JOAN VENNOCHI Profits are up, so its time to slash the workforce. Thats the story at State Street Corp, which recently announced the elimination of 1,400 jobs, including 400 in Massachusetts. Those jobs are gone, even though State Street last reported profits of $427 million, up about 20 percent from a year ago. Operating revenue also rose 8.4 percent. In an internal email, Chief Executive Jay Hooley explained the strategy as necessary to enhance service excellence and innovation and drive a stronger sense of urgency about getting things done. Those scary words reflect the new normal incorporate America. Since the US economy entered into recession at the end of 2007, jobs have been shed and wages frozen or cut. But, while wage and salary payments to workers declined by $121 billion or about 2 percent since the last quarter of 2008, pre-tax corporate profits rose sharply - up by $572 billion or 57 percent over the same time period, according to Andrew Sum, a professor of economics and director for the Centre for Labour Market Studies at Northeastern University. Productivity also increased, but workers got no reward - only unemployment insurance. Instead of getting outraged over corporations that fire people, even as they reel in cash, cable TV and talk radio hosts are choosing to get outraged over the inability of those fired to find new employment. Why not get angry at the CEOs, who instead of seeing increased resources to invest in hiring, only see rising expenses to be cut by firing? They share responsibility for a recovery that lags as job growth lags. By cutting loose 1,400 workers, State Street shifts the burden of keeping them solvent from the private sector to the public. Now, its the taxpayers job to underwrite them, via unemployment benefits. And thats only the start of the ripple effect on a still-fragile economy. How many of the newly unemployed will no longer be able to pay their mortgages, or keep up with cable and credit card bills? Without employer-backed health insurance, how many will turn to state-subsidised insurance? While workers hit the streets, management hits the jackpot. According to, Hooleys 2009 compensation package totalled $13.9 million. And that was before he took over as State Streets CEO last March. Asked if management would be taking pay cuts or forgoing bonuses, Carolyn Cichon, a State Street spokesperson, said only that 2010 compensation, including executive incentive compensation, will be determined in the first quarter of 2011. State Street was also able to tap into billions of dollars the US central bank made available in the fall of 2008 to avoid further financial chaos. The Fed cant lend money directly to money markets. So it used 11 large banks, including State Street, as intermediaries. The banks used the Fed money to buy securities from money market funds, giving them cash to repay clients. As reported last week by The Globe, State Street bought $86 billion in investments from clients such as Eaton Vance Investment Managers, T. Rowe Price, and Columbia Funds. It held those investments until their maturity dates and earned $60 million in investment profits. All the Fed funds were repaid. Even so, that means State Street reaped the benefits of taxpayer-supplied money. Wheres the fairness? asks Lew Finfer, Director of Massachusetts Community Action Network, if all the taxpayers helped your business continue to exist, dont you have a responsibility back to maintain jobs, create jobs, and invest in communities? There would be an excuse if you are losing money, but if you are not losing money, where is the excuse? Replies State Streets Chichon: The industry as a whole is still undergoing significant headwinds and the competitive climate is fierce. Thats their excuse and they are sticking to it. But, for the out of work, the climate is even fiercer. Boston Globe