I am reading the Sunday New York Times editorial about unemployment and the call for more federal intervention to create jobs.
With the passage of the next stage toward health care reform the federal government is doing it’s part to create a massive bureaucracy and the jobs that go with it.
What about the private sector? Many of the people and organizations who decry government intervention in anything seem to have no trouble cutting jobs when the next quarterly earnings report is in jeopardy of dropping a penny or two.
It is almost as if some corporations are using the economy as an excuse to clean house or cut costs simply for a better short term objective. Listen to me, a conservative at heart criticizing capitalists.
While manufacturing jobs of necessity are in direct proportion to production, many jobs lost do not have such a direct relationship. It is these jobs that corporations can favorably impact. Sure times are tough, but any reasonable person and certainly any sophisticated investor knows that things will improve even if it takes two or three years, or more to the point eight to twelve quarters. A sound, well managed company is not going away simply because of a downturn.
As unemployment rises and stagnates at high levels more and more government action will result with the accompanying increasing debt eventually leading to higher taxes……
So, corporations of America wouldn’t it be better to maintain control, retain your good talent and be better postioned for the recovery by avoiding layoffs even if you have to explain to a bunch of analysts what you are doing and why and that earnings will suffer a bit for a few quarters?
As many observers have noted, favorable earnings reports have been driven by cost cutting, not revenue growth. We all know it’s a big game, what we seem to forget is that it is people (people with long memories) who are the pawns in this game.
In today’s corporate jargon you hear terms like “employee engagement,” “employee alignment,” and the old standby being “on board.” Guess what captains of industry, your corporate communications can’t turn BS into fertilizer. And, take note HR departments as you warmly embrace and believe your own PR about human capital, this is partly your fault and you should be fighting for your workforce not enabling the CFO, and you should be doing it because it is in the long term best interest of your organization.
Just as with health care, you can’t have it all without paying the price, pay now or pay later. Maintain control or gripe about government intervention and taxes (which if I recall accounting 101 also impact net earnings).
Perhaps it can be said much simpler, do the right thing.
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