40 replies to this topic

[Alpha_ProgDes]

Unemployed are going to stay that way

Some employers have said they're unwilling to hire unemployed workers because they believe that if a worker has once been let go, that's a sign that he or she is probably not a great hire. "People who are currently employed … are the kind of people you want as opposed to people who get cut,"

I wouldn't have a problem with this logic if it wasn't for the fact that we've had the greatest recession since the great depression and to get out of it, you need to hire people!

So companies sitting on $3 trillion of reserves and being extremely picky with hires, still need tax breaks to encourage job growth? Huh?

[Mike.Popoloski]

Wow, which companies are sitting on $3 trillion in reserves? Whatever they're doing, they're doing it right, so I'd be inclined to let them keep doing it without bothering them.

[Alpha_ProgDes]

Wow, which companies are sitting on $3 trillion in reserves? Whatever they're doing, they're doing it right, so I'd be inclined to let them keep doing it without bothering them.

$1 trillion. My bad.

[alnite]

Wow, which companies are sitting on $3 trillion in reserves? Whatever they're doing, they're doing it right, so I'd be inclined to let them keep doing it without bothering them.

They aren't doing it right, but we can't blame them either. Companies are watching out for themselves. They'd only hire people that they like. Qualifications is no longer applicable.

If the executives can make $20m from deals, why should they be worrying about hiring the rest of the country creating excess workforce in the company?

Warren Buffet could easily hire 1000 workers and pay them 50k each doing nothing but paint a picture of him, and raise the GDP. However, would that benefit his company in any way? No.

Nobody is playing the Schindler's role here.

[sooner123]

Wow, which companies are sitting on $3 trillion in reserves? Whatever they're doing, they're doing it right, so I'd be inclined to let them keep doing it without bothering them.

I'm sure the private corporation known as the Federal Reserve is sitting on a lot more than $3 trillion.

[frob]

I think it is overblown.
Private companies can hire whomever they want, with very few restrictions.

Gaps in a resume should be explainable. If the company says they don't like the explanation and it is enough to block from the job, that is certainly their choice.


The free market has a very simple way to compensate for this. Those who are poached from other companies require more money, those who are unemployed or underemployed will be willing to work for less, making them relatively more valuable. And in short order, those lower-paid people will be just as valuable as the previously employed, quickly balancing the ecosystem.

[Alpha_ProgDes]

If the free market was doing this right now, I'd agree. But it seems that companies are going against the free market. And they are using "unemployment" as the scapegoat.

[alnite]

If the free market was doing this right now, I'd agree. But it seems that companies are going against the free market. And they are using "unemployment" as the scapegoat.

Well they are already doing what they are supposed to do -- running their businesses and recruit the people they want. Whether they are unemployed or employed, it really is their business who they want to recruit.

If they want to discriminate potential workers based on employment status, it is their loss if you think about it. These workers they think are 'undervalued' could've been a great asset if only they had hired them. Unfortunately, people love to think that they can understand people off a piece of paper and a few phone calls.

[Hodgman]

If the free market was doing this right now, I'd agree. But it seems that companies are going against the free market. And they are using "unemployment" as the scapegoat.

I can't make sense of this.
Isn't the point of a free market that there is nothing to go "against", except competitors? No matter which direction the market goes in, that's the direction of the "invisible hand" of freedom, right?

I wouldn't have a problem with this logic if it wasn't for the fact that we've had the greatest recession since the great depression and to get out of it, you need to hire people!

If hiring more people was the answer to business' problems, then why all the redundancies/unemployment? In order to survive the recession, businesses need to cut back on staff costs and be very selective about they people that they do hire...

[Mike.Popoloski]

Yeah, not sure what you want to happen here. Force all companies in the US to hire X number of new people? Companies aren't trying to be evil and stick it to all the poor honest folks without jobs; they're hiring who they want for the price they're willing to pay for their services because they think it will be most profitable to their business. If you hire someone who is already employed, then that other company is going to have to hire someone else to fill that position they just lost, yes?

I think you're complaining just for the sake of complaining, which is really lame.

Also,

I'm sure the private corporation known as the Federal Reserve is sitting on a lot more than $3 trillion.

I'm trying to figure out if this is some sort of joke or sarcasm or what have you. Since when is the Federal Reserve a private corporation?

