Buying the (bread) line
As I was doing the dishes today, I was listening to the news online. I shouldn’t bother: the news is unceasingly bad, with the recession central in every headline. Last week, I got forwarded this little chart:
During the first 13 months of the recession, we’ve lost 3.6 million jobs across the country. That’s roughly 1 percent of the entire population. (My statistics aren’t good enough to account for people who were unemployed before this, or who don’t/can’t work.)
That’s a hell of a lot of people. Here in Seattle, as across the US, it is the big companies who are cutting back — Microsoft, Circuit City, Starbucks, Boeing. Each day brings another grim headline about additional workers released into the unemployment pool.
All of this has me wondering: what is driving the need to shed workers on the company side? Is it the fear that the stock value will drop? Or is it really bottom-line profitability? If it’s the latter, what would happen if companies simply hung on to some of their workers and took the hit to their stock price?
It seems to me that large companies are engaging in a full-scale panic. They can’t be sure that they won’t take a loss to their ledger books, so they are going to cut the only asset they have: their employees. This is having a domino-effect in the economy and news — as more companies engage in huge layoffs, other companies freak out and do the same. I’m not convinced it’s necessary.
Look at Microsoft, for example. They laid off 1700 in January. If Microsoft were to hang onto these people for an extra six months, what would happen to the company? Would they really lose a ton more money? MS has no debt. If they took the hit and moved people around internally (or engaged in “good attrition” — letting people go who didn’t fit after a re-org), the Seattle economy might be a little more stable. The company would be, certainly. As it is, the loss of those 1700 full time Microsoft employees will result in a hit of well over a hundred million dollars to the Seattle economy over the next year (assuming none of these people find work). A HUNDRED MILLION DOLLARS. Think of how many cheeseburgers you could buy with that! (Or how much health insurance.)
So this is my question: do corporations have the same obligation as individuals to help stem the tide of our bleeding economy? Maybe no one entity can stanch the flow, but if all of us take the hit collectively, it won’t be so bad. I just don’t buy the line that it is the taxpayer’s – and the government’s – responsibility to bail out huge companies who can’t keep their act together (US auto manufacturers, cough, cough). So, Microsoft, Starbucks, Borders, Boeing, I ask you: can you hang onto your workers for a little longer?
~ by ecp on February 19, 2009.
Posted in social commentary