Why Are Companies Still Not Hiring?

The biggest hurdle, by far, to overcome this recessionary period of US economic history, is the fact that we still are facing a very hard job market. Companies are sitting on billions of dollars in cash, just hording it, because like the rest of us, they are uncertain about where the economy is going and if they are going to need those stockpiles of money for something, or to fall back on, in the near future when demand goes down again.

And that seems to be the common theme here in the US that is killing us on a robust economic recovery – NO ONE wants to spend their money. That includes us “civilians”. People are saving their money at record rates right now, and it doesn’t show any signs of slowing down.

It seems that everyone is hesitant these days to part with their cash, and they are more content and rest more easily when the money they do have is stashed somewhere safe that they can access it for a rainy day.

This has caused a two pronged continuance of the recession. First, companies aren’t hiring and instead are hording their cash, making for a horrid job market for us, and second, consumers aren’t spending as much, so they are creating less demand, and this is making the corporations that provide goods and services nervous.

It’s totally a self perpetuating problem, and that’s what the conundrum is. You can’t change everyone’s way of thinking and make them start spending money, so the government has been trying to pump money in to help it turn around. It’s not enough, we need a consumer and jobs led recovery.

The latest news on jobs is that more were cut this past quarter than were expected, but most of them were government jobs. Hello – government jobs! Couldn’t they find better ways to save money after the massive stimulus spending put them years in the hole!

Instead they choose to lay off people and put us in a further hole as far as jobs growth. More people are now out looking for jobs thanks to that decision, which just makes things worse.