Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Spring Fund Drive: Keep CounterPunch Afloat
CounterPunch is a lifeboat of sanity in today’s turbulent political seas. Please make a tax-deductible donation and help us continue to fight Trump and his enablers on both sides of the aisle. Every dollar counts!
FacebookTwitterGoogle+RedditEmail

They Make Millions Per Employee and Cry They Don’t Make Enough

The amount of profits piled up by corporations dwarfs all reason, but the amount of money executives and speculators haul in at our expenses comes into stronger focus when we examine a different metric: Revenue per employee.

The 10 corporations that have the highest revenue per employee averaged US$5.8 million per employee. Each of these top 10, incidentally, is either a pharmaceutical or an oil and gas company. Topping the list is Phillips 66, which managed to haul in $11.5 million per employee. One suspects that the average employee sees no more than a minuscule fraction of that figure.

Examining the 100 largest corporations in the world by revenue, Expert Market, a business consultancy, ranked them by revenue per employee to see which were the most “efficient.” (It is quite possible that other, smaller corporations extract more revenue per employee.) The other oil and gas companies among the top 10 were PTT, Valero Energy, Exxon Mobil, Royal Dutch Shell, BP and Statoil.

Interestingly, two of these companies are government enterprises: PTT is majority-owned by the government of Thailand and Statoil is two-thirds owned by the government of Norway. So much for the idea that governments should never own enterprises; at least the profits from these companies can be used for public good. The public ought to own all energy companies considering the gigantic subsidies they receive — an estimated US$5.6 trillion per year, when environmental and health costs are added to the subsidies, foregone taxes and other expensive goodies handed out by governments.

The pharmaceutical companies among the top 10 are Amerisourcebergen Corp., Express Scrips Holding Co. and McKesson Corp. Amerisourcebergen and McKesson both distribute pharmaceuticals, and Express Scrips administers prescription drug benefits for tens of millions of health plan members. Each of these primarily operates in the United States, the only advanced-capitalist country without universal health coverage, and two also operate in Canada, where corporate pressure on the public health system is strong, in part due to its proximity to the U.S.

The pharmaceutical industry is immensely profitable in the U.S., and the industry’s layer of distribution and administration adds to the overall cost. Health care in the U.S. is designed to deliver corporate profits rather than health care, and these kinds of huge profits explain why health care costs in the U.S. are vastly higher than any other countrywhile delivering mediocre results.

Technology companies squeeze somewhat less out of their employees. Apple ranks as the technology company with the most revenue per employee, at about $1.9 million. Google ranks second at $1.2 million. But how much profit does a company need to make? Apple’s products are produced through sweatshop labor outside the U.S., mostly in China, through an army of subcontractors that dwarf the size of Apple’s direct employees.

U.S. President Barack Obama once asked Apple’s chief executive officer, Steve Jobs, what it would take to bring those jobs back to the U.S., and Jobs replied, “They aren’t coming back.” Apple claims it can’t afford to pay higher wages. Yet Apple is sitting on an immense pile of money — $206 billion according to its own quarterly financial report.

Research by the Centre for Research on Socio-Cultural Change in Manchester, in 2012, found that the cost of manufacturing a 4G iPhone in China is $178 while the phone sells for $640 — a profit margin of 72 percent. The Centre calculated that if it were made in the U.S. by employees making $21 an hour, the production cost would be $337, a still robust profit margin of 46 percent.

At the end of the day, corporate executives and financiers expect those revenues to be converted into profits, and the higher the revenue that can squeezed out of each employees, the higher the profit is likely to be. From 1995 to 2005, profits per employee at the 30 largest companies by market capitalization (that is, the highest valuations set by stock markets) more than doubled, according to the business consultant McKinney & Company.

A more recent list, prepared by Bloomberg, shows 25 corporations with profits per employee higher than $400,000. Oil and gas companies are well represented here, with 10 making the list, including Exxon Mobil. Four biotechnology companies made the list, as did Apple with $573,000 net income per employee.

So if more is squeezed out of us, then there is less we are able to buy. Thus the “recovery” often blathered about in the corporate media is a recovery for the one percent. Of the eight recessions since 1960, consumer spending has increased less from the bottom of the recession than in any of the previous ones after the same period of time. If you don’t have it, you aren’t buying it, especially since so many people are trying to reduce their debt.

