President Obama’s efforts to reduce U.S. unemployment via export growth might not work as fast as he would like.
There’s a lot of slack in the U.S. economy and companies have learned how to trim their costs during the recent crisis. Many employees are running on less-than-full-time employment as well.
Thus many economists and business people believe that export-heavy companies will be able to meet substantial foreign demand growth with their current level of employees.
“We are going to be very careful about hiring,” said Jim Dugan, a spokesman for heavy-equipment maker Caterpillar. The company responded to a 37 per cent drop in sales last year by cutting 19,000 workers, reducing others’ workweeks to four days and idling facilities one week per month. The company is a successful exporter, with about a third of its U.S.-based production sold overseas.
“What we don’t want to do is bring someone back and then lay them off again,” Dugan said, adding that there are “ways to raise capacity without boosting head count.”
It’s not that export growth won’t lead to job growth, it’s that it could take a very long time for current U.S. export promotion efforts to bear fruit. In the world of politics, even two years would be too long for the current administration.
Yet from an business owner’s perspective, U.S. companies might be able to achieve substantial productivity gains off of their current employees. In the long-term this is great, but it could leave many Americans feeling disenfranchised in the near-term.