Bank of America announced it would send 30,000 more people to the unemployment line in a massive layoff in the hopes of cutting costs. The majority of people cut would be those working in data centers and deposit systems, according to reports from Bloomberg.
The layoffs are part of a plan by CEO Brian T. Moynihan, who wishes to cut $5 billion in annual costs in order to bolster the bank’s profits and stock:
“Profit is under pressure mainly because of losses, legal costs and writedowns tied to the 2008 takeover of subprime lender Countrywide Financial Corp. At the same time, revenue is shrinking as the U.S. economy slows. Moynihan has said that because the bank is one of the biggest consumer lenders, its fortunes are closely tied to home prices and the jobless rate.”
According to some admittedly unscientific data, the average salary for a Bank of America job is probably right around the $50,000 per year mark. Moynihan pulls down nearly $2 million per year in a salary and other sources of income. Recently, he told investors his entire net worth is in Bank of America, whose stock has been plummeting.
Here we see a very familiar narrative in America today, one that is exactly why our economy still keeps sinking, why home prices continue to remain stagnant. A CEO who pulls down a salary 35 times larger than an average employee, whose fortune is directly tied to bank profits, is deciding the fate of that employee. Moreover, he blames current jobless rate for at least part of his company’s current woes. How exactly will another 30,000 unemployed individuals help bring that same economy back out of the toilet? The wealthiest of Americans are not only deciding the fate of the rest of us, some are actively hurting the average wage earner economically, in order to keep their riches.
Yet, instead of finding a better way of pulling ourselves out of the depression we’re in, many continue to believe the narrative that folks facing troubled times should simply pull themselves up by their bootstraps. We’re still somehow tied to the idea that tax breaks for the wealthy, deregulation of industry and a supposedly “small government” (unless we’re not talking about social issues like gay marriage or matters of defense) will allow the rich to prosper and therefore, give them the “freedom” to let us eat scraps from their table. Americans need only to work hard to make the same fortune, like Horatio Alger did, despite the overwhelming odds stacked against them.
One can only wonder how Horatio might’ve fared in the era of the McJob, where the largest employers provide mostly minimum wage opportunities, whose CEO’s and investors do their best to make certain they didn’t have to pay for his health care, or provide better working conditions or even a fair wage.
“In a memo last month, Moynihan disclosed 3,500 job cuts, saying ‘This obviously is a challenging time for our company in the markets, and for our shareholders…I know it is tough to have to manage through reductions, but we owe it to our customers and our shareholders to remain competitive, efficient and manage our expenses carefully.’”
It’s too bad those 30,000 employees apparently, aren’t owed anything more than a pink slip.