My Kingdom for a Raise
While this article is something of a mish-mash of both very conservative and very liberal viewpoints, I agree with gist of it: It's easy for corporations to post record profits when they're not paying the people who make it happen.
There has been a shift, over the last couple of years, back toward a robber-baron mentality in the corporate world. It's happened before, and it's usually temporary, as there are specific regulations in place to control it. However, as is pointed out towards the end of the article, this is occurring at a very bad time; if consumers have to stop or severely slow their discretionary spending to keep gas in their cars this summer--and I think that likely--it could easily trigger rapid inflation by the early fall. That, in turn, would force the Fed to bump interest rates, thereby threatening to pop the housing bubble that has been the driving force behind much of the rapid economic growth we've seen in the last five years.
You don't have to be a mathematician to see where this is going. Add to those other factors the fact that many people are becoming disillusioned and disgruntled with corporations in general--due mainly to the very public displays of greed we've seen in recent years--and you've got a formula for disaster.
Something, as the article says, must give. Corporations must start capital spending and significant employee salary increases very soon, or we'll be looking at some severe economic fallout. The oil field has started gearing up for large-scale capital outlay; I see that around me every day. But it will take at least a year for that to have any significant impact, both at the pumps and in the general economy.
The neo-capitalist economy we've created in the United States is very politically sensitive. It's a challenging balancing act even in the calmest of times. This is far from the calmest of times, and simple corporate greed--if that is indeed what's driving this cycle--cannot be allowed to unbalance that system. Either way, something will change pretty soon; hopefully it's for the better.
In the meantime, baby needs a new pair of shoes.
There has been a shift, over the last couple of years, back toward a robber-baron mentality in the corporate world. It's happened before, and it's usually temporary, as there are specific regulations in place to control it. However, as is pointed out towards the end of the article, this is occurring at a very bad time; if consumers have to stop or severely slow their discretionary spending to keep gas in their cars this summer--and I think that likely--it could easily trigger rapid inflation by the early fall. That, in turn, would force the Fed to bump interest rates, thereby threatening to pop the housing bubble that has been the driving force behind much of the rapid economic growth we've seen in the last five years.
You don't have to be a mathematician to see where this is going. Add to those other factors the fact that many people are becoming disillusioned and disgruntled with corporations in general--due mainly to the very public displays of greed we've seen in recent years--and you've got a formula for disaster.
Something, as the article says, must give. Corporations must start capital spending and significant employee salary increases very soon, or we'll be looking at some severe economic fallout. The oil field has started gearing up for large-scale capital outlay; I see that around me every day. But it will take at least a year for that to have any significant impact, both at the pumps and in the general economy.
The neo-capitalist economy we've created in the United States is very politically sensitive. It's a challenging balancing act even in the calmest of times. This is far from the calmest of times, and simple corporate greed--if that is indeed what's driving this cycle--cannot be allowed to unbalance that system. Either way, something will change pretty soon; hopefully it's for the better.
In the meantime, baby needs a new pair of shoes.
posted by Jar(egg)head at 10:00
1 Comments:
I was surprised to see that this is happening all over. I myself haven't received a raise in almost 3 years, but that is because I work for a small company that is struggling to cover its expenses (for reasons that I could easily rant about for hours). My previous employers were both large corporations who handed out raises regularly, so I assumed that my situation was somewhat unique. Its not very encouraging to see that this is a much larger trend than I had realized.
At this point, the only thing keeping me ahead of rising costs is real estate. However, that will not last forever, as the article points out.
When the housing market cools off, companies had better start handing out raises or things are going to go from bad to worse. I speak from experience when I say that morale drops sharply when efforts are not rewarded, especially when the costs are increasing at a substantial rate. Who wants to work hard and be productive for less of a reward? Answer: nobody in their right mind. Companies that do not realize this will see drops in their productivity which, when coupled with lower consumer spending, will eventually result in a downward spiral of decreasing profits, layoffs, and eventual bankruptcy.
Pad those résumés. If this trend continues much longer, its going to be a much tougher job market very soon.
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