didn’t meet”: All quotes from Bergstrand and details on his life and career through the end of the chapter are from a series of interviews with him by the author in 2011, 2012, and 2013.
“Running off information”: From a 2013 interview by the author with Highberger.
String of acquisitions: Between August 1987 and December 1991, CCE bought, among others, Valley Bottlers in Texas; Mid-Atlantic Coca-Cola Bottling; Miami/Memphis Bottlers, Arkansas Bottlers; and the Johnston Coca-Cola Bottling Group for a total of $2.7 billion. It also sold some bottling entities during that period, but its acquisitions greatly eclipsed its divestitures. New efficiencies: CCE annual reports show that right after it went public, the company was doing about $2 billion worth of business annually across thirty-one states. Five years later, CCE was supplying soft drinks in thirty-seven states and its revenues had doubled to $4 billion. And yet its headcount over that period was up by a relatively tiny amount—from 21,000 employees to just 25,000. Also see Hays, 156. “Economies of scale”: “Coke Shakes Up L.A. Bottling Unit—and Area’s Soft-Drink Industry as Well,” Los Angeles Times, Aug. 15, 1987.
Had thought up: Oliver, 49–53; Tedlow, 125–126. “Was reviled”: From a 2013 interview by the author with Highberger.
One of those: All details on Maiocco’s life and career, as well as all quotes from him, through the end of the chapter are from a 2013 interview by the author with Maiocco.
Pale and fatigued: Hays, 162–165; Greising, 301–302. Three packs: Hays, 163.
Heir apparent: Greising, 303; Hays, 166.
“Loved this company”: Greising, 304. Coke’s stock: Greising, xvii.
Check the machine: Greising, 302; Pendergrast, 421.
File contained: According to the National Archives and Records Administration. “Court decided”: From a 2013 interview by the author with the attorney, J. Douglas Peters. See Sprague v. General Motors, US Court of Appeals, Sixth Circuit, Nos. 94–1896, 94–1897, 94–1898 and 94–1937 (1998). Also see Schultz, 168–169.
Sprague had joined: All of the details about Sprague’s life and career are from testimony and documents in Sprague v. General Motors, US District Court, Eastern District of Michigan, 90-CV-70010 (1993); 2013 interviews by the author with Sprague’s sons, Robert Jr. and Bill.
Approached him: Unless otherwise noted, all details throughout the chapter on GM’s early retirement programs and health-care benefits, as well as employees’ quotations on these matters, are drawn directly from the court record in Sprague v. General Motors, Case No. 90-CV-70010. Early retirement: Sprague elected to take part in a program known as “special early retirement.” GM had introduced this program in 1974. $63 billion: Fortune 500 list for 1979. 620,000 US workers: “A Brief History of General Motors Corp.,” Associated Press, Sept. 14, 2008. Profit stood: Fortune 500 list for 1979. Sent a note: From a 2013 interview by the author with Hartwig.
Huge losses: Ingrassia, Crash Course, 80. Since 1921: “General Motors Reports ’80 Loss of $763 Million,” New York Times, Feb. 3, 1981; Kanter, The Change Masters, 313. Eked out: “G.M. Posts Profit for 1981 as Slump in Sales Persits,” New York Times, Feb, 2, 1982. Credit rating: “Rating on G.M.’s Bonds Is Cut to AA by Moody’s,” New York Times, Nov. 19, 1981; “G.M. Bond Rating Cut by S.&P.,” New York Times, Nov. 21, 1981. J-car: “General Motors: A Giant in Transition,” New York Times, Nov. 14, 1982; Keller, Rude Awakening, 71–72. Agreed to “givebacks”: Ingrassia, 80. Big bonuses: Ingrassia and White, 73; Ingrassia, 80.
“Nervous breakdown”: Ingrassia and White, Comeback, 96–97. Also see Keller, Collision, 32; Maynard, Collision Course, 43. Running joke: Ingrassia, 87. “Tough to operate”: “U.S. Cars Come Back,” Fortune, Nov. 16, 1992, quoting GM’s Jack Smith.
Warranty claims: Ingrassia and White, 98. Catch on fire: Ingrassia and White, 105–107. “Biggest catastrophe”: “U.S. Cars Come Back,” Fortune, Nov. 16, 1992. Mistakenly sticking: Ingrassia and White, 111. Also see Ingrassia, 91; Maynard, 114. Market share: “U.S. Cars Come Back,” Fortune, Nov. 16, 1992. “Vastly underestimated”: “A Real Bailout for Auto Makers,” Barron’s, Dec. 1, 2008. Also see Ingrassia and White, 172.
GM announced: “General Motors to Shut 11 Plants; 29,000 Workers Will Be Affected,” New York Times, Nov. 7, 1986; “GM’s November Massacre,” U.S. News & World Report, Nov. 17, 1986. It had lost: GM’s lost market share, as well as the gains made by the other automakers, are reflected in annual figures provided by WardsAuto.
Phasing out: “GM Offers White-Collar Workers Incentives to Leave,” United Press International, Aug. 25, 1986; Ingrassia and White, 115. “A direct link”: “G.M.’s Cuts Reflect a Long-Term Trend,” New York Times, Nov. 10, 1986.
Since 1979: John Paul MacDuffie’s essay “The Changing Status and Roles of Salaried Employees in the North American Auto Industry” in Osterman, Broken Ladders, 84–89. Nearly 30,000: “Demolition Means Progress: Race, Class, and the Deconstruction of the American Dream in Flint, Michigan,” a doctoral dissertation by Andrew R. Highsmith, University of Michigan, 2009.
“Two more friends”: “Dance Band on the Titanic: Auto World and the Death of Flint” by Michael Moore, Michigan Voice, Sept. 1984.
Threatened to eat into: Statement of UAW President Owen Bieber before the US Senate Subcommittee on Labor, Jan. 26, 1987, UAW. “Fucking terrorist”: Moore, Here Comes Trouble, 312. Critics skewered: Among the toughest critics in this regard were Harlan Jacobson and Pauline Kael. “Hardships associated”: “Effects of Plant Closing Research Study: Final Report, Michigan Health and Social Security Research Institute, Fall 1991, UAW. For more on the mental-health aspects of layoffs, see Uchitelle, 7, 120, 178–204, 228–229; Swasy, 63–88.
“Thrown away”: Uchitelle, 35. “Moral bedrock”: Newman, Falling from Grace, 175.
Still count on: “G.M.’s Jobless Net: How Safe?” New York Times, Nov. 12, 1986. Also see “Auto Industry Experiments With the Guaranteed Income Stream” by Peter Cappelli, Monthly Labor Review, July 1984. Had been enlarged: “Wage Chronology: Ford Motor Company, June 1941–September 1973,” Bulletin 1787, US Bureau of Labor Statistics, 1973; “UAW Won Protection from Layoff After Grueling 68-day Strike in ’67,” Automotive News, June 16, 2003.
Jobs Bank: Regarding the origins of the program, see “Detroit’s Symbol of Dysfunction: Paying Employees Not to Work,” Wall Street Journal, March 1, 2006. Ingrassia, 87; Lutz, 30. 5,000 or so: “G.M.’s Jobless Net: How Safe?” New York Times, Nov. 12, 1986. Gross perversion: “Detroit’s Symbol of Dysfunction: Paying Employees Not to Work,” Wall Street Journal, March 1, 2006; “The End of the Jobs Bank, a Symbol of Excess,” Automotive News, Jan. 27, 2014. “Welfare mother”: Autoworkers Adjust to Job Banks’ End as GM, Ford Try to Rebound,” Bloomberg, Aug. 25, 2010. Also see Lowenstein, 52–53.
“Job security” measures: For a discussion of how the UAW came to focus on job security as its main goal, see “Labor Relations in the Unionized Automobile Assembly Industry in the United States: 1961–2006” by Richard N. Block, paper prepared for the Local Legislative Agenda for the Automotive Partnership Council for North America, Toluca, Mexico, July 19–21 2006; “Factors Influencing Employment in the U.S. Automobile Industry” by Paul S. Davies, The Park Place Economist, Illinois Wesleyan University, Spring 1983. Smaller and smaller: MacDuffie’s essay in Osterman, Broken Ladders, 84–89; “Auto Industry Jobs in the 1980s: A Decade of Transition” by Christopher J. Singleton, Monthly Labor Review, Feb. 1992.
“Strategic retreat”: “GM to Reduce Capacity to Match Its Sales—Move to Shrink Itself Is First for Auto Maker,” Wall Street Journal, April 25, 1988. Ephlin’s quote is from the same article.
Shelling out 13 percent: From the testimony of GM officials in Sprague v. General Motors, US District Court, Eastern District of Michigan, 90-CV-70010 (1993). “Serious disadvantage”: Testimony before the US Senate Finance Committee hearing on “Comprehensive Health Care Reform and Cost Containment,” May 6–7, 1992. Also see “A Health-Care Taboo Is Broken,” New York Times, May 8, 1989; Lutz, 29. Ever richer: The 1979 GM-UAW contract was especially generous in this regard. See Lowenstein, 45–46. $1,600 less: Lowenstein, 46. “Firm on wheels”: Lowenstein, 62.
In January 1988: Unless otherwise noted, all details on the changes to GM’s health-care plans—and the reactions to them—through the end of the chapter are from testimony and documents in Sprague v. General Motors, US District Court, Eastern District of Michigan, 90-CV-70010 (1993). Up to $750: For an individual, annual out-of-pocket expenses could be as high as $700 a year. By the early 1990s, that would rise to $1,300. Were affected: “GM Retirees to Protest Cuts in Health Care,” Detroit News, March 19, 1988.
“Will be provided”: The company added that major medical coverage, where retirees had always been asked to pay a share of the premiums and an annual deductible and a copayment was required for certain services, would be “continued for a small monthly contribution.”
A class action: The court ruled that 34,000 “general retirees”—that is, those who’d retired in accordance with the company’s normal criteria, not through an early retirement program—were not allowed to join the class.
It would close: Ingrassia and White, 285; “G.M. Retrenchment to Cut 70,000 Jobs; 21 Plants to Shut,” New York Times, Dec. 19, 1991; “GM Wields the Ax,” Detroit Free Press, Dec. 19, 1991. Also see Keller, Collision, 39–40. “Much different”: Ingrassia and White, 285; “G.M. Retrenchment to Cut 70,000 Jobs; 21 Plants to Shut,” New York Times, Dec. 19, 1991; “GM Plans to Close 21 More Factories, Cut 74,000 Jobs, Slash Capital Spending,” Wall Street Journal, Dec. 19, 1991.
“Economic Pearl Harbor”: This and the Bieber quote are from “Reaction,” Detroit News, Dec. 19, 1991. “Rolling up its sleeves”: “Shakeout at GM,” Detroit News, Dec. 19, 1991. “Sees a snake”: Ingrassia and White, 119; Ingrassia, 91; Maynard, 45. In 1986, GM bought out Perot’s stock for $700 million, and he left the automaker’s board. “Facing reality”: “Reaction,” Detroit News, Dec. 19, 1991. Also quoted in Maynard, 116.
Started at GM: Biographical details on Stempel are from Ingrassia and White, 162–163. Also see Maynard, 14–15. Distinct from: Ingrassia, 96; “Smaller Giant: Huge GM Write-Off Positions Auto Maker to Show New Growth,” Wall Street Journal, Nov. 1, 1990; “Robert Stempel: Man in the Hot Seat,” Time, Nov. 14, 1988. Liked to speak: “American Industry Faces the Challenge of Tougher Times,” New York Times, Dec. 31, 1990.
Thirty-six weeks: “Layoff Provisions Buoy Auto Union,” New York Times, Sept. 19, 1990. Also see Ingrassia, 96. “Level of trust”: “GM, UAW reach agreement,” United Press International, Sept. 17, 1990.
Was sensitive: See “Bob Stempel: GM Made Him Famous; ECD Made Him Happy” by Tom Henderson, Crain’s Detroit Business, May 12, 2011. “Are expendable”: “Smaller Giant: Huge GM Write-Off Positions Auto Maker to Show New Growth,” Wall Street Journal, Nov. 1, 1990. Would boo him: “Layoff Provisions Buoy Auto Union,” New York Times, Sept. 19, 1990.
Half the size: Ingrassia and White, 285; “GM Plans to Close 21 More Factories, Cut 74,000 Jobs, Slash Capital Spending,” Wall Street Journal, Dec. 19, 1991; “G.M. Retrenchment to Cut 70,000 Jobs; 21 Plants to Shut,” New York Times, Dec. 19, 1991.Triggered fears: “GM Fund for Laid-Off Workers in Danger,” Los Angeles Times, Oct. 15, 1992; “G.M. and Its Union Plan to Encourage Early Retirements,” New York Times, Dec. 15, 1992. The exact size of the fund, which was supposed to last until Sept. 1993, was $3.35 billion.
One day after: Ingrassia and White, 183; Ingrassia, 96; Maynard, 101. The recession had officially started in July 1990. Prices spiked: See “Historical Oil Shocks” by James D. Hamilton, University of California at San Diego, Feb. 1, 2011. Consumer confidence: “Consumer Confidence in Worrisome Drop,” New York Times, Aug. 30, 1990. GM would lose: Ingrassia, 96–97; “Big Losses for G.M. and Ford,” New York Times, Feb. 15, 1991; “The G.M. Cutbacks,” New York Times, Feb. 25, 1992. Go bankrupt: Maynard, 246; Ingrassia, 97. “Don’t want to buy”: “GM Strikes 3-Year Deal With UAW,” Los Angeles Times, Oct. 25, 1993. Doing better: Keller, Collision, 38; Maynard, 102.
Leaning on Stempel: Igrassia and White, 277–300; Maynard, 110–112; Keller, Collision, 37–39. Feeling the heat: Useem, Investor Capitalism, 22–24; Monks and Minnow, Corporate Governance, 441–444; Ingrassia and White, 289–291; Osterman, Securing Prosperity, 66. “Status quo”: Useem, Investor Capitalism, 24. Hadn’t bothered: Keller, Collision, 37; Ingrassia and White, 287. Still dithering: Maynard, 15, 126; Ingrassia, 295–296. And grasping: Keller, Collision, 37.
Being considerate: Maynard, 115. In limbo: “Workers Left Wondering If They’ll Be the Ones to Go,” Detroit Free Press, Dec. 19, 1991; “Willow Run, Texas Fight Each Other to Survive,” Detroit News, Dec. 19, 1991. “Has AIDS”: “Reaction,” Detroit News, Dec. 19, 1991. Also quoted in Maynard, 116. Stempel insisted: See “Excerpts from Robert Stempel’s Media Briefing, Questions Pertaining to ‘Whipsawing,” Dec. 18, 1991, UAW. Had been open: “Stempel Issues a Challenge to UAW: Give In or Lose Jobs,” Detroit Free Press, Feb. 25, 1992. Been slower: “GM Forcing Showdown on Work Rules?” Detroit News, Feb. 25, 1992. Also see Maynard, 118–119.
Hot dogs: This detail and the Homer Wiley quote are from “Rage, Relief Mark Decision by GM on Closing Plants,” Wall Street Journal, Feb. 25, 1992. While the Willow Run assembly plant was targeted for closure, a neighboring transmission factory was spared—for a time. In 2010, this other Willow Run facility would also be shuttered as part of GM’s bankruptcy restructuring.
“Got reverent”: “Nobody Ever Thought Plant Would Close,” USA Today, Feb. 25, 1992.
Were reeling: “Tarrytown’s Workers Stunned by GM Move,” The Globe and Mail of Toronto, Feb. 26, 1992.
“Tough and aggravating”: All the quotes from Shore, and details on his life, are from “Former Fiero Worker Has a Sense of Deja Vu,” Detroit News, Feb. 25, 1992. In 1915: “GM Tarrytown: An Autobiography,” General Motors Corp., 1996. “GM Gypsies”: Besides the Detroit News article on Shore, also see, for instance, “GM Plant Closes in New York; Workers Scatter Across Country,” Wall Street Journal, June 26, 1996.
Worst factories: “Quality of Worklife: Learning from Tarrytown” by Robert H. Guest, Harvard Business Review, July/Aug. 1979; Kanter, The Change Masters, 336. “Goddamn boss”: Grievance case No. L-190, Chevrolet-Tarrytown, Jan. 11, 1967, UAW. “Were scum”: From a 2012 interview by the author with Marmo. “Jump up and down”: “Quality of Worklife: Learning from Tarrytown” by Robert H. Guest, Harvard Business Review, July/Aug. 1979. “Was destructive”: “Worker Participation: A Joint Union-Management Venture at GMAD-Tarrytown,” April 1978, UAW.
Out of business: Kanter, The Change Masters, 336. Unveiled a program: The idea of a QWL program was first introduced as part of the UAW’s 1973 national contract with GM. Under QWL: See “Quality of Worklife: Learning from Tarrytown” by Robert H. Guest, Harvard Business Review, July/Aug. 1979; “Worker Participation: A Joint Union-Management Venture at GMAD-Tarrytown,” April 1978, UAW.
“Half way”: “Worker Participation: A Joint Union-Management Venture at GMAD-Tarrytown,” April 1978, UAW.
“Olive branch”: “Worker Participation: A Joint Union-Management Venture at GMAD-Tarrytown,” April 1978, UAW. More than 3,000: “Quality of Worklife: Learning from Tarrytown” by Robert H. Guest, Harvard Business Review, July/Aug. 1979; Kanter, The Change Masters, 336. “A team”: From a 2012 interview by the author with Inzar. Was enormous: “Quality of Worklife: Learning from Tarrytown” by Robert H. Guest, Harvard Business Review, July/Aug. 1979; Kanter, The Change Masters, 336. “Like human beings”: Cole, Work, Mobility, and Participation, 254.
“Screw the union”: Kanter, The Change Masters, 337. Turned around: Kanter, The Change Masters, 338–339.
“Go back down”: Milkman, Farewell to the Factory, 168. Intended to undermine: Katz, Shifting Gears, 86–87. “Just go ahead”: “UAW Girds for Debate on ‘Cooperation’—Contract Goals to Be Discusssed at Convention,” Wall Street Journal, April 10, 1987. “Rest room”: Ingrassia, 9.
