[Translated from Landplage September 2006]
In times of crisis it is said:
“The company has incurred losses. Unfortunately, we must layoff a part of the staff in order to return to the profit zone. Only so that we can save the jobs of the remaining workers. And if the net yield is improved, we can create new jobs.”
Not only entrepreneurs can be heard saying this when they want to lay people off. The politicians also justify dismissals with the statement that “jobs are secured” this way and promise: “If the economy makes profits, jobs are again created.” In order to convince the working class, the business gurus and economics professors lend their ideological support with scientific authority but false arguments: Employees must sacrifice jobs and wages in a crisis; in this way, at first profits will grow and then jobs too. This is how the paradoxical expectation -- “layoffs create profits -- profits create jobs” -- became a generally accepted commonplace. At present many companies do something practical that disproves this alleged objective law. Because ever more frequently large companies proudly announce record profits in their news conferences -- and announce at the same time that they plan large-scale layoffs. For example, an insurance company came into the headlines with the announcement:
“Despite record gains: Allianz to cut 7,500 jobs”.
With “despite” a conflict is maintained between profit making and job slashing -- and with the reproachful undertone that companies that diminish jobs despite good profits renege on their -- at least moral -- duty. A company counters this complaint with the fact that there is no conflict between profit and layoffs for it; on the contrary: The “record gains” are pleasing, but they are not yet high enough and therefore must still be increased, not because the shareholders would not get plenty but because even these record gains lie below the average in international comparison, so they are still much too low. Allianz justifies its attack on the living costs of its employees with an interesting “emergency”: It suffers not from a lack of, but less profitability than its competitors. As a capitalist business this is just as dangerous for them as red numbers despite good profits. And here it is revealed that the reason for the layoffs is something worse than greed for profit – it is purely about capitalism: profits are not the purpose of a company, but higher profits than the competitors; because only this way do they win the competition for capital investors who invest in the papers of the corporations with the best profit prospects and equip them with the capital for their penetration in global competition. Because of this the profitability of Allianz must be improved; not from an emergency -- this is the lie of the justification -- but because it wants to be the company that wins the competition on the worldwide insurance market. The layoffs are the means to do it. This is really not something new: in the end, the “record gains” just reported also came about not least from systematically saving in the number of staff -- which is not a peculiarity of the company Allianz, but is known to everyone under the term “rationalization,” which is constantly pursued by all companies.
How is the assertion that “record gains” and layoffs “actually” do not fit together arrived at? The reason lies in the belief of those who must live from wage labor -- and despite their bad experiences continue with it as their means of subsistence -- that it actually is the duty of the entrepreneurs to create “jobs.” Of course they are also still behind in their profit that must be as high as possible, it is the condition so that they can do what the honorary title awarded to them says: “give work.” Because this belief is so firmly in people’s heads, the entrepreneurs can state uninhibitedly and without being contradicted: “profits today are the jobs of tomorrow.” And the whole world only too gladly wants to believe that the profit success of a company has to also be good for the staff -- in the form of “job security.” Therefore one does not want to know anything about the fact that profit is the purpose that exclusively counts for a company, and that it exclusively benefits the owners and investors. Instead one hopes that it is -- somehow, in the long term, in the end -- also a means for those who work for the company, and has to be. If then a company earns profits and lays people off, one finds this – alleged, but only too warranted -- requirement cheated: one finds it unfair and is outraged.
This indignation is not well founded. Because one has already swallowed that private advancement is no more than a dependent variable of the profits that others pocket. Here arises the requirement, which one imagines, that allows work at all on a job for wages. Both -- job and wages – are given only according to the yardstick of the so-called employers. Anyone positioned in this dependence, even if he deplores the fact that a business is to make profits, is absolutely for it. He has seen that an enterprise that incurs losses must “save costs, thus also labor costs” and accordingly its staff must be decimated. It is no less clear to him that in order to get back into “black numbers” again and “keep up in the global competition” he must be rationalized. Only he does not want to then draw the conclusion from everything that he saw and accepted: That profit is the end purpose of the companies and it depends on the employees only as a means for this purpose, their services are only in demand if they are worthwhile for the company. And the company ensures that they do this practically -- by constantly lowering the costs of the work, with and without layoffs.
Politicians and the media agree with the exceptional indignation spreading there:
“Again a company that makes billions in profits at the same time announces layoffs to a huge extent,” complains a newspaper. Chancellor Merkel holds Allianz’s decision to be “unfortunate” but she cannot “correct” it.
For years the governing location managers and commentators affirmed and spread the swindle -- basic to the system -- that “growth creates jobs.” Under their leadership this was the promise that allowed people to imagine that the business success of capital also benefits them. So they insist on taking the cared-for people further by the hand if this grand delusion becomes a little freaky. A little correction is given to this irritation: “Yes, it is difficult to understand if high earning enterprises do not act to provide what they owe to the community, i.e. create jobs.” This then is by no means the last word but the prelude to adjusting the “understandable” complaints. An unbeatably good reason arises in the heads of the responsible people for these “outrageous” layoffs -- what else? Of course, the best of all reasons: “receipts and job creation”! Responsible companies have to think on a long-term basis about that which the simple workhorse and the insignificant office worker with their worm’s eye view would completely overlook. Just because of the high mission these enterprises are pursuing they may not be blinded by “record profits;” on the contrary, they must pay attention to secure their “profit situation” also “for the future.” That means: today they must dismiss in order to “protect the remaining jobs” and to be able to again “create” more tomorrow. Politicians and business journalists clear this up: What a “farsighted enterprise” it is that lays off its redundant workers exactly then, “when the company is healthy, thus is not yet in a deep crisis and must carry out emergency operations”! Layoffs are thus announced when a company is “healthy.” Only so that it can avoid eventually going into a “deep crisis” for lack of profit and – then what must it do? Layoff only in a crisis. There in the same breath it is maintained that layoffs secure profit and increase them and that this profit protects jobs, even if they do not increase. This is a considerable insult to reason! But unfortunately it evidently works.
Politicians who maintain such things are not laughed at but are elected and economic journalists write such stuff every day in newspapers that are bought and read. This is because it is not a matter of “correct” or “wrong” arguments anyway. Rather they reconfirm to the public again and again what it has already long swallowed: without profit nothing can happen. They connect the basic truth that in this society everything depends on profit with the basic lie that profits are needed so that jobs can be made available. And if the behavior of the companies strains this basic lie too much, the public is instructed that no alternative remains for them other than to trust the wisdom of the entrepreneurs who are the only ones who know how to protect “jobs” – even and also if they diminish them. The people may experience layoffs at any time and along with their Chancellor regard this as “unfortunate.” However, they should see that this is simply inevitable: in the crisis anyway and in the upswing as well. Reason enough, actually, to give up the belief that “profits create jobs” -- or that at least they should -- and instead draw the correct conclusion from the continuous proof in practice of the entrepreneurs that layoffs (rationalization) create profits.