Help Wanted

In a recent article in a news blog called The Huffington Post, Robert Reich, the current Chancellor's Professor of Public Policy at the University of California at Berkeley, writes about the recent increase in new jobs in America. Reich informs us that 227,000 new jobs were added in February, and that it is the third month in a row that news jobs exceeded 200,000.  Not only this statement, but the article in its entirety, appears to be directed at those currently unemployed, as well as the nation as a whole.  

Reich takes the stance that the increase in new jobs could be fleeting, and that this increase is based upon public spending, which in turn affects corporations creating new jobs.  He also states that the ratio of profits to wages is currently higher than ever, meaning that although corporations are profiting much greater than before, employee wages are shrinking.  After reading this article, I feel that I somewhat disagree with Mr. Reich. Yes, in an ideal world public spending would directly affect business growth, and that would in turn create new jobs and would generate a profit allowing for higher wages of employees. I do not think that is exactly what is happening though. In regards to public spending, Reich says that “spending is anemic” in the US. Really? I haven’t driven past an empty mall parking lot recently, and two women I work with both just received $400 Dooney & Burke handbags last month. As gifts. For Valentine’s Day. People are definitely spending. This leads me to corporation profit and new job creation as a result. I disagree with Reich here as well. I think that no matter how much money people spend, corporations are not going back to the employee force that once was. Businesses have learned in the past 5-6 years that they can run their business on skeleton crews. So now that the economy is starting to look up, why would corporations hire large numbers of employees, when they can continue with the employees they currently have, and keep the extra profit from the upturn in the economy? If I were a business owner, and learned by way of an economic downturn, that I can run my business just as efficiently with 10,000 employees versus the previous 15,000, hiring those 5,000 employees back and paying out my profit in wages, well, that would just be bad business sense on my behalf. So, while there has been an increase in new jobs, I disagree with Reich that public spending has much to do with it, but I do agree with him that the growth won’t last.