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Establishing rules for the new workplace - Economics
USA Today (Society for the Advancement of Education), Nov, 2002 by John A. Challenger
Unions were predominant and effective. It was taken for granted that unions had won the battle for job security, so labor focused on other goals like better wages and working conditions. A company that sought to terminate the employment of a union member needed an ironclad case of wrongful behavior, and still could expect a battle from the union.
U.S. companies focused on domestic labor markets. They did not build plants overseas, especially to manufacture products for domestic markets. A large network of support companies spread out around a region--e.g., in the Midwest, suppliers and original equipment manufacturers burgeoned and eventually surrounded the auto industry in Detroit. Shipping and logistics costs were prohibitive and effectively prevented companies from locating operations in other parts of the world.
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The forces of change
Several primary forces brought about systemic change in the economy in the 1980s and 1990s. The American economic system, which had come of age after World War II and grew unchecked until the Vietnam War, was beset by economic and social crises.
Globalization forced the U.S. out of its isolation. Companies began to look for new markets overseas. Coca-Cola and McDonald's spread throughout the world. NAFTA, GATT, and free trade brought down barriers that had once prevented a more-open flow of goods and services and human resources around the world. Inevitably, the law of unintended consequences took effect on the American economy. Protected industries like automakers faced serious competition from overseas for the first time, with devastating consequences. Chrysler came within a hair's breadth of closing down, and General Motors announced it was cutting 74,000 jobs in December, 1991, the single-largest downsizing of the 1990--and perhaps ever.
Technology and automation transformed the way companies operated. The PC revolution brought power to the desktop that was unimaginable a few decades before. Enterprise software programs, laptops, cell phones, e-mail and the Internet, e-commerce, business-to-business exchanges/alliances, and supply chain destruction and reformulation--these technological phenomena have emerged in rapid succession.
Big computer makers like IBM lost their dominant position because of an onslaught of competition from Apple and other companies making PC clones. IBM announced the second-largest downsizing of the 1990s, with 63,000 job cuts in July, 1993.
Diversity and antidiscrimination forces that flowered in the 1960s worked their way into the mainstream. There was a strong push from outsider segments of the population on the moral, legal, and legislative front to repair age, gender, race, and ethnicity discrimination damage. The fact that the dominant social group--white males--could expect to face discrimination once they reached their 50s contributed to a recognition of the fundamental unfairness and the eventual breakdown of the former caste system.
The deregulation of protected industries in the 1980s and 1990s created competition for companies where none had previously existed. The telecom, banking, energy, and aerospace industries were roiled by the change. The big bureaucratic corporations that had dominated these protected industries were forced to compete in an open market and started letting people go in sizable numbers in the early 1990s. It was not surprising that telecom, financial services, and aerospace dominated the list of those experiencing the heaviest downsizing in the early to mid 1990s.
