From the banking industry’s health to swine flu threats, here is a litany of issues that companies should keep in mind as the country nears recovery.
By Michael Beygelman
There are interesting events unfolding economically and socially, which affect both U.S. employers and workers alike. Even though unemployment hit its highest rate in 26 years, the rate of the job losses is decelerating. The Department of Labor said that employers cut 345,000 jobs in May 2009, the fewest since September 2008, and far less than economists had forecast. U.S. employers cut 504,000 jobs in April 2009 by contrast.
Banking Stress Test. Earlier in May, the U.S. Federal Reserve released results following “stress tests” given to 19 of the largest banks in the U.S. The tests were executed to determine if the institutions had the minimum amount of capital needed to weather a worsening economy. The Fed used a worst-case scenario to measure the strength of the banks and determined that 10 of the 19 banks tested would need additional new capital to withstand a steeper decline.
Federal Reserve Chairman Ben Bernanke said the public and investors should take “considerable comfort” that the banks have been evaluated, and any and all weaknesses have been identified. The stress test measured banks against a considerably worse economy than the current situation. It will be important to follow all economic indicators to determine if the worst-case scenario will become a reality or if the economy will turn in a more positive direction.
Employers should conduct stress tests on their own businesses as a whole, as well as by department. Measurement against worst-case scenarios during the next six months, in the next year, and even further will allow businesses to make contingency plans for any necessary reorganization.
The Business of Politics. Senator Arlen Specter (PA) was first elected as a Republican to the U.S. Senate in 1980. On April 29, 2009, the senator switched parties to become a Democrat. This move could further change the balance of power in the chamber pending the outcome of the ongoing Minnesota senate race; the Democrats could have a 60-vote majority. Specter made the announcement clarifying his move is not intended to change the balance of power but rather to pursue and carry out the legislative desires of Pennsylvania constituents. Given his voting history, it can be expected that he will not simply vote down party lines. Even if Democratic contender Al Franken wins the Minnesota senate race, a filibuster-proof majority for the Democrats is not a certainty.
To deal with the current economic turmoil, many important decisions are being made in Washington—in the White House, Congress, and Supreme Court. In the forthcoming months, these branches will be voting on powerful healthcare, financial, housing, and other social issues. At these times, it’s important to stay in touch with your congressional representatives; they are elected by and work for the American voters. They welcome input and feedback to ensure they are representing your interests in the best way.
Swine Flu Update. The outbreak of the H1N1 swine influenza has slowed in the U.S., with more than 99 percent of confirmed cases reported as mild. It is no longer considered an immediate public health threat, however researchers warn the disease should be tracked closely as the virus could return when flu season picks up again in the late fall. Develop a plan for how your company will react if impacted by another potential outbreak. Consult the Centers for Disease Control (CDC) and the Occupational Safety and Health Administration (OSHA) to ensure compliance with all health and safety standards. Communicate with colleagues and clients to ensure proper health standards are met at all places of business. Consider flexible worksite/workforce telecommuting and flexible work hours for colleagues who are experiencing symptoms.
The current state of our economy and unemployment situation is not rosy by any means and will most likely remain complicated for some time to come. However, let’s remain hopeful that the worst economic news is already behind us, and now our businesses can focus on rebuilding and repositioning for future growth.
Michael Beygelman is SVP, business development with Adecco Group North America. He can be reached at email@example.com.