Jobs and the Job Market

Top 75. Jul 20, 2005 3:45 PM

» Bill_Duffy - Job market for layoffees

White-collar jobless blues
For some professionals who lost their jobs in the 2001 recession, weeks of unemployment have stretched into years, forcing them to take 'survival jobs'

By Barbara Rose
Tribune staff reporter
Published July 17, 2005

William Spolec sips iced tea at a window table in a busy downtown Starbucks.

Dressed in slacks and a knit shirt, a brown leather attache case at his feet, he easily could be mistaken for a casually dressed professional taking a late afternoon break.

Instead, the veteran human resources executive is early for a seven-hour shift behind Starbucks' counter.

Laid off two years ago at age 62 from a bank vice president's job, he took the $7.50 per hour job because his health insurance was running out. He felt lucky to find it.

"I'm getting good benefits," he says.

Spolec is one of hundreds of thousands of professionals who lost their jobs during the 2001 recession and its aftermath, a long jobless recovery.

They were caught in an unusual economic downdraft, a period marked less by the sheer number of people thrown out of work--2.7 million in all, or about 2 percent of the workforce--as by unrelentingly high rates of long-term unemployment, economists say.

While previous recessions hit less-educated blue-collar workers harder, this downturn took a greater toll on white-collar workers, who made up 44 percent of the long-term unemployed during 2001-04, according to a study by the Economic Policy Institute and National Employment Law Project.

In June 2005, long-term unemployment dropped below 20 percent of total unemployed for the first time in nearly three years.

"This was a very unusual expansion and downturn," said Yolanda Kodrzycki, senior economist and policy adviser at the Federal Reserve Bank of Boston.

High-paying industries such as software, telecom and finance fueled the late 1990s boom, she said. "In the downturn, those same industries were the ones shedding jobs."

The economy didn't start adding jobs again until late 2003, when more than one in every five jobless Americans had been looking for work six months or longer. Even then, job growth was weak.

"That puts the long-term unemployed in an incredible bind," said National Employment Law Project policy analyst Andrew Stettner.

"People who have been out of work longest are going to have a hard time getting back to work," Stettner said.

These are the stories of Spolec and other professionals for whom weeks of unemployment stretched into months, then years. They are largely overlooked in an economy where unemployment is trending down and things are looking up for many job seekers.

Like others in their predicament, they are no longer unemployed. They work "survival" jobs while trying to climb back into their fields.

From banks to special blends

Starbucks is not where Spolec, a DePaul University MBA, imagined ending his working years.

For more than three decades he worked in administrative and human resources jobs, mainly at foreign banks.

His last job, managing a staff of eight at Bank of Tokyo-Mitsubishi's Chicago branch, ended when the bank laid off half the branch and consolidated Spolec's human resources function in New York.

That was July 2003, at the tail end of a jobless recovery when unemployment was near a 9-year high and 2 million Americans had been unemployed for more than six months.

Spolec had gone through layoffs twice before, but he knew this one would be different.

"I was very apprehensive," he recalls. "I knew it was going to be difficult for me to find another job at my age. I figured it would take at least a year, and by then my severance and unemployment would run out.

"So I really began making plans--survival plans, basically," he says.

Almost immediately, he put his modest home on a leafy street in west suburban River Forest on the market and prepared with his wife of 40 years to move to Berwyn, the blue-collar suburb where he grew up.

A childhood friend who is a financial adviser helped him reorganize. With his home equity, he paid off debts and bought a Berwyn two-flat with his younger brother. By the time his unemployment ran out, he had applied for Social Security and converted his 401K to dividend-producing investments to provide income.

By economizing, he and his wife could get by while he hunted work. A career center affiliated with Old St. Patrick's Church in downtown Chicago gave him support and a place to go when his outplacement help ran out.

His darkest time came early this year when his temporary insurance was running out. "I was down," he says. "Financially I was OK, but we needed insurance."

Peers in his job group suggested Starbucks, where he started in February. "Basically you do what you have to do," he says.

These days, his attache case is stuffed with resumes, a cell phone, a mystery to read on his train commute and his bright green Starbucks apron.

His hours are all over the map--some weeks he starts at 4:45 a.m. one day, then works 7 p.m. to 11 p.m. the next--but the job is getting easier.

"I'm learning more and getting very proficient," he says, adding that making Frappuccinos can be tricky. "They're very messy--it gets all over."

He hasn't given up looking for a human resources job, but he knows his odds of landing one are slim.

"I don't want to sit home," he says. "I've worked all my life. I'd like to work another 10, 11 years if I can."

