James Parks
By James Parks
AFL-CIO Senior Writer
While nearly 27 million U.S. workers are either jobless or in need of full-time work, America’s corporations are sitting on record profits that could be used to put people back on the job.
This irony is especially cruel for the 2 million workers who will lose their unemployment benefits by the end of the year because corporate America’s Republican friends in Congress blocked an extension of unemployment insurance (UI) benefits for people who have been jobless for six months or more. (Sign the petition and join online solidarity actions to help long-term unemployed workers—find out more here.)
The U.S. Department of Commerce reported last week that American companies just had their best quarter ever, earning profits at an annual rate of $1.659 trillion in the third quarter. The next-highest annual corporate profits level on record—$1.655 trillion—was in the third quarter of 2006. In fact, American corporate profits have grown for seven straight quarters at some of the fastest rates in history.
Economists say the record profits can be attributed to strong productivity growth—companies making more with fewer people—and to companies spending the money in—and sending jobs to—fast-growing countries such as China and India. As a result of the Federal Reserve’s consistent long-term lowering of interest rates, corporations have rarely had it better, they say.
Consumer spending and the American Recovery Act have fueled what little growth there has been in the U.S. economy, says Heidi Shierholz, an Economic Policy Institute (EPI) economist. One of the key engines growing the economy is extended UI benefits, she said.
Writing in The Huffington Post earlier this month, Shahien Nasiripour says banks are loaded with cash as well. Through September, banks had $981 billion in excess reserves at the 12 regional Federal Reserve banks across the country, Fed data show. In August 2008, right before the financial system nearly imploded, banks had just $1.9 billion in excess reserves.
Read Nasiripour’s article, “Federal Reserve Rains Money On Corporate America—But Main Street Left High And Dry,” here.
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Re-posted from the AFL-CIO Now Blog
Posted December 1, 2010 at 8:00 am, in From AFL-CIO
December 2nd, 2010 at 11:22 am
General Motors took the bailout money and constructed an engine manufaturing plant in Mexico to hire Mexicans!
I guess that they fired the US citizens that previously made those engines in the USA!
Why did President Obama do this when the federal government acquired control of General motors under President Obama’s administration!
I guess that nobody cares about keeping US citizens employed!
December 2nd, 2010 at 1:02 pm
The businesses across this nation are creating new permanent jobs to manufacture their products, but these jobs are located in foreign nations because of the existing US government’s Free Trade laws.
If labor rates to make shirts in Sri Lanka cost 4% of the US labor costs, then if the $4.00 of labor to make that $10 shirt that you and I bought at Walmart might cause that shirt to cost ($4.00/4%=$100.00) $106.00 if US labor was used to make that shirt.
This cost does not include any additional overhead, payroll burden, environmental compliance, profit and other business costs that are applicable to making things in the USA.
December 2nd, 2010 at 1:06 pm
I blame our Republican and Democratic Congressmen and Senators that created the “Free Trade” legislation that destroyed the non-government jobs in the USA and also President Clinton who signed NAFTA into law.
Where were the Union Leaders that should have objected to NAFTA?
December 3rd, 2010 at 12:20 pm
Every new “FREE TRADE” law and special trade agreement created by our Republican and Democratic Congressmen and Senators destroys US jobs and future job opportunities for US workers!
Why don’t our labor leaders object, or at least stop donating to the campaigns of those that favor “FREE TRADE”?