Timesizing® Associates - Homepage
Timesizing News, July 17-19, 2004
[Commentary] ©2004 Phil Hyde, Timesizing.com, Box 622, Porter Sq, Cambridge MA 02140 USA 617-623-8080
7/17-19/2004 primitive timesizing & worktime consciousness in the news = glimmers of strategic hope - all are 7/16-18 from GoogleNews & are searched-screened-collected by *Ken Ellis (KE) of New Bedford MA (except #1-5 which are from the 7/17-19 newspaper hardcopy, & backup from recently- & soon-again-to-be-vacationing Alan Applebaum of Brookline MA), and excerpts and [comments] are by Phil Hyde (PH) unless otherwise initialed -
- ['Earnings' (ie: wages) lag productivity (see last sentence) - but then, the notion that wages vary with productivity has always and only been a management myth to get people to "work harder." Ditto the notion that wages vary with hours. Actually, wages only vary with supply and demand, like all other prices.]
7/18 Hourly pay in U.S. not keeping pace with price rises [ie: with inflation], by Eduardo Porter, NYT via nytimes.com via Kumar Venkat .
The amount of money workers receive in their paychecks is failing to keep up with inflation. Though wages should recover if businesses continue to hire, three years of job losses have left a large worker surplus.
[At last, a mainstream-media acknowledgement of the wage-depressing labor surplus.]
"There's too much slack in the labor market to generate any pressure on wage growth,'' said Jared Bernstein, an economist at the Economic Policy Institute, a liberal research institution based in Washington. "We are going to need a much lower unemployment rate.'' He noted that at 5.6%, the national unemployment rate is still back at the same level as at the end of the recession in November 2001.
Even though the economy has been adding hundreds of thousands of jobs almost every month this year, stagnant wages could put a dent in the prospects for economic growth, some economists say. If incomes continue to lag behind the increase in prices, it may hinder the ability of ordinary workers to spend money at a healthy clip, undermining one of the pillars of the expansion so far.
Declining wages are likely to play a prominent role in the current presidential campaign. Growing employment has lifted President Bush's job approval ratings on the economy of late. According to the latest New York Times/CBS News poll, in mid-July, 42% of those polled approved of the president's handling of the economy, up from 38% in mid-March.
Yet Senator John Kerry, the likely Democratic presidential nominee, is pointing to lackluster wages as a telling weakness in the administration's economic track record. ``Americans feel squeezed between prices that are rising and incomes that are not,'' Mark Mellman, a pollster for the campaign, said in a memorandum last month.
On Friday, the Bureau of Labor Statistics reported that hourly earnings of production workers - nonmanagement workers ranging from nurses and teachers to hamburger flippers and assembly-line workers - fell 1.1% in June, after accounting for inflation. The June drop, the steepest decline since the depths of recession in mid-1991, came after a 0.8% fall in real hourly earnings in May.
Coming on top of a 12-minute drop in the average workweek, the decline in the hourly rate last month cut deeply into workers' pay. In June, production workers took home $525.84 a week, on average. After accounting for inflation, this is about $8 less than they were pocketing last January, and is the lowest level of weekly pay since October 2001.
On its own, the decline in workers' wages is unlikely to derail the recovery. Though they account for some 80% of the work force, they contribute much less to spending [precisely because they get so small a share of the national income!]. Mark M. Zandi, chief economist at Economy.com, a research firm, noted that households in the bottom half of income distribution account for only one-third of consumer spending.
[What a stupid backwards argument! These are the consumers who want to spend the most, who need the most, and who spend immediately when they get money. These are the people who account for every real boom in economic history, from wartime booms like those of World Wars I and II, to plague booms like that of 1348. Mark "Don't Rock the Boat" Zandi cannot even imagine what a recovery would look like if this 80% of the workforce got 80% of the national income, or even 50%, instead of the top 5% getting 80% of the national income.]
Nonetheless, coming after the bonanza of the second half of the 1990's, the first period of sustained real wage growth since the 1970's, the current slide in earnings is a big blow for the lower middle class.
[Cut the crocodile tears for the poor and cut to the chase! The current slide in earnings is a big blow for a real recovery. It's a big blow for the dysfunctional rich, who currently are converting to cash because they "see little they want to buy in current market" - see "Holding pattern: Fund managers flock to cash - Top performers see little they want to buy in current market," by Jeff Opdyke, 7/15/2004 WSJ, D1 (see 7/15/2004 #2). They have concentrated so much of the national income and wealth, not to mention skills and employment, that they are literally cannibalizing their own consumer base and starving their own investments and potential investments.]
Moreover, the absence of lower income households [huh? there are more lower-income households than anything else! what on earth is he chattering about?] could also weigh on overall economic growth - putting a lid on the mass market and skewing consumption toward high-end products.
["Could also weigh"?? This is already happening! Has been for over a decade! See recently "Retail sales are below expectations - June's gain of 2.9% breaks robust run, brings worry; luxury stores buck trend," 7/15/2004 WSJ, A2.]
"There's a bit of a dichotomy," said Ethan S. Harris, chief economist at Lehman Brothers. "Joe Six-Pack is under a lot of pressure. He got a lousy raise; he's paying more for gasoline and milk. He's not doing that great. But proprietors' income is up. Profits are up. Home values are up. Middle-income and upper-income people are looking pretty good."
[And they don't spend as much of their income as fast as Joe Six-Pack. Ergo, starving the bottom is starving growth and sustainability.]
