| HeraldNet - Snohomish County's online news source |
 WEDNESDAY, FEBRUARY 10, 2010 5:46 am |
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Employers squeeze more productivity out of fewer workers WASHINGTON — Companies across the economy are finding ways to do more with fewer workers, dimming hopes that hiring will take off anytime soon.Employers became leaner and more efficient in the third quarter. Wages, meantime, remain flat or falling. The result is that productivity — output per hour of work — jumped at the fastest pace in six years. The good news for companies, though, may be bad news for the jobless. As long as companies can get their workers to produce more, they have little reason to hire — at least until consumer spending picks up. And the squeeze on incomes could depress consumer spending, putting the economic recovery at risk. Still, some economists were encouraged by the productivity report. They say that eventually, employers won’t be able to squeeze more from their staffs. They will then have to ramp up hiring — something that could happen next year, even though the jobless rate is expected to hit double digits. Productivity rose at an annual rate of 9.5 percent in the July- September quarter, the Labor Department said Thursday. That was much better than the 6.4 percent gain economists had expected. Unit labor costs fell at a 5.2 percent rate. While companies aren’t doing much hiring, they’re not cutting as many workers, either. The number of newly laid-off workers filing claims for unemployment benefits last week fell to the lowest level in 10 months. On Wall Street, the better-than-expected jobless claims report and an upbeat forecast from Cisco Systems Inc. buoyed investors. The Dow Jones industrial average added nearly 204 points to 10,005.96, and broader indexes also gained. The 9.5 percent productivity rise followed a 6.9 percent surge in the second quarter and was the fastest since a 9.7 percent increase in the third quarter of 2003. The gain reflected that the overall economy, as measured by the gross domestic product, grew for the first time in a year — at an annual rate of 3.5 percent. The higher output came as companies continued to lay off workers. That meant employers produced more with fewer workers. The 5.2 percent drop in unit labor costs marked the third straight decline and was larger than the 4 percent decrease economists were expecting. Productivity is the key ingredient to rising living standards. It lets companies pay their workers higher wages. Those increases tend to be financed by increased output, rather than higher costs for products. But as they struggled with the recession, companies boosted productivity while continuing to lay off workers. Many produced more goods; others kept their output down but slashed costs. Companies kept wages down by freezing pay or imposing unpaid furloughs. “Survival meant cutting costs as rapidly as possible and fulfilling orders with the fewest number of workers,” said Joel Naroff, chief economist at Naroff Economic Advisors. Some companies in hard-hit sectors have managed to boost productivity despite job cuts. They’ve had to find ways to stretch their remaining workers to keep up with demand. Fein Tool North America, a Cincinnati company that supplies auto parts manufacturers, has cut about 100 workers, or 33 percent of its staff. But Fein president Ralph Hardt said the company can still fill its orders by using more overtime shifts and temporary workers. |
- Sorry, Hawkeye; M*A*S*H gets bowled over
- Former Whidbey student shot
- County archive software paid for but waiting for set-up
- Ruling expected on Sultan beating statement
- ‘Roadkill’ caucus seeks a voice for centrist Democrats
- Police seek witnesses in two accidents
- PAWS calls out for critter care-givers
- Boeing has a busy test schedule
- Ex-Boeing engineer jailed for espionage
- Morning mystery: What happened to House Bill 3181?
- Lynnwood sets height limit on grass: 8 inches
(10) - State Senate votes to toss I-960's tax-raising hurdle (9)
- School levies in Snohomish County all passing, Marysville bond failing (6)
- A tidy lawn could be law in Lynnwood (4)
- County archive software paid for but waiting for set-up (3)
- Vote on school levies by Tuesday (3)
- Two suspects sought in Everett shooting that injured two (3)
- Schools do well in levy elections (3)
- Lynnwood makes law against too tall lawns (3)
- North Sound Christian girls winning with just six players (2)
- Jackson girls outlast Meadowdale owdale
- OBT raises barre in children’s program
- Junior firefighters
- School levies passing
- Mavericks topple Wolfpack
- Get a second look at Second City Feb. 13
- Sports Briefs
- Warriors advance 11 to regional meet
- Arlington's Cascade Valley Hospital celebrates expansion, national award and 100 years of service
- Business Licences Feb. 2010
- Technology tips for launching your own business
- Business Events Feb. 2010
- Tech Talk: No excuse today for going without a Web site
- State already raising fees and rates that restrict business growth
- Some legislators again targeting people’s initiative petition rights
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