Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Unemployment’

Europe’s New Jobs Lack Old Guarantees—Stoking Workers’ Discontent

Posted by hkarner - 19. November 2019

Date: 18-11-2019
Source: The Wall Street Journal

Unemployment in Europe is at its lowest level in a generation, but workers complain about lack of benefits, security

Yoann Perrotin, outside Grenoble. His temporary work contract with a bank wasn’t renewed, making it difficult to plan or buy a home.

By Daniel Michaels in St. Ismier, France and Paul Hannon in London

Europe’s job market is booming. So why are so many workers so angry?

Unemployment in Europe is at its lowest level in a generation. Ten million more people have jobs today than before the financial crisis a decade ago. Demand for workers remains high, with more job openings than ever before across the European Union. Of the 22 EU countries that have a minimum wage, all but Latvia raised theirs last year.

Yet behind the numbers is a shift that is changing Europe. A growing proportion of new jobs are part-time, temporary or self-employed positions that lack the benefits that European workers have long expected. Den Rest des Beitrags lesen »

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The ECB Needs New Inflation Rules

Posted by hkarner - 3. Juli 2019

Michael Heise

Michael Heise is Chief Economist of Allianz SE and the author of Emerging From the Euro Debt Crisis: Making the Single Currency Work.

The European Central Bank has consistently undershot its inflation objective of “close to, but below 2%” for over a decade, potentially threatening its credibility. To maintain credibility, the ECB should adopt a two-pronged strategy focusing on a medium-term inflation target and systematically smoothing financial cycles.

MUNICH – The upcoming change of leadership at the European Central Bank represents an opportunity – if not an obligation – to review the Bank’s policy framework. The ECB can take credit for major achievements during Mario Draghi’s presidency – most importantly, stabilizing the eurozone during the 2007-08 global financial crisis and ending speculation about the possible breakup of the single currency during the sovereign-debt crisis in 2012. But the ECB’s strategy of steering consumer-price inflation has been much less successful.

The ECB’s policies regarding inflation have had some powerful side effects – including increased risk-taking, skewed capital allocation, rising inequality, and growing pension gaps. Yet annual inflation has undershot the bank’s objective of “close to, but below 2%” for over a decade, and has averaged only 1.2% since the financial crisis. To bolster its credibility on inflation in today’s uncertain policymaking environment, the ECB should adjust its rules and adopt a more flexible approach.The impact of monetary policy on economic activity and inflation has been hotly debated ever since John Maynard Keynes published The General Theory of Employment, Interest and Money in 1936. Although there have always been cracks in the transmission of such policies to the real economy and prices, the financial crisis and its aftermath exposed major ruptures. Den Rest des Beitrags lesen »

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ECB’s Draghi Grows Bolder as His Tenure Nears End

Posted by hkarner - 2. Juli 2019

Date: 01-07-2019
Source: The Wall Street Journal

The president of the European Central Bank is doubling down on a tried-and-tested strategy in an attempt to guard the bloc against too-low inflation

Mario Draghi, who has three policy meetings left before his term ends, is shown speaking during a conference at the ECB headquarters in Frankfurt earlier in June.

FRANKFURT—Mario Draghi is teeing up some of the boldest policy moves of his eight-year term as European Central Bank president only four months before he steps down, potentially binding the hands of his successor for years.

The late burst of activism by the 71-year-old Italian is buoying European financial markets and catching the eye of President Donald Trump, even as it raises legal and practical questions about how much more the ECB can squeeze out of its existing toolbox.

The shift toward easier money, mirroring a move by the Federal Reserve, comes despite relative resilience in the eurozone economy, whose unemployment rate is at the lowest level in a decade.

Mr. Draghi’s final three policy meetings—in July, September and October—are suddenly in play for a policy decision. Analysts expect the ECB to cut interest rates, which are already negative, at or before its Sept. 12 meeting. Some also expect Mr. Draghi to announce the relaunch of the bank’s €2.6 trillion ($3 trillion) bond-buying program, known as quantitative easing or QE. Den Rest des Beitrags lesen »

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Beyond Unemployment

Posted by hkarner - 30. Mai 2019

Michael Spence, a Nobel laureate in economics, is Professor of Economics at New York University’s Stern School of Business and Senior Fellow at the Hoover Institution. He was the chairman of the independent Commission on Growth and Development, an international body that from 2006-2010 analyzed opportunities for global economic growth, and is the author of The Next Convergence – The Future of Economic Growth in a Multispeed World.

In modern economies, people may have jobs, but they still harbor major concerns in a wide range of areas, including security, health and work-life balance, income and distribution, training, mobility, and opportunity. By focusing solely on the unemployment rate, policymakers are ignoring the many dimensions of employment that affect welfare.

MILAN – For much of the post-World War II period, economic policy has focused on unemployment. The massive job losses of the Great Depression – reversed only when World War II, and the massive debt accumulated to finance it, kick-started economic growth – had a lasting impact on at least two generations. But employment is just one facet of welfare, and in today’s world, it is not enough.

