COURSEY: Bottom line: It's not about the jobs
Published: Monday, March 4, 2013 at 12:49 p.m.
Last Modified: Monday, March 4, 2013 at 12:56 p.m.
The next time you hear a deficit hawk or anti-tax crusader defend his or her position by saying, “It's all about jobs,” remember the story that ran on today's Page A1.
It's not about jobs; it's about profits.
The American economy is doing just fine – if you own a corporation, or part of one. The stock market is going gangbusters, flirting with record levels, and we live in “a golden age for corporate profits,” according to the story from the New York Times.
But if you're just a working stiff, things may not be so great.
Continuing high unemployment rates don't just affect those without jobs. With all that supply (unemployed workers) out there, it's an employers' market, meaning that salaries are stagnant even as productivity soars in lean-and-mean workplaces. That pads the corporate bottom line without doing a thing to create new jobs.
It just creates more wealth at the top.
Meanwhile, Washington dithers with endless arguments about deficits and taxes, the latest result of which is the federal budget sequester that will cut $85 billion in government spending between now and Sept. 30.
Is Wall Street worried? Apparently not so much, according to the Times. But working people should be. The budget cuts could directly cost the country 700,000 jobs. And that doesn't include further job cuts that are expected as corporate chiefs trim their payrolls in order to protect their bottom lines from the effects of the sequester.
In other words, jobs will be sacrificed in order to protect profits.
Yes, this is the way capitalism works; business doesn't exist without profit. We shouldn't be surprised by any of it. But let's make sure we understand that corporate profits are going through the roof right now, even as the political mantra of “protecting jobs” and “defending the middle class” has become the excuse for gridlock in Washington.
But in reality, jobs are an afterthought. Today's story calls out the industrial giant United Technologies, which has seen its annual bottom line jump from about $43 billion in pre-recession 2005 to nearly $58 billion last year, a 35 percent gain. Yet even as its stock price reached record levels last month, the company announced it will eliminate 3,000 jobs this year, on top of the 4,000 it cut last year.
The United Technologies example may be extreme, but the company is certainly not alone. The Dow Jones industrial average has rebounded from the depths of 2008 to come within 75 points of an all-time record last week. The unemployment rate, which had declined for three years, has been stuck at just less than 8 percent for the last six months.
So, the next time you hear someone say the national deficit or a tax on business is a “job killer,” remember that it's not the jobs that he or she is worried about.
It's the profits.
Chris Coursey's blog offers a community commentary and forum, from issues of the day to the ingredients of life in Sonoma County.
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