Employers would rather buy machines than hire YOU and here is why

Thinking in the shower this morning, and it hit me that the HUGE jumps in productivity vis a vis the paltry increases in employment is a sign of a paradigm shift among employers.
Until now, I’d been thinking that the employment numbers were historically bad for coming out of a recession because they’d never really gotten bad, and so there was nowhere to recover from.
But then I thought again about the productivity gains, which just keep going strong, WAY strong, record strong. Too strong. Keep in mind most jobs are created by small businesses, and only a few of them are really high tech computer driven stuff. Yes, what you read about productivity gains in the paper or magazines always seems to imply that the gains are due to innovation, and innovation with a high-tech flavor at that, but I don’t believe it. Most businesses are much more prosaic than that.
I think what we’re seeing is a fundamental attitude change on the part of businesses in favor of machines and against people. And I think it’s based on fear.
Like I’ve said before, most of my friends are small businessmen and contractors. And while none of them, and no one they know (as far as I know), has ever had any kind of employee lawsuit against them, they all fear it. They are afraid an off-color joke will slip out and next thing they know they’ll be in court defending themselves for creating a hostile work environment. They fear it.
Now I think it’s natural for people to hire people, and a little unnatural to buy new, unfamiliar machinery. After all, it’s nice to have people around, it makes you feel important, you feel like you’re helping others, and employees can be turned to any needful task, not just the one thing you would buy the machine for. But that’s not how me and my friends feel anymore. When we think of employees, we think of the near impossibility of complying with all the labor laws involved.
What if they’re an illegal immigrant? Will we get slammed by the INS? What if they have a previous injury? Will we get slammed by workers comp? What if they’re careless and hurt themselves? Will we get slammed by OSHA? What if they turn out to be some minority fraction that we didn’t know about? Will we get slammed by the EEOC? What if they spill a drum of some common chemical on their skin? Will we get slammed by the EPA? What if their simple need to park a car in the parking lot throws us over some unknown zoning threshold? Will we get slammed by the ADA and the county zoning enforcement officer?
We don’t even know what the threats are, we have no faith in our ability to learn what they are, or to keep up to date with them. We suspect the penalties can be extreme. We expect the employees to be ungrateful, envious, looking to a chance to stick it to us. We know that the alphabet soup of government agencies is not there to help us. Having a presidential presumptive nominee refer to companies (including his wife’s) who take prudent steps to protect themselves against these threats “Benedict Arnold corporations” doesn’t help at all.
A lot of the perceived threat is not true, and much of what is true is exaggerated in our minds. Like I said, I don’t know anyone who’s actually been sued for a hostile work place, a la Clarence Thomas. But employers’ thinking it’s true has had a devastating effect on prospective employees. In prior business cycle recoveries, employment has been a lagging indicator because employers waited until they were really sure of the recovery before hiring new workers. Now employers do anything they can to avoid hiring a new worker. More machinery. More subcontracting. More outsourcing. Even doing less business is often seen as preferable to hiring new workers. The jump in productivity, the stubbornness of employment numbers despite a strong economic recovery in all other measures – these are proofs of my theory.
And now that the attitude corner has been turned – for the worse – it will take a lot to turn it around.

Comments

[David Foster]

An interesting analysis. You may be right when it comes to very small companies, but I doubt if this is going on, at least at any conscious level, in larger ones. Say you're VP of manufacturing with 300 people working for you. If you're considering hiring 20 more, are you really going to think in terms of additional legal exposure?...you've already got plenty of it.

[Pedro]

David, I think you're right about big companies, for what my opinion as an outsider is worth. I've been in small firms all my working life, and in a monosexual construction segment at that. But what I say about my friends is true -- they're scared to death to hire any one, and wouldn't dream of hiring their first woman. If they already have women, then another is not the end of the world.
But folks in the world of big business forget how much of the total workforce is small business.... I've read estimates of 60%, but even if small business is only 33%, that's still a lot.