Employers Doing More With Less
Posted on 06 December, 2010 | 73 Comments
The problem with bringing down the stubbornly high unemployment rate is that employers are learning to do more with less.
Employers still aren’t hiring enough. Just look at November’s disappointing employment report, which barely eked out a gain in jobs. Or better yet, look at the holiday workers at your local mall. If you can find them.
Retailers, who are reporting a strong start to the holiday shopping season, are apparently doing so with less help than in the past.
The US Labor Department reported a drop of 28,000 retail jobs in the month in its employment report once it adjusted the numbers for seasonal factors. Except for 2008, when the economy was in the process of falling off a cliff, there hasn’t been such a weak November for retail payrolls in in 29 years.
The push to do more with less help isn’t limited to stores. It can be seen in offices and factories across numerous industries Businesses simply are not certain that the recovery is for real so they are taking their time in hiring. And because of productivity gains, they don’t need to hire as many people.
Businesses were forced to figure how to be more productive and change the way they did business, in order to survive during the recession. And that isn’t going away anytime soon, he said.
It’s not just getting people to do more. Companies have also stopped doing things that were niceties to have but added marginal value. As one senior executive said: ‘It was a nice to have those extra 23 reports we used to do every week, but we don’t have the people to do them.’ That’s not going to change.”
It is no surprise therefore that the job market has remained stuck in the mud. While gross domestic product, the broadest measure of the economy, has recovered 84% of the output that was lost during the recession, the labor market has recouped only 11% of the jobs that were lost.
The US is now producing almost as much as it did before the recession but with 7.5 million less people. The difference is going into the productivity numbers and corporate profits.
The latest reading on productivity, which measures the economic output of each hour Americans work during a quarter, was up 2.5% from a year ago in the third quarter, the Labor Department reported this week. It’s the sixth straight quarter of gains of that level or higher.
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