EU-DIGEST

Will Americans be able to sustain their life style?

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American workers are overpaid, relative to equally productive employees elsewhere doing the same work. If the global economy is to get into balance, that gap must close. Americans take advantage of the higher productivity that makes their country rich: better education and infrastructure, abundant capital and a strong work ethic. But how much higher should American wages be? The answer depends in large part on two measures: the difference in productivity in making goods that can be traded across borders, and the quantity of such goods. Both measures point to a narrowing wage gap. Many factors are raising productivity in poor countries. Fast development, cheap capital and more efficient shipping all help. Cheap communication via the Internet reduces costs and makes it easy to trade many more goods and especially services. The global wage gap has been narrowing, but recent labor market statistics in the United States suggest the adjustment has not gone far enough.

Global wage convergence is great for the poor but tough on the overpaid. It’s possible to run the numbers to show that American manufacturing workers should take average real wage cuts of as much as 20 percent to get into global balance. The required cut may be smaller. But if American wages get stuck above global market-clearing levels, as in the 1930s, the result could well be something approaching Depression-era levels of unemployment.

Labels: Labor market, Life Style, Unemployment, US Economy

Friday's unemployment report offered no comfort to economists, government officials and the 27.4 million Americans now unable to find full-time employment. In recent months unemployment numbers have produced growing economic concerns over the likelihood of an economic recovery that fails to produce job growth; and this month's unemployment report, coupled with recent GDP estimates point support those concerns. Despite billions of dollars in stimulus spending that continues to flow out of Washington, the Department of Labor report pointed to job loss numbers that have failed to improve amid the spending. The Department of Labor reported a rise in the adjusted non-farm unemployment rate to a new high of 10.2% after the economy shed another 190,000. However, the Department of Labor also reports that the number of unemployed Americans increased by 558,000 last month, representing a sharpest increase in unemployment since this spring. In addition, beyond the adjusted payroll number lies a host of employment numbers including the disturbing reality that 27.4 million Americans are now unable to find full-time employment.

According to the Department of Labor, 15.7 million Americans are now unemployed. 9.3 million Americans are unable to find full-time employment and 2.4 million Americans have simply given up. As a result, 27.4 million Americans are now unable to find full-time employment.

Labels: Labor, Unemployment, US Economy

For the first time in more than a quarter century, unemployment in the United States has reached double digits. That's bad economic news for America, which has now been shedding jobs for 22 consecutive months. That's bad social news for the Americans who are out of work, for their families and for their communities, especially when we consider data that tells us 35 percent of jobless men and women have been looking for work for more than six months. And that's bad political news for President Barack Obama and the Democrats in Congress, who continue to make the mistake of treating unemployment as an afterthought rather than the most serious issue facing the nation.

Labels: Unemployment, US Economy

Labels: EU, Eurozone, Unemployment

US economy - Unemployment Confronts Obama Rhetoric With Chronic Joblessness - Rich Miller

Economists since the mid-1990s have reckoned that full employment was equivalent to about a 5 percent unemployment rate, taking into account the time required to switch jobs. Now Nobel Prize winner Edmund Phelps and Pacific Investment Management Co. Chief Executive Officer Mohamed El-Erian say the fallout from the deepest recession in more than five decades is driving the so-called natural rate higher, perhaps to 7 percent. “We are in the midst of a large and protracted increase in both actual unemployment and its natural rate,” said El-Erian, 51, whose Newport, California-based company manages the world’s largest bond fund. Even with the economy growing, “it will take at least a couple of years” for joblessness to fall to 7 percent from 9.7 percent now. That may keep the federal budget deficit near a record $1.6 trillion into next year and might prevent the Federal Reserve from raising interest rates in 2010, said Bruce Kasman, chief economist at New York-based JPMorgan Chase & Co., the second- largest U.S. bank. Economists since the mid-1990s have reckoned that full employment was equivalent to about a 5 percent unemployment rate, taking into account the time required to switch jobs. Now Nobel Prize winner Edmund Phelps and Pacific Investment Management Co. Chief Executive Officer Mohamed El-Erian say the fallout from the deepest recession in more than five decades is driving the so-called natural rate higher, perhaps to 7 percent.

