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When Corporations abandoned the 99%
April 3, 2012 2:12 AM   Subscribe

In 2010, the top 500 U.S. corporations - the Fortune 500 – generated $10.7 trillion in sales, reaped a whopping $702 billion in profits, and employed 24.9 million people around the globe. Historically, when these corporations have invested in the productive capabilities of their American employees, we’ve had lots of well-paid and stable jobs. That was the case a half century ago.
posted by marienbad (35 comments total) 17 users marked this as a favorite

 
Er, the percent sign has disappeared from the 99 tag? Anyone know how to fix this?
posted by marienbad at 2:13 AM on April 3, 2012 [1 favorite]



Capital versus labour mobility:

The implications of our analysis is that workers’ incomes and jobs become less secure and capitalists’ incomes more secured.

We have shown that international capital mobility can substantially amplify fluctuations in unemployment and output.

The effect of technology on employment (I)

Apple is the embodiment of the knowledge-based economy. It is America's biggest stock-market quoted company, and with the advent of the iPad 3 will be adding to the 100m in tablet sales it has already chalked up. Yet it employs just 47,000 people – a tiny fraction of the workforce in its home state.

When General Motors was America's biggest company it employed more than 600,000 people. Semi-skilled workers could earn decent wages, with pensions and healthcare benefits to boot. An eco-system of suppliers generated many more jobs and helped build the world's most prosperous middle class.

Does Apple show that a hi-tech new economy enriches just a few and hollows out the rest?


The effect of technology on employment (II)

Technology has always displaced some work and jobs. Over the years, many experts have warned — mistakenly — that machines were gaining the upper hand. In 1930, the economist John Maynard Keynes warned of a “new disease” that he termed “technological unemployment,” the inability of the economy to create new jobs faster than jobs were lost to automation.

But Mr. Brynjolfsson and Mr. McAfee argue that the pace of automation has picked up in recent years because of a combination of technologies including robotics, numerically controlled machines, computerized inventory control, voice recognition and online commerce.

Faster, cheaper computers and increasingly clever software, the authors say, are giving machines capabilities that were once thought to be distinctively human, like understanding speech, translating from one language to another and recognizing patterns. So automation is rapidly moving beyond factories to jobs in call centers, marketing and sales — parts of the services sector, which provides most jobs in the economy.

During the last recession, the authors write, one in 12 people in sales lost their jobs, for example. And the downturn prompted many businesses to look harder at substituting technology for people, if possible. Since the end of the recession in June 2009, they note, corporate spending on equipment and software has increased by 26 percent, while payrolls have been flat.


In the future, what will people do?

In such a world where fewer people are needed to produce all required goods and services, what will people do? The answer may be surprising – replace technology with a world made by hand. More people, rather than fewer, will be working the land by hand, making things by hand, teaching and entertaining others in person. Many people will work in this way by choice as a counter-weight to an overly technological world. It is even possible that, in one particular economic and energy future where the global economy retracts drastically in the face of energy shortages and climate change catastrophes, work will become more human-centered and less technological by necessity rather than choice.
posted by nickrussell at 2:32 AM on April 3, 2012 [6 favorites]


Eh, starting in the 1980's Reagan and his boomer boosters decided America didn't really need a stable middle class any longer.

I give it about another 15-25 years before total collapse and the Chinese and Indians take over.
posted by bardic at 2:40 AM on April 3, 2012 [1 favorite]


Eh, starting in the 1980's Reagan and his boomer boosters decided America didn't really need a stable middle class any longer.

And accelerating in the 1990's under Clinton and his free trade policies. Indeed, the only remarkable effort to stem the flow of jobs beyond US borders was when George W Bush imposed 30% import duties on steel in the early days of his administration.

This has not really been a partisan thing, it's been a class struggle and American investors have pretty much had their way with American citizens no matter what party holds power.
posted by three blind mice at 3:12 AM on April 3, 2012 [7 favorites]


I give it about another 15-25 years before total collapse and the Chinese and Indians take over.

That sounds interesting! Despite all the potential for personal upheaval and hardship, I really would like to see this whole system come down within my lifetime. I am ready to work the land and make by hand.
posted by Meatbomb at 3:15 AM on April 3, 2012 [2 favorites]


John Robb on when elites depart.
posted by ollyollyoxenfree at 3:23 AM on April 3, 2012 [2 favorites]


I really would like to see this whole system come down within my lifetime. I am ready to work the land and make by hand.

