Monday, April 9, 2012

US Firms Excel in Efficiency and Profitability / US Workforce Of Full Time Employed Workers Contracts

The Wall Street Journal has two separate headlines on the health of US firms today April 9, 2012:

"U.S. Firms Emerge Stronger" by S. Thurm p. A1

"For Big Companies, Life is Good: Large Corporations Emerge from Recession Leaner, Stronger -- Hiring Overseas." by S. Thurm p. C1.

Let us look at some facts from each of these articles.

"For Big Companies"
"In 2007, the companies generated an average of $378,000 in revenue for every employee on their payrolls. Last year, that figure rose to $420,000." C1

"They also have lightened their debt burdens and many are flush with cash" C1

They are also reluctant to hire in the US. [paraphrase p. C1]

Majia here: The other article celebrates this new status of pathology.

"U.S. Firms Emerge Stronger" A1

"Big U.S. companies have emerged from the deepest recession since World II more productive, more profitable, flush with cash and less burdened by debt" (A1)

A former chief economist at Wells Fargo, Sung Won Sohn, described US corporations as having become "leaner, meaner, and hungrier."

Majia here: Now compare these headlines with the comments made by Joseph Stiglitz.

Joseph Stiglitz "The Book of Jobs" in Vanity Fair December 2011

[excerpted] "It has now been almost five years since the bursting of the housing bubble, and four years since the onset of the recession. There are 6.6 million fewer jobs in the United States than there were four years ago. Some 23 million Americans who would like to work full-time cannot get a job. Almost half of those who are unemployed have been unemployed long-term. Wages are falling-the real income of a typical American household is now below the level it was in 1997...."

Majia here: This system is not working. It reinforces greed, renders the population of industrialized nations increasingly useless outside of consumption, while exploiting and poisoning the populations of the less-developed nations.

The only reason mega-industrial capitalism worked in the second half of the twentieth century was because it was regulated and persuaded by legislation to give workers decent wages and benefits.

Of course, capitalism generally did not behave well during this period when operating abroad, given the poor regulatory conditions on labor and environmental protections in the developing world.

Now citizens of the US get to see what mega-monopoly capitalism does when de-regulated and set free by technology and a neoliberal global economic system.

I'm not stating that capitalism is inherently evil, but it sure does amplify our worst behaviors when legally reified and protected in the form of the modern mega-corporation.

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