Politics

A Hireless Recovery?

Michael Schrage on HBR.org (commenting on an NYTimes article) argues “U”, “L”, “V”… it dosen’t matter the shape of the recession — this is not a “jobless” recovery, it is a “hireless” recovery.  Instead of asking “where all the jobs have gone”, a better question might be “where did all the employers go?”

Executives and entrepreneurs aren’t asking “Who should we hire?” They’re asking, “Why should we hire?” World-class firms are still looking for world-class people. But when world-class people aren’t what’s needed, world-class firms will consider world-class alternatives. Most people looking for a job today aren’t competing against each other. They’re competing against alternative ways to getting that job done.

He rightly suggests that this is a structural, not a cyclical shift.  Necessity is the mother of invention — as the recession lingers, companies are becoming more efficient at finding alternate methods of value creation and, as a result, these jobs are not likely to come back anytime soon..

For most organizations, people are a means and medium to an end. They’re not hiring employees, they’re hiring value creation. If they can get that value — or most of it — from contingency workers, outsourcing, automation, innovative processes or capital investment, why wouldn’t they? If tweaking a process or program empowers three people to do the work of five, then tweakonomics is the way to go.

Along these lines, Robert Reich on Business Insider talks about “The Great Decoupling of Corporate Profits from Jobs”.

Second-quarter earnings reports are coming in, and they’re making Wall Street smile. Corporate profits are up. And big American companies are sitting on a gigantic pile of money. The 500 largest non-financial firms held almost a trillion dollars in the second quarter, and that money pile is growing larger this quarter.  Profits that plummeted in the recession have bounced back. Big businesses have recovered almost 90 percent of what they lost.

He suggests that hiring is not happening for three reasons: 1) profits are coming from overseas operations (so that is where investments are going) 2) companies are investing in labor saving technologies and 3) companies are using their money to pay dividends and buy back stock.   According to Reich, this leaves us with huge paradox:

Big American companies may never rehire large numbers of workers. And they won’t even begin to think about hiring until they know American consumers will buy their products. The problem is, American consumers won’t start buying against until they know they have reliable paychecks.

So where does this leave the American worker, particularly the unemployed?  What opportunities are out there for progressive companies?

  • Twitter
  • Facebook
  • FriendFeed
  • Delicious
  • Digg
  • Share/Bookmark

Lohan who? 20-somethings worth reading about.

My sister-in-law posted this on FB earlier this week… I thought it was worth reflecting upon and sharing:

I can’t believe the news coverage being given to a spoiled 20-something yr old. Here are a few 20 year-olds worth knowing about: Justin Allen 23, Brett Linley 29, Matt Weikert 29, Justus Bartett 27, Dave Santos 21, Chase Stanley 21, Jesse Reed 26, Matthew King 23, Christopher Goeke 23, & Sheldon Tate 27. These 20-somethings gave their lives for you this week.

Then I read this morning that “July is deadliest month of Afghanistan war for US”.  Where is the moral outrage?

  • Twitter
  • Facebook
  • FriendFeed
  • Delicious
  • Digg
  • Share/Bookmark

Lingering Consequences of Bad Choices

There is fascinating article in yesterday’s Washington Post by Paul Schwartzman that chronicles the choices one family has to make as they face economic hardship. The article evokes a range of emotions from sympathy (doting father, bad luck, articulate family) to outrage (spending unemployment money on gambling, beer and cigarettes).  I found that the most interesting thing about this situation was the compounding nature of (bad) choices made long ago.  One choice or decision led to another with compounding consequences; once you head off a path, it is increasingly difficult to correct course.   

Stephen Dubner posted some interesting commentary on the article — the comments are telling insight into the polarization of American views on the economic crisis.

  • Twitter
  • Facebook
  • FriendFeed
  • Delicious
  • Digg
  • Share/Bookmark