If the economy can grow with a small workforce, why hire more people?

[amdhunter]

I was over at Huffington and noticed the headline:

ECONOMY GREW 5.7% IN FOURTH QUARTER
Fastest Pace In 6 Years... But When Will Job Growth Begin?​

After seeing that, I thought to myself -- as a business owner, what would be the point of hiring more people, if I can sustain, or surpass my expectations/profits with the small workforce that I have now? It seems reckless to hire more people [more full-time salaries] and pay more insurance than to keep a smaller group happy with modest raises from time to time.

Or am I just missing something? Clearly the economy is able to sustain itself as it is right now, even with unemployment at it's current levels.

I guess my question is, if I can make profit with a small group of people, what would be the incentive of hiring more and losing profit?

 

[Genx87]

Most of that was govt spending. I think the real sustainable growth was 2.2%.

 

[nonameo]

As the workforce tends towards higher efficiency, the need for labor goes down.

 

[Carmen813]

Eventually you will need more people to expand your business, even if they operate at a high level of efficiency.

That is until robots replace all of us.

 

[GoPackGo]

The corporate motto is now "More with Less" and due to how hard working American's are they are getting it.

 

[amdhunter]

The corporate motto is now "More with Less" and due to how hard working American's are they are getting it.

Are you implying that people are lazy? A few more months of being unemployed should cure that up.

 

[Slew Foot]

Hunger is the best cure for unemployment

 

[QuantumPion]

The corporate motto is now "More with Less" and due to how hard working American's are they are getting it.

Well, its better than the Union motto anyways: "hey slow down over there, you're making the rest of us look bad."

 

[DanDaManJC]

Are you implying that people are lazy? A few more months of being unemployed should cure that up.

I'd guess to the contrary. Most professionals i know regularly work 50-60+ hour weeks all the time.

 

[zephyrprime]

The question is a wrongly thought out. Of course, there is no incentive. The real question is, "what's wrong with the economy because a natural economic incentive should exist". Let me point out that perpetually poor countries like Mexico and Saudi Arabia are also able to grow slowly on average with their huge level of unemployment. High unemployment is not directly linked with growth or the lack thereof. However, high unemployment is and indicator that there is something wrong with the economy.

 

[RyanPaulShaffer]

Because we need more productive people in society who pay taxes? I'm not an economist, but this seems fairly obvious to me. The most destitute countries in the world are almost always those with high levels of the population being unemployed.

 

[spidey07]

Productivity is high and staff is still low. Most businesses are about as lean as they can get and in many instances too lean and quality/service is starting to suffer.

Businesses have cut so much costs that they can't really cut much more without harming their ability to react to opportunities or sales growth. The smart ones can manage, the dumb ones will get hurt. This is where the wisdom and experience of those evil CEOs comes into play.

 

[Jhhnn]

Productivity is high and staff is still low. Most businesses are about as lean as they can get and in many instances too lean and quality/service is starting to suffer.

Businesses have cut so much costs that they can't really cut much more without harming their ability to react to opportunities or sales growth. The smart ones can manage, the dumb ones will get hurt. This is where the wisdom and experience of those evil CEOs comes into play.

Yeh- that's why we had to bail out the banks, the automakers, and AIG, right?

Savvy CEO's are only savvy to the point of enriching themselves...

Oh, yeh, add Simmons mattress to the list of "success stories"-

http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=2&pagewanted=4&th&emc=th

Damn, I love the smell of a looting spree in the morning...

 

[Jeffg010]

Productivity is high and staff is still low. Most businesses are about as lean as they can get and in many instances too lean and quality/service is starting to suffer.

Businesses have cut so much costs that they can't really cut much more without harming their ability to react to opportunities or sales growth. The smart ones can manage, the dumb ones will get hurt. This is where the wisdom and experience of those evil CEOs comes into play.

This is so true. I work for a very large bank and last year we became the 5th largest bank when we bought out anther large bank. My department is the tech support for all of the Pittsburgh area for software/hardware. Last week we had a mandatory meeting and found out we had more cuts. This was a good excuse claiming with the merger of the 2 banks cuts were needed. About year ago we lost some FTEs in our group when they moved part of the group up to 3rd level support that creates the installs for the software and OS install. We were real fucking lean and with the cuts we had last week, we are going to be really suffering. These people who got cut have 60 days until they are gone.

 

[Jeffg010]

Yeh- that's why we had to bail out the banks, the automakers, and AIG, right?

Savvy CEO's are only savvy to the point of enriching themselves...

Oh, yeh, add Simmons mattress to the list of "success stories"-

http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=2&pagewanted=4&th&emc=th

Damn, I love the smell of a looting spree in the morning...

Not all banks are as bad as them seem. My bank IMO is going to come out of this as the top bank when all is said and done. When we bought this other bank we took on a huge amount of debt and the stock dropped like a rock since then we climbed back up and are viewed as a strong bank. We are the big fish in the sea and we are going to eat banks for lunch.

 

[WhipperSnapper]

The economy may be "growing" in terms of corporations growing--growing their businesses in India and China.