Tech still feels right

Computer consultant Jill Wohlbedacht, a fortysomething professional, is still struggling to come to grips with the layoff that jolted her comfortable life and stalled her career.

She took great pleasure in being able to walk into a Fortune 500 company, pick up a software project and run with it. For 2 1/2 years she'd been assigned to an insurance company in downtown Chicago.

Then came the tech meltdown in 2001, when employers were throttling back spending. Higher-paid consultants like Wohlbedacht, who made six figures and supervised three workers, were first to be cut.

She spent one month on her consulting firm's "bench"--idle and without a client--before the firm let her go.

At first, she wasn't overly concerned. "I've always been employable, I never had a problem finding a job," she says.

But this time was different.

The market was so glutted with tech workers in early 2002 that more than 500 resumes poured into a downtown bank in a single day after it announced information technology openings.

Some employers told her she was overqualified; others wanted experience she didn't have, like the firm that passed her over in favor of a candidate who knew foreign currency exchange.

Friends advised her to quit the tech world and strike out in a new direction, but when she weighs her options she always comes back to the same conclusion: "This is where I should be. This is what I enjoy doing."

Hoping to improve her chances, she's back in training for the third time since her layoff to add yet another credential to her resume: Microsoft Certified Systems Engineer.

She has refinanced her Lisle home to dip into her equity. She has quit her health club, canceled magazine and newspaper subscriptions, and stopped going out except for an occasional dinner at a friend's house.

To slow the rapid drain on her savings, she works part-time as a sales associate at J. Jill, a woman's clothing store. Since her health insurance ran out more than two years ago, she has gone without.

"The biggest change in my life is worrying about money," she says. "You gotta watch everything. You pinch pennies so tight."

Career center regular

Charles Crimmins never went long between jobs until the summer of 2001.

That's when the certified public accountant moved back to Chicago from Montana, where he was a state university vice chancellor, figuring there would be no shortage of opportunity for an experienced business manager and financial officer.

What he didn't count on was a series of unprecedented jolts--the Sept. 11 attacks, the stock market's dive and the collapse of the Andersen accounting firm where he had started his career.

Four years later, the Downers Grove resident, now 60, works survival jobs between consulting gigs. He recently earned $10 an hour conducting telephone interviews for a research center.

He is easy to spot at the suburban career centers where he's a regular at networking groups. He is the genial, mustachioed man with a name tag dangling from a yellow lanyard over his dress shirt and tie.

His tagline reads: "Composing, Orchestrating and Conducting Business and Financial Affairs for Colleges and Not-for-Profits."

"What you try and do is develop a brand so people recognize you from all the other `Chucks,'" he explains.

One of his specialties is turnarounds, like the work he did cleaning up a financial mess at the Illinois College of Optometry in Chicago in the late 1990s.

He carries a folder with four different resumes, but it's been hard to branch outside his financial niche after 26 years at private colleges such as Vassar and Bard, both in New York.

So he researches the nation's colleges, assessing who's nearing retirement, who's angling to move, who may be on the way out.

His long jobless spell has forced him and his wife to dip into their retirement savings. Their combined $30,000 annual income is less than one-fourth of what they used to make. Her sales job at Chico's, a woman's clothing chain, provides health insurance, but he goes without such basics as regular eye exams.

"One of the things I badly need is glasses," he says, pulling off his wire aviator frames to peer at small print.

One way he stays upbeat is by reading autobiographies of figures like Benjamin Franklin, who achieved success despite setbacks. Franklin, he notes, was well into his 70s when he was named ambassador to France.

What's more, Crimmins adds, "He was very big on networking."

Not the security he envisioned

LeRoy "Joe" Zebley's voice is confident, his shoulders erect. Briefcase open on a table in front of him, he's talking to a group of high-tech workers.

He looks and sounds like a project manager trying to pump energy into the room. Only these professionals are not designing a network or a software system. They are looking for work.

Zebley has been out of a job longer than any of them.

When he took early retirement from SBC Communications Inc. at age 55 in late 2000, figuring he'd land another job and work 7 to 10 more years, the telecom market was cooling. Few predicted the depth and duration of the bust that followed--the industry's worst downturn in history.

"I've been searching ever since," says the McHenry resident. "The hardest work I've ever done is finding a job."

Two years ago, he organized a networking group as a free resource for tech professionals. The NorthWest Information Technology networking group meets Wednesday evenings at a career center in Barrington.

On a recent evening, dressed in a sport jacket and collar-less black shirt, he set out paper plates of his homemade peanut butter cookies and brownies--baking is a hobby--before getting the discussion rolling with a "good news roundtable."

