Pink Slip Nation

The American economy shows no signs of reversing its relentless increase in the rate of unemployment. Jobs are disappearing at a rate not seen since the 1981–82 recession.

Companies continue to cut costs by laying off workers. This is the main source of the increase in corporate earnings – not increased output, but decreased output. How is this profitable? Because of increased output per surviving worker. In the midst of recession, businesses are learning how to cut costs. Labor in most businesses is the #1 cost. Cut labor, and you cut costs faster than by cutting anything else.

Workers see what is happening. They are working harder because they are facing pink slips.

We cannot spend our way out of this depression. We could work our way towards prosperity but Cap and Trade legislation is looming, threatening a manufacturing resurgence. Businesses are avoiding taxes and regulations by relocating abroad.