While the Obama administration tries to work on a way to bring down our high rate of unemployment and underemployment, many people on Wall Street and in corporate boardrooms are quite happy about the large number of jobless Americans. Here are the top ten reasons why big businesses support a high rate of unemployment:
1)A large number of unemployed and underemployed workers drives down wages. In a buyer's market, companies can hire people at a low salary because so many are happy just to get a job.
2)High unemployment rates increase efficiency and worker discipline. Since no one wants to lose their spot in a tough job market, companies can force workers to do more for less.
3)When unemployment goes up, workers will accept flat wages and reduced benefits. Even companies like Verizon, which are experiencing record profits, are trying to downsize benefits and reduce wages.
4)Shedding jobs looks good on the balance sheet. When companies layoff workers, they often see a surge in their stock prices, since reduced costs increases profitability.
5)Unstable job markets can block unionization. While it would seem that a bad job market would make workers want to organize, the fear of losing one's job, prevents workers from taking the risk of joining a union or going on strike.
6)Temporary labor feeds off of an army of surplus labor. Just look at the Texas Miracle, which has produced more minimum wage jobs than the rest of the other states combined (Go President Perry!).
7)Fewer workers means lower taxes. When employers reduce the workforce, they can cut down on the costs of payroll and social security taxes.
8)When corporations lower wages and the number of workers, more money is left for the people at the top. Instead of sharing profits with a large number of employees, profits can be horded by the top dogs.
9)Low employment creates deficits for state and national governments, which in turn makes deregulation and tax cuts more attractive. Okay, this one is irrational, but that is what is going now.
10) Rich people only know they are rich because there are a lot of poor people. Since everything is relative, it helps to have a large number of people who make virtually nothing.
Of course, in the old economy, the idea was you needed well-paid workers so they could buy your products, but in a globalized economy, employers believe they can make and sell their goods anywhere. Goodbye local loyalty, hello the global race to the bottom. Since companies want a high unemployment level, the only solution is for the government to simply hire workers.