Are you also ready to do your own dental and medical care? If the whole system comes down, you'll have to. The worst cases in the short term are going to be cities, which have essentially no capacity for food production. City dwellers who realize that early are going to be headed out to where you're working the land, so you'd better also be ready to fight off some hungry people.
posted by Kirth Gerson at 3:31 AM on April 3, 2012 [1 favorite]


@ollyollyoxenfree: Damn that is a solid and concise piece of work you linked.

A few wealthy families came to own much of the land in the western empire, and were able to defy the imperial government.

The empire came to sustain itself by consuming its capital resources; producing lands and peasant population
posted by nickrussell at 3:39 AM on April 3, 2012


Are you also ready to do your own dental and medical care?

I guess it depends. The sum total of my dental care the last 10 years has been having extractions, I suppose as long as they don't kill every dentist that will still be doable after the deluge.

City dwellers who realize that early are going to be headed out to where you're working the land, so you'd better also be ready to fight off some hungry people.

Yeah, kind of racing the clock as I am not there yet, but I guess being the guy worrying about getting pillaged rather than a desperate refugee would already have me ahead of the curve, eh?
posted by Meatbomb at 3:47 AM on April 3, 2012


Despite all the potential for personal upheaval and hardship, I really would like to see this whole system come down within my lifetime. I am ready to work the land and make by hand.

A group of us were doing development work in India, and we came up with the idea of giving people a trial-run of subsitance living. Seems that the majority of people with the fantasy do not really consider the totality of what it entails. Yet for a few others, we noticed, they love it and thrive. There were a few Americans working on farms that absolutely had flourished. They had no desire to ever see a city again. They lived very simply and were absolutely content.

For most, I think it's an escapist fantasy, but for some, it really is the life they were meant to live. We thought it would be cool if there was a way for people to try that out and discover their orientation before committing to it. There probably are ways that I just don't know about.
posted by nickrussell at 4:03 AM on April 3, 2012 [6 favorites]


I guess being the guy worrying about getting pillaged rather than a desperate refugee would already have me ahead of the curve, eh?

Yes, definitely, at least in the short term. But unless you're very well-prepared defensively and very remote, I'm not sure it's going to make a lot of difference. If you're very remote, those remaining dentists aren't going to be much help. Let's say you're in upstate NY, as far from Albany, Buffalo, and NYC as you can be. I think more than a few of those millions of people would still find you. If even one of them is a better predator than you're prepared to deal with, you lose.

I think the best we can hope for is a gradual transition away from the current system, rather than a sudden collapse.
posted by Kirth Gerson at 4:13 AM on April 3, 2012


I think the best we can hope for is a gradual transition away from the current system, rather than a sudden collapse.

I guess it depends what you want from life. There are plenty of fat rich people that I want to see killed and eaten, all of their stuff stolen or burnt. With a gradual transition the elites get to keep their stuff and pass it on to their progeny.
posted by Meatbomb at 4:25 AM on April 3, 2012 [4 favorites]


Q: Are you suggesting that there's a conspiracy -- that there are people who gather and decide we're going to eliminate unions, we're going to eliminate popular participation in political parties, we're going to do this and that?

A: My point is exactly the opposite. For example, there's no conspiracy in a board of managers that it tries to raise profits. In fact, if the managers didn't pursue that program, they wouldn't be in business any longer. It's part of the structure of the social system and the way in which the institutions function within it, that they will be trying to maximize profit, market share, decision-making capacity, and so on.
...
Q: That is the premise of your whole view, is it not? That in democracy, the people should initiate --?

A: They should run their own organization, whether it's a community or a union.

Q: Should corporations be run by their shareholders?

A: No, they should be run by the employees. I don't think there should be shareholders. The very idea of shareholders reflects the conception of the wealthy getting more votes than the poor -- a lot more votes, in fact. If we were to move toward democracy, even in the eighteenth-century sense, there would be no maldistribution of power in determining what's produced, what's distributed, and what's invested. In fact, unless we move in that direction, human society probably isn't going to survive.

Q: Why not?

A: We now face the most awesome problems of human history -- nuclear conflict and the destruction of our fragile environment. They're of a level of seriousness that they never were in the past.

Q: But why do you think more democracy is the answer?

