Robert Reich: The Great Decoupling of Corporate Profits from Jobs
GM officials say no American taxpayer money is being used to expand in China. But money is fungible. Because of our generosity, GM can use the dollars it doesn’t have to spend in the United States meeting its American payroll and repaying its creditors for new investments in China.
Second, big U.S. businesses are investing their cash in labor-saving technologies. This boosts their productivity, but not their payrolls.
Last Friday, for example, Ford reported a $2.6 billion second-quarter profit. The firm is already more than two-thirds the way to equaling its record 1999 profits. But due to labor-saving technologies, Ford now has half as many employees as it did a decade ago.
How can you get the diagnosis this right and the prescription so wrong? You can’t stimulate car consumption and expect jobs to pour in - we need jobs from new industries. Old ones aren’t going to do the job, so stop with the highway projects and the bailouts of creaky old-economy blue chip corporations.
What we really need are for innovative individuals to find capital. Instead, we’ve directed every spare dollar we have toward war, decrepit banks, and old-guard automakers. Why? Investing in the past means that others will drive the economy of the future - we need to completely rethink the way Keynes is being applied for it to work.
This.
We do not need the person that punches the holes in Cheerios anymore. We need the people that can design and maintain the Cheerio hole punching machines. The problem is that our educational system has been failing to properly train, and more importantly, inspire said individuals to move past these low skill jobs.
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