March 9th 2019

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Articles from this issue:

COVER STORY Commissioner Hayne offers banking stimulus

EDITORIAL Beijing's warning shot hits our soft economic underbelly

CANBERRA OBSERVED Coal ban just one front in Beijing's war on everyone

RURAL AFFAIRS Activist groups harass farmers while claiming tax-exempt status

BANKING ROYAL COMMISSION Dealing with disaster back into the too-hard basket

FOREIGN AFFAIRS Why Hungary and Poland rile the EU

RELIGION AND POLITICS Christians resolve to raise their voices in the public square

GENDER POLITICS Another freedom bites the dust under Daniel Andrews

FAMILY AND SOCIETY The end of 'Liberalism'

CHINA Thank you for your service, soft power; sharp power will take it from here

SCIENCE AND PHILOSOPHY Fermi's Paradox: Is Big Alien watching you?

MUSIC Perpetual vibe: From medium to media

CINEMA At Eternity's Gate: Impressions of Vincent

BOOK REVIEW Balanced account after the hysteria

BOOK REVIEW Golden Age for workers and its end



SPECIAL EDITORIAL Has Cardinal George Pell been wrongly convicted?

THE CARDINAL PELL CASE: Triumphalism over Pell verdict shows civilisation just a veneer


Books promotion page

Golden Age for workers and its end

News Weekly, March 9, 2019

THE END OF LOYALTY: The Rise and Fall of Good Jobs in America

by Rick Wartzman

Public Affairs, New York
Hardcover: 432 pages
Price: AUD$42.99

Reviewed by Colin Teese

The author could not have chosen a better title for what he wanted to illustrate: whereas American big business was once able and willing to provide well-paid and reliable jobs and working conditions to all Americans willing to work, that is no longer the case.

In the process of making his case, Rick Wartzman provides the reader with a thoroughgoing and painstakingly documented account of the evolution of U.S. labour relations for most of the 20th century and up to the present.

The book is constructed in three parts: I. The Golden Age; II. Turbulent Times; and III. The Era of Shareholder Supremacy. It is centred on the activities in relation to the evolution of working conditions and employment in four major American companies: Kodak, Coca-Cola, General Motors and General Electric.

The golden era actually begins in the immediate aftermath of World War II.

As the war in the Pacific was drawing to a close in 1945, a group of 19 businessmen gathered in New York to plan the peace. Going under the name of the Industrial Advisory Board of the Committee for Economic Development, it devised a plan to ensure that 58 million discharged servicemen, along with the others who had sustained war production, would be able to find secure and regular employment in a postwar U.S. economy.

The CED, as it came to be known, turned out to be thoroughgoing, influential and progressive. Some complained that it was promoting an extreme brand of “enlightened capitalism”; in particular because it accepted an important place in postwar industrial relations for organised labour. This latter position was radical even for Kodak’s George Eastman, whose idea was to pay his workers so well they would ignore unions.

The postwar climate of U.S. industrial relations was built on the idea of an adversarial system in which unions would be recognised as legitimate advocates of labour in the bargaining exchanges with employers. In the process, industrial peace became the norm, and wages and workers’ conditions steadily improved.

All of this was helped by the times. A nation in possession of more money and secure employment wanted more and more of the things U.S. business was happy to provide. The view, misguided, was that all of this could continue forever. Curiously, it was brought down by the system itself, helped by the onset of the global economy.

U.S. business actually harmed itself by insisting that business, not government, should provide both health and retirement insurance for workers. By the beginning of the 1960s, this was pushing up wages to levels that began to aggravate inflation. The 1970s oil crisis made it all worse, at a time when the American economy was so important that its inflation infected the rest of the world.

As well, American companies, which hitherto had the domestic market to themselves, now began to feel the pressure of import competition. Wage rates were generating inflation and making American businesses internationally uncompetitive.

From this time, the great compact bet­ween U.S. labour and employers began to unravel. With the onset of globalisation, it was doomed. U.S. companies not merely wanted to be able to meet international competition at home, they wanted to compete for international business.

Moreover, they became obsessed with profit over social responsibility. A new face of capitalism was emerging in which long-term job security would no longer be possible. Business was even saying that employee loyalty was no longer necessary or desirable.

The consequences for labour were devastating. Wartzman tells us that, by the 21st century, the four biggest U.S. companies – Apple, Amazon, Facebook and Google – employed 300,000 workers; fewer than half the number employed by General Motors alone in the 1970s.

All of this Wartzman elegantly des­cribes for us by means of bringing to life the personalities who were the driving forces behind what happened on both the employer and union sides of the dispute.

Amid all the goodwill, the fundamental error that American business made from the beginning was to oppose the idea of government-funded universal health and pensions services in favour of business providing the same benefits for its workers.

The irony is that other Western capitalist economies followed suit.

Purchase this book at the bookshop:


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