[Khaiy]

I think that the issue is that a significant part of the current economic slump is low consumption, which is fed by high unemployment, which is exacerbated by hiring practices like this one. But while it might be good for the economy as a whole, and therefore for businesses, that doesn't make it a great idea for any particular business to hire people to try and raise aggregate employment. Demand will improve when unemployment goes down, and unemployment will go down when demand improves. It's not the invisible hand or the glory of capitalism, it's a market failure, where incentives align to produce a non-optimal outcome.

[Luckless]

I'm sure the private corporation known as the Federal Reserve is sitting on a lot more than $3 trillion.

I'm trying to figure out if this is some sort of joke or sarcasm or what have you. Since when is the Federal Reserve a private corporation?

Since it started? However I was under the impression that the Federal Reserve wasn't truly a private corporation, but some weird government-private hybrid system that was designed to make paranoid conspiracy theorists have wet dreams.

[Alpha_ProgDes]

Yeah, not sure what you want to happen here. Force all companies in the US to hire X number of new people? Companies aren't trying to be evil and stick it to all the poor honest folks without jobs; they're hiring who they want for the price they're willing to pay for their services because they think it will be most profitable to their business. If you hire someone who is already employed, then that other company is going to have to hire someone else to fill that position they just lost, yes?

I think you're complaining just for the sake of complaining, which is really lame.

I think you're not listening. If companies want to hire only people who are employed or have been unemployed for less than 3 months, then obviously they can do so. But for anyone to say that the current laws are stunting job growth and there's no one qualified for the jobs posted is obviously nonsense. To say that a person who was fired must not be a good employee is silly given we just went through the biggest recession in US history and companies are not hiring. At this point, it's not policy or the debt that's stunting job growth, it's the companies themselves.

[Alpha_ProgDes]

If the free market was doing this right now, I'd agree. But it seems that companies are going against the free market. And they are using "unemployment" as the scapegoat.

I can't make sense of this.
Isn't the point of a free market that there is nothing to go "against", except competitors? No matter which direction the market goes in, that's the direction of the "invisible hand" of freedom, right?

If the free market was truly at work, then alot more companies would have fell completely during the Recession.

[Prefect]

I'm sure the private corporation known as the Federal Reserve is sitting on a lot more than $3 trillion.

I'm trying to figure out if this is some sort of joke or sarcasm or what have you. Since when is the Federal Reserve a private corporation?

Since it started? However I was under the impression that the Federal Reserve wasn't truly a private corporation, but some weird government-private hybrid system that was designed to make paranoid conspiracy theorists have wet dreams.

That sums it up pretty well, though I believe it is designed that way to give wet dreams not to conspiracy theorists but to certain schools of economists who get off on "central bank independence". I suppose the end result is more or less the same: despite all the smoke and mirrors, the Federal Reserve is an institution of the US government.

By the way: To say that the Federal Reserve is "sitting on money" is ridiculous anyway. Since the Fed is the institution that is running the US$ monetary system, they can always spend (create) more money. What the ancestor probably meant is the amount of reserves in accounts at the Fed, but this is actually a liability of the Fed (using the term liability in the accounting sense, not in the natural language sense), because that money belongs to member banks (and perhaps some other member institutions).

[Prefect]

Yeah, not sure what you want to happen here. Force all companies in the US to hire X number of new people? Companies aren't trying to be evil and stick it to all the poor honest folks without jobs; they're hiring who they want for the price they're willing to pay for their services because they think it will be most profitable to their business. If you hire someone who is already employed, then that other company is going to have to hire someone else to fill that position they just lost, yes?

I think you're complaining just for the sake of complaining, which is really lame.

I think you're not listening. If companies want to hire only people who are employed or have been unemployed for less than 3 months, then obviously they can do so. But for anyone to say that the current laws are stunting job growth and there's no one qualified for the jobs posted is obviously nonsense. To say that a person who was fired must not be a good employee is silly given we just went through the biggest recession in US history and companies are not hiring. At this point, it's not policy or the debt that's stunting job growth, it's the companies themselves.

I don't really think so. If the companies really needed more workers to satisfy the demand that they're seeing, then clearly they would lower their standards and start hiring unemployed workers - otherwise, they would lose market share. Since this is not happening, the most likely explanation is that companies simply aren't seeing enough demand to justify hiring a lot of new people. This is essentially the same general glut situation that was observed in the Great Depression, and it can only be resolved by somebody spending more money. So if you are seriously interested in resolving the situation, you need to think about who or what institution could start spending significantly more money in the current situation.

[Alpha_ProgDes]

Well I won't pretend to be an economics expert (and I'm sure someone will use that fact for a cop-out rebuttal). But what sort of spending and where? The gov't already did the spending thing and that hasn't spurred wild job growth.

