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Economy

A Serial Job-Killer Is Stalking America

With Barack Obama's election, real reform has once again become politically viable. And America's anti-union business leaders know it.

A new crime has burst out onto America’s political blotter. Move over drug pushing and car stealing, meet the new menace. Job killing. But fear not. We now have in Congress a dedicated army of self-selected saviors who have loudly vowed to keep us protected.

And just how are these lawmakers going to keep our jobs secure? They’re going to put the kibosh on labor law reform.

Americans who believe all workers have the right to bargain collectively with their employers have been battling for labor law reform for some time now. The plentiful loopholes in our current labor law, they note, let companies make life intolerably miserable for workers who want to start a union. But reform had no chance so long as George W. Bush sat in the White House.

With Barack Obama’s election, real reform has once again become politically viable. And America’s anti-union business leaders know it. They’ve been spending furiously on anti-reform ads and lobbying. And now the U.S. Chamber of Commerce is threatening a “firestorm bordering on Armageddon” if Democrats in Congress try to get reform onto President Obama’s desk.

Business groups are claiming that passage of the Employee Free Choice Act — the prime pending labor law reform bill — would “harm the economy and cost millions of jobs.” In Congress, reform foes are echoing that pitch at every opportunity. Labor law reform, as South Dakota Senator John Thune enjoys asserting, would be “a job killer for our economy.”

This drumbeat won’t be letting up anytime soon. Corporate interests have even named their anti-reform front group the “Alliance To Save Main Street Jobs.”

But we need to give the masterminds of this campaign against labor law reform some credit. They actually do have a legitimate point to make. Job killers really are stalking America today. Here's the catch: The real-life “job killers” in our midst aren’t pushing the Employee Free Choice Act. They’re opposing it.

Over the last quarter-century, these real-life job killers — the power suits who run Wall Street and Corporate America — have essentially turned job killing into standard business operating procedure. In effect, they’ve been on a job-killing spree. Their motive: keep CEO pockets stuffed. Their M.O.: merge and purge.

Here’s how the deadly corporate job-killing game has worked: Instead of devoting their time to nurturing enterprises that make good products and offer quality services, impatient CEOs spend their every waking hour cutting deals to buy out other companies. After each deal, they gobble up the customers of these other companies — and then fire huge numbers of their workers.

The euphemism for this job killing: downsizing. Top executives at the 50 U.S. companies that did the most “downsizing” in 2001, researchers from the Institute for Policy Studies and United for a Fair Economy reported in 2003, averaged 44 percent pay increases the next year.

Compensation for those job killers, that study documented, increased over seven times faster than compensation for CEOs overall.

This job-killing profiteering is still going strong. Mark Hurd, the CEO of Hewlett-Packard since 2005, last year cleared $44.4 million in gains from previously awarded stock options and other “incentives” — plus another $21.4 million in new compensation. Over his first 46 months as H-P CEO, Hurd wheeled and dealed his way to 31 mergers. He has so far killed nearly 40,000 jobs.

Larry Ellison, the CEO of business software giant Oracle, has merged and purged his way to a fortune that Forbes last month estimated at $22.5 billion. Ellison pulled off his most brazen bit of job killing back in 2005 when he shelled out $10.6 billion to buy out PeopleSoft, an 11,000-employee rival, then proceeded to put the ax to 5,000 jobs.

Ellison’s latest takeover — last week’s acquisition of Silicon Valley’s Sun Microsystems — will end up eliminating, analysts believe, between 5,500 and 10,000 positions, even more jobs than the PeopleSoft grab. But no members of Congress who’ve been blasting the Employee Free Choice Act have so far made any protest whatsoever against Oracle’s latest job-killing maneuver.

Ellison’s personal fortune, meanwhile, is holding up quite nicely, despite the global financial meltdown. This May 8, notes CNBC, Ellison will pocket a $57.5 million quarterly Oracle stock dividend check. In all, over the next 12 months, he’ll reap $230 million in dividends alone.

Job-killers like Larry Ellison don’t have to worry about sharing any of the enormous wealth their empires are so prolifically generating. They don’t, after all, bargain collectively with their employees — and they don’t want to have to start. If Congress kills the Employee Free Choice Act, they won’t have to.

Sam Pizzigati is the editor of the online weekly Too Much, and an associate fellow at the Institute for Policy Studies.
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