2.16.2005

The Question We've Been Asking Ourselves...

Economy's Growing, but Where Are the New Jobs?
Los Angeles Times (02.15)
"Firms are expanding without hiring. Some analysts wonder if this change is permanent."

Oh lots of he said/she said here... but don't lose sight of the fact that good jobs are just not being created, folks are sorta taking a pay cut since wages haven't kept pace with inflation and healthcare is a big factor here (actually it's the elephant in the room but we're not there yet)

Let's begin shall we?

Carlton Guthrie sees bright times ahead. After weathering the 2001 recession, his manufacturing company has made enough money to pay off some debt and position itself to expand.

But he's not planning to add jobs.
So much for that "trickle down" crap they've been trying to sell us. Bastards.
Guthrie's ability to expand his business without enlarging the payroll — a feat achieved by many executives across the nation — helps explain why job creation continues to be sluggish even while the economy appears to be booming.

The U.S. economy grew at a brisk 4.4% clip last year, but it was not until last month that the number of jobs recovered to the levels of early 2001. The Labor Department pegs the unemployment rate at 5.2%, the lowest in four years, but the share of people who have stopped hunting for work is the largest it has been since 1988. Today's job growth is more than twice as slow as it was after the 1990-91 recession, and slower than during any recovery since World War II, analysts say.
That means that "The Economy" is growing for some but not for others.
The discrepancy is fueling a growing debate about whether such low employment growth is a harbinger of a world in which businesses can rake in increasing profits without much of it trickling down to workers.

"Until now, this recovery has been all about businesses," said economist Mark Zandi of Economy.com, an economic research firm in West Chester, Pa. "Businesses are in about as good a financial shape as I've seen them."

Instead of aggressively adding workers, corporations have been buying labor-saving equipment, banking cash, distributing record dividends, buying back stock or undertaking ambitious mergers that often lead to job losses.
But what about "a rising tide lifts all boats" and all that trickle down notion they've been selling us since Reagan? Are you saying that doesn't need to be true anymore?

Here's our favorite part...
There is a wide range of reasons for these choices. Manufacturers such as Guthrie are pinched by price competition and required to continually cut costs. Other executives are wary about expanding payrolls in a time of ballooning healthcare premiums. Companies are cautious about bloating their staffs, remembering the excesses of the late 1990s. And shipping jobs out of the country still seems cheaper than paying American salaries.
Again it comes down to Healthcare (or the lack of it) and you're "bloating" your company. You give them gas. You're the problem.

Actually we love how it's "American salaries"... because that's the ticket: if you're not management then you're part of the problem because you're cutting into their bottom line. YOU cost them money that could be going into their beach houses, SUVs and other crap.
Another factor that could soon lead to more job growth: slowing gains in productivity. Companies have squeezed just about all they can out of existing workers through labor-saving technology and efficient management practices, analysts say.

Skeptics point to the fact that wages remain relatively flat, growing slower last year than the rate of inflation — translating into a cut in take–home pay for many workers. That stagnation indicates to skeptics that the traditional business cycle — in which growth leads to a tight labor market that bids up wages — may be a thing of the past.
Oh we don't like the sound of that...
"The big question is: Has there been some structural change, in that what we're seeing in the rearview mirror doesn't apply to what's in front of us?" asked Jared Bernstein of the liberal Economic Policy Institute in Washington.
That's what we're afraid of: the game has changed and we're in uncharted territory. Damn those liberals for pointing out the unpleasant truths we might have to recognize!

Lots of other goodies here. Check it out.

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