Layoffs Cause Self Esteem Problems, Author Finds

PAUL SOLMAN: So, one myth of layoffs, that they would stop. In fact, they haven't even slowed down.

LOUIS UCHITELLE: The equilibrium we have settled into is the equilibrium of the -- of the knee-jerk layoff, if you will.

PAUL SOLMAN: A second myth, says Lou Uchitelle:

LOUIS UCHITELLE: In a changing economy there's plenty of good jobs out there, folks, and all you have to do is be in the right skills. If you're in the wrong skills and you lose your job, go, we will train you to be in the right skills. And it's turned out, there just aren't enough good jobs at good pay for all the qualified people who want them in this country.

PAUL SOLMAN: That's another theme we have been hearing for more than a decade.

UNIDENTIFIED MALE: I have been here 30 years. Where am I going to get a job at 52? McDonald's? Maybe I can get your job. How would you like it if I went to do your job?

PAUL SOLMAN: But the final myth was, to Uchitelle, the most disturbing: that, in deciding whether and how to lay people off, the economics should be dictated by the costs and benefits to the company alone.

MAN: They can make a bajillion dollars, but I don't think it should be at the expense of a community.

MAN: I put my blood -- See it? -- It's right there -- my blood on that job.

PAUL SOLMAN: Uh-huh.

MAN: My machines are stained from blood, OK? And they're going to stay here.

PAUL SOLMAN: That man was also laid off in 1996, the year Uchitelle spearheaded a major New York Times series about so-called corporate downsizing. When the series inspired us to discuss economic insecurity on the "NewsHour," the CEO of Sunbeam, Al Dunlap, seemed, to some, outlandish in defense of layoffs.

AL DUNLAP, Former CEO, Scott Paper Co.: I had a corporation where every person stood the chance of losing their job, so, I got rid of 35 percent of the people. But 65 percent of the people have a more secure future than they've ever had. And we did this without a single labor interruption or a single grievance. We must have been doing something right.

PAUL SOLMAN: Or something wrong. Dunlap, already know as "Chain Saw Al," was later pursued by the SEC for fraud, and settled by paying out millions and being banned from corporate America for life. Yet, his book back then, "Mean Business," became a best-seller -- layoffs, a more and more acceptable way to boost a firm's stock price by making it leaner and meaner.

Now, in his new book, "The Disposable American," Lou Uchitelle argues that this legitimizing of layoffs has come at a devastating cost to workers and American society as a whole.

LOUIS UCHITELLE: My book is not about unemployment. It's about the blow, the trauma that people suffer when they're told they don't have value.

PAUL SOLMAN: The evidence of that trauma comes not only from laid-off workers, it turns out, but those in whom they have confided, like their psychotherapists.

How many of you have had a patient or patients who have been laid off, lost their jobs? And that's just virtually everybody here. How many of you have had patients who have been traumatized by that event?

"The Disposable American" was the trigger for this session at the annual meeting of the American Psychoanalytic Association, chaired by psychiatrist Ted Jacobs, on the psychic costs to those laid off.

TED JACOBS, American Psychoanalytic Association: Depression, severe anxiety, panicky feelings, crises of self-esteem, and regressive behavior are not at all uncommon.

PAUL SOLMAN: Now, a cynic might argue that these shrinks are themselves in a shrinking profession, so, they're projecting their own anxieties onto their patients. But their case histories suggested otherwise: people scarred by an economy that now treats layoffs as a get-over-it fact of life.

DR. MARK SMALLER, Psychoanalyst: I cannot underscore the kind of reverberation this had in his life, in his family.

PAUL SOLMAN: Mark Smaller's talking about a friend, also a therapist, who was counseling laid-off workers when he himself was laid off. He got a better job, right away, but:

MARK SMALLER: A year ago, he called me and said, this weird thing had happened, that his super, his boss of the company, had called him on a Friday and said, there's something I need to speak with you about, but it can wait, and I will talk with you on Monday. And the entire weekend, he was anxious and couldn't sleep, because it had stirred up the whole trauma all over again.

PAUL SOLMAN: The news is that research now quantifies such traumas for white- and blue-collar workers alike. The average layoff, it turns out, takes years off your life.

MICHAEL MARMOT, Professor of Epidemiology and Public Health, Royal Free and University College Medical School: The facts are that people who become unemployed have a 20 point higher mortality rate than others from the same socioeconomic strata who remain employed.

PAUL SOLMAN: Please forgive the odd image and sound, but we interviewed British epidemiologist Michael Marmot, via the Internet from London, to avoid blowing a fortune on travel, and perhaps risk being laid off ourselves.

He has found a higher death rate from layoffs, worse health just worrying about them.

MICHAEL MARMOT: What we have shown is that, in the anticipation of layoffs, so, people who are working under the cloud of job insecurity, have worse health while they're feeling insecure at work.

PAUL SOLMAN: Marmot's data is backed up by this new Yale study, which found that people laid off after age 50 were twice as likely to suffer a heart attack or stroke in the decade following as those still working, holding all other risk factors constant.

And what's driving it? Lack of control over one's life, says Marmot, which actually raises stress hormones.

MICHAEL MARMOT: One way to deprive people of control over their lives is to take away their livelihood away from them, take their job and their livelihood away from them. And a lack of control has profound physiological effects.

JIM FUSCO, Computer Consultant: Lack of control, that's really what it comes down to.

PAUL SOLMAN: Jim Fusco's father was laid off from his manufacturing job.

JIM FUSCO: It really destroyed him, I think. It really did destroy him. He, he died of -- you know, he -- he died of heart disease and...

PAUL SOLMAN: At what age?

JIM FUSCO: He was 57.

PAUL SOLMAN: And you attribute that to his job woes?

JIM FUSCO: Yeah, by just making him -- increasing his stress level.

PAUL SOLMAN: And Fusco himself, a computer consultant, has been laid off twice, from AT&T and IBM. The laid-off are often pariahs, he says.

JIM FUSCO: They're treated, in a certain way, like they're lepers, you know, like they have some kind of disease, like, to -- to associate with them is -- is to maybe perhaps bring -- bring that same bad luck on yourself.