David Leonhardt and Daniel Altman write in the New York Times that Weak Growth Means Few Jobs, and Pain Is Felt Far and Wide. Almost a year after the economy began growing again, a broad jobs slump has spread the pain more evenly than almost any downturn on record.
We're at a very critical point in the economic cycle, when consumer confidence is teetering even as business reaches the bottom and begins to recover. At this point, business' ability to retain employees may be the deciding factor as to whether the economy dips deeper or stays at this low point and establish the beginning of a solid recovery. This article goes on to point out that in the coming decade where will still be a tighter labor market because the Boomers retiring will not be followed by so many young workers -- but that is still a decade away. This feels very 1931, in the middle of the three and a half year downward slide in the markets, when there was no business, let alone show business, that was hiring.
The despair in Silicon Valley is evidence that consumers, who have carried the economy on their backs while business has been pummeled by its own over-spending is evidence that consumer confidence is all but exhausted.
The reporters go on: "Still, barring an unexpected shock, the job market does seem likely to improve, particularly over the longer term. Indeed, if the economy follows roughly the same recovery schedule as it did a decade ago, companies will begin adding more than 100,000 jobs a month by early next year."
An unexpected shock? Every new announcement of 10,000 layoffs, like Lucent this week, is a minor quake. It adds up. If business does not want to see consumer demand fall off, delaying the recovery by years, it needs to bite the bullet and retain people whenever possible.Posted by Mitch Ratcliffe at October 12, 2002 01:12 PM | TrackBack