Tales of tight budgets at the bottom are springing up across the country. "I haven't had a salary increase in two years, but the cost of living is going up," said Eric Lambert...a father of three who earns $13 an hour as a security guard at 660 Madison Ave. in Manhattan.
Silvia Vides, 43, who earns $11 an hour in a union job as a housekeeper at the Universal City Sheraton hotel in Los Angeles, said, "Sometimes I don't know how I pay the bills and food and rent." She has cut back on all nonessential expenditures and she is four months behind on payments on $4,000 in credit-card debt.
Their woes are a product of supply and demand for labor. From 1996 through 2000 when employers were hiring hand over fist, real hourly wages of ordinary workers rose by 7.5%. Those for leisure and hospitality workers rose 9.6%, and retail workers' climbed 8.9%. The raises continued even as the economy slipped into recession in 2001 and businesses began to shed workers.
From 2001 to 2003, 2.4 million jobs were eliminated, as businesses sharply reduced their work forces, refusing to hire back even as demand started picking up. Over a million of these jobs have been regained this year.
Yet with the lowest number of people employed as a share of the population since 1994, there is still a plentiful supply of unused laborers looking for jobs.
As the rise in energy prices in the earlier months of this year led to rising inflation, pushing prices in June up 3.2% from the same month of last year, the lackluster job market has left workers in a weak position to demand more money.
"Since last November, we've had a pickup in hiring and a pickup in hours worked in virtually all of our businesses," said David Pittaway, a senior managing director at Castle Harlan, an equity investment company that owns everything from Burger King franchises to a shipping company.
But there is clearly still a lot of slack. When Castle Harlan advertised in the newspapers to fill 70 to 80 positions at a Morton's restaurant it opened in early July in White Plains, 600 to 700 people showed up.
Ms. Vides in California ticks off the items of a rising cost of living. She pays $850 a month for a one-bedroom apartment in Panorama City, $25 more a month than last year. The cost of a bus pass rose $10, to $45 a month. The electricity bill is much higher and food costs more. "I've got to do miracles with my salary," she said.
So Ms. Vides said she was outraged that the hotels negotiating a new contract with her union were offering annual raises of 40 cents to 45 cents an hour each year for the next five years. The raise in 2004 would be about 4%, just enough to keep up with the 4% rise in prices in Los Angeles over the last year. "This is miserly," said Ms. Vides, who said the union wants $1.25 this year and $1.50 next.
Colleen Kareti, president of the Los Angeles hotel employers' council, which represents the hotels, argued that negotiations had not yet gotten down to bargaining over wages. But she pointed out that times are hard for the hotel business, too. "It's been pretty bad for the last three years. We're nowhere near the levels of business where we were in 1998 through 2000," Ms. Kareti said.
Some economists warn that if wages remain depressed for a long time they may end up weighing on the economy. "The recovery will likely continue on despite the travails of lower-income households, but it cannot flourish," Mr. Zandi said.
[It cannot even be real, because it's based on the padded GDP, which gives points for prison-building and shelter-building. Remember how weapons-building was replaced for 10 years by prison-building? Well, less well-known was the homeless-shelter building boom. See "Shelters a grim growth industry," 11/26/1992 Boston Globe, p.57.]
So far, spending has been fueled mostly by debt, as consumers took advantage of bedrock-low interest rates to whip out their credit cards and refinance their mortgages. But as interest rates rise to keep inflation in check, continued growth in consumer spending will depend more on jobs and wages.
Spending is still holding up, led by strong corporate profits as well as higher salaries and bonuses at the upper end of the income distribution. But the lagging earnings at the bottom end are making for a somewhat lopsided expansion.
The upper echelons of consumer spending, at places like Saks Fifth Avenue, Neiman Marcus and Nordstrom department stores, are reporting gangbuster business. "I'm surprised by how well we've sold high-priced fashion at this stage," said Pete Nordstrom, president of Nordstrom's full-line stores.
But at the other end, sales at stores open at least a year at big-box discounters like Target and Wal-Mart have disappointed, while sales of used cars are declining year over year, government figures show. "We're not seeing the traffic, not even the same volumes of sales calls," said Richard Cooper, a sales manager at Jones Ford in Charleston, S.C.
Wages at the bottom should eventually recover, as businesses continue hiring to meet growing demand. The question is how fast. "As unemployment slides down, more of the benefits of growth should flow to the working class," Mr. Bernstein said. "But not until we reach truly full employment are they likely to see their earnings rise at a level closer to that of productivity."
- [Here, several WSJ-hardcopy headlines relating to worktime -]
7/19 Consumer prices rise modestly; but pay increases lag behind - Decline in working hours, low wages hurt workers, by Joseph Rebello & James R. Hagerty, WSJ, A2.
- 7/19 Appeals court voids new rules for truckers' work, rest breaks, by Daniel Machalaba, WSJ, A2.
...The new rules were intended to reduce fatigue among truck drivers and help cut down on highway fatalities. They increased the time truck drivers must set aside to rest in each 24-hour period to 10 hours from 8 hours, and the total time a driver can be on duty fell to 14 hours from 15 hours. In one of the biggest impacts on safety, drivers were required to include as work hours time spent waiting at customers' loading docks.
But some safety advocacy groups said the new rules set back safety [because of] a provision that boosted to 11 hours from 10 hours the time drivers are allowed to spend behind the wheel. \They\ brought a suit against \the\ Transportation Dept.'s Federal Motor Carrier Safety Administration [FMCSA]..\..
But the [FMCSA] agency that drafted and imposed the rules...said the court decision isn't effective immediately and that the new rules will remain in effect while the agency considers its legal options. The agency says it has 45 days to review the court decision and decide how to respond....