Not all the news is upbeat.

"I'm really depressed," says a software engineer. "I'm looking at going into a sandwich business and saying good-bye to my professional career."

Another member announces good news: After two years of driving a truck, he finally landed an IT job. "So there is hope, even if you are smart," he quips.

Zebley's career started in the early 1970s after a stint in the Navy. He earned a four-year degree from DeVry Institute of Technology, went to work as a technician at Illinois Bell, now part of SBC, and was promoted into management six years later.

The initials "PMP" after his name signify certified Project Management Professional. He's also a Certified Professional Management Consultant.

His long stretch of unemployment has taken a heavy financial toll. He and his wife, who cares full-time for their 24-year-old mentally retarded son, moved into an apartment last year after selling their three-bedroom home and one of two cars.

They've exhausted their savings and his pension; it's a struggle to pay the monthly premiums of nearly $700 on his retiree health insurance. If something doesn't break soon, they will be forced to move again.

His 37-hour weeks as a security guard earn him $10 per hour, less than $20,000 a year. He works Saturdays and Sundays to keep as many weekdays open as he can for his job search.

"After four years of this you start talking to yourself and thinking, `What is wrong with me?'" he says. "People tell you, `There's nothing wrong with you,' but there's not a whole lot of comfort in that.

"To me, this is like the Great Depression. I didn't expect to arrive at this point at this stage in life."

- - -

WHITE-COLLAR JOBLESS BLUES

William Spolec

Age: 62

Profession: Human resources

Laid off: July 2003

Today: Works at Starbucks.

Charles Crimmins

Age: 60

Profession: University vice chancellor

Laid off: Summer 2001

Today: Consulting, telemarketing

Jill Wohlbedacht

Age: 40s

Profession: Computer consultant

Laid off: 2001

Today: Part-time sales at clothing store

LeRoy `Joe' Zebley

Age: 60

Profession: Project manager

Laid off: Took early retirement in 2000

Today: Security guard

----------

Displaced workers' stories at www.chicagotribune.com/workers

berose@tribune.com

-- posted by Bill_Duffy

http://www.businessweek.com/@@uk2Y*WYQxH...

Top 76. Jul 31, 2005 7:34 AM

» SteveT - A Head Of Steam On The Factory Floor

A Head Of Steam On The Factory Floor

Profits are up, capacity's tight, and companies are building new plants

Only a couple of months ago, it looked like the manufacturing sector was losing steam. Profit growth had slowed from 2004's scorching pace. Worries about the exodus of production to China and the loss of jobs had resurfaced as payroll figures sank lower and inventories began piling up. Add in rising interest rates and high energy prices, and it's easy to see why investors were cashing out.

Turns out U.S. manufacturing still has plenty of spunk. A gust of investment spending, led by the transportation and energy sectors, has boosted demand for industrial gear. Orders for nondefense capital goods excluding aircraft -- a good proxy for business investment -- jumped 3.8% in June, vs. a 0.6% decline in May. The big winners: communications gear, computers, and machinery. "Some of these guys who were basically going out of business are getting a shot in the arm," says James V. Gelly, chief financial officer of Rockwell Automation Corp.

It's a virtuous cycle that pushed the group to the top of the earnings heap in the second quarter, and one that will power growth throughout 2005. According to analysts' consensus estimates, earnings at the 54 industrial companies in the Standard & Poor's 500-stock index should climb 19% this quarter and 22% in the next, excluding one-time items. That comes after a projected 19% increase in the second quarter, a growth rate twice that of the index. Only energy and materials did better. Just as impressive, the surge came despite the weakness in domestic autos.

Among manufacturers, makers of industrial equipment and transportation gear are the stars. Thanks to strong demand in the U.S. and overseas, Caterpillar Inc. (CAT ) reported a 34% jump in second-quarter profits, to $760 million, on a 23% rise in sales, to $9.4 billion. Both are records -- and Cat execs promise more, boosting its 2005 earnings forecast to $2.85 billion. Boeing Co. (BA ) also hiked its outlook, while other industrial-equipment makers such as Ingersoll-Rand Co. (IR ) and Eaton Corp. (ETN ) surprised Wall Street and upped their full-year numbers, too.

The roots of these returns go back to the industrial recession that stretched into 2003. To survive, most manufacturers cut costs to the bone by eliminating inefficient equipment and slashing headcounts. Today, with limited production capacity and strong worldwide demand, companies have been able to raise prices. At Cat, for example, price hikes of around 5% added $470 million to revenues this quarter. In the second quarter, 3M Co. (MMM ) jacked up prices by 2% in the U.S.

