Tuesday, April 6, 2010

The lost productivity

Although the productivity of the American workers have increased because of numerous factors but still the burden of almost 9 million adults out of work is reducing our productivity even more. These unemployed folks are not only the less educated but also highly educated and experienced people who can rightly contribute more to the economy then to just collect the unemployment check. Even looking for a job means that a very productive person is wasting his time looking for a job when he or she is supposed to be working and contributing to the GDP of the economy.

Since now the health care reform has been passed, the next big issue (to me the biggest one) is how to put all these unemployed people back to work. Even the FED today in its minutes released said that the weak recovery can loss steam and that is why they will keep the interest rates low for a while.

The main thing is now confidence on the part of the businesses that the recovery is real and the demand for their products is going to go up. Unless the business confidence is recovered, there can be no new hiring. So the top most priority (apart from all the talk) is to devise plans to restore this confidence without which there will be no sustained recovery.

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