As I was walking in from the parking lot this week after giving blood, the driver of the bus that is used as a mobile blood collection center asked if he could walk in with me so he could use the restroom. He knew he needed someone to buzz him into the building, and I did just that.
As I showed him where the facilities were, he turned and asked what happened to the receptionist who used to sit at the front desk. I told him that our organization downsized a bit after the start of the Great Recession, and we learned that we could do more with less. He nodded his head and responded, "I think a lot of companies learned that, and that's what's keeping companies from hiring more people."
That bus driver didn't have an economics degree, but his observation is absolutely correct. Businesses don't want to hire any full-time employees unless they absolutely have to. It keeps them lean and helps them to be more flexible in the face of the next economic downturn.
That's why you see much more of a reliance on temporary employees. They can be trimmed much more easily from a workforce, and they don't carry the same health care costs as a full-time hire would. It's the nature of the work world today.
Not only are manufacturing companies not hiring at the level they once did, but they also are paying employees less than they did before the downturn. In fact, raises aren't keeping up with inflation.
If people aren't earning more money, they aren't buying as much. If they aren't purchasing as much, the U.S. economy—which is heavily dependent on consumer spending—drags. When the economy is slow, companies don't expand. Do you see the circle of stagnation developing?
Of course, the housing industry is rebounding, but it faces its own growth issues. Also, it's highly unlikely people will be able to leverage their homes like they did in the past to finance luxury purchases. There is hope in housing, but it won't be a lightning fix for the lack of job growth.
That leaves the U.S. on a treadmill, not a path, to prosperity. The scenery isn't going to change that much in the foreseeable future.