Regardless of the recent pronouncements made by the U.S. Bureau of Labor Statistics (BLS), employment continues to decline.
It’s no big secret, except to the politicians and the mainstream media, that day after day, discouraged job seekers give up their search and are thus not counted in the employment equation.
From technology and overseas outsourcing to lack of job skills and legacy costs, there are a multitude of reasons that are responsible for this continual increase in joblessness. However, perhaps becoming an even more dominant factor in the unemployment rate discussion these days, there is one motive that hasn’t received any attention — Wall Street.
Back in the good old days, before a company went public and was still in its embryonic stage, certain things were understood.
For example, the founder of the company would make the most money. To enable the founder to receive the highest compensation, it would require hiring employees that would be paid by either an annual salary or an hourly wage, according to their efforts.
Then, the business would try to develop a presence in the community as both upper management and the general workforce were encouraged to represent the company in the best light possible.
If the business became successful, which means making a profit over and above all expenses including taxes, employees could expect rewards.
Pensions were established in order to acknowledge years of service, profit sharing plans were formed to incentivize the workers, and if it was a particularly good year, a Christmas bonus was almost always a certainty.
On the other hand, if the profits were small, so too were the rewards and if the company was failing and unprofitable then layoffs could be expected with ultimate closure being the worst-case scenario.
Yes, the old-fashioned ebb and flow of business was very easy to understand. Nevertheless, the game has changed in very dramatic fashion.
Nowadays, it’s not a question of profit but how much profit, and more importantly, does it meet the stock analysts’ expectations?
Recently, Hasbro, Inc., one of the largest toy makers in the world, decided to cut 10% of its workforce.
Consequently, 550 employees will be let go, with their families and communities suffering greatly from this decision. Hasbro CEO Brian Goldner will also feel the pain as his annual salary will be cut by a whopping 67%, from $23 million to $7.6 million.
I thought to myself, wow, Hasbro must have lost a lot of money.
Yet, I was wrong. Hasbro expects to report that 2012 revenue was $4.09 billion, with profits to pay everyone including the CEO.
In spite of this, the reason for the recent downsizing announcement was “failure to meet Wall Street expectations.”
How many jobs have been lost because the perceived importance is not the American worker, but rather the company’s current stock market quote?
In the 1986 musical comedy film Little Shop of Horrors, the man-eating plant is constantly stating “feed me, feed me, feed me.”
With that image in mind, how many jobs need to be lost in order to satisfy the man-eating plant known as Wall Street?Perhaps going public is not all that it’s cracked up to be, especially for the American worker.
(An important interview) Saving the Net from the surveillance state (And Crony Media): Glenn Greenwald speaks up (Q&A) | Nick Sorrentino