Sunday, January 15, 2012

Ali Velshi: We Can't Hang Corporations for Treason

I heard Ali Velshi on TV yesterday morning regurgitating a handful of CEO's old and tired arguments that 3 million jobs are open, but that millions of unemployed Americans don't have the necessary skills to fill those jobs. That is patently false.

There are millions of high school graduates (or drop outs) who can easily qualify for menial labor jobs that have been outsourced overseas. There are millions more who were laid off that have years of work experience, higher education, and exceptional office and tech skills. I've been reading their stories, blogs, and comments for the past 3 years.

Some corporations have moved to other states for preferential tax breaks, taxpayer funded amenities, and for lower Boeing did by moving a factory from Washington to South Carolina, putting lots of skilled workers out of work.

Excluding the millions of recent college graduates we've had just since the recession started, jobs are still being bled for menial labor jobs and telephone operators to India, China, and elsewhere. How much "skill" does one need to work in a factory or on an assembly line in China? Or to pack a box, drive a truck, or sweep the factory floor?

Many of our returning military service personnel from Iraq and Afghanistan are very skilled and disciplined, and corporations were offered tax incentives to hire vets, but their rate of unemployment exceeds that of the national average. Only the higher ranking officers and "celebrity generals" may find themselves lucrative paying jobs after they retire with full military lobbyists in Washington D.C. on K Street for the defense industry, such as at Lockheed Martin or Northrop Grumman.

And most of those who have been unemployed for any extended time, are now under-water on their homes and can't sell and/or afford to relocate. Many, if not most, have already spent their life savings trying to maintain the status quo while searching for work....ANY work. And they're also competing with teenagers looking for summer jobs too. Over 8 million Americans are "under-employed", and many are working two or more low-paying jobs to stay afloat.

Many Americans have also lost their cars for non-payment, and no longer have reliable transportation to anywhere within their own local labor market, let alone pack up the family car with what's left of their belongings after selling what they could at garage sales, or on eBay, or to a local pawn shop to pay their bills -- and then just beam themselves, their job skills, and their families to match up with a job in another state, across the country, or in another country on the other side of the world - - like China. They can't be "more mobile".

As one of Ali's guests had pointed out on the program, 3 million job openings is really not that very many when it comes to the natural churn in the job market. And we have millions more unemployed than the 12 million Ali quoted (Sorry Ali, but these numbers are a pet peeve of mine).

Many people might not be physically capable to do the job that's offered if it's labor intensive, or a company might impose an unnecessary higher educational requirement for menial jobs because of such a glut in the labor market. They can now hire people with PhD's to lick envelopes for minimum wage.

Some corporations impose a 3rd party psychological exam after completing an initial on-line job application, and be disqualified by a software program without even getting an interview with a real person, then only to get an auto-generated email rejection letter saying "Thanks, but no thanks. But please feel free to re-apply next year.".

After the recession, many people had their credit rating reduced, making it harder to find a job. Just by BEING unemployed can disqualify a person from even being considered for employment.

And from everything I've read in the news, blogs, the Bureau of Labor Statistics, and the email I receive, people are still being laid off and having their hours and wages cut. Most people can't afford to abandon their home, leave their extended family and friends behind, and drive from California to New York with the hope of being hired for a janitor's position.

And why does Ali Velshi always have Steve Moore as a guest on his show when it's common knowledge that Mister Moore is just a shill for the Wall Street Journal and corporate America. I've caught him in many lies. It's no wonder Lawrence O’Donnell recently touted MSNBC’s ratings win over CNN. I once used to think that CNN and those like Ali Velshi were like the non-partisan referees between Fox News and MSNBC, but they've been leaning more "right" lately. Erin Burnett appears to drool unashamed over CEOs with mega-wealth. (When she interviewed Sir Richard Branson of Virgin Atlantic Airways last month, I though she came close to jumping in his lap).

Since June of 2008, when Congress first created the Emergency Unemployment Compensation (EUC) program, based on a White House study, nearly 18 million Americans have at some point received federally funded extended unemployment benefits. 15.7 million were unemployed in October of 2009 when the unemployment rate was 15.2%. Of those, at any one time 10 million were receiving unemployment benefits, but they have all since exhausted them.

Is Ali saying that none of these people have the skills needed to find 3 million open jobs, when only 3 million net jobs were created since Obama took office? Do we need 3 million nuclear scientists?

