One of the most important economic trends to emerge in recent years is that gains in corporate profitability are not translating to wage increases or more hiring. The New York Times just published an article on this disconnect, but it’s nothing new. The basic story is simple. Even as corporate profits have increased at a healthy clip, there has not been a similar gain for workers in terms of new hiring or increased compensation for current employees. Continue reading
The Wall Street Journal recently published the article, “What’s Wrong with America’s Job Engine?” which talks about the changing relationships between employers and workers in the wake of the recession. The article suggests that companies have not ramped up their hiring in the ways that many expected.
The first thing that really jumped out at me was that over the past ten years, the U.S. economy’s output of goods and services increased by 19% —but the number of private sector jobs —declined by almost 2 million. Sure, part of the decline in jobs can be blamed on the recession, but David Wessel, the article’s author, notes that much of the shift is due to long-term changes in the U.S. job market—meaning that American business is looking to do more with less. Continue reading