A: More democracy is a value in itself. Democracy as a value doesn't have to be defended any more than freedom has to be defended. It's an essential feature of human nature that people should be free, should be able to participate, and should be uncoerced.

Q: But why do you think if we go that route --?

A: -- that's the only hope that other values will come to the fore. If the society is based on control by private wealth, it will reflect the values that it, in fact, does reflect now -- greed and the desire to maximize personal gain at the expense of others. A small society based on that principle is ugly, but it can survive. A global society based on that principle is headed for massive destruction. We have to have a mode of social organization that reflects other values inherent in human nature. It's not the case that in the family every person tries to maximize personal gain at the expense of others. If they do, it's pathological. It's not the case, if you and I are walking down the street and we see a child eating a piece of candy, and we see that nobody's around, and we happen to be hungry, that we steal the candy. Concern for other people's needs and concern for our fragile environment that must sustain future generations are part of human nature. But these elements are suppressed in a social system which is designed to maximize personal gain. We must try to overcome that suppression. That's, in fact, what democracy could bring about. It could lead to the expression of other needs and values which tend to be suppressed under the institutional structure of a system of private power and profit.
Meaningful Democracy
Chomsky inteview with Bill Moyers, 1988
posted by deanklear at 4:30 AM on April 3, 2012 [14 favorites]


Yeah, I'm not so much worried about the loss of access to typical goods and services as rather the loss to my peace of mind not to be mugged or robbed for a stale bit of bread or my last laying hen. Of course, I'm being mugged & robbed constantly by the financiers, but at least I'm still able to eat, keep dry and maintain bodily integrity.

And I guess that's why they're still in power. Most of us aren't visibly bleeding on a regular basis.
posted by seanmpuckett at 4:31 AM on April 3, 2012 [1 favorite]


Are you also ready to do your own dental and medical care?

I'm a low-income, uninsured American so yes, actually I am, I'm already there, because this is already the situation for millions of people. Dollar store razorblades and isopropyl for all!
posted by fuq at 4:42 AM on April 3, 2012 [10 favorites]


Other companies' employees are this company's customers. Our employees are their customers. Screw over our employees, and they can no longer afford to buy from other companies, which in turn are forced to screw their own employees or go under. It's a spiral of disaster.

The only things which can save corporate capitalism (if it is still worth saving, and can be saved) are strong unions and high minimum award wages.
posted by aeschenkarnos at 4:43 AM on April 3, 2012 [4 favorites]


A group of us were doing development work in India, and we came up with the idea of giving people a trial-run of subsitance living. Seems that the majority of people with the fantasy do not really consider the totality of what it entails.

This is basically the argument that the system has to be propped up regardless of why it's failing. It's why both parties rushed to bail out the banks. It's why Gore knew to stop fighting the questionable Bush election.
posted by Obscure Reference at 5:05 AM on April 3, 2012 [1 favorite]


I guess it depends what you want from life. There are plenty of fat rich people that I want to see killed and eaten, all of their stuff stolen or burnt.
haha, yeah i...

what
posted by This, of course, alludes to you at 5:09 AM on April 3, 2012 [6 favorites]


I think people have a hard time understanding that there are a lot a lot of people who are profoundly and deeply dissatisfied, no, more than dissatisfied. Some people have been fucked over for no reason and are extremely angry and resentful. This manifests in revenge fantasies. This attitude irrational, but the extreme and needless oppression of working people is irrational. I think it is the irrationality of it that makes it so dangerous. There are many people who feel like cornered cats and are frustrated even more because they don't see a reason to be beset on all sides. Eventually the cornered cat decides to claw it's way out. Ideally, that situation should be avoided by not corning the cat screaming "WHY YOU IN A CORNER? WHY DON'T YOU GET OUT OF THE CORNER? BOOTSTRAPS KITTY!". Don't be surprised by an angry, clawwy, kitty.
posted by fuq at 5:19 AM on April 3, 2012 [9 favorites]


Additionally, while the statutory corporate tax rate in America is in fact one of the worlds highest (a fact republicans and corporations love to repeat) the effective tax rate is one of the lowest in the industrialized world.

Additionally, the US earns a relatively small percentage of it's income, only 2.1%, from corporate taxes.
posted by Freen at 5:24 AM on April 3, 2012 [4 favorites]


Does Apple show that a hi-tech new economy enriches just a few and hollows out the rest?

