The corporate "margin" (the relationship of net to gross) is at 13.5%, the highest its been since at least 1950 when the statistic was first maintained. This is a direct result of an overall reduction in expenses, particularly labor costs, and it is a very meaningful statistic for those who live along Main Street.
Corporate America continues to eliminate and export jobs and, as discussed later in this article, the political establishment seems to be doing its best to hide the true nature of the problem. Typically, layoffs are scheduled over a period of time so the workers who remain on the job can take on the work of those let go. The insecurity that this creates is immense, and it is rarely, if ever, discussed in the mainstream media.
For example, the Connecticutt newspaper, TheDay, has reported that Phizer, the world's biggest drug company, is concluding a three-year program of job slashing involving a total of 60,000 positions with an estimated annual cost savings to the company of $6 billion. Yes, that's right - $6 billion per year from this year forward.
Also, on the same day that the GOP presidential candidates duked it out in Mesa, Arizona, discussing everything, it seemed, but jobs, Procter & Gamble announced it would jettison 5,700 jobs over the next year and a half. The company's announcement boldly admitted that while the U.S. workforce would be reduced, hiring would continue in China and the other emerging markets.
At one point, Congress had an opportunity to tackle the problem of jobs flowing out of the country. In September of 2010, a bill came before the Senate that would have penalized companies that exported jobs and rewarded companies that imported them. However, the legislation was killed by the Republicans.
Meanwhile, the folks along Main Street are suffering from the longest jobs crisis since the Great Depression and, unfortunately, much of the pain may be sliding out of public view in this election year. The information related to the monthly job gain-or-loss numbers rarely mentions the growth in the labor force which has generally exceeded the creation of new jobs.
It also appears that the Obama administration may be putting a little too much frosting on the other data as well. The reduction in the unemployment rate in January was not the result of more jobs. It was primarily caused by a surprising reduction in the size of the calculated workforce. The Bureau of Labor Statistics dropped an astounding 1.2 million workers that month, presumably on the assumption that they had given up looking for work.
A more accurate indication of the jobs situation, and one less likely to be manipulated, is the ratio of the number of employees to the total population. According to this measure, there has been no improvement for more than a year. Another statistic tells us that one year ago, 99 million people were unemployed or otherwise not working. Currently, that number has swelled to over 100 million.
The desire to create an election-year mirage is understandable, but the downside is that it then becomes more difficult to address the reality of the crisis if it continues to face the middle class.
Furthermore, as time goes by it may become increasingly difficult to hide the true nature of the jobs problem, which may cause one to wonder if the Obama administration acted too soon in fudging the data. However, the thinking might be that the phony scenario could actually serve to kickstart the all-important consumer-confidence level.
In any event, an old Chinese saying states: "May you live in interesting times."
So, by that measure, this may be our lucky year.