Has labor market reached tipping point?
TEXT OF STORY
Kai Ryssdal: Once we get past the craziness that was the stock market today, we would do well to look at an actual economic indicator that came out this morning. The Bureau of Labor Statistics says we are working hard, America. Productivity was up more than 3 percent in the first quarter. The same number of workers cranking out more widgets is a pretty simple way to think about that. In theory that could mean some green shoots in the labor market as employers try to keep up that level of production. But those shoots are going to grow pretty slowly.
Marketplace’s Eve Troeh reports.
EVE TROEH: When the economy sheds jobs, those left at work have to pick up the slack. That’s tough on employers, too.
Michael Denny owns American Wine Distributors in San Francisco. He’s still reeling from the end of 2008, when he let go five of his 22 workers. He hears things are picking up, but he’s cautious. He doesn’t want to hire and fire again.
MICHAEL DENNY: We still have a world of economic troubles out there, and I don’t think the stimulus is really doing anything for the average joe.
Yet Denny admits things are looking a little better. He’s booked a few orders, and he’s considering one new hire.
DENNY: We’re putting together a job description and if the deals that look like they’re supposed to come through do in fact come through, we’re thinking about hiring somebody by the end of the summer.
The workers he has now are pretty stretched. Denny says last year was a “no vacation” year.
Julia Coronado is an economist at the global bank BNP Paribas. She says employers can’t push their staff endlessly.
JULIA CORONADO: They reach a limit as to how much they can get out of their existing workforce, and they actually need to start hiring.
Coronado thinks we’re at that tipping point. Employers are testing the waters with temporary workers to meet any rise in demand.
CORONADO: And then they convert them into permanent workers as the recovery looks more and more sustainable.
She says it’ll be several more months before those jobs are posted. We need a longer period of steady economic growth to soothe employers’ frazzled nerves.
I’m Eve Troeh for Marketplace.
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