Surviving tough times: Do U.S. firms make it tougher? American companies disdain their workers?

The unemployment rate just rose to 9.6% nationwide. How does the U.S. compare with other nations? Not well. All economies suffered in the recession but the U.S. unemployment picture is worse than other nations, according to a recent NPR story.

A decade ago, we had the second lowest unemployment rate in the world. Now, we have moved into first place. Countries notorious for high unemployment, like Italy, now have lower levels of unemployment. We even surpassed France’s unemployment rate, though the French have just caught up.

What’s the reason?

When times are bad, the first resort for many American companies is to fire workers. Some call it downsizing, or, euphemistically, rightsizing, but the result is the same. Firing workers is not the first resort in other nations. Some foreign companies can’t easily cut workers due to governmental regulations. But even in countries were they could cut workers easily (like the U.K.), they don’t make it the first resort in troubled times. Some firms, for example, reduce hours rather than cut their workers.

Why do American companies so easily cut their workforces? An economist quoted in the story, Adam Posen, put it succinctly: attitude. American companies didn’t have to cut workers as aggressively as they did.  They chose to do so.

Does this mean that American companies disdain their workers? Would they rather invest in automation than in people?

Are you surprised that we are winning the “unemployment sweepstakes”?

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