Again, I'm not worried about whether companies do or do not hire people. My concern is that these arbitrary filters/requirements for hiring just seem more like a convenient excuse than a real reason.

[kryat]

Consider the opposite: Would you rather work for an established company that is profitable, has a good org structure, and give its employees decent benefits. Or new start-up whose CEO, who just so happens to also be their CTO and CFO, and has piloted his last four start-up companies into the ground and owes a couple million dollars in back wages, has sketchy benefit package. They are both jobs, and they both want to hire you, but which one would you RATHER work for?Its the same thing, just from the other side of the fence.

[Alpha_ProgDes]

Consider the opposite: Would you rather work for an established company that is profitable, has a good org structure, and give its employees decent benefits. Or new start-up whose CEO, who just so happens to also be their CTO and CFO, and has piloted his last four start-up companies into the ground and owes a couple million dollars in back wages, has sketchy benefit package. They are both jobs, and they both want to hire you, but which one would you RATHER work for?Its the same thing, just from the other side of the fence.

That's a terrible analogy. First, half, if not more, of the people who are unemployed are unemployed because of the recession. Not because they suck at their job. Also, in your example, I have a choice. And just as important, they have a choice. My choice does not affect the economy on the same scale as the situation the country is currently facing. Also, using your example, I am not saying that I can't accept either job because of the tax burden that's been placed upon me.

No one in this economy is going to be job-hopping. The risk is too great. So there's going to be little movement in that area, which makes the whole "won't hire unless already employed" silly as it is. So the companies have a few job openings and there's a large talent pool. It's hard to believe that a company can't get a qualified individual from that talent pool. And at a low rate as well. There are HR departments for a reason. Read the resume, do a background check, and then decided if the person is worth the interview. If they're not going to do that, then why are they getting paid in the first place?

[Prefect]

Well I won't pretend to be an economics expert (and I'm sure someone will use that fact for a cop-out rebuttal). But what sort of spending and where? The gov't already did the spending thing and that hasn't spurred wild job growth.

It's true that there are some who say the stimulus didn't work, so why do it. On the other hand, if you look at what people who are actually doing econometrics are saying, then they seem to pretty much agree that the stimulus did work, it was just far too small (and they may have their differences in opinion on just how well it worked). There was an interesting story a while back about how the Obama administration basically ignored their main advisor tasked with coming up with stimulus plans. She had identified a roughly 2000 billion US$ output gap, per year, but the administration settled on what would eventually become this roughly 400 billion US$ per year stimulus, which is really tiny in comparison to the magnitude of the problem (and a lot of that is actually neither direct spending nor direct tax relief, so the actual stimulus is even smaller). Unfortunately I don't find the story any more right now and I'm too lazy to spend too much time searching (yes, I know, how convenient - I apologize).

Since hindsight is always 20/20, and we don't really have the benefit of hindsight yet, it might be interesting to take a lesson from Japan. In this context, I find interesting what Richard Koo is saying, If you have an hour to kill, you may want to listen to this talk of his and look at the accompanying slides. If there is even a small chance that the US situation is only slightly similar to Japan's, then you'll need massive increases in government spending if you want to have even the tiniest chance of getting unemployment down to acceptable levels.

As for your question of spending where, I don't think that question is actually too difficult. From what I'm reading, there are plenty of fields where the US could really need investment in infrastructure and education. Also, considering the sad state of many local and state governments, and the USian distaste for anything related to the federal government, it might be a good idea to consider a program where the federal government simply gives money to state and local governments for them to spend. To avoid a political mess, such programs should probably be on a strictly per-capita basis. State and local governments could then use that money to keep providing those services that they really should provide, and perhaps extend them. Finally, direct job creation is a very useful tool, i.e. a Job Guarantee type program (what jobs would that be? Again, that should probably best be left to local organizations in general)

Again, I'm not worried about whether companies do or do not hire people. My concern is that these arbitrary filters/requirements for hiring just seem more like a convenient excuse than a real reason.

There are two parts to that. On the one hand, you have to consider the perspective of the people making the hiring decisions. Their job is not exactly easy, and I can understand that they consider previous unemployment (especially for longer period) as a bad sign. On the other hand, this is not an excuse for not creating new jobs in the first place. As far as that second point is concerned, I agree: they should just step forward and make clear that they're not creating any jobs because they don't see enough demand for their products or services. The whole unemployed thing is just a convenient excuse. Of course, it's hard for managers to admit that business isn't going too well, so that may be a big impediment for getting the truth out ...