by James Buchanan

An AFP article reports “The US unemployment rate shot up to 10.2 percent in October as another 190,000 jobs were shed, the government said Friday in a report showing narrowing job losses.”

Most American know that these government numbers are -at best- flawed and -at worst- fabricated. Anyone who uses up his last unemployment check without finding a job, falls off the official government tally of the unemployed. Considering the job market has been a disaster for the last two years with millions of job losses, it’s probably a fair assessment that 80 to 99.9 percent of the people who have lost their jobs are still unemployed. The real percentage of unemployed Americans is almost certainly in the 15 to 20 percent range.

To add insult to injury, the stock market shot up about 200 points on the day the official unemployment rate broke through ten percent. There’s a theory among investors that “laying off people is good for business”. This has been around since at least the horrible Bush Senior recession in the early ’90s.

I suppose there’s nothing like lay offs to crack the whip over the heads of all those cubicle workers. The implicit threat is: “Better start putting in unpaid overtime or you’re next.” Despite this obvious pressure on surviving workers, just how valid is the theory that lay offs make businesses more efficient?

Notice there are never “too many” lay offs. No investment gurus ever talk about too many key people being laid off to the extent that the work can no longer get done right. There is also never any talk of “worker burn out” where the slave-driven workers become so demoralized their efficiency drops off. (I guess managers are supposed to spot those workers and fire them too.) And there supposedly is never a drop in productivity from all those lay offs. It’s always a good thing no matter what the business is.

I guess if these businesses really want to become the most efficient possible in the eyes of the Wall Street gurus, they should lay off everyone, but the CEO and the public relations department, then the stock should shoot up to its highest possible value even though all the people actually making things have been laid off.