Where Have All The Jobs Gone?

Business, China, Company Strategy, Europe

Greekyouthunemmployment

By John Richardson

POLITICIANS everywhere know that their chances of staying in office depend on how many jobs they can at the very least prevent from disappearing down the economic plughole.

Ideally, they also want to be able to lay credible claims that their “long term vision” has created lots of new employment across the socio-economic spectrum – i.e. from low-end manufacturing and service jobs all the way up to the software engineers at Google and Apple who are busy designing the next generation of automobiles.

Right now, though, the world is in panic mode. The reason is the the inevitable failure of central banks to print babies. For every high end job that is being created, working and middle class jobs are either disappearing down the proverbial economic plughole or are not being created at a fast-enough rate to satisfy demographic challenges. It is working class and middle class jobs that obviously matter the most because the world will never need that many software engineers or biochemists.

Nobody should be surprised, therefore, that with youth unemployment at more than 50% in Greece since January 2012, the political establishment has been kicked out. The only surprising thing is that it took so long. But, sadly, the Syriza election victory came as a big shock to the rest of the EU political establishment.

So what should chemicals companies do to avoid being similarly shocked by future economic upheavals of the type that is taking place in Greece today? By paying close attention to employment stress levels. By employment stress, this means measuring both current unemployment rates and the pressure on jobs in the future.

They then need to ask themselves these questions:

  • If employment stress has increased in any particular country or region, what does this mean for immediate policy direction? For example, what is the risk of more antidumping or other temporary import duties?
  • What are the longer term implications? A change of government? What would this mean for economic and so chemicals consumption growth?

Greece might seem, given the size of its economy, of little global consequence. But we know that there could be ripple effects with elections due in Portugal, Spain and the UK this year. And what might happen in the French presidential election in 2017? I will look at employment stresses in some of these countries in future blog posts and will think through the implications.

Then there is the developing world which is obviously led by China. Monday’s blog post will focus again on China, its elevated level of employment stress and what this means for the chemicals industry. There are few, if any, more important topics at the moment.

I will also take a tour through some of the rest of the developing and developed world over the next few weeks and months. This will,  of course, include the US where I remain unconvinced by the headline jobs-growth data.

This research might eventually result in a new tool: An “employment stress” index. If not, we certainly do need new tools, backed up by new thinking, if we are going to prosper in the New Normal.

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