Sunday, August 15, 2010

Take This Job and Shove It:

The economy has been growing for a year, and corporate profits have surged—Standard & Poor's estimates that profits of the constituents of the S&P 500 rose nearly 52 percent in the second quarter of 2010 from 2009. Much of that impressive profit growth has been driven by the remarkable gains in efficiency and productivity that corporate America has notched since the recession took hold. Last year, productivity—the ability to produce more with less—soared 3.5 percent, up from 1 percent in 2008 and 1.6 percent in 2007. Yes, companies embraced the Gospel of Cost Cutting with missionary zeal—printing on both sides of the paper, eliminating bottled water, turning off the lights. But most of the gains came straight out of payroll. Companies slashed salaries and curtailed benefits, all while asking shell-shocked veterans to pick up the slack for downsized colleagues. Even as business has picked up, companies have been extremely slow to hire; the private sector has added just 630,000 jobs so far this year. And when it comes to wages and benefits, corporate America's bean counters could make Scrooge blush. Many of the firms that slashed pay or cut 401(K) matches haven't restored them even though their balance sheets are in rude health.

Look, unemployment can be enormously stressful. But under today's conditions, employment can also get on your nerves. Steven Slater's cathartic meltdown came several hours before a government release signaled that companies have pushed workers about as far as they can go. For the past year, the U.S. economy has been prodding workers to do more, produce more, serve more, with each passing week, without much assistance, and without much of a raise. Over the past four quarters, BLS reported, "unit labor costs fell 2.8 percent as output per hour increased faster than hourly compensation." But when the Bureau of Labor Statistics reported the second-quarter productivity numbers on Tuesday, Aug. 10, the results were a little shocking. For the first time in several years, productivity actually fell—at a 0.9 percent annual rate. Workers put in more hours, but output didn't keep up. They simply can't run any faster.