It is generally understood that the job market recovers more slowly after a recession than the overall economy, but there are already indications that job creation could be more anemic than usual, because of the structural changes many companies made during the downturn and their reluctance to take on payroll until the recovery is assured. For example, many companies reduced the number of employees they had in order to cut costs and have now adapted to doing more with less. In other words, each employee became more productive. This is great for a company's bottom line, but means companies will try to make do with their current employees as long as possible before hiring new ones.
New Factories May not Mean New Workers
In many cases when companies choose to modernize their facilities or open a new factory, the number of jobs created is far less than it may have been 10 or 20 years ago due to growing reliance on technology and robotics to do the work that humans used to do. As the economy continues to come out of the recession and companies consider opening new facilities and/or upgrading or expanding existing ones, the likelihood is that they are going to take advantage of the latest technologies to maximize efficiency and keep labor costs down.
Intel's fabrication factories are great examples of this type of factory. Anything that can be automated is. These factories do create two kinds of new jobs, but neither is the factory job of the past. First, thousands of construction workers are needed to build these factories. Once the building is complete, their work is done, though, so these are temporary jobs unless the economy continues to grow and new buildings are constantly being put up. Once completed, these high tech factories do require workers, but not line-workers doing repetitive tasks. They require high skilled scientists and engineers who understand the technologies being used and can repair, calibrate and, if necessary, replace equipment.
It Will Take Time to Retrain the Workforce
The challenge facing many American workers is a lack of skills for the jobs that are likely to be created as the economy rebounds. And to acquire those skills will take time, thereby further delaying improvements in the unemployment numbers. Recent speeches by President Obama on the importance of science, technology, engineering and math and the critical role that community colleges play in providing technical training show that there is an awareness by America's political leadership of the challenges facing the American workforce. But these are longer term solutions, not quick fixes.
Unemployment Should Improve in 2011
Unemployment will eventually improve when the economy grows sufficiently that employers feel confident in adding payroll. But, when they do, they will look to workers with the skills for the new types of technically oriented jobs, not the ones companies learned to do without during the recession.
For additional reading:
http://business.theatlantic.com/2010/01/dude_wheres_my_job.php
http://www.ft.com/cms/s/0/db6b7758-118d-11df-9195-00144feab49a.html
Simon Etcher - Simon Etcher has spent the past twenty years working with and listening to America's CEOs, university leaders and top government ...
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