vol. XVII no. 1

				Q&A Continued Is outsourcing a long term source of concern? Long term no, because you get productivity improvements, cost cutting and higher profits and you source away a job that requires lower skills. Does it matter in the short run? Yes, for the people who lost the jobs; no, for the overall economy. What you gain is a lot more than what you lose. However, it becomes a political and social issue. In the coming decade, outsourcing is old news. Business process management is the new thing. What happens to middle managers who lose their jobs because of business process management? They will have to retool themselves in this job market. In the 1990s, the job became unstable, but you could still go from company to company for the same job. We just didn't know how long you were going to be there. Now the danger is that your skills may deteriorate faster than you can build them up. If you're not building up your skills, you'll be left behind. What are the risks to the economy from issues like terrorism, mad cow disease and SARS? These are random factors, random shocks. They cause a problem in the system, but you cannot forecast them. These are the things that can blow your forecasts. Turning to Atlanta, do you anticipate our region will continue its growth? The question is going to be, "What is the quality of the growth?" Unfortunately, given the data, the quality of the growth is not so good. The flatness of state tax revenues tells you the quality of new jobs is not there. The three pillars of growth in Atlanta in the early 1990s were telecom, transportation and tourism. All three took a big hit with 9/11. Telecom was already coming down. Delta Air Lines and our hospitality industry have not fully recovered, and they will never come back to their old levels. What will replace these traditional pillars? Health care has done some of that. Unfortunately, the other jobs that have shown up are in categories like temporary services or business services - jobs that pay less than $500 a week. Those are not going to generate the income to buy condos in Buckhead or homes in Virginia-Highlands. What about all those pricey new condos going up all over town? The issue is this: Any town depends on new people with high-paying jobs moving in to put the spice into the real estate market. That influx, unfortunately has dried up. None of the top 10 employers in the city seem to be hiring people at the higher levels. What will happen to the mortgage refinancing boom? It's like the Energizer Bunny that keeps on going and going. And our housing starts have been great. We're going to have another wave of refinancing. It's not going to be as strong as the last two years, but it's not going to die away quickly. And the housing sector, at least on the residential side, will again remain strong in 2004, which is a surprise. How? Because the interest rates are very low. And people still have jobs. It's just that the new jobs are not coming in. The unemployment rate is still less than 6 percent, which is considered very good. Is there a danger for individuals taking on so much mortgage debt? If you refinance and your payments come down, it's a great thing to do. If you refinance, take the money and use it for some other thing, that's fine too. But if you take a home equity loan in the anticipation that your home will increase in value down the road, which I don't think will be possible the way it was in the last few years, then you're gambling. Top | Back | Next Page

Copyright © 2004 Robinson College of Business/Georgia State University.