Sunday, January 23, 2011
In Wreckage of Lost Jobs, Lost Power
This article discusses our recovery from the recession compared to the recoveries of other countries such as Britain, Germany, and Japan. I really enjoyed this article because of how it made me think about a lot of the terms and concepts we have been studying in class and how they relate to the economy in its present state. It starts off by explaining the confusing and problematic situation we are currently experiencing in the United States- GDP has recovered better here than in Russia or Germany for example, yet we are continuing to suffer from a deep jobs slump worse than in many other countries. Basically what is happening is that we have a smaller amount of Americans producing goods and services more efficiently. David Leonhardt explains that it isn't this simple and the basic structure of the American economy and the balance of power between employers and employees might be at fault. He suggest that we start studying and considering the policies implemented by other countries as possibilities for our own employment recovery.
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The fact that profits for corporations have risen 12 percent since late 2007 while unemployment rates have continued to fluctuate in the high 9's creates interesting questions. Has the recession given corporations a chance to 'trim the overhead' so to speak? Have they streamlined their processes so much that 9 percent unemployment will be the new norm? Who knows? Are corporations now able to profit more and be more efficient with fewer workers? As a graduating senior, I hope not.
I really think encouraging corporations to cut hours of workers, but not cutting workers in general is the way to go. My uncle has worked for Lincoln Electric, which is based in Cleveland, for years. They are very well known for not laying off workers during rough economic times, but rather cutting back workers' hours. This may sound harsh, and it may be unfair to those that have been with the company for a long time, but isn't it the case that really all people want in tough economic times is a job that pays the bills? I think so. So if corporations worked to keep more workers on the payroll, even if that means paying them for part time, I think we could see a rise in the employment level and a gradual improvement in the economy.
I like the thought that all people really want during tough economic times is a job to pay the bills. When people are struggling to even have a job it seems like the wrong time to be complaining about not making enough money. This goes along with the idea mentioned in the article to spread out the pain among the entire workforce rather than having to actually lay people off. The workforce should be able to understand that in tough economic times they will have to take a pay cut and if they are able to make it through the tough times then there is a good chance that their payments will be able to increase into the future. It is amazing to me that as mentioned in the article, wages for the employed continue to increase while unemployment still remains "terribly high." It seems as though corporations simply panicked and started laying off employees as opposed to looking at other options such as taking pay cuts to their entire workforce and spreading out the pain.
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