One interesting side effect of the current economic situation is interest rates for lending are at near all time low levels. As well, companies are enjoying increased profitability and record margins.
So, one would think this would easily bring jobs back to American workers. Unfortunately, according to a New York Times report business are stockpiling cash without creating any new jobs. Business are putting away money hoping for ripe opportunities for when the economy improves, but as the report finds, the economy is unlikely to rebound while large corporations sit on these piles of cash.
This corporate attitude is in stark contrast to American households, who are trying to reduce their debts, and tightening their belts by spending less and doing more with less than they are accustomed to. Currently, there are over 14.9 million unemployed Americans, with hundreds of thousands more underemployed and unable to find full-time work.
The overwhelming sentiment amongst corporations seems to be “Wait and See”, and put off any major expansions until the first quarter of next year. It is this exact attitude that may be stalling the hiring of new employees, which in turn could spur the spending and ease the effects of the recession. While corporations may benefit from these opportunities, when will these same corporations act for the benefit of all?