- 7/19 Daimler's top executives offer to take pay cuts, by Stephen Power, WSJ, A9.
Seeking an end to a labor dispute that has resulted in work stoppages across Germany, DaimlerChrysler [DC] AG's top executives have offered to take an unspecified pay cut in conjunction with demands for increased productivity from the automaker's workers [not on a meaningful per-hour basis but on an irrelevant per-employee basis!].
The unusual offer, coming less than a week after DC threatened to cut about 3% of its German workforce in an effort to reduce costs by E500m ($622m), suggests Daimler's mgmt board may be softening its negotiating tactics in the face of worker criticism that bad executive-level decisions - not high labor costs - are to blame for the company's problems....
The offer was reported over the weekend by the German newspaper Bild am Sonntag, which characterized it as a 10% paycut offer. ...Like many German companies, DC is contending with Germany's labor costs, among the highest in the world when it comes to manufacturing, at roughly $33 per hour, compared with $22 an hour in the U.S.
- millions for Mitsubishi...the company's investment in ailing Japanese automaker Mitsubishi Motors Corp....
- executive pay....
- the company's participation in a consortium to build a satellite-based toll-road system in Germany [huh?], a much-delayed project that resulted in charges of E279m against DC profit during Q1....
[Yeah, but we bet a lot more German employees can afford to buy their brand-new Mercedes than American employees who can afford to buy their brand-new Cadillacs. CEOs need to decide: Do we need a consumer base or not? Do we need markets or not? If we do, we need a stronger centrifuge mechanism to spread around the national income, and the simplest, least wasteful and most market-oriented is shorter hours, especially the Timesizing way.]
- 7/19 Japan predicts strong rebound will continue, Dow Jones via WSJ, A9.
TOKYO - Japan's economy will continue to enjoy its strongest recovery in more than a decade [that's not saying much!] as structural changes pay off [eg: ??] and private-sector demand accelerates, the government said in its annual Economic & Fiscal White Paper.
[This probably just means that they're ignoring ("externalizing") more negatives.]
But the government warned that persistent deflation [is a] potential risk...to the 'recovering' economy [our quotes]....
[Well if you're still worried about deflation, you still have got no significant acceleration in private-sector (or public-sector) demand.]
The government white paper says that Japan's current recovery is more substantial than the 2 brief recoveries experienced in the 1990s. This time, the recovery is supported by private-sector demand, not government spending, the white paper adds.
[Sounds like wishful thinking if they're still worried about deflation. How about re-activating all the deactivated Japanese consumers by cutting the workweek, going from over 5% unemployment to less than 1% as in the 1980s, and getting people writing mgmt books about Japan again?!]
- 7/18 Hi ho, hi ho, it's off to work we go, by Jeremy Slater, Tech Central Station.
The sluggish heart of Europe is suddenly beating a little bit faster. In what amounts to a small revolution for a continent that has enjoyed the benefits of long holidays and shorter working weeks for nearly 30 years, people are being asked to put in longer hours on the job, often for no increase in pay. But instead of union representatives threatening strikes or other forms of industrial action, they are actually agreeing to the demands.
Strangely, the reasons given for this acceptance of longer work hours are the same as before [ie: the same as for shorter work hours]: that is, it will help improve productivity and therefore job prospects.
[But during the Age of Automation, it's not productivity that needs improvement, and improved productivity triggers prospects for layoffs, not new jobs.]
This sudden attitude shift cannot be linked directly to the European Union's recent enlargement and the fact that some jobs will emigrate to central Europe or the Far East; this threat has loomed for years.
[Yes, it can, because prior to including eastern Europe in the EU, they could apply tariffs to protect their quality of life.]
So why has the penny has finally dropped?
[Ah, the expression is, so why has the other shoe finally dropped?]
Perhaps it has to do with the effect of four long years of economic slowdown and recession in the three countries where this semi-revolution is occurring: Germany, France and Belgium. For these states, unemployment has remained stubbornly high with rates in France and Germany sitting around 10% for nearly 20 years.
[Except the unemployment rate in France was up at 12.6% in 1997 before the workweek reduction began, and it came down to 8.6% in spring/2001 when much of the workweek reduction had been accomplished. If the workweek had been reduced even more, unemployment would have been reduced even more, roughly 1% per hour of workweek cut.]
The flipside of this economic coin [what economic coin?], productivity, which used to outstrip that of the US, has fallen behind since the middle of the 1990s.
[Only on an irrelevant per-employee basis, not on a relevant per-workhour basis. And the flipside of productivity is marketability, which is going to plummet if they start relengthening the workweek, because fewer people will have lower-wage jobs due to the greater concentration, on fewer employees, of the technology-shrunken market-demanded workload of the nation.]
Such high rates of productivity allowed people to enjoy lives of relative leisure and luxury, despite the fact that those who could not get jobs were having a miserable time and because of strict labor laws were unlikely to get them.
[Not true. France made hiring a lot easier in the run-up to and implementation of the 35-hour workweek.]
With falling growth and productivity rates that misery has now spread.
[What complete nonsense. The shorter workweek was and is very popular in France.]
A recent survey revealed that nearly a quarter of Belgians have difficulty paying their bills on time and one of the reasons suggested the effects of high unemployment.
[That's a function of overlong workweeks relative to an economy's level of technology, not overshort workweeks. After all, robots can work all night.]