Companies are using the money from price hikes to pay for new equipment and plants and to hire employees. Manufacturing investment in the second quarter grew to an annualized rate of $15.1 billion, up 26% in a year, according to Economy.com. Indeed, tightness on the factory floor is forcing Eaton to spend around $400 million on capital expenditures this year. Eaton is hiring too, with 400 jobs posted on its Web site. At Cat, U.S. payrolls are up by 10,000 over the past year, to 82,250.

Despite those gains, however, the strong profits are not generating overall job growth. Offshoring continues, and new domestic factories often require a fraction of the headcount. Manufacturing jobs in the U.S. fell by 60,000, to 14.3 million in the year through June. More will be lost. In recent months Eastman Kodak Co. (KMP ) plans to let go of 6,000.

Still, even as the industrial recovery enters its third year, manufacturers remain upbeat. Though analysts expect profit growth will slow to 13% in the first quarter of 2006, China's July revaluation of the yuan by 2.1% has increased hopes that exports will grow anew and the sector will surprise again. For a long-suffering group, good news of any size is welcome.

By Adam Aston in New York and Michael Arndt in Chicago

-- posted by SteveT

Top 77. Aug 8, 2005 10:20 PM

» Normxxx - Best News Almost Over?

<img src="http://www.bankcreditanalyst.com/images/general/blirtry.gif">
<img Align="Left" hspace="10" vspace="5" src="http://www.bankcreditanalyst.com/public/...">U.S. Payrolls: Is The Best News Almost Over?

10:28:00, August 08, 2005

The July U.S. payroll report showed further solid gains. However, the employment outlook is starting to cloud.

There have been a rash of layoff announcements in recent weeks (although new unemployment claims have not yet moved higher).

[Normxxx Here: Outplacement firm Challenger Gray & Christmas announced recently that planned job layoffs for the rest of 2005 have recently surged. ]

The downward pressure on profit margins from the dollar, the Fed, energy prices and rising labor costs remains intact. Thus, the risks are skewed in the direction of companies becoming more cautious as the year progresses. Our payroll Model heralds some moderation, small companies (NFIB) have pruned hiring plans and the improvement in the “jobs are plentiful” index has stalled (much as occurred during the mid-expansion slowdown in the mid-1990s).

Bottom line: job growth should decelerate, but the Fed will not pause until clear evidence of weakness emerges.

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 78. Aug 10, 2005 8:34 PM

» Normxxx - Reverse Brain Drain?

M.B.A. Students Bypassing Wall Street for a Summer in India

By SARITHA RAI, NYTimes | 10 August 2005

BANGALORE, India, Aug. 9 - This summer, Omar Maldonado and Erik Simonsen, both students at the Leonard N. Stern School of Business at New York University, did something different.

Bypassing internship opportunities on Wall Street, just a subway ride away from their Greenwich Village campus, they went to India to spend the summer at an outsourcing company in Gurgaon, a suburb of New Delhi.

"The India opportunity grabbed me," said Mr. Maldonado, a Boston native whose family is from the Dominican Republic. "I wanted to get a global feel for investment banking and not just a Wall Street perspective."

He and Mr. Simonsen, both 27, are spending three months at Copal Partners, an outsourcing firm with 100 analysts. It produces merger and acquisition pitch books and provides equity and credit analysis and other research to global banks and consultant groups, including those on Wall Street.

Mr. Maldonado and Mr. Simonsen, of Riverside, Calif., are part of a virtual invasion of India by American students. Graduate students from top schools in the United States, most from master of business administration programs, are vying for internships at India's biggest private companies. For many, outsourcing companies are the destinations of choice.

India is not just a line on an American student's résumé, said Kiran Karnik, president of the outsourcing industry trade body, Nasscom, "but also culturally fulfilling." Many students travel while in India, giving them a view of the country and its long history, he said.

Nasscom is now trying to track the ever-increasing numbers of foreign interns. Many are in India to study globalization firsthand, Mr. Karnik said; that is often not possible in China because, unlike India, English is not widely spoken there.

Mr. Karnik said he had met more than a dozen interns from the Harvard Business School who were spending this summer in India. "I expect a bigger horde of students to arrive next year because the ones here said they had a great time and will go home to talk about it," he said.

Elsewhere, too, the trend is on the rise. Four students from Fuqua School of Business at Duke University are interning in India, compared with only one last year and none in 2003. Of this year's interns, three are at Infosys Technologies, an outsourcing company in Bangalore, and the fourth is in Chennai at GlobalGiving, an organization based in Bethesda, Md., that helps support social, economic and environmental projects around the world.

