Earlier reports may have suggested that the job market was steadily picking up right along with the economy, but recent reports show that that’s not quite the case. Fox News investigated the topic and confirmed that, while the economy may be boosting to better levels, the job market looks to remain stagnant.
According to Mark Vitner, a senior economist at Wells Fargo, the majority of the economy’s growth is coming from very “capital intensive parts of the economy.” While the economy may be picking up, the businesses contributing to the growth are using more and more technology rather than actual human labor to increase their productivity, resulting in a growing economy and a stagnant job market. Furthermore, even though the market and large companies aren’t exactly back to where they were before the recession, they no longer need the same amount of manpower as they did before due to technological advancements.
Vitner states that, “It’s not just new businesses. When a retail chain opens a store today they have so much new technology that they’re putting in place there that they don’t have to hire as many associates as they did in the past. On top of that, in businesses where you hire lots of part-time workers there is an incentive to hire fewer of them and require that they work longer hours so you don’t have to pay as much in fines or health care coverage.” With that, many argue that the new healthcare law awaiting a Supreme Court decision is going to greatly prevent businesses from hiring as many workers as they may have before. Furthermore, businesses are likely to wait for things to get better rather than take initiative and hire workers simply on a hope that things will get better. No company is hiring ahead of demand and likely won’t anytime soon. This obviously harms the job market and the unemployment rate in our country.
Take a look at the video and see what Mark Vitner has to say on the job market of 2012.
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