Headline: 'App Economy' has created 466,000 US jobs

I'm not trying to agree or disagree with the point of the post, just pointing out that you can't really quantify Apple's effect on the economy simply by looking at the number of people they directly employ.
posted by LastOfHisKind at 5:37 AM on April 3, 2012


For most, I think it's an escapist fantasy, but for some, it really is the life they were meant to live. We thought it would be cool if there was a way for people to try that out and discover their orientation before committing to it. There probably are ways that I just don't know about.

There's always WWOOFing...
posted by showbiz_liz at 5:38 AM on April 3, 2012


Great, Luddites.

And Apple employs only 47000 people, right? So, if Apple were to go out of business, only 47,000 people would be out of work? Somehow GM's suppliers are counted as employment, but Apple's aren't. This kind of 'information' undermines the whole thing.

On top of that, a good chunk of the 99% continue to invest in their varied investment funds, those same investment funds which pay those outrageous salaries to CEOs. That 99% continues to value cheap goods over quality goods, and ignores the origin and implications of their goods. The 99% continues to drive their unnecessary SUVs and Pick-ups, and put more money then ever into the pockets of oil companies. The 99% continues to resist paying the real price of energy and food, instead condoning government subsidies of both.

The 99% directly enriches and condones the actions of the corporations. They feed the beast. It is their own selfishness that gives the beast its power. You want to change things, convince the 99% to stop empowering the 1% by giving them an easy time instead of railing at the 1%.
posted by Bovine Love at 6:01 AM on April 3, 2012 [2 favorites]


Headline: 'App Economy' has created 466,000 US jobs

How does that compare to the number of mechanics, gas station attendants, car salesmen, auto insurance, etc. that were employed when GM was employing 600,000? If you're going to count people indirectly employed due to Apple & Android, you need to count those indirectly employed by the auto industry, too.
posted by fings at 6:02 AM on April 3, 2012 [1 favorite]


'App Economy' has created 466,000 US jobs

GM was employing 600,000


This framing is useless. If it's going to be measuring contest between new and classical forms of industry then you're going to end up no where.

This is about the triangular relationship between corporations, nation states and labor.

Right now A is using B to undermine C. This only works because the condition of labor in developing countries is so terrible that recent quality of life gains exceed the gap in labor practices relative to the US.

This is a short-run solution for corporations, especially once empowerment of women and 1st world health changes the demographics of the situation across wider geographies.
posted by Reasonably Everything Happens at 6:31 AM on April 3, 2012 [5 favorites]


Despite all the potential for personal upheaval and hardship, I really would like to see this whole system come down within my lifetime. I am ready to work the land and make by hand.

You know, you are welcome to do this right now. Those of us who like what modern society has to offer (air conditioning, iPads, anesthesiologists, well constructed roads, synthetic fibers, building codes, electricity, etc) won't even notice your absence.

It sucks that half the people in America are effectively working poor. It's insensitive to talk about how easy the poor have it, let's talk about what "poor" is in America. It's endless work or searching for work. It's anxiety and worry. There's no european-style safety net. Mothers don't get time off when they have kids. Childcare is unobtainable. Your life expectancy is lower. There are real infant mortality problems. The criminal justice system is awful. There's no sense of breathing room or sense of security.

It sucks, but you're probably not going to starve, freeze, have your family killed by a gang of thugs with sticks, or die at age 10 of asthma or an infection or some communicable disease. You'll get access to an education and at least a reasonable shot at moving up in the world. You almost certainly have electricity, a TV, a cell phone. You probably won't have problems with rats. You won't have to bury your own shit in the backyard every day. You won't be burning animal dung to cook your food. For god's sake, do you have any idea what cholera outbreak looks like?

The system is really broken right now. Things feel like they're on the verge of going to hell. There are a few people living like kings while the majority of Americans scrape to get by. All the trend lines are bad. But I'd much rather fix it or live with it than watch it burn down and try to rebuild it. And hell, when societies collapse it's still usually the same old upper class that emerges from the ashes ahead of everyone else. Don't make the mistake of thinking that being part of the 1% is just about money.
posted by pjaust at 7:01 AM on April 3, 2012 [8 favorites]


I guess being the guy worrying about getting pillaged rather than a desperate refugee would already have me ahead of the curve, eh?

