Tuesday, November 23, 2010
Corporate Profits Were the Highest on Record Last Quarter
For grade on 3 December 2010. So if corporations are making all this money, where are the jobs???
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Welcome. This is a blog dedicated to the students enrolled in the CSHS AP Economics classes. Click on the title of the article, read, and click comment.
Honestly, I'm not really sure how corporations are making money during this time. With so many people unemployed, one would think that corporations would not be making money, but it is the other way around. In addition, I didn't even know about this until I read this article. However, they may be making money because there are less employed. With less employed, there are less salaries to be payed. Also, there could be tax cuts that may also contribute to the economic profit.
ReplyDeleteI believe that the corporations are waiting, with these large profits they just pulled in, and some of the lowest profits gained years prior to this it almost off sets. If a quarter like this comes around soon, you will most likely see more jobs opening. Either that, or some board members are making a boat load of money in bonuses.
ReplyDeleteI have to agree with Kyle, we should expect corporations to begin opening new jobs some time in the next few financial quarters. Although corporations, seeing that they can make a ridiculous profit even without as many employees might decide they're better off without opening new jobs. The government should then intervene and force companies that are making above normal profits and giving it as ridiculous bonuses to hire new workers or face penalty taxes.
ReplyDeleteI can't believe I'm saying this, but I agree with Josh (and Kyle, but that's not as surprising). Corporations have to be making profits before they feel comforable in raising costs by increasing jobs. We've discussed many times how unemployment is the last indicator to improve. I'm sure that some of the jobs were permanently lost to outsourcing or technological improvements, but seeing these profits, I suppose that more jobs are soon to open.
ReplyDeleteI believe that the jobs are soon to open up. Unemployment is not cured instantaneously, so I'm sure that in the next few months, more jobs will be opening up to the public. Corporations are still becoming stable after the recent depression and although they may have made high profits, it may be some time before they are ready to share.
ReplyDeleteJobs still aren't opening up because after such a loss companies must once again become comfortable in their profits before they are willing to cut into the profits with the cost of hiring employees. These companies are able to make profits without high numbers of employees and, as the article says, they are able to make more with less.
ReplyDeletePart of me is waiting for the CEOs of some big corporation to be fined for all this money that isn't trickling down to more job opportunities, but while reading the article I had to wonder just how well the Chinese and Indian markets were doing. The inflation rate for the US as of Nov. 3 is lower than India and China though so that leaves me without an answer. Perhaps company board members are reinvesting it into the companies. This would be like if the corporations were restaurants and tourist season has just begun. Maybe they're using the profits now to pay back all their bills from when they didn't have customers.
ReplyDeleteI don't understand how corporations are doing so well in an economy like this. I would think they would be doing worse off because employment is down meaning output it lower which in turn means lower profits. The corporations must be pocketing a lot of money for the CEOs and other company officials.
ReplyDeletei believe that the job market will soon look brighter if this profit continues, however it is strange to think that in a seemingly poor economy major corporations are turning a large profit. it is really good because it could possibly offset the recession over time and it will in turn increase the job market and the economy as a whole
ReplyDeleteMany corporations have labor overseas, therby circumventing America's economy. Simple as that. Most important quote = "This breakneck pace can be partly attributed to strong productivity growth — which means companies have been able to make more with less — as well as the fact that some of the profits of American companies come from abroad. Economic conditions in the United States may still be sluggish, but many emerging markets like India and China are expanding rapidly."
ReplyDeleteAlthough it does seem to make sense, that corporations are making profits in such a hostile economy, employment does not just appear out of the blue, just because the corporation has received a profit. Most businesses are reluctant to offer employment instantly, instead they prefer to wait and see if they will continue to gain profit before hiring.
ReplyDeleteThe corporations won't begin to hire new employees until they are sure that the their profits will continue. Employment rate is the last thing to bounce back. The jobs are there already, they just aren't filling them yet. Once they are assured that their profits will continue then those jobs will be filled to increase their profits further.
ReplyDeleteCorporations have been forced to go through restructuring in order to adjust to the current economic recession. These adjustments include the laying off of workers and downsizing. By eliminating part of its labor supply, companies have been able to generate an increased profit. In addition, with jobs being sent to countries such as Mexico and Taiwan, many citizens in the United States are having a hard time finding jobs. Corporations are still obtaining profit from their factories in other countries.
ReplyDeleteComing out of the recession the corporations would need to make sure they have a strong basis in their profits before they begin to open up jobs positions for the rest of America. Most people look out for only themselves and that is what the corporations are doing, when they know they will be safe more positons will open up.
ReplyDeleteEven though corporations are making money, they are still cautious on hiring more employees. Most corporations want to have a steady profit before they hire more people in this unstable economy, which is understandable. Thus, in the near future, the unemployment rate will go down significantly.
ReplyDeleteThe reason why the corporations are making profit, but there is still no increase in available jobs is because the corporations need to make sure that there profit is stable until they provide job openings for citizens. Unemployment is the last to change in an economy, so eventually it will decrease, but citizens will just have to wait a little bit longer. Eventually, there would be more jobs available to people in our country, but this will only happen when corporations hire more employees to work for them.
ReplyDeleteI really don't want to sound repetitive but the only answer that I can come up with this late at night is that corporations don't hire until they are making profits. We've talked about this in class.
ReplyDeleteThe answer as to why no new jobs are opening up is simple. Although corporations are making a profit, they are still not confident. After waiting it out a little, surely they will start to offer up jobs. As it has been said in class countless times, the last economic indicator that a depression is ending is when unemployment improves. In the near future, when the corporations once again have confidence in our economy, available jobs will surely increase.
ReplyDelete