In normal times, self-interest keeps society working and increases the wealth of nations. Corporations earn profits but also supply needed products. Consumers furnish their nests but also create jobs.
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest," wrote Scottish philosopher Adam Smith, who figured this out two centuries ago.
These are not normal times. As shoppers threaten to go on strike, as bankers shrink from lending, as investors flee the markets, behavior that makes sense for one family or one company is proving poisonous for us all.
This includes you, employers. The United States lost more than a half-million jobs in September and October. New layoff announcements arrive daily. If the country is to avoid the worst downturn in 70 years, butchers, bakers and other employers need to question their instinct to fire people as a response to weak business conditions.
Your employee is somebody else's customer, breadwinner and mortgage payer.
This is not a plea to outlaw layoffs, have companies keep workers at all cost or hire people they don't need. When bankruptcy and breakup are the alternatives, layoffs are unavoidable. What economists call a "flexible work force" lets companies adjust to change and keeps the United States ahead of its competitors.
But at the margins, until this crisis is past, the fewer layoffs the better.
It's not like companies can claim investors will punish them if they don't slash and hack. Everybody's stock has already tanked. Share values bear little relationship to profits. A fatter payroll-to-sales ratio for a few quarters won't hurt anybody's bonus if the company's survival is not at stake.
And companies can afford it, as long as they're not General Motors or Citigroup. Last June, cash held by nonfinancial corporations in the Standard & Poor's 500 index hit an all-time record of $648 billion, says S&P analyst Howard Silverblatt. He's still crunching numbers for the third quarter, but he doesn't expect them to be substantially different.
That's a nice pot of rainy-day money to tide over the work force and the economy.
For some reason, we never exhort retailers, manufacturers, law firms, hospitals and other employers to do a little extra with payrolls to push the economy over a bump.