Quality Network: Weekley and Wilber, United We Stand, 209–216. Also see “People Power: GM Woos Employees By Listening to Them, Talking of Its ‘Team,’” Wall Street Journal, Jan. 12, 1989. NUMMI: See Paul S. Adler’s essay “The ‘Learning Bureaucracy’: New United Motors Manufacturing, Inc.” in Staw and Cummings, Research in Organizational Behavior, 111–194; “How to Change a Culture: Lessons from NUMMI” by John Shook, MIT Sloan Management Review, Winter 2010; “New United Motors Manufacturing, Inc. (NUMMI)” by Charles O’Reilly, Stanford Business School case study, revised Nov. 2004; Maynard, 83–84. For a critical view of the labor-management relationship at NUMMI, see Parker and Slaughter, Working Smart, 44–55. The NUMMI venture would end in 2010. “Participatory management”: “Building Cars Japan’s Way,” Newsweek, March 31, 1986. Such values: Ingrassia, 118–121; Rubinstein and Kochan, Learning from Saturn, 24–26; Maynard, 48–64; “Toward a Stakeholder Theory of the Firm: The Saturn Partnership” by Thomas A. Kochan and Saul A. Rubinstein, Organization Science, Volume 11, Issue 4, July/Aug. 2000; Uchitelle, 144. In 2003, Saturn workers would vote to return to the GM-UAW master contract, unwinding the unit’s special culture. Six years later, GM halted Saturn production, and a year after that the brand was discontinued. Trailblazer: Ingrassia, 119. Also see “Revolution by Evolution: The Changing Relationship Between GM and the UAW” by Donald F. Ephlin, The Academy of Management Executive, Vol. 2, No. 1, Feb. 1988. “Lowest possible level”: “The Birth of GM’s Saturn Corporation (Sample Chapter)” by Donald F. Ephlin, UAW. For a critical view of the labor-management relationship at Saturn, see Parker and Slaughter, 95–206; Maynard, 140.
Had evolved: See Paul S. Adler’s essay “Toward Collaborative Interdependence: A Century of Change in the Organization of Work,” in Kaufman, Beaumont, and Helfgott, Industrial Relations to Human Resources and Beyond, 337–385. Willing to try: Lawler, Mohrman, and Ledford, Employee Involvement and Total Quality Management, 9–10.
More than a third: See “How Common Is Workplace Transformation and Who Adopts It?” by Paul Osterman, Industrial and Labor Relations Review, Vol. 47, No. 2, Jan. 1994. For other surveys measuring the extent to which companies had adopted various worker participation programs, see Cappelli, Bassi, Katz, Knoke, Osterman, and Useem, Change at Work, 94–99; Osterman, Securing Prosperity, 99; Eileen Applebaum and Peter Berg’s essay “High-Performance Work Systems: Giving Workers a Stake” in Blair and Kochan, 102–144. Corning Glass: Cappelli, Bassi, Katz, Knoke, Osterman, and Useem, 93–94. Xerox: Cappelli, Bassi, Katz, Knoke, Osterman, and Useem, 110. J.C. Penney: Kanter, The Change Masters, 167. Texas Instruments: Peters and Waterman, In Search of Excellence, 49. Kodak: See “TQM’s Challenge to Management Theory and Practice” by Robert M. Grant, Rami Shani, and R. Krishnan, MIT Sloan Management Review, Winter 1994. Coca-Cola: The company introduced its own version of TQM, The Coca Cola Quality System, in 1995. “Foster we/they”: Peters and Waterman, 48–49.
“Been empowered”: Cappelli, Bassi, Katz, Knoke, Osterman, and Useem, 89. Also see Robert Drago’s essay “New Systems of Work and New Workers” in Barker and Christensen, Contingent Work, 144–169. “Fit together”: “UAW Girds for Debate on ‘Cooperation’—Contract Goals to Be Discusssed at Convention,” Wall Street Journal, April 10, 1987.
“Worst thing”: From a 2012 interview by the author with Marmo. Report exalting: “Late Praise for Model Plant,” New York Times, March 1, 1992. Too high: See “The G.M. Cutbacks; A Surprise Cuts Deep in Westchester,” New York Times, Feb. 25, 1992; “Vehicle’s Design Doomed Van Plant,” New York Times, Feb. 26, 1992.
Rolled off: See “GM Plant Closes in New York; Workers Scatter Across Country,” Wall Street Journal, June 26, 1996. Number: “GM Tarrytown: An Autobiography,” General Motors Corp., 1996. Was demolished: See “Mourning a Departed Mainstay,” New York Times, Oct. 7, 1998. Ninety-seven-acre: See “Plan Moves Forward to Redevelop Old GM Plant Site in Westchester County,” Wall Street Journal, May 19, 2014. Down the street: From a site visit by the author in 2012.
Enough alarm: Ingrassia, 308; Maynard, 148. Executive committee: Maynard, 126; Keller, Collision, 47; Ingrassia and White, 296. Also demoted: Maynard, 126; Keller, Collision, 46; Ingrassia and White, 295–296. “Fundamental Change”: Maynard, 4, 130. Found himself isolated: Maynard, 136; Ingrassia and White, 303–308; Keller, Collision, 127. Rumors swirled: Ingrassia and White, 310; Maynard, 149–150.
He resigned: Maynard, 7–8, 151–152; Keller, Collision, 128–129; Ingrassia and White, 314; “What Went Wrong? Everything at Once.” Time, Nov. 9, 1992. Most wretched: See, for instance, “History’s 10 Worst Auto Chiefs,” Fortune, April 3, 2013. Just a victim: Keller, Collision, 129–130; “Shake-Up at G.M.: Stempel Quits Job as Top G.M. Officer in Rift with Board,” New York Times, Oct. 27, 1992. Galvanizing effect: Ingrassia and White, 316; “The High-Energy Board Room,” New York Times, Oct. 28, 1992; Maynard, 6–7. CEO tenure: Judge, The Leader’s Shadow, 23. Also see Mizruchi, 215; “Revolving Door Spins Faster at Top Corporations—Leashes Get Shorter for Executives,” New York Times, July 18, 1997. Annual pension: “Boss’ Severance Rankles Retailer’s Shareholders,” Baltimore Sun, Dec. 18, 1994. Consulting deal: Maynard, 157.
Wasn’t the biggest: “Disposable Workers,” Time, March 29, 1993. Again and again: See, for instance, Lynn, End of the Line, 45; Hatton, 87; Kathleen’s Barker and Kathleen Christensen’s introduction “Controversy and Challenges Raised by Contingent Work Arrangements” in Barker and Christensen, 1; Micklethwait and Wooldridge, The Company, 145.
Manpower had about: “The Diversity of Contingent Workers and the Need for Nuanced Policy” by Stewart J. Schwab, Washington and Lee Law Review, Vol. 52, No. 3, June 1995. “Increasingly becoming”: “Disposable Workers,” Time, March 29, 1993.
To include men: Hatton, 38. “Swelling of the Payroll”: Hatton, 53.
Were pleased: See Osterman, Securing Prosperity, 86; “Working in the Gig Economy Is Both Desirable and Detestable” by Rick Wartzman, Fortune, April 27, 2016. Also see “Valuing Alternative Work Arrangements” by Alexandre Mas and Amanda Pallais, National Bureau of Economic Research, Working Paper No. 22708, Sept. 2016. “Provides the economy”: See Dean Morse’s essay “The Peripheral Worker” in Barker and Christensen, 40.
More than 80 percent: “Contingent and Alternative Employment Arrangements,” Report 900, Bureau of Labor Statistics, Aug. 1995. Also cited in Sharon R. Cohany, Steven F. Hipple, Thomas J. Nardone, Anne E. Polivka, and Jay C. Stewart’s essay “Counting the Workers: Results of a First Survey” in Barker and Christensen, 59. “Major function”: “The Diversity of Contingent Workers and the Need for Nuanced Policy” by Stewart J. Schwab, Washington and Lee Law Review, Vol. 52, No. 3, June 1995. For a counterview about the effectiveness of the “core-periphery model,” see Cappelli, Bassi, Katz, Knoke, Osterman, and Useem, 223–224; Cappelli, 144–146.
Between 10 and 30: The 10 percent figure comes from “Contingent and Alternative Employment Arrangements,” Report 900, Bureau of Labor Statistics, Aug. 1995. Also cited in Weil 272; Sharon R. Cohany, Steven F. Hipple, Thomas J. Nardone, Anne E. Polivka, and Jay C. Stewart’s essay in Barker and Christensen, 55. The 30 percent calculation, which includes part-time workers, comes from “The Rise of the Contingent Work Force: The Key Challenges and Opportunities” by Richard S. Belous, Washington and Lee Law Review, Vol. 52, No. 3, June 1995. Also see Cappelli, 139; Harrison, Lean and Mean, 201–202. Especially fast: Tilly (Half a Job, 1) notes that the temporary workforce “exploded 15-fold between 1968 and 1992 (while the labor force as a whole did not even double).” Also see Hatton, 67, 90; Cappelli, 140; “Taking the Workers Back Out: Recent Trends in the Structuring of Employment” by Jeffrey Pfeffer and James N. Baron, Research in Organizational Behavior, Vol. 10, 1988; Hacker, The Great Risk Shift, 81. “To the Caribbean”: Hatton, 71. Two-thirds of temps: “Contingent and Alternative Employment Arrangements,” Report 900, Bureau of Labor Statistics, Aug. 1995. Also cited in Sharon R. Cohany, Steven F. Hipple, Thomas J. Nardone, Anne E. Polivka, and Jay C. Stewart’s essay in Barker and Christensen, 59. Less per hour: Sharon R. Cohany, Steven F. Hipple, Thomas J. Nardone, Anne E. Polivka, and Jay C. Stewart’s essay in Barker and Christensen, 51, 64. Also see Cappelli, 140; Hatton, 131; “Nonstandard Employment Relations: Part-time, Temporary and Contract Work” by Arne L. Kalleberg, Annual Review of Sociology, Volume 26, 2000; “Contingent Workers: Incomes and Benefits Lag Behind Those of Rest of Workforce,” US General Accounting Office, June 2000. Usually received: Hatton, 129; “The Expendables: How the Temps Who Power Corporate Giants Are Getting Crushed,” ProPublica, June 27, 2013; Deal and Kennedy, 99; Fraser, White-Collar Sweatshop, 74; Osterman, Securing Prosperity, 88; Greenhouse, 132. Safety training: “How to Improve Temp Worker Safety,” ProPublica, Dec. 27, 2013. Battled unions: Hatton, 78–81. Also see M. Catherine Lundy, Karen Roberts, and Douglas Becker’s essay “Union Responses to the Challenges of Contingent Work Arrangements” in Gleason, The Shadow Workforce, 99–132. “Precarious nature”: “Outsourcing and the Changing Nature of Work” by Alison Davis-Blake and Joseph P. Broschak, Annual Review of Sociology, 2009.
Nearly all of the growth: Tilly, 14–15. Also see “Short Hours, Short Shrift” by Chris Tilly, Economic Policy Institute, 1990. Also see Greenhouse, 128.
“A second class”: Kathleen Christensen’s essay “Trends in Family-Sensitive Firms” in Barker and Christensen, 125. The term “contingent work,” coined by labor economist Audrey Freedman in 1985, has been defined in various ways. But Baker and Christensen use it to mean “jobs that are done on temporary, self-employed contract, or involuntary part-time bases.” Also see Greenhouse, 117–120; “Part-Time Work New Labor Trend,” New York Times, July 9, 1986. Biting articles: Kelly, Best of Temp Slave!. Also see Hatton, 87. Cult classic: Saval, 279. “Soul-sucking”: “Mr. Beavis Goes to Work,” New York Daily News, Feb. 21, 1999. “Permatemps”: See “Rise of The Permatemp,” Time, July 12, 1999. Over time, activists, legislators, and others questioned the temp industry’s definition of employer status. Instead of defining the employer by whose name was on a worker’s check, they wanted it defined by where the work was done, for how long, and who controlled it. The landmark case in this area is Vizcaino v. Microsoft. The temp workers won, but it wasn’t a total victory for these employees. The court also made clear that, as long as companies were explicit about it, they could exclude temps and other nonstandard workers from various compensation and benefit plans. For a thorough analysis of the ruling and its implications, see Hatton, 100–106. “Not exploiting”: “Disposable Workers,” Time, March 29, 1993. Also quoted in Hatton, xxviii.
More temps in: Regarding the expansion of contingent work into all manner of jobs, including professional and technical positions on one end and day laborers on the other, see Hatton, 95–97. Also see Fraser, White-Collar Sweatshop, 50–53. More work out: Weil, 269–271. The extent of domestic outsourcing is, however, difficult to measure, and there is a dearth of good research on the subject. In regard to these shortcomings, see “Domestic Outsourcing in the U.S.: A Research Agenda to Assess Trends and Effects on Job Quality” by Annette Bernhardt, Rosemary Batt, Susan Houseman, and Eileen Appelbaum, Future of Work Symposium, US Department of Labor, Dec. 2015. Always depended on: Lynn, End of the Line, 7; Of the pioneers: “10 Years That Shook IT,” CIO, Oct. 1, 1999; Lynn, End of the Line, 194; “CIO Hall of Fame: Katherine M. Hudson,” CIO, Sept. 15, 1997; “Kodak Exec Relates Outsourcing Lessons,” Network World, Dec 17, 1990. Data centers: Kodak outsourced other parts of its information-services operation to Digital Equipment Corp. and Businessland. 5 to 15 percent: Lynn, End of the Line, 194. “Photographic company”: From a 2013 interview by the author with Hudson.
“No matter what”: From a 2013 interview by the author with Hudson.
Brought up: Biographical details are from a 2013 interview by the author with Hudson; “An Unusual Climb at Kodak Wins Her a Place at the Top,” New York Times, Jan. 30, 1994. “Moving our people”: From a 2013 interview by the author with Hudson.
“Doing the Kodak”: “Can Outsourcing Save Jobs?,” CIO Insight, March 25, 2005. Tried to fight: M. Catherine Lundy, Karen Roberts, and Douglas Becker’s essay in Gleason, 112–116. Too weak: Lynn, End of the Line, 142. 100,000 jobs: “Globalization and Jobs in the Automotive Industry” by Timothy J. Sturgeon and Richard Florida, Industrial Performance Center, Massachusetts Institute of Technology Working Paper Series, Nov. 2000. Also see Lynn, End of the Line, 144.
They paid: “Globalization and Jobs in the Automotive Industry” by Timothy J. Sturgeon and Richard Florida, Industrial Performance Center, Massachusetts Institute of Technology Working Paper Series, Nov. 2000. Janitors and guards: Weil, 90–91. Food-service workers: “Who’s the Boss: Restoring Accountability for Labor Standards in Outsourced Work” by Catherine Ruckelshaus, Rebecca Smith, Sarah Leberstein, Eunice Cho, National Employment Law Project, May 2014. Call centers: “Behind Shrinking Middle-Class Jobs: A Surge in Outsourcing,” Los Angeles Times, June 30, 2016. Warehouses: See “The New Blue Collar: Temporary Work, Lasting Poverty and the American Warehouse,” Huffington Post, Dec. 20, 2011. More vulnerable: Weil, 180. Also see Greenhouse, 10–11.
Found the engineer: Maynard, 90–91; Keller, Collision, 149.
Promoted to: Maynard, 91, 173; Ingrassia and White, 395. Sending the work: Lynn, End of the Line, 23; Keller, Collision, 151; Maynard, 92. “Worldwide purchasing”: Maynard, 91. Began calling him: Ingrassia and White, 395; Lynn, End of the Line, 19. Also see Keller, Collision, 153.
Which spent: Maynard, 172. “Warriors”: Maynard, 178; Ingrassia and White, 396. Fifteen-hour days: Keller, Collision, 148; Lynn, End of the Line, 21. “Warrior’s Diet”: Maynard, 178; Keller, Collision, 149–150; Lynn, End of the Line, 21. “Direct correlation”: Keller, Collision, 150. Billions of dollars: Maynard, 180181; Lynn, End of the Line, 21; Keller, Collision, 177. Different accounts put the savings at anywhere from $2 billion to $7 billion. Six rounds: Ingrassia and White, 396. Also see “Inside GM Purchasing: Sorting Out the Winners and Losers,” WardsAuto, March 1, 1995.
“Fighting to save”: Maynard, 172; Lynn, End of the Line, 19. “Love the union”: “Why G.M. Buyer Unnerves Suppliers,” New York Times, Sept. 30, 1992. Wherever they could: Lynn, End of the Line, 23; “G.M. Cost Cutter Sharpens His Ax,” New York Times, June 9, 1992. Lopez wouldn’t stay long at GM, and his defection to Volkswagen—allegedly with GM secrets in his possession—set off a corporate soap opera of unrivaled proportions. For details see Ingrassia and White, 391–413; Maynard, 181–196. Also see Cappelli, 104.
More than fifty: “A 20-Year G.M. Parts Migration To Mexico,” New York Times, June 24, 1998. Also see Jorge Carrillo’s essay “Delphi Mexico: From an Assembly Model to a Centralized Coordination Model” in Kawamura, Hybrid Factories in the United States, 257–267. “Hardly anybody”: “A 20-Year G.M. Parts Migration To Mexico,” New York Times, June 24, 1998.
“Paid around”: Maynard, 175–176. Imported about: “The North American Automotive Value Chain: Canada’s Role and Prospects” by Timothy J. Sturgeon, Johannes Van Biesebroeck, and Gary Gereffi, International Journal of Technological Learning, Innovation, and Development, Vol. 2, Nos. 1–2, 2009.
Over decades: Glickman and Woodward, 167–169. Technology and logistics: Lynn, End of the Line, 109–113; Porter, Competition in Global Industries, 44. “What is new”: “Who Is Us?” by Robert B. Reich, Harvard Business Review, Jan./Feb. 1990. Some experts thought Reich was overstating the matter. For more on this, see Harrison, 222–224.
Taiwan became: Lynn, End of the Line, 60–63. Chinese factories: See “The Growing U.S. Trade Imbalance with China” by Thomas Klitgaard and Karen Schiele, Current Issues in Economics and Finance, Federal Reserve Bank of New York, Vol. 3, No. 7, May 1997. Also see Lynn, End of the Line, 64–69. 11 percent: Reich, The Work of Nations, 122.
General Electric chopped: “Welch’s March to the South,” BusinessWeek, Dec. 6, 1999. “Shocked the system”: Welch, 310. “On a barge”: “GE’s Welch Shares Secrets,” Times-News of Erie, Pa., Nov. 22, 1998. Also prodded: “Welch’s March to the South,” BusinessWeek, Dec. 6, 1999. Also see Fraser, White-Collar Sweatshop, 40.
“Some Americans”: Reich, The Work of Nations, 172.
Texas Instruments: “Who Is Us?” by Robert B. Reich, Harvard Business Review, Jan./Feb. 1990. Opened R&D labs: Reich, The Work of Nations, 123. Hewlett-Packard: Reich, The Work of Nations, 123.
