“Why Aren’t Companies Hiring?” Part I

“As unemployment approaches 10%, what is less well publicized is that the number of “underutilized” workers in the U.S. has increased dramatically from 15 to 30 million. Those without jobs, as well as those individuals who only work part-time and have become discouraged and stopped looking, total 30 MILLION people. The number is staggering.”

-Bill Gross, from the July 2009 Pimco Investment Outlook


The unemployment issue currently facing the country is severe and complex.  Although this unemployment problem is to various extents recognized, there seems to be little discussion around the question “Why aren’t companies hiring?”  The  simple, and perhaps indirect answer, is “because the economy is bad.”

The next few posts will explore this question “Why aren’t companies hiring?”

A few disclaimers with regard to this series of posts:

First, this unemployment/hiring aspect of our current economic situation is very complex.  This series of posts will present a simplified approach to the question, as to avoid excessive complexity and length.

Second, as with any discussion of our current economic situation, it is of course impossible, and unwise, to characterize all businesses as if they currently are in the same situation.  Obviously, they are all unique; however, there is enough commonality as to be able to generalize to some extent, especially among those businesses that suffer when the economy is weak.

Third, I have many theories as to why companies aren’t hiring; this series of posts will explain some of them.  The remainder will go undiscussed, at least for now, due to a variety of reasons.

Part II to follow…


SPX at 976.29 as this post is written

Copyright 2009 by Ted Kavadas