A report by the Belgian government's employment council has discovered that only 60 Belgians out of every possible 100 who can work actually have job. The EU average is 64, with high-employment countries such as the Netherlands and the UK at around 70.
[The Netherlands has high employment because it treats part-time work with the same respect and benefits as full-time work. The UK has high-employment because like the US, they cook the official figures and externalize (ie: ignore) a lot of the problem.]
In France, President Jacques Chirac has announced that the former Socialist government's experiment with a compulsory 35-hour week had not created the extra jobs it was supposed to
[never mind its corelation to a 4% drop in the unemployment rate]
and there is evidence that parts of society are worse off because they cannot work overtime.
[France failed to implement automatic overtime-to-training&hiring conversion and set up plenty of attractive alternatives for employees who want to work overtime to get more pay instead of upgrading their skills and wages to get more pay within the new shorter workweek.]
In Germany, a majority of the population may still believe that working fewer hours will create more jobs, but in the ministries in Berlin, political thinking has swung away from this belief.
[And they're getting hammered at the polls.]
Gerhard Schröder's Agenda 2010, a plan which is meant to reinvigorate the German economy, argues that a longer working week would be beneficial for the country's performance.
[Gerhard Schroeder is an idiot whose Agenda 2010 should be calle Agenda 1910. It may help performance in terms of hgher irrelevant productivity per employee, but there will be lower consumption per capita because there will be fewer employees and they will be making lower wages.]
Telecommunications workers at electrical giant Siemens seem to have agreed with this assessment.
[Dummkopfs! There's always half the labor movement too stupid to recognize a trap when they see one.]
Through their union they have acquiesced to a proposal that workers should increase their average hours from 35 to 40 a week and forego the usual Christmas and summer bonuses. The reason for this was the threat that 2,000 jobs in the mobile phone division would have shifted eastwards to Hungary.
[In short, they have caved in to job blackmail, thus guaranteeing more bullying and blackmail.]
Maybe if they were living in more confident times this wouldn't have happened, but the average person in France, Germany and Belgium is not in a confident mood at the moment. (And not everybody gets the message: Mercedes employees went on strike this week, unwilling to give up five-minute breaks every hour even if it means losing their jobs to Hungary.)
[Maybe Mercedes employees realize that "in quietness and confidence is their strength." Start going weak and you're finished. Employers will return you to sweatshops and thence slavery - starving their own markets and then joining your ranks on the breadlines.]
Which just goes to show there is a long lag time between economic statistics improving and people feeling more confident about their prospects.
[It shows nothing of the kind. This is a complete non sequitur.]
Latest figures show that the above economies are starting to expand and should record rates of growth of around 2% this year, much better than the performance of recent years, and that things will get better next year as the world economy is driven by growth in the US, Japan and China.
[Economies have been "starting" to expand now for two years, and it's all hype. There is nowhere for this expansion to come from, because rising sales limited to the luxury markets are not sufficient to carry it.]
However, the expected rates are not strong enough by most economists' definitions to have a serious impact on unemployment
[especially with automation and robotization pouring in.]
Which means that the French and German governments will have to continue to 'reform' [our quotes] their economies if they want to improve growth and employment rates.
[True, but longer hours are the opposite of reform. What's needed are stronger centrifugal forces on the income of the nation, and longer hours mean even stronger centripetal forces.]
So it seems a sudden change in mood may have a chance to become more permanent.
- The newly appointed finance minister in Paris, Nicolas Sarkozy, is keen to push through changes if for no more of a reason than to build himself a political support base so that he can attempt to win the presidential election in 2007.
[This fool is merely cutting his own political throat by trashing the French cultural exception = world leadership on shorter hours.]
- Schröder also wants to speed up the reform process so that by the next federal election in 2006 he can show German electors that the economy is improving.
[This dummkopf will show them only a further weakening in domestic consumer demand.]
- In Belgium, Prime Minister Guy Verhofstadt is currently hamstrung after his party's poor showing in regional elections, but he originally came to power promising economic 'reforms.' If the economy keeps improving he may have a chance to push these through.
[It won't, especially if he too goes for longer hours and a greater concentration of the marketable skills and employment hours of the nation.]
[Nope, no chance.]
But Europe's leaders will have to work overtime.
[The current 'leaders' always have (Chirac and Schroeder), but then, they have zero understanding of the Technological Age and its Timesizing Imperative.]
- 7/16 Investigation into "Britain’s new underclass" - While the EOC is to look into why around 40% of mothers and 20% of [child and elder] carers have to turn down jobs because of their responsibilities, research suggests that not even a career can keep you safe from poverty, HR Gateway [UK].
[Here's and article about some of the underemployment that the UK has been ignoring.]
Around four in ten mothers and one in five carers have had to turn down a job because of caring responsibilities and today
the Equal Opportunities Commission (EOC) launched an investigation into what it sees as ‘Britain’s new underclass’.
The EOC are looking to find out why women with caring responsibilities often end up in poorly paid part-time jobs and how
the perception of part-time work and barriers to flexible working contribute to the problem:
‘Women with a family often find their prospects are limited to low paid work with little hope of promotion. As a result many
men end up working long hours to make up for the family's loss of income.
‘By launching this investigation, the EOC is aiming to find out what needs to change to make sure more people have access to
flexible working hours at all levels of the labour market,’ said EOC chair Julie Mellor.
Announced to coincide with the release of its annual report, the EOC investigation will be taken to Patricia Hewitt,
Secretary of State for Trade and Industry and Minister for Women for the formation of recommendations next Spring.
