Companies Continue to Cut Costs by Pierre Carras

As companies continue to cut costs in order to make up for the decrease in revenues, the unemployment rate in the U.S. has hit its 10-year high at 7.8%. Companies are laying off employees in divisions where revenues have decreased dramatically and divisions where revenue outlooks have been lowered. Some of the most recent cases of corporations laying off employees are Citigroup’s plan to shed 52,000 jobs (about 15% of their workforce), Adobe’s elimination of 8% of its employees, JPMorgan Chase cutting 9200 Washington Mutal jobs nationwide, and Credit Suisse getting rid of 650 investment bankers (about 3% of its investment banking division). Furthermore, there have been a half-million jobs lost in the contrustion industry, and according to the government the total number of jobs lost has topped 1.2 million since the start of 2008. The worst part about this is that since some the committee of economists responsible for dating the nation’s business cycles stated that the U.S. recession began last December, there is more speculation that the downturn will continue well into 2009. One of the solutions that I believe will work would be to create jobs in the energy sector, which is part of Barack Obama’s plan to revive the economy and focus on being independent of other countries for our consumption of energy. Barack Obama has a plan to create 5 million “green collar jobs” by investing $150 Billion over the next 10 years. Of course this plan will require billions of dollars but these billions will be distributed to workers who will, in turn, spend there salaries and consume. This plan would be much more beneficial to the country than the current bailout plan because the government would truly stimulate the economy by starting at the root of our problems instead of backing up huge corporations, where top executives are ultimately benefiting from the government investments. I know that many of the banks have eliminated bonuses for their executives for this year but who is to say that they will not be getting bonuses in the future. Another benefit from creating the energy jobs is that the U.S.’s dependence on oil would decrease dramatically, which means less money spent outside the country and more money available to help our troubled country.