FIGHTING TRIM:

Big companies are awash in cash as economy picks up (Tom Petruno, 3/23/10, LA Times

By one prominent measure, major companies had extraordinary success weathering the recession: Industrial companies in the Standard & Poor's 500 index, a list that includes such giants as 3M Co., Coca-Cola Co. and United Technologies Corp., ended last year with a record $832 billion in cash and short-term securities on their books, up 27% from a year earlier.

"The big question is what do they do with it," said Susan Sterne, an economist who heads Economic Analysis Associates in Greenwich, Conn.

The U.S. economic recovery could be stunted unless a large share of that corporate wealth flows to average workers, either in the form of new jobs or higher wages, some analysts say.

"If we don't get jobs growing soon and we don't give ordinary working families a sense that they're benefiting from this recovery, there's going to be an economic price to pay," Kochan said.

Historically, smaller firms have led the way in U.S. job creation, not multinational Fortune 500 companies. But economists note that smaller companies provide many goods and services to larger firms, so the good health of the giants should help firms down the food chain.

There have been some signs that businesses overall are beginning to reinvest their cash mountain. The government's chief measure of capital spending, outlays for equipment and software, rose sharply in the last three months of 2009 after plummeting in the first half of the year.