Meanwhile, new research from the Future Foundation/Elizabeth Finn Trust suggests that not even a career can protect people
from poverty, with ill health, redundancy, family breakdown and poor pension provision all playing their part.
Teachers, nurses and managers are among the 120 occupations that make up the UK’s 3.8 million new professional ‘hidden
poor’, the research claims, with some living on as little as £114 a week
Half of people ‘just grin and bear’ the strain, it states, preferring instead to only come forward when they hit ‘rock
bottom’. The report predicts that the number of people in this situation will grow to 11% of all adults by 2020:
‘We tend to assume that people such as managers, accountants, teachers and nurses should be able to look after themselves.
This new research dispels this myth and also shows that only when people are in desperate circumstances do they ask for
‘These people are in situations that no-one could possibly plan for such as a chronic and debilitating illness, having to
give up work to care for a child or partner, or redundancy, often with no support,’ says Jonathan Welfare, chief executive
of the Elizabeth Finn Trust.
- 7/16 French economy threatened by high taxes, 35-hour work week: IMF,
AFP via Channel News Asia [Singapore].
[More long-hours propaganda.]
WASHINGTON - France's economy is crawling forward at a modest pace, but
faces "serious challenges" in the long term due to high taxes and generous
social programs including its 35-hour work week, the IMF warned.
The International Monetary Fund staff said in its annual report on the
French economy that gross domestic product is likely to expand at a pace of
about 2.5% over 2004 and 2005, up from an earlier forecast of 1.8% this year and 2.4% in 2005.
But the IMF, in an unusually harsh assessment, said France faces looming
economic and budget problems as tries to maintain its social welfare
policies with an aging population and rigid labor market rules.
"Serious challenges persist to maintain France's attractiveness for
investment and secure long-term fiscal viability," said IMF report presented
to its executive board.
"Indeed, a high tax burden and low employment rates, together with a large
deficit, and an impending demographic shock cast a shadow over long-term
The IMF was especially critical of the French law mandating a 35-hour work
week. The program was enacted in 1998 in an effort to boost job creation by
reducing the number of hours for each employee, but has failed to curb the
high jobless rate and is now under scrutiny by the government.
"The issue that has now clearly come to a head is the pernicious nexus
between labor market policies and the budget. This nexus needs to be
untangled," the IMF report said.
Also hurting French compeitiveness was the minimum wage, known as the SMIC,
recently raised to 7.61 euros (9.40 dollars) per hour and due to increase
again in 2005.
"The ensuing increase in labor costs is likely to price more young and
unskilled workers out of market jobs and reduce the tax base or,
alternatively, require further cuts in social security contributions thatwill burden the budget," the IMF said.
"Only changes in labor market institutions can reverse this spiral ... It
is necessary to avoid further real increases in the SMIC."
France, with a jobless rate of 9.8%, can ill-afford to keep generous
unemployment benefits, the IMF added, suggesting "work-fare" taking the
place of welfare payments in some cases.
"Returning people to activity will be helped by shifting from income
support to work-fare arrangements."
Nonetheless, the French economic landscape "presents several positive
features that provide encouragement for an unwavering pursuit of the
government's reformist strategy and for strengthened fiscal adjustment," the
"The economic recovery is now reasonably self-sustained and not in need of
Positive factors included some cuts in social security contributions and a
health care reform.
However, to make further progress, the IMF said "the solution lies in an
improvement of labor market institutions to raise labor utilization, a
steadfast reduction in public spending to eliminate budget deficits and make
room for growth-enhancing tax cuts, and an acceleration of product market
reforms to increase competition."
- 7/16 Alert - To all Component-4 Facilities Members - Arbitrator delays implementation of 37.5 hour work week, B.C. Government & Service Employee's Union (BCGEU) [Canada].
The arbitrator appointed to oversee the implementation of Bill 37, the
Health Sector (Facilities Subsector) Collective Agreement Act, has ordered a
delay in the implementation of the 37.5-hour work week imposed by the BC
In a clear victory for health care workers, arbitrator James Dorsey ruled
that the 90-day period to implement the extended work week begins on July
29. This means that the four% hourly wage cut that accompanies the
37.5 hour work week will be delayed until the end of October.
The arbitrator also ruled that health care workers who entered into local
agreements reached after September 2003 are eligible for overtime based on
the 36-hour work week after April 29, 2004.
Bill 37 does not meet the basic test of fairness for health care workers,
said Jaci White, chair of the BCGEU Facilities Bargaining Committee.
While delaying the longer work week, Dorsey also turned down a union bid to
allow retention and recruitment wage exemptions, subject to arbitration. He
ruled Article 3.03 of the collective agreement which deals with legislative
changes that impact the contract does not compel health sector employers to
negotiate wage rates for affected workers.
The BCGEU will continue to work with health sector unions to convince the
government to treat front line health care workers with respect and dignity,
White said. Bill 37 is an attack on working British Columbians that deserves
to be rejected by the people of the province.
- 7/16 Fulton Co. ditches idea for cutting workweek - Other plans explored to fix budget shortfall, Toledo Blade, OH.
WAUSEON, Ohio - Fulton County commissioners will continue to review options to
reduce expenses to balance the 2005 budget, but the county administrator
recommended yesterday that officials abandon discussions about reducing the
Vond Hall, the administrator, said that he backed off his proposal to cut
employees' hours by five hours a week to save $500,000 through December,
2005, because there was "tremendous opposition" from department heads,
elected officials, and employees.
He said officials and department heads told him they wouldn't be able to get
all of their work done in their offices if hours were cut, and employees
didn't want their paychecks cut.
