A Million Jobs Here, A Million Jobs There, but Unemployment Remains High
It was just before New Year’s when Associated Press reporter Pallavi Gogoi broke the news that many U.S. companies are hiring…..overseas.
The Economic Policy Institute a think tank in Washington, D.C. estimates American companies created 1.4 million jobs overseas in 2010, compared with fewer than 1 million domestic jobs.
Now Ed Stoddard at Reuters is reporting that during the last two years as unemployment hovered at or near double digits, over 1 million immigrants found work. Many were here illegally.
The common denominator in both these stories is one of cost savings for employers.
Tags: Associated Press, Economic Policy Institute, hiring, immigration, job creation, outsourcing, Reuters
Update: Gallup Chief Economist Dennis Jacobe on Job Creation
We asked Dennis Jacobe, the chief economist at Gallup why he thought big business was adding jobs while entrepreneurial companies were shedding them.
He said, “I think the current job situation reflects the lingering effects of the financial crisis and efforts to deal with it. Historically low interest rates and the associated efforts to pump money into the economy, are now producing uneven global growth. Larger companies have access to the credit markets; are building strong cash reserves; and are experiencing strong global demand for commodities and capital goods. Smaller entrepreneurial companies have not recovered full access to credit, nor have the benefited significantly as a group from the global commodities boom. At the same time, the federal government’s ability to run deficits has allowed it to expand spending while the remainder of the government sector had had to pull back.
While it appears large company and federal government hiring is sufficient right now to produce minimal new job creation, the economic challenge today is to find a way to get America’s entrepreneurs and small businesses once again creating jobs. This is a major challenge given the blunt nature of fiscal and monetary policy, but the only way we are going to see sufficient job creation is to get the employment rate back down to acceptable levels in a reasonable amount of time.”
How did Gallup know to compare job creation in large organizations and small businesses? Said, Mr. Jacobe “We have several jobs measures including the Job Creation Index, Underemployment, and our Small Business survey. We asked this additional factor to the survey to see if it would help us reconcile the jobs data we are getting from different sources.”
Looking for Jobs in the Wrong Place?
For those who have been applying to small businesses, the traditional engines of job creation, a new finding from Gallup may have them reorganizing their job search.
Gallup found that for the second week in November larger companies are hiring more workers while the smallest businesses are shedding jobs. Over 40% of companies that have at least 1,000 employees said their company was hiring, while 22% reported layoffs.
At the other side of the workplace spectrum, nearly 10% of workers said their employer was ramping up and 16% said their employer was letting people go.
This was the first time that Gallup asked about company size and I’ve asked Gallup if their chief economist, Dennis Jacobe can explain why and what job seekers can expect heading into the New Year. As soon as I hear back from him, I’ll add an update.
Separately, the study also found that the federal government was hiring while state and local governments were letting employees go, the legacy of budget cutting in the aftermath of the recession.
Tags: hiring, job creation
