Friday, May 14, 2010

Profits Before People

Pruning relatively less-efficient employees like clerks and travel agents, whose work can be done more cheaply by computers or workers abroad, makes American businesses more efficient. Year over year, productivity growth was at its highest level in over 50 years last quarter, pushing corporate profits to record highs and helping the economy grow. - NY Times

Over the last two years I have had trouble keeping the stories straight coming from corporate America. On the one hand American workers are lazier and less productive than their counterparts in other parts of the world and then on the other hand productivity in America has never been higher. It is so high in fact that many companies are doing twice as much work with half the workforce. The good news there is that it makes the companies huge profits. As every student of business knows labor is always your highest expense. The bad news is that the American worker has become so efficient they are cutting their own throats. The proof is in the last two “so-called jobless” recoveries. Companies are using the recessions as tools to cut labor while increasing the amount of work being heaped on those employees who are left.

These remaining employees have seen the amount of work they are being asked to do more than double while their wages have remained stagnant. This has been accomplished with fear of lay-offs or fear of outsourcing jobs to overseas. So I am a little confused the employees have become more productive creating millions in profits for their employers and yet their wages have not improved markedly for the last ten years. I’m no Ivy League educated economist but even I can see that this doesn’t quite add up. How is it possible for corporate America to pull this off? It is simple really and it involves a three prong approach that has been successful for generations and continues to be so.

The first prong is that they convince enough people that someday they could be wealthy too and so it is not a good idea to create problems or taxes for wealthy people because someday they could affect you. Let’s take a closer look at this concept that anyone can get rich in America. The truth is that while this country more than any other offers the opportunity for almost anyone to become wealthy, the truth is that few of us ever will. The idea that you could go from humble beginnings to great wealth is a well worn myth that continues to be propagated in our society. The truth is that less than 40 folks a year get rich by means other than inheritance, marriage, or criminal enterprises. So good luck with that!

The second prong is to convince people that having wealthy people pay their fair share is somehow evil or socialism. You would not know it but the current tax burden of Americans is the lowest since Harry Truman was president. If this is true then why are the tea-partiers and their wealthy benefactors complaining about the government’s assault on working people by over burdening them. Much of our debt could be reduced if we just went back to the tax structure we used under Bill Clinton. The problem in America is that no one wants to pay for anything. Everybody wants free stuff. I can understand middle-class folks complaining about being squeezed but we have the biggest discrepancy between wealthy and everyone else since the “Gilded Age”. Is it unfair to ask those who have received more to pay more? If it is then our democracy and our economic system is a sham.

The third and final prong is the tactic of diversion. The wealthy get the people to focus on issues that divide versus issues that unite. This is the job of their high paid mouthpieces Rush Limbaugh, Glen Beck, and Sarah Palin. Their goal is to focus people’s attention on the black and brown hordes who are stealing “our America” and our “way of life”. The one thing I have noticed at all of those Congressional hearings about the economic meltdown, the ecological disaster in the Gulf, and any other current complaint that the tea-partiers are complaining about all of the CEO’s and representatives were not black or brown. They were to a person white and male. So who is really stealing us blind?

If our system is to survive we will have to figure out a way to have reinvestment of some of those billions in profits that have been created not by the overpaid CEO’s but by the productivity of the American worker. I don’t believe that it is only the government’s responsibility to retool the American worker. Is it not also the responsibility of those who have profited from these workers to provide for their future or are they just responsible for their demise?

Everyone is entitled to their own opinion, but not their own facts. - Daniel Patrick Moynihan
The Disputed Truth

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