Employment Provision And Importance In The Economy And Share Market

Job Growth and importance for the economy and stock market is an issue that affects most countries, but particularly those that that are most heavily industrialized.

America and Europe are still not yet clear of the crisis. The supply of jobs is increasing, but so slowly that the Chairman of the Federal Reserve estimates that it will take a number of years to repair the situation, if the improving trend continues.

The temptation for politicians to interfere is almost overpowering. They call in business people and exhort them to give out jobs, as if profit does not matter. But it does, and the belief in market driven economies is so firm that politicians are wary of going too far. Nevertheless it is only when the number of jobs grows that the stock markets will confirm economic growth and stability.

In the 1950s there were still gangs of labourers working on roads and farms. Now the jobs they did have all been mechanised and replaced by jobs that require more skills.

The supply of jobs in the information technology has replaced the loss of jobs on the railways, but workers have to be flexible and retrain themselves in order to fill the new job opportunities. In Britain they have tended to fallback on the social welfare system. Machines have taken over where miners once worked with picks and shovels.

Despite the torpidity of some sectors of the economies there was growth in other sectors. Information technology, the leisure industry and the environmental sector all generated new jobs. For example, sports events were promoted by TV, and gathered clusters of jobs around them in much the same ways as gladiatorial events did in ancient Rome.

But new jobs, even more than the old ones, demand productivity because there is little point in paying people more than they are worth. This is a painful truth that has become apparent as the remuneration of investment bankers has come under scrutiny. It is also why jobs in the manufacturing sectors have migrated to the East where Chinese and Indian works don’t insist on so many holidays

However many new opportunities are created two inescapable requirements remain. Workers must be prepared to retrain and work productively so that entrepreneurs can turn a profit. In this regard Indian and Chinese have proved so superior that firms shut up shop in America and Europe, and moved their operations to the East where greater profit was possible. Western workers may have sneered about ‘sweat shops’ and ‘human rights’ but the hard facts of profit prevail over sentiment.

The situation could turn around as Chinese and Indian workers begin to improve the quality of their lives. There will then be a greater demand for the sort of leisure products that are produced in the West, and a more equitable distribution of jobs throughout the world.

The phenomenon of globalization is much maligned in the West because it is seen to diminish the supply of jobs. Yet, it could be the solution to job growth and its importance for the economy and the stock market. If countries learn to collaborate rather than squabble with each other the whole world could benefit.

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