Recovering from the Economic Downturn – Were the Economists Too Optimistic About The 2010?
The global financial crisis that has threatened the international economies, including the USA, hit mainly construction, automotive, tourism, finance services and real estate sectors. Within the construction and related sectors it has mostly affected the unskilled and semi – skilled workers from eastern Europe and the Philippines who were made redundant and forced to return homes. The forestry sectors in Finland, Sweden, Canada and Chile have also made cuts in employment. A lot of companies decided to work out and implement rescue strategies to restore the rate of profit.
Desperate attempts to recover from, what some call, the worst crisis since the Great Depression may have benefited the economy but had an adverse effect on the workers. The strategies include reduction in money wages, cutting back on health insurance and enforcing a “speedup”, which means making the employees work faster and more effectively for the same amount of money and within the same time frames. Some companies would also declare Chapter 11 bankruptcy which allowed them to continue to operate, renegotiate debts and declare their union contracts null and void. As a result, the profit and the rate of it has been increased, though at the expense of workers According to economists, all these steps were necessary to gradually improve the global economy and succesfully overcome the severe recession in the USA by 2010.
Now, with the beginning of March 2010, a question arises: were they too optimistic? Separate reports on U.S. economy indicate that although certain improvement took place and the economy shows some traces of recovery, it’s far from being robust. The personal income rose 0.1 per cent which is far less that the economists had expected. As it has been reported by the Commerce Department, the construction spendings have dropped by 11.5 per cent when compared with 2009. At the same time, some companies and sectors managed to come out of the recession at an impressive pace, contributing to the “mixed picture” of the U.S. Economy. Take Mascus, for example, the online marketplace for buyers and sellers of used machinery and equipment. They have recorded one million visitors to its portals in November 2009 and managed to sustain that level until January 2010. This means, that the enterpreneurs feel safe and positive about the future of heavy industry as they visit the platform every month to buy, sell and keep the business moving. It’s difficult to say for sure which direction the U.S economy will go and what outcome it will have. For now, it is better to stay patient and wait until things go clearer, being neither a doomsayer nor too much of an optimist.
