The open window of disloyalty

How President Reagan shaped employee loyalty forever.

First off, don't misunderstand. I am a big fan of President Reagan. I served under him and then President Bush in the United States Marine Corps. I regard President Reagan as the greatest president of my lifetime and suspect I always will. God speed, Sir.

However, no one is perfect, and we all make mistakes. Reading Simon Sinek's “Leaders Eat Last”, again, I realize as I reached chapter 12, that it is this very day in 1981 that Ronald Reagan fired eleven thousand air traffic controllers for illegally striking, according to the Taft-Hartley Act, and refusing to return to work.

Now, please don’t misunderstand me a second time. I do feel insubordination requires consequences and that could absolutely result in termination. Unfortunately, President Reagan took it a few steps further and enacted a policy where they could never work in their field of employment again. Most of these employees were following union rules and had only that particular marketable skill. Those extended consequences forced many families into poverty.

The Greatest Generation set the standard and the silent generation stayed the course of selflessness and others/country first. They would never have thought of mass layoffs or anything that would do harm to another family. That’s not how we won the world wars. They sacrificed everything they had for each other no matter the cost. As a fifty four year old Marine, it makes me wonder if we could ever win another world war with the selfishness we see in society today. That's for another day.

Simon points out how that first mass firing of the air traffic controllers was the catalyst, or open window, to usher in the era of mass layoff/cost-cutting measures in the private sector as well.  He has little doubt President Reagan’s decision had an impact on corporate America. If the federal government can consider employees expendable, they can too. The window was opened. Jack Welch was the next to jump through. Many followed.

The Baby Boomers were the first generation to use mass layoffs to preserve profits at a time when profits were high. The “Roaring 80s” it was termed. So the dreaded “profits over people” paradigm shift began with the boomers and still seems with us today. Just recently the Covid pandemic brought mass layoffs and furloughs long before many companies were in dire straits and facing the possibility of going out of business. They didn't go off the beaten path as it was a normal cost-cutting, a profit-preserving tactic that has been used ever since the window was opened. The question that remains to be answered is at what opportunity cost.

So is it any wonder we don't see company loyalty with gen x and younger? It certainly shouldn't surprise anyone that we now have what's called the “gig worker” and the “gig economy.” Gig simply means temp appointment/job hopping as that generation's preferred employment behavior. Unfortunately, it is impossible to create a winning culture and strengthen your organization's brand long term with this type of employment.

Employers complain constantly about loyalty and the younger generation not buying into a company's culture. It seems we have done it to ourselves and only have ourselves to blame. We have taught employees how to treat us. We have shown them that if times are tight, they are expendable. Profits over people never brought a company to its full potential. Again, I'm not advocating holding the budget erroneously and going out of business. That hurts everyone. However, layoffs and furloughs at the first sign of trouble or adversity are the quickest ways to lose your greatest competitive advantage, your people, and their loyalty.

Let's hope we’ve learned our lesson.