The job machine grinds to a halt

[Joanne98]

Ain't no hiring. And ain't likely to be any for a good long time.

The problem isn't merely the greatest downturn since the Great Depression. It's also that big business has found a way to make big money without restoring the jobs it cut the past two years, or increasing its investments or even its sales, at least domestically.

In the mildly halcyon days before the 2008 crash, the one economic outlier was wages. Profit, revenue and GDP all increased; only ordinary Americans' incomes lagged behind. Today, wages are still down, employment remains low and sales revenue isn't up much, either. But profits are the outlier. They're positively soaring.

Among the 175 companies in the Standard & Poor's 500-stock index that have released their second-quarter reports, the New York Times reported Sunday, revenue rose by a tidy 6.9 percent, but profits soared by a stunning 42.3 percent. Profits, that is, are increasing seven times faster than revenue. The mind, as it should, boggles.


http://www.washingtonpost.com/wp-dyn/content/article/2010/07/27/AR2010072704791.html

[maddezmom]

1. Joanne98

please remember when referencing copyrighted work, post a short excerpt (not exceeding 4 paragraphs) with a link back to the original.

[xchrom]

2. Recommend

[fasttense]

3. So the logical conclusion is that trickle down does NOT work.

What this so called journalist failed to mention was:

1. The $14 trillion in bailouts and guarantees the federal government gave to financial firms. When you bailout the big investment corporations (calling them banks so you can use the FDIC money) and privatize their losses. They have to be very stupid NOT to make a profit.

2. The mark to imaginary values the change in accounting rules allowed the corporations. They can claim they have billions in assets in failing loans when in actuality they have losses on the books.

So, bailing out the investment corporations and allowing them to lie on their books allowed corporations to continue to play in the stock market casino and claim profits by merely putting out their hand.

But the bottom line is despite their free and easy ways, corporations are showing a profit that is NOT trickling all over main street.

[Igel]

4. I got two requests for job interviews in the last week.

In one case, the employer contacted me several times to make sure I knew they were inviting me to interview.

I didn't put in any applications. I'm in a training program. I have no intention of applying for a job this fall. I haven't even met all the requirements for the jobs and I'm not going to rush to qualify.

I simply don't want these particular jobs. Starting would be $45k or so/year with a lot of benefits and time off. But I don't want to commute that far. I want the requests for interviews to go away.

Perhaps they contacted me and 499 other people. I'm thinking they contacted me and one or two dozen others at most. They're desperate.

The two places between them laid off a hundred people last spring. Different skill sets--they lay off some people but the places are still hiring.

[Juche]

5. It is working really well for them sadly

Corporations get the best of all worlds.


Shrink your workforce, that'll instill fear, desperation and make people feel there are no better alternatives out there for finding a new job with better wages, treatment or benefits. Increase the workload of your shrunken workforce. Make the smaller workforce do the same workload as the old workforce (labor has been cut by 10% in this economy, but productivity is only down 3%). Keep the higher productivity for yourself via higher profits and cash reserves.

Now corporations have high profits, high case reserves, and a workforce that is too desperate and scared with too few options to bargain for better treatment.


If the jobs do start coming back, all the workers who are being exploited will leave their current companies looking for a better future. As long as corporations can make money w/o creating new jobs, they can keep the workers more or less captured.