India was becoming: See “India’s IT sector: Back Office of the Global Village,” Mint, April 26, 2016. Also see Greenhouse, 93–94, 203–204. First consolidated: Lynn, End of the Line, 193. “On the cheap”: Lynn, End of the Line, 185. “When I can”: From a 2013 interview by the author with Hudson.
In the 1980s: Regarding some of these early concerns, see “Manufacturing Offshore Is Bad Business” by Constantinos C. Markides and Norman Berg, Harvard Business Review, Sept. 1988. Of sophistry: “The Outsourcing Bogeyman” by Daniel W. Drezner, Foreign Affairs, Vol. 83, No. 3, May/June 2004. Also see Bhagwati, In Defense of Globalization, 18–43. Accounting for: “The Muddles Over Outsourcing” by Jagdish Bhagwati, Arvind Panagariya, and T.N. Srinivasan, Journal of Economic Perspectives, Vol. 18, No. 4, Fall 2004. Also see “The Politics and Economics of Offshore Outsourcing” by N. Gregory Mankiw and Phillip Swagel, National Bureau of Economic Research, Working Paper No. 12398, July 2006; “Offshoring (a.k.a. Offshore Outsourcing) and Job Insecurity Among U.S. Workers” by Linda Levine, Congressional Research Service, updated May 2, 2005. Graver danger: See, for instance, Bhagwati, 142–143. Also see “The Long-Term Jobs Killer Is Not China. It’s Automation,” New York Times, Dec. 21, 2016. Serve local markets: “The Politics and Economics of Offshore Outsourcing” by N. Gregory Mankiw and Phillip Swagel, National Bureau of Economic Research, Working Paper No. 12398, July 2006. Increased their hiring: “Outsourcing and Insourcing Jobs in the U.S. Economy: Evidence Based on Foreign Investment Data” by James K. Jackson, Congressional Research Service, updated May 4, 2005. American affiliates of foreign companies accounted for about 4 percent of total US civilian employment through the 1990s. Also see Glickman and Woodward, 301–302. Warren and Thoms (Battleground Business, 193) note that from 1995 to 2005, employment in foreign-owned auto factories in the United States grew more than 50 percent while domestic car plants lost hundreds of thousands of jobs. Panoply of goods: Greenhouse, 206–207. Other gains have included helping to raise living standards for workers across the developing world. See “In Praise of Cheap Labor” by Paul Krugman, Slate, March 21, 1997.
Hire two people: See “Outsourcing 101,” Wall Street Journal, May 27, 2004. The editorial cites the work of Dartmouth’s Matthew J. Slaughter. Also see “Offshore Jobs and Taxes: Will Democrats Attack?,” Tax Notes, April 7, 2008; “Outsourcing: What’s the True Impact? Counting Jobs Is Only Part of the Answer” by Steven Pearlstein, Washington Post, July 1, 2012; “Big U.S. Firms Shift Hiring Abroad,” Wall Street Journal, April 19, 2011.
“We seek”: Speech transcript from the NAFTA signing ceremony found at the University of Virginia’s Miller Center (millercenter.org/president/speeches/speech-3927). Although Clinton signed the final agreement into law, NAFTA was initiated by George H.W. Bush.
“Giant sucking sound”: Perot, running for the White House as an independent, first said this during the second presidential debate, on Oct. 15, 1992. “The blessings”: “Expanding Trade and Creating American Jobs,” remarks by Bill Clinton, North Carolina State University, Oct. 4, 1992. “Depress wages”: Economists have, in fact, found evidence that imports and offshoring help hold down wages for workers in the United States. See Greenhouse, 212–213; Deal and Kennedy, 156. Also see Harrison, 214.
In conflict: “Clinton Pounds Unions’ Tactics Against NAFTA,” Baltimore Sun, Nov. 8, 1993; Uchitelle, 174. “An obligation”: Speech transcript from the NAFTA signing ceremony found at the University of Virginia’s Miller Center (millercenter.org/president/speeches/speech-3927).
“Even though”: “Jobs, Jobs, Jobs” by Michael Mandel, BusinessWeek, Feb. 21, 1993.
Only ten months: “Understanding the ‘Job-Loss Recovery,’” Public Policy Briefs, Federal Reserve Bank of Boston, No. 04–1, 2004. “Jobless recovery”: See “Jobless Recoveries and the Wait-and-See Hypothesis” by Stacey L. Schreft, Aarti Singh, and Ashley Hodgson, Economic Review, Federal Reserve Bank of Kansas City, Fourth Quarter 2005; “Are Jobless Recoveries the New Norm?” by Murat Tasci, Economic Commentary, Federal Reserve Bank of Cleveland, March 22, 2010; “Jobless Recoveries: Causes and Consequences” by Natalia Kolesnikova and Yang Liu, The Regional Economist, Federal Reserve Bank of St. Louis, April 2011; Stiglitz, 33, 72.
Especially manufacturing: “The 1990–91 Recession: How Bad Was the Labor Market?” by Jennifer M. Gardner, Monthly Labor Review, June 1994. “Labor hoarding”: See “Why Have the Dynamics of Labor Productivity Changed?” by Willem Van Zandweghe, Economic Review, Federal Reserve Bank of Kansas City, Third Quarter 2010; Stiglitz, 182–183; “The Jobless Recovery Has Begun” by Brad DeLong, The Week, July 20, 2009; “The Cyclical Behavior of Labor Productivity and the Emergence of the Labor Hoarding Concept” by Jeff E. Biddle, Journal of Economic Perspectives, Vol. 28, No. 2, Spring 2014. Some have raised questions about the data that underlie the notion that companies have largely stopped labor hoarding. See “Cyclical Variation in Labor Hours and Productivity Using the ATUS” by Michael C. Burda, Daniel S. Hamermesh, and Jay Stewart, National Bureau of Economic Research, Working Paper No. 18603, Dec. 2012; “Economists Use Shoddy Data” by Matthew Yglesias, Slate, Jan. 7, 2013.
Were terminating: This list of companies, as well as Roach’s quote, are from “Even if Downturn Ends, Jobs Aren’t Likely to Return,” Detroit News, Dec. 19, 1991. “To be weathered”: “Has Structural Change Contributed to a Jobless Recovery?” by Erica L. Groshen and Simon Potter, Current Issues in Economics and Finance, Federal Reserve Bank of New York, Vol. 9, No. 8, Aug. 2003.
Overly cautious: Swasy, 41. Fuji and private-label: “A New Sense of Urgency at Kodak,” New York Times, May 3, 1993; “The Battle to Shape Up Kodak,” Fortune, May 31, 1993. Make the leap: Swasy, 29–30: “George Fisher Pushes Kodak Into Digital Era,” Wall Street Journal, June 9, 1995. Since 1957: “Kay R. Whitmore, 72; Led Eastman Kodak in 90’s,” New York Times obituary, July 29, 2004. Fall asleep: Swasy, 41. Bill Gates: Swasy, 44.
Still making money: In 1992, Kodak earned $1.14 billion on sales of $20.2 billion. Outside directors: These included Roberto Goizueta, the CEO of Coca-Cola. Were frustrated: “Contrasting Images: The New Finance Chief At Kodak Has a Style Quite Unlike His Boss’s,” Wall Street Journal, April 28, 1993; “A New Sense of Urgency at Kodak,” New York Times, May 3, 1993; “Eastman Kodak Chief Is Ousted by Directors,” New York Times, Aug. 7, 1993. Swasy (48–49) notes that Monks’s firm wasn’t calling for layoffs specifically. As listless: Swasy, 9. “A glacier”: “Contrasting Images: The New Finance Chief At Kodak Has a Style Quite Unlike His Boss’s,” Wall Street Journal, April 28, 1993.
Lowered its head count: Swasy, 31, 33, 38–39. Another 2,000: Swasy, 50. “Sense of urgency”: “Kodak Chief Seeks Time To Turn Company Around,” Sun-Sentinel of Ft. Lauderdale, Fla., May 13, 1993. Earned a reputation: Swasy, 50–51; “Contrasting Images: The New Finance Chief At Kodak Has a Style Quite Unlike His Boss’s,” Wall Street Journal, April 28, 1993. Abruptly quit: “Kodak Stock Plunges As Officer Quits,” New York Times, April 29, 1993; Swasy, 52.
“Post-Stempel world”: “Contrasting Images: The New Finance Chief At Kodak Has a Style Quite Unlike His Boss’s,” Wall Street Journal, April 28, 1993. Also quoted in Ingrassia and White, 316. Board voted: Swasy 55–56; “Eastman Kodak Chief Is Ousted by Directors,” New York Times, Aug. 7, 1993. Billion dollars: Swasy, 56.
Cut 10,000 jobs: Swasy, 57; “10,000 Jobs to be Cut by Kodak,” New York Times, Aug. 19, 1993. 20,000 positions: Swasy, 56; “10,000 Jobs to be Cut by Kodak,” New York Times, Aug. 19, 1993. A cartoon: Swasy, 58.
Preside over: Swasy (114) notes that by the time Fisher arrived in late 1993, more than 3,000 jobs already had been eliminated. “Have 1,000 people”: “George Fisher Pushes Kodak Into Digital Era,” Wall Street Journal, June 9, 1995. This was Paul Orfalea, the CEO of Kinko’s. The strategy: “George Fisher Pushes Kodak Into Digital Era,” Wall Street Journal, June 9, 1995; Swasy, 185.
Regularly strolled: “Fisher at Center Stage,” Rochester Democrat and Chronicle, Oct. 30, 1994. Employee cafeteria: Swasy, 91. Opposing views: From a 2011 interview by the author with Fisher; Swasy, 132–133. “Sit at the table”: From a 2012 interview by the author with Swift. Pay package: Swasy, 104; “A Builder, Not a Slasher,” Time, Nov. 8, 1993. Also see Cappelli, 84.
Holding employees accountable: Swasy, 165. Wage dividend: “As Kodak Goes, So Does Pay,” Rochester Democrat and Chronicle, Jan. 28, 1995; Swasy, 134. “When I joined”: Testimony of Michael P. Morley during hearings on “Corporate Restructuring and Downsizing” before the U.S. House Budget Committee, March 23, 1995.
Pulled back: Swasy, 196. “Gut-wrenching”: From a 2012 interview by the author with Swift. “Got to do it”: From a 2011 interview by the author with Fisher.
“Dashed to pieces”: Swasy, 68. “Met him”: Swasy, 76.
“New social contract”: “Rebuilding the Social Contract at Work: Lessons from Leading Cases” by Thomas A. Kochan, Futurework, Task Force Working Paper WP09, U.S. Department of Labor, May 1, 1999. For a critical analysis of these types of arrangements—which had also been put into place at Apple, AT&T, and GTE, among others—see Cappelli, 22–33. “Still craved”: Swasy, 199. “Sincere interest”: Swasy, 200.
Kodak announced: Details on the layoffs, as well as Fram’s quote, are from “Kodak Raises Its Job-Cut Total Sharply,” New York Times, Dec. 19, 1997. Also see Fraser, White-Collar Sweatshop, 179–180. It’s important to note that just 8,700, or less than 45 percent, of these job cuts were slated for the United States.
Going from: Employee numbers are from IBM’s online archives. Also stepped up: Cappelli, 120. “Its soul”: Mills, The IBM Lesson, 208.
Nearly $8 billion: Earnings figures are from IBM’s online archives. “As bureaucratic”: Gerstner, Who Says Elephants Can’t Dance?, 23.
Revealed plans: “I.B.M. Chief Making Drastic New Cuts,” New York Times, July 28, 1993. Whether IBM still really had a no-layoff policy before Gerstner came to the company is debatable. Gerstner himself said that for years IBM had been clinging “to the fiction of ‘no layoffs.’” Now, even any such pretense was gone. Also see Osterman, The Truth About Middle Managers, 29–35; Cappelli, 72–74; “The Changing Social Contract in American Business” by Daniel Quinn Mills, European Management Journal, Vol. 14, No. 5, Oct. 1996.
Return to profitability: Earnings figures are from IBM’s online archives. In 1994, IBM turned a profit of more than $3 billion. Computer services: “Now, Big Blue Is at Your Service,” New York Times, Jan. 18, 1998. Venerated leaders: See, for example, “He Loves to Win. At I.B.M., He Did.,” New York Times, March 10, 2002. Eventually laid off: All of the detail on IBM in this paragraph, including Smith’s quote, is from “New IBM Jobs Can Mean Fewer Jobs Elsewhere,” Wall Street Journal, March 8, 2004. Another tactic: “Phantom Workforce,” PLANSPONSOR, Oct. 1994; “I.R.S. Inquiry: Is Worker At I.B.M. Really A Contractor?,” New York Times, July 6, 1995; Cappelli, 74; Uchitelle, 145. Also see Hatton, 76; “Disposable Workers,” Time, March 29, 1993. Employer favorite: Cappelli, 137; Kathleen Christensen’s essay in Barker and Christensen, 121.
“Neutron Lou”: From a 2012 interview by the author with Welch.
Michael Cunningham: All details on, and quotes from, him are drawn from “System Crash” by John Hoerr, The American Prospect, Winter 1994. Also see Fraser, White-Collar Sweatshop, 17–20.
Among many others: See Gandolfi, Corporate Downsizing Demystified, 4. Long be cited: The book grew out of Hammer’s article “Reengineering Work: Don’t Automate, Obliterate,” Harvard Business Review, July/Aug. 1990. “Obliterated”: “Top 10 Influential Business Books of All Time,” Inc., Feb. 6, 2013.
Would be combined: Hammer and Champy, Reengineering the Corporation, 51–52. Also see Osterman, The Truth About Middle Managers, 27–29. “Has been hijacked”: “Time 25,” Time, June 17, 1996. Also see “Michael Hammer, 60, Business Writer,” New York Times obituary, Sept. 5, 2008; “‘Next Big Thing’: Reengineering Gurus Takes Steps to Remodel Their Stalling Vehicles,” Wall Street Journal, Nov. 26, 1996. For a particular harsh critique of reengineering, see Hopper and Hopper, 239–242. Also see Greenhouse, 90; Cappelli, 90–91; Deal and Kennedy, 66–67; Fraser, White-Collar Sweatshop, 177–178; Osterman, Securing Prosperity, 40. “Shedding bodies”: From a 2012 interview by the author with Champy.
Bipolar: See Osterman, Securing Prosperity, 71–72; Greenhouse, 91. “Downsizing Decade”: Gandolfi, 2; Dhar, Strategic Human Resource Management, 220; “Downsizing Without Downgrading: Learning How Firms Manage Their Survivors” by Shimon Dolan, Adnane Belout, and David B. Balkin, International Journal of Manpower, Vol. 21, No. 1, 2000. “The Roaring Nineties”: This is the title of Joseph E. Stiglitz’s 2003 book.
Best of any president: The facts in this paragraph are drawn from “Which Presidents Have Been Best for the Economy?” U.S. News & World Report, Oct. 28, 2015; “The Clinton Economy, in Charts,” Wonkblog, Washington Post, Sept. 5, 2012; “Power of Progressive Economics: The Clinton Years,” Center for American Progress, Oct. 28, 2011; Stiglitz, 6, 74, 77; “The Clinton-Gore Economic Record,” White House news release, Jan. 7, 2000; “Productivity Growth, Its Slowdown in the 1973–90 Period and Its Resurgence in the 1990s: Truth or a Statistical Fluke?” by Nouriel Roubini, Stern School of Business, New York University, 1998; Bernstein, The Reconnection Agenda, 29, 52–53, 176. “To dream”: From President Clinton’s State of the Union address, Jan. 27, 2000.
Increasingly split: “The Polarization of Job Opportunities in the U.S. Labor Market:Implications for Employment and Earnings” by David Autor, Center for American Progress and The Hamilton Project, April 2010. Also see “Trends in U.S. Wage Inequality: Revising the Revisionists” by David H. Autor, Lawrence F. Katz, and Melissa S. Kearney, The Review of Economics and Statistics, May 2008; “The Patterns of Job Expansions in the United States: a Comparison of the 1960s and 1990s” by Erik Olin Wright and Rachel E. Dwyer, Socio-Economic Review, 2003; “Long-Run Changes in the U.S. Wage Structure: Narrowing, Widening, Polarizing” by Claudia Goldin and Lawrence F. Katz, a paper prepared for the meeting of the Brookings Panel on Economic Activity, Sept. 6–7, 2007; Harrison, 192–201; Kalleberg, 79–82. For a different view on whether good jobs in the middle of the economic spectrum have been “hollowed out,” see “The Economy Goes to College: The Hidden Promise of Higher Education in the Post-Industrial Service Economy” by Anthony P. Carnevale and Stephen J. Rose, Center on Education and the Workforce, Georgetown University, 2015. Late 1970s: Harrison, 190. Also see “The Great American Job Machine: The Proliferation of Low-Wage Employment in the U.S. Economy” by Barry Bluestone and Bennett Harrison, Joint Economic Committee, Dec. 1986; “U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations” by Frank Levy and Richard J. Murnane, Journal of Economic Literature, Vol. 30, No. 3, Sept. 1992. Prime causes: “The Polarization of Job Opportunities in the U.S. Labor Market:Implications for Employment and Earnings” by David Autor, Center for American Progress and The Hamilton Project, April 2010.
Paid less: Greenhouse, 90–91; Fraser, White-Collar Sweatshop, 55. Also see Uchitelle, 67–69. Osterman (Securing Prosperity, 83–84) and Fraser (White-Collar Sweatshop, 53) point out that the magnitude of earnings losses after a job “dislocation” was roughly the same in the 1994–1996 period as it had been a decade earlier; in other words, this was not a brand new phenomenon. Especially men: See Osterman, Securing Prosperity, 72–73. Also see Benjamin J. Keys and Sheldon Danziger’s essay “Hurt the Worst: The Risk of Unemployment Among Disadvantaged and Advantaged Male Workers, 1968–2003” in Newman, Laid Off, Laid Low, 56–73; “White Working-Class Men Increasingly Falling Behind as College Becomes the Norm,” Washington Post, Oct. 5, 2016. Stopped looking: This was actually part of a decades-long trend. See “The Long-Term Decline in Prime-Age Male Labor Force Participation,” White House Council of Economic Advisers, June 2016; “The Missing Men” by Derek Thompson, The Atlantic, June 27, 2016; “The Non-Mystery of Declining Employment Rates for Pime-Age Workers” by Jared Bernstein, On the Economy, Sept. 7, 2016; “Men Need Help. Is Hillary Clinton the Answer?” by Susan Chira, New York Times, Oct. 21, 2016. Also see “To Help Low-Income American Households, We Have to Close the ‘Work Gap’” by Isabel V. Sawhill, Nathan Joo, and Edward Rodrigue, Social Mobility Memos, Brookings Institution, May 31, 2016; “Labor Force Participation: Recent Developments and Future Prospects,” Brookings Panel on Economic Activity, Sept. 11–12, 2014. “Calls into question”: “Out of a Job and No Longer Looking” by David Leonhardt, New York Times, Sept. 29, 2002.
