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Global Unemployment on the Rise Again

“After dropping for the past two years, global unemployment is on the rise again according to the International Labor Organization, a UN jobs watchdog. 2013 is expected to top 200 million unemployed for the first time with the epicenter in the advanced economies as 28 million jobs have been lost since the onset of the crisis. Critically, for the globalists, they unsurprisingly note that macro imbalances have been passed on to the labor market to a significant degree.

Weakened by faltering aggregate demand, the labor market has been further hit by fiscal austerity programs in a number of countries, which often involved direct cutbacks in employment and wages, directly impacting labor markets. Far from the anti-cyclical response to the initial crisis in 2009 and 2010, the policy reaction has been pro-cyclical in many cases in 2011 and 2012….”

Full article and bar graph 

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$GOOG’s Larry Page Would Like to Hire 1 Million People

“$GOOG currently has about 60,000 full time employees and tens of thousands more contractors.

Google CEO Larry Page dreams of scaling the company “10X” to a million employees, he told Wired’s Steven Levy at the end of a magnificent interview.

He said:

“We’re a medium-size company in terms of employee count. We have tens of thousands of employees. There are organizations out there that have millions of employees. That’s a factor of a hundred, basically. So imagine what we could do if we had a hundred times as many employees.”

“Doesn’t Walmart have more than a million employees? OK, maybe it’s not important for us to have a million employees, but I like to think that we could build companies that are really scalable to that size. We could add people and still be really innovative. That would be great for us. We’re one of the bigger companies of the world, and I’d like to see us do more stuff—not just do what somebody else has done, but something new.”

It would be lovely if Google could find a way to enter into human capital intensive businesses and see them pay off.

Lately, tech companies have been great at creating wealth – but not jobs….”

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Unemployment Ticks Higher in Australia, Worst Job Growth Since 1997

“Australia’s unemployment rate rose as the nation posted its worst back-to-back years of job growth since the 1997 Asian financial crisis, throwing up an obstacle in Prime Minister Julia Gillard’s re-election bid this year.

Payrolls advanced 148,300 last year after a 49,800 gain in 2011 for a two-year increase that was the weakest since 1996-1997, government data compiled by Bloomberg show. Unemployment rose to 5.4 percent last month as the number of workers fell by 5,500 and may keep climbing after the economy slowed in the second half of 2012….”

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China Gets a Dose of Off Shoring Factory Work

“BEIJING—China is losing its competitive edge as a low-cost manufacturing base, new data suggest, with makers of everything from handbags to shirts to basic electronic components relocating to cheaper locales like Southeast Asia.

The shift—illustrated in weakened foreign investment in China—has pluses and minuses for an economy key to global growth. Beijing wants to shift to higher-value production and to see incomes rise. But a de-emphasis on manufacturing puts pressure on leaders to make sure jobs are created in other sectors to keep the world’s No. 2 economy humming.

Total foreign direct investment flowing into China fell 3.7% in 2012 to $111.72 billion, the Ministry of Commerce said Wednesday, the first annual decline since the fallout from the global financial crisis in 2009.

Then, a 13% fall in foreign investment into China reflected dire conditions for business in the U.S. and Europe, and global risk aversion, which choked off capital flows. Economists say the drop in 2012 is also partly cyclical, driven by slowing overall growth in China and Europe’s prolonged debt crisis.

But it also is the result of a long-term trend of rising wages and other costs that have made China less attractive, especially for basic manufacturing, economists say.

By contrast, foreign direct investment into Indonesia was up 27% in the first nine months of last year…..”

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Temp Workers Are Good For Avoiding a Living Wage, Healthcare, & Now Safety

“Just as employers use temporary workers instead of permanent ones to save money and drive down wages generally, a new report shows that avoidance of worker safety rules is another dubious “benefit” bosses seek when hiring temps, also called contingent workers. Released last week, the report suggests several reforms, including urging the government to target companies that often use contingent workers and to issue new rules to ensure they get proper safety training and protective equipment.

