This time around, some economists say unemployment may not return to healthy levels until 2013. Companies have been slashing workers’ hours, squeezing more work out of the employees who are left, and relying on cheaper temporary staffers to fill the gaps.
In North Carolina, a company called Power Curbers, which makes barriers and curbs for subdivisions, is finally breaking even after shedding 35 percent of its staff. The owner, Dyke Messinger, plans no more cuts.
Yet he is wary of adding to the staff, which now numbers about 80. First he wants to see new orders.
“When you look out and see that the country has stabilized, that gives you confidence that you can hold on to everybody that you’ve got,’’ he said. “But we will be very hesitant to hire until business turns up.’’
Employers wiped out 247,000 jobs in July, far fewer than any other month this year. The economy shrank in the second quarter at a much slower pace. But that doesn’t translate into job creation.
William Dunkelberg, chief economist for the National Federation of Independent Business, said a survey of small businesses found only about 7 percent of them added to their workforces in the second quarter of the year, while 24 percent cut jobs.
Hiring should start again late next year, said Sophia Koropeckyj, managing director for Moody’s Economy.com. It has a long way to go: The recession has eliminated 6.7 million jobs, and 14.5 million workers are unemployed and unable to find work.
When the economic crisis struck last fall, many employers steeled themselves for the worst, laying off workers, cutting hours, imposing unpaid furloughs, and cutting benefits.
Some companies will find there are cheaper alternatives to bringing in new full-time workers. For example, they can increase the hours worked by the employees they already have. Right now, the average workweek is 33.1 hours.
More significantly, businesses in this recession have managed to produce just as much with fewer workers. From April through June, productivity surged by the largest amount in nearly six years, the government said yesterday.
Once the economy starts adding jobs again, employers who depend on battered industries like housing will probably be among the holdouts.
Dan Tyree, owner of Second Chance Auto Sales of St. Louis, doesn’t expect to hire anytime soon. Tyree said he’d have to double his revenue for several months before he’d consider it.
“Everyone’s afraid to spend even $1,200 on a scooter,’’ said Tyree, who laid off a salesman there recently and had to fill in on the sales floor himself.
