WICHITA — Worker productivity rose 6.6 percent in the second quarter because companies cut their work forces a lot faster than their sales fell. Apparently, companies didn’t wait to see how bad this recession would be and just started swinging their axes, leaving their remaining workers to manage somehow. That’s different than in the past when companies laid off workers only after sales started falling. That’s why jobs and the unemployment rates are traditionally considered a lagging indicator — the last thing to go down in a recession and the last thing to snap back.
That’s bad in the short run. Obviously, millions are unemployed, and tens of millions more are having to work harder to compensate. For companies, there’s rising profits from running extremely lean (and furloughing and cutting salaries, eliminating the 401(k) contribution, etc.)
But there is a possible silver lining. Because companies cut quickly and deeply, it may mean they rehire more quickly than they have in the past. Companies may not be able to have that “jobless recovery” because they’re already so thin.
5 Comments
I think the return of many of the lost jobs will never happen. My company has lost 50+ full time
positions that will never return. The biggest reason
is the behavior of this president and the congress.
Most employers will sit it out for a long while
rather than end up with more taxes on the taxes. What incentive does business have to produce any
more jobs with business being treated by this administration as the problem for everything?
The heaviest job losses and overall downturn took place BEFORE the current administration took office.
The sharp downturn began when democrats figured out they could jawbone the economy into the tank as an election strategy. The sheeple are not sophisticated enough to see what was done to them, but the demos carry most of the burden. Bush was no saint, for sure – his socialist policies were not economically stellar by any means and I don’t defend him, except his poor policies didn’t cause most of the destruction of the past 12 months. This recent pain was caused intentionally as an election tactic.
n0bama has intentionally made things worse as a method to get the sheeple to become even more dependent on his government.
So I gather the Party out of power just waved a magic wand and tanked the economy while Bush was president. My what power they have!
Chuckle. I have to admit that comment and the one above it made me laugh, Ben.