President Trump and Republican leaders in Congress should add one small thing to the tax reform bill to truly help make American great again.
In case you haven’t noticed, corporate earnings are driving the stock market to record highs. Across the board, earnings are up; earnings are strong.
When the corporate tax cut House Republican leaders revealed last week hits and knocks rates from 35 percent to 20 percent or so, earnings will go up even more. (Many think the market is up in anticipation of this earnings bump.)
Of course, one of the ways big business has maximized earnings, and thereby stock valuations, has been through employee layoffs and offshoring jobs to foreign countries.
Major companies with big layoffs in 2017 included Microsoft, Walmart, Nike, Lowe’s, Union Pacific, Caterpillar, Hershey, Kellogg, State Farm, Oracle, Macy’s, J.C. Penney and more.
Major companies that rely on offshoring jobs include Apple, Walmart, Nike, IBM and Cisco.
Now, big business is licking its chops over a new way to dump jobs and pump up earnings.
“Wall Street’s robot revolution has begun,” Bloomberg Businessweek reported in September. “JPMorgan Chase & Co. is rolling out a program called LOXM that executes equities trades so well, it’s replacing the humans who used to do that.” The article added that Management consultant Opimas LLC predicts “90,000 people in asset management will be replaced by machines by 2025.”
“The forces that trump all others are human capital and technology, man and machine, and we’re at an inflection point with them, in the midst of a structural change that will impact the labor market globally,” Vanguard’s chief economist Joe Davis said at Morningstar’s annual ETF conference last month. “The trend that will define our lives is how work changes for all of us. I can’t think of a more seminal issue that will face the economy in the years ahead.”
In reporting Davis’ comments, MarketWatch noted that the impact of automation and artificial intelligence could be massive, particularly as new technologies — such as driverless cars and “bot” programs that can mimic human speech patterns — mature and disrupt ever-larger segments of the economy. The article cited recent research claiming that every industrial robot takes up to six jobs, with some 6 million jobs at risk of being lost to automation over the coming decade.
“Tech is always moving faster and getting smarter,” Davis said. “Work has always been an arms race between education and technology, but the pace of change, and the scale of the change, are different this time.”
In October, CBS Money Watch reported as many as 10 million U.S. jobs could disappear “as companies deploy machines that can learn and perform tasks.” Jobs at risk included cooks, cleaners, movers, truckers, nurses and retail sales.
Disappearing jobs, layoffs and offshoring will not make America great again. More and better jobs will.
So, the simple thing President Trump and Republican leaders in Congress should add to the tax cut bill is this — require public corporations to announce their U.S.-based job totals at the same time they announce earnings each quarter.
Put the spotlight on big business so Americans can easily see if the tax cut really does grow U.S. jobs, not just earnings.
Bill Crawford is syndicated columnist from Meridian.