“We are in the midst of a large and protracted increase in both actual unemployment and its natural rate,” said El-Erian, 51, whose Newport, California-based company manages the world’s largest bond fund. Even with the economy growing, “it will take at least a couple of years” for joblessness to fall to 7 percent from 9.7 percent now. That may keep the federal budget deficit near a record $1.6 trillion into next year and might prevent the Federal Reserve from raising interest rates in 2010, said Bruce Kasman, chief economist at New York-based JPMorgan Chase & Co., the second- largest U.S. bank.

Labels: Unemployment, US Economy

Real US unemployment rate at 16 pct: says US Fed official

AFP:The real US unemployment rate is 16 percent if persons who have dropped out of the labor pool and those working less than they would like are counted, a Federal Reserve official said Wednesday. "If one considers the people who would like a job but have stopped looking -- so-called discouraged workers -- and those who are working fewer hours than they want, the unemployment rate would move from the official 9.4 percent to 16 percent, said Atlanta Fed chief Dennis Lockhart. He underscored that he was expressing his own views, which did "do not necessarily reflect those of my colleagues on the Federal Open Market Committee," the policy-setting body of the central bank. Lockhart, who heads the Atlanta, Georgia, division of the Fed, is the first central bank official to acknowledge the depth of unemployment amid the worst US recession since the Great Depression.

Labels: Unemployment, US Economy

U.S. unemployment rate highest since 1983<

U.S. employers cut 467,000 jobs in June, far more than expected, while the unemployment rate rose to 9.5%, the government said on Thursday in a report that showed a labor market continuing to struggle with a deep recession. The June job losses were more than 100,000 greater than the 363,000 consensus of Wall Street economists polled by Reuters and broke a four-month trend of moderation in job losses. The Labor Department data showed that in April and May, 8,000 fewer jobs were lost than previously reported. The May job losses were revised downward to 322,000, while the April losses were revised upward to 519,000.

Labels: Economy, Labor, Unemployment, US

US Economy - US calls 345,000 job losses 'start of recovery

The US economy shed another 345,000 jobs last month and the unemployment rate rose to 9.4 per cent, but the losses were smaller than expected and amplified hopes of a recovery.Economists described the figures as an unambiguous sign of improvement, yet also clear evidence of broadening national distress as millions of households grappled with joblessness and lost working hours. The fact that a report showing the highest unemployment rate in more than 25 years was embraced optimistically testifies to the stark fears over the economy in recent months. The US economy has lost 6 million jobs since the recession began in December 2007. Some economists think two million more could be lost.

Labels: Economy, Unemployment, US

Europe Unemployment Rate Rises to Highest Since 1999 - by Simone Meier

Europe’s unemployment rate rose to the highest in almost 10 years in April as the worst global economic slump in more than six decades forced companies to cut jobs and spending. Unemployment in the 16-member euro region increased to 9.2 percent from 8.9 percent in March, the European Union statistics office in Luxembourg said today. That was the highest since September 1999 and exceeded the 9.1 percent rate expected by economists, according to the median of 29 forecasts in a Bloomberg News survey.

Labels: EU, Unemployment

Unemployed, and Not Getting a Job Anytime Soon? Why Not Build a Better World? - by Barbara Ehrenreich

Unemployed, and Not Getting a Job Anytime Soon? Why Not Build a Better World?

In most parts of the world, mass unemployment brings the specter of mass social unrest. Not in the U.S., though, where 13 million people have accepted joblessness with nary a peep of protest. Many reasons -- from Prozac to Pentecostalism -- have been cited to explain American passivity in the face of economic violence. But the truth might be far simpler: In America, being unemployed doesn't mean you have nothing to do but run around burning police cars. Unemployment has been reconfigured as a new form of work.

