FULL EMPLOYMENT ACT, NOT LAYOFFS by Peter Moss, The IBM layoffs in Vermont, 501 employees and 988 more effective August 2002 remind us of the power imbalance between management and labor. Only the productive side of labor has always been generally recognized but the employees' spending is at least as important, and probably more so. From a human viewpoint, consumption is more important than production because an employee can go a lot longer without working than without food and shelter. Moreover, salaries and wages for human consumption are not only the largest component of the Gross National Product but the principal distribution mechanism for the GNP. Henry Ford is still remembered for recognizing that unless he paid decently, his workers could not buy his cars. The reasons for the imbalance in not recognizing the superior importance of consumption have historic origins, of course,, but today the imbalance serves big business operatives and they like it just fine. I believe if we became more concerned with workers' food and shelter than with making the rich richer at everybody else's expense, we would support full employment legislation. And yes, full employment can be successfully legislated. The fact that layoffs of more than 500 people presently require 60 days' notice establishes that yes, the federal government has jurisdiction and the means to enforce its equitable laws. There was much hand wringing by reporters in the local media, but no suggestions or proposals to prevent future mass layoffs. More disappointingly, our distinguished Congress persons were not quoted either with any suggestions or proposals to prevent future mass layoffs. The only one to address the future was the local outlet of the national conservative think tank farm in a "report" ridiculing the layoff as 'Painful Economics 101." The conservative solution: "Instead of finger pointing, we need to move quickly to create the positive business climate that will encourage other entrepreneurs ... to take up the slack ... etc." And that "climate" is, of course, lower taxes, less regulation, and no costly [environmental] mandates. Note that such climate change would not have stopped the IBM layoffs but is proposed to draw other entrepreneurs. Such "other" entrepreneurs would then pay until they are ready to shed their subsequent batch of 1500 victims and the cycle repeats. If elected to the U.S. Senate in 2004, I will introduce a Full Employment Act bill for 2005 passage. This measure would have three features underscored below. It is generally believed that management 'prefers" stockholders to employees, but this is a misleading oversimplification. Management members are themselves substantial stockholders and "favoring' profits over job stability is simple The IBM layoffs, 501 employees last November and 988 more effective August 2002 remind us of the power imbalance between management and labor. Only the productive side of labor has always been generally recognized but the employees' spending is at least as important, and probably more so. From a human viewpoint, consumption is more important than production because an employee can go a lot longer without working than without food and shelter. Moreover, salaries and wages for human consumption are not only the largest component of the Gross National Product but the principal distribution mechanism for the GNP. Henry Ford is still remembered for recognizing that unless he paid decently, his workers could not buy his cars. The reasons for the imbalance in not recognizing the superior importance of consumption have historic origins, of course,, but today the imbalance serves big business operatives and they like it just fine. I believe if we became more concerned with workers' food and shelter than with making the rich richer at everybody else's expense, we would support full employment legislation. And yes, full employment can be successfully legislated. The fact that layoffs of more than 500 people presently require 60 days' notice establishes that yes, the federal government has jurisdiction and the means to enforce its equitable laws. There was much hand wringing by reporters in the local media, but no suggestions or proposals to prevent future mass layoffs. More disappointingly, our distinguished Congress persons were not quoted either with any suggestions or proposals to prevent future mass layoffs. The only one to address the future was the local outlet of the national conservative think tank farm in a "report" ridiculing the layoff as 'Painful Economics 101." The conservative solution: "Instead of finger pointing, we need to move quickly to create the positive business climate that will encourage other entrepreneurs ... to take up the slack ... etc." And that "climate" is, of course, lower taxes, less regulation, and no costly [environmental] mandates. Note that such climate change would not have stopped the IBM layoffs but is proposed to draw other entrepreneurs. Such other entrepreneurs would then pay until they are ready to shed their subsequent batch of 1500 victims and the cycle repeats. If elected to the U.S. Senate in 2004, I will introduce a Full Employment Act bill for 2005 passage. This measure would have three features underscored below. It is generally believed that management 'prefers" stockholders to employees, but this is a misleading oversimplification. Management members are themselves substantial stockholders and "favoring' profits over job stability is simple self-dealing. The remedy: prohibit management from holding stock in the companies they manage. An additional advantage of this remedy is that it would prevent criminal insider trading which is make secret decisions that will have a predictable market impact, cash in by selling short or long depending on whether the price will predictably go up or down, and then announce the decision to the market suckers. Second remedy: pay executives a percentage of the payroll. This is already the case for middle managers: a person of a department of 1000 employees is paid more than one supervising 100 employees. Once executive pay is based on payroll supervised, executives will staff as if every department was a battleship. This will bring the nation very close to full employment, if not overemployment. Nor would executives suffer. The income ratio of CEOs' to average worker's pay went from 40-to-1 in the 1970s to 531-to-1 today. Average CEO pay went from $326,000 a year to $20 million over that same period. Jack Welsh, CEO of GE, cut GE's domestic workforce by half and nearly doubled GE's employment abroad. His 2000 pay was $231 million plus $57 million in stock options. That's about the combined wages of 60,000 GE factory workers in Mexico, according to The Washington Spectator. Ali this raises the eternal question about free enterprise: who is free to do what to whom? Third remedy: provide workers a legal property right in their job, valued at remaining work years tiii 65, times the average of the last three years' pay. If employers want to fire or lay off, they would have to negotiate an appropriate settlement based on the residual value of the job. After all, you can't take away the livelihood of the butcher or baker or candlestick maker without just compensation. Why tolerate global megacorporations who can legally rob employees of their livelihood? Needless to say, these three remedies are only practical if federally implemented. Otherwise, companies would just move from state to state, as they did to avoid stricter environmental regulations. But Uncle Sam stopped that by appropriate EPA laws. Employers exporting jobs would be subject to duties to make their imported goods 20% less profitable than their domestic products. Vermonters who believe the conservative snake oil of "a more business-friendly climate' are hopelessly naive which can hurt everybody. Statewide and local politicians who promote the conservative snake oil of 'a more busine3s-friendly climate" certainly know that layoffs are a national problem not curable by snake oil and are at best disingenuous. I believe a better world is possible and it can be legislated, and IBM and Enron and Arthur Andersen and Global Crossing and World Com and Xerox executives don't have to like it.