Companies forced: Cappelli, 117–118, citing the work of Princeton economist Henry Farber. Also see Greenhouse, 89. “Difficult to imagine”: Cappelli, 118.
Two-thirds: Cappelli, 22–23. Also see Hacker, The Great Risk Shift, 68–69; Osterman, Securing Prosperity, 90–91. “Hidden behind”: Hacker, The Great Risk Shift, 63. Hacker was writing, specifically, about the period around 2005–2006, but he makes clear that these same trend lines apply to the late 1990s as well. “Growing recognition”: Hacker, The Great Risk Shift, 62–63.
Financially sound: Cappelli, 117; Reichheld, The Loyalty Effect, 94; Heckscher, 5. More likely: Cappelli, Bassi, Katz, Knoke, Osterman, and Useem, 69; Cappelli, 118, 236–237; Gandolfi, 6–7; Deal and Kennedy, 81; Greenhouse, 79; Uchitelle, 151; Osterman, The Truth About Middle Managers, 55. This trend of white-collar workers being especially vulnerable to downsizing began, actually, in the mid-1980s. Cope with: See Cappelli, 126–128; Gandolfi, 79–85; Cappelli, Bassi, Katz, Knoke, Osterman, and Useem, 198–203; Fraser, White-Collar Sweatshop, 8–11, 36–38; Deal and Kennedy, 82–85; Greenhouse, 92. “White-collar sweatshop”: This is the name of her 2001 book.
New hiring: Baumol, Blinder, and Wolff, 259. The same time: Cappelli, 117; Gandolfi, 10. Managerial positions: Osterman, The Truth About Middle Managers, 48–51. Also see “Life in the Middle,” Wall Street Journal, Aug. 6, 2013. “Upsizing”: Baumol, Blinder, and Wolff, 128–129. “The script”: Baumol, Blinder, and Wolff, 261. Also see Charles L. Schultze’s essay “Has Job Security Eroded for American Worers?” in Blair and Kochan, 28–65.
Extraordinary churn: See Osterman (Securing Prosperity, 40–54) for an analysis of job tenure, quits, and layoffs. He writes of the “consistent story” told in the data: “Job tenure is falling, modestly for the entire labor force and sharply for men. Quit rates have not increased, even though the labor market superficially seems stronger.… Dislocation has increased, also in the face of a strong labor market, and some groups, particularly people with a college education, find that the risks they face are rising even more quickly. When these data are taken as a whole, then, it is safe to conclude that job security has worsened and that internal labor markets, while not disappearing, are fraying.” Also see Henry S. Farber’s essay “Short(er) Shrift: The Decline in Worker-Firm Attachment in the United States” in Newman, Laid Off, Laid Low, 10–37; “Employment Stability in the U.S. Labor Market: Rhetoric Versus Reality” by Matissa Hollister, Annual Review of Sociology, 2011. For a different interpretation of what was happening, see Ann Huff Stevens’s essay “Not So Fast: Long-Term Employment in the United States, 1969–2004” in Newman, Laid Off, Laid Low, 38–55. “Logic of its own”: Meyer, Executive Blues, 241. The New York Times also began to publish its important series “The Downsizing of America” in 1995. Many other major publications also took note of the relentless job cuts during this period. See, for instance, “The Temping of America,” Time, March 29, 1993; “What Happens to Laid-Off Managers,” Fortune, June 13, 1994; “The Hit Men” by Allan Sloan, Newsweek, Feb. 26, 1996; “Young Are Business Veterans At Early Age, Study Finds,” Wall Street Journal, March 19, 1997; “Preserving Employee Morale During Downsizing” by Karen E. Mishra, Gretchen M. Spreitzer, and Aneil K. Mishra, MIT Sloan Management Review, Winter 1998. 680,000 job cuts: Fraser, White-Collar Sweatshop, 138. Also see Kalleberg, 113.
Grew solidly: Real average hourly earnings of private production and nonsupervisory workers rose 1.4 percent annually from 1995–2000. This and all other figures in this paragraph are from Mishel, Bivens, Gould, and Shierholz, The State of Working America, 184. Also see “Earnings and employment Trends in the 1990s” by Randy E. Ilg and Steven E. Haugen, Monthly Labor Review, March 2000. Half a percent: Real average hourly earnings of private production and nonsupervisory workers rose 0.6 percent annually for this group from 1989–2000. A quarter: They rose 2.3 percent annually for this group from 1947–1967. Reticent to ask: Cappelli, 234; Fraser, White-Collar Sweatshop, 42. Also see Baumol, Blinder, and Wolff, 262.
Nearly 30 percent less: Fraser (White-Collar Sweatshop, 68) reports: “Back in 1979, companies paid 63 cents per hour for pension costs related to each employee. By 1996, that was down to 45 cents.” Also see Hacker, The Great Risk Shift, 119. “Were the norm”: Quoted in Osterman, The Truth About Middle Managers, 33. A third or more: This figure, along with the quote from Bernie Sanders, is from “Companies Cash In On New Pension Plan; But Older Workers Can Face Penalties,” New York Times, Aug. 20, 1999. In 1995, IBM had switched from a traditional defined-benefit plan to a different model known as a “pension equity plan.” Four years later, it converted to a cash-balance plan. The second move, in particular, set off a firestorm among workers, and IBM ultimately allowed some 65,000 older employees to remain in the original system. The switches were still challenged in court, where IBM eventually prevailed. In the meantime, the company in 2004 began giving its workers 401(k)s. See “IBM Pension-Plan Changes Spark Ire-Filled Web Site,” Wall Street Journal, June 14, 1999; Fraser, White-Collar Sweatshop, 72–73; “I.B.M. Does an About-Face on Pensions,” New York Times, Sept. 18, 1999; “Judge Says I.B.M. Pension Shift Illegally Harmed Older Workers,” New York Times, Aug. 1, 2003; “I.B.M. Prepares Substitution for Pensions of New Hires,” New York Times, Dec. 9, 2004; “Court Rules for I.B.M. on Pension,” New York Times, Aug. 8, 2006.
Medical inflation: From 1983–1992, the average annual increase in health-care expenditures in the U.S. was 9.9 percent, according to “History of Health Spending in the United States, 1960–2013” by Aaron C. Catlin and Cathy A. Cowan, Centers for Medicare and Medicaid Services, Nov. 19, 2015. 37 million: Eckholm, Solving America’s Health-Care Crisis, 5. “Job lock”: Eckholm, 3. Some felt locked in their jobs because they had a preexisting medical condition; others worried that their new employer might not provide affordable coverage or any coverage at all. “Of this generation”: Judis, 282.
Big business: The small-business lobby, led by the National Federation of Independent Business, was always dead set against the Clinton proposal. That was principally because of the Clinton mandate that employers would have to pay into a regional purchasing alliance that would offer a choice of private plans to nearly the entire US population younger than sixty-five. Concerned about: Employers’ costs of providing health benefits had increased especially fast in the late 1980s. See “A Look at Employers’ Costs of Providing health Benefits,” US Department of Labor, July 31, 1996. Also see Eckholm, 12–20. Opposed the president: For an excellent account of what transpired, see Johnson and Broder, The System, 316–326. Also see “Abandoned Surgery: Business and the Failure of Health Reform” by John Judis, The American Prospect, Spring 1995; Mizruchi, 248–253; “Health Policy in the Clinton Era: Once Bitten, Twice Shy” by David Cutler and Jonathan Gruber, a paper prepared for Harvard’s Center for Business and Government, May 2001; “What Went Wrong? How the Health Care Campaign Collapsed,” New York Times, Aug. 29, 1994; Hacker, The Divided Welfare State, 264–265. “In the past”: Judis, 288. Also quoted in Mizruchi, 253.
Directed their employees: In 1988, 73 percent of insured employees were in traditional fee-for-service plans; by 1998, only 14 percent were, with the rest in managed care. See “Health Benefits In 2005: Premium Increases Slow Down, Coverage Continues To Erode” by Jon Gabel, Gary Claxton, Isadora Gil, Jeremy Pickreign, Heidi Whitmore, Benjamin Finder, Samantha Hawkins, and Diane Rowland,” Health Affairs, Vol. 24, No. 5, Sept. 2005. Only 28 percent: “Why Did Employee Health Insurance Contributions Rise?” by Jonathan Gruber and Robin McKnight, the University of Michigan’s Economic Research Initiative on the Uninsured, Working Paper No. 9, March 2002. Some say that this increase in premium costs to employees is the main reason that a growing percentage of workers declined their employers’ health coverage through the 1990s, leading to an increasing number of uninsured in America. See “Employee Costs and the Decline in Health Insurance Coverage” by David M. Cutler, National Bureau of Economic Research, Jan. 2003 (nber.org/chapters/c9863). At the same time, the full picture is more complicated, as average annual out-of-pocket health insurance costs for those employees who were covered declined through the 1990s. See “Trends In Out-Of-Pocket Spending By Insured American Workers, 1990–1997” by Jon R. Gabel, Paul B. Ginsburg, Jeremy D. Pickreign, and James D. Reschovsky, Health Affairs, Vol. 20, No. 2, March 2001. Their retirees: The share of employers with 200 or more workers offering retiree health benefits declined from 66 percent in 1988 to just 38 percent in 2003. See “The State of Retiree Health Benefits: Historical Trends and Future Uncertainties” by Patricia Neuman of the Henry J. Kaiser Family Foundation, for a hearing of the US Senate’s Special Committee on Aging, May 17, 2004. Many retirees also dropped their employer-provided health coverage, when it was offered, because it got too expensive. See Schultz, 74–75. Worked for GM: Even as GM looked to cut retiree health benefits, it still had a massive burden to cope with. The company posted a $23.5 billion net loss in 1992—the largest deficit in the history of corporate America—largely because of a $20.8 billion charge to account for the future costs of retiree medical care. See “G.M. Los $23.5 Billion Last Year,” New York Times, Feb. 12, 1993. Cough up more. There was ample incentive for corporations to cut health benefits for retirees or require them to contribute more of the cost. A change to accounting rules—similar to FAS 87 for pensions—had the effect of boosting earnings beyond the sheer savings they’d get from lower expenses. The health-care provision, Financial Accounting Standard 106, took effect for large companies in 1993. See Schultz, 65–79; “Retiree-Medical Plans Are Transformed Into Source of Profits by Sears, Others,” Wall Street Journal, Oct. 25, 2000; “How Cuts in Retiree Benefits Fatten Companies’ Bottom Lines,” Wall Street Journal, March 16, 2004; U.S. Senate Labor Subcommittee hearing on “Retiree Health Benefits: The Impact on Workers and Businesses,” March 2, 1993.
“GM’s failure”: Sprague v. General Motors, US Court of Appeals, Sixth Circuit, Nos. 94–1896, 94–1897, 94–1898 and 94–1937 (1998).
One of three: Two other judges concurred in part and dissented in part. Seven judges joined the majority opinion. “Was flush”: Sprague v. General Motors, US Court of Appeals, Sixth Circuit, Nos. 94–1896, 94–1897, 94–1898 and 94–1937 (1998). Also quoted in Schultz, 169.
The companies won: “How Safe Are Your Retiree Health Benefits?,” Wall Street Journal, Oct. 19, 2005. The Sprague case even influenced cuts for retirees who were covered by union contracts. See “Companies Sue Union Retirees to Cut Promised Health Benefits,” Wall Street Journal, Nov. 10, 2004.
Albert Einstein: “Person of the Century,” Time, Dec. 31, 1999. Musical works: See www.npr.org/programs/specials/vote/100list.html#S. “Defining device”: “A Century of Cars,” Popular Mechanics, Jan. 2000. Many saw: See, for instance, Nelson Lichtenstein’s essay “Wal-Mart: A Template for Twenty-First-Century Capitalism” in Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism, 4; Pelfrey, Billy, Alfred, and General Motors, 186–189; “Salutary Lessons from the Downfall of a Carmaker,” Financial Times, June 3, 2009.
“The face of”: The book, Wal-Mart: The Face of Twenty-First-Century Capitalism, grew out of a conference held at the University of California at Santa Barbara in April 2004. Also see Greenhouse, 156.
Retailer became: In 2001, Wal-Mart was second on the list, behind Exxon Mobil; in 2000 it was also second, this time behind General Motors. Revenues exceeded: Figures are from Wal-Mart’s 2005 annual report and are for the fiscal year ending Jan. 31, 2005. Nation’s leading: “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003. Company employed: “Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs,” New York Times, Oct. 26, 2005. At this time, Wal-Mart had about 1.6 million workers worldwide.
The cheer: Lichtenstein, The Retail Revolution, 84; Daft, Kendrick, and Vershinina, Management, 102. “Like motherhood”: Slater, The Wal-Mart Decade, 181.
Muddy boots: Lichtenstein, The Retail Revolution, 93. He’d started: The details on when Walton started his original dime store and the first Wal-Mart are from the company’s website. “Associates”: Lichtenstein, The Retail Revolution, 96. “As persons”: “Sam Walton Is Dead At 74; the Founder of Wal-Mart Stores,” New York Times, April 6, 1992. “People Division”: Lichtenstein, The Retail Revolution, 96. “Serves the associate”: Lichtenstein, The Retail Revolution, 109.
Hardworking people: Greenhouse, 137. “Work together”: Walton spoke these words when he received the Presidential Medal of Freedom in 1992. To shop at: Fishman, The Wal-Mart Effect, 6.
Translated into: “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003. Richest person: “Sam Walton: Net Worth,” Investopedia.
Set up: Thomas Jessen Adams’s essay “Making the New Shop Floor: Wal-Mart, Labor Control, and the History of the Postwar Discount Retail Industry in America” in Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism, 218. Also see Greenhouse, 141.
Forced employees: Greenhouse, 49–55; Also see Lichtenstein, The Retail Revolution, 151–152; Fishman, 47; “Suits Say Wal-Mart Forces Workers to Toil Off the Clock,” New York Times, June 25, 2002; “Wal-Mart Settles 63 Lawsuits Over Wages,” New York Times, Dec. 23, 2008; “Pa. Supreme Court Affirms $151M Ruling Against Wal-Mart,” Philadelphia Inquirer, Dec. 17, 2014. Child-labor laws: Greenhouse, 135; “In-House Audit Says Wal-Mart Violated Labor Laws,” New York Times, Jan. 13, 2004; “Wal-Mart Agrees to Pay Fine in Child Labor Cases,” New York Times, Feb. 12, 2005. Illegal immigrants: Greenhouse, 227–228; “Wal-Mart to Pay U.S. $11 Million in Lawsuit on Illegal Workers,” New York Times, March 19, 2005. Although immigration is a hot-button issue and undocumented workers are vulnerable to exploitation, there is little evidence that immigrant labor has hurt native-born Americans very much, save, perhaps, for those who don’t complete high school. See “The Crumbling Case for a Mexican Border Wall” by Eduardo Porter, New York Times, Sept. 6, 2016; “Wage War,” The Economist, Aug. 27, 2016; Greenhouse, 228–230. Also see “Can Immigration Hurt the Economy? An Old Prejudice Returns” by Eduardo Porter, New York Times, Feb. 14, 2017. Locked workers: Greenhouse, 49–55, 100. “Workers Assail Night Lock-Ins By Wal-Mart,” New York Times, Jan. 18, 2004. These and other: For the full litany, see Greenhouse, 149–151. “Downright Dickensian”: This is the title of the fourth chapter of Greenhouse’s book, The Big Squeeze.
Some Wal-Mart managers: Greenhouse, 100–101. “Had to do”: Greenhouse, 101. Also see Lichtenstein, The Retail Revolution, 150.
Ten dollars: “At Wal-Mart, Choosing Sides Over $9.68 an Hour,” New York Times, May 4, 2005; David Karjanen’s essay “The Wal-Mart Effect and the New Face of Capitalism: Labor Market and Community Impacts of the Megaretailer” in Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism, 153–154; Fishman, 232. Thirty dollars: “GM vs. Toyota: By the Numbers,” National Public Radio, Dec. 19, 2005. Also see Hacker, The Great Risk Shift, 80. Profit-sharing: “How Wal-Mart Fights Unions” by Nelson Lichtenstein, University of Minnesota Law Review, Vol. 92, No. 5, May 2008; Lichtenstein, The Retail Revolution, 175–176. High turnover: Turnover at Wal-Mart was 44 percent a year, close to the industry average, according to “The High Cost of Low Wages” by Wayne F. Cascio, Harvard Business Review, Dec. 2006. Before Jan. 31, 2008, Wal-Mart employees became fully vested in the company’s profit-sharing plan after seven years of service. Following that date, they became fully vested in six years. Lichtenstein (The Retail Revolution, 175) notes that as Wal-Mart’s growth slowed after the year 2000, profit-sharing contributions also diminished so that “only one Wal-Mart associate out of fifty ever accumulated $50,000” in their accounts. Health benefits: Lichtenstein, The Retail Revolution, 296–303; Greenhouse, 155; “Wal-Mart and Job Quality—What Do We Know, and Should We Care?” by Arindrajit Dube and Steve Wertheim, prepared for presentation at the Center for American Progress, Oct. 16, 2005. Wal-Mart acknowledged: “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003. Public relief: David Karjanen’s essay in Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism, 155; Lichtenstein, The Retail Revolution, 296; Greenhouse, 154; “At Wal-Mart, Choosing Sides Over $9.68 an Hour,” New York Times, May 4, 2005; “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003.
“At one point”: Ehrenreich, Nickel and Dimed, 174–175.
“Manager’s Toolbox”: This document is from 1997. It is accessible at reclaimdemocracy.org/wordpress/wp-content/uploads/2012/08/antiunionman.pdf. It is also cited in “How Wal-Mart Fights Unions” by Nelson Lichtenstein, University of Minnesota Law Review, Vol. 92, No. 5, May 2008; Lichtenstein, The Retail Revolution, 193, 198; “How Walmart Persuades Its Workers Not to Unionize” by Steven Greenhouse, The Atlantic, June 8, 2015; “How Walmart Keeps an Eye on Its Massive Workforce,” Bloomberg Businessweek, Nov. 24, 2015.
