Saturday, July 25, 2015

Hoarding Employees

Here is an interesting phenomenon: hoarding employees.  Keeping people on the payroll not necessary for present operations.
Employers in some sectors are hoarding workers. Similar behavior in the past has been associated with bubbles, and has led to massive retrenchment, usually within 18 months or so. In the housing bubble, similar behavior continued well beyond the peak of that bubble in 2005-06. Employers seem to take their cues from stock prices.
Along with that is the inventory levels are growing.  So when the next bust comes, expect massive layoffs plus big discounts (deflation) on prices as companies try to unload the built up inventory.

If you are self-employed, an economic crash is most welcome.

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