Top Fed Official Warns Jobs Will Be Scarce As 'Paradigm Shift' Slows Hiring

[AllentownJake]

A top Federal Reserve official warned Monday that even as the economy starts to grow again, employers are likely to continue squeezing more productivity out of workers rather than start hiring new ones, thereby prolonging the economic crisis for the millions of unemployed.

In remarks at the University of San Diego, Federal Reserve Bank of San Francisco President Janet Yellen said that rather than experiencing a "V-shaped recovery," the economy will continue to be sluggish and won't be operating at its full potential until 2013.

As reasons, she cited consumer anxiety due to the high unemployment rate; a housing sector that "could weaken again"; "very nervous and exceedingly cost-conscious" businesses; and a commercial real estate market that won't contribute to growth "for some time."

For workers, though, her prognosis was particularly dire: the labor market will be slow to recover because businesses have learned that they can cut workers yet maintain output.

"There is an alternative explanation regarding the events of last year, though, that bodes poorly for rapid employment gains going forward," she said in her prepared remarks. "According to this view, last year's large increase in productivity is here to stay. In that case, we won't see a quick drop in unemployment and may be in for a jobless recovery akin to those in the early 1990s and early 2000s. This is closer to my view and broadly consistent with my forecast," she said. She continued:

http://www.huffingtonpost.com/2010/02/22/top-fed-official-warns-jo_n_471681.html

[sakabatou]

1. Well fuck.

[NightWatcher]

2. the beatings will continue until morale improves

[Donnachaidh]

3. translation - we bailed out our banker buddies with your tax dollars

But you can forget a bail out for the working class. We're just going to squeeze them for more *productivity* on the job (productivity meaning slave labor).

There's that darned CHANGE thing again...

[jody]

More likely many manufacturing jobs will be outsourced if our economy ever recovers.

On the other hand jobs might be available in unusual professions.

Business picking up for pet-waste companies

Armed with nothing but a bucket on a pole, a rake, some doggy treats and his wits, Joel Osborne entered the territory of a 175-pound Great Dane named Maggie.

The dog barked and paced but kept her distance as Osborne went about his business. That is, as he went about picking up Maggie's business.

Osborne, owner of a Pet Butler franchise in Murrieta, is among a handful of Inland professionals dedicated to keeping the region's backyards and dog runs free of pet droppings.

[Hannah Bell]

27. a franchised dog poop picking up operation. jesus.

[HeresyLives]

4. Well there's a paradigm shift alright, but this ain't it.

Most companies have operated on the 'just-in-time' principle since the 90s; and there are the same job losses in countries which have much lower productivity levels than the US.

[Arctic Dave]

5. 'Paradigm Shift'

:puke:

I hate that saying as much as I hate "trickle down economics".

[AllentownJake]

12. Paradigm shift is corporate speak for you are about to get fucked royally

7 years of corporate American experience and I hear that word and I say, uh oh here comes a good beating.

[Hardrada]

19. It is also really a meaningless phrase like "global economy."

How about a paradigm shift like one out of three greedy CEO's hanging from a lamp post? That would give it some meaning.

[XemaSab]

25. We're going to need a bigger lamp-post

:P

[ananda]

6. But let's not do anything proactive to regulate or pressure companies to hire!

Sheesh

[KT2000]

7. Push Back!

Companies will pull all kinds of crap like this until they get "push back." They set up delayed payments to their suppliers, work their employees to death until they get push back. Suppliers changed their "paradigm" and demanded payment before shipping parts and now workers need to unionize.

[Junkdrawer]

8. Economics 101: What do we make that the world wants...

now that packaging up our debt and selling it is no longer viable?

[unblock]

29. why, packaging up greek debt and selling it, of course!

[Raschel]

9. I guess the Repub mantra of give business tax breaks to grow jobs doesn't work.

[AllentownJake]

10. Well, only if the business is interested in investing the money in America

They aren't too keen on that idea.

[99 Percent Sure]

11. Jobs are already scarce for the millions who are unemployed.

According to federal statistics, there are at least 15 million unemployed, and one job has six applicants. That's job scarcity in the present, not the future.

