WASHINGTON — The United States is out of step with the rest of the world’s richest industrialized nations: Its economy is growing faster than theirs but creating far fewer jobs.
One reason is that U.S. workers have become more productive.
Companies are producing and profiting more than when the recession began, despite fewer workers. They’re hiring again but not fast enough to replace most of the 7.5 million jobs lost since the recession began.
Measured in growth, the American economy has outperformed those of Britain, France, Germany, Italy and Japan — every Group of 7 developed nation except Canada, according to the Associated Press’ new Global Economy Tracker, a quarterly analysis of 22 countries representing more than 80 percent of global output.
Yet the U.S. job market remains the group’s weakest. U.S. employment bottomed and started growing again a year ago, but there are still 5.4 percent fewer American jobs than in December 2007. That’s a much sharper drop than in any other G7 country. The U.S. had the G7’s highest unemployment rate as of December.
Canada and Germany have added jobs since the recession ended in June 2009.
U.S. companies aren’t acting the way economists had expected them to.
In the past, when the U.S. economy fell into recession, companies typically cut jobs but often kept more than they needed. Some might have felt protective of their staffs, or they didn’t want to risk losing skilled employees they would need once business rebounded.
Panicked by the 2008 financial crisis and deepening recession, U.S. employers cut jobs mercilessly. They slashed about 780,000 jobs a month in the January-March quarter of 2009.
Yet after shrinking payrolls, many companies found they could produce just as much with fewer workers. And with that higher productivity came higher profits. By the July-September quarter of 2010, U.S. corporate earnings were 12 percent more than when the recession began.
“When there’s pressure to cut costs in the United States, it’s borne by the workers,” says Howard Rosen, visiting fellow at the Peterson Institute for International Economics. “In Europe, it’s borne differently.”
