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Companies Not Hiring

If real estate investors are counting on a private sector revival to stoke demand for space and bail them out of cash flow shortfalls they better think again. After a government stimulus prompted spurt, U.S. economic growth is now expected to ebb. The stock market is slumping again and European governments are going into austerity mode, and Congress resists further pump priming.

By Jonathan D. Miller | Updated on July 01, 2010

If real estate investors are counting on a private sector revival to stoke demand for space and bail them out of cash flow shortfalls they better think again. After a government stimulus prompted spurt, U.S. economic growth is now expected to ebb. The stock market is slumping again and European governments are going into austerity mode, and Congress resists further pump priming.

Companies realize the obvious– this is no time to rev up hiring engines and institutionalize various strategies to buffer bottom lines using fewer high cost U.S employees—stepping up offshoring, outsourcing to more freelancers (who don’t get paid benefits or take up office space), and relying more on technological efficiencies than manpower. That’s why private hiring looks so anemic. As the government pulls back its stimulus and state governments retrench, the unemployment rate will stay high, consumer confidence will remain low, and business profits will continue to depend on productivity advances not sales gains. It looks like a vicious cycle, tamping down employment growth which the economy desperately needs. 

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