People Hurt Profits
The problem for everyone right now is the same. How do we make money? Profits are very hard to come by in this highly competitive global economy. Companies can either cut costs, or grow their businesses to increase profits. Cost cutting is certainly never going to stimulate hiring, but how much hiring does a growing company really want to do?
The Jobs Problem is not Bush or Obama’s fault. The issue has more to do with the problems labor faces in this modern industrialized economy. Jobs require more training than ever. People must develop or acquire very specific skill sets in order to work in this more demanding and competitive economy. This highly specialized labor force can earn more money, but must pay more money for education.
The cost of training is not the only problem facing new workers. These workers take a huge risk by specializing. The more specific their job skills, the less transferable they become. Because they need to amass more skills, and become more specialized, our workforce also faces a much higher rate of obsolescence than ever before. This means that our labor force requires more training than ever before, at a higher cost than ever before, but can also be obsolete faster than ever before.
Consider a computer programmer who masters a computer language. If the industry standards evolve, he must retrain in order to remain employable. Teachers, doctors and people at all levels in the work force are required to go to seminars and training sessions on everything from company e-mail to healthcare benefit explanations.
Combine the costs of training new hires, with the absurd healthcare burdens that employers now face, and it really should be no surprise to anyone, even a congressional member, that hiring people is quite risky, and should be avoided whenever possible. Outsourcing, temp hiring, consultants and part timers should all be considered before making the draconian move of actually hiring a person with a salary and benefits.
People are going to need to find ways to make money. However we must not expect some huge hiring boom by large multinational companies, or assume that corporate hiring is going to increase dramatically. Making such assumptions based on prior recessions, or prior periods in history is a mistake. Hiring will remain tepid at best. Jobs are going to remain very scarce. People are expensive to train, expensive to manage, and can become obsolete in a very short time.
This problem is not a result of bad policy, or bleeding hearts. The problem is a product of technological advancement. As our society continues to become more and more advanced our labor force will be increasingly burdened with more costs of training and retraining. Our workers will not be able to compete globally without the proper education, and vocational training. We must anticipate a much bigger degree of frictional unemployment in the modern world.
Joy to the world
peter