“Soft” Job Growth a Drag on Recovery, Cash Says at Mid-Year Economic Update Luncheon
(Greensboro, NC) September 4, 2013 – Though the “great recession” ended four years ago, American workers and business owners don’t yet feel an economic recovery because of slow gains in the job market, real estate investment banker Algenon Cash said in a presentation to business leaders last week.
Cash’s remarks came at the Mid-Year Economic Update Luncheon, held Thursday, Aug. 29, at the Piedmont Club. The event was part of a monthly luncheon series sponsored by Wharton Gladden and Company, of which Cash is managing director.
“America’s GDP is currently at a record level, $16 billion, and we saw a much busier spring and summer than normal,” Cash said. “But whenever I speak to groups of business leaders about what they experience day to day, two-thirds of the room say they just don’t feel the economy is improving.”
The reason for that is that the current recovery is a “soft recovery,” Cash said, with the pace of job creation lagging. While the GDP grew 2.5 percent in the second quarter of 2013 – up from 1.1 percent in the first quarter – the growth rate would need to be four to five percent in order to significantly boost job creation and household incomes. “It doesn’t feel like a recovery because we aren’t expanding at the rate we should be, Cash said.”
Cash pointed out that 80 percent of real capita GDP growth is due to increased output per hour worked by the currently employed, as opposed to businesses adding new positions. Furthermore, “The job creation we do have in our country is among part-time and temporary jobs. They’re not stable, full-time jobs,” Cash said.
One major hurdle to full recovery is a shortage of skilled workers to fill available jobs due to what Cash called a “disconnect” between educational institutions and businesses. “I travel all over North Carolina, and I talk to companies that want to expand, but can’t find people qualified to take those jobs,” Cash said. “Technology has disrupted the labor market, leaving behind older workers who aren’t computer literate. We have to ask ourselves, how do we take people with degraded skills and get them back in the labor market?”
About 45 people attended the lunch, including area corporate and non-profit leaders. Two candidates for the Winston-Salem City Council’s Northwest Ward seat attended: Lida Hayes-Calvert (Republican) and Jeff MacIntosh (Democrat), along with Lou Baldwin, President/CEO of Baldwin Properties Inc.; Dr. Tony Burton, President/CEO of Northwest Child Development Centers Inc.; Michael Suggs, executive director of the Goler Community Development Corporation; and Cynthia Williams, chief corporate communication officer at BB&T.
Cash co-founded Wharton Gladden in 2003 to provide small and middle market developers, investors and corporate real estate owners with capital markets advisory, underwriting, asset management and private equity. Today, Wharton Gladden has strategically advised clients on over $1 billion in whole loan acquisitions and liquidations, and the firm has successfully closed over $300 million in multifamily and commercial real estate transactions. Cash is author of 80 articles and featured in over 50 videos on a wide range of topics including economy, finance, business, financial literacy, American politics and philosophy.
About Wharton Gladden & Company:
Wharton Gladden & Company is a uniquely designed boutique investment banking firm that specializes in providing strategic advisory services, underwriting, capital placement and private equity for a diversified client base that includes corporations, real estate developers, financial institutions, investors, municipalities and high net worth individuals.