The concerns that people have about employment are supposed to get better and not worse as the economy comes out of a recession. That is not true among most Americans, according to research from Gallup.

The percentage of Americans holding these views about finding a quality job is as high now as it was a year ago, and higher than it was at this time in 2008, when the recession was fully underway. Three years ago, in September 2007 — just prior to the official beginning of the recession that December — 55% held this view of the job market.

The perception has a basis in a number of truths. The first is that too many people are looking for too few jobs. Another is that there are a number of signs that productivity will continue to rise, which means employers will force as much work out of their current employees as they can. Yet another is that the specter of a double dip recession still hangs over the economy. Roubini Global Economics recently put the odds that will happen at 40%. The FOMC notes show that the agency has seen a significant slowdown in economic activity in the last two months.

One of the perverse aspects to the unemployment situation is that while companies continue layoffs, or at least have maintained hiring freezes,  they continue to raise money at record levels because interest rates are so low. Where is the money going? To increased dividends in the cases of many large firms. Microsoft (NASDAQ: MSFT) recently became the latest big company to do it.  Smaller firms seem to be replacing higher yield debt with lower payout paper.

Companies may be able to raise capital, but their sales and cash flows are generally not rising, except in cases where margins have improved due to layoffs. That has taught many firms a lesson. The quickest route to improved operating results is to fire as many people as they possibly can.

Employment worries are not a shock in an environment where the stark truth is that joblessness has not improved and may get worse.

Douglas A. McIntyre

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