Economy based in reality

By Mitchell Levin

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We all owe Clay Jones a debt of gratitude. In making his announcement about the layoffs at Rockwell Collins, he provided us with a picture of the realities of the business world, especially as it pertains to employment. He gave two reasons for the layoffs.

First, defense spending is being reduced. The immediate impact of cuts in the federal budget, no matter how laudable that may be, is an increase in unemployment. So anybody who tells you that on day one he is going to balance the budget by cutting spending and on day two is going to create millions of jobs is being disingenuous at best.

The second reason: streamline internal operations. Employees are an expense, so the fewer of them you have, the more profitable the business unit is. If there is any doubt, look at the announcement about cuts in employee benefits.

This is not a bashing of Jones. He is a decent, honorable man doing everything to keep his business profitable in an economic world that he did not create. The lesson is that corporations are in the business of optimizing profits for the benefit of the shareholders and senior management compensation packages. And as we have seen over and over again, this means cutting jobs, not creating them.

So politicians who portray the business community as chomping at the bit to increase employment levels are being disingenuous. Yes, there was a time when companies were in business to provide goods or services that benefited shareholders, customers and employees - a time when employees were seen as more of an asset you developed and retained instead of being disposable. Twenty-five years ago, when the company I worked for, AEGON, put in its first organization-wide 401(k) plan, the leaders made a conscious decision to continue with the pension plan, a move that set them apart from many of their peers. I do not know why.

But they were telling us that if we worked hard, stayed the course, contributed to the organization, our efforts would be rewarded in the long run. These were businessmen who also knew how to make a profit and how to make the shareholders happy.

The world of employment and job creation is undergoing a paradigm shift. People created the system where people were valued. People created a system where people became a disposable commodity.

This is not a brief for “the good old days.” It is time to work on building an economy based not on political posturing, but on the realities that Jones has portrayed along with a desire to create a better future.

Mitchell Levin of Cedar Rapids is retired after 30 years as director of human resources in the financial services industry. He is a contributing editor and featured columnist for SEGULA, and a contributing editor to JANGLO and the CRJN, whose work can be seen at http://thisdayinjewishhistory.blogspot.com/. Comments: melech3@mchsi.com