[girl gone mad]

13. k & r

[Nikki Stone1]

14. How soon before they find too many useless to live?

:tinfoilhat:

[Cali_Democrat]

15. Businesses aren't too bright, are they?

Instead of hiring new workers, they will attempt to squeeze more productivity out of existing workers. :wtf:

The whole problem right now is a lack of demand for goods and services produced. How can demand increase if businesses won't hire new workers? Who's gonna buy their goods and services?

These are the same geniuses that cratered the world economy. Craziness :crazy:

[AllentownJake]

16. Energy Cost

That is what this is all about.

Remember, the candidates weren't talking about unemployment from January to April of 2008. They were talking about gasoline prices.

If we went back to employment of 2006 gas would be at $4.50 a gallon overnight.

[Alias Dictus Tyrant]

17. Actually, it makes perfect sense

The cost of hiring new workers is far higher than the nominal return on that investment right now. With all the nonsense that is currently going on, hiring someone would make a business *lose* money. Businesses do not go bankrupt intentionally.

Until the government stops screwing around with the economy creates a situation where it is worthwhile to invest in new hires, businesses won't. Economic growth and reduced costs of capital will encourage investment in people, not idle wankery from the politicians. I hate to say it, but the economic competence of the current administration is not much better than the last one.

[AllentownJake]

18. Disagree

Oil is at $80 a barrel. If employment returned to it's 2006 level tomorrow gas would be at $150 a barrel again. Energy is a huge expense of any business. One expense goes up, you have to find a way to reduce another one. The people working took a hit.

Quite frankly the entire world economy is set up for $50 a barrel gas prices.

This is no longer a right vs. left argument. It is simply a scarcity of resources argument and a supply and demand issue.

We could be libertarian or communist right now with the same reduction in standard of living.

[Alias Dictus Tyrant]

20. Oil is a factor

Oil is a factor, but only a small one in the cost of a hire. For a lot of businesses, expanding payroll has a very substantial overhead cost even if total wages paid don't change. For my company, it is something like $10k of overhead per additional hire, so more people doing less work increases total costs even if wages are neutral.

Oil increases the costs of goods which naturally lowers consumption, but I don't think that is the dominant effect here. These gas prices are not unprecedented.

[AllentownJake]

22. Laying people off has the same overhead cost

We were heading this way pre-1983. Energy prices went up, they went down, people went back to work, we had a recession in the 90s after energy prices increased in the lead up to Gulf War I.

In the 1990s Bill Clinton had two things go his way. Low energy costs and a new technology that increased production but required trained workers to utilize it.

Gas prices go down, things expand, they go up things contract.

Supply and Demand. Politics isn't about how much wealth you have to go around, it is who gets what share of it.

Barack Obama was running around with money to build Nuclear Power Plants last week...now why would he be doing such a thing?

[0rganism]

21. fantastic! it's not underemployment, it's a Paradigm Shift!

It's not a depression, it's a V-shaped Recovery!

It's not downsizing, it's Rightsizing!

:woohoo:

[hayu_lol]

23. It is a depression, thats what it is...

for those who are anti-union, time to rethink about unions.

[lib2DaBone]

24. cost of gas and the economy...

Yes.. Oil is a major factor.

I was offered a job yesterday. I was thrilled.. I almost cried with joy.. until they told me it was minimum wage. (then I cried but it wasn't for joy)


Although my vehicle gets 16 MPG... I could not afford to take a job with a daily commute of 100 miles.

I figured the cost of gas at $130 per week (not to mention tires, oil, wear and tear).. after taxes I take home $200.... less the $130 for gas... so now I am working, full time, for $70 a week?

Welcome to Amerika... flog the troops a little harder and get more productivity from each worker.

[XemaSab]

26. What would a 32-hour work week with mandatory double pay for overtime do?

:think:

[AllentownJake]

28. Not much

This is a resource issue.

Supply and Demand. Other cost are increasing so another cost has to decrease.