Economy

Employers: New Economic Normal Means Little Hiring

Chicago workforce center

Pedestrians walk past a sign in Chicago instructing people how to file for unemployment insurance benefits online, August 2010. Kiichiro Sato/AP hide caption

itoggle caption Kiichiro Sato/AP

No one knows, of course, precisely how the U.S. economy will fare in the coming months and years.

But there's the very real possibility the economy will bump along for much longer than anyone, especially the unemployed, wants to envision.

The Washington Post has a new piece by Neil Irwin that attempts to explain why employers aren't hiring.

It comes down to companies lacking confidence in consumer spending. They see a future where such spending is tepid at best as consumers continue to repay debts or save.

And the story conveys the strong sense that employers don't believe the federal government can do much about that, even if Democrats could achieve more economic stimulus which they likely can't.

An excerpt:

Across the industrial parks and office towers of the Chicago region, in more than a dozen interviews, senior executives said they see Americans for years ahead paying down debts incurred during the now-ended credit boom and adjusting spending to match their often-reduced incomes.

"It's a different era," said Daryl Dulaney, chief executive of Siemens Industry, which has 30,000 U.S. employees who make lighting systems for buildings and a wide range of other products. "Our hiring and investment decisions have to be prudent and reflect that."

Another executive, David Speer, CEO of Illinois Tool Works, reinforced that view to the WaPo:

"It took us a decade to get in the ditch we are in," Speer said. "There isn't going to be instant gratification to get us out of it. We're going to have to get used to a lower growth economy, and that is going to be a big adjustment for all of us."

Such sentiments run counter to Americans' normal can-do spirit. And it would be political poison for a politician, especially a president, to tell the American people that they might have to settle for a long period of markedly reduced lifestyles for themselves and perhaps their children.

But based on what these executives told the WaPo's Irwin, that may be where we're headed.

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