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.
