The Job Machine Grinds to a Halt

By Harold Meyerson 
Washington Post 
July 28, 2010

Ain't no hiring. And ain't likely to be any for a good
long time.

The problem isn't merely the greatest downturn since
the Great Depression. It's also that big business has
found a way to make big money without restoring the
jobs it cut the past two years, or increasing its
investments or even its sales, at least domestically.

In the mildly halcyon days before the 2008 crash, the
one economic outlier was wages. Profit, revenue and GDP
all increased; only ordinary Americans' incomes lagged
behind. Today, wages are still down, employment remains
low and sales revenue isn't up much, either. But
profits are the outlier. They're positively soaring.

Among the 175 companies in the Standard & Poor's 500-
stock index that have released their second-quarter
reports, the New York Times reported Sunday, revenue
rose by a tidy 6.9 percent, but profits soared by a
stunning 42.3 percent. Profits, that is, are increasing
seven times faster than revenue. The mind, as it
should, boggles.

How can America's corporations so defy gravity? Ever
adaptive, they have evolved a business model that
enables them to make money even while the strapped
American consumer has cut back on purchasing. For one
thing, they are increasingly selling and producing
overseas. General Motors is going like gangbusters in
China, where it now sells more cars than it does in the
United States. In China, GM employs 32,000 assembly-
line workers; that's just 20,000 fewer than the number
of such workers it has in the States. And those
American workers aren't making what they used to; new
hires get $14 an hour, roughly half of what veterans
pull down.

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