Why layoffs are for lazy corporate overseers

FORTUNE -- Probably every worker today has experienced -- or known someone who has experienced -- at least one layoff. Layoffs are an abomination -- for the pain they cause innocent victims -- and the lack of accountability they often represent.

Before the great recession, in 2006, Lou Uchitelle sent out a warning about the terrible costs of layoffs in his book The Disposable American: Layoffs and their Consequences. The book traces the history of job security -- and layoffs -- in the U.S. and explores the psychic trauma created by corporations' overuse of this so-called right-sizing tool.

Soon after his book came out, Uchitelle explained to me that he "made a presentation at a meeting of the American Psychoanalytic Association, and at the end, there was a vote taken among more than 30 psychoanalysts. They were asked, 'Do you, from your experience, consider a layoff a traumatic experience?' And all of them put their hands up."

Many workers today don't know of a world without layoffs. But they haven't always been common. I was in New York attending a disaster recovery conference in 1992 when IBM (IBM) announced its very first layoff. I remember the shock among the IBMers attending that conference. The Big Blue rug had been pulled out from under them, and they told me they would never feel the same way about IBM again.

Twenty years later, the Bureau of Labor Statistics reports that in 2012 alone there were over 17,000 U.S. mass layoff events. (The Bureau defines mass layoff events as 50 employees or more laid off at a single employer.)
Some layoff announcements are huge. HP (HPQ) recently said that they would dismiss 29,000 workers  -- more than the population of many U.S. towns. This would have been unthinkable in the 1950s, '60s, and '70s.
"We're sort of a 'we invent as we go along' nation," Uchitelle said, referring to the U.S. "And we've invented some wonderful things. And one of the things we invented was job security."

Large corporations, labor, and government all realized job security was in their mutual best interests, beginning in the late 1800s, he said. When layoffs did happen in the 1930s, the government stepped in. Politicians of all stripes agreed that job security was important -- and job security increased over time until the mid-1970s. Since then, "we've been going away from it."

The corporate movement away from job security coincided with the advent of big executive bonuses and the rise of global competition. Consulting firms seized the moment and devised practices to teach companies how to eliminate staff.

But the recommendations of the consulting firms are not agnostic. They rarely, if ever, recommend cutting the heads of those who hired them.

Compensation also insulates most executives from layoff shocks. Executive compensation has changed dramatically since the mid-1970s. Today, top executives receive huge bonuses that they can stash away, shielding them from any layoff distress should it strike them. In contrast, the workers most subject to cuts are unable, given their wage rates, to scrape together that level of financial freedom.

Layoffs often demolish an employee's social circle and identity -- and the same is true for family members of laid off workers. During the financial crisis, layoffs forced foreclosures, leaving families homeless, and many who lost their jobs then still struggle amid dim job prospects....................