Potential budget reductions outlined by Mr. Hall yesterday included
implementing a pay freeze for nonunion employees, curtailing overtime
requests, transferring funds to the general fund, eliminating vacant general
fund positions, and reducing expenditures in the various county departments.
Layoffs and voluntary reduction of hours were listed as possible options if
Mr. Hall also recommended that commissioners put a freeze on salary
increases, suggesting that wages should be capped at the 2004 level. The
purchase of new equipment should be limited, and service contracts should be
reviewed in an effort to cut back costs as well, he said.
The transfer of nongeneral funds into the general fund would involve
discussions with the Fulton County Common Pleas Court judge about possible
court action to allow the transfer under state law provisions, Mr. Hall
said. He told commissioners that he doesn't have a handle yet on how much
money or what funds would be involved.
Sandra K Barber, county re-corder, who attended the commissioners' meeting
yesterday, said after the session that she has offered to pay a portion of
her staff's salaries from funds set aside for computer expenses. Such a
move, she said, would require a court order.
She said she has offered to do what she can to help out. "I understand the
financial situation," she said, noting that the county's investment returns
have dropped from more than $1 million in 2002 to an estimated $400,000 this
year. When that happens, she said, the "county is going to experience a
County officials, she said, have taken steps to trim their budgets.
Further discussions will be held with county officials and department heads
about budget reductions, Mr. Hall said.
Among the factors cited in Mr. Hall's report as reasons for the county's
fiscal situation were state budget cuts to funds designated for the county,
increases in health insurance costs for employees, unfunded mandates from
the state and federal governments, and the reduction of investment income
due to global economics.
Officials have predicted a budget deficit of $400,000 by the end of 2005 if
no reductions are made in the proposed budget.
- 7/16 Martha Stewart sentenced to 5 months in prison, by Constance L. Hays, International Herald Tribune [France].
Martha Stewart, who built a multimillion-dollar empire around her own
cooking, entertaining and decorating visions, was sentenced Friday to five
months in prison and five months in home detention for lying to U.S.
investigators.... Stewart received the minimum recommended sentence for her conviction on four crimes, all linked to a 2001 stock trade whose timing aroused the interest of government regulators.... During house arrest, which Stewart will serve at her home in Bedford, New York, she must wear an electronic monitoring bracelet and limit herself to a 48-hour workweek, including doctors' appointments.
[If limiting to a 48-hour workweek is punishment in America, maybe Americans should start enjoying more sweatshops and, looking ahead, repeal the Abolition of Slavery.]
She will have another 19 months of probation after that, and must also pay a $30,000 fine....
- 7/16 German auto workers protest job cuts by DaimlerChrysler, by Dietmar Henning, World Socialist.
On July 15, a total of 60,000 DaimlerChrysler (DC) workers took part in a
range of strikes and other actions to protest the company's plans for job
cuts and attacks on working conditions. Workers at virtually all of the
German-US transnational company's plants in Germany stopped work for a
At the company's main complex at Sindelfingen, in the southern German city
of Stuttgart, 20,000 workers struck the early shift and gathered to take
part in the biggest protest meeting in the history of the factory. In nearby
Untertürkheim, 10,000 workers struck the late shift. Protests also took
place at DC works in Mannheim, Bremen and other towns across Germany.
At the mass meetings and rallies, the speeches made by trade union
functionaries and local stewards were for the most part hollow and
demagogic. The chairman of the company's central trade union committee,
Erich Klemm, told workers, "Millions are stronger than millionaires!" He
then declared, "We will not be blackmailed, and we will not allow ourselves
to be divided!"
He went on, however, to stress that the plant in Sindelfingen is
competitive, and emphasised the readiness of the factory union committee to
enter into discussions with management. Press reports indicated that in
discussions that have already taken place, the union committee has offered
concessions to management estimated to be worth 200 million euros.
DaimlerChrysler has issued an ultimatum threatening massive job cuts only
weeks after the giant Siemens company successfully used the threat of
layoffs to blackmail workers involved in the production of mobile
telephones. DaimlerChrysler is threatening to switch production of its new
Mercedes C-class automobile from Sindelfingen to its plants in Bremen in
Northern Germany and East London in South Africa, unless the unions agree to
annual savings in production costs of 500 million euros.
The head of Mercedes auto production, Jürgen Hubbert, stated that the
planned savings had to be agreed on by the end of the month and realised by
2008-2009. As with Siemens, the Mercedes subsidiary of DaimlerChrysler is
claiming that existing production costs are too high.
Siemens's chief executive, Heinrich von Pierer, threatened to shift
production from two factories in Germany to plants in Hungary, resulting in
the loss of 2,000 jobs. Working in collaboration with the engineering trade
union IG Metall, Siemens was able to increase the work week in both of the
German plants, imposing a 40-hour week instead of the previously established
35-hour week. Workers will receive no compensation for the extra hours
worked. In addition, the company cut supplementary payments.
DaimlerChrysler management has been engaged for a number of weeks in talks
with the unions over cuts at its car factories. Even before the deal was
struck at Siemens, DC had declared that an agreement was necessary to secure
production of the new Mercedes model and thereby save 10,000 jobs,
ostensibly through 2011. The deal at Siemens, however, encouraged companies
throughout Germany to "up the ante" and demand even more radical concessions
from their work forces. DaimlerChrysler management promptly increased the
range of concessions it was demanding from its workers.
