Productivity up 6.2%, Unemployment up

Discussion in 'Wall St. News' started by noob_trad3r, Feb 4, 2010.

  1. http://www.cnbc.com/id/35233130

    Wow if Productivity keeps going up this fast, I see more unemployment. Why hire when 1 person does the work of 3.

    What happens to the excess glut of workers never needed back?
     
  2. Makes it MUCH more difficult for employers to justify new or rehires.
     
  3. Employment will only come back once demand returns.
    With taxes going up it will delay even more any increase in demand.
     
  4. Not if productivity keeps going up this fast. Last quarter it went up 7.2%

    Why hire if one employee can now do the job of 3.
     
  5. Correctamundo.

    The Government has a new "jobs" stimulus where they will pay an employer $5,000 to hire a new employee. However, that won't work in most cases because the ONLY justification for adding new workers is that they are NECESSARY* to meet demand. No demand, no hires.

    *presumes the demand cannot be met with cheap overseas labor, also..
     
  6. S2007S

    S2007S


    The $5,000 credit is pretty much worthless, it will not create demand for new jobs at all. No one can afford to hire new workers now. As you said there has to be demand, where will it come from with the only thing creating any kind of demand for goods and products is the stimulus they keep pushing through the system.
     
  7. Even if demand for goods increase it does not mean employment will increase. Why hire someone if you have someone doing the job of 3 people?

    Rising Productivity means less humans required to produce widgets. The fact is less and less humans will be needed in the future as technology and other methods increase the output per human.

    The only fix is some new disease and maybe a WW III

    Just like Forest fires have to happen to clear out the excess growth.
     
  8. This Government program is a waste of our money. Only those who were going to hire anyways will take the money. No business will hire to get 5K.

    At some point productivity without demand should lead to lower prices, deflationary.
     
  9. The government presumes (better yet, they really understand and LIE) that the economy is merely a "tinder box, just waiting to be ignited with the spark of stimulus". THE TRUTH... our consumers are so overleveraged that the economy is more like a "burned out cinder"... can't be ignited because it's all been consumed. Stimulus is like pouring gasoline on a pile of rocks... once the gas has burned, there is nothing left to sustain the flame.
     
  10. Daal

    Daal

    Productivity is up because companies are firing and trying to keep the same level of output by squeezing their existing workers. Not because humans all the sudden got smarter. However, this will normalize as there is only so much you can squeeze them, they will run out of fat to burn and be forced to hire/increase hours worked
     
    #10     Feb 4, 2010