Corporate profits are up. Stock prices are up. So why isn't anyone hiring?
Actually, many American companies are – just maybe not in your town. They're hiring overseas, where sales are surging and the pipeline of orders is fat.
More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.
The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well: All but 4 percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.
But the jobs are going elsewhere...
There is NOTHING that politics can do to stop this trend. As long as energy costs are cheap, globalization will continue and Americans will just have to bend-over and take it. A great equalization of global living standards is well-underway. The American Middle-Class can only lose that fight.
However, maybe Jeff Rubin has got it correct:
Economist Jeff Rubin Talks $225 Oil by 2012 and the End of the Global Economy (Feb 2010)
Jeff Rubin is not an oil alarmist—he doesn’t think that the world’s supply of crude will run out and cause resource wars and food shortages of apocalyptic proportions. In fact, he doesn’t even think the world’s supply of crude is running out at all.
... “The world’s not running out of oil.” However, after milking the pause for a second or two, Rubin went on: “But it has already run out of oil it can afford to burn.”
Instead of calling for government action to avert the crisis-causing apex of these two trends, Rubin thinks the crisis will be addressed by local and individual action driven by market forces. “The prices needed to get unconventional oil out of the ground are the same prices that will get you off the road,” he explained. He elaborated by predicting that stratospheric oil prices would force consumers and producers alike to change behaviors that would eventually lead to a breakdown of the global economy and a return to local economies.
A recent update:
Oil to revisit triple-digit prices next year: Rubin (Dec 2010)
The Star: What, in your view, does that mean for oil prices in the short term?
Rubin: The reality of this for prices is that we’re going to be at triple-digit oil prices within the first quarter of 2011. We may even be taking a run at the $147-high watermark (per barrel) before 2011 is over. The question is whether the world economy is any better prepared to operate at that level of fuel cost than it was in 2008. If it isn’t, we’re going right back into a recession, which is really the point of my book. It’s about how do we grow with triple-digit oil prices. That requires going from a global economy to a much more local economy. That hasn’t happened yet. It will happen. Certainly, that will happen if we have another oil-induced recession.
So, if Rubin is correct, we should see the peak in overseas hiring by American companies in 2011 - very, very soon.
Sure doesn't look like it, though. Somehow my intuition tells me that oil will not break very far into triple-digit prices this year and the trend of globalization will continue for longer than Rubin thinks.
I think we are probably NEVER going to have structural unemployment much less than 9% ever again - because so much can be automated and the supply of cheap labor is endless.
