President Barack Obama gave a major economic policy speech yesterday. Here’s what he didn’t say, and probably won’t ever say: Businesses will not begin new, significant hiring this year or in 2014.
Business leaders around the country tell me they’re not thinking about new hires right now. Rather, their sole focus is on how to win new customers. Too few people know this, but employees follow customer growth, not the other way around. Most importantly, businesses want to survive. They’ve cut everything to the bone and stored cash, and they won’t risk anything until they experience customer growth. New hires don’t solve their problems.
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Bluntly, the jobs picture is not improving, despite what you hear in the news, and it will get worse. Yes, businesses are sitting on billions of dollars in cash and productivity gains and the stock market has been rallying. But those businesses are hoarding that cash because they still lack that all-important state of mind and spirit: confidence.
Phi Beta Iota: The situation is much worse than Mr. Clifton lets on. Only 47% of all US adults have a full-time job — everyone else is either unemployed or scraping by on one or more part-time jobs. The actual general unemployment rate is 22.4%; the unemployment rate among new college graduates and post-50 non-pension folks is closer t0 40%. Combine that with any combination of national disasters and the looming food and water crises, and you have a social meltdown, not just a political or economic meltdown.