Robert Reich Explains the Disconnect Between Profits & Jobs
July 27, 2010
by
PaulM
Posted in Politics, Current Events, Election 2010, History, Lowell
2
Comments
On his blog, which I picked up from truth-out.org, economist Robert Reich dissects the issue of a jobless recovery. He explains why corporate profits are rising in some cases, but still not leading to fresh hiring. Read his blog post here.
Quoting Mr Reich, “Second, big U.S. businesses are investing their cash in labor-saving technologies. This boosts their productivity, but not their payrolls.”
Are these labor-saving technologies free goods? Do they not generate payrolls?
What is the trade-off?
Regards — Cliff
Of course they are going to invest to reduce their costs. It is only when tax laws make “investment” work overseas better than in the US that there is a problem. If we had the courage to step up and unburden our labor from so many ancilary costs, such as health care, medicare tax, social security tax, etc., labor would have a better chance of winning some of the tradeoffs, whether they be for equipment investment or outsourcing. A progressive tax system including both income taxes and consumption taxes could go a long way to achieving a better balance for labor.