January 9, 2011

AN EARLY CONTENDER FOR THE ANNUAL FOX BUTTERFIELD AWARD:

Profits are Booming. Why Aren’t Jobs? (MICHAEL POWELL, 1/09/11, NY Times)

To gaze upon the world of American corporations is to see a sunny place of terrific profits and princely bonuses. American businesses reported that third-quarter profits in 2010 rose at an annual rate of $1.659 trillion, the steepest annual surge since officials began tracking such matters 60 years ago. It was the seventh consecutive quarter in which corporate profits climbed.

Staring at such balance sheets, you might almost forget that much of the nation lives under slate-gray fiscal skies, a place of 9.4 percent unemployment and record levels of foreclosures and indebtedness.

And therein lies the enduring mystery of this Great Recession and Not So Great Recovery: Why have corporate profits (and that market thermometer, the Dow) spiked even as 15 million Americans remain mired in unemployment, a number without precedent since the Great Depression? Employment tends to lag a touch behind profit growth, but history offers few parallels to what is happening today.


Actually, the question should be: why will businesses waste these profits hiring do-nothing employees?

Posted by Orrin Judd at January 9, 2011 10:59 AM
blog comments powered by Disqus
« CATCHING UP TO THE END OF HISTORY: | Main | THIS STORY ALWAYS END THE SAME WAY...: »