At Georgetown University, Stanley D. Nollen, a professor of international business at the Robert Emmett McDonough School of Business, said India was of growing interest to students.

"No longer is India thought of as a land of snake charmers and bride burnings," he said. "Now India means the world's best software services, and increasingly, pharmaceuticals and auto parts."

Professor Nollen directs the school's programs for M.B.A. students in India, which include "residencies" - academic courses that are centered on consulting projects for companies operating in India. A group of 49 students arrived this month and went to companies like Philips India Software and MindTree Consulting, both in Bangalore; the motorcycle-making unit of Eicher in Chennai; and the ICICI Bank in Mumbai.

India can be a jolt to a first-time American visitor. In Gurgaon, a small town despite its tall office complexes and shiny new malls, Mr. Maldonado and Mr. Simonsen share an apartment where the power fails several times a day. Temperatures are regularly above 100 degrees Fahrenheit in the summer.

The two men said they came prepared to find inadequate infrastructure, but were not prepared for the daily frustrations of Gurgaon. There is no mass transportation system, and shopping, even for something as basic as an umbrella, can take hours. They rumble to work in an auto rickshaw - a motorized three-wheeler that seats two and is a ubiquitous form of transport in Indian cities.

But the sophistication of the work being done in Copal's Gurgaon office contrasts with the chaotic city outside. Mr. Simonsen said he was amazed. "I came expecting to see number-crunching and spreadsheet type of work; I didn't expect American banks to farm out intricate analytics," he said. The two students are working on a project that analyzes investment opportunities for clients across 23 countries.

Infosys Technologies, the country's second-largest outsourcing firm after Tata Consultancy Services, discovered how popular India had become as an internship destination for Americans when the company began recruiting: for the 40 intern spots at its Bangalore headquarters, the company received 9,000 applications. Only those with a cumulative grade-point average of 3.6 or more made it to a short list, and then they were put through two rounds of interviews.

The final 40, who cut a wide academic swathe from engineering schools like M.I.T. and Carnegie Mellon to business schools like Stanford, Wharton and Kellogg, have since arrived on campus for average stays of three months. The interns work in areas from marketing to technology. They live in a 500-room hotel complex on Infosys's expansive campus in the suburbs of Bangalore, exchanging coupons for meals at the food court and riding the company bus downtown to decompress at the many pubs and bars.

Among the Infosys interns is Caton Burwell, 28, from the Stanford Graduate School of Business. "India has come to symbolize globalization and I wanted to participate in the workings of the global economy," he said. "Besides, it would look great on my résumé."

Mr. Burwell said that, since arriving in India, he had developed a better grasp of the workings of the global economy and the logic behind the choices companies and countries make. "Being here is a powerful experience; it is impossible not to think differently," he said.

Also, his attitude toward outsourcing has changed since meeting Indian employees, who he said work very hard and care a great deal about the quality of their work. "To come here, meet these people, and to return home and turn your back on outsourcing is hard," he said.

Jeffrey Anders, 29, from the Sloan School of Management at M.I.T., is similarly stirred. Mr. Anders is halfway through his internship at the business process outsourcing division of Hewlett-Packard India in Bangalore.

"I can't help but feel that I am witnessing the creation of a new global economic order, a new reality that most people back home don't realize is coming," said Mr. Anders.

After a meeting with the recruiting head of Hewlett-Packard India's back-office unit at a conference at M.I.T., Mr. Anders came to India to help build a group of Indian economists and statisticians to perform complex analytics and predictive modeling for Western multinationals. "These highly educated and qualified people are not stopping at call centers and back-office work," he said. "They are getting ready to compete for every job."

Meanwhile, Indian companies are looking at summer internships as a way of building a diverse work culture.

"Bringing investment bankers here provides our Indian team a perspective and context of Wall Street," said Joel Perlman, co-founder of Copal Partners, a company based in London that has four employees each in New York and London and another 100 or so in India.

Other companies, and even the schools themselves, are looking at internships as a step toward attracting bright young Americans to work in India. Infosys, for instance, hired Joshua Bornstein, a former intern from Claremont McKenna College in California, nearly two years ago as its first American employee based in India.

"In this increasingly global economy, we would expect to see India become an even greater source of employment for our students," Sheryle Dirks, director of the Career Management Center at Fuqua, said.

Mr. Anders, from the Sloan school, works in a new Hewlett-Packard building, where he sometimes works out at the gym in the basement and eats at the cafeteria on the terrace. The employees work in open cubicles, similar to those in offices anywhere in the West. His team consists of four Indians, all with M.B.A.'s like him, and they operate globally, collaborating with teams in California and elsewhere.

