Could there be a silver lining to unemployment? According to Steve Matthews, writing at Bloomberg.com, yes—if you’re a business.
“The 6.8 million Americans out of work for 27 weeks or longer — a record 46 percent of all the unemployed — are providing U.S. companies with an eager, skilled and cheap labor pool,” he writes. In fact, companies have been able to upskill their workforces so effectively that Matthews argues it’s the factor behind the 61 percent uptick in the S&P 500.
In other words, profits are up: because so many talented people are desperate for work, companies that do have openings are able to pluck anyone they want from the ranks of the unemployed.
Andrew Leonard at Salon.com picked up the Bloomberg item, noting: “How far we’ve come from the days of Henry Ford, who gave his workers wage increases so that they could afford to buy Ford’s cars. Just how sustainable are corporate profits that are predicated on squeezing workers, if the end result is a working class that can’t afford to buy anything?”
photo: | El Caganer