-- American companies are hiring, but mostly abroad, most of all in the People’s Republic of China.
-- With more than 5,000,000 unemployed Americans for any job vacancy, employers have the leverage to skip any wage increase, and sometimes to cut wages and benefits even while enjoying record profits.
-- The gap between the fortunes of business firms and workers is widening, to the continuing decline of the middle class.
-- Companies are buying back their own stock at unprecedented levels, in large part because this is the surest way to meet the targets that will trigger higher executive compensation.
Those are highlights of trends that Dean David L. Finegold of Rutgers has identified by assembling dozens of bits of information and connecting the dots. He published his insights in the first issue of his new blog under the title “The Global Battle for Good Jobs: Is the U.S. Even Fighting? on September 15.
Two months have not made his analysis out of date. Illustrative of his prescience is that in the latest fiscal year “Paychecks for CEOs Climb,” as announced by a front page headline of the November 15 Wall Street Journal.
Finegold, who heads Rutgers’School of Management and Labor Relations, emphasizes a fundamental element in the transformation of key sectors of the 21sr century economy. It is the contrast in the very mindset of the two competing giants in the global battle:
Rather, I draw attention to the less discussed factor that firms themselves are pursuing different objectives. While US executives are focused on maximizing short-term profitability and “shareholder value,” Chinese firms are seeking to grow long-term market share and expand the amount of high-end work being performed in China.
This is particularly true of the approximately 130 large state-owned enterprises (SOEs) that dominate strategic sectors of the economy. These are not the old SOEs that existed to provide employment, with little concern for product quality or global competitiveness. Instead, these SOEs have been reinvented to work in tandem with China’s foreign policy of economic nationalism to win share in global markets. As Financial Timesreporter Richard McGregor describes in a fascinating new book, The Party, while these firms operate predominantly according to market principles, the Communist Party retains ultimate control over key decisions through selection of key executives….
In sum, it is difficult to see how the crisis facing current and future U.S. workers will be reversed so long as both US and Chinese companies can optimize their own measures of success by moving jobs to China.
For details, read Finegold’s blog, which Rutgers houses at http://core-training.rutgers.edu/schools/smlr/content/global-battle-good-jobs-us-even-fighting
"Place rest of the text here. It will work once the new post is published"