cutting jobs is really, really simple to understand. it's just about the anticipation of a slowing economy.
i mean, you and i, as consumers, do it all the time. let's say you have gotten a raise because your performance has been good, but you also realize that the risk of you losing your job is getting higher because your company isn't doing so well, so naturally you start saving more and spending less, especially on unnecessary items.
another reason, less obvious, but well-recognized by many, is that companies tend to have too much pork when the economy is doing well, like in the middle of 2000s. in lean times, they're forced to streamline operations. it's really not much different from you and i really.
a long time back when i was in high school, few economists predicted a long-term equilibrium unemployment rate (if such a notion makes sense, to which i have alternative perspectives) in the US to be 4%. few developed nations, japan being a notable one, had such a low unemployment. we've had essentially 4% unemployment for a while now, and perhaps this low unemployment is the number that's unsustainable. perhaps the equilibrium rate is 7%, which we just passed, and of course, overshooting. or perhaps the figure is 10%. who knows. nobody understands the economy, and economists will be the first to tell you that.
don't get me wrong, i'm not saying a higher employment is good. people are suffering, that's the bottom line.
the Wii is an epidemic.
