by Naomi Klein
Top: Bill Gates, Microsoft President and CEO, gets pied. Bottom: Biotic Baking Brigade strikes again. Economist Milton Friedman, architect of the global corporate takeover, gets his just deserts.
CHAPTER ELEVEN
BREEDING DISLOYALTY
What Goes Around, Comes Around
In our manufacturing, administrative, and distribution facilities, we have a specific philosophy — cameras keep honest people honest.
—Leo Myers, safety and security systems engineer for Mattel, explains the company’s enthusiastic use of video surveillance on its global workforce, 1990
When I dropped out of university in 1993, I could count on the fingers of one hand the number of my friends who had jobs. “The Recession,” we repeated to one another over and over again, through years of jobless summers, through listless decisions to slog it out in grad school, through periods of cutbacks to our universities, through miserable stretches when parents were out of work. Just as we would later blame El Niño for everything from droughts to floods, the Recession was an economic bad weather system that had sucked up all the jobs as if they were Missouri trailer parks.
When the jobs disappeared, we understood that it was a result of the tough economic times that seemed to be affecting everyone (though perhaps not everyone equally) from company presidents facing bankruptcy to ax-wielding politicians —everybody, men and women, old and young, in all walks of life and work, right on down to me and my middle-class friends and our halfhearted job searches. The shift from the Recession to the cutthroat global economy happened so suddenly I feel as if I was sick that day and missed the whole thing —as with Grade 10 algebra, I will forever be playing catch-up. All I know is that one minute we were all in the Recession together. The next, a new strain of business leader was rising like a phoenix from the ashes — suit freshly pressed, enthusiasm pumped — announcing the arrival of a new golden age. But as we have seen in the last two chapters, when the jobs came back (if the jobs came back), they came back changed. For the workers in the contract factories of the export processing zones, and for the legions of temps, part-timers, contract and service-sector workers in industrialized countries, the modern employer has begun to look like a one-night stand who has the audacity to expect monogamy after a meaningless encounter. And many of them even got it for a while. Running scared from years of layoffs and gloomy economic projections, most of us did swallow the rhetoric that we should be happy picking up whatever pay stubs were scattered our way. There is mounting evidence, however, that workplace transience is finally eroding our collective faith, not only in individual corporations but in the very principle of trickle-down economics.
Soaring profits and growth rates, as well as the mind-boggling salaries and bonuses that CEOs of large corporations pay themselves, have radically changed the conditions under which workers originally came to accept lower wages and diminished security, leaving many feeling that they’ve been had. Nowhere was this shift in attitude more apparent than in the public’s sympathy for the striking United Parcel Service workers in 1997. Though Americans are notorious for their lack of sympathy for labor strikes, the plight of UPS part-timers struck a chord. Polls found that 55 percent of Americans supported the UPS workers, and only 27 percent sided with the company. Keffo, the editor of a bitter zine for temporary workers, summed up the public sentiment: “Day after day, [people] read and heard how great the economy is and it doesn’t take a rocket scientist to realize well, duh, if UPS is doing so well, why can’t they pay their workers more, or hire part timers as full timers, or keep their grubby fingers out of their workers’ pension fund. So in a hilarious twist of fate, all the ‘good’ economic news works against UPS in favour of the Teamsters.”1
Realizing that it had become a lightning rod for a broader malaise, UPS agreed to convert 10,000 part-time jobs to full-time jobs at twice the hourly pay, and increased pay for part-timers by 35 percent over five years. In explaining the concessions, UPS vice chairman John W. Alden said the company never foresaw its workers becoming symbols of the rage against the New Economy. “If I had known that it was going to go from negotiating for UPS to negotiating for part-time America, we would’ve approached it differently.”2
From Job Creators to Wealth Creators
As we have seen, it has only been in the past three or four years that corporations have stopped hiding layoffs and restructuring behind the rhetoric of necessity and begun to speak openly and unapologetically about their aversion to hiring people and, in extreme cases, their total exodus from the employment business. Multinationals that once boasted of their role as “engines of job growth” — and used it as leverage to extract all kinds of government support —now prefer to identify themselves as engines of “economic growth.” It’s a subtle difference, but not if you happen to be looking for work. Corporations are indeed “growing” the economy, but they are doing it, as we have seen, through layoffs, mergers, consolidation and outsourcing — in other words, through job debasement and job loss. And as the economy grows, the percentage of people directly employed by the world’s largest corporations is actually decreasing. Transnational corporations, which control more than 33 percent of the world’s productive assets, account for only 5 percent of the world’s direct employment.3 And although the total assets of the world’s one hundred largest corporations increased by 288 percent between 1990 and 1997, the number of people those corporations employed grew by less than 9 percent during that same period of tremendous growth.4
The most striking figure is the most recent: in 1998, despite the stellar performance of the U.S. economy and despite the record low unemployment rate, U.S. corporations eliminated 677,000 permanent jobs —more job cuts than in any other year this decade. One in nine of those cuts came in the aftermath of mergers; many others came from the manufacturing sector. As the low U.S unemployment rate suggests, two-thirds of the companies that eliminated jobs created new ones and laid-off workers found alternative employment relatively quickly.5 But what those dramatic job cuts demonstrate is that a stable, reliable relationship between workers and their corporate employers has little or nothing to do with either the unemployment rate or the relative health of the economy. People are experiencing less stability even in the very best of economic times —in fact, these good economic times may be flowing, at least in part, from that loss of stability.
