Saturday, October 31, 2009

Joblessness: The Real Culprit

The Associated Press: Obama tempers economic news with caution on jobs: "'Economic growth is no substitute for job growth'"

Honestly, I wish folks would stop skirting the issues and just identify the real culprit in the employment slump: the employers.

Here's the reality of the situation -- and, mind you, I've not heard this anywhere else, so this could be a "breaking news" item for the rest of the world:

Long before the markets collapsed, industries in general were feeling a great pinch right around the lungs area, literally sucking the air and life out of every business. That great pinch was "too many employees". As business grew, they hired more people. As the economy started to slow, businesses were reluctant to lay people off, so they started making up flimsy excuses for "downsizing" and "rightsizing" and "excessing" employees. They would force managers to read verbatim to their soon-to-be-dismissed employees the protective legalese jargon that would ultimately protect the employers from being sued. Fear of litigation kept employers from reducing their staffs to meet the reduced demand for their products.

Along came the recession/depression, with its predictions of mass layoffs. This was a godsend to employers who were desperate for an excuse to let people go without justification. As more and more companies fell in lockstep with this self-fullfilling proclamation of joblessness, everyone who ever wanted to trim their payrolls did just that. The year was 2009.

So here we are, on the cusp of recovery and we still have a joblessness problem. Why? Two main reasons: First, employers are only starting to turn profits and they need to see at least a couple of consecutive quarters of positive numbers before they start into new growth cycles. Second, downsized companies who are making a profit are actually benefiting from more productive, smaller staffs. There's no compelling incentive to hire more people if the current staffing can handle the load. Only when productivity is exceeded by demand will these employers start replenishing their ranks.

In short, joblessness is the fault of the employers. Well, sort of. It's really the responsibility of the individual to recognize the supply-and-demand nature of the jobs marketplace and adjust by retraining. It's painful and not always successful, by necessary for survival.

I don't take issue with the employers -- the culprits of joblessness. I take issue with everyone who keeps pointing their fingers at everyone else.