After leaving the Navy at the end of World War II, my father, like his father before him, went to work for DuPont. Like most large corporations at that time, DuPont provided health benefits for my father and his family, a solid retirement plan, stock bonuses when the company had a good year and job security.
My father worked hard by the standards at the time, 40-50 hours a week making sales calls in his region and spending occasional overnights away from home for training and conferences. In the 1950s and 1960s, DuPont’s work expectations provided him with enough time to coach my Little League team, serve as PTA president of the junior high I attended and sing in the church choir and a local chorale. He retired when he turned 62. When he passed away, my mother continued to draw on his pension, worked with a broker to manage his stock portfolio and used his health insurance to pay her medical bills for cancer treatments.
Those were the good old days, when there was a covenant between businesses and their employees and between businesses and the communities where their employees lived. DuPont not only provided generous benefits for my father, it encouraged him and his colleagues to engage in civic activities, in some cases viewing those activities as an asset when promotions were considered.
In the mid-1970s, my brother followed in my father’s footsteps at DuPont — with very different results.
After 22 years selling X-ray film, he learned that DuPont was selling his division to a British corporation. Later, that corporation sold the X-ray film division to a Dutch enterprise. As a result of each of these changes, my brother’s sales territories expanded and his support staff was reduced. Each acquisition also resulted in diminished benefits, less vacation, lost accumulated sick leave and lost retirement benefits.
Serve in the community or sing in a group? Forget it. After spending hour after hour driving to cover his ever-expanding territory, my brother returned to his home office to complete the paperwork that had been performed by an administrative assistant (a secretary) in my father’s era.
In sum, my brother worked more hours and experienced more stress than my father and had a lot less to show for it when he eventually left the corporate world to work for a locally owned and operated company.
My brother is not the only person of my generation who experienced the broken promises of large corporations. The auto industry, technology corporations like IBM, communications businesses and large companies like DuPont all downsized, right-sized and outsourced. In doing so, they broke covenants with their employees — many of whom, like my brother, expected to retire with a solid pension, a good stock portfolio and full health benefits.
As these same businesses thinned their workforces to “increase productivity,” they moved factories and backroom support services offshore to reduce costs and expanded work expectations to 60-70 hours per week. Consequently, the pool of volunteers to serve on public boards, the parents to coach youth sports teams, and the voices to sing in church and community choirs diminished — and so did the quality of life for many families and their communities.
Corporations not only broke covenants with their employees — they broke covenants with entire communities.
Across much of New England, the corporations that owned the mills and factories sponsored civic activities, underwrote the cost of local parks and ballfields and paid taxes that enabled the communities to have good schools and well-maintained roads. Seeking higher profits, they closed mills and factories across New England and relocated to other parts of the country, where they paid lower taxes and lower wages and added to their bottom lines.
In the wake of their departure, they left 1950s-vintage schools, parks in varying degrees of disrepair, empty storefronts and job- and revenue-starved communities.
These broken covenants were not limited to New England. Eventually, many communities that enticed corporations with tax incentives, looser regulations and lower wages experienced what New England did: The corporations eventually decided to move jobs overseas, seeking even lower wages, lower taxes and fewer regulations.
The jobs left behind are those that cannot be moved offshore or replaced with robots, and many are in the public sector. Jobs in schools, fire and police departments and many town and state offices cannot be relocated or outsourced the same way as the jobs in factories, offices or, more recently, retail stores. The work of publicly funded teachers, police, firefighters, road crews and caregivers requires personal presence and face-to-face contact with members of the community.
There is another factor that has protected public employees from the impact of broken covenants: Many public sector employees are union members whose wages and benefits cannot be reduced or eliminated unilaterally.
To the privately employed volunteers serving on school boards and selectboards at the time contracts for public-sector employees were initially put in place, the notion of providing them and their families with fair wages, affordable health insurance and a decent retirement package seemed reasonable. It mirrored what was offered in the private sector at the time and seemed particularly fair since the compensation of these public-sector employees was low in comparison. Indeed, in the community I grew up in outside of Philadelphia in the early 1960s, teachers earned so little that they typically worked part-time in local stores during the school year and held summer jobs in order to make ends meet.
Over the past 40 years, voters have often expressed a desire to see “government run like a business.” They support governors like Scott Walker in Wisconsin, who (before losing his bid for a third term last year) pledged to break longstanding covenants with police officers, road crews, civil servants and teachers the same way corporate CEOs did with people like my brother. Why? Because many voters believe that turning over public operations — schools, police departments, water and sewer services — to the private sector will yield efficiencies that will save money without compromising services.
We’ve learned that premise is invalid.
When government is run “like a business” and deregulated enterprises perform functions once done by public sector employees, profits take precedence over the well-being of the community. The winners are the CEOs and the shareholders of the corporations that broke the covenants with employees and communities in the first place, the corporations that then underwrote the campaigns of politicians like Walker and the corporations that benefit from lower corporate tax rates.
The losers? Residents in communities like Flint, Mich., where “running the government like a business” resulted in lead-tainted water and, later, obligated the city to pay a premium to buy clean water — from another private corporation.
Here’s a thought: Maybe if enough stockholders got together, they could encourage company executives to “run the business like a democratic government.” In doing so, the profits would be lower but the overall benefits of economic growth would be shared more equitably and the quality of life in our communities would improve.
It seemed to work in the 1950s and 1960s. Maybe it could work again.
Wayne Gersen lives in Etna.