Most economists argue that layoffs and a certain amount of job
insecurity are part of a healthy, competitive economy. Joseph
Schumpeter labeled the process of new technologies replacing workers
and new companies displacing established companies "creative
destruction." While such a competitive economy isn't always pleasant
for those who are temporarily out of work, most economists say it
undeniably creates a more prosperous economy for all.
But most economists are never interviewed by network news
reporters. The result is that, for the most part, viewers are told
only about the destructiveness of a competitive economy and not job
creation. Media Research Center analysts reviewed every story about
employment on network evening news shows (ABC's World News Tonight,
CBS Evening News, CNN's World News, and NBC Nightly News) during
January and February. Of the 21 stories, 19 focused on corporate
layoffs and downsizing. Only two highlighted parts of the economy
where jobs are plentiful. And while there were eleven soundbites
from politicians, there was only one soundbite from an economist.
Tom Brokaw, on the January 29 Nightly News, expressed the typical
tone. Introducing a story about "today's frightening job market," he
said, "Job security is a thing of the past now and the way of the
future is downsizing and layoffs, even for America's biggest
companies. It's making for serious anxiety. A recent poll in New
York state shows a third of the workers fearful they or someone in
their household will lose their job, and soon. And with good reason.
Last year there were more than 400,000 announced layoffs across the
country, bringing the three-year total to 1.5 million."
Dan Rather, on the February 22 CBS Evening News, gave a similar
diagnosis: "Millions of American workers know it. Despite soaring
profits and a record Wall Street, U.S. businesses are still cutting
good jobs and barely raising wages." According to Rather,
"Republican Pat Buchanan has hit a nerve with his rhetoric about
this. He is connecting with real anger and fear in the workplace."
CBS's Wyatt Andrews, on that same broadcast, described "an
increasingly anxious middle class, whose dreams of upward mobility
have met a downward reality." NBC's Mike Jensen, on the January 4
Nightly News, declared that "as for the future, American companies
are locked on a new course. Layoffs and firings are no longer
something they do only in a recession. Instead, they're business as
usual."
AT&T's announcement that it would lay off 40,000 workers prompted
many of the gloomy jobs stories. According to CNN's Kathleen
Kennedy, on the January 3 World News, "The latest rounds of
corporate cutbacks have left many people fearing that they may be
the next to be fired. AT&T announced that it was cutting 40,000
jobs." On January 2 Brokaw announced that "if what happened today to
40,000 workers at AT&T is any kind of barometer of what's ahead, it
will be another long, anxious year for the American middle class."
But neither followed up on the AT&T workers. Like almost all of
the other reports about the country's job picture, they ignored the
parts of the economy which are generating jobs. T.J. Rogers of
Cypress Semiconductor, in the March 12 Wall Street Journal, argued
that "for the past decade or more, jobs have been migrating to
smaller, more nimble, entrepreneurial companies from the Fortune 500
as those companies streamline and lose employment. This trend
strengthens our economy, but it has created a short-term fear for
their jobs among Americans."
According to Rogers: "What is not publicized is that my company
has already hired some of those [laid-off] AT&T people. And our
rival, Cirrus Logic, beat us to the punch in starting up a design
center in South Carolina to take advantage of hiring those ex-AT&T
engineers. The bad news from big companies gets front-page coverage,
but the near-immediate absorption of their skilled workers is rarely
discussed."
Similarly, economics columnist Robert Samuelson noted in the
March 13 Washington Post that most laid-off workers find valuable
employment elsewhere. "Among rehired workers," Samuelson wrote, "the
Labor Department reports as follows: 27 percent got wages at least
20 percent higher than at their previous jobs; 26 percent got wages
up to 20 percent higher; 16 percent suffered a pay loss no greater
than 20 percent; and 31 percent suffered pay losses of more than 20
percent.
And American Enterprise Institute economist Herbert Stein pointed
out in the March 14 Wall Street Journal that "in 1995, on average,
5.6 percent of the civilian labor force was unemployed. In the
previous 20 years the rate had been lower than that in only three
years." According to Stein, "The highly publicized layoffs by large
corporations were a tiny fraction of the labor force and a small
fraction of the number of people who enter or leave employment each
year."
Stein also wrote that "concern with insecurity ought to be
evident in real behavior." He noted that people didn't change their
smoking or drinking behavior until they became seriously concerned
with health or their social behavior until they became seriously
concerned about crime. "If people were seriously concerned about
their economic condition one might expect them to save more, but
they don't." He noted that people are not retiring later, a trend
that would be expected if workers felt financially insecure.
But good business news is rarely news. Only two network news
reports focused on the country's enormous job growth. One was by
Wyatt Andrews for the February 6 CBS Evening News. Andrews reported
that some companies which laid off workers over the past few years
have started rehiring. "The era of layoffs in America is not over,"
Andrews told viewers, "but there is a countertrend going on. In the
latest polls, most American managers now admit they fired too many
people...and that growth, including the hiring of new workers, is
the only way to survive."
The other was by NBC's Linda Vester on the January 26 Nightly
News. "From small machine shops to giant auto plants," Vester
reported, "the manufacturing industry is in dire need of the best
and the brightest." She said that many manufacturers cannot find
enough skilled workers and are even employing headhunters to recruit
them. Vester told viewers that "according to one study more than
half of America's manufacturers say they're having trouble finding
qualified people." She pointed out that people seeking to meet the
demand are enrolling at vocational schools. Vester was the only
reporter to interview an economist about the country's job picture.
But Vester was an exception. For most of her colleagues, two
things still stand in the way of presenting their viewers with an
accurate picture of the economy: The overwhelming preference they
have for interviewing politicians instead of economists and their
obsession with bad -- and only bad -- business news.