Includes bibliographical references and index.

"Downsizing in America offers a range of compelling hypotheses to account for adoption of downsizing as an accepted business practice. In the short run, many companies experiencing difficulties due to decreased sales, cash flow problems, or declining securities prices reduced their workforces temporarily, expanding them again when business conditions improved. The most significant trigger leading to long-term downsizing was the rapid change in technology. Companies rid themselves of their least skilled workers and subsequently hired employees who were better prepared to work with new technology, which in some sectors reduced the size of firms at which production is most efficient." "Baumol, Blinder, and Wolff also reveal what they call the dirty little secret of downsizing: it is profitable in part because it holds down wages. Downsizing in America shows that reducing employee rolls increased profits, since downsizing firms spent less money on wages relative to output but it did not increase productivity. Nor did unions impede downsizing. The authors show that unionized industries were actually more likely to downsize in order to eliminate expensive union labor. In sum, downsizing transferred income from labor to capital - from workers to owners." "Downsizing in America combines an investigation of the underlying realities and causes of workforce reduction with an insightful analysis of the consequent shift in the balance of power between management and labor, to provide us with a deeper understanding of one of the major economic shifts of recent times - one with far-reaching implications for all American workers."--Jacket.

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