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America’s Illusions of Growth

Posted by hkarner - 15. Mai 2019

Jeffrey D. Sachs, Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, is Director of Columbia’s Center for Sustainable Development and of the UN Sustainable Development Solutions Network. His books include The End of Poverty, Common Wealth, The Age of Sustainable Development, Building the New American Economy, and most recently, A New Foreign Policy: Beyond American Exceptionalism.

Many commentators have interpreted buoyant GDP and unemployment data in the United States as vindicating President Donald Trump’s economic policies, and some suggest that his re-election chances have improved as a result. But these indicators fail to measure what really counts for the public.

NEW YORK – National politics in the United States has become enslaved to macroeconomic indicators that have little bearing on true wellbeing. For many commentators, the snapshot growth rate of 3.2% for the first quarter of 2019, coupled with a decline in the unemployment rate to 3.6% in April, implies that President Donald Trump’s economic policies have been vindicated, and some suggest that his re-election chances have improved as a result.

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France’s Macron, Celebrated Abroad, Faces Isolation at Home

Posted by hkarner - 10. Oktober 2018

Date: 09-10-2018
Source: The Wall Street Journal

Support has tumbled amid chronically high unemployment and a slowing economy

Emmanuel Macron’s approval ratings have tumbled to as low as 29% in September from 50% at the start of the year.

PARIS—The presidency of Emmanuel Macron has reached a tipping point.

Viewed from abroad, the 40-year-old former investment banker is a poster boy for international cooperation, widely applauded for speeches like his recent United Nations address denouncing protectionism and nationalism.

At home, however, Mr. Macron is increasingly isolated. His cabinet is heading for a shuffle, after two prominent ministers, including one of his earliest allies, abruptly resigned from government. The French economy, growing at a rate 1.6% this year, has fallen behind the rest of Europe. And the labor market overhaul Mr. Macron decreed a year ago has done little to lower France’s chronically high unemployment.

That malaise represents an acute threat to Mr. Macron’s signature cause—deeper European Union integration as an answer to growing nativist movements across the blocbecause the French leader himself has argued that France can only lead the EU if it shines as a model to other member states. It also undercuts the ethos of free markets and trade that Mr. Macron has come to represent in France and beyond. Den Rest des Beitrags lesen »

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Britain’s unemployment is ultra-low, but its wages are ultra-measly

Posted by hkarner - 9. September 2018

Date: 08-09-2018
Source: The Economist

Normally, low joblessness means high wages. No longer

BRITAIN is enjoying a jobs miracle. Its rate of unemployment is one of the
lowest in Europe. Before long, and possibly as soon as the next release of data on September 11th, it could fall below 4%, a level not breached since 1974. The ruling Conservative Party is rightly proud of its record on jobs. Yet the economy that has got so many people into work has proved incapable of generating pay rises. Real wages are lower than a decade ago. The government may crow about unemployment being at its lowest since the 1970s, but pay growth is at its weakest since the Napoleonic wars.

A few factors help to explain why Britain enjoys such little unemployment. The OECD, a club of mostly rich countries, says the country has the least-regulated labour market in Europe. Hiring and firing staff is easier than in countries such as France, where the hassle of getting rid of bad employees makes bosses think twice about taking someone on in the first place. (France’s unemployment rate is more than twice Britain’s.) Policy measures have made Britons more employable. Since the 1980s governments have more closely supervised jobseekers’ efforts, which some research has associated with lower long-term unemployment.

In the past, low unemployment went hand in hand with juicy pay rises. The fewer the number of people looking for work, the harder employers had to compete for staff. The inverse relationship between unemployment and wage growth is summed up by the Phillips curve, named after William Phillips, who first plotted it in 1958. Yet in recent years the relationship has become much weaker. Economists in many rich countries, including America and Germany, have noticed that low unemployment is not generating the high wage-growth that might be expected. Britain’s ultra-low rate of joblessness, coupled with particularly weedy wages, makes it perhaps the biggest Phillips-buster of all.

As Britain’s unemployment rate has fallen, economists have been stumped time and again by the failure of pay to respond. In 2013 calculations from the Bank of England suggested that 6.5% was as low as unemployment could go without wages beginning to push inflation above its target rate. Within a few months that estimate had edged down to 5.5%. Then 5% or so. Now that rate is thought to be just over 4%.

Yet even as unemployment heads below that level, there is little sign of pay pressure. If the relationship seen during the 2000s held today, workers would be enjoying nominal wage rises of some 5% a year (see chart 1). Instead, the most recent official reading shows annual nominal wage growth of just 2.7% in June. Data from Adzuna, a job-search website, show that advertised salaries fell from June to July. The upshot is that wages have done worse in Britain lately than almost anywhere in the rich world (see chart 2). To explain this unusually poor performance, consider three factors.