Reliably ungenerous: A notable exception has been Wal-Mart truck drivers, a key part of the company’s vast logistics network, who have been treated very well. “Blood-sucking parasites”: Lichtenstein, The Retail Revolution, 205. Walton had hired: Lichtenstein, The Retail Revolution, 172.
“Would be closed”: “How Wal-Mart Fights Unions” by Nelson Lichtenstein, University of Minnesota Law Review, Vol. 92, No. 5, May 2008; Lichtenstein, The Retail Revolution, 180.
“Staying union free”: This document is accessible at reclaimdemocracy.org/wordpress/wp-content/uploads/2012/08/distribctr6022manual.pdf. It is also cited in “How Wal-Mart Fights Unions” by Nelson Lichtenstein, University of Minnesota Law Review, Vol. 92, No. 5, May 2008; Lichtenstein, The Retail Revolution, 185; “How Walmart Persuades Its Workers Not to Unionize” by Steven Greenhouse, The Atlantic, June 8, 2015.
“Labor team”: “How Wal-Mart Fights Unions” by Nelson Lichtenstein, University of Minnesota Law Review, Vol. 92, No. 5, May 2008; Lichtenstein, The Retail Revolution, 198–199. Also see “How Walmart Keeps an Eye on Its Massive Workforce,” Bloomberg Businessweek, Nov. 24, 2015; How Walmart Persuades Its Workers Not to Unionize” by Steven Greenhouse, The Atlantic, June 8, 2015. “Like a neurosurgeon”: Greenhouse, 250.
Kingman, Arizona: Details on this episode, including the quotes from Adams, are drawn from “How Wal-Mart Fights Unions” by Nelson Lichtenstein, University of Minnesota Law Review, Vol. 92, No. 5, May 2008; Lichtenstein, The Retail Revolution, 200.
Not for long: “Pro-Union Butchers at Wal-Mart Win a Battle, but Lose the War,” Wall Street Journal, April 11, 2000. Partial win: A federal appeals court in Washington, DC, ruled that Wal-Mart should have bargained with the UFCW over how employees would be affected when the company changed from cutting meat to stocking prepackaged meat. But the court also found that because the employees no longer used specialized meat-cutting skills on the job, the Jacksonville meat department itself was no longer an appropriate bargaining unit under labor law. See United Food and Commerical Workers Local 540 v. National Labor Relations Board, Nos. 06–1358, 07–1060, 07–1087 (2008).
Unions filed: Lichtenstein, The Retail Revolution, 198. “Never seen”: “Up Against Wal-Mart,” Mother Jones, March/April 2003.
They’d lose: Coca-Cola Bottling Company of Los Angeles d/b/a Yuma Coca-Cola Bottling Company and United Industrial, Service, Transportation, Professional, and Government Workers of North America, SIUNA, AFL-CIO, Case 28-RC-6066, National Labor Relations Board, May 23, 2003. Michael Crane: Johnson Technology Inc. and IUE-CWA, the Industrial Division of Communication Workers of America, AFL-CIO, CLC and Working @ GE (W.A.G.E.), Case 7-CA-45747 and 7-CA-45795, National Labor Relations Board Division of Judges, Aug. 4, 2004. The manager denied ever making this specific statement, though he didn’t refute that he told Crane to remove his union paraphernalia.
Some 30 percent: Troy and Sheflin, Appendix A, Historical Statistics, 1897–1983. “Nervous as whores”: “The Union Avoidance Industry in the United States” by John Logan, British Journal of Industrial Relations, Vol. 44, No. 4, Dec. 2006. By the 1980s: In addition to Logan’s study, see “A New Breed of Anti-Union ‘Experts,’” U.S. News & World Report, Jan. 30, 1978; “The Union-Busters,” Newsweek, Jan. 28, 1980.
“No longer reserved”: “No Holds Barred: The Intensification of Employer Opposition to Organizing” by Kate Bronfenbrenner, Economic Policy Institute, Briefing Paper No. 235, May 20, 2009. Bronfenbrenner’s work is also cited in Greenhouse, 247. Also see “A War Against Organizing” by Kate Bronfenbrenner, Washington Post, June 3, 2009. Adept at delaying: “The Empirical Case for Streamlining the NLRB Certification Process: The Role of Date of Unfair Labor Practice Occurrence” by Kate Bronfenbrenner and Dorian Warren, Institute for Social and Economic Research and Policy, Columbia University, Working Paper Series 2011.01, June 2011. In 2015, the National Labor Relations Board imposed a new rule to speed up elections, though it wasn’t immediately clear what would happen to the rule under the Trump administration.
About $200,000: “Evaluating the Effectiveness of National Labor Relations Act Remedies: Analysis and Comparision With Other Workplace Penalty Policies” By Morris M. Kleiner and David Weil, National Bureau of Economic Research, Working Paper No. 16626, Dec. 2010. Also see “If Labor Dies, What’s Next?” by Harold Meyerson, The American Prospect, Sept./Oct. 2012.
Dedicating less: “If Labor Dies, What’s Next?” by Harold Meyerson, The American Prospect, Sept./Oct. 2012. During the 1930s: “Fortress Unionism” by Rich Yeselson, Democracy, Summer 2013. Service sector: There is an argument that those working in information and communications technologies are relatively difficult to organize as well. See “The Rise and Fall of Unions in the U.S.” by Emin M. Dinlersoz and Jeremy Greenwood, National Bureau of Economic Research, Working Paper No. 18079, May 2012.
Which propelled: “A Brief History of American Labor,” The American Prospect, Sept./Oct. 2012. Also see Milkman, L.A. Story, 155–162; the Justice for Janitors History Project from the UCLA Center for Labor Research and Education at socialjusticehistory.org/projects/justiceforjanitors/. Home-care aides: “Home-Care Workers’ Vote for Union a Landmark for Labor,” Los Angeles Times, Feb. 26, 1999; “In Biggest Drive Since 1937, Union Gains a Victory,” New York Times, Feb. 26, 1999. Just 9 percent: “Union Members in 2000,” Bureau of Labor Statistics, Jan. 18, 2001. In 1980: Troy and Sheflin, Appendix A, Historical Statistics, 1897–1983. A majority: “Do Workers Still Want Unions? More Than Ever” by Richard B. Freeman, Economic Policy Institute, Briefing Paper No. 182, Feb. 22, 2007.
Dragging down: Regarding wages, see Rosenfeld, 79–83. Regarding benefits, see, for example, “Union Effects on Health Insurance Provision and Coverage in the United States” by Thomas C. Buchmueller and John DiNardo, National Bureau of Economic Research, Working Paper No. 8238, April 2001. Researchers have found: See, especially, “Unions, Norms, and the Rise in U.S. Wage Inequality” by Bruce Western and Jake Rosenfeld, American Sociological Review, Vol. 76, No. 4, Aug. 2011; “Widening the Gap: The Effect of Declining Unionization on Managerial and Worker Pay, 1983–2000” by Jake Rosenfeld, Research in Social Stratification and Mobility, 2006. Also see “Unions and the Wage Structure” by David Card, Thomas Lemieux, and W. Craig Riddell, Sept. 2002 (faculty.arts.ubc.ca/tlemieux/papers/unions%20structure.pdf); “Bargaining for the American Dream: What Unions do for Mobility” by Richard Freeman, Eunice Han, David Madland, and Brendan Duke, Center for American Progress, Sept. 9, 2015; “What Do Unions Do for the Middle Class?” by Richard Freeman, Eunice Han, Brendan Duke, and David Madland, Center for American Progress, Jan. 13, 2016; “Americans Don’t Miss Manufacturing—They Miss Unions” by Ben Casselman, FiveThirtyEight, May 13, 2016. Income inequality: This trend hit males especially hard. “Deunionization”: “Unions, Inequality, and Faltering Middle-Class Wages” by Lawrence Mishel, Economic Policy Institute, Aug. 2012. Also see “Union Decline Lowers Wages of Nonunion Workers,” Economic Policy Institute, Aug. 30, 2016; Reich, Saving Capitalism, 126–131; Hacker and Pierson, 56–61.
Were running: “Wal-Mart, After Remaking Discount Retailing, Now Nation’s Largest Grocery Chain,” Wall Street Journal, May 31, 2003. Other analyses have found that Wal-Mart’s grocery prices have been anywhere from 5 percent to 39 percent lower than those of other stores. See Greenhouse, 139; “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003. Hold down inflation: “CPI Bias from Supercenters: Does the BLS Know That Wal-Mart Exists?” by Jerry Hausman and Ephraim Leibtag, National Bureau of Economic Research, Working Paper No. 10712, Aug. 2004. Also see Fishman, 146–153; “How Wal-Mart’s Price Cutting Influences Both Rivals and Inflation,” Wall Street Journal, Nov. 25, 2006; “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003.
“Ten bucks”: “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003.
Workers’ wages: See “The Effects of Wal-Mart on Local Labor Markets” by David Neumark, Junfu Zhang, and Stephen Ciccarella, National Bureau of Economic Research, Working Paper No. 11782, Nov. 2005. Also cited in Greenhouse, 140. “To the bottom”: Greenhouse, 140.
“The third party”: “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003.
Depicted it: “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003. Wal-Mart paid: “Grocery Unions Battle to Stop Invasion of the Giant Stores,” Los Angeles Times, Nov. 25, 2003. Had led to: Lichtenstein, The Retail Revolution, 188. “If we don’t”: “Grocery Unions Battle to Stop Invasion of the Giant Stores,” Los Angeles Times, Nov. 25, 2003. This was Rick Middleton, a Teamsters official.
Two-tier system: “Union, Stores Reach a Deal to End Strike,” Los Angeles Times, Feb. 27, 2004; “How the Supermarket Strike Was Settled,” Los Angeles Times, March 8, 2004. “Poorly paid ones”: “UFCW Sacrifices Workers While Declaring Victory” by Michael Hiltzik, Los Angeles Times, March 4, 2004.
They were unlikely: “UFCW Sacrifices Workers While Declaring Victory” by Michael Hiltzik, Los Angeles Times, March 4, 2004. Set its sights: Regarding the ups and downs of Wal-Mart’s strategy in this area, see “Wal-Mart’s Limited Growth in Urban Retail Markets: The Cost of Low Labor Investment” by Anthony Roberts, UCLA Institute for Research on Labor and Employment, 2015. “I’d rather have”: “Grocery Unions Battle to Stop Invasion of the Giant Stores,” Los Angeles Times, Nov. 25, 2003. “Will be redirected”: “Wal-Mart Supercenters: What’s in Store for Southern California?” by Gregory Freeman, Los Angeles County Economic Development Corporation, Jan. 2004.
Under the old: Analysis of the contract is from “Two-Tiered Grocery Contract Leaves Anger, Questions,” Labor Notes, April 1, 2004; “Wage and Health Benefit Restructuring in California’s Grocery Industry” by Arindrajit Dube and Alex Lantsberg, Center for Labor Research and Education, University of California at Berkeley, July 6, 2004. “A career”: Both Renaud and Harrison’s quotes are from “Grocery Workers Relieved, if Not Happy, at Strike’s End,” New York Times, Feb. 28, 2004.
Able to reverse: “Grocery Union Fought for Unity,” Los Angeles Times, July 24, 2007. Market share: The Last Grocery Strike Opened the Door for Supermarket Upstarts. What Happens If There’s Another Strike?” Los Angeles Times, June 17, 2016. Made workers wait: This detail, the annual income figures, and Tilly’s quote are from “Weakened Grocery Companies, Workers Square Off Over Contract,” Los Angeles Times, June 14, 2016.
“Whittled down”: Krauss’s quotes and all details on his company are from “An Empire Built on Bargains Remakes the Working World,” Los Angeles Times, Nov. 23, 2003. The example of Lakewood is also cited in Edna Bonacich and Khaleelah Hardie’s essay “Wal-Mart and the Logistics Revolution” in Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism, 176.
Tried to score: Lichtenstein, The Retail Revolution, 214. By the mid-1990s: Lichtenstein, The Retail Revolution, 220; “Scouring the Globe to Give Shoppers an $8.63 Polo Shirt,” Los Angeles Times, Nov. 24, 2003. Wal-Mart brought in: Fishman, 102–103. $27 billion: Lichtenstein, The Retail Revolution, 220. A tenth: Total US imports from China in 2006 were valued at $287.8 billion. “How can it”: Fishman, 103. 11 percent: “Economic Impact of Trade Agreements Implemented Under Trade Authorities Procedures,” United States International Trade Commission, June 2016.
More than 300,000: “A Conservative Estimate of ‘The Wal-Mart Effect,’” by Robert E. Scott, Economic Policy Institute, Dec. 9, 2015. The analysis found that Wal-Mart’s growing trade deficit displaced more than 400,000 jobs overall between 2001 and 2013. “Until about”: “Globalization and Unemployment: The Downside of Integrating Markets” by Michael Spence, Foreign Affairs, July/Aug. 2011. Also see “Fixing the US Jobs Problem” by Michael Spence, What Matters, McKinsey & Co., June 1, 2011. About 1 percent: “Where Have All the Jobs Gone?” by Jared Bernstein, New York Times, May 3, 2013. Been eclipsed: Hufbauer and Schott, NAFTA Revisited, 81–90; “The U.S. Employment Impacts of North American Integration After NAFTA: A Partial Equilibrium Approach” by Raúl Hinojosa Ojeda, David Runsten, Fernando De Paolis, and Nabil Kamel, North American Integration and Development Center, UCLA School of Public Policy and Social Research, Jan. 2000. Also see “NAFTA at 20: Misleading Charges and Positive Achievements” by Gary Clyde Hufbauer, Cathleen Cimino, and Tyler Moran, Peterson Institute for International Economics, May 2014; “The Effects of NAFTA on U.S. Mexican Trade and GDP,” Congressional Budget Office, May 2003; “The North American Free Trade Agreement” by M. Angeles Villarreal and Ian F. Fergusson, Congressional Research Service, April 16, 2015; “Nafta May Have Saved Many Autoworkers’ Jobs” by Eduardo Porter, New York Times, March 29, 2016.
Very different: See “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade” by David H. Autor, David Dorn, and Gordon H. Hanson, National Bureau of Economic Research, Working Paper No. 21906, Jan. 2016. Imports into: They rose from $1.4 trillion in 2001 to $2.6 trillion in 2008. 5 percent: “Where Have All the Jobs Gone?” by Jared Bernstein, New York Times, May 3, 2013. “China upended”: “How the China Shock, Deep and Swift, Spurred the Rise of Trump,” Wall Street Journal, Aug. 11, 2016.
“Imports swept”: “How the China Shock, Deep and Swift, Spurred the Rise of Trump,” Wall Street Journal, Aug. 11, 2016. Plunged after: “All Employees: Manufacturing,” Economic Data, Federal Reserve Bank of St. Louis; “The Surprisingly Swift Decline of U.S. Manufacturing Employment” by Justin R. Pierce and Peter K. Schott, CESifo Working Paper No. 4563, Jan. 2014; “Worse Than the Great Depression: What Experts Are Missing About American Manufacturing Decline” by Robert D. Atkinson, Luke A. Stewart, Scott M. Andes, and Stephen J. Ezell, Information Technology & Innovation Foundation, March 2012. Also see Bernstein, The Reconnection Agenda, 116–144. Researchers have also found a connection between trade with China and lower wages for US workers. See “Why Are American Workers Getting Poorer? China, Trade and Offshoring” by Avraham Ebenstein, Ann Harrison, and Margaret McMillan, National Bureau of Economic Research, Working Paper No. 21027, March 2015. Would lead many: “Where Americans and Europeans Agree and Disagree on Foreign Policy” by Richard Wike, Pew Research Center, June 14, 2016. The report notes that 49 percent of Americans say US involvement in the global economy is a bad thing because it lowers wages and costs jobs; only 44 percent think it is a good thing because it creates new markets and opportunities for growth. “Left a scar”: “On Trade, Angry Voters Have a Point” by Eduardo Porter, New York Times, March 15, 2016.
“Well-meaning critics”: “At Wal-Mart, Choosing Sides Over $9.68 an Hour,” New York Times, May 4, 2005.
A quarter or more: “Percent of Employment in Manufacturing in the United States,” Economic Data, Federal Reserve Bank of St. Louis. Two-thirds: According to the US Census Bureau, 32.5 percent of Americans, ages twenty-five and older, had a bachelor’s degree or higher in 2015. In 2005, that number was 27.7 percent, and in 2000 it was 25.7 percent. High wages: “The Benefits of Manufacturing Jobs” by David Langdon and Rebecca Lehrman, US Department of Commerce, ESA Issue Brief No. 01–12, May 2012; “The Manufacturing Footprint and the Importance of U.S. Manufacturing Jobs” by Robert E. Scott, Economic Policy Institute, Jan. 22, 2015. Now demanded: See “International Trade, Offshoring, and U.S. Wages” by Ann Harrison, Avraham Ebenstein, Margaret McMillan, and Shannon Phillips, Vox, Center for Economic and Policy Research, Aug. 31, 2009; “The Skills Gap in U.S. Manufacturing: 2015 and Beyond,” Deloitte and the Manufacturing Institute, 2015. Also see “Corporate America and Free Community College: A Match Made in Economic Heaven” by Rick Wartzman, Fortune, Feb. 4, 2015.
“Unloads the truck”: “Over Half of Higher Ed Is Vocational,” Deseret News, Nov. 5, 2014. “Remarkable upgrading”: “The Economy Goes to College: The Hidden Promise of Higher Education in the Post-Industrial Service Economy” by Anthony P. Carnevale and Stephen J. Rose, Center on Education and the Workforce, Georgetown University, 2015. Less than half: The Lumina Foundation put the figure at 45.3 percent in 2014. See www.luminafoundation.org/stronger_nation2016. Also see Goldin and Katz, 347. While complaining: See “Skill Gaps, Skill Shortages, and Skill Mismatches: Evidence and Arguments for the United States” by Peter H. Cappelli, ILR Review, Vol. 68, No. 2, March 2015; “What Employers Really Want? Workers They Don’t Have to Train” by Peter Cappelli, Washington Post, Sept. 5, 2014. On-the-job training: See “The Rise of the Self-Reliant Young Worker” by Rick Wartzman, Fortune, May 1, 2015; “Why Do We Spend So Much Developing Senior Leaders and So Little Training New Managers?” by Victor Lipman, Harvard Business Review, June 28, 2016; “We Need to ‘Re-Wire’ the Labor Market” by Byron Auguste and Tyra Mariani, Medium, updated Nov. 24, 2015. Also see Geoghegan, 28–44. Surveys now indicated: Accenture’s 2013 Skills and Employment Trends Survey found that just 52 percent of workers employed at large companies in its sample were currently receiving formal, employer-provided training. A previous Accenture survey found that only 21 percent of US workers said they had received company-provided formal training between 2006 and 2011. Also see “Did Employers in the United States Back Away From Skills Training During the Early 2000s?” by C. Jeffrey Waddoups, ILR Review, Vol. 69, No. 2, March 2016; “Lifelong Learning,” The Economist, Jan. 14, 2017.
