Rick Belous calls it the FILM hypothesis. He uses it to explain the new willingness of employers to dump workers at the first sign of economic trouble.

Belous, a labor economist for the National Planning Association, an economic research group, believes his theory is key to understanding one of the most important shifts in the way managers view their work force in the 1980s.

FILM stands for the "financial impact on labor markets," and the basic thesis is really quite simple: If a company with a lot of debt has to cut costs, it's a whole lot easier to get rid of employees than it is to negotiate a new deal with its bankers. And after the '80s, there are a lot of companies with a lot of debt on their hands.

"American labor markets have felt the heat generated by financial markets, corporate raiders, etc.," Belous writes in a paper he delivered to the Industrial Relations Research Association, a group of mostly academics involved in labor relations.

Although most economists have always viewed labor as a variable cost in the operation of a business, Belous writes, most corporate managers tended to regard their work force as a fixed-cost item. And until the 1980s, he says, most companies had the flexibility to make necessary cutbacks in spending without considerable disruption to their labor force.

Not anymore, says Belous.

"It is an understatement to say that American labor markets recently have experienced a sea change," Belous writes.

"The shifts have been dramatic.

"In general, the United States appears to have moved away from the model of administered labor markets and toward a more short-run, profit-maximized system."

Why? How do you explain this fundamental shift in labor markets?

Belous says many analysts point to such factors as the growing level of imports, declining union membership as a percentage of the work force, government deregulation, and the increased number of women and part-time workers to explain the "new flexibility" in the American work force.

But, he says, many labor economists have looked at these variables and concluded they were not strong enough to explain what's happening in the work force.

Thus, writes Belous, "there must be some 'missing link' in the chain of events constructed by analysts who believe that an era of 'new employee relations' has come to America."

That missing link, suggests Belous, is the impact of the nation's changing financial markets on the way management views its work force.

Just as there was a union threat that served to bring about change in years past, Belous says there is now a "financial threat" altering conditions in the workplace.

Unlike the union threat, however, the financial threat seldom improves conditions for employees.

Fearful of being gobbled up by corporate raiders or pressured by Wall Street to improve short-term financial results, Belous says, company managers have taken a harder look at ways to cut costs.

"In recent years," he writes, "American management has often found its revenue options very constrained.

"Also, so-called fixed costs are 'untouchable' in the short run. This means that variable costs could be in center stage as the best way to improve short-term profits."

Under that scenario, he concludes, "labor costs may be viewed as the primary variable cost slated for reduction."

Belous insists "it has been this financial kick -- as much as any other factor -- that has moved American management in the direction of profit-maximized labor markets."

Belous finds a direct correlation between an increase in merger and acquisition activity in the United States and the levels of both employment and compensation at affected corporations.

Therefore, he writes, "it is reasonable to expect that if the activities of American corporate raiders are not tempered by shifts in regulations or business conditions, then these trends will continue."

Belous suggests that if his hypothesis is correct, American workers have a direct stake in the current debate over the need to tighten financial regulation.

"If the recent drive for renewed financial regulation wins in America, then U.S. labor markets could move in the direction of administered labor markets," Belous writes.

In laymen's terms, if Belous is right, the harder it is to raise money for mergers and acquisitions, the more stable the labor market.