Labels: Labor market, Unemployment

Sony Ericsson Cuts Swedish Staff by 400 - by Mikael Ricknäs

Mobile phone manufacturer Sony Ericsson will reduce its workforce by about 400 people in Lund, Sweden, cutting 160 employees and 250 consultants, the company announced on Friday. The site in Lund had a workforce of about 4,000, including 1,000 consultants, before the cuts, according to a spokesman. One hundred consultants were already shown the door in April, a statement said. The cutbacks are part of a plan to lower its global workforce by approximately 2,000 people -- out of a total 10,000 -- by the middle of next year. The plan was announced on April 17, when the company announced its results for the first quarter of 2009.

Labels: Economy, EU, Sony Ericsson, Sweden, Unemployment

EU unemployment now stands at 8.1%

In March an estimated 419,000 people lost their jobs across the 16 countries in the eurozone. The Eurostat data agency says levels of unemployment now stand at 8.9% of the population who are eligible for work, up from 8.7% in February. EU officials estimate 3.5 million jobs will be lost across the whole of the EU this year.

Labels: Economy, EU, Unemployment

The news that U.S. unemployment has hit 13.7 million, pushing the rate to 8.9 percent, tells only half the story of this recession. The total number of Americans who are not working full-time but ought to be is actually about 22 million, or 15.8 percent, according to the Bureau of Labor Statistics. Who are those other 8.3 million Americans? Call them the unofficially unemployed. Each time the Bureau releases the monthly unemployment figure, it does not include many out-of-work Americans. "In the case of the monthly jobs report, the Labor Department contacts 60,000 households to determine the unemployment picture for the entire workforce, which consists of about 154 million Americans." The problem with this methodology is that it does not include millions of Americans who are not working full-time who ought to be. Those, in the bureau's words, who are "marginally attached to the labor force."

Those numbered an additional 2.1 million Americans in the first quarter of this year, the bureau said. Alarmingly, that number was up 35 percent from the first quarter of 2008.

Labels: Economy, Unemployment, US

U.S., Europe Are an Ocean Apart on Human Toll of Joblessness - by Markus Walker

In Germany, losing his factory job didn't stop Alfred Butt from taking a Mediterranean vacation this winter. Thanks to generous jobless benefits, being out of work "hasn't changed my life that much," Mr. Butt says. In the U.S., Dylan DeRoberts lost similar work -- but there's no seaside getaway for him. Instead, he's giving up life's little pleasures, like riding his snowmobile, because he lost his insurance, too. "I've learned to live at a new level," Mr. DeRoberts says. Unemployment is taking a very different human toll on opposite sides of the Atlantic, which helps explain why Europe and the U.S. can't agree on how to attack the global recession. The U.S. is spending hundreds of billions of dollars -- including increased assistance to the unemployed -- to prop up the economy, and wants Europe to follow suit. But most of Western Europe already has a strong, if costly, social safety net, so governments feel less pressure to spend their way out of trouble.

The irony is that for years, Europe tried to rein in its own worker protections -- long considered a drag on growth in good times -- to emulate the faster-growing U.S. economy. Now the U.S. is moving toward a more European system.

Labels: EU, Labor, Unemployment, US

Double-digit unemployment hits 7 states - G. Scott Thomas

US unemployment: Seven states posted unemployment rates above 10 percent in February, as Ohio inched toward the double digits, according to seasonally adjusted figures released Friday morning by the U.S. Bureau of Labor Statistics. Ohio's unemployment rate for February was 9.4 percent, an increase of 3.5 percentage-points. Michigan registered the nation’s worst rate, with 12 percent of its labor force out of work as of February 2009. Also in double digits were South Carolina (11 percent), Oregon (10.8 percent), North Carolina (10.7 percent), California (10.5 percent), Rhode Island (10.5 percent), and Nevada (10.1 percent).

Labels: Economy, Unemployment, US