Hard times are here again, and they touch us all -- losing a job, taking a pay cut or shutting down a small business. Even the massive corporations of the just-released 2009 Fortune 500 feel the pain. Sure, their pain comes in their total profit falling to just $98.9 billion last year -- mere double-digit billions in profitability! As always, the new Fortune 500 list contains an excellent analysis of our current economic condition and the role of America's big businesses in it. And as always, it's pretty embarrassing.
The centerpiece is the list of America's 500 biggest corporations by revenues, but the big story this year is the steep dive in profit by the companies -- under $99 billion in 2008 vs. $785 billion in 2006. That's a crash of 85 percent, an incredible swing in fortunes for American capital. The magazine admits that there had been a "bubble" in earnings, mainly in finance, although it fails to identify the broad deregulation of that sector as the reason.
The analysts find one reason that profit had been so enormous during the bubble period was that "labor costs, which account for two-thirds of all corporate expenses, barely budged during the glory days." This was in part due to "a pro-business administration" that kept down labor, and as Fortune magazine puts it, "Wages rose modestly." Very modestly -- the Economic Policy Institute reports that real wages grew by 0.0 percent over 2000-2006.
The business world is up in arms about the Employee Free Choice Act (EFCA), which would make it easier for workers to unionize, by obliging companies to recognize a union once a majority of workers sign verified union cards. This would replace the more common practice of voting in union representation elections, which take several months and are conducted by secret ballot. The Wall Street Journal on March 26 called this “antidemocratic,” but it’s the employers, not union organizers, who flex the muscle in union elections. The reality lies in two words: “You’re fired.”
In a recent report, the Center for Economic and Policy Research (CEPR) calculated that employers fire an impressive one in five union activists during union election campaigns. Using a conservative calculation method developed by University of Chicago economists, the report concludes that pro-union workers in general have a one-in-50 chance of being fired by their employers during a union election campaign. But employers “are unlikely to fire workers randomly, or simply for expressing pro-union views. Employers maximize the return to illegal firing by focusing on union activists.”
The Journal leaves out exactly how secret ballots will protect workers once they’ve been canned for supporting unionization.
By now everyone knows the new Supreme Court tilts to the right. Bush’s nominees, Justice Alito and Chief Justice Roberts, lead a conservative five-justice bloc, where reproductive health rights have been cut back and the president’s Office of Faith-Based Initiatives will keep getting very real public money. No surprises from the Old Men in Black there.
But what’s less known is the court’s new major function, which is acting as an institution of corporate power. Since Bush’s appointments, the court has begun hearing far more business cases, and in case after case has “pushed the law in a direction favored by business,” as the Wall Street Journal reports. For example, the U.S. Chamber of Commerce, America’s most powerful business lobby, took a position on 15 cases before the court in 2007, and its side won in all but two.
That makes sense, since Roberts previously represented and filed briefs on behalf of the Chamber and other prominent business organizations like the National Association of Manufacturers and other corporate clients. The Financial Times refers to Roberts and Alito as “pretty much the dream candidates of economic conservatism,” calling Justice Roberts himself “a white-shoe corporate lawyer” and noting “Justice Alito often sided with employers in his prior life as a judge.”