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article imageOp-Ed: Jobs economics 101 — Why the US jobs market defines US recovery

By Paul Wallis     Aug 5, 2011 in Business
New York - The 117,000 jobs created in July sent the first positive news through the US markets in a long time. The irony is that the neurotic markets themselves are refusing to grapple with the fact that jobs make the economy thrive.
This is the situation:
1. A huge percentage of Americans are now on food stamps.
2. 9%+ of the workforce is unemployed.
3. (These two facts mean that a large sector of the population simply doesn’t have the money to buy food and pay bills.)
4. Economic growth slowed to a crawl after the 2008 crash.
5. The huge high capital housing market, without enough domestic buyers, is stagnant.
6. Many corporations have been shutting down operations to save costs.
7. Over 100 US banks and other financial institutions have gone down since 2008.
8. Capital moving through the economy has been drastically reduced thanks to all these factors.
9. Revenue has going backwards because of the above issues for several years.
If you starve a car of fuel, how’s it supposed to run? US employment is the biggest single capital market in the world. It turns over more money per day than the piddling few billion Wall Street cringes its way into making.
The joke, such as it is, is that the idiots seriously believed that penny-pinching on labour costs was some sort of brilliant move. Apparently none of them knew, or know, a damn thing about economics, and why the US domestic economy, the biggest in the world, needs cash.
US wages are pitiful. I’ve seen an internship advertised for someone with a Masters to conduct and plan research, manage data and sweep floors, and the lucky recipient of this job would make $21 an hour. In Australia, if you offered a salary like that to someone with a Masters for a job like that, they wouldn’t be able to stop laughing long enough to tell you where to go.
Labour cost efficiency depends on job design, and no other factor. Job designs are supposed to be profitable. If you expect workers to make a fortune for you by picking up beans using tweezers rather than shovels, you’re out of your mind. The US could have simply improved production methods, rather than shovelling all its jobs offshore. These guys don’t understand the mix of technology and labour. They’re accountants, not productivity experts.
For example: Taiwan’s Foxconn, which is one of China’s major producers, and the company held responsible for the appalling conditions in electronics assembly, has decided to start making its computers using a million robots, the largest automated workforce in history. The labour force can be moved into quality control and sales, or redeployed elsewhere. Productivity will increase, jobs will simply be redesigned.
In rather less exotic Minnesota, the High Road employment approach, high wages/high productivity approach moved a big industrial boiler making company from the brink of bankruptcy to multi-billion dollar orders right in the middle of the Rust Belt. The workers make big money, and the company makes big money. This is a highly motivated workforce, and the incentives for productivity are excellent.
Meanwhile the hard cash-starved US economy continues to beg for liquidity. It becomes less competitive, in terms of both productivity and capital. The 19th century/20th century sitcom job structure, which has been out of date everywhere else on Earth for at least a decade, continues to fester.
Those 117,000 jobs are a drop in a gigantic bucket, but they prove a point- The market is now, finally, reacting to economic realities. It cannot continue to act in its own worst interests by refusing to do the real business that creates the real jobs that make the economy function.
Some suggestions:
1. Lose the “hate and despise the employees” thing.
2. Start doing business, not masturbating on spreadsheets.
3. Get someone who can read and write to do your business plans.
4. Hire productivity experts, not accountants, to plan your business ventures.
5. Get real job designers, not chicken-brained sycophantic number-shufflers, working on your employment policies and practices.
6. Get rid of any drama queens in executive management whose main topic of conversation is bitching about other people who are actually productive.
7. Get out of those damn meetings! Turn the conference room into a workspace, and don’t hold meetings unless you need to hold meetings.
8. Managers are supposed to manage. Hire the people that do manage, not the people that just talk about managing.
9. Kindly look at the date, and note which year you’re living in.
You want economic growth?
This is how you get it.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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