No excuses. Big businesses MUST hire

By Paul R. La Monica, assistant managing editor


NEW YORK (CNNMoney) -- Dear Corporate America,

Friday's jobs report better be very good or you will have a lot of Ricky Ricardo-esque explaining to do. Economists surveyed by CNNMoney expect a job gain of 200,000 from the private sector in April.

paul_lamonica_morning_buzz2.jpg

Call me greedy. But it would be really nice if that number was north of 250,000.

Yes, commodity costs may still be a wild card. But it's time to stop hiding behind the veil of "uncertainty."

It's time to start using the massive amounts of cash you have to hire more people.

First quarter earnings were mostly solid and many companies issued upbeat guidance for the remainder of the year, citing healthy demand. Qualcomm (QCOM, Fortune 500), Johnson & Johnson (JNJ, Fortune 500) and Bed Bath & Beyond (BBBY, Fortune 500) are just a few of many big companies that have issued a more bullish outlook for 2011.

If businesses really believe that the rest of 2011 should be strong, it's time to put money where your proverbial mouth is. Stop stretching existing workers to the breaking point. Increased productivity can only go so far.

If you want the recovery to be "self-sustaining" instead of "transitory", then add to headcount. Fewer people out of work could go a long way toward boosting consumer confidence -- and more importantly, consumer spending.

It could even help the housing market. It's no secret that the foreclosure crisis is related to the fact that so many people are unemployed or underemployed.

Cash is being put to work to reward shareholders. Many firms, including CBS (CBS, Fortune 500), IBM (IBM, Fortune 500) and Pepsi (PEP, Fortune 500), have recently boosted their dividends. Others, such as Northrop Grumman (NOC, Fortune 500), Merck (MRK, Fortune 500) and DuPont (DD, Fortune 500), are increasing share buybacks.

Then there's the explosion in merger activity. Companies are pairing up like drunken teens in the back seat of a limo after their high school prom. And many are using cash, not inflated stock, to do it.

Just this week, there have been four notable multi-billion dollar deals.

Arch Coal (ACI) is buying International Coal (ICO) for $3.4 billion in cold hard cash. Israeli drug maker Teva (TEVA) is buying biotech Cephalon (CEPH) for $6.8 billion. All cash. Applied Materials (AMAT, Fortune 500) is paying $4.9 billion in cash for rival Varian Semiconductor (VSEA).

And food giant Conagra (CAG, Fortune 500) upped its bid for cereal maker Ralcorp (RAH), switching from a cash and stock deal to an all-cash offer of $4.9 billion.

Do we even want to get into the issue of executive compensation? Ford (F, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Target (TGT, Fortune 500) have all rewarded their CEOs handsomely for a job well done.

So let's recap. Companies seem to be more optimistic about the economic outlook. They have the money to spend on acquisitions. They have the money to spend on bigger payouts to shareholders. The C-suite guys and gals are getting fat bonuses.

Fortunately, some companies are taking steps in the right direction. McDonald's (MCD, Fortune 500) is going on a major hiring spree. Google (GOOG, Fortune 500) keeps adding workers even though investors shortsightedly punish the company for doing so.

How can other big businesses still claim with a straight face that it's too early to bring more people back to work? There is no legitimate reason why the nation's largest companies shouldn't be aggressively hiring more again.

Come on! Job growth shouldn't be an afterthought.

Sincerely,

Paul R. La Monica

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,083.80 -2.83 -0.02%
Nasdaq 4,472.11 -1.59 -0.04%
S&P 500 1,987.98 0.97 0.05%
Treasuries 2.51 0.04 1.83%
Data as of 11:40pm ET
Company Price Change % Change
Facebook Inc 74.98 3.69 5.18%
Ford Motor Co 17.84 0.06 0.34%
Yahoo! Inc 36.17 1.46 4.21%
Bank of America Corp... 15.62 0.10 0.64%
Apple Inc 97.03 -0.16 -0.16%
Data as of 4:02pm ET

Sections

Would you pay $7.76 for a Big Mac? The Economist's iconic Big Mac index is a lighthearted way to compare currencies and buying power around the world. More

The government says health insurers are charging lower premiums, thanks to a provision in Obamacare. More

In New York City, business travelers have ditched meals at Starbucks in favor of Seamless takeout, according to a new report. More

CNNMoney readers rip managers who micromanage to death, play favorites, throw their staff under the bus and steal credit for their work. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.