Any transfer of production of the new C-class would have grave consequences
for the workforce at Sindelfingen. At stake, according to personnel director
Günther Fleig, are some 6,000 jobs - mainly at the Mercedes plant in
Sindelfingen, but also at factories in Mannheim and Untertürkheim in
Stuttgart. According to the company's union committee, the concessions
demanded will result in a pay cut of 700 euros per month for many workers.
Mercedes boss Hubbert referred to extensive cost disadvantages of Mercedes
works in the southern German state of Baden-Württemberg, compared to other
regions of Germany. The Bremen factory, for example, carries out two more
weeks of production per year for the same costs as its sister factory in
Sindelfingen. Workers at the latter plant have 12 public holidays compared
to 9 in Bremen. Supplementary payments for holiday work are also 50%
higher at the Sindelfingen plant. On a range of other issues relating to
working conditions, shift work, breaks and bonus pay, Bremen employees are
at a disadvantage compared to their colleagues at Sindelfingen.
The concessions currently being demanded are just the beginning. Under its
chief executive, Jürgen Schrempp, DaimlerChrysler is pursuing an
international strategy. The merger of Daimler with the American Chrysler
auto company is part of a range of international moves aimed at making
Daimler one of the biggest auto producers worldwide. At present, the
German-based company ranks fifth among international auto firms. Last year
its operating profit was 5.8 billion euros. Approximately 60% of its
total profits (3.1 billion euros) were accrued by the Mercedes Car Group.
However, returns for the Mercedes Car Group are stagnating. In May, the
DaimlerChrysler subsidiary announced a worldwide downturn in sales of 9.2
%, and June saw a further drop. The decline would have been even more
dramatic were it not for improved sales of the company's small car, Smart.
A year ago, the company engaged the consultancy firm McKinsey to undertake
an investigation of its potential "productivity reserves." The McKinsey
study concluded that Mercedes could shed 10,000 jobs from its global total
of 104,000 without sacrificing productivity or the quality of its cars.
The aim is to satisfy the demands of the company's shareholders. Since its
takeover of Chrysler, Daimler has been regarded in financial circles as a
weak source of profits, leading to a drop in the share price of the merged
In hypocritical fashion, top DC management has declared that should its
cost-cutting target of 500 million euros be agreed to, it would be prepared
to do its own part by forgoing pay raises for a year. Many workers see this
announcement as little more than a provocation.
In 2001, the DaimlerChrysler executive pocketed a total of 22 million euros.
One year later this sum had soared to 50.8 million - a wage increase of 130
%. On average, DaimlerChrysler executives took in 3.7 million euros
annually, and the company occupies the top position for executive
remuneration in the DAX index of Germany's 30 largest companies. Annual
remuneration for the chairman of DaimlerChrysler, Jürgen Schrempp, is
estimated at 10.8 million.
The role of IG Metall
IG Metall and the company's union committee not only have no answer to the
attacks and to the company's international strategy; they are, in the final
analysis, responsible for assisting the firm in blackmailing the workers by
claiming that sweeping concessions are inevitable.
The central DC union committee has already made extensive concessions and
declared its willingness to relinquish a payment of 180 million euros it had
negotiated on behalf of DC workers in their last wage agreement. The union
committee also offered to sacrifice a wage increase of 2.79% that had
already been agreed on with the company and was due to be paid from 2006.
In addition, the chairman of the central trade union committee, Erich Klemm,
stated: "We are prepared to introduce a 40-hour week in the research and
development departments, production planning, and other areas of the central
The unions declared there would have to be compensation for the extra hours
worked. However, in light of the union cave-in at Siemens, where IG Metall
agreed to an extra five hours of unpaid labour, DC workers should treat the
union's demand for compensation with the scepticism it deserves.
Before the latest management demands, the union committee at DC had already
accepted the destruction of 2,000 jobs in connection with the introduction
of the new Mercedes C-class model. It supported the argument put forward by
the company executive that new and improved production methods required
At Sindelfingen, which employs a total work force of 31,000, some 1,500 jobs
have been lost since the end of last year as a result of early retirements
and part-time contracts. An additional 800 short-term workers will lose
their jobs when their contracts run out at the end of this year.
While tens of thousands of workers have made clear that they are determined
to defend their jobs and working conditions, the DC union bodies and IG
Metall have refused to undertake a principled campaign to defend jobs at all
of the company's factories both at home and abroad. In line with German
industrial practice, many of the shop stewards have sat on management boards
for years, and the chairman of the central shop stewards' committee, Klemm,
is deputy chairman of the company's board of directors.
In the past, these union bureaucrats have faithfully supported company
policy, and Klemm has on numerous occasions boasted of his key role in
backing DaimlerChrysler chief Schrempp in important and controversial
The incapacity of the unions to conduct a principled struggle for the
defence of jobs is not merely a product of their close relations with
management, and of the resulting privileges enjoyed by union officials.
Against the backdrop of the globalisation of production, their entire
perspective of a "social partnership" with big business has been
transformed. As long as production took place primarily within the
boundaries of the nation state, the unions were able to use a combination of
strikes and negotiations to win limited concessions for workers. With the
advent of globalisation, however, and the corporate strategy of shifting
production to cheap-labour havens around the world, the corporatist and
nationalist essence of the union's perspective has emerged in the form of
open collaboration with the employers in slashing the jobs, wages and living
standards of the workers they nominally represent.
DaimlerChrysler is exemplary in demonstrating the extent to which
labour-management relations have changed. With Daimler's takeover of
Chrysler and its expansion of production facilities all over the world, the
workforce - totalling 360,000 worldwide - has been plunged into an intense
competitive struggle. Facilities in Europe, the US, Asia and Africa are
played off against each other.
