Ablin: Economic growth doesn't necessarily mean more jobs
A top economist with BMO Harris Private Bank said Wednesday that the economy likely will continue to grow at a fast pace, but that doesn't necessarily mean more jobs.
Technology also is growing at an incredibly fast pace, leading many companies to adopt technology for faster, more efficient operations, and therefore, they are able to eliminate certain jobs.
“Technology and innovation are destroying more jobs than they are creating,” said Jack Ablin, executive vice president and chief investment officer for BMO Harris Private Bank in Chicago. “We're doing more now with fewer people and if a company is doing more and working more efficiently, what happens to the people and their skills?”
Ablin was the keynote speaker at the 2015 Economic Update and Outlook Breakfast, hosted by Harper College Education Foundation in Palatine. About 200 suburban school officials, elected officials and business leaders attended the breakfast event to learn more about how the economy is affecting companies, jobs and growth.
“The U.S. economic growth is accelerating,” Ablin said. “That's not something I could have said last year. Banks are beginning to lend. That's a good sign too.”
Ablin, a Highland Park resident, said the economy is in better shape than a year ago and it is leading to more consumer confidence and spending, particularly among the lower and middle classes.
As costs decrease for natural gas and gasoline, consumers have more money in their pockets, he said in a separate interview.
“Energy is about 25 percent of the costs on middle-class households, so if they're cutting costs, they're allowed to help move the economic needle,” he said.
The United States also is doing a good job of increasing its domestic supplies of crude oil, which is keeping a lid on oil prices, he said.
And as more companies switch their transportation vehicles from gasoline to natural gas, prices again will continue to change, based on supply and demand.
“Transportation companies formerly had their vehicles on diesel and they've been shifting to natural gas,” Ablin said. “Just take a look at municipal busses, trucks and others. They're switching.”
State Rep. Elaine Nekritz, a Buffalo Grove Democrat, listened to Ablin's presentation but said she wouldn't necessarily agree with such optimism about the economy.
“I am still hearing from the long-term unemployed,” she said. “They still feel like they've been left behind in the economic recovery and it presents a huge challenge to working with them to get them back into the workforce.”