The flip side of this is that the massive profits corporations are raking in by not paying their employees, and squeezing more out of those who do have a job, is that record amounts are spent on buying back their stock, paying out higher dividends, on mergers-and-acquisitions or on bloated executive salaries. The corporations comprising the Standard & Poor’s 500 Index are on course to spend nearly $1 trillion on stock buybacks and dividends in 2015, or nearly equal to their total operating earnings for the year.

Cut back, cut back is the mantra. But have you noticed its always working peoples’ turn to cut back?

More articles by:

Pete Dolack writes the Systemic Disorder blog and has been an activist with several groups. His book, It’s Not Over: Learning From the Socialist Experiment, is available from Zero Books.

May 22, 2018
Stanley L. Cohen
Broken Dreams and Lost Lives: Israel, Gaza and the Hamas Card
Andrew Levine
November’s “Revolution” Will Not Be Televised
Ted Rall
#MeToo is a Cultural Workaround to a Legal Failure
Gary Leupp
Question for Discussion: Is Russia an Adversary Nation?
Binoy Kampmark
Unsettling the Summits: John Bolton’s Libya Solution
Doug Johnson
As Andrea Horwath Surges, Undecided Voters Threaten to Upend Doug Ford’s Hopes in Canada’s Most Populated Province
Kenneth Surin
Malaysia’s Surprising Election Results
Kathy Kelly
Scourging Yemen
Dana Cook
Canada’s ‘Superwoman’: Margot Kidder
Dean Baker
The Trade Deficit With China: Up Sharply, for Those Who Care
John Feffer
Playing Trump for Peace How the Korean Peninsula Could Become a Bright Spot in a World Gone Mad
Peter Gelderloos
Decades in Prison for Protesting Trump?
Thomas Knapp
Yes, Virginia, There is a Deep State
Andrew Stewart
What the Providence Teachers’ Union Needs for a Win
Jimmy Centeno
Mexico’s First Presidential Debate: All against One
May 21, 2018
Ron Jacobs
Gina Haspell: She’s Certainly Qualified for the Job
Uri Avnery
The Day of Shame
Amitai Ben-Abba
Israel’s New Ideology of Genocide
Patrick Cockburn
Israel is at the Height of Its Power, But the Palestinians are Still There
Frank Stricker
Can We Finally Stop Worrying About Unemployment?
Binoy Kampmark
Royal Wedding Madness
Roy Morrison
Middle East War Clouds Gather
Edward Curtin
Gina Haspel and Pinocchio From Rome
Juana Carrasco Martin
The United States is a Country Addicted to Violence
Dean Baker
Wealth Inequality: It’s Not Clear What It Means
Robert Dodge
At the Brink of Nuclear War, Who Will Lead?
Vern Loomis
If I’m Lying, I’m Dying
Valerie Reynoso
How LBJ initiated the Military Coup in the Dominican Republic
Weekend Edition
May 18, 2018
Friday - Sunday
Andrew Levine
The Donald, Vlad, and Bibi
Robert Fisk
How Long Will We Pretend Palestinians Aren’t People?
Jeffrey St. Clair
Wild at Heart: Keeping Up With Margie Kidder
Roger Harris
Venezuela on the Eve of Presidential Elections: The US Empire Isn’t Sitting by Idly
Michael Slager
Criminalizing Victims: the Fate of Honduran Refugees 
John Laforge
Don’t Call It an Explosion: Gaseous Ignition Events with Radioactive Waste
Carlo Filice
The First “Fake News” Story (or, What the Serpent Would Have Said)
Dave Lindorff
Israel Crosses a Line as IDF Snipers Murder Unarmed Protesters in the Ghetto of Gaza
Gary Leupp
The McCain Cult
Robert Fantina
What’s Wrong With the United States?
Jill Richardson
The Lesson I Learned Growing Up Jewish
David Orenstein
A Call to Secular Humanist Resistance
W. T. Whitney
The U.S. Role in Removing a Revolutionary and in Restoring War to Colombia
Rev. William Alberts
The Danger of Praying Truth to Power
Alan Macleod
A Primer on the Venezuelan Elections
John W. Whitehead
The Age of Petty Tyrannies
Franklin Lamb
Have Recent Events Sounded the Death Knell for Iran’s Regional Project?
FacebookTwitterGoogle+RedditEmail