Sunday, June 6, 2010

Find me a 2x 4

When I was young, very young, I worked each summer on a farm. It was a modern farm; with all the technology advances, diesel tractors, automated irrigation systems, and state-of-the art planting, cultivating and harvesting equipment.

And yet the owners still kept one old horse named Bill, used mostly for small plot plowing and narrow row cultivating. A farm hand, Myron, was responsible for this horse, the only person allowed to drive it for these operations.

I can recall watching Myron hitching Bill up for the days work, and being fascinated by the size and power of this animal. Myron would counter my wonder by stating that Bill was “not too bright”, needing a lot of encouragement to get going. He joked that every once in awhile he would “hit him upside the head with a 2 x 4 to get his attention.”

I don’t know why this stuck in my mind as I responded to a colleague’s concern about the latest U. S. employment numbers issued last Friday. We’ve had the same news each month for the past six months; good news from the marketplace and bad news from the employment scene.

A few months ago I, along with more learned observers, came to the conclusion that this was to be a “jobless recovery”. Since then I have been reiterating this opinion in print and verbally at several public forums. So many times that I am beginning to sound like a broken record on this subject; thus the 2 x 4 analogy. What does it take to get peoples attention?

Many companies are back to pre-recession production levels, and they are doing this with fewer employees than before the crash. When they leaned-down as the recession deepened they used every trick to keep their key people, on the premise that when things turned they wanted to be able to ramp up quickly. And this is just what happened, except they also found they could get back to normal with fewer people.

I don’t find this exemplary, but I recognize the wisdom of it, and I have sincere empathy with those affected by this change in employment practices, as this is a situation not of their making, and they are the unfortunate casualties.

Proof that this is working is given by the U.S. productivity numbers, up 2.1% for the last quarter, but up 6.1% over the past four quarters, the largest gain since 2002. So, doing more with less seems to be working. So back to the analogy, what will it take to get the publics attention, a whack with a board? Times have changed and we need to revise our thinking on the employment numbers. Experts think these will shift down over time as the unemployed find other work and their numbers gradually decline. The time period for this is said to be lengthy and that is not a relief for those affected.
Out of this may come a sleek, streamlined, superefficient U.S. manufacturing industry - buffed-up by automated processing systems, among these highly efficient

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