Interns like Mr. Anders are getting a close view of social changes that are happening in India. Outsourcing has created thousands of better-paying jobs and spawned communities of young people who can afford cars, apartments and iPods.

"I thought the stipend was the down side," said Mr. Anders, "but coming here is a priceless experience."

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 79. Aug 14, 2005 12:46 PM

» Normxxx - Watching the Economy Crumble

Watching the Economy Crumble

By Paul Craig Roberts | 14 August 2005

Dr. Roberts, is a former Associate Editor of the Wall Street Journal and a former Contributing Editor of National Review, was Assistant Secretary of the Treasury during the Reagan administration. He is the author of The Supply-Side Revolution. Not exactly some 'left-wing' nut.

The US continues its descent into the Third World, but you would never know it from news reports of the Bureau of Labor Statistics’ July payroll jobs release.

The media gives a bare bones jobs report that is misleading. The public heard that 207,000 jobs were created in July. If not a reassuring figure, at least it is not a disturbing one. On the surface things look to be pretty much OK. It is when you look into the composition of these jobs that the concern arises.

Of the new jobs, 26,000 (about 13%) are tax-supported government jobs. That leaves 181,000 private sector jobs. Of these private sector jobs, 177,000, or 98%, are in the domestic service sector.

[Normxxx Here: Where are the engineering jobs? ]

Here is the breakdown of the major categories: 30,000 food servers and bartenders, 28,000 health care and social assistance, 12,000 real estate, 6,000 credit intermediation, 8,000 transit and ground passenger transportation, 50,000 retail trade and 8,000 wholesale trade.

(There were 7,000 construction jobs, most of which were filled by Mexicans.)

Not a single one of these jobs produces a tradable good or service that can be exported or serve as an import substitute to help reduce the massive and growing US trade deficit. The US economy is employing people to sell things, to move people around, and to serve them fast food and alcoholic beverages. The items may have an American brand name, but they are mainly made off shore. For example, 70% of Wal-Mart’s goods are made in China.

Where are the jobs for the 65,000 engineers the US graduates each year? Where are the jobs for the physics, chemistry, and math majors? Who needs a university degree to wait tables and serve drinks, to build houses, to work as hospital orderlies, bus drivers, and sales clerks?

In the 21st century job growth in the US economy has consistently reflected that of a Third World country—low productivity domestic services jobs. This goes on month after month and no one catches on— least of all the economists and the policymakers.

Economists assume that every high productivity, high paying job that is shipped out of the country is a net gain for America. We are getting things cheaper, they say. Perhaps, for a while, until the dollar goes. What the cheaper goods argument overlooks are the reductions in the productivity and pay of employed Americans and in the manufacturing, technical, and scientific capability of the US economy.

What is the point of higher education when the job opportunities in the economy do not require it?

These questions are too difficult for economists, politicians, and newscasters. Instead, we hear that "last month the US economy created 207,000 jobs."

Television has an inexhaustible supply of optimistic economists. Last weekend CNN had John Rutledge (erroneously billed as the person who drafted President Reagan’s economic program) explaining that the strength of the US economy was "mom and pop businesses." The college student with whom I was watching the program broke out laughing.

What mom and pop businesses? Everything that used to be mom and pop businesses has been replaced with chains and discount retailers. Auto parts stores are chains, pharmacies are chains, restaurants are chains. Wal-Mart, Home Depot, and Lowes, have destroyed hardware stores, clothing stores, appliance stores, building supply stores, gardening shops, whatever— you name it.

Just try starting a small business today. Most gasoline station/convenience stores seem to be the property of immigrant ethnic groups who acquired them with the aid of a taxpayer-financed US government loan.

[Normxxx Here: And who seem to be the only 'Americans' willing to work that hard for that little income anymore. ]

Today a 'mom and pop' business is a cleaning service, a pool service, a lawn service, or a limo service that employs Mexicans, or some other 'etnic' group.

In recent years the US economy has been kept afloat by low interest rates. The low interest rates have fueled a real estate boom. As housing prices rise, people refinance their mortgages, take equity out of their homes and spend the money, thus keeping the consumer economy going.

The massive American trade and budget deficits are covered by the willingness of Asian countries, principally Japan and China, to hold US government bonds and to continue to acquire ownership of America’s real assets in exchange for their penetration of US markets.

This game will not go on forever. When it stops, what is left to drive the US economy?

