Profits over jobs

PROFITS OVER JOBS,

Once again the United States finds itself in a unique place in world standing. As the worlds richest industrialized nations begin to come out of the depths of financial down-times, a strange thing is happening in the United States. Production is up, profits are up, but job creation or retention is  flat,  down, or recovering slowly.

Measuring growth, the United States economy has outperformed Britain, France, Germany, Italy and Japan, all group of 7 developed nation except Canada, according to the Associated Press' new Global Economic Tracker quarterly, which analyses  22 countries representing more then 80% of global output.

How can this be, one might ask, how can fewer workers produce more, when other countries and companies have retained more of their workers during this down time, through innovative cost cutting ways, through 3 day work weeks, through shifting some workers to other areas of production and biting the bullet like their employees.

Believe it or not, some foreign companies actually value their employees, those people that are experienced in their jobs, those people that, through the years have proven to be valuable, intricate members of the overall success of the company.

United States industry, on the other hand, has seen an opportunity to shrink their work force, viewing their employees as a debit and not a credit on their books. This attitude has been created, in the beginning of the financial downturn, back in 2008, first by the business atmosphere and later, when it was found that the same production was possible with fewer workers.

The equation, (more production, less workers) was at first interesting and intriguing to management and some examined how this could be. Management also noticed a huge change in the attitude of those retained workers, especially those shops that were without unions.  A feeling of thankfulness for having a job, of being lucky that they had a job begin to take over, and workers begin to feel the pressure to preform and produce at a better rate.

Workers were not as independent as they might have been in 2007, there was more of a fear to protect their jobs through additional effort. As production went up, as more and more positions were eliminated, America's workplace took on a whole new look. As unionization became less an option, as management became more and more aware of this, the push for production with less became the watchword in much of American industry.

American industry, in 2011 has a sleeker more robust look, less workers doing the same jobs and generating the same production guarantees higher profits, today, 2+2=6. The margin of profit goes up for the business owner, big and small. Is this new attitude by business good for the country, well lets take a look at some statistics and you can tell me.

In the past, when the U.S. economy fell into recession, companies typically cut jobs, (however did not eliminate them). Companies often kept more workers then they needed, some feeling protective of their workforce, or didn't want to lose skilled workers, once the economy turned around.

The result of this job cut during tough times was predictable, productivity, (output per worker) either decelerated or dropped as the economy weakened. Japan and Europe followed this script and, at the depth of the recession, productivity shrank from 2.2% to 3.7%.

However during this same period of time, (2008-2009), United States productivity doubled and then doubled again in 2010. In America there was a (weeding out process), a pitiless slashing of jobs to the tune of more then 700,000 a month in the January-March quarter of 2009. Workers with either weak production records or those that management simply didn't like or want were cut from their payroll ledgers.

Now as profits roll in and the realization sinks in that less workers means higher profits a possible new chapter has begun in American history. In my wife's office, five people have left the department either through transfer or retirement and not one position has been filled. The work load has been re-distributed among the remaining workers.....a tool to balance the budget. Two of the retired position, the department director and the office manager might never be refilled.

Temporary help is easy to hire with little constrain to a company, lower wages, no benefits and interchangeable. This is good practice for the company, but terrible for the workers. At the moment, everything is tilted towards the employer, the employee has next to no leverage. If your boss wants you to work the next two Saturdays, "what are you going to say.....no."

However down at the end of the line, when things change, the worker rights and union power will return. American business simply does not see the trees for the forest. A smolder anger will undoubtedly turn to a small fire and then into a blaze and change will once again overtake the country.

Treating American workers with dignity and respect is always way down the list of priorities for American business, a (make it while you can attitude) is prevalent in the thinking process of American business and in the end is the great American business weakness.