The report from the nonprofit Center for Progressive Reform (CPR) details the increasing use of contingent workers to perform dangerous, undesirable jobs in industries like farming, construction, warehousing and hotel services. Noting that the number of contingent workers has doubled in twenty years to more than 2.5 million, the report underscores Bureau of Labor Statistics data that they suffer higher rates of injury and death than other employees.The economic and political vulnerability of contingent workers, who are often poor and sometimes undocumented, makes them easy to exploit not only with low wages and long hours, but also with unsafe working conditions. According to the study, because contingent employees rarely have health insurance or even workers’ compensation coverage, employers are able to shift the financial burden of workplace injuries onto the public, and often skimp on safety training of temps.

The recent case of Carlos Centeno is illustrative. In November 2011, Centeno was working for a temp agency and was assigned to a Raani Corp. plant near Chicago. The 500-gallon chemical tank he was cleaning doused him with a 185-degree mixture of water and citric acid, burning him over 80% of his body. When the company refused to call 911, a co-worker drove Centeno to get help, although more than 98 minutes passed before Centeno arrived at a hospital emergency room, and he died a painful death three weeks later. The only safety equipment given to Centeno that day was a pair of latex gloves and rubber boots….”

 Full article

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Eurozone Unemployment Continues To Hit New Highs

“Businesses in the eurozone may be feeling more confident but there’s no sign of that translating into better employment prospects yet.

Eurostat data published Tuesday showed unemployment in the 17-nation eurozone hit a record high of 11.8% in November, leaving 18.8 million people without work – two million more than a year ago…”

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Small Business Confidence Improves, Labor Market a Different Story


“WASHINGTON (Reuters) – Small business sentiment clawed back from a 2-1/2 year-low in December, but owners’ assessment of the labor market remained downbeat, a survey showed on Tuesday.

The National Federation of Independent Business said its optimism index edged up half a percentage point to 88 last month, the second lowest reading since March 2010. The index hit a 2-1/2 year-low of 87.5 in November.

The December survey does not capture the 11th hour deal reached in the U.S. Congress to prevent a raft of sharp cuts in government spending and higher taxes, or the fiscal cliff, that could have drained about $600 billion from the economy at the start of the year.

“Having some certainty about tax rates and some ‘tax extenders’ will provide some relief to owners, but doesn’t guarantee a more positive forecast for the economy,” the NFIB said in a statement.

“The January survey will sort this out – will higher taxes and spending cuts be viewed as a ‘positive’?”

Labor market gauges worsened last month, with only a net 1 percent of small business owners saying they planned to create new jobs. There was a slight drop in the share of owners reporting that job vacancies were hard to fill.

“More owners expect their real sales volumes to be lower in the first quarter than predict higher sales and more owners plan to reduce inventories than plan to add to them,” said the NFIB.

It said capital spending remained in ‘maintenance’ mode, while plans to make capital outlays remained at recession levels.

(Reporting By Lucia Mutikani; Editing by Neil Stempleman)”

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U.S. Set for Biggest State-Local Jobs Boost Since 2007

“State and local governments are in their best financial shape since the recession, giving them leeway to cushion the U.S. economy from federal budget cuts with spending and hiring of their own.

After slashing their workforces by about half a million in the past five years, state and local authorities will add employees in 2013, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. Their payrolls in the fourth quarter will be 220,000 larger than in the same period for 2012, he projects….”

Full article 

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Challenger, Gray, & Christmas Report Layoff Announcements Hit 1997 Lows

Layoff announcements were very limited in December which hints at strength for tomorrow’s employment report. Challenger’s count totals 32,556 vs 57,081 in November. December’s total is the lowest since August and is the third lowest of the whole recovery!

Announcements in December were heaviest in the financial sector reflecting an 11,000 announcement from Citigroup. For 2012 as a whole, layoff announcements total 523,362, down from 606,082 in 2011 for the lowest annual total since 1997…”


Full report

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Initial Claims and Final Q3 GDP

Initial Claims: Prior 343k, Market Expects 345k, Actual 361k

Q3 GDP Prior 2.7, Market Expects 2,7, Actual 3.1%

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The Crisis for American Labor

“American labor is in crisis. This is no news to people who have been paying attention—the passage of Michigan’s ‘right to work’ bill last week makes it the 24th state to join the race to the bottom. What appears to be less well understood is how poorly the broad workforce is doing relative to the corporate economy. Private employers—corporations, are seeing rapidly rising profits and the share of corporate revenues that shows up as profits is the highest in history. This is coincident with labor seeing its lowest share in history. As the Economic Policy Institute (EPI) illustrates, this trend dates back to the 1970s.