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 80. Oct 4, 2005 4:47 PM

» Normxxx - Labor force still shrinks

Jobs recover, but labor force still shrinks

By H.J. Cummins, Star Tribune | 29 September 2005

Linda Williams' career change might hold a clue to one more aberration in this extra-long recovery from the 2001 recession.

The recession happened normally, economists tell us. Jobs went down, the jobless rate went up, and the labor force shrank.

But the recovery is breaking the mold. Jobs came back and the unemployment rate went down, as they should. But the labor force— the percentage of adult Americans who are working, or at least looking for work— is still shrinking.

"What's perplexing is we haven't seen the typical rebound," said Steve Hine, labor market research director at the Minnesota Department of Employment and Economic Development.

The same phenomenon is happening nationally, according to a new report from the nonprofit Center for Economic and Policy Research in Washington, D.C.

What's also important is that the trend is hitting different groups very differently: The labor force rates are dropping the most for young people and women, who might be going to school or other training, or opting out; or they might be losing to older workers who are snapping up the job openings— because they're not going boldly off into early retirement these days.

Williams, 53, of Bloomington, fits a couple of those trends. Laid off in June from warehouse work— shipping, receiving, packing— she has decided to retrain rather than look for another job right away. And that takes her temporarily out of the labor force, one more minus in the head count.

"At my age, I don't want to unload semis anymore," she said.

That's why she's investigating training possibilities through the Minnesota Workforce Center in Bloomington. She also wants to make more money, she said.

The old, obvious reasons for a shrinking labor force rate don't fit, Hine said.

Sure the state's population is growing, but there have been enough new jobs to invite more people back into the labor force— especially in the past year, he said.

Also, there's no evidence that Americans are particularly discouraged about finding work. The Bureau of Labor Statistics put discouraged workers at 384,000 in August, down from 534,000 a year earlier.

Still, instead of dropping and then rebounding, the labor force in Minnesota has been going down steadily from the pre-recession high of 76.1 percent in 2001, to 75.7 percent, then 75 percent, then 74.6 percent last year.

Nationally, the labor force went from 67.2 percent in 2000 to 66 percent last year. Minnesota is typically first or second in the nation in labor force participation rate.

The only difference between the two sets of figures is that Minnesota counts anyone working or looking for work; the national policy research report counts only those who are working.

Here's the breakdown by category and hunches on what's going on:

• The largest declines for men were in the 16-to-24 age group. Part of that might be good news, Hine said. It could mean that after those $12-per-hour pizza delivery jobs in the late 1990s sidelined young people, they're now going to college or some other further study.

• Women's poor showing might be pivotal. Their labor force rates have been climbing dramatically since the 1960s, even through the recession recoveries of those decades. But now, in Minnesota, their rates dropped from 71.2 percent in 2002 to 69 percent last year. Also, the national report shows that in past recoveries women got jobs much faster than men. But this time, they are climbing back just as slowly as the men. That report speculates that's because some of the heavily female kinds of jobs— temp work, cleaning and manufacturing— were particularly hard hit in the recession. Some economists speculate that women's labor force entry rates are finally plateauing.

Young workers and women can be part of "swing groups," said Michael Swanson, Wells Fargo senior economist. Young wives and mothers, for example, might have good reason to stay out of the labor force for a while, Swanson said.

"With a married couple, with two young kids, you have to overcome the day care hurdle and the work clothes/second-car/lunch hurdle and the incremental tax hurdle, for the second parent to go back to work. Is $12 an hour enough? $16? $20? I'm not sure those swing groups are being offered those no-brainer jobs now."

• Older workers, especially men, are the exception to the downward trend. In Minnesota, men's overall labor force rates did drop, but just 1 percentage point between 2001 and 2004; women dropped more than 2 percentage points from their peak. The national report shows that the only group with more jobs than before the recession are men and women 55 and older. After the last recession, the group tended just to retire, leaving the job openings for younger workers. But now they've decided to keep working, because their savings lost a lot of value in the recession and they're worried about health care costs.

"We hear a lot of people say, 'I can't afford those [health insurance] payments,' " said Tom Arendt, office manager at the Bloomington Workforce Center. "There are people who can't afford to take early retirement. And with companies cutting back on everything these days, including retirement incentives, it's just not an option anymore."

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The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 81. Oct 26, 2005 8:23 AM

» Normxxx - Unhealthy need not apply

Wal-Mart memo: Unhealthy need not apply

By Andy Serwer | 26 October 2005

[Normxxx Here: Gee! Republicans have really managed to roll back the clock and eliminate employer funded insurance and retirement. I never thought they actually meant it! I suppose, it's now on to SS! ]

NEW YORK (Reuters)— An internal memo sent to the Wal-Mart Stores Inc. board proposes numerous ways to hold down health care and benefits costs with less harm to the retailer's reputation, including hiring more part-time workers and discouraging unhealthy people from seeking jobs, the New York Times said Wednesday.