First, productivity. In the long run, changes in real wages depend on how much workers produce per hour. Since the financial crisis, productivity growth has stagnated. Low government and business investment may be in part to blame. Britain’s manufacturing industry uses fewer robots per worker than Slovakia’s. Moreover, in recent years Britain has seen the rapid growth of low-productivity jobs in industries such as hospitality. The number of hairdressers has risen by 50% since 2010. The growth of such jobs has dragged down average productivity. Our analysis suggests that the changing composition of jobs in the British labour market has pushed down the average real wage by more than 2%.

Yet productivity is not the whole story. Pay per person has deviated further from its pre-crisis trend than productivity growth. In the past year output per hour has at last picked up, but wages have not. This points to a second reason for Britain’s weak wage-growth: workers’ diminished bargaining power.

The decline of unionisation is commonly blamed for this. In the 1960s, when unions were mightier, the share of GDP accruing to workers was far higher. But the kneecapping of the unions in the 1980s predates the recent stagnation in pay. Perhaps a more important reason is the government’s cap on public-sector pay rises. Since 2011 salaries for most public employees have increased by no more than 1% a year in nominal terms (though in recent months the cap has been raised). The pay premium typically enjoyed by public-sector workers has diminished. This also affects the private sector. If bosses are less fearful of losing workers to the state, they will be less inclined to offer pay rises.

Changes to welfare policy from 2010, including tougher rules on who gets benefits, and declines in their value, have also played a role. Cross-country analysis of welfare policy is scanty, but it suggests that the reforms in Britain have been especially hard-nosed. As losing a job becomes a scarier prospect, workers may not bargain so hard for better pay.

In trying to puzzle out the breakdown of the relationship between unemployment and pay observed by Phillips, economists are increasingly asking themselves whether the labour market is really as tight as the headline unemployment rate suggests. Few Britons are out of work altogether, but 8% say they would like to work more hours than they do, a higher share than before the financial crisis. A delivery driver, for instance, might want more errands than he is offered. Such workers may be more concerned about securing extra hours than demanding higher pay.

All this means that the labour market may need to tighten even more before wage growth improves substantially. Yet with inflation above the official 2% target, the Bank of England’s monetary-policy committee has lately taken a hawkish turn, raising interest rates in an effort to dampen the spending and investment that would raise demand for labour. Meanwhile, with Brexit six months away, the outlook for economic growth is poor. It may be some time before Britain’s miraculous unemployment figures are matched by equally impressive wage growth.

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Hiobsbotschaft für Rom: Wachstum bremst sich ein

Posted by hkarner - 30. Juli 2018

29. Juli 2018, 18:20  derstandard.at

Italiens Wirtschaft wächst langsamer. Mit dem Bankenverband ABI hat nun das vierte Institut die Prognose geschwächt

Mailand – Hiobsbotschaft für Italiens Regierung: Das Wirtschaftswachstum verlangsamt sich. Der Bankenverband ABI (Associazione Bancaria Italiana) hat die Wachstumsprognose für 2018 bis 2010 von ursprünglich 1,5 auf 1,3 Prozent pro Jahr gesenkt. Nach dem Industriellenverband Confindustria, der Notenbank Banca d’Italia und dem Internationalen Währungsfonds (IWF) sagte am Wochenende die vierte Institution reduziertes Wachstum voraus. Die Gründe für die Abschwächung sind zwei Monate nach Antritt der neuen Regierung aus Lega und Fünf-Sterne-Bewegung teils hausgemacht: Vizepremier und Industrieminister Luigi Di Maio will wichtige Infrastrukturprojekte stoppen und Verträge auflösen. So soll der Kaufvertrag für das Stahlwerk Ilva rückgängig gemacht und das mit den Franzosen vereinbarte Superschnellbahnprojekt TAV zwischen Turin und Lyon abgebrochen werden. Das verunsichert ausländische Investoren und wird Rom auch teuer zu stehen kommen. Allein der TAV-Stopp würde zwei Milliarden Euro an Rückzahlung erfordern, die von der EU bereits finanziert wurden. Dabei braucht das Land Projekte, um den Rückstand zu anderen EU-Ländern aufzuholen.

Arbeitsmarkt schwächelt

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The rich world needs higher real wage growth

Posted by hkarner - 3. Juli 2018

Date: 02-07-2018
Source: The Economist

Pay is rising, but so are prices. Blame more expensive oil

CENTRAL bankers and economists have spilled much ink in recent years on the question of why wages have not grown more. The average unemployment rate in advanced economies is 5.3%, lower than before the financial crisis. Yet even in America, the hottest rich-world economy, pay is growing by less than 3% annually. This month the European Central Bank devoted much of its annual shindig in Sintra, Portugal to discussing the wage puzzle.

Recent data show, however, that the problem rich countries face is not that nominal wage growth has failed to respond to economic conditions. It is that inflation is eating up pay increases and that real—that is, inflation-adjusted—wages are therefore stagnant. Real wages in America and the euro zone, for example, are growing more slowly even as the world economy, and headline pay, have both picked up (see chart). Den Rest des Beitrags lesen »

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