To be clear, there is no shortage of corporate revenues behind the decline in labor’s share. Corporations and the plutocrats who own them are taking the profits for themselves. The richest 1% of Americans own 40% of the stock market and the richest 10% owns 80%. The same concentration can be seen in the ownership of ‘non-public’ corporations (those that don’t issue stock). Federal, state and local policies that have benefited corporations and diminished the economic power of labor, such as ‘right to work’ laws, are redistributing wealth from labor to capital. This has been bi-partisan political practice in the U.S. since the 1970s.

Western mythology has it that capitalism works because entrepreneurs take economic risk to build corporations from nothing. The second order mythology is that highly educated managers keep business competitive through innovation—the development and adoption of new processes and technologies, while keeping labor at the minimum levels consistent with maximum productivity. The facts are that large, connected corporations that have existed for decades earn most of the profits in dispute. And corporate executives—paid managers, have helped themselves to ownership in these corporations through the granting of stock options. Contrary to both mythology and capitalist theory, labor now takes nearly all of the economic risk while benefits accrue to executives.

The question making the rounds in the economic mainstream at present—Robots or Robber Barons?, requires strict adherence to the utterly irrelevant for some decades now to even be a question—is technology or the diminishment of labors’ power responsible for rising corporate profits and wealth concentration? And while I do have some sympathy for the complexities, one ‘model’ I put forward is the unrelenting, systematic effort by connected capitalists and their servants in Federal, state and local government to boost the power of capital while diminishing that of labor, broadly defined. If one were to begin with this set of facts and infer the likely consequences they might be—rapidly rising corporate profits, increasing concentration of wealth, rising insecurity amongst workers and increasing corporate / plutocrat control of government.

But simply asserting these outcomes is isn’t enough. The explanation circling official Washington, and coincidentally the party line of the Mergers and Acquisitions (M&A) folks on Wall Street for the last thirty years, is that the miserable state of American labor is due to workers being replaced with technology—either allowing fewer workers to do work formerly done by many or through ‘robotics’ that replaces human beings in manufacturing with machines. Evidence of this trend is provided in the difference between ‘productivity,’ total output divided by the quantity of labor that went into producing it, and what labor is paid. Since the 1970s productivity has increased in a near straight line (see EPI graphs, link above), while the compensation paid to labor has stagnated….”

Full article

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State of the Economy: Hit the Bricks Kid…I mean Soon to Be Old Man

“….Older workers like Johnson are staffing fast-food grills and fryers more often, according to data from the U.S. Census Bureau’s Current Population Survey. In 2010, 16- to 19-year-olds made up 17 percent of food preparation and serving workers, down from almost a quarter in 2000, as older, underemployed Americans took those jobs.

“The sheer number of adults in the industry has just exploded” because fast-food restaurants “not only survived, but thrived during the economic recession,” said Saru Jayaraman, director of the Food Labor Research Center at the University of California at Berkeley….”

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Analysis: More Pressure on Global Wages Could Backfire

“(Reuters) – If rising income gaps are at least partly responsible for the global credit crisis, governments and companies should be wary of squeezing wages yet again to help rebuild their finances.

In the long buildup to the global financial crisis, households took on debt to offset the gradual fall in their incomes and consumption relative to the more wealthy.

But as they’ll get little or no help from easy credit today, driving wages down even more risks a cratering of household consumption and a severe test of social cohesion.

A renewed public focus on decades of widening wealth and wage inequality in the United States, Britain and other developed and developing economies has been one of the most durable legacies of the five-year-old credit crisis.

Work by Nobel Laureate Joseph Stiglitz’ on the 1 percent of U.S. super-rich, “Occupy” protest movements around the world and electoral swings to the left have all spotlighted what business, finance or government elites now realize they can’t ignore.”

Full article

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