Thursday, September 16, 2010
The gross unfairness and imbalance of corporations
A headline today points out one of the many inherent unfairnesses and imbalances created by the constantly-demanded profits of corporations. Here it is: FedEx 1Q profit doubles; will cut 1,700 jobs It's insane. They double their profit for the first quarter of this year but they slash jobs by 1700. Here's another insanity--these same corporations that do this still expect the great unwashed masses out here to buy and use their products and services. How can we do that, if we get pay cuts or, worse, fired or "let go"? When it used to be "mom and pop" businesses, people realized there were business cycles and we all lived with them. But now, in the modern, corporate world, these same corporations constantly demand profits and, worse, increases in profits, resulting in situations like this where, sure the business not only made money but made twice as much, during the quarter, as it did earlier. But that's not enough. It's never enough. So what do they do? Fire people. They "make them unemployed". It's ugly. It's incongruous. It makes no sense. And yes, I know I'm looking at a smaller, one-quarter of the year picture but the point is still very valid. This is a smaller microcosm of what happens in our corporate culture, in the broader view, absolutely. The trouble is, without a full collapse of Western society, there's no way to stop this process, either. The corporations will keep demanding ever-larger profits and, to make matters worse exponentially, they will also keep merging with other companies and devouring each other, which makes for less jobs due to duplication of work, once those companies do combine. In short, to summarize--we're screwed, you and I. Good luck out there today. Try to enjoy the weather.
Link to original story: http://news.yahoo.com/s/ap/20100916/ap_on_bi_ge/us_earns_fedex
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2 comments:
What are you proposing--you cannot reduce employment if you are profitable?
When companies in a competitive environment compete, prices come down more than wages are lost. The problem is one of perception rather than reality--you can point to a person who lost his job, you can't usually see where the price of products became a tiny fraction cheaper as a result--but the sum total of those microscopic price reductions, year after year exceeds the more visible lost wages.
In the mid 1800's, first Waltham, then Elgin, then several others reinvented watchmaking--taking what used to require 3 or so weeks of highly skilled labor and reducing it to a couple of days worth of semiskilled labor by around 1875. As a result, thousands of watchmakers were reduced to watch repairmen--but millions of middle class people could now afford watches.
Most of the modern efficiencies are on a much smaller scale--but the net result is eventually similar.
I'm proposing that corporations--all corporations--be guided not simply, solely and singularly on and by profits since, as this case shows, even if/when they're profitable, they continue to fire people. I'm proposing that corporations keep in mind that having people employed is good for their own bottom line, too.
mr
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