TITLE

PROFITS WITHOUT PEOPLE

AUTHOR(S)
Miller, Karen Lowry
PUB. DATE
November 2003
SOURCE
Newsweek (Atlantic Edition);11/10/2003 (Atlantic Edition), Vol. 142 Issue 19, p50
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
The author discusses why the economic recovery in the United States has not led to job creation, and speculates that Europe and Asia will soon feel the same pressures. Market forecasters are on edge because U.S. companies typically start creating jobs three months after a downturn, but in the 23 months since the official end of the U.S. recession nearly 2 million more jobs have disappeared. Now U.S. angst over a jobless economic recovery has sparked a round of China-bashing as politicians try to blame cheap imports for lost jobs. Even the U.S. economy's surprisingly strong third-quarter showing last week does not change the fact that many of the factors creating the jobless recovery in the United States are still in place. Equipment is still being used at three quarters of capacity, well below the average 84 percent, and quarterly productivity numbers are still rising. But the most powerful forces behind the U.S. jobless recovery are global phenomena that will likely hamper the rest of the developed world's fight against unemployment when their economies eventually return to health. China is becoming a factory to the world, allowing American, European and Japanese firms to farm out production at much lower costs. And the Internet now makes it possible to outsource even high-tech services to such low-wage countries as India and the Philippines. And before long, Europe and Asia will feel the same global pressures. In Japan, there are hints that the long recession is about to bottom out, but companies will be more focused on rebuilding their own profits than in bulking up payrolls. When it comes to the global job crunch, demographics may intervene where economics do not. That's because when the baby boomers retire, the current jobless-recovery debate could look shortsighted.
ACCESSION #
11296268

 

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