As dozens of major corporations announced increased second-quarter profits this week, the US working class was hit with a disastrous new round of mass layoffs.
On Monday, book seller Borders announced that it would liquidate all of its stores, laying off 10,700 workers. That same day, Cisco, the telecom equipment maker, said it would cut its workforce by 11,500. Within 24 hours, Lockheed Martin, the aerospace company, announced that it would eliminate 6,500 jobs.
At the same time, Caterpillar, the maker of construction equipment, said its profits were up 44 percent in the second quarter compared to last year. Office equipment maker Xerox saw its profits grow 41 percent in the same time.
General Electric’s profits were up 17 percent, PepsiCo’s were up by 18 percent, and McDonald’s, the fast food company, saw a 19 percent increase, reaching a new record.
The energy and mining companies did even better, benefiting from rising gas prices, which reduced the real incomes of American workers by billions of dollars. Halliburton, the oil contractor, said its profits were up by 53 percent in the second quarter compared to a year earlier, while fellow oil contractor Schlumberger said its profits were up by 64 percent.
Most of the major banks likewise said their profits were up significantly in the second quarter. Goldman Sachs announced $1.09 billion in profits, up 57 percent from last year. But even this huge increase was considered a “disappointment” for traders.
JPMorgan said its second-quarter profit was up by 13 percent, despite setting aside a $1.3 billion charge-off for lawsuits it expects in relation to its trafficking of fraudulent mortgages. Citigroup reported a profit of $3.34 billion, up 24 percent from a year ago.
This renewed growth in profits comes at the same time as the sharpest growth in unemployment since 2009. Between March and June, the unemployment rate grew by 0.4 percentage points, to 9.2 percent. In the same period, the number of unemployed people grew by 545,000.
Apple, the world’s largest music retailer and a leading manufacturer of mobile electronics, announced a 95 percent increase in profitability. In its earnings statement, the company said that it was sitting on a cash hoard of $76 billion. This staggering sum, amassed by a single company controlled by a few large shareholders, could put two million people to work full-time for a year.
US corporations have combined cash reserves of $2 trillion. That is enough money to put all the unemployed people in the United States to work for four years, even without any profit generated from their labor.
But fresh off of what is for many a record-breaking second quarter, the companies are refusing to use their newly accumulated cash to hire. In fact, planned mass layoffs have only accelerated.