So Much for the Conventional Wisdom
We keep hearing that when the economy begins to turn around, businesses will start to hire. Well, it ain’t necessarily so:
Motorcycle sales are falling in 2010, as they have for each of the last three years. The company does not expect a turnaround anytime soon.
But despite that drought, Harley’s profits are rising — soaring, in fact. Last week, Harley reported a $71 million profit in the second quarter, more than triple what it earned a year ago.
That’s impressive! But:
Many companies are focusing on cost-cutting to keep profits growing, but the benefits are mostly going to shareholders instead of the broader economy, as management conserves cash rather than bolstering hiring and production. Harley, for example, has announced plans to cut 1,400 to 1,600 more jobs by the end of next year. That is on top of 2,000 job cuts last year — more than a fifth of its work force.
and:
Because of high unemployment, management is using its leverage to get more hours out of workers,” said Robert C. Pozen, a senior lecturer at Harvard Business School and the former president of Fidelity Investments. “What’s worrisome is that American business has gotten used to being a lot leaner, and it could take a while before they start hiring again.”
What’s worrisome to me is that businesses may choose to perpetuate high unemployment.
Harley has warned union employees at its Milwaukee factory that it would move production elsewhere in the United States if they did not agree to more flexible work rules and tens of millions in cost-saving measures.
This could be a frightening new US reality – companies holding workers hostage, in exchange for jobs.
Tags: predatory economy, unemployment
So what’s new? Corporations have been holding workers hostage for the past 15 years. The only worrisome truth nowadays is that it seems that workers no longer have the stomach to organize and fight back. They seem to be complacent and fearful rather than outraged. It’s sad to see all that labor has worked for and gained over that past 50 years is being given away by todays workers who expect others to fight for them and their interests. American labor has to wake up, draw the line, and be motivated to fight and protest against these corporatists trying to turn this country into a third world economy for labor. American labor has to fight for their piece of pie. Nobody is just going had them decent wages and benefits.
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Duck You are right on.
I have lived too long, I guess. I have seen this country go from the greatest in 1960′s to a third world country today.
Jobs will come back when other countries begin to outsource them back to us once we get lower than the other countries where they went.
We have developed another class of Americans — Peasants.
We have found a new third world country … and it is us.
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I’m afraid that you’re all correct. Corporate America knows that it can basically bully the American worker by threatening to take jobs offshore and replace them with low-paying, high-turnover, low-quality of life work or just no jobs whatsoever. I agree that companies are showing profits not by increased sales or more work and more hired to work but to cut expenses to the bare bones to where the working person is doing twice to 3 times more for the same or lower pay. This is a sad situation in Amerca today, folks.
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Everyone keeps looking at the unemployment rates and wondering when they will go down. The fact is the jobs won’t return; they have been shipped overseas.
Unemployment has been on the rise ever since the removal of import tariffs, which moved us from fair trade to free trade. This was the beginning of the jobs going overseas to cheap, cheap labor and unregulated standards.
Of course our products did cost more to make here because not only have our workers over the years gained a decent wage for a reasonable workweek, but the products cost more because of the additional other protections we require in producing our products in America as opposed to those of Third World countries.
We implemented and regulated safety standards in our workplace. We demanded quality standards in our products. We insisted on regulated standards and the monitoring of our food and medical items.
These are all very costly requirements compared to the unregulated Third World countries. Also, the Third World work force is willing to work obscene hours for little pay and horrible and unsafe working conditions.
In order for jobs to return to America, our work force will have to be content to work under Third World standards to compete. Don’t look for this to happen anytime soon. In fact, look for unemployment to increase until the work force accepts this reality.
The cost of the move to free trade was fair trade, and it has devastated the American work force.
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