Dominated by: “The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market” by David H. Autor and David Dorn, American Economic Review, Vol. 103, No. 5, Aug. 2013. Also see “Economic Change and the Structure of Opportunity for Less-Skilled Workers” by Rebecca M. Blank, Focus, Vol. 26, No. 2, Fall 2009; Thomas Jessen Adams’s essay in Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism, 214. Regarding the broader structural shift in the economy from manufacturing to services, see “U.S. Labor Force Trends” by Marlene A. Lee and Mark Mather, Population Bulletin, Vol. 63, No. 2, June 2008; “Outsourcing and the Shift from Manufacturing to Services” by Giuseppe Berlingieri, CentrePiece, Winter 2013/14; “Where Did All the Workers Go? 60 Years of Economic Change in 1 Graph” by Derek Thompson, The Atlantic, Jan. 26, 2012; “The Jobs Americans Do,” New York Times Magazine, Feb. 23, 2017. In 1960: “How U.S. Lost Out on iPhone Work,” New York Times, Jan. 22, 2012. “Subsistence level”: “How the Recession Turned Middle-Class Jobs Into Low-Wage Jobs,” Washington Post, Feb. 28, 2013.
“Raised prices”: “At Wal-Mart, Choosing Sides Over $9.68 an Hour,” New York Times, May 4, 2005.
“Being able”: “An Elder Challenges Outsourcing’s Orthodoxy,” New York Times, Sept. 9, 2004. Samuelson died in 2009. Seventeen dollars: “How Costco Became the Anti-Wal-Mart,” New York Times, July 17, 2005. Bigger proportion: “The High Cost of Low Wages” by Wayne F. Cascio, Harvard Business Review, Dec. 2006. Far superior: Greenhouse, 163. $46,000: Greenhouse, 163. “Little Sisters”: Greenhouse, 158. Also see “Jim Sinegal: Costco CEO Focuses on Employees,” U.S. News & World Report, Oct. 22, 2009; “Costco CEO Craig Jelinek Leads the Cheapest, Happiest Company in the World,” Bloomberg Businessweek, June 7, 2013; Lichtenstein, The Retail Revolution, 343–364; Nelson Lichtenstein’s essay in Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism, 16. Even with its excellent record and reputation, Costco has not been without some controversy. In 2013, the company agreed to pay $8 million and change its promotion procedures to settle a lawsuit alleging that it had failed to give female employees an equal shot at management positions. See “Costco Settles Lawsuit for $8M, Vows Reforms,” Seattle Times, Dec. 17, 2013.
“It starts with”: “Want Engaged Employees? It’s Easy—Pay Them” by Rick Wartzman, Fortune, July 10, 2015. Also see Greenhouse, 162–164; Nelson Lichtenstein’s essay in Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism, 27. Stock price: Ton, The Good Jobs Strategy, 12. From December 31, 1999 through June 30, 2016, adjusted for dividends and stock splits, Wal-Mart shares rose 5.6 percent; Costco’s rose 244.2 percent.
A surprise: “The 2001 Recession: How Was It Different and What Developments May Have Caused It?” by Kevin L. Kliesen, Review, Federal Reserve Bank of St. Louis, Sept./Oct. 2003. “The New Economy”: Stiglitz, 4–5.
High-tech companies: “Dot-Coms: What Have We Learned,” Fortune, Oct. 30, 2000; “The $1.7 Trillion Dot.Com Lesson,” CNNfn, Nov. 9, 2000; “A City Takes a Breath After the Dot-Com Crash; San Francisco’s Economy Is Slowing,” New York Times, July 24, 2001. Had overinvested: “Growth in the Post-Bubble Economy” by Kevin J. Lansing, FRBSF Economic Letter, Federal Reserve Bank of San Francisco, June 20, 2003. Tanked: “Looking Back on the Crash,” The Guardian, March 10, 2005. This one was: “The 2001 Recession: How Was It Different and What Developments May Have Caused It?” by Kevin L. Kliesen, Review, Federal Reserve Bank of St. Louis, Sept./Oct. 2003. Also see ‘The Recent Recession, the Current Recovery, and Stock Prices” by William D. Nordhaus, Brookings Papers on Economic Activity, Vol. 2002, No. 1, 2002. Three years: It wasn’t until thirty-eight months into the recovery, in fact, that the net number of jobs lost during the recession was regained. See “Jobless Recoveries and the Wait-and-See Hypothesis” by Stacey L. Schreft, Aarti Singh, and Ashley Hodgson, Economic Review, Federal Reserve Bank of Kansas City, Fourth Quarter 2005; “The Jobless Recovery from the 2001 Recession: A Comparison to Earlier Recoveries and Possible Explanations” by Marc Labonte and Linda Levine, Congressional Research Service, Aug. 12, 2004.
Corporate profits: They expanded at an annual rate of 10.3 percent from 2001–2007 compared with the postwar average of 7.4 percent, according to “How Robust Was the 2001–2007 Economic Expansion?” by Aviva Aron-Dine, Chad Sone, and Richard Kogan, Center on Budget and Policy Priorities, revised April 22, 2008. Total output: Annual GDP grew at an annual rate of 2.9 percent from 2001–2007 compared with the post-war average of 4.3 percent. Also see “Accounting for U.S. Growth: Is There a New Normal?” by Kevin L. Kliesen, The Regional Economist, Federal Reserve Bank of St. Louis, Oct. 2012. Employment grew: These and the wage and salary figures are from “How Robust Was the 2001–2007 Economic Expansion?” by Aviva Aron-Dine, Chad Sone, and Richard Kogan, Center on Budget and Policy Priorities, revised April 22, 2008.
More than 90 percent: Peck, Pinched, 85. More than doubled: Peck, 85. Biggest housing boom: According to Robert J. Shiller. See “Be Warned: Mr. Bubble’s Worried Again,” New York Times, Aug. 21, 2005. Also see “Recession Looms for the U.S. Economy in 2007” by Dean Baker, Center for Economic and Policy Research, Nov. 2006. Order up a mortgage: See “Financialization: What It Is and Why It Matters” by Thomas I. Palley, Levy Economics Institute of Bard College, Working Paper No. 525, Dec. 2007; “The Bubble: How Homeowners, Speculators and Wall Street Dealmakers Rode a Wave of Easy Money With Crippling Consequences,” Washington Post, June 15, 2008; Bernstein, The Reconnection Agenda, 198–201. For a different view, see “Loan Originations and Defaults in the Mortgage Crisis: The Role of the Middle Class” by Manuel Adelino, Antoinette Schoar, and Felipe Severino, Review of Financial Studies, March 28, 2016. “Keep on making”: Lewis, The Big Short, 45.
Sparking: The mortgage meltdown wasn’t, in and of itself, the sole cause of the Great Recession. For a longer list of culprits, see “Causes of the Financial Crisis” by Mark Jickling, Congressional Research Service, April 9, 2010. What would be: See “The Recession and Recovery in Perspective,” Federal Reserve Bank of Minneapolis. Didn’t bottom out: “The Great Housing Rebound of 2012: How the Fed Helped Sellers Beat the Odds,” Time, Dec. 27, 2012; “After 8 Years, the Real Estate Market Is Finally Looking Normal Again,” Fortune, March 31, 2014; “Forecast Says U.S. Home Prices Are Overvalued, Will Peak In 2016,” Wall Street Journal, July 17, 2014. Also see Peck, 86. 4 million: “2012 Foreclosure Market Outlook” by Daren Blomquist, RealtyTrac, Feb. 13, 2012. This was from Jan. 2007 to Dec. 2011. In addition, there were more than 8 million foreclosure proceedings started during that period.
Above 7 percent: The jobless rate was at 7.2 percent in October 2013. It would finally fall to 6.9 percent a month later. Were regained: “Economy has Recovered 8.7 Million Jobs Lost in Great Recession,” Los Angeles Times, June 6, 2014; “The U.S. Economy Finally Hit a Historic Milestone—and It Doesn’t Matter” by Derek Thompson, The Atlantic, June 6, 2014. Historically high: “Chart Book: The Legacy of the Great Recession,” Center on Budget and Policy Priorities, Sept. 2, 2016. Also see “Job Loss in the Great Recession and its Aftermath: U.S. Evidence from the Displaced Workers Survey” by Henry S. Farber, IZA Discussion Paper No. 9069, May 2015; “How Long Before the Unemployed Find Jobs or Quit Looking?” by Randy Ilg, US Bureau of Labor Statistics, May 2011. Six months: More precisely, “long-term unemployment” is defined as twenty-seven weeks or longer of joblessness. To atrophy: “Will Today’s Unemployed Become Tomorrow’s Unemployable?” by Catherine Rampell, New York Times, Dec. 2, 2010; “99 Weeks Later, Jobless Have Only Desperation,” New York Times, Aug. 2, 2010. “Missing workers”: As of August 2016, there were still more than 2 million “‘missing workers’—potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job,” according to the Economic Policy Institute. See www.epi.org/publication/missing-workers/. Was modest: “Chart Book: The Legacy of the Great Recession,” Center on Budget and Policy Priorities, Sept. 2, 2016. Pay go down: “Occupational Wage Declines Since the Great Recession,” National Employment Law Project, Sept. 2015. Take years: “Slump Prods Firms to Seek New Compact With Workers,” Wall Street Journal, Oct. 20, 2009. Regarding retirement benefits, see “Why Did Some Employers Suspend Their 401(k) Match?” by Alicia H. Munnell and Laura Quinby, Center for Retirement Research at Boston College, Feb. 2010; “Benefits Leader Reins In 401(k)s,” Wall Street Journal, Dec. 6, 2012; “Companies Are Pitching in More for Retirement,” Bloomberg, April 30, 2015. Regarding health-care benefits, see “Fewer Small Employers Offering Health Coverage; Large Employers Holding Steady” by Paul Fronstin, ebri.org Notes, Employee Benefit Research Institute, Vol. 37, No. 8, July 2016. The article points out that because of the recession, smaller employers (those with ninety-nine workers or fewer) cut back on their health-care coverage, a trend that may have then been exacerbated by the Affordable Care Act.
Underlined deeper: Peck, 28; “Jobless Recoveries” by Henry Siu and Nir Jaimovich, Third Way, April 8, 2015; “In Wreckage of Lost Jobs, Lost Power” by David Leonhardt, New York Times, Jan. 19, 2011. “Arguably the most”: Peck, 29.
Felt the effects: “Recession Takes Fizz Out of Coke’s Profit,” NBCNews.com, Feb. 12, 2009. “Bad bronchitis”: “Coca-Cola Profit Rises on Volume Gains,” Wall Street Journal, July 22, 2010. Cut costs: The company planned to realize annualized operating savings of $500 million by the end of 2011.
Momentum faltered: Even Coke’s vaunted “49 percent solution” turned out to be a burden as Coca-Cola Enterprises, the company’s bottling operation, became a drain on finances. See Hays, 321–322. In 2010, the parent company acquired CCE’s North American operations, while CCE remained a stand-alone company focused on producing and distributing Coke products in Europe. See “Coke Acquires North American Unit of Bottler,” New York Times, Feb. 24, 2010. In 2015, Coke reversed its strategy once again and decided to sell off all of its US bottling operations. See “Coke Tweaks Its Business Model Again,” Wall Street Journal, March 22, 2016. Doug Ivester: “After Short Tenure, Ivester Quits As the Chairman of Coca-Cola,” Wall Street Journal, Dec. 7, 1999. Douglas Daft: “Coke’s Chief Set to Retire at End of 2004,” New York Times, Feb. 20, 2004. Also see “The Real Story: How Did Coca-Cola’s Management Go from First-Rate to Farcical in Six Short Years?,” Fortune, May 31, 2004. Able to preserve: Hays, 329. “Job for life”: Isdell, 162.
More than 5,000: The company said originally that it would cut 6,000 jobs, but it eliminated 5,200 in the end, according to Hays, 331. Also see “Coca-Cola to Cut 20% of Its Staff After Woes at Home and Abroad,” New York Times, Jan. 27, 2000. Were outsourced: Hays, 329; “Word of All the Layoffs Comes as Shock to Atlanta,” New York Times, Jan. 27, 2000. Voice-mail message: Hays, 328. Stock options: Hays, 330. “Doesn’t matter”: Hays, 332. “Daft the Knife”: 329.
Employees sued: Hays, 256–262; “Blacks, Citing Bias at Work, Sue Coca-Cola,” New York Times, April 23, 1999; “Suit Is Filed Against Coke by Current, Past Employees Who Allege Racial Bias,” Wall Street Journal, April 26, 1999. Also see “Can the Real Thing Do Right Thing? A Race-Bias Suit Is a Test for Coke,” Wall Street Journal, May 18, 1999. “Only had one”: “Group of Black Employees Calls for Boycott of Coca-Cola Products,” New York Times, April 20, 2000. Also see Hays, 338–339.
Company settled: “Coca-Cola Settles Racial Bias Case,” New York Times, Nov. 17, 2000. About $40,000: Hays, 340. Experts regularly review: First Annual Report of the Task Force, Ingram, et al. v. Coca-Cola Co., US District Court, Northern District of Georgia, 1–98-CV-3679 (RWS), 2002. Also see “Coca-Cola Selects Former Labor Secretary to Lead Diversity Task Force,” New York Times, March 16, 2001; “How Coca-Cola Built Strength on Diversity,” Harvard Management Update, April 2008; Isdell, 189–190. Was now tied: “Prevention Is the Best Defense: Coke Dithered, Blundered, Then Settled. Now, At Last, It’s Trying to Change Its Culture,” Fortune, July 10, 2000; “Coke: Say Good Bye To The Good Ol’ Boy Culture” by Dean Foust, BusinessWeek, May 28, 2000. “Internal cultures”: “Coca-Cola Settles Racial Bias Case,” New York Times, Nov. 17, 2000. First condemned: Greising, 92–93; Pendergrast, 337–338; Hays, 135; “Can the Real Thing Do Right Thing? A Race-Bias Suit Is a Test for Coke,” Wall Street Journal, May 18, 1999. Again voiced: “Group of Black Employees Calls for Boycott of Coca-Cola Products,” New York Times, April 20, 2000.
Make up 37 percent: “2014 Job Patterns for Minorities and Women in Private Industry (EEO-1),” US Equal Employment Opportunity Commission. Larger companies: The EEOC data covers only companies with 100 or more employees or companies with at least 50 employees and a $50,000 federal contract.
Expanded fivefold: “Fifty Years After March on Washington, Economic Gap Between Blacks, Whites Persists,” Washington Post, Aug. 28, 2013. Still earned: “Labor Force Characteristics by Race and Ethnicity, 2014,” BLS Reports, US Bureau of Labor Statistics, Nov. 2015. Twice as likely: This hadn’t changed over time. See “40 Years: The State of Black America, 1976–2016,” National Urban League. Were clustered: “Whiter Jobs, Higher Wages: Occupational Segregation and the Lower Wages of Black Men” by Darrick Hamilton, Algernon Austin, and William Darity, Economic Policy Institute, Briefing Paper No. 288, Feb. 28, 2011. To slide down: “The Stalled, Struggling Black Middle Class” by Steven Brown, Urban Wire, Urban Institute, Feb. 10, 2016. Harder time: “A College Degree is No Guarantee” by Janelle Jones and John Schmitt, Center for Economic and Policy Research, May 2014; “Black Unemployment Is Significantly Higher Than White Unemployment Regardless of Educational Attainment” by Valerie Wilson, Economic Policy Institute, Dec. 17, 2015. Compensated badly: “Discrimination in the Credential Society: An Audit Study of Race and College Selectivity in the Labor Market” by S. Michael Gaddis, Social Forces, Vol. 93, No. 4, June 2015. Also see: “Black-White Wage Gaps Expand With Rising Wage Inequality” by Valerie Wilson and William M. Rodgers III, Economic Policy Institute, Sept. 20, 2016. Comparable discrimination: See “2014 Job Patterns for Minorities and Women in Private Industry (EEO-1),” US Equal Employment Opportunity Commission; “Racial, Gender Wage Gaps Persist in U.S. Despite Some Progress” by Eileen Patten, Pew Research Center, July 1, 2016; “Working While Brown: What Discrimination Looks Like Now,” CNNMoney, Nov. 25, 2015.
Nearly half: “Statistical Overview Of Women in the Workforce,” Catalyst, April 6, 2016. 30 percent: “A Century of Change: The U.S. Labor Force, 1950–2050” by Mitra Toossi, Monthly Labor Review, May 2002. 80 percent: “Gender Pay Gap: Recent Trends and Explanations,” White House Council of Economic Advisers Issues Brief, April 2015. Also see “What Is the Gender Pay Gap and Is It Real?” by Elise Gould, Jessica Schieder, and Kathleen Geier, Economic Policy Institute, Oct. 20, 2016. Leveled off: “Women in the Labor Force: A Databook,” US Bureau of Labor Statistics, May 2014. Stopped shrinking: “Five Decades of Remarkable but Slowing Change in U.S. Women’s Economic and Social Status and Political Participation:” by Martha J. Bailey and Thomas A. DiPrete, The Russell Sage Foundation Journal of the Social Sciences, Vol. 2, No. 4, Aug. 2016; “Gender Pay Gap: Recent Trends and Explanations,” White House Council of Economic Advisers Issues Brief, April 2015. In 2014: “2014 Job Patterns for Minorities and Women in Private Industry (EEO-1),” US Equal Employment Opportunity Commission. Also see “When Women Thrive, Businesses Thrive,” Mercer, 2016; “Women in the Workplace,” Lean In and McKinsey & Co., Sept. 2016. Just twenty-one: “The Percentage of Female CEOs in the Fortune 500 Drops to 4%,” Fortune, June 6, 2016.
