When I listened to Labor Secretary Hilda Solis talk about the jobs report and labor market I was aghast. She talked about how the government has done everything it could to create jobs. Ok, you’re telling that to millions of Americans who are suffering to make ends meet. And then signing off she wished everyone a happy Labor Day Weekend. I’m sure it was with all good intentions, but for the millions of jobless Americans – Just stick a knife in and twist it a bit, will ya?
Got that ugly report out of the way. Done…gone….history. Let’s move forward with some solutions. It should send a message, but hasn’t that been the case for months if not years? When you look back at August is it any surprise we saw no job growth? I suppose the most optimistic could see some light – but when you put the pieces together it makes sense. The beginning of the month saw us dealing with that debt ceiling fiasco, transcended by the debt downgrade just days later, a big Fed meeting, new Euro issues and then the uncertainty of Bernanke’s Jackson Hole speech. Add in the government was on vacation (hence, who was there to hire anyone) and they are cutting spending, so there you have it. It was a complete ‘freeze out’ of hiring.
Companies will hire back when they have clearance. Simply put when there is some visibility of business prospects and growth then hiring can happen. Some would argue that many of our jobs have been lost overseas. This would be correct, an unfortunate circumstance when our very own companies become slaves to the bottom line, and hire abroad. According to a recent article in Newsweek there have been half a million jobs created since 2000 – 2.9 million offshore by multinationals, while simultaneously cutting 2.4 million jobs here at home. Other countries partner up with our firms and offer generous benefits to bring jobs to their people. Sounds like stealing, but it’s more like ‘come to our house, we have better food’. Does it make sense for companies to hire with so much uncertainty and trends calling for weakness?
I’m not sure what the President has in mind for his speech on jobs but the bar is set quite low. After all, it was a year ago where he started to lay out plans for job creation, but that fell far short. In Dec 2009 Obama boldly went after the middle class with a jobs creating agenda, but that was dropped. I suspect with a Congress that will not work with him to get something done on behalf of the American people it will be difficult to make headway. So therein lies the dilemma – a Congress who is willing to let things blow up only to lay blame at the doorstep of the President so as to make him a lame duck. With 9% unemployment this is most likely the case already. With the election just 14 months away does it make sense to keep job-seeking Americans wanting and waiting longer just to achieve this objective? The markets will be keying in on this but is likely factoring in some weakness. After all, the White House threw in the towel this week and forecast 9% unemployment for next year – a far cry from the bold 7% or lower number projected in 2009. This could be a very difficult year unless some compromise and agreement are reached – for the people. It may be wishful thinking.