Blaming 30 million under-employed and unemployed Americans for not having the necessary skills is total B.S. And most of those jobs are probably part-time low-paying jobs...not even enough to pay the rent.

Many job openings are government jobs requiring special skills and education, but are only listed because of federally mandated law by the Equal Employment Opportunity Commission, and people are usually promoted from within a particular agency (much like in a union house, where jobs are posted for bid, and those with the most in-house seniority would apply and qualify).

It's become quite clear that corporations have been squeezing labor and consumers dry for the past three has absolutely nothing to do with job skills. Every conceivable type of skill is already in the unemployed work force. With record CEO pay and profits, there's just no reason for corporations to hire them. They've made due with less and increased worker productivity, and with lower wages and reduced benefits.

To report the lie that the unemployment situation is based on any evidence that Americans "lack the right job skills" is just plain ludicrous. Many can learn a skill that's needed with only one day of on-the-job training, or a few short weeks of acclimation.

Corporations have been maximizing their profits for greater executive pay, hence the wealth disparity...not because they need more workers with better skills. Only a few examples might be true, but doesn't address the overall problem.

It's become quite clear, after carefully reviewing both sides of the argument regarding income inequality, where the biggest problem's in the insatiable thirst for corporate profits. A company never realizes a finite size, then becomes satisfied with its market share in the economy. As a legal limited liability non-entity, a corporation always needs a financial reason to grow, no matter what the human cost.

Corporations have had mergers and acquisitions since the dawn of time. Monopolies were always pursued to dominate markets, and competitors were always destroyed or bought out. It's the nature of corporations. Look at Mitt Romney's Bain Capital for an example of predatory venture capitalism by private equality firms, whose sole purpose is to create wealth, not jobs.

A CEO who earns $1 million a year must make his company's stock appreciate in value, year after year, bringing in ever more profits. The CEO will be rewarded with bonus pay for performance, and might be earning $2 million a year the following year, even if it means cutting wages or benefits for the other employees, or laying them off...such as outsourcing their jobs for cheaper labor.

A corporation, unlike an individual employee, can never be satisfied with just meeting the rising costs of payroll raises or business expenses. They must also meet, and then exceed, those ever rising costs.

And if the employees were in a labor union, and were getting annual raises (say 2%) to exactly meet the annual rate of inflation (just to maintain perfectly stagnant wages), the company not only has to exponentially earn more to meet those 2% costs in payroll expenses, but exceed them by a marginal rate that's high enough to pay the board of directors their 2% raise (ha-ha) and the stockholders a 2% increase in their stock prices and/or dividends.

But CEOs and stockholders aren't just trying to meet and exceed inflation rates, but to exceed them to the maximum in any way they put more money in their pockets, not ours.

In manufacturing (for example), if the cost of higher taxes, regulation, payroll, and commodities are higher from one year to the next, then their product might cost more to produce. To absorb these increased costs so as not to affect their bottom line, they'll pass the cost on to the consumers whenever and however they can (and use an army of tax attorneys to find write-offs, deductions, exemptions, deferments, etc.).

Once a market becomes saturated (and/or consumer demand drops), new markets must be opened ("emerging markets"), so that a corporation can continually grow, even as it constantly devours resources (natural and monetary), like an ever growing and hungry monster in a Sci-fi movie.

And no matter how much a corporation might save with tax incentives (loopholes), or with cheaper commodities (such as buying in bulk, etc.), the CEOs and shareholders will always strive to maximize profits. It's the corporation's only reason for existing, not to be a "job creator". The CEO's job is to maximize profits, not be a good neighbor, a responsible captain of industry, or a pillar of the community.

If a company was only breaking even year after year (but still paying CEO salaries and dividends to their shareholders on their stocks that equally matched rising inflation), they would not be satisfied with such meager returns on their investment. The idea is to constantly grow, the bigger and faster, the matter what.

After all else (tax breaks from local municipalities, outsourcing, automation, etc.), the remaining employees (excluding top executives) will be forced to take cuts in pay and benefits, or be laid off, to keep profits high enough to meet CEO pay and shareholder value (that's at least equal to, or exceeding, the rate of inflation). But they don't strive to break even, they strive to constantly grow, the bigger and faster, the matter what.