The paper said the draft memo to Wal-Mart's board was obtained from Wal-Mart Watch, a pressure group allied with labor unions that says Wal-Mart's pay and benefits are too low.

The paper said in the memorandum Susan Chambers, Wal-Mart's executive vice president for benefits, also recommends reducing 401(k) pension contributions and wooing younger, and presumably healthier, workers by offering education benefits.

The memo is quoted as expressing concern that workers with seven years' seniority earn more than workers with one year's seniority, but are no more productive, said the paper, which posted the memo on its Web site.

[Normxxx Here: Soon, we will be back to "piece work" pay. Does anyone on this site know what that means? ]

To discourage unhealthy job applicants, the paper said, Chambers suggests Wal-Mart arrange for "all jobs to include some physical activity (e.g., all cashiers do some cart-gathering),"

The memo also proposed that employees pay more for their spouses' health insurance, called for cutting the company's 401(k) contributions to 3 percent of wages from 4 percent and for cutting company-paid life insurance policies.

The memo acknowledged that Wal-Mart, the world's largest retailer, had to walk a fine line in restraining benefits because critics attacked it for being stingy on wages and health coverage. Chambers in the memo acknowledged 46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid.

Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which have soared by 15 percent a year on average since 2002. Like much of corporate America, Wal-Mart has been squeezed by soaring health costs, the paper said.

The proposed plan, if approved, would save the company more than $1 billion a year by 2011, the paper said.

In an interview, Ms. Chambers said she was focusing not on cutting costs, but on serving employees better by giving them more choices on their benefits. Chambers also said that she made her recommendations after surveying employees about how they felt about the benefits plan.

One proposal would reduce the amount of time, from two years to one, that part-time employees would have to wait before qualifying for health insurance. Another would put health clinics in stores, in part to reduce expensive employee visits to emergency rooms.

[Normxxx Here: Back to "company medicine." ]

Wal-Mart's benefit costs jumped to $4.2 billion last year, from $2.8 billion three years earlier. Last year Wal-Mart earned $10.5 billion on sales of $285 billion.

Under fire because less than 45 percent of its workers receive company health insurance, Wal-Mart announced a new plan Monday that seeks to increase participation by allowing some employees to pay just $11 a month in premiums.

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The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 82. Oct 26, 2005 1:32 PM

» Bill_Duffy - Re: Unhealthy need not apply

.
Gee, maybe the'll require potential employees to succesfully push a wheelbarrow loaded with a 90 pound bag of concrete a mile uphill to eliminate the fatties smile

But seriously, this is just another example of how coupling employment with Health Insurance distorts the labor market. Employers ought to be free to focus on satisfying customers instead of being consumed by health care issues.

For a good read, see "The New Health Insurance Solution" by Paul Zane Pilzer. Sub-title is "How to get cheaper, better coverage without a traditional employer plan."

-- posted by Bill_Duffy

Top 83. Oct 26, 2005 2:41 PM

» Kirk - Re: Unhealthy need not apply

In response to Unhealthy need not apply posted by Normxxx:

I heard them talk about it on the radio and TV today.

They read part of the memo on the financial spot I was listening to (top story each half hour that I try to catch when driving). It said that Walmart had employees that were LESS healthy than the US average so they were looking at way to change this.

I think it is good people are looking at this from both government and big business. The very rich like Kathy Hilton to Tom Cruise have the best bodies because they have the time and money to make getting in a workout a priority. (They also have great genes that means they work hard and the results are complimentary. I work out hard and I'm still a bald guy with a big head who eats too much ice cream.)

I'd actually like to see fitness tests to get certain lower rates on health insurance. If you work out hard and can do a treadmill and other stress tests with good results, then you should get a reduction in health insurance. Health habits for insurance rates should be similar to what you pay to live in a flood plane or in Earthquake country and want insurance for those "events."

I think it is all good to have workers pay more so it isn't simply popping a pill that your company insurance plan pays for when you get too fat and don't exercise. I can say this because I had terrible health habits in the 1980's where they put me on pills for BP and cholesterol. I quit drinking, quit smoking (That took longer) and started a regular exercise program and my BP is now fine, if not sometimes on the low side, and my cholesterol is OK... all without pills. Why should you or others pay for my pills if I wanted to drink, eat crappy food, smoke and not exercise?

-- posted by Kirk