Business Ethics for the 21st Century: Chapter 3 (pp. 109 - 116): "Downsizing and Layoffs: Employee Job Security"

1. The "canonical view" of downsizing and layoffs:

CHANGES IN THE JOB MARKET

1. Examples of "downsizing" that have caused nervousness among workers:

[Millions of blue-collar manufacturing jobs have been "shipped overseas." By 2015, 3.3 million "white-collar" jobs are due to be "outsourced."]

Loss of traditional skilled and semi-skilled union jobs and replacement with service-sector jobs.

[Note: Many of the full-time, union, and benefitted jobs lost through layoffs and downsizing are eventually restored as --

U.S. Bureau of Labor Statistics occupational forecast (see online).

See statistics for layoffs due to overseas relocation here. See statistics for layoffs overall here.

THE EMPLOYMENT-AT-WILL DOCTRINE

1-2. Workers in many European countries have rights to continue working [where firing is subject to due process]. For the most part, European workers cannot be fired without a "just cause" [based upon an assumed contractual relation between employer and employees.

American workers are generally subject to employment-at-will, whereby an employer may fire a worker for any reason at any time [unless protected by union agreement or] unless prohibited by laws against discrimination and the like, e.g. disability, gender, age, religion.

3. Certain other exceptions to employment-at-will also apply:

4. Possible "moral" arguments in behalf of the employment-at-will doctrine:

UNIONS AND PERMANENT REPLACEMENTS

1. Historically, unions have won certain rights from management. The National Labor Relations Act established the National Labor Relations Board to regulate union organizing, collective bargaining, and workers' rights overall.

2. But the "clout" of unions has diminished. "Right-to-work" laws, which outlaw "closed" or "union-only" shops have weakened the hold and effectiveness of unions. [Also diminishing the power of unions have been such forces as "union-busting" and globalism.]

On the whole, unions have protected workers from some of the worst aspects of employment-at-will. Union contracts require that employees not be dismissed without good reason.

3. Because the relationship between managements and workers is often adversarial, unions help afford workers some "balance of power." The workers' ability to strike makes employers respond to workers' demands for fair wages, safe working conditions, and other benefits. Much of this balance of power has been undone by hiring replacements for striking workers, as Ronald Reagan did in the case of [over-worked and overtired] air-traffic controllers.

HOSTILE TAKEOVERS AND PLANT CLOSINGS

1. "Restructuring," through merger or plant closing or "hostile takeover":

Companies argue that short-term harm to some workers and to the community will eventually give way to the long-term good that is associated with the profit of stockholders and the economic well-being of the society, wherein good companies win and bad companies lose. [Note: Stock prices, after an initial "bump" from restructuring, often decline because of bad public relations or revelations of internal problems.]

THE READINGS

I highly recommend these. See especially Judith Lichtenberg's, "On Alternatives to Industrial Flight: The Moral Issues" (pp. 155 - 161).

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