Monday, September 7, 2009

Will Joblessness Stifle Global Economic Recovery?

With the unemployment rates of the under 25s steadily on the up-rise, will the “green shoots” of global economic recovery going to just wither and die?

By: Ringo Bones

When the term “green shoots” became a buzzword in the American economic community back in April 2009, everybody and their dog thought that the much-anticipated global economic recovery is just around the corner. Even though whether or not the data of the economic fundamentals indicate the supposed glimmers of an economic spring is an another thing entirely. But after a series of quantitative easing and bank stress tests, why is it that the endemic problem that points to the fact that the global economy is still not well and good – namely unemployment – still remains unsolved?

Many tenured economic analysts point out that unemployment rate reports – more often than not – tend to lag behind the economic data that indicates the soundness of the fundamentals that point to economic recovery. Though this explanation is quite encouraging, it still not restored investor confidence to pre-subprime mortgage crisis levels. Add to that it seldom – if ever – addresses the on-going problem of rising unemployment and laid-off workers.

Economist held in retainer by big corporations should start to realize that a well-paid workforce is a valuable asset – rather than a liability – when it comes to keeping the wheels of the economic system rolling. I mean to whom does the production sector sell their products? - Certainly not to a vacuum. Governments around the world should start bailing out their workforces, as opposed to just the major banks and other big financial institutions because without a well-paid workforce, a country’s economic system could easily grind to a halt. Destroying any chance for a global economic recovery.

No comments: