The Washington Post counts the number of jobs that have been cut by American companies just this month and comes up with 43,000:
American companies announced job cuts totaling 43,000 this morning, as the global downturn slammed the profits of such exporters as Caterpillar and a domestic recession hit hard at retailer Home Depot.
As companies begin announcing their financial results for the end of 2008, they are also moving fast to cut costs in response to poor results and a diminished outlook for the coming year.
The job cuts announced so far today include 20,000 at heavy equipment maker Caterpillar, 8,000 at the Sprint Nextel telecommunications company, 7,000 at Home Depot, and 8,000 anticipated from the pending merger of the Pfizer and Wyeth pharmaceutical companies.
When you add the 5,000 that Microsoft has announced that it will cut that comes to 48,000. And the post needs to check its math. The 18% reduction they calculate in Caterpillar’s workforce probably isn’t correct. I believe they’re counting all 20,000 of the jobs cut rather than the 12,000 actual Caterpillar employees. I doubt that the 8,000 contractors whose jobs have been cut are counted in the company’s total workforce of 112 some-odd thousand.
I have several concerns about this. Obviously, one must be concerned about the people who are out of work. In the current climate they’re going to have a tough time finding new jobs and I have no doubts that many of those who find jobs will end up taking pay cuts.
I think it’s one thing for a company to cut jobs when it’s hunkering down in survival mode, another thing entirely when it’s doing so to keep its dividend up or impress Wall Street. If a company’s stakeholders bear all of the pain while its stockholders bear little, that invites political reprisal.
To understand my other concern you’ve got to recall that our economy has seen little job growth over the number needed just to stay up with what’s quaintly called the “natural increase” and that growth has either been in construction or government and its handmaiden industries of education and health care.
Well, construction is on the mat and government, education, and health care are all heavily dependent on tax dollars.
To replace the jobs that have been lost we’re going to need a recovery that’s a lot different than the economy of the last eight or ten years and I have no idea what’s going to build that.