You see, in the end it all comes down to zombie movies. Except instead of zombies, it's blue collar versus white. But instead of brains they're after grains, and fruits and legumes, and small woodland creatures and such.
posted by Blue_Villain at 7:13 AM on April 3, 2012


And hell, when societies collapse it's still usually the same old upper class that emerges from the ashes ahead of everyone else. Don't make the mistake of thinking that being part of the 1% is just about money.

Repeated for truth. Why do you suppose the truly rich, like the Koch brothers, are such gleeful anti-government crusaders? They, like others of their stripe, know that it's a lot easier to get away with shady business practices and to control the authorities in relatively lawless nations. Why do you think so many of them own homes in developing countries? Why do you think the Koch's are so enthusiastic about anti-government, libertarian rhetoric? The materially wealthy always go into social collapses with a leg up on the rest of the folks--especially if they've been planning for it.
posted by saulgoodman at 7:16 AM on April 3, 2012 [2 favorites]


we’ve had lots of well-paid and stable jobs.
Oh, you mean Americans. Because these companies are creating lots of comparatively well paid jobs in Asia. Every time big corporates off shore a job it results in more than one job in a developing country, which is great. I just wish it happened without the job losses here.
posted by bystander at 7:17 AM on April 3, 2012


The 99% directly enriches and condones the actions of the corporations. They feed the beast. It is their own selfishness that gives the beast its power. You want to change things, convince the 99% to stop empowering the 1% by giving them an easy time instead of railing at the 1%.

And if only all those soldiers would put down their weapons, we'd have no more war!
There area lot of structural reasons why people end up investing in these things; basically it's a prisoner's dilemma where defection keeps you (and your family) fed. The way to deal with such problems generally isn't to tell the participants (who are often captives of the system in one way or another) to change their evil ways - it's to enact policy change. Unfortunately, though, the political system in the US is fucked and couldn't policy-change its way out of a paper bag...
posted by kaibutsu at 7:46 AM on April 3, 2012 [2 favorites]


kaibutsu, I see what you are saying and in many ways your right but the fact is that the 99% continues to vote in the same losers as they did last time. Not surprisingly, those guys keep the same policies.

There is a good number of poor people who are, indeed, captives of the system. But there is also a large middle class that behaves very selfishly; sure, it might be a form of the prisoners dilemma, but at the end of the day, if everyone only cares how much stuff they can buy, then the society is doomed. That attitude needs to change, and it will be slow are long. Part of that is voting for people who will actually stop helping the oil companies, stop funding bad farming practices, stop the insanity. It is those voters you need to convince to pay more for their food, fuel, housing and clothing. If they are unwilling to do this, they will still vote in the same losers, and you will have the same result.

Its a democracy. The 99% has spoken. They may hate the guys in congress (sub 10% approval ratings!!!), but they'll vote them in again. You want change, you need to get those voters -- and they *are* the 99% -- to change.
posted by Bovine Love at 8:05 AM on April 3, 2012 [1 favorite]


Suddenly all that worry about negative population growth and not having enough of the working generation to support the retired generation becomes less relevant. Because when half of the 'working generation' can't find work, supporting them takes away from the retired generation.

Also, I believe the long-running argument for middle-class liberal-types investing in Apple was 'it's not like other corporations' (also applies to investments in 'liberal media' companies and Whole Foods and Google most other 'good' corporations). Now where will they put their money (including all the money they made from those investments)?
posted by oneswellfoop at 8:10 AM on April 3, 2012


In such a world where fewer people are needed to produce all required goods and services, what will people do? The answer may be surprising – replace technology with a world made by hand. More people, rather than fewer, will be working the land by hand, making things by hand, teaching and entertaining others in person. Many people will work in this way by choice as a counter-weight to an overly technological world.

That seems to be the philosophy of a particular annoying species of leftist, that idea that we'll all be growing our own food and go back to the land, but what about kicker boots? Or radical magazines? No, you can't, can you? That will only work if everybody is really into seeds.
posted by MartinWisse at 8:56 AM on April 3, 2012 [1 favorite]


Are you also ready to do your own dental and medical care?... I'm a low-income, uninsured American so yes, actually I am, I'm already there, because this is already the situation for millions of people. Dollar store razorblades and isopropyl for all!

Health care in the US is totally unfair, but not because uninsured Americans are not drilling their own teeth and setting their own broken bones.
posted by the jam at 4:45 PM on April 3, 2012


...but not because uninsured Americans are drilling...
posted by the jam at 4:47 PM on April 3, 2012


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