Anyone looking for a status update on the American Dream should read and absorb Rick Wartzman's The End of Loyalty. The current proliferation of zero hour contracts, absolute wage deflation, last-minute scheduling and growth of atypical “gig” work has a backstory in U.S. economic history. Dismantled by Drucker Institute’s Rick Wartzman in his overview of post-war industrial relations, the American Dream has largely waned and fallen out of reach for regular working people.
In its 363 pages, “The End of Loyalty” takes stock of the places, people and employers that colour and characterise the American industrial narrative since 1945. This inventory helps to explain how, when and where a period of rising wages, job security and sound business came to be eclipsed by the interest of private “diffuse” shareholders.
The successes of a number of employers lead to the development of entire cities of workers who, in the post-Depression era, flocked to industrial towns that swelled in size and surged with opportunities. The Golden Age boom period of growth immediately following World War Two put the likes of Detroit, Flint, Michigan and Rochester, New York not just on the map within the U.S., but also within the international stage while war-torn Europe and post-colonial old world languished. Smaller towns also consolidated their roots, including Fort Wayne, Indiana, Lordstown, Ohio and Pittsfield, Massachusetts. The second half of Wartzman’s book carefully charts the subsequent demise of the towns as critical employers come to terms with post-boom.
Within the streets and factory floors of these towns, a band of executives emerge. Varying in style and background, these managers face unions in a time of peak membership, while adopting new management thinking that aligns with Milton Friedman’s landmark thesis pointing to shareholder value. Advocate of decentralized management philosophy, Ralph J. Cordiner served as president of General Electric from 1950 to 1958, and as its chairman and chief executive officer from 1958 to 1963. Late comers are Jack Welch, chairman and CEO of GE from 1981 to 2001, a period when he broken down hierarchy inherited from Cordiner and maintained a close relationship with the, then, weakening UAW. From 1954, Robert Goizeta rose through the ranks to become CEO of Coca-Cola from 1980 to 1997, using his leadership to engineer massive shareholder value.
They find their match in Walter Reuther, president of the United Automobile Workers from 1946 until 1970. During his leadership, Reuther marched with Martin Luther King, Jr., survived two assassination attempts and set a model for trade unions across the world. He was replaced by Leonard Woodcock who set up the National Department of the Future to come to terms with technological change which was evident in Japan and nascent in a post-industrial U.S. Over in Rochester, New York, Saul Alinsky’s activism of lead to the Industrial Areas Foundation and the establishment of Freedom Integration God Honor Today, pushed to Kodak in an effor to hire locally and employ African-American residents.
The two decades that followed WW2 mean broad and extraordinary prosperity for the United States. Wartzman cites the extent of this economic expansion - 106 consecutive months until 1965. This trend provided fertile grounds for internal learning, the types of things that the forefather to Wartzman’s employer, Peter Drucker, helped formulate. Alfred Stern also emerges during this time, another progressive thinker who was considered to be mad when he turned down two promotions during the 1950s, his “Age of Conformism”. For both thinkers, gifted with the knowledge of the internal routings of General Motors, the corporation should function for and be accountable to society, a principle that slides after Friedman.
The slowdown of the U.S. economy towards the end of the 1960s coincides with a cultural undercurrent characterised by youth movements, post—Civil Rights and feminism. The accelerating production lines from the mid-1960s lead to was Wartzman calls the “dead-end dullness and degradation” of work, a mode of work that blue-collar youth fronted up against. Rates of absenteeism in auto factories increased significantly, 5% in 1970, doubling the rate maintained throughout the 1950s. Abuse of drugs and alcohol was common, behaviours which became associated with the visual appearance of shoulder-length hair and bell-bottomed trousers - an impressive critique from Lordstown, Ohio’s Akron Beacon Journal that Wartzman re-surfaces.
Gains for skilled jobs for African Americans were meagre, with pay gap earnings at the end of the 1970s standing at 27%, only an 8 percent narrowing from differences in 1967. Women also continued to earn 6c less than their male counterparts automotive assemblers. It wasn’t until 1978 when the Pregnancy Discrimination Act under President Carter, places women on common or comparable terms. Wartzman’s navigation out of the labour literature is notable, via Kurt Vonnegut in a public relations role, to Bruce Springsteen who’s 1980 ”The River” identified the systematic and personal deterioration of the American Dream.
I got a job working construction for the Johnstown Company
But lately there ain’t been much work on account of the economy
Now all them things that seemed important
Well, mister, they vanished right into the air
Now I just act like I don’t remember
Mary acts like she don’t care
Throughout, Wartzman makes a dexterous handling of language on a subject topic that is not only about the thinning, but might be best expressed through telling numbers. A look into the calculating terminology of the post-industrial era is apt, when Downsizing, Rightsizing, Outsourcing, Offshoring explained the move towards towards using non-U.S. facilities, a trend that was consolidated by NAFTA in 1993. Looking to his colleagues, Wartzman employs Yale’s Jacob Hacker’s “spectre of workplace insecurity emerges”. In another instance, Wartzman jousts at the top labour negotiator for General Electric, “[Virgil] Day, who was as a private pilot was naturally inclined to take a high altitude view of things.”
Wartzman’s study is a foundational primer for those coming to terms with the future of work and designing better outcomes for the most underserved workers. Lifelong learning, job security and the distribution of opportunity have all been trialed before - they’ll just need updating and docking to monitorial systems and software abilities of the new millennium.
Find out more about Rick Wartzman’s work at KH Moon Center for a Functioning Society, and order a copy of “The End of Loyalty” to your local bookshop. Originally published in 2017 by PublicAffairs.