Here is a rather grim run down of the morning economic news and opinion:
- Catherine Rampell, The New York Times – Worry About a New Wave of Layoffs
Right before Labor Day, Mr. Myricks, of La Palma, Calif., near Los Angeles, lost his position as a factory machine operator, a job hard-won after a long spell without work. That painful loss was an echo of July 2009, when a supermarket eliminated his position as an assistant manager. Mr. Myricks joined the 28 percent of teenage men in the work force – 39.7 percent of black teenage men – who were idle and looking for a job then. He spent over a year looking for work, and moved into a cheaper home with his wife, Briana, 20, to help make ends meet. After a few months delivering pizzas part time for Pizza Hut, he finally secured a full-time job in April 2010 at a box factory where his brother is an assistant manager. ‘It is a very, very dangerous job,’ Mr. Myricks said of his work at Georgia-Pacific. ‘There are operators in my plant who are missing fingers, or missing legs. They’re still working there, though.’
This is how most people respond to a job loss, they do what they can to make ends meet. Remember that the next time you see a lazy newspaper columnist wax on about lazy workers.
- Adi Ignatiu, Harvard Business Review – HBR Economic Survey: Little Hiring Growth Planned for 2012
The news – particularly around hiring – is not good: Only 31-percent of respondents in the US and UK/Europe said they planned to increase their hiring efforts next fiscal year. The news out of Asia was slightly better, with 41-percent planning to increase hiring. This general trepidation most likely can be explained by respondents’ fears of an impending second global economic recession: 70-percent believe another global economic recession is either somewhat or very likely in the coming months. Also telling is the respondents’ estimates of their own companies’ performance, with only mixed confidence in their near-term organizational performance. Slightly more than half believe their companies will achieve revenue targets for 2011, but a significant portion – at least a quarter of all respondents – expect to miss the mark.
The persistent lack of hiring is a serious problem. Of course, not everyone knows that. Last week, Scott Ehrig, an economist from M & T bank claimed on Smart Talk that there are enough jobs for everyone who wants one. Scott doesn’t know what he doesn’t know; there are no jobs to be found for three out of four unemployed workers. When you include the underemployed, that figure rises to just under seven out of eight workers who can’t find enough work here in Pennsylvania.
- David Sell, The Philadelphia Inquirer – Merck tells staff of layoffs by end of October
Pharma-industry watchers have suggested that about 5,200 of the total cuts could be U.S. jobs, with from 3,000 to 4,000 in New Jersey and Pennsylvania. A Merck spokesman would not comment on the state-by-state plans. The cuts through October won’t be the end of the process, though.
- Len Boselovic, The Pittsburgh Post Gazette – Horsehead to build new plant in N.C.
Horsehead Holding will build a zinc smelter in North Carolina and close its existing smelter in Monaca once the new plant is commissioned … Horsehead received a $300,000 grant in 2005 from Pennsylvania’s Department of Community and Economic Development to retain 600 jobs in the state.
I told you it was going to be grim!
While it is hard to predict what will happen if a new banking crisis erupts in Europe, for now the economy continues to grow just very slowly. Slow growth means persistently high unemployment. The correct response to this crisis is expansionary fiscal and monetary policy to boost employment growth. The people in charge of both those policy tools remain somewhat reluctant to do the right thing. And with that I leave you with Paul Krugman.
P.S. Matt Damon will play me in the Keystone Research movie of the week, although I’m not sure he has the hair for it.