Faking the Hand-off

One more article in the popular press proposes that the economy is waiting for consumers or employers to blink...this one suggests that employers will blink first.

Employer-consumer standoff is key to economy - Stocks & economy- msnbc.com: "Therein lies the standoff that helps explain the weakness of the recovery and the depth of the jobs crisis. Each side — employers on one, consumers on the other — is waiting for the other to spend more. Until then, the recovery will likely feel shaky. And job openings will be few."

***

Will the employers blink or wink? Certain sectors like restaurants are likely to increase hiring when there are more consumers. However, quite a few of the firms who create high-paying jobs are not waiting for demand to come back. Demand has come back, especially in other countries. When consumers are shifting their purchases, on the margin, from physical stores to Amazon, it does not create as many jobs at Amazon when compared to the impact on the physical stores. Firms like GE, Yahoo, IBM and others are hiring in huge numbers in India- the intellectual work can be done anywhere.

It is time that the politicians and media start reporting the hard truth- either we work and pray for another "Internet-like phenomenon"that will drive explosive job growth, or work on continuous improvement and accept the realism of higher unemployment and lower pay without a dramatic lowering of affordability and life style.