I believe that there are a lot of people out there that just have no idea what the average worker faces on a daily basis. Many workers face a very unhappy workplace with management that just doesn't seem to be in touch with reality. Many others go into their offices with the complete understanding that as long as they keep their mouth shut and their heads down they have little to worry about. And then there is another segment of the working population that always seems to be able to manipulate the “system” to their advantage and/or us it against others. Either way many American workers are frustrated, overworked, in some cases under paid and certainly underappreciated being abused.
Last month (June, 2011) in the United States a whopping 18,000 jobs were added to the payrolls and the unemployment rate actually rose from 9.1% to 9.2% (http://economix.blogs.nytimes.com/tag/june-2011-jobs-report/). Keep in mind that the unemployment statistic from the US Department of Labor do not account for people that have just given up looking for a job or have exhausted their benefits, basically the real unemployment number is higher (http://www.bls.gov/cps/cps_htgm.htm). With that said, not even a month later just over 30% of those jobs “added” to the economy have been removed with the announcement that Cisco Systems will be cutting 6,500 positions (http://www.bloomberg.com/news/2011-07-18/cisco-plans-to-cut-about-6-500-jobs-take-pretax-charge-up-to-1-3-billion.html). The best and funniest part of this is that Cisco announces that they are eliminating the positions to, “help trim $1 billion in annual costs and step up profit growth”. “Step up profit growth” this is great, so now we increase profit by eliminating employees? I suppose if the government can “increase revenues” by raising taxes why can't corporations “step up profit” by eliminating employees, makes perfect sense (insert sarcasm here).
I have to take a moment here to ask, “How does a government have revenue?” What does the government produce? What does the government sell? How do you produce nothing and sell nothing but have revenue? What will it take for people to understand that the government has no money. The “revenue” that the government enjoys raising and spending is YOUR money. The only “revenue” that the government has is what it collects in taxes and “fees”. This money is suppose to be used to pay the expenses created while the government is serving its citizens. While at the same time the government is being regulated by its citizens. This might be a good time to remind everyone of a famous quote from the past. President Lincoln once made the statement,”...and that this government of the people, by the people, for the people.” Most of us understand that this means the government is not an entity that exists on its own.
On Tuesday 7/19/2011 Goldman Sachs reported its disappointing earnings. It was extremely unfortunate that they were only able to report a earnings of $1.05 billion dollars even after all their hard work to reduce costs (http://dealbook.nytimes.com/2011/07/19/goldman-sachs-reports-profit-of-1-05-billion/). Along with their earnings report Goldman Sachs is now planning to cut staff and reduce non-compensation expenses by $1 billion dollars over the next 11 months. In fact, Goldman Sachs says it will be cutting nearly 1000 jobs (http://www.bloomberg.com/news/2011-07-19/goldman-sachs-plans-job-cuts-as-debt-trading-misses-estimates.html). Between Cisco and Goldman Sachs the total number of jobs lost will be approaching nearly half of the total jobs added in June 2011.
In addition to Cisco and Goldman Sachs now Borders has announced that they will not just be cutting employees they are closing all 399 of their remaining stores and liquidating all their current assets (http://online.wsj.com/article/SB10001424052702303661904576454353768550280.html). This will be a loss of 10,700 positions. I have to call this a failure to adapt to a changing market place. With the increasing availability of online media and books the “old fashion” paper books for the most part are doomed. So with this addition to our little list that brings the grand total to 17,300 jobs lost and its only July 19th. For those that don't want to do the quick math that would leave June 2011 with a net loss of 200 jobs. Yes, some of these jobs will be lost over a specific time period and the result of normal attrition and the elimination of open positions. But as long as corporate America is able to “step up profit growth” I suppose it’s not a problem for our economy to have a net loss of 200 in a 30 day period (insert more sarcasm here).
Now in addition to the layoff announcements by Cisco, Goldman Sachs, and Borders there is more to add to the pile. Lockheed Martin has just joined in the crowd and has offered “buyouts” to 6500 employees (http://www.washingtonpost.com/business/capitalbusiness/shedding-jobs-lockheed-martin-launches-another-buyout-program/2011/07/19/gIQAVQVMOI_story.html). These employees will be joining the unemployment lines this fall so Christmas looks great so far. This announcement comes just weeks after Lockheed decided to lay off 1500 other employees. Let’s face it a buyout is just a friendly way of asking who wants to walk the plank rather than being thrown overboard. The list will continue to grow but have no fear the government has everything under control (yes, insert sarcasm again).
These are the scenarios that your everyday American employee must deal with. Nobody really knows when they will get that call that they have become a casualty of a layoff, reduction in force, downsizing efforts, restructuring, or redistribution of labor. No matter what catchy phrase a corporation uses these employees and their families are impacted.
Now I understand that companies have no reason to keep employees on the payroll that they do not need. In addition each company has a fiduciary responsibility to its investors and share holders to remain as profitable as possible. However it also seems that companies in the past have been able to employ people for an entire career. I was raised with the concept that you work hard in school, get a good education, take an interest in an industry or trade and start at the bottom. As you work hard, prove that you have talent and you are reliable you are rewarded by moving forward and upward within the company. This process benefits both the employee and the company. The employee earns respect, benefits, and increased salary. The company creates an increased level of “tribal” knowledge that allows them to leverage the past against the future. The end result if everything is done correctly is that the company profits, employees enjoy a good work atmosphere and the consumer gets a good product at a reasonable cost. These principles no longer appear to be valid within corporations any longer. It now appears that the methodology employed by corporations in today's market to “step up profit growth” is that employees are an expendable and renewable resource. Reliable, talented and creative employees appear to no longer have any value.
The employment market now works like an accordion that expands and contracts with the changing tide of the global markets. Rather than a company work to make itself more profitable or efficient they simply layoff employees. In most cases what many people outside of these situations rarely realize is that the work load does not change just the number of people performing the tasks. Middle and upper management always seem so impressed with themselves how profits or revenues increase right after a mass layoff and then complain when the work begins to back up. Then more bodies are thrown at the issue usually in the form of contract labor and things get better for a while.
The solution to the madness might just be found in the fact that we have become such a reactive society. With our global markets, 24 hour news cycles, and easy access to different markets and data it seems that too many people and business' are quick to react rather than spend the time to analyze the situation and make informed decisions. If business became more proactive and looked forward and invested in the future they might not find themselves in the situation of playing the accordion so often. Until then the madness will continue and more and more workers will find themselves working jobs that may or may not exist from day to day.
Thanks for listening.
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