The Wall Street Journal recently reported on the latest trend to undermine American workers. It doesn’t come from China, India or some Third World country.
As the cartoon character Pogo once said, “We have met the enemy and he is us.”
“Never before have American companies tried so hard to employ so few people,” the Journal reported, citing the widespread increase in contract workers rather than full-time employees.
“The shift is radically altering what it means to be a company and a worker,” it stated. “More flexibility for companies to shrink the size of their employee base, pay and benefits means less job security for workers.”
It also “maximizes shareholder value,” which Wall Street believes trumps all.
American Airlines shareholders were incensed last fall when management raised employee pay, which had fallen behind other major carriers.
“This is frustrating,” Citi analyst Kevin Crissey wrote to clients. “Labor is being paid first again. Shareholders get leftovers.”
Ah, shed a tear for the poor investor class.
Once there was a myth that we’re all in this together.
In 1953, Charlie Wilson, General Motors chief executive officer, famously told a Senate committee, “What is good for the country is good for General Motors, and vice versa.”
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But in the 1980s corporate raiders — Carl Icahn, T. Boone Pickens, Ronald Perelman, the Bass brothers and others — bought up companies, cutting them to the bone, fat or not, to “maximize shareholder value” in a game of oligarch monopoly.
“How the cult of shareholder value wrecked American business” was a 2013 Washington Post column by Stephen Pearlstein, a George Mason University professor of public affairs, who attempted to restore proper perspective.
“Shareholders,” he wrote, “have a contractual claim to the ‘residual value’ of the corporation once all its other obligations have been satisfied.”
Instead, they’ve laid claim to primary rights, as if the playing field wasn’t already tilted in their favor.
Which brings us to the Republicans’ corporate tax cut (and the top rate needed to be reduced; even Barack Obama recognized that), which was advertised as a boon to workers, who ended up with a pittance.
A National Association for Business Economics survey of 116 companies last month found that 81 percent didn’t alter investment or hiring plans because of the tax plan, the New York Times reported.
Just Capital, a nonprofit research group that tracks 1,000 large public companies, stated the typical worker received about $225 in increased salary, a one-time bonus, or both.
So where did most of the money go? Payouts to shareholders are up 23 percent to $1.3 trillion, according to Goldman Sachs.
Because two-thirds of my retirement income is derived from 401k accounts with a fairly substantial investment in the market, I’d be hypocritical to deny I enjoy getting paid for doing virtually nothing.
But somebody has got to do the work — and preferably not just on contract. As corporate profits soar, employees should be in line for an equitable return on their contribution.