Corporations may be returning to profits, but there is little indication it’s because of increased sales. In fact, business are mostly doing better by shedding payroll. Indeed, the quickest way to profitability is to cut back on staff and overwork those lucky employees who are keeping their jobs. These companies have a couple other things in common besides just laying off workers.
1.) These company are sitting on a hunk of cash- Non financial firms especially have been in much better economic position recently especially when compared to the start of the financial crisis. Unfortunately, so many businesses are afraid of another recession and simply choose to save their money instead of getting it back out into the community.
2.) These companies like to complain- When you ask these companies why the aren’t hiring workers with this cash, most of the time they would shift the argument Indeed, the complaint will be that they are overtaxed an over-regulated when the truth is that thy make a pile of money export their labor to India and China. Workers in the countries will work much longer house for less pay and the companies farming out the work pocket all the difference.
These are the hardest times workers have perhaps ever seen. Housing prices are still low becuase there is a surplus of existing homes. New homes are not being built as there are no buyers in line commanding the work. The chicken has to come before the egg, however. People are not going to buy homes until they are put back to work and they won’t be working until companies start freeing up their nest egg cash.
President Obama is currently enacting legislation to reward employers for hiring workers and keeping them on for at least a year. Perhaps companies will hire again if they can be incentivized to do so.