Strong second-quarter earnings from McDonald's, General Electric and Caterpillar on Friday are just the latest proof that booming profits have allowed Corporate America to leave the Great Recession far behind.
But millions of ordinary Americans are stranded in a labor market that looks like it's still in recession. Unemployment is stuck at 9.2 percent, two years into what economists call a recovery. Job growth has been slow and wages stagnant.
Corporations don't want to hire until they see consumer spending go up, but consumers are still paying off debts and trying to make it in what remains of the Great Recession, and it seems to me that until employees start getting raises and jobs again, they're not going to spend, so there's a conundrum there. Meanwhile
The article has some interesting statistics regarding the balance between corporate profits and wages and salaries in previous recessions vs. this one. Come on Corporate America. Share the wealth a little.
- U.S. corporations are expanding overseas, not so much at home. McDonalds and Caterpillar said overseas sales growth outperformed the U.S. in the April-June quarter. U.S.-based multinational companies have been focused overseas for years: In the 2000s, they added 2.4 million jobs in foreign countries and cut 2.9 million jobs in the United States, according to the Commerce Department.
- Back in the U.S., companies are squeezing more productivity out of staffs thinned out by layoffs during Great Recession. They don't need to hire. And they don't need to be generous with pay raises; they know their employees have nowhere else to go.
- Companies remain reluctant to spend the $1.9 trillion in cash they've accumulated, especially in the United States. They're unconvinced that consumers are ready to spend again with the vigor they showed before the recession, and they are worried about uncertainty in U.S. government policies.
I spoke to a young woman today who was excited to get a job from the University of Kentucky's job fair (UK being one of our biggest employers). She currently has a job with a business that does a lot of call centre customer service and insurance work, a business I've heard many people talk about that tends to hire and then lay off workers. But she has benefits now, although she didn't say how decent they were. The UK job is a temporary position in food service, without benefits, but might lead to a regular one with them. It's a foot in the door, she believes. But in the meantime, she'll be without any sort of health insurance, although her daughter at least has Medicaid.
This is a snapshot of the kind of working poor I've gotten to know very well between working at a gas station for five years and riding the bus. They want something better, but often do not have the education or skills to get out of low-paying jobs. If she can get on at UK long-term, she'll have retirement, health care, and tuition reimbursement. She could get an education. So I see where she's coming from, especially with her company not providing the stability of UK. Still, it's a gamble.
But it's kind of disheartening when you go to a job fair where the place is proclaiming 'we're hiring' and they offer you temporary positions. And that's a university. Corporations that are hiring are hiring temporary workers to save on benefites. Half of the people I've known who have worked at Toyota, a nearby plant, for example, have been temporary workers, and the ones who were regular were hired years and years ago and have recently retired. That says something, I think.
No one seems to have real job security anymore. Even though I'm doing better on the job front, and have good benefits, there's real concern over the future of our jobs say, five years from now, due to a variety of factors I won't go into here.
I'm so ready to see this recession go. Aren't we all?
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