Friday, April 18, 2008

Just What Do You Think You're Doing?!?

Sounds just like what a mom would shout at you, doesn't it? In view of jobs data we keep seeing, it's not a bad time to look at that very question. Seems like a lot of us are working less than a full job, earning less than a full salary, and of course giving up a lot of things that are being priced out of our reach.

Productivity is the great word that is favored by the anti-worker crowd. It means, as we have mentioned here before, working more for the same or less pay. Now you can save your employer the replacement costs, and do less work for less! Such gains should thrill the hearts of those industrial giants who don't worry about who's going to buy the finished product when we can't afford our own grocery bills.

Throughout the country, businesses grappling with declining fortunes are cutting hours for those on their payrolls. Self-employed people are suffering a drop in demand for their services, like music lessons, catering and management consulting. Growing numbers of people are settling for part-time work out of failure to secure a full-time position.

The erosion of the paycheck has become a stealth force driving the American economic downturn. Most of the attention has focused on the loss of jobs and the risk of layoffs. But the less-noticeable shrinking of hours and pay for millions of workers around the country appears to be a bigger contributor to the decline, which has already spread from housing and finance to other important areas of the economy.

While official unemployment has risen only modestly, to 5.1 percent, the winnowing of wages and working hours for those still employed has become a primary cause of distress, pushing many more Americans into a downward spiral, economists say.

Moreover, this slippage is a critical indicator that the nation may well be on the verge of a recession, if not already in one.

Last month, the hours worked by those on American payrolls dropped, compared with six months earlier, according to an index maintained by the Labor Department. The last time the index moved into negative territory was February 2001, when the economy was on the doorstep of recession. A similar slide emerged in August 1990, one month into what proved an even more severe downturn.

From March 2007 to March of this year, the average workweek reported in the private sector slipped slightly to 33.8 hours, from 33.9 hours, while overtime for manufacturing workers fell by a larger margin.

At the end of last month, more than 4.9 million people were working part time either because they could not find full-time jobs or because their companies had cut hours in the face of slack business, according to a Labor Department survey. That represented an increase of 400,000 since November.

And on Wednesday, the government reported that average earnings slipped in March after accounting for the rising costs of food and fuel — the sixth consecutive month that pay failed to keep pace with inflation.

Of course, we've been seeing for some time now that when a business shows losses, the geniuses in charge can save their stock from plummeting by cutting the workforce. If the cuts were in the executive suites, it would make better business sense since that's where the failure to improve actually occurred. But no! in high finance circles, the rewards continue unabated in executive-land when losses show up on the books. It's only those who did the job they were assigned that get the boot. And like today in that financial realm alternate reality, the stock goes up.

Citigroup just posted $16 Billion. in losses, but cut 9,000 jobs, and their stock just gained, 9.2% in pre-opening value. That's because the new CEO is reputedly 'driving down costs'.

AT&T is cutting 4,600, and has gained 1%, called "streamlining" the company.

Those streamlined, driven down, partially employed folks of course are going to be expected to go on putting food on the family, driving the usual path, using the heat or AC they require to live comfortably, right? So does anyone see a problem? Go shopping, you'll feel better.

Here in "right-to-work" Texas, cheery self-congratulations abound as jobs growth is announced. The areas of growth? service industry, as you probably guessed.

“Our Texas economy continues to show significant underlying strength with gains of nearly 40,000 jobs during the last three months,” said Tom Pauken, chairman of the Texas Workforce Commission.

“Unemployment rates remain near record lows, and our annual job growth rate remains a strong 2.1 percent, well above the U.S. job growth rate of 0.4 percent,” he said.
(snip)U.S. employers cut 80,000 payroll jobs last month, according to preliminary figures from the U.S. Department of Labor.

But Texas is already feeling the effects of the national slowdown. The state’s employers have added an average of less than 13,300 jobs per month this year, compared with a monthly average of more than 21,300 last year.

While it's only the standard method of reporting business figures to make a shining city on the hill out of the garbage dump, in Reagan tradition, this isn't amusing to those who are not making it. The sales of stock are buoyed up by reporting the rosey picture. The needs of underemployed, and the growing numbers working more than one job to keep afloat, are weighed down.

Cost cutting can make the business profile look better to investors, but it doesn't make investors out of those who get the cuts.

Sales are up at eBay, too. Because of the weak dollar, the sales abroad are booming. this is the latest form of outsourcing I've come across. Aunt Gertrude's silver tea service will be a hit in Chang Mai, no doubt.

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Blogger shrimplate said...

We'll be outsourcing our own garage sales.

12:17 PM  
Blogger Ruth said...

What, you haven't outsourced the garage yet?

12:44 PM  
Blogger problematic30 said...

thats next week. I see this happening where I work 15 people were laid off. the companys profits went up so much that they were able to buy 12 new microwave, tables to put them on( since the solid ones that were there before were no longer good enough), New computers for the bosses, and got the whole front office re done. Yet I can't get one hour of overtime.

10:16 AM  
Blogger Ruth said...

problematic, I used to commute with some TI employees, when one was let go the others were getting their work without any increase in salary. Called attrition.

12:49 PM  
Anonymous Anonymous said...

I sold a $20 used book to South Africa yesterday. I figure I'm helping the economy by exporting.

10:28 PM  

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