Wednesday, October 12, 2011

Industries Decreased Their Workforce Despite Growth In Demand

From supply and demand (in that order) blog, "Growing Businesses Cut Payrolls, Too" by Casey Mulligan:
In many industries, sharp employment cuts during the recession cannot be attributed to a lack of demand.
Since 2007, the number of mobile connections has increased almost 20 percent, to 303 million from 255 million. The Bureau of Economic Analysis estimates that consumer spending on mobile communications increased 15 percent (not inflation adjusted) over that time frame.

Despite continued demand growth, employers in the wireless telecommunications industry sharply cut employment, at an even greater rate than employers in other industries. After growing 6 percent from 2005 to 2007, the industry’s employment had fallen 14 percent by 2010.

There is no way to blame that sharp employment drop on “poor sales.”

This pattern is not limited to the cellphone industry. Other industries sharply cut back their employment even while their revenues were falling little, if at all; the employment loss from such industries numbers in the millions.
Read the complete post here.

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