Deepening the Downturn

Updating our post from yesterday is an article from the New York Times which says that workers are getting fewer hours, deepening the downturn: click here

This is a huge problem as not only are workers being laid off, but the ones who are still employed are getting less overtime and taking in smaller paychecks--which the Times cites as a worse problem than the layoffs....

And those layoffs continue, especially in the financial sector. After Merrill Lynch announced 4000 layoffs yesterday, Citigroup went more than double that with a planned 9000 layoffs: click here

This is going to create a big problem for the United States economy. With a weakening dollar, low interest rates and rising inflation, smaller salaried and laid off workers are going to be spending less. Less consumer spending will lead to less money going to companies. And companies taking on losses will be more likely to layoff more workers. Something needs to happen to stop this cycle from worsening soon or there will be quite a situation on our hands.

If you happen to be at a company that is currently trying to grow and expand, you've hit the jackpot. There are a lot of skilled workers increasingly having their wages cut or being laid off and these people will be more than willing to line up to be hired. Not only will this allow you to get the best workers, but probably pay a lot less in the process.

If you look at the graphs to the right, you can see how this has been playing out in the United States and get some idea of where we are going in the future if this continues.

Stay tuned to see how this situation continues to develop...

UPDATE: A really good point from a fellow blogger: click here