Are Corporate Profits related to Employment ?

I don’t see a direct correlation between corporate profits and employment and in fact would suggest that when the world is becoming flatter and flatter and technology advances at a high-speed this basic notion of “If a company is doing well it will hire more” will slowly taper out.
Take for example Consulting and Professional services sector which has done well and thus Big 5 are hiring in India and China at breakneck speed .Same goes to Manufacturing sector where technological advancements and outsourcing have kept the company profits buoyant where as hiring is down. I think this is a fundamental supply problem, think of it as this way , If Walmart gets a product manufactured for lesser cost than doing it in China why would it not change its procurement policies ?

Now this can be done either 2 ways one is to increase our population and thus the add cheaper workforce (which is not practical) or get the use of technology to reduce the price to produce. The demand is there but supply of labor force is short

Unemployment and potential areas for growth

For a substantial increase in GDP we agree that we need increased consumer spending and for increasing consumer spending we need to put money in people’s pockets and for that we need folks to get jobs.
This train of thoughts led me to see which occupational areas are promising and see a potential growth and here is what I pulled from a couple of sites
Unemployment statistics
• Number of unemployed = 14 million
• % Unemployed Present = 9.1
• Long term unemployed (27 weeks and over)= 6 million
• % Long term unemployed = 49.2 % of Unemployed
• % Unemployed Jan 08 = 5 %
From the U.S. Department of Labor, U.S. Bureau of Labor Statistics the fastest growing occupations from the year 2008 and projected to year 2018
I have shortlisted this list only for folks with Moderate to Short-term on-the-job training (the reason being we cannot send masses to a 4 year degree and short to moderate on the job training would be practical way forward).
Here are the areas of occupation and % increase we see majority of jobs being created in the Healthcare sector so in case we focus on this area more than other areas we can see a substantial growth in job market
• Home health aides 50%
• Personal and home care aides 47%
• Physical therapist aides 36%
• Medical assistants 33%
• Physical therapist assistants 30%
• Occupational therapist aides 30%

Source of my data : http://www.bls.gov/emp/ep_table_103.htm

Credit Crisis and its roots ...

If we were put things in perspective and chronologically enumerate the actions they would be like ..
• THE GLB Act of 1999 allowing commercial and investment banking to merge which in turn allowed risky investment vehicles to start running at full speed ( the birth of CDO and MBS)
• 2001 – 2002 Historically Low interest rates by FED to spur easy credit and interbank loans
• With all the above things and media promotion and an average Americans dream of owning a home which was construed as safe investment finally led to subprime crisis
• Finally when the bubble crashed ,t he excess inventory started showing up with home prices declining and inability to refinance led downward spiral with banks failures leading to liquidity crunch and high unemployment

Savings– In 1960 average American saved 11 % of paycheck , in 1990 decreased to 5 % and in 2003 fell to 2.5% but due to economic situation its increased to around 6%
Investment- 401K and IRA have been affected by the crisis but if we look at it from long term we have seen growth in this investment, The house which was supposed to be the safest of all has declined substantially Unemployment The drastic rise in this area averaging about 4% in Q1 2000 to 6% in 2003 and 9.1 % present is probably the biggest indicator of economic crisis and can be linked as directly proportional to savings and investment combined