Oswald Letter

Where’s the Jobs?

Remember, the “Where’s the beef?” commercials Wendy’s restaurants began running in 1984? The advertising slogan soon became a catch phrase anytime someone wanted to question the substance of an idea or product.

It seems to me, with apologies to my middle school English teacher, “Where’s the jobs?” is an appropriate slogan for the current, so-called economic recovery. Economists have been telling us for months that the economy is growing again, albeit at a relatively slow pace. We’ve seen some modest improvements in the number of new jobless claims — that is, until recent weeks. It seems that the new jobless claims rose to 496,000 last week and that the unemployment rate is once again creeping into double-digit territory.

I don’t understand how we can have any type of sustainable recovery without new jobs being created. If people can’t collect a paycheck, they don’t have anything to spend. If consumers don’t have anything to spend, then companies that provide the goods and services don’t have anyone to sell to. And if they can’t sell their products, they need to slow production and cut jobs to reduce expenses. It’s a vicious cycle.

Even those who do have jobs are now saving for a rainy day. Americans, famous for our spending, have suddenly begun to squirrel away some money just in case they’re the next one to get a pink slip. So those employed Americans aren’t really helping spur on the economy because they’re fearful they might not have a job for long. Not a pretty picture is it?

So the guy sitting in the corner office, what is he thinking? My guess is that it goes something like this.

I’ve suffered through the toughest economic times of my career. I think the worst is behind me, but I don’t see it getting significantly better anytime soon. The glimmer of hope we’ve seen in recent months has helped me pare down some of my inventory so I’m actually ready to begin production again at very modest levels. I’ve made some difficult decisions, including letting some great employees go. I’m going to be extremely cautious about rehiring because I don’t want to go through that again. Plus, the only way I can produce any profit is by continually cutting expenses. Revenue certainly isn’t growing. I sure hope that things get better.

That’s the collective mood of business owners and executives across this country. Everyone is afraid to move — and for good reason. So I ask again, “Where’s the jobs?”

With our elected officials in Washington running up the deficit, spending like drunken sailors, businesspeople are afraid. They realize that sooner or later someone is going to have to pay the tab and that usually means higher taxes. And whether businesses or individuals are paying taxes, it means less spending.  Companies will have less to spend on capital investment, and consumers will have less to spend on, well, consumption. Unless Congress gets the spending under control, I’m guessing I need to hold on to some of my money for the tax increase that is bound to come. I better take a wait-and-see approach.

The health care reform debate rages on. Who knows where we’ll end up, but until there is some resolution it’s hard to move forward. Will companies with quality plans end up paying a tax on those benefits? Will there be any type of tort reform to curb malpractice insurance costs? Will the plan that gets passed actually help cut health care costs? Will any plan get passed? A lot of questions without answers, better to sit tight until I can evaluate the situation. Once I know the outcome, I can determine the best course of action.

Bottom line is that business executives are taught to evaluate a situation, assess the risks and opportunities, and then proceed accordingly. Only right now, they can’t get any answers. It has become impossible for them to evaluate the situation because there are no resolutions to some very large issues that could have a huge impact on the economic fortunes of most companies. The people who run these businesses have adopted a wait-and-see approach to the problem. Until Congress and the White House act, businesses aren’t going to take on any risk. It’d be foolish.

Business executives, and consumers for that matter, need a clearer view of what the future is going to hold before they’re willing to move forward. That means Washington needs to get its act together, make some decisions, and provide a clear vision of where we’re headed as a country. Until they do, we’re stuck with a weak economy and double-digit unemployment. “Where’s the jobs?” They’re waiting for some leadership from the nation’s capital.