rssCompanies Sitting on Cash, But Not Hiring
Thursday, July 15, 2010 at 1:04 pm
- 15 Comments
Companies are back to profitability — in part because of the massive layoffs of the past two years. But they are not back to hiring yet, instead holding onto cash and waiting for a stronger recovery, Jia Lynn Yang writes in today’s Washington Post:
Nonfinancial companies are sitting on $1.8 trillion in cash, roughly one-quarter more than at the beginning of the recession. And as several major firms report impressive earnings this week, the money continues to flow into firms’ coffers.
Yet all the good news from big business hasn’t translated into much promise for jobless Americans, leading many to wonder: If corporations are sitting on so much money, why aren’t they hiring more workers?
The answer to that question has become a political flash point between the White House and big business groups such as the U.S. Chamber of Commerce, which held a jobs summit Wednesday and accused the Obama administration of dumping onerous regulations on businesses. That has created an environment of “uncertainty,” which is causing firms to hold back on hiring as the unemployment rate has hovered near 10 percent, the Chamber said.
I’ll have more on the debate over whether the jobless recovery is due to regulations, lack of demand or an uncertain business outlook later. But for now, I think this chart from Larry Mishel at the Economic Policy Institute shows the rising tide for businesses but the continued hard times for workers better than any other I have seen:
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15 Comments
Pingback posted July 15, 2010 @ 1:29 pm
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Pingback posted July 15, 2010 @ 1:44 pm
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Pingback posted July 15, 2010 @ 6:12 pm
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Pingback posted July 15, 2010 @ 6:41 pm
[...] Companies Sitting on Cash, But Not Hiring « The Washington Independent [...]
Pingback posted July 15, 2010 @ 6:41 pm
[...] Companies Sitting on Cash, But Not Hiring « The Washington Independent [...]
Pingback posted July 15, 2010 @ 6:44 pm
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Pingback posted July 15, 2010 @ 6:58 pm
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Comment posted July 15, 2010 @ 6:41 pm
The chart is nice, but you fail to take into account the element of volume…that is, the damage done (financially) to the companies over the eight quarters before entering making a profit for two…why aren't they hiring? Damage was done: repairs delayed, equipment replacements deferred, inventories reduced, etc. Companies were running a thin margin – close to failure. You have only to drive down the block and see the closed shop fronts to see the one's that didn't make it.
Pingback posted July 15, 2010 @ 7:59 pm
[...] Companies Sitting on Cash, But Not Hiring « The Washington Independent [...]
Pingback posted July 17, 2010 @ 2:09 pm
[...] Companies Sitting on Cash, But Not Hiring « The Washington Independent [...]
Pingback posted July 26, 2010 @ 6:17 pm
[...] exactly what’s going on. As this “economic recovery” plods along, companies are sitting on piles of cash while squeezing every ounce of efficiency and productivity out of their supposedly valued [...]
Pingback posted February 18, 2011 @ 8:50 pm
[...] Yet one percent of the richest Americans have financial wealth equivalent to the bottom ninety-five percent of the people. Corporate profits and compensation of corporate bosses are at record levels. While companies, excluding financial firms, are sitting on two trillion dollars in cash. [...]
Pingback posted February 22, 2011 @ 10:45 am
[...] Yet one percent of the richest Americans have financial wealth equivalent to the bottom ninety-five percent of the people. Corporate profits and compensation of corporate bosses are at record levels. While companies, excluding financial firms, are sitting on two trillion dollars in cash. [...]
Pingback posted February 24, 2011 @ 5:48 pm
[...] is still battered from the recession, and most people still do not feel it is over—though companies are making great profits again, they are not hiring. Though the unemployment rate has decreased to 9%, black unemployment is still 15%. We have been [...]
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