I’m a bit depressed about the economy right now.

I’ve been hearing lately in the news and on NPR that companies were doing better and making money, higher revenues, etc, but that they just weren’t hiring new employees. At the same time, I’ve been reading articles in magazines like ComputerWorld that employees in the IT sector are overworked, understaffed, and underpaid. Why the discrepancy. If the companies can afford it, they should relieve their workers a bit… you’d think that increased job satisfaction and lower stress would lead to greater levels of accomplishment and achievement within your organization. Instead, companies are hoarding their dollars to look favorable in the eyes of investors and shareholders. Senior level management is more focused on what’s better for them personally than what’s good for the company.

The latest round of news is truly disturbing. There have been a spate of large mergers and aquisitions about. You have the P&G| Gillette deal, and the SBC | AT&T deal to name a few. Why all these large mergers right now? According to the news, this is because interest rates are low and companies have capital on hand due to the recovering economy. But what does this really mean? Only 1/3 of mergers and acquisitions can be measured as successful. So who really wins? It’s usually the senior management and the heads of these companies, who can pocket 100s of millions of dollars. Also, shareholders of companies that are purchased see instant payouts. At the same time, these mergers inevitably result in the layoff of thousands of employees.

So what are we doing here. We’re basically reorganizing our corporate structure so that 1 person pockets $100 million, and 1000 people are out of job. We are redistributing the wealth in the wrong direction. What would happen if we took that $100 million and used it to keep those folks on for an additional year? That’s $100,000 per employee. After taxes and benefits, that’s the equivelant of a $40-50k salary for each of them.

How can we prevent the few from pocketing all this money and instead redestribute that wealth to the lower and middle class?

This entry was posted on Wednesday, February 2nd, 2005 at 8:37 AM and is filed under Observation Deck. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.