Big Profits, Few Jobs: Fortune 500 Tells Tale of Two Economies
The Fortune 500: Oil boomed, the bailout worked, but still no jobs.
May 5, 2011 -- "It was the best of times, it was the worst of times…" The famous opening to Charles Dickens' "A Tale of Two Cities" would have been an apt headline for this year's Fortune 500.
"It's the best of times for American big business. Profits were up over 80 percent for America's 500 largest companies," said Andy Serwer, Fortune's managing editor. The Fortune 500 ranks the top U.S. public companies as measured by gross revenue. That's the third-biggest jump since the magazine started keeping track. "Business is picking up again, and they're minting money right now."
How? That was the "worst of times" part.
"Big business is making a lot of money right now by making employees work that much harder," said Serwer.
To put it in economic terms, employees' productivity has grown. It had to when more work fell to fewer workers: Unemployment remains high, at 8.8 percent.
The top of the list was studded with oil companies. After number-one Wal-Mart, the next three were Exxon-Mobil, Chevron and ConocoPhillips, whose profit was up 133 percent over the previous year.
"Oil companies make a lot of money...selling gasoline to Americans, and we can't get enough of it," said Serwer.
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Given the current spike in oil prices, reflected in $4-per-gallon prices at the gas pump, oil companies could do even better on next year's list, Serwer said.
Apple, whose iPhone and iPad grew ever more popular last year, was up 21 places, to 35. Its profits were up 145 percent.
"Apple continues to streak," Serwer said. "No big company on the list has the performance of Apple."
Homebuilders, after being shut out of last year's list due to the mortgage crisis, have crept back on, with two companies on the list.
General Motors was number eight, and AIG was 17. Both were huge beneficiaries of U.S. taxpayer bailouts. Even if many Americans are feeling like characters in another Dickens work, "Oliver Twist," asking for "more" work, at least they can say they made the Fortune 500.
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