Job creation as part of the corporate mission, particularly the creation of full-time, decently paid, stable jobs, appears to have taken a back seat in many major corporations, regardless of company profits. (See related tables.) Rather than being one component of a healthy operation, labor is increasingly treated by the corporate sector as an unavoidable burden, like paying income tax; or an expensive nuisance, like not being allowed to dump toxic waste into lakes. Politicians may say that jobs are their priority, but the stock market responds cheerfully every time mass layoffs are announced, and sinks gloomily whenever it looks as if workers might get a raise. Whatever bizarre route we took to get here, an unmistakable message now emanates from our free markets: good jobs are bad for business, bad for “the economy” and should be avoided at all cost. Although this equation has undeniably reaped record profits in the short term, it may well prove to be a strategic miscalculation on the part of our captains of industry. By discarding their self-identification as job creators, companies leave themselves open to a kind of backlash that can come only from a population that knows that the smooth sailing of the economy is of little demonstrable benefit to them. (See Table 11.1–Table 11.4.)
According to the 1997 report of the United Nations Conference on Trade and Development (UNCTAD), “Rising inequalities pose a serious threat of a political backlash against globalization, one that is as likely to come from the North as well as from the South…. The 1920s and 1930s provide a stark, and disturbing, reminder of just how quickly faith in markets and economic openness can be overwhelmed by political events.”6 With the effects of the Asian and Russian economic crises in full sw
ing, a UN report on “human development” issued the following year was even more severe: noting the growing disparities between rich and poor, James Gustave Speth, administrator of the United Nations Development Program, said, “The numbers are shockingly high, amid the affluence. Progress must be more evenly distributed.”7
You hear this kind of talk more and more these days. Ominous warnings about a simmering antiglobalization backlash cast a shadow over the usual euphoria of the annual gathering of corporate and political leaders in Davos, Switzerland. The business press is littered with more uneasy forecasts, such as the one in Business Week that noted, “The sight of bulging corporate coffers co-existing with a continuous stagnation in Americans’ living standards could become politically untenable.”8 And that’s America, which has a record low unemployment rate. The situation becomes even less comfortable in Canada, where unemployment is at 8.3 percent, and in European Union countries that are stuck with an average unemployment rate of 11.5 percent. (See Table 11.5, Appendix.)
At a speech delivered to the Business Council on National Issues, Ted Newall, chief executive officer of Nova Corp. in Calgary, Alberta, called the fact that more than 20 percent of Canadians live below the poverty line a “time bomb that is just waiting to go off.” Indeed, a little side industry has developed of CEOs falling over each other to proclaim themselves ethical clairvoyants: they write books about the new “stockholder society,” publicly berate their peers at luncheon addresses for their lack of scruples and announce that the time has come for corporate leaders to address the growing economic disparities. Trouble is, they can’t agree on who is going to go first.
The fear that the poor will storm the barricades is as old as the castle moat, particularly during periods of great economic prosperity accompanied by inequitable distribution of wealth. Bertrand Russell writes that the Victorian élite in England were so consumed by paranoia that the working class would revolt against their “appalling poverty” that “at the time of Peterloo many large country houses kept artillery in readiness, lest they should be attacked by the mob. My maternal grandfather, who died in 1869, while wandering in his mind during his last illness, heard a loud noise in the street and thought it was the revolution breaking out, showing that at least unconsciously, the thought of revolution had remained with him throughout long prosperous years.”9
A friend of mine whose family lives in India says her Punjabi aunt is so afraid of an insurrection of her own household staff that she keeps the kitchen knives locked up, leaving the servants to chop vegetables with sharpened sticks. It’s not so different from the growing numbers of Americans moving into gated communities because the suburbs no longer provide adequate protection from the perceived urban threat.