Pay got cut: “The Fatherhood Bonus and The Motherhood Penalty: Parenthood and the Gender Gap in Pay” by Michelle J. Budig, Third Way, Sept. 2, 2014. Also see “Why Sexism at the Office Makes Women Love Hillary Clinton” by Jill Filipovic, New York Times, Feb. 20, 2016. Tended to plateau: “When Women Out-Earn Men” by Jaison R. Abel and Richard Deitz, Liberty Street Economics, Federal Reserve Bank of New York, Aug. 5, 2015. Pay went down: “Occupational Feminization and Pay: Assessing Causal Dynamics Using 1950–2000 U.S. Census Data” by Asaf Levanon, Paula England, and Paul Allison, Social Forces, Vol. 88, No. 2, Dec. 2009. Also see “As Women Take Over a Male-Dominated Field, the Pay Drops” by Claire Cain Miller, New York Times, March 18, 2016. Wasn’t even recognized: “Men Really Are Clueless About Their Female Coworkers” by Rick Wartzman, Fortune, March 10, 2016. The piece is based on a survey by PayScale. Also see “Women and Leadership: Public Says Women are Equally Qualified, but Barriers Persist,” Pew Research Center, Jan. 14, 2015; “What’s Holding Women Back,” Wall Street Journal, Sept. 30, 2015.
Just 8 percent: This and the other figures are from the Fifth Annual Report of the Task Force, Ingram, et al. v. Coca-Cola Co., U.S. District Court, Northern District of Georgia, 1–98-CV-3679 (RWS), 2006. Compensation system: Third Annual Report of the Task Force, Ingram, et al. v. Coca-Cola Co., US District Court, Northern District of Georgia, 1–98-CV-3679 (RWS), 2004.
“Fear and disaffection”: Isdell, 163. To revive: “Chief of Coke to Step Down After Steering Its Recovery,” New York Times, Dec. 7, 2007. Cleared the way: See “Shaking Things Up at Coca-Cola,” an interview with Muhtar Kent, Harvard Business Review, Oct. 2011. In December 2016, Coke announced that Kent would step down as CEO in May 2017. Also see “Muhtar Kent’s New Coke,” Fortune, May 10, 2012. Most exhaustive: “Coke’s Leadership Formula: Sending Its Rising Star Execs Away for Six Weeks” by Rick Wartzman, Fortune, May 14, 2015. Was severing: Coca-Cola to Cut 1,600–1,800 Jobs Globally,” Wall Street Journal, Jan. 8, 2015.
“Unprecedented amount”: “Kodak Cancels Profit and Sales Forecast for Year,” New York Times, Dec. 10, 2008. Before suspending: The wage dividend was reinstated the next year, in 2010. See “Kodak Bonuses Restored,” Rochester Democrat and Chronicle, Feb. 6, 2010. All he could: See “Chief Says Kodak Is Pointed in the Right Direction,” New York Times, Dec. 25, 1999. So had: See, for example, “Kodak Chooses an Outsider To Speed Digital Transition,” New York Times, April 12, 2001; “Kodak Looks to H-P’s Perez To Boost Digital Development,” Wall Street Journal, April 2, 2003; “Kodak Shifts Focus from Film, Betting Future on Digital Lines,” Wall Street Journal, Sept. 25, 2003; “Kodak to Stress Digital Business and Cut Dividend,” New York Times, Sept. 26, 2003; “Perez’ Kodak Loses No. 1 U.S. Digital Camera Spot,” Forbes, May 9, 2006. Printer business: “Kodak Struggles to Find Its Moment,” Wall Street Journal, Aug. 11, 2011. “A tragedy”: “Bankruptcy Judge Approves Kodak’s Restructuring Plan,” Wall Street Journal, Aug. 20, 2013. Also see Keen, The Internet Is Not the Answer, 86–96.
A focus on: See “At Kodak, Clinging to a Future Beyond Film,” New York Times, March 20, 2015. Fewer than 9,000: “Kodak Moments Just a Memory as Company Exits Bankruptcy,” Bloomberg, Sept. 3, 2013. 50,000: “New Kodak CEO Jeff Clarke Outlines Growth Strategy,” Rochester Democrat and Chronicle, March 16, 2014. 128,000: “Kodak Timeline: 1878–Present,” Rochester Democrat and Chronicle, Jan. 19, 2012. Couple of thousand: Rochester’s New ‘Big 3’ Focus on Health Care, Groceries,” Rochester Democrat and Chronicle, June 28, 2014. 60,000-plus: “Despite Long Slide by Kodak, Company Town Avoids Decay,” New York Times, Jan. 16, 2012. Health-care coverage: “Kodak-Next: Out of Bankruptcy, Into a New Era,” Rochester Democrat and Chronicle, Sept. 1, 2013.
Expressed hope: “Our New Self-Image,” Rochester Democrat and Chronicle, Sept. 1, 2013. To some extent: “Rochester Looks to Rebuild from the Rubble,” Marketplace, Sept. 27, 2016; “Despite Long Slide by Kodak, Company Town Avoids Decay,” New York Times, Jan. 16, 2012; “Rochester’s Rise Amid Kodak’s Demise,” TheStreet, Aug. 2, 2013; “Tech Talks: Why It Matters to Rochester’s Future,” Rochester Democrat and Chronicle, March 11, 2016. Ranked Rochester: “Playing an Insecure Hand: Low-Wage Workers in the New Economy,” University at Buffalo Regional Institute, Policy Brief, Feb. 2010. “Service jobs”: “Our New Self-Image,” Rochester Democrat and Chronicle, Sept. 1, 2013. Also see “Low-Wage Work in Rochester” by Vincent Serravallo, Rochester Labor Council, Nov. 6, 2014; “Working Here: Middle-Skills Gap Widens,” Rochester Democrat and Chronicle, June 29, 2015.
“Best days”: “GM’s $11,000,000,000 Turnaround,” Fortune, Oct. 17, 1994. Remained profitable: Author’s review of GM’s annual income statements for 1993–2004. The company was forced to restate its earnings for a number of those years after discovering that it had made certain accounting errors, but it still remained consistently profitable during that period.
Oldsmobile division: Ingrassia, 153. “Go Fast”: Ingrassia, 154. Also see “Time to Praise GM” by Jerry Flint, Forbes, Dec. 10, 2001. “Ten years ago”: Barabba, Surviving Transformation, 79.
Wagoner reverted: Ingrassia, 155–156; “Wagoner Had to Go,” Wall Street Journal, March 31, 2009; “At GM’s Helm or Going Under?,” New York Times, March 29, 2006; Rattner, Overhaul, 84–85; “GM Pledges to Make Plug-In Hybrid Vehicle,” Washington Post, Nov. 30, 2006. “If you’re bleeding”: From a 2012 interview by the author with O’Neill. $10 billion: GM originally posted an $8.6 billion net loss, but that widened by $2 billion when the company subsequently reported revised results. See “G.M. Reports Big Losses as Its Woes Grow,” New York Times, Jan. 26, 2006; “G.M. Loss for 2005 Is Steeper,” New York Times, March 17, 2006. Ultimately, GM settled on a net loss of $10.4 billion, according to its federal financial filings. Series of cuts: “G.M. to Cut 30,000 Jobs and Close Some Factories,” New York Times, Nov. 21, 2005.
352–353 Nationwide strike: See “Time Warp: The GM Strike, Then and Now,” National Public Radio, Sept. 26, 2007; “GM Strike Marks End of an Era,” U.S. News & World Report, Sept. 29, 2007; Ingrassia, 202. Many new: These were in jobs classified as “non-core,” and about 20 percent of all GM assembly plant workers would wind up in these second-tier positions. By comparison, those in second-tier jobs accounted for 45 percent of the union workforce at Fiat Chrysler and 25 percent at Ford. See “Viewpoint: One-Sided Class War: The UAW-GM 2007 Negotiations,” Labor Notes, Oct. 29, 2007; “UAW R.I.P.?,” The Nation, Oct. 18, 2007. “G.M. to Start Another Round of Buyouts and Seek Cheaper Labor,” New York Times, Dec. 19, 2007; Ingrassia, 202; “Are Those Detested Two-Tiered UAW Contracts Finally on the Way Out?” by Michael Hiltzik, Los Angeles Times, Oct. 13, 2015. Paycheck to paycheck: “A Darker Future for ‘Tier 2’ Wokers,” Remapping Debate, July 27, 2011; “New Generation of United Auto Workers Push to End Second-Tier Union Status,” The Guardian, Sept. 13, 2015. Jobs Bank: “UAW Concedes to GM,” Bloomberg, Sept. 27, 2007. Union-controlled trust: This was the Voluntary Employee Beneficiary Association, or VEBA. See Ingrassia, 201–203; “G.M. Workers Return After Deal Reached With Union,” New York Times, Sept. 26, 2007; “UAW Concedes to GM,” Bloomberg, Sept. 27, 2007.
“The goose”: From a 2012 interview by the author with Kresa. During the government’s auto bailout, Kresa would serve as GM’s interim chairman. Just how tattered: See “A Turning Point for Health Care,” Wall Street Journal, Sept. 27, 2007. The headline: “Treaty of Detroit Repealed,” In These Times, Nov. 13, 2007.
Had exposure: “Mortgage Mess Curtail’s Wagoner’s Honeymoon,” Wall Street Journal, Nov. 21, 2007; Rattner, 145–146; Ingrassia, 203. “Once and for all”: “U.S. Throws Lifeline to Detroit,” Wall Street Journal, Dec. 20, 2008. Pushed him out: Rattner, 133–142; Ingrassia, 239–242; “Government Forces Out Wagoner at GM,” Wall Street Journal, March 30, 2009. GM filed: Rattner, 211–245; Ingrassia, 270–274; “G.M. Heads to Bankruptcy Protection as Government Steps In,” New York Times, June 1, 2009.
“Shiny New GM”: Rattner, 183. Also see “How General Motors Was Really Saved: The Untold True Story of the Most Important Bankruptcy in U.S. History,” Forbes, Oct. 30, 2013. The company’s: “GM Set to Exit Bankruptcy,” Wall Street Journal, July 10, 2009. GM’s debt went from $176 billion to $48 billion, its factories from 47 to 34, its brands from 8 to 4, and its dealers from 5,900 to 3,600.
Debbie Werner: Her story and Ramirez’s are from “Autoworkers Earning Less in U.S. Happy to Compete Again,” Bloomberg, Oct. 18, 2012. Daughter of: “General Motors Names Mary Barra as CEO,” Wall Street Journal, Dec. 10, 2013. Won high marks: “G.M. Posts Record Profit of $9.7 Billion for 2015,” New York Times, Feb. 3, 2016; “How GM’s Mary Barra Does It” by Paul Ingrassia, Fortune, Sept. 9, 2016; “Is Mary Barra Standing on a ‘Glass Cliff?,” by Jaclyn Trop, New Yorker, April 29, 2014. “Crappy cars”: “GM’s Mary Barra to Staff: ‘No More Crappy Cars,’” Fortune, Oct. 16, 2013. It would end: “GM-UAW Deal Highlights: Wage Hikes, Signing Bonuses,” Detroit Free Press, Oct. 28, 2015; “GM Sets Raise for Its U.S. Factory Workers,” Wall Street Journal, Oct. 26, 2015. Profit-sharing bonuses: This program was established during the 2011 contract between GM and the Auto Workers. See “GM-UAW Workers to Receive $11K Profit-Sharing Checks,” Detroit News, Feb. 3, 2016.
Eight Years: “Workers Ratify U.A.W. Contracts With General Motors and Ford,” New York Times, Nov. 20, 2015. Would be lower: In 2016 dollars, the average hourly wage at GM was projected to be $28.69 from 2015–2019, compared with $30.57 in 1996, $31.85 in 1999, $32.29 in 2002, and $31.83 in 2005–06. These figures were calculated by Kristin Dziczek of the Center for Automotive Research, based on a blended average-wage history, which takes into account the mix of skilled trades, production, and entry-level workers. Shortfall projected: At the end of 2014, the trust’s long-term shortfall was estimated at $20 billion. Experts still considered the trust well managed, however, and administrators expressed confidence that it would meet its obligations. See “Health of UAW Retiree Medical Benefits Trust Improving,” Crain’s Detroit Business, March 27, 2016; “The UAW Benefits Failure That Wasn’t,” Bloomberg Businessweek, Aug. 27, 2015. Also halted: Coverage was stopped for retirees age sixty-five and older, many of whom used their GM benefits to supplement their Medicare. The company did boost pensions as a way to help those affected pay for new coverage. See “Retiree Benefits Take Another Hit,” Wall Street Journal, July 16, 2008; “Some G.M. Retirees Are in a Health Care Squeeze,” New York Times, Nov. 9, 2008. Tried to buy out: “U.S. Automakers Cut Retirees Loose,” Bloomberg Businessweek, June 28, 2012. “Run leaner”: “Retirees Wrestle With Pension Buyout from General Motors,” New York Times, July 18, 2012.
“That argument”: “A Portrait of My Industry” by Rick Wagoner, Wall Street Journal, Dec. 6, 2005.
Obama named: “Obama Picks G.E. Chief for Board as Focus Turns to Jobs,” New York Times, Jan. 21, 2011.
Russ Feingold: “Feingold to Obama: Fire Immelt,” Roll Call, March 30, 2011. Bill O’Reilly: “Tea-Party Attacks Put GE on Defense,” Wall Street Journal, Oct. 10, 2011. Also see “The O’Reilly Factor” for Aug. 23, 2011, in which O’Reilly attacks GE for a launching an aerospace joint venture in China, saying that the company “is helping the Chinese compete against America while its boss heads up the president’s council on competitiveness.” Their reproof: Immelt was also attacked, especially by the right, for being too cozy with President Obama. See “General Electric’s Crony Capitalism” by Hunter Lewis, Mises Institute, Nov. 25, 2013. Also see “The Unholy Marriage of GE and President Obama at the Altar of Industrial Policy” by Dan Ikenson, Forbes, April 8, 2011. GE came under fire, as well, for aggressively trying to minimize its US tax payments. See “The Truth About GE’s Tax Bill” by Allan Sloan and Jeff Gerth, Fortune, April 4, 2011; “GE and Verizon’s Claims About Their Taxes Don’t Stand Up” by Bob McIntyre, TaxJustice, April 14, 2016. Also see “What Happened to Corporate Stewardship?” by Rick Wartzman, Harvard Business Review, Aug. 29, 2014. In 2015, GE did say that it would pay about $6 billion in US taxes in order to repatriate about $36 billion in foreign earnings from the sale of GE Capital. See “G.E.’s Retrieval of Overseas Cash Highlights Tax Debate,” New York Times, April 10, 2015.
Now based outside: “Tea-Party Attacks Put GE on Defense,” Wall Street Journal, Oct. 10, 2011. These numbers were for 2010. Added a total: “U.S. Firms Eager to Add Foreign Jobs,” Wall Street Journal, Nov. 22, 2011. Including GE: See “Making the Move to Low-Cost Countries” by Till Vestring, Ted Rouse, Uwe Reinert, and Suvir Varma, Bain & Co., 2005. Lighten their cost: “5 Facts About Overseas Outsourcing” by Alex Lach, Center for American Progress, July 9, 2012. “Go to Brazil”: “Jeffrey Immelt at The Economic Club of Washington, D.C.,” Business Roundtable, March 31, 2011 (businessroundtable.org/media/news-releases/jeffrey-immelt-at-the-economic-club-of-washington-dc). Also quoted in “Big U.S. Firms Shift Hiring Abroad,” Wall Street Journal, April 19, 2011; “Why the Jobs Are Going Over There” by Ted C. Fishman, USA Today, May 17, 2011. Also see “The World I See,” an address by Jeff Immelt to New York University’s Stern School of Business, May 20, 2016.
He reoriented: See “The CEO of General Electric on Sparking an American Manufacturing Renewal” by Jeffrey R. Immelt, Harvard Business Review, March 2012; “G.E. Goes With What It Knows: Making Stuff,” New York Times, Dec. 4, 2010. Stepping out: “Jeffrey Immelt Is Putting His Own Stamp on Jack Welch’s G.E.,” New York Times, April 13, 2015; “Back to Basics” by James Surowiecki, New Yorker, May 4, 2015; “GE Is No Longer a Bank” by Justin Fox, Bloomberg View, Jan. 15, 2016. Louisville: “The Insourcing Boom” by Charles Fishman, The Atlantic, Dec. 2012. In 2016, GE sold its Louisville-based appliances business to the Chinese company Haier. Schenectady: See “Made in the USA,” Time, April 22, 2013; “Ideas on an Assembly Line,” New York Times, Dec. 14, 2012.
355–356 Pipe dream: See “Alan Tonelson: ‘The Insourcing Boom That Isn’t,’” The Atlantic, Dec. 14, 2012; “U.S. Manufacturing Surges Ahead—but Don’t Look for a Factory Job,” Forbes, Aug. 22, 2011; “Manufacturing is Growing, Even When Manufacturing Jobs Are Not,” The FRED Blog, Federal Reserve Bank of St. Louis, Dec. 18, 2014; “The Myth of America’s Manufacturing Renaissance” by Adams B. Nager and Robert D. Atkinson, Information Technology & Innovation Foundation, Jan. 2015; “The Mirage of a Return to Manufacturing” by Eduardo Porter, New York Times, April 26, 2016. Much higher now: “Think Nothing Is Made in America? Output Has Doubled in Three Decades,” Market-Watch, March 28, 2016; “Industrial Production Index,” Economic Data, Federal Reserve Bank of St. Louis. Less than 200: “Behind America’s ‘Jobless Recovery’” by Rick Wartzman, Bloomberg Businessweek, July 15, 2011. “Get real”: “The Myth of Industrial Rebound” by Steven Rattner, New York Times, Jan. 26, 2014. Also see “They Don’t Make ’Em Like That Any More,” The Economist, Jan. 14, 2017.
GE derived: “The World I See,” an address by Jeff Immelt to New York University’s Stern School of Business, May 20, 2016. “An American company”: “The Jobs Czar: General Electric’s Jeffrey Immelt,” 60 Minutes, Oct. 9, 2011.