If corporations that are using organized labor can't break even (e.g. because of poor management, lack of sales due to poor demand, competitor's prices, etc.), they will blame unions for high wages and pensions, even though the employees might not even be meeting a level of inflation year after year, and may have 10% less buying value than from 5 years previously.

But because a corporation must always grow to satisfy shareholder/investors, they will invest in lobbyists to have their taxes lowered (and other political favors), file bankruptcy to break labor contracts and divest debt, hire CPAs to find loopholes in the tax code, and/or lay off more employees or cuts their wages and benefits more...anything to maintain shareholder value. Breaking even or remaining stagnate is not an option....the CEO might lose his/her job.

A corporation (or CEO) is not in business to create jobs, but to create returns (wealth) for their shareholders, which is also usually everyone on a company's board of directors as well. Read: How the 1% bilks the 99%

They are not "job creators". Job creation is simply the by-product of providing the necessary labor needed to fulfill the functions needed to operate a business or service. Higher consumer demand usually necessities the hiring of more employees to meet that demand. If automation or any other means are available to lower the cost of payroll, it will be used to lower a business's overhead to be more competitive in the marketplace.

When Bill Gates had wanted to reduce the cost of labor for the assembly of his products, he had them made in China. When Steve Jobs wanted to be competitive with Bill Gates, he also moved his labor to China.

Bill Gates could have made his products in the U.S. paying his employees a "fair and living wage", charged the same for his operating system as he does now, and still have been a billionaire (just less of one). Steve Jobs could have undercut Bill Gates in labor costs, but Bill Gates could have still been "globally competitive".

But instead of doing good for American workers, Bill Gates started a foundation to help people in India and Africa with his massive wealth. Instead of paying Americans a wage to reinvest in the American economy with consumerism and taxation, Microsoft enabled workers in China to do so. The same goes for Apple (and the same goes for 52,000 other manufacturers just since 2001).

But they all were just maximizing profits...because as American businesses with legal limited liability, and as non-entities, these corporations always need a financial reason to grow, no matter what the human cost, either to American workers, the American economy, or to America's society and our once middle-class as a whole.

Because corporations aren't real people, and because only anonymous individuals that make up the corporate hierarchy might be, most corporations can't be patriotic either.

So we can't hang corporations for treason, but we can regulate and tax them and their board of directors...or nationalize them, like we should do with BIG OIL and the banking industry. Maybe only then can we more fairly re-circulate our money supply, rather than it having it being hoarded by the top 1%.

Where is this mysterious "master list" of job skills and job positions that are most needed by these CEOs who claim they can't find qualified workers? Tell us, so that at least the young people today won't waste their time and money (and go into life-time debt) graduating from law school to join the ranks of the already unemployed lawyers.

Engineers were laid of at NASA and can't find a job at McDonalds. I too have the skill to flip a burger, but no one would hire me either. So much for that theory about "job skills".

Ali, I love you man, but millions of Americans aren't only struggling and suffering, but they're also getting very pissed off whenever they hear this crap about "lack of job skills" on their TV sets...almost a much as when they're accused of being lazy, and only wanting to live on the government tit.

Read this 49-page study:

"Economists writing about the impact of technology on the labor market in recent years have tended to emphasize the role played by skill-biased technical change (SBTC), the idea that technology is biased in favor of skilled workers and against unskilled workers. The idea of SBTC has primarily been used to explain rising wage inequality.

But a recent paper has argued for a more nuanced way of understanding the impact of technology in general (and computers in particular) on the labor market. They argue persuasively that technology can replace human labor in routine tasks, be they manual or cognitive, but (as yet) cannot replace human labor in non-routine tasks.

The hypothesis is intuitively plausible and they provide evidence that industries in which routine skills were heavily used have seen the most adoption of computers, and this has reduced the extent of routine skills But, if the hypothesis is correct then we might expect to see evidence for it in other areas: this is the aim of this study."

My Related posts:


  1. PAUL KRUGMAN - New York Times: "America Isn’t a Corporation"

  2. The Skills mismatch argument is merely an excuse. In my field, companies use different software apps as their budget allows (I can't afford some of them on UI benefits), but job postings list specific ones just because they saw them listed in a journal. The main disqualifiers seem to be age, race, creed, color, gender, orientation, health, etc. In short, the applicant does not look like Ken or Barbie. My biggest career mistake was adding a year to my age every 365 days.