Last week’s news from Pepsi-Cola CEO Indra Nooyi that the company was planning to cut (for a change they did not use the word ‘layoff’ so these folks are not coming back) 8,700 workers http://www.investorplace.com/2012/02/pepsico-to-cut-8700-workers/ was greeted with little surprise. The total number will be achieved over several years and represents roughly 3% of Pepsi’s global workforce.
Companies reducing their workforces are in no short supply since the ‘Great Recession’ began in 2008. For the people that manage to hang onto their jobs, the constant cutbacks only mean they will continue to be required to do more with less – people that is. Longer hours, more responsibility await for those that remain.
Worker productivity as a result of technology (starting with computers) here in the United States as well as around the globe has enabled the jobs of many to be inherited by the fewer. This too should not be met with much surprise but for whatever reasons befuddle both economists and politicians.
Why would a company want to grow from a total employee standpoint? Everyone who’s anyone in business knows that employees are expensive. The industrial revolution was the beginning of less relevance for employees.
Think about accounting and bookkeeping today versus forty years ago? Bookkeeping was a laborious process of physically entering data into a ledger with a good old-fashioned writing utensil like a pen or pencil which today has been replaced by electronic spreadsheets and computer applications. How much faster and more accurate (well, not always more accurate) is today’s bookkeeper versus one from 1972? Three times faster? Four or five times faster? Do you need more or fewer employees to perform the tasks? The ability to use fewer people to do the same or more work goes straight to the company bottom line.
Why hasn’t the explosion in productivity resulted in the creation of more new ‘new’ jobs? After all eight years ago who would have thought there would be a job such as social media community managers? And that the need for them would become so important? The problem is that the rate of old ‘old’ job loss is far greater than the creation of new ‘new’ jobs. Entrepreneurs like Mark Zuckerberg and even Groupon’s CEO Andrew Mason have helped create thousands of new ‘new’ jobs.
Groupon in fact is a very labor intensive business at present with salespeople all over the U.S. as well as other countries. You can bet the folks at Groupon are desperately looking for ways to automate the sales process so that they can dispense with the sales employees who are really nothing more than a necessary evil.
The government can do things to help create jobs like the ones that would be part of repairing the nation’s infrastructure. Most of those would be new old jobs and many of those jobs would not necessarily be long-term sustainable. The government (it has been said), can also help create favorable conditions to attract entrepreneurial people who then would be inclined take a chance in starting a company with what could be a next great idea. However that is much easier said than done.
It’s also easy (and obvious) to say that education, training, and re-training are essential to preparing people to operate in the new economy with the new ‘new’ jobs. The old ‘old’ jobs are not coming back. Steve Jobs even said so.
Who out there these days is working fewer hours and is making more money at the same time?