Let's get economic ball rolling in right direction
Clint Engel, Senior retail editor -- Furniture Today, March 2, 2003
A recent Reuters story ran with the headline, "Data paints a surprisingly poor picture." It was all about bad economic news — a slowdown in domestic manufacturing in February, a spike in first-time unemployment benefits and wholesale inflation, and Americans' ever-increasing appetite for foreign over domestic goods.
But the only thing I find surprising about all of this is that anyone finds this at all surprising.
The stock market is in a deep hole, as is consumer confidence. The threat of war is scaring the pants off many people (and they keep their wallets in those pants). But the biggest threat of all, the threat that few seem to weigh fully, is the threat of joblessness.
Barely a week goes by when someone doesn't announce a headcount cut. Last week, we reported Ethan Allen would close three plants that employed nearly 600 people. As I write, the Detroit Free Press reports Kmart will let go of 1,000 more people at its Troy, Mich., headquarters. That will leave about 1,900 people where once there were 5,000.
Unemployment has spread through much of the manufacturing sector. The tech sector has been hit especially hard, with an unemployment rate more than double the 5.7% national average in January. The New York Times says that in two years, the Big Apple has lost nearly 176,000 jobs.
No wonder it's called the city that never sleeps. Fear of unemployment makes for restless nights.
We all know someone who's lost his or her job in the past two years, and who's still looking for work. Yet for some strange reason, big business expects me, Joe Consumer, to act like Joe Millionaire — to make the next big move, to buy and spend our way out of this mess.
Well, I'm not buying. And neither are all those hundreds of thousands of people out of work. Until the word "hiring," replaces "firing," I wouldn't hold my breath for any meaningful shift in business conditions.
That doesn't mean the situation is hopeless for the industry's best. I know many retailers who are more than hanging in there right now. Some, like Miskelly Furniture in Jackson, Miss., are expanding, remodeling, hiring.
The winners in this industry will be those who make the best of a little less than usual while they develop new ways to gain market share from competitors.
That's probably true for all industries, and I can think of no better way to gain market share than to invest in the one thing that can get the ball rolling in the right direction — people.
I'm sure many would say I'm oversimplifying, that it's irresponsible, even ridiculous, to suggest businesses stop cutting people and start hiring. The winners are not fat with employees; they're lean, mean, consumer-forward machines.
And they'd be right. Maybe investing in "business" — advertising, expansion, remodeling — would be a better way to look at it. Still, that means investing in a way that ultimately means more jobs, if not for you, for somebody.
Until we see a little more of this from a lot more companies, you can hit me with all kinds of bad news.
Nothing will surprise me.
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