Bank of America memo hopes workers' conditions worsen

[live love laugh]

https://theintercept.com/2022/07/29/bank-of-america-worker-conditions-worse/


A BANK OF AMERICA executive stated that “we hope” working Americans will lose leverage in the labor market in a recent private memo obtained by The Intercept. Making predictions for clients about the U.S. economy over the next several years, the memo also noted that changes in the percentage of Americans seeking jobs “should help push up the unemployment rate.” The memo, a “Mid-year review” from June 17, was written by Ethan Harris, the head of global economics research for the corporation’s investment banking arm, Bank of America Securities. Its specific aspiration: “By the end of next year, we hope the ratio of job openings to unemployed is down to the more normal highs of the last business cycle.”

Snip

What the memo calls “the ratio of job openings to unemployed” is generally calculated the other way around — i.e., the ratio of unemployed people to job openings. The more widely used ratio offers one measurement of the balance of power between workers and employers. The lower this number, the more options unemployed people have when searching for work and the greater opportunities employed people have to switch to jobs with better pay and conditions. According to the Bureau of Labor Statistics, this ratio stood at 0.5 as of May, meaning that there were then two job openings per unemployed person.
In 2009 — at the worst moments of the economic calamity that followed the collapse of the housing bubble during the end of the George W. Bush administration — the ratio climbed as high as 6.5, so there were more than six unemployed workers for each open job. It then slowly declined over the next decade, reaching 0.8 in February 2020 before Covid-19 lockdowns began…

Snip

The memo is an uncanny demonstration that the economist Adam Smith was right when he described the politics of inflation in his famed 1776 work, “The Wealth of Nations.”. “High profits tend much more to raise the price of work than high wages,” Smith argued. “Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price. … They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.” Thus, exactly as Smith would have predicted, Bank of America complains loudly about the bad effects of high wages in raising prices, but appears to be silent about the pernicious effects of high profits.

Snip

[dalton99a]

1. Fucking parasites

[Solly Mack]

2. K&R

The c word.

[Gaugamela]

3. The Reserve Army of Labour:

Big industry constantly requires a reserve army of unemployed workers for times of overproduction. The main purpose of the bourgeois in relation to the worker is, of course, to have the commodity labour as cheaply as possible, which is only possible when the supply of this commodity is as large as possible in relation to the demand for it, i.e., when the overpopulation is the greatest. Overpopulation is therefore in the interest of the bourgeoisie, and it gives the workers good advice which it knows to be impossible to carry out.

Karl Marx

https://en.wikipedia.org/wiki/Reserve_army_of_labour

This also explains their rabid opposition to abortion.

[live love laugh]

6. Just had an aha moment.

I’ve often wondered why the companies are so greedy that with record profits they barely want to pay minimum wages.

It’s suddenly clear that if people make living wages the “demand” for jobs, and thus the labor pool, will decrease.

(Sometimes it takes a minute but when I get it I get it. )

[Gaugamela]

7. Exactly. Also the value of money begins to fall. If people are comfortably

well off who is going to paint the rich man’s yacht? Property begins to deteriorate. Before you know it everyone is equal again. Can’t have that.

[live love laugh]

4. BOA also refusing small businesses ppp loan forgiveness

https://www.forbes.com/sites/kotlikoff/2021/08/05/bank-of-americas-malfeasant-treatment-of-small-businesses---brian-moynihan-pick-up-the-damn-phone-and-call-ember/?sh=15cbbb965779

[Ziggysmom]

5. Screw the big banks. I get better services and rates at my Credit Union.

[Baked Potato]

8. Shit, the banks aren't on the Peoples' side? WTF.

[sakabatou]

9. Just another reason why you should bank with the local credit union.

[live love laugh]

10. I'm pretty sure it's not just banks wishing for this.

Last edited Sun Jul 31, 2022, 02:41 AM - Edit history (1)

Corporations everywhere are in the same boat—juggling stockholder profit expectations with increased labor shortage costs.

[multigraincracker]

11. Adam Smith was also right when he warned, in the same book

that a lack of regulation would lead to monopolies that would upset the "free market" and cause inflation.

Time to break up the large banks like Bank of America if it's not too late already.

[Hermit-The-Prog]

16. There are several monsters that need breaking up, starting with media.

[House of Roberts]

12. The baby boom generation is retiring.

Roughly 300,000 reach retirement age each month. Even if all don't retire, enough are ceasing to work, but remaining consumers, to maintain demand for goods and services, with a smaller percentage of workers to fill the gap. This is a demographic shift that was always going to happen, and explains why the oppressor class wants the retirement age raised to keep workers forced to remain in the labor force.

[uponit7771]

13. Big Corps don't want to admit US is heading towards negative unemployment. There are more dead from

... covid or during covid heavy US death years than CDC is reporting

[Amishman]

15. COVID is only a small factor, baby boomer retirement is the real engine

Modern HR practices are built on the idea that employees are easily replaceable / disposable. This attitude has worked to maximize profits due to the employee / employer balance of power skewed in favor of the latter for more than a generation. The baby boom generation size shifted more of the population into the prime working age ranges.

Baby boomer retirement is peaking, and Gen Z is a far smaller cohort. That labor glut is ending, and corporate leverage is vanishing with it.

[uponit7771]

18. Good point!!!!

[Amishman]

14. Corporate America needs to be forced to share their prosperity with workers

Mandatory profit sharing with workers, as well as requiring all stock buybacks and executive bonuses be matched with bonus payments to non executives.

Also a progressive tax on corporate profits, based on company net worth. Part of the problem is big companies have economies of scale that small businesses do not. Make the big guys carry a heavier tax load while giving smaller businesses a break.

Also tougher rules against overuse of contractors and offshoring.

[Hotler]

17. Perfect reason to join a credit union. nt