It is once again a boom time for the titans of American business, with corporations posting high profits on eye-popping earnings statements; yet unemployment remains stubbornly high (with few signs pointing to a rapid acceleration in hiring on the horizon).
New York Magazine has a theory that partially explains the disconnect—corporations now need far fewer employees to run the show. In a recent piece entitled "The Hiring Gap"—comparing the top ten most valuable companies in the nation in 1964 with the top ten today—it is clear that corporate earnings are rising exponentially while the number of employees required to run those companies is either similar or far lower (especially when you consider how many more people are in the workforce these days).
A few interesting points:
• Only two companies on the 1964 list appear on the current list—GE and IBM.
• In 1964, the single largest employer (AT&T) had more employees than the combined 2011 workforces of Exxon, Berkshire Hathaway, Apple, Microsoft, Chevron, and Google.
• Berkshire Hathaway is #2 on the current list, with a market cap of $405 billion, and 260,000 employees. It is worth noting that those are the total employees at companies owned by the investment firm—only 21 people work at the company's offices.
• In 1964, Kodak was tenth on the list, booking a market cap of $40 billion and employing 81,500. Tenth on the list today—Google, with a market cap of $183 billion, and employing 24,400.
• In 1964, AT&T topped the list with $254 billion in market capital, and 758,611 employees. Today, Exxon Mobil is in first place—with $412 billion in market capital, and 83,600 employees.
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