Two-tier: “GE to Unions: Drop Dead,” Labor Notes, May 24, 2011; “Factory Jobs Gain, but Wages Retreat,” New York Times, Dec. 29, 2011; “At General Electric Company, Workers Struggle To Find Footing As Shareholders Reap Windfalls,” International Business Times, April 17, 2015. Had closed: Schultz, 1–2; “GE Closes DB Plan for Salaried Employees,” Pensions & Investments, Jan. 17, 2011; “GE’s Deep Pension Freeze” by Rebecca Davis, PRC Perspectives Blog, Pension Rights Center, Feb. 24, 2011. More responsible: “Health Care: GE Gets Radical,” Bloomberg Businessweek, Nov. 19, 2009; “High Health Plan Deductibles Weigh Down More Employees,” New York Times, Sept. 1, 2014. For its retirees: “Changes to GE Health Plans Leave Retirees Stunned,” Connecticut Post, Feb. 22, 2015; “GE Saves $3.3 Billion With Cuts to Retires’ Life, Health Benefits,” TheStreet, Aug. 4, 2015. While the company ended its supplemental-insurance plans, it did agree to provide $1,000 a year toward such coverage purchased through a private exchange. Buying back: “How GE and Jeff Immelt Are Failing to Reinvigorate the U.S. Economy” by William Lazonick, The Globalist, May 3, 2011. Lazonick reports that from 2000–2009, GE spent more than $50 billion on stock buybacks. It wouldn’t be the last time, either. See “GE Stock Soars Today, Announces $50 Billion Share Buyback Program, Selling Real Estate Holdings,” TheStreet, April 10, 2015. Also see “GE Shows How to Make Shareholders Richer and Retirees Poorer” by Michael Hiltzik, Los Angeles Times, March 14, 2016. Notably, some investors have criticized GE for buying back its shares when the price was too high—a poor use of capital. See, for example, “GE’s Value Destroying Stock Buybacks” by Steven Towns, Seeking Alpha, Sept. 26, 2011.
“The essence of”: From the back jacket of Hoffman, Casnocha, and Yeh, The Alliance. LinkedIn: In 2016, the company was purchased by Microsoft.
“The old model”: Hoffman, Casnocha, and Yeh, 3. “Too rigid”: Hoffman, Casnocha, and Yeh, 5.
“Acknowledging that”: Hoffman, Casnocha, and Yeh, 27–28.
Wasn’t new: Cappelli, 172–179. Also see Fraser, White-Collar Sweatshop, 138–139. “Taking time off”: Leinberger and Tucker, The New Individualists, 400. Digital powerhouse: “G.E., the Software Start-Up,” New York Times, Aug. 28, 2016; Every Company Is a Technology Company” by Alan Murray, Fortune, June 10, 2016; “How GE Exorcised the Ghost of Jack Welch to Become a 124-Year-Old Startup,” Bloomberg Businessweek, March 17, 2016. Making mistakes: “GE Tries to Reinvent the Employee Review, Encouraging Risks,” Wall Street Journal, June 8, 2016.
“Purpose, freedom”: Bock, Work Rules!, 10. More or less stress: Regarding the “more” side, see “Inside Amazon: Wrestling Big Ideas in a Bruising Workplace,” New York Times, Aug. 15, 2015. Great perquisites: “20 Hottest Tech Companies With the Best Employee Perks,” Inc., Feb. 3, 2016. There were limits, however. See “Silicon Valley’s Newest Trend Is Realizing Its Most Insane Perks Aren’t Sustainable,” Quartz, May 10, 2016.
About 300,000: The breakdown was as follows: Amazon, 152,000; Apple, 76,000; Alphabet (Google’s parent company), 62,000; and Facebook, 13,000. These figures are based on federal financial filings for 2015, as well as information from Apple’s corporate website and “Full-Time Jobs at Amazon Grow at Rapid Pace in First Quarter,” Seattle Times, May 9, 2016. If anything, the 300,000 total is on the high side, as Alphabet and Facebook don’t break out US employment. Apple makes most of its products in China, using subcontractors. See “How the U.S. Lost Out on iPhone Work,” New York Times, Jan. 21, 2012. In January 2017, Amazon announced that it would hire 100,000 jobs over the next 18 months. Amazon, meanwhile, has been heavily criticized for the way it treats its warehouse workers. See “Brutal Conditions in Amazon’s Warehouses Threaten to Ruin the Company’s Image,” Business Insider, Aug. 5, 2013; “How Amazon Shames Warehouse Workers for Alleged Theft,” Bloomberg Businessweek, March 7, 2016; “Inside an Amazon Warehouse, the Relentless Need to ‘Make Rate,’” Gawker, June 6, 2016. General Motors: It employed more than 618,000 people in the United States in 1979. See “A Brief History of General Motors Corp.,” Associated Press, Sept. 14, 2008.
“Eating the world”: “Why Software Is Eating the World” by Marc Andreessen, Wall Street Journal, Aug. 20, 2011. A million: The 1.1 million positions included software developers for both systems and applications. This figure and the other occupational and wage data in this paragraph are from the US Bureau of Labor Statistics, May 2015.
“When George Eastman”: “Robots Are Hurting Middle Class Workers, and Education Won’t Solve the Problem, Larry Summers Says,” Washington Post, March 3, 2015. Also see “The Age of the Ghost Company” by Gillian B. White, The Atlantic, Jan. 7, 2016; “Silicon Valley Is Not a Job Creator” by Chris Matthews, Fortune, Dec. 4, 2015; “The Internet Has Been a Colossal Economic Disappointment” by William H. Davidow, Harvard Business Review, March 30, 2015; Davis, The Vanishing American Corporation, 91–92; “America’s Dazzling Tech Boom Has a Downside: Not Enough Jobs,” Wall Street Journal, Oct. 12, 2016; “Amazon Is Going to Kill More Jobs Than China Did,” MarketWatch, March 15, 2017.
Lakeside house: From a 2014 visit by the author to Rocheleau’s Wiconsin home. Cutting of: For years, GE had offered employees over sixty-five years of age several health plans to supplement Medicare. Then, in 2012, the company announced that it would no longer cover retirees who had not turned sixty-five by January 1, 2015, and that it would require those who had reached sixty-five by that date to assume half the cost of certain plan benefits. The company subsequently decided to terminate these plans altogether and give all retirees the option of purchasing supplement medical coverage through a private exchange. Retirees who were already over sixty-five would receive a $1,000 subsidy. About $1000: From a 2016 interview by the author with Rocheleau.
Hourly retirees: “GE Labor Unions to Join Brawl Over Retiree Health Care,” TheStreet, Nov. 6, 2015; “Unions Sue GE Over Retiree Health Benefits Cut,” Courier-Journal of Louisville, Ky., Nov. 10, 2015. “Can afford it”: “GE Ex-Labor Chief Switches to Defend Retirees’ Benefits,” Bloomberg, Sept. 12, 2013. On a promise: The crux of Rocheleau’s lawsuit against the company was that two months before it terminated its post-sixty-five medical plans, it issued a handbook to retirees saying that it “expects and intends to continue” the coverage indefinitely. The company also said that it “reserves the right to terminate, amend, or replace” the plans. But Rocheleau and his coplaintiff argued that GE had a fiduciary duty to act in the interest of plan participants—and saying that it expected to continue the plans when it must have known otherwise at that point in time was a violation of that duty. For its part, GE has maintained that the language in the handbook was neither inaccurate nor misleading, and that the company had no intention of deceiving anyone. It also said that the changes it made have helped—not hurt—tens of thousands of GE retirees. Under its new private-exchange system, the company noted, 70 percent of them paid lower premiums in 2015 than they did under their old plans in 2014. See Evelyn Kauffman and Dennis Rocheleau v. General Electric, US District Court, Eastern District of Wisconsin, 14-CV-1358, 2014.
Grew up: All biographical details are from a 2014 interview by the author with Rocheleau. “Schooled in”: Remarks by Dennis Rocheleau to a meeting of the Labor and Employment Relations Association in San Francisco, Jan. 4, 2009.
In 2003: See “Union at G.E. Plans Strike on Health Fee,” New York Times, Jan. 8, 2003; “GE and Labor: This Could Get Ugly,” Bloomberg, June 1, 2003; “G.E. Union Cites Deal to Curb Workers’ Share of Health Costs,” New York Times, June 18, 2003. “Advocates for mushy”: Remarks by Dennis Rocheleau to a meeting of the Industrial Relations Research Association in East St. Louis, Ill., April 10, 2003.
More than 140,000: From a 2014 interview by the author with Rocheleau. To 24,000: This and the 2015 figure are from GE’s federal financial filings. “Always maintained”: “GE Ex-Labor Chief Switches to Defend Retirees’ Benefits,” Bloomberg, Sept. 12, 2013. “Ass-kissed”: From a 2014 interview by the author with Rocheleau.
“My faith in”: Dec. 2, 2012, letter from Rocheleau to Immelt. For forty years: As noted by Immelt himself. See “Transcript: GE CEO Jeff Immelt on Fortune’s The Chat,” Fortune, June 3, 2015. To back off: From a 2014 interview by the author with Rocheleau.
Spoke out at: The quotes are from meeting transcripts on the GE corporate website.
More than $4.5 billion: The company booked savings of $832 million in 2012, $586 million in 2014, and $3.3 billion in 2015. See ““GE Labor Unions to Join Brawl Over Retiree Health Care,” TheStreet, Nov. 6, 2015. Was profitable: “Jet Engines and Energy Equipment Lift Profit at G.E.,” New York Times, Jan. 18, 2013. “General Electric’s Industrial Segments Lift Earnings,” New York Times, Jan. 17, 2014. “Deal is a deal”: From a 2014 interview by the author with Rocheleau.
New tools: See, for example, “American Workers Try to Organize—One Click at a Time” by Rick Wartzman, Fortune, Feb. 16, 2016. Also see “New Frontiers of Worker Power: Challenges and Opportunities in the Modern Economy” by Michelle Miller and Eric Harris Bernstein, Roosevelt Institute, Feb. 15, 2017. Fight for $15: See “Eyeing the Trump Voter, ‘Fight for $15’ Widens Its Focus,” New York Times, Nov. 29, 2016. Never again see: Some argue that we can, in fact, find ways to forge a new kind of labor movement that will help restore prosperity and strengthen democracy. See, especially, Geoghegan, 195–255. Others, meanwhile, are especially concerned about what a Trump presidency will mean for organized labor. See “Donald Trump Can Kill the American Union” by Harold Meyerson, Washington Post, Nov. 23, 2016.
With few skills: See “How to Protect Workers from Job-Stealing Robots” by Jason Furman, The Atlantic, Sept. 21, 2016. Technological Progress: See “A Future That Works: Automation, Employment, and Productivity,” McKinsey Global Institute, Jan. 2017. International commerce: See “The Sustainable Equitable Trade Doctrine” by Todd N. Tucker, Roosevelt Institute, March 13, 2007; “Pulling Back Too Far on Trade Will Hurt American Workers” by Rick Wartzman, Fortune, Jan. 24, 2017. Are imported: “Trump’s Tough Trade Talk Could Damage American Factories,” New York Times, Dec. 2, 2016. Also see “Trump’s Fight Against Made-in-Mexico Could Carry Price on Both Sides of Border,” Washington Post, Dec. 1, 2016. Flow of data: “Five Priorities for Competing in an Era of Digital Globalization” by Jacques Bughin, Susan Lund, and James Manyika, McKinsey Quarterly, May 2016; Baldwin, The Great Convergence, 11-12. Also see “Free Trade’s Great, but Offshoring Rattles Me” by Alan S. Blinder, Washington Post, May 6, 2007.
The government has: For more on the items in this paragraph see, “The Agenda to Raise America’s Pay,” Economic Policy Institute (www.epi.org/pay-agenda/); Gordon, The Rise and Fall of American Growth, 644–649; Weil, 214–267. Some experts maintain that the best program the government could implement at a time when jobs are poised to rapidly disappear because of automation is a Universal Basic Income. See “Would a Universal Basic Income Fix US Economic Inequality? One Group Is Spending $10 Million to Find Out,” Quartz, Dec. 8, 2016. Also see “What It Takes to Get Workers to Be Their Most Creative” by Rick Wartzman, Fortune, May 12, 2016; “Startup CEO Loves Tech but Fears Millions Will Be Jobless” by Rick Wartzman, Fortune, Nov. 14, 2015. Paid family leave: See “That Fantastic Parental Leave Policy Sweeping America? It Isn’t.,” Bloomberg, March 13, 2017. Is being generated: Estimates of Americans doing independent, contingent, or alternative work vary greatly—from 53 million, according to the Freelancers Union; to 36 million, according to the Rockefeller Foundation and The Bridgespan Group; to 24 million, or 16 percent of the labor force, according to “The Rise and Nature of Alternative Work Arrangements in the United States, 1995–2015” by Lawrence F. Katz and Alan B. Krueger, March 29, 2016. The difference depends, in part, on whether someone is doing contingent work on a full-time or part-time basis. Strikingly, Katz and Krueger found that all of the net employment growth in the United States between 2005 and the end of 2015 could be attributed to alternative work.
Portable benefits: “Gig workers” is used here to describe independent work done both online (via platforms such as Uber, TaskRabbit, and others) and not online. See the “Portable Benefits Resource Guide” by Libby Reder, Natalie Foster, and Greg Nelson, Aspen Institute’s Future of Work Initiative, July 13, 2016; “Protecting Workers in a Patchwork Economy” by Shayna Strom and Mark Schmitt, Century Foundation, April 7, 2016; “Common Ground for Independent Workers,” Medium, Nov. 9, 2015. Still small but: “The Rise and Nature of Alternative Work Arrangements in the United States, 1995–2015” by Lawrence F. Katz and Alan B. Krueger, March 29, 2016. Katz and Krueger found that those engaged in alternative forms of work constituted about 16 percent of the American labor force in 2015, up from 10 percent a decade earlier and 9 percent twenty years earlier. “Alternative work” includes freelancers, as well as temp agency and contract company employees. Also see “Independent Work: Choice, Necessity, and the Gig Economy” by James Manyika, Susan Lund, Jacques Bughin, Kelsey Robinson, Jan Mischke, and Deepa Mahajan, McKinsey Global Institute, Oct. 2016. Technological innovation: See “Restoring American Competitiveness” by Gary P. Pisano and Willy C. Shih, Harvard Business Review, July/Aug. 2009. Fosters entrepreneurship: Some argue that one key to more innovation and entrepreneurship, as well as more jobs, is more vigorous enforcement of our antitrust laws at a time when big companies are in many cases dominating their markets. See “America’s Monopoly Problem” by Derek Thompson, The Atlantic, Oct. 2016; Lynn, Cornered, 129–135; Reich, Saving Capitalism, 29–47. Also see “The Rise of ‘Superstar Firms’ and Why Americans Are Working More for Less, New York Times, March 9, 2017. Others, meanwhile, are also calling for reform of the nation’s occupational licensing system. See “Occupational Licensing: A Barrier to Entrepreneurship” by Jason Wiens and Chris Jackson, Ewing Marion Kauffman Foundation, Sept. 16, 2015; “Occupational Licensing and the American Worker” by Ryan Nunn, Hamilton Project, June 21, 2016. A low ebb: “How America Lost Its Mojo” by Derek Thompson, The Atlantic, May 27, 2016; “The Surprising Slowdown in Startups” by Geoff Colvin, Fortune, March 18, 2016; “A Drop-Off in Start-Ups: Where Are All the Entrepreneurs?” Los Angeles Times, Sept. 7, 2014. Full employment: For a robust full-employment agenda, see Bernstein, The Reconnection Agenda, 330–334.
Tax laws: “Killing Conscience: The Unintended Behavioral Consequences of ‘Pay for Performance’” by Lynn A. Stout, The Journal of Corporation Law, Vol. 39, No. 3, Spring 2014; “Taxes and Executive Compensation” by Steven Balsam, Economic Policy Institute, Briefing Paper No. 344, Aug. 14, 2012; “5 Ways to End CEO Pay Subsidies” by Sarah Anderson, Inequality.org, Feb. 8, 2017. To look beyond: See “Short-Term Thinking in Corporate America Is Strangling the Economy” by Rachelle C. Sampson, Vox, Oct. 3, 2016; “How to Stop Short-Term Thinking at America’s Companies” by Alana Semuels, The Atlantic, Dec. 30, 2016. Also see “The Long View: Why ‘Maximizing Shareholder Value’ Is On Its Way Out” by Rick Wartzman, Time, Sept. 25, 2013; “Corporations Need a New Reason to Be” by Justin Fox, Bloomberg View, Jan. 4, 2017. Institutional investors: Some have started to move in this direction. See “BlackRock’s Fink, McKinsey Lead Group Fighting Wall Street Myopia,” Wall Street Journal, March 11, 2015. Also see “Getting Past the Great Ideological Divide in Business Today” by Rick Wartzman, Time, May 20, 2014; “When Shareholder Capitalism Came to Town” by Steven Pearlstein, The American Prospect, April 19, 2014.
“Once felt”: “How U.S. Lost Out on iPhone Work,” New York Times, Jan. 22, 2012.
More training: ManpowerGroup’s 2016/2017 “U.S. Talent Shortage Survey” did find a sharp upturn in on-the-job training during the most current year with 48% of employers offering training and development to their workers—up from just 12% in 2015. What’s unclear is if this is just a short-term blip. Peter Cappelli points out that, while accounting rules treat purchases of capital equipment as “assets,” training programs are typically described as “overhead costs.” “So we have the irony,” he writes, “that business is rewarded for investments in capital that raise productivity by eliminating jobs but punished for investments in people… that raise productivity and save jobs.” See his essay “How to Save Good Jobs,” Washington Post, Feb. 10, 2017.
Ultimately bad: Some experts have expressed concern that the squeeze on workers’ wages has cut so severely into consumer spending that it may be undermining overall economic growth. See “Wal-Mart, Starbucks, Aetna’s Pay Hikes: Why now?” by Rick Wartzman, Fortune, March 4, 2015; “Retailer Revelations: Why America’s Struggling Middle Class Has Businesses Scared” by Brendan Duke and Ike Lee, Center for American Progress, Oct. 13, 2014; Reich, Saving Capitalism, 163; “Report of the Commission on Inclusive Prosperity,” cochaired by Lawrence H. Summers and Ed Balls, convened by the Center for American Progress, Jan. 2015; “The Case for Wage-Led Growth” by Jeff Madrick, New America Foundation, June 2012. “Healthy business”: Drucker, Management: Tasks, Responsibilities, Practices, 327.
Was so honored: Wal-Mart was number fifteen on the list of fifty.
Much more: See “Walmart Workers Get a Raise, but Is That Enough?” by Bourree Lam, The Atlantic, Jan. 21, 2016. Also see “And in This Aisle, Higher Pay,” New York Times, Oct. 16, 2016.
362–363 “The American people”: “The Economics of a Free Society” by William B. Benton, reprint from Fortune, Oct. 1944, PHP. “Sons and daughters”: According to the Equality of Opportunity Project, “children’s prospects of achieving the ‘American Dream’ of earning more than their parents have fallen from 90 percent to 50 percent over the past half century.” This decline, the group says, has occurred for children from both low- and high-income families.