Have you heard the good news for profits, brother?

You know those encouraging signs of economic progress we keep hearing about?  Well...:

U.S. businesses are cutting workers' hours and jobs at a pace that far outstrips the rate of the economy's contraction, generating a productivity boom that in ordinary times would be a welcome sign of healthy growth.

It is a bit of mystery why companies are downsizing so drastically, but the consequences are clear. For Corporate America, it means a strong -- although possibly fleeting -- rebound in profits. For employees, it means a dismal job market is getting worse and may not recover any time soon.

(See, it doesn't strike me as particularly mysterious that corporations would take advantage of an economic downturn to fire people, and then use the fear they've created in the remaining workers to demand even higher and more dangerous levels of "productivity".  But then, I'm not paid to ignore explanations like that.)

But surely someone is happy?

The fact that companies are managing to produce more with less labor is good news for profits and helps explain why many companies have reported better-than-expected second-quarter results in recent days.

Hey, great.  I admit I was surprised to hear that "profits" are following the news, but you learn something every day.

Comments

[Catherine]

We need some new vocabulary to describe such actions and the people who carry them out. Words such as "disgusting," "contemptible," and "nauseating" no longer cut it. Even "eternally damned" is too weak (and also, on rethinking, redundant).

[SteveB]

It seems to me that this could be a more or less permanent state of affairs. That is, the "recovery" consists of anemic growth coupled with high rates of unemployment and underemployment and continuously rising levels of exploitation (excuse me, "worker productivity") punctuated by speculative bubbles and massive government bailouts when the bubbles pop.

Oh, wait - I just described the last forty years.

[KDelphi]

Part of the reason is, with so many out of business, they have monopolies...it is actually bad news for those who cannot invest in the Stock mkt, as it will keep the campaign donations rolling...

But at least "health care reform" will be "deficit neutral" (now that theyve paid for Wall St and the wars)

[SteveB]

"health care reform" will be "deficit neutral"

Plain English translation: "If you want to provide better health care to poor people, you have to provide shittier health care to old people. There's just no other way!"

And, after rereading that story, I have to give the author credit for using the more-honest term "profits" rather than the corporate-media-approved euphemism, "earnings."

[John Caruso]

...I have to give the author credit for using the more-honest term "profits"...

Yeah, I appreciated that as well, and I'd like to see more business writers doing it. Actually the article itself is pretty good.

[KDelphi]

Ask Pres. Obama, Sens Warner and Webb, of Wise County , Virginia, to attend a RAM (remote area med) this weekend at the Fairgrounds...it is pretty much a MASH unit that is now pspending 40% of its time in the US!! (used to spend more time in Bangladesh).

Then they may be better able to ascertain the scope of the "problem" of the un and under-insured and decide whether "choice" and "deficit neutral" are really the issues...thanks...http://www.ramusa.org/about/mission.htm

[SteveB]

This is from a NY Times report on efforts by Obama administration officials to rein in investigations by the antitrust division of Obama's own Justice Department:

In some cases, though, the new approach is being opposed by administration officials. Some fear that the crackdown is coming at a bad time, as corporate America reels from the recession.

These recessions are quite the thing, if you're corporate America - an opportunity to screw your workers even harder, and a "get out of jail free" card to hand to government anti-trust investigators. Let's just hope no one notices those climbing profits (we're supposed to be "reeling", you know.)