Mass Layoffs: The Breakfast of Billionaires

When Will Public and Private Sector Workers Unite to Stop Them?

The destruction of jobs, both public and private, creates billionaires. But most working people don’t know that, and the Democratic Party is afraid to say it.

Why? Because billionaires who have killed jobs of all kinds, dominate both political parties with their ill-gotten gains. Money buys silence.

The power of billionaires is rising as their numbers increase. In 1990, there were 66 billionaires in the United States. In 2023 there were 748. And in the U.S. alone, billionaire wealth in 2024 increased by $l.4 trillion, that’s $3.9 billion a day.

How did that happen?

It’s hard to wrap your mind around how much a billion dollars is. If you earned $1,000 per hour, it would take you 68.5 years to reach $1 billion, and at that point you’d have as much money as one thousand millionaires. That’s a lot of money, more than we can imagine, certainly more than any human being needs, ever.

But they earned it, right? Isn’t earning billions of dollars a just reward for unparalleled entrepreneurial success? And isn’t criticizing that success sour grapes, the same as criticizing what makes our country so prosperous, free, and strong?

Maybe, until you look under the hood.

To become a billionaire, you have to be willing to kill jobs with reckless abandon. It is one of the most effective ways to extract money from working people.

The carnage started with the deregulation of Wall Street in the late 1970s, widened during the Reagan years, and was then adopted as the mantra of the Clinton administration during the 1990s.

The deregulation of Wall Street allowed companies to buy each other up with few constraints, often using borrowed money and putting the debt on the books of the acquired company. Layoffs are used to pay off that debt.

Deregulation also led to the legalization of stock buybacks, which allowed companies to repurchase huge amounts of their own shares and drive the share price up. Wall Street investors and CEOs, who were increasingly paid with stock incentives, became fabulously rich as the price of their shares rose, though their company was no more profitable. Layoffs are used to finance those buybacks.

Before deregulation, corporate leaders were ashamed if they had to lay off workers. They saw that as a sign of their own failure as managers. CEOs then thought themselves to be in the service of their employees, their communities, and their shareholders.

But free-market ideologues in the 1970s waged a successful campaign to favor shareholder supremacy above all -- jobs, workers and communities be damned! (Please see Wall Street’s War on Workers, for the details)

That new cutthroat Wall Street mindset has led to approximately 18 million involuntary layoffs per year, year after year, since the 1990s.

But wait, you probably thought most job loss was caused by new technologies, like those that caused the disappearance of elevator operators and horse and buggy drivers?

Nope. Technological change, even AI, changes overall job composition slowly, over many years, even decades. Newness is expensive, so changes are adopted incrementally as costs come down.

But Wall Street-driven job destruction happens in a flash. All it takes is a stock buyback, a merger, or a private equity purchase, and jobs will be cut overnight to pay for the deals.

Public Employees Are Now Sitting Ducks

When labor unions represented more than 30 percent of private sector workers, from WWII to the 1960s, their wages and benefits improved year by year. So did the standard of living of public sector workers.

In New Jersey, for example, 40 years ago there were 60,000 highly-paid auto workers with good pension plans. Public sector workers used them as a yardstick to increase their own compensation. But today, those autoworker jobs are gone, which has put downward pressure on the wages and benefits of public sector workers.

Overall, in 1980, more than 50 percent of all private sector workers had pensions. Today, it’s only 11 percent. Meanwhile, 75 percent of state and local government employees, and nearly all federal workers, continue to have access to such plans. That’s why they are sitting ducks.

Divisive politicians can fire away by saying, “Why should private sector workers like you pay taxes to support public sector worker’s benefits that you don’t even have!”

That’s one reason why Trump and Musk have been getting away with trashing federal employees, with very little blowback from working people in the private sector, at least so far.

But there’s more.

Musk and his fellow billionaires need to cut federal government jobs so they can continue to stuff themselves at the federal trough. They want job cuts to pay for the hundreds of billions of taxpayer dollars that go to the largest US corporations via tax breaks, subsidies, and fat federal contracts. Last year alone, Fortune reports that Musk received $6.3 billion in federal and local taxpayer funding, and during the past four years the total was nearly $25 billion.

Privatization of public sector jobs also is a bonanza for wealthy investors. Just imagine the billions to be made by turning over the postal service to the private sector.

There’s no way around it. The mass slaughter of jobs, whether public or private, grows billionaires.

“Save Our Jobs from Billionaire Greed”

Imagine if federal worker unions and Democratic Party officials showed up at the plant gate of a company that was about to close its doors to finance hefty stock buybacks for its billionaire owners. A show of support for their fellow layoff victims and a unity message aimed at stopping billionaire job destruction would be simple to craft and easy to share. It would be news.

Why aren’t the Democrats doing this?

Because they don’t want to upset their billionaire donors by interfering with Wall Street’s pillage of working people. As Ken Martin, the new chair of the Democratic Party put it recently, “There are a lot of good billionaires out there that have been with the Democrats, who share our values, and we will take their money…”

If the Democrats dared to look under the hood, they would find that every one of those “good billionaires” is making money from job cuts that boost the value of her or his portfolio.

I was born and raised as a working-class Democrat, but I know that the slaughter of public and private sector jobs won’t stop until there’s a new party that truly represents the interests of working people.

Only then can we fight back against the billionaires and their two-party poodles so willing to curl up in their laps.