Despite the widening gulf between rich and poor consistently reported by the UN and despite the much-discussed disappearance of the middle class in the West, the attack on jobs and income levels is probably not the most serious corporate offense we face as global citizens: it is, in theory, not irreversible. Far worse, in the long term, are the crimes committed by corporations against the natural environment, the food supply and indigenous peoples and cultures. Nevertheless, the erosion of a commitment to steady employment is the single most significant factor contributing to a climate of anti-corporate militancy and it is this that has made the markets most vulnerable to widespread “social unrest,” to quote The Wall Street Journal.10
Table 11.1
Total Assets of Top 100 Transnational Corporations, 1980 and 1995
Table 11.2
Direct Employment in Top 100 Transnational Corporations, 1980 and 1995
Table 11.3
Growth of Employment through Temp Agencies in Europe and U.S., 1988 and 1996
Table 11.4
Average Number of People Employed Daily through U.S. Temp Agencies, 1970 and 1998
When corporations are perceived as functioning vehicles of wealth distribution —effectively trickling down jobs and tax revenue — they at least provide the bedrock for the often Faustian bargains by which citizens offer loyalty to corporate priorities in exchange for a reliable paycheck. In the past, job creation served as a kind of corporate suit of armor, shielding companies from the wrath that might otherwise have been directed their way as a result of environmental or human-rights abuses.
Nowhere was this armor more protective than in the “jobs vs. the environment” debates of the late eighties and early nineties, when progressive movements were sharply divided, for example, between those who supported the rights of loggers and those who wanted to protect old-growth forests. In British Columbia, activists were people who came in by bus from the city while loggers loyally stood by the multinational corporations that had anchored their communities for generations. This kind of division is becoming less clear for many participants, as corporations begin to lose their natural allies among blue-collar workers who have been disenfranchised by callously executed layoffs, sudden mill closures and constant company threats to move offshore.
Today, it’s hard to find a contented company town, where citizens do not feel they have in some way been betrayed by the local corporate sector. And rather than dividing communities into factions, corporations are increasingly serving as the common thread by which labor, environmental and human-rights violations can be stitched together into a single political ideology. After a while it becomes apparent that the unsustainable search for profits that, for example, leads to the clear-cutting of old-growth forests is the same philosophy that devastates logging towns by moving the mills to Indonesia. John Jordan, a British anarchist environmentalist, puts it this way: “Trans nationals are affecting democracy, work, communities, culture and the bio sphere. Inadvertently, they have helped us see the whole problem as one system, to connect every issue to every other issue, to not look at one problem in isolation.”
This simmering backlash is about more than personal grievances. Even if you happen to be one of the lucky ones who has landed a good job and has never been laid off, everyone has heard the warnings — if not for themselves, then for their children or their parents or their friends. We live in a culture of job insecurity, and the messages of self-sufficiency have reached every one of us. In North America, the back end of an eighteen-wheeler heading for Mexico, workers weeping at the factory gate, the boarded-up windows of a hollowed-out factory town and people sleeping in doorways and on sidewalks have been among the most powerful economic images of our time: metaphors, seared into the collective consciousness, for an economy that consistently and unapologetically puts profits before people.
That message has perhaps been received most vividly by the generation that came of age since the recession hit in the early nineties. Almost without exception, they mapped out their life plan while listening to a chorus of voices telling them to lower their expectations, to rely on no one for their success. If they wanted a job with General Motors, Nike or General Electric, or indeed anywhere in the corporate sector, the message was the same: count on no one. Just in case they weren’t paying attention, it was reinforced by high-school guidance counselors holding seminars on how to become “Me Inc.,” by nightly newscasts filled with stories about how pension funds will soon be empty and by companies like Prudential Insurance urging us all to “Be your own rock.” At university campuses across North America, orientation-week events —the time when students are first introduced to campus life —are now sponsored by mutual-fund companies, which use the opportunity to prod incoming students to start saving for their retirement before they’ve even picked a major.
All this has had its effects. According to the bible of demographic marketing, The Yankelovich Report, the belief in the need to be self-reliant has increased by one-third with every generation —from the “Matures” (born 1909–1945), to “Boomers” (born 1946–1964) to “Xers” (defined loosely and somewhat inaccurately as everyone born between 1965 and the present). “Over two-thirds of Xers agree that, ‘I have to take whatever I can get in this world becaus
e no one is going to give me anything.’ Far fewer Boomers and Matures agree —only half and one-third, respectively,” the report states.11 The New York advertising firm DMB&B found similar attitudes in its study of global teens. “From a lengthy battery of attitudinal items, the one that teens most agree with worldwide is: ‘It’s up to me to get what I want out of life.’” Nine out of ten young Americans polled agreed with this sentiment of total self-reliance.12
This shift in attitude has translated into a serious boom for the mutual-fund industry. Young people, it seems, are buying more RSPs than ever before. “Why is Generation X more focused on the need to save?” wonders a reporter in Business Week. “Much of it has to do with self-reliance. They believe they’ll succeed only on their own initiative and have little confidence that either Social Security or traditional employer pensions will be around to support them in retirement.”13 In fact, if you believe the business press, the only impact this spirit of self-reliance will have is the spearheading of a new wave of cutthroat entrepreneurial initiatives as the kids who can’t count on anyone look out for Number One.