The epoch of "social partnership" and the regulation of the economy by
nation states is irrevocably gone. After wages and working conditions have
been driven down in Germany, the downward spiral will continue - at the
company's plants in the US, South Africa, Argentina, Brazil, India, etc.
Under these conditions, there no longer exists room for manoeuvre within the
framework of national relations - both for the state, with regard to welfare
provisions, and for the employers, with regard to wages and working
conditions. While the German government is busy axing the country's welfare
state and imposing sanctions on the unemployed, German corporations are
seeking to improve profits by driving down conditions in the factories.
Under such circumstances, the traditional trade union policy of class
collaboration and social partnership has undergone a transformation, and now
assumes the form of a conspiracy against workers and their interests. The
radical phrases thrown about by union leaders at protest rallies merely
serve as a cover - on the grounds that there exists no alternative - for
acquiescence in wage cuts and attacks on working conditions.
To seriously and effectively counter this systematic blackmail, workers at
DaimlerChrysler, Siemens and other companies must break with the nationalist
orientation of the trade unions and recognise that their defence must be
rooted in the forging of a united struggle of the international working
The most important task is to establish a principled collaboration with
Chrysler workers in America and DC workers at factories around the world.
Just as employers organise their activities on a world scale, workers must
Protectionism and nationalism serve only to force workers into a
competitive, internecine struggle to see which section is prepared to work
for the lowest wages and under the worst conditions. Mercedes workers must
pursue a policy of equal wages and conditions for workers all over the
It is necessary to reorganise global production in the interests of working
people, in order to utilise the developments in technology and science to
raise living standards and overcome social inequality. This presupposes a
socialist programme that places the defence of the rights and interests of
working people above the profit drive of big business and the large
shareholders who dominate the financial markets.
- 7/16 Korean Air likely to post loss of 19.6b won in Q2 - Higher fuel price, increasing foreign debt are eroding carrier's earnings, Bloomberg via Business Times Singapore.
SEOUL - Korean Air Co, South Korea's largest carrier, may post a
second-quarter loss as higher fuel price raised costs and a weaker currency
increased the size of its foreign debt when converted into won.
Bumpy ride: Korean Air's costs rise by about 30b won for every dollar
increase in the price of jet fuel, according to analysts' estimates. Its
shares have fallen 25% this year
Korean Air, Asia's fifth-largest carrier, may report a net loss of 19.6
billion won (S$28.9 million), compared with a 90.6 billion net profit a year
earlier, according to the median estimate of eight analysts surveyed by
The price of fuel, which surged to a 14-year high of US$48.65 a barrel in
May, has eroded earnings, even as demand for air travel resumed after last
year's outbreak of Sars. That's making investors such as Park Hyung Ryul
reluctant to buy shares in Korean Air or in Asiana Airlines.
'Korean airline stocks aren't that attractive because of their exposure to
currency fluctuations and oil prices,' said Mr Park, who helps manage one
trillion won at Seoul-based KTB Asset Management Co. 'Travel demand is
rising, but it's not enough to offset concern about higher oil prices.'
Korean Air will probably report its financial results early next month.
Korean Air shares have fallen 25% this year.
The world's airlines may lose as much as US$3 billion on international
routes this year if oil prices remain above US$45 a barrel, the highest
since Iraq's invasion of Kuwait in 1990, according to the International Air
Korean Air's costs rise by about 30 billion won for every dollar increase
in the price of jet fuel, according to analysts' estimates. Fuel costs
account for between 15% and 20% of an airline's expenses.
'If fuel prices had stayed at first-quarter levels, Korean Air might have
seen a profit in the second quarter as travel demand increased,' said Nam
Kwon Oh, an analyst at Good Morning Shinhan Securities Co in Seoul.
Oil prices have been surging because of rising demand, concerns about
terrorism and reduced production by refiners.
Jet fuel traded at an average of US$43.18 a barrel in the second quarter, a
third more than US$28.40 a barrel a year ago. It traded at US$46.70 a barrel
in Singapore on Wednesday, according to oil-pricing service Platts.
A growing number of South Koreans are going overseas after their travel
plans were delayed because of last year's Sars outbreak. The introduction of
a shorter workweek this month is also giving people more opportunity to
Korean Air flew 2.5 million passengers in the second quarter, 61%
more than a year earlier, according to South Korea's Ministry of
Construction and Transportation.
'Travel demand has recovered and is actually increasing from pre-Sars
levels,' said Jee Heon Seok, an analyst at Hyundai Securities Co in Seoul.
'The problem is higher costs as oil prices have unexpectedly maintained high
Korean Air's overseas borrowings increase by 48 billion won for every 10
won decline against the US dollar. The South Korean currency was at 1,155.45
won to the US dollar at the end of June, little changed from the end of
March. The currency gained 5.1% against the US dollar in the second
quarter last year.
Asiana Airlines Inc, South Korea's second-largest carrier, yesterday
reported a 15% decline in second-quarter net income to 29.3 billion
won because high fuel prices increased costs and the weaker won increased
the value of its foreign debt.
The airline reported an operating profit of 24.8 billion won in the second
quarter, compared with a loss of 53.9 billion won. Sales rose by almost a
third to 702.4 billion won.
- 7/16 System vs. individual: Justice emigrates to Europe, by Ronald P. Sokol, International Herald Tribune, France.
PUYRICARD, France - Although I completed my formal legal education many years
ago and have advised clients and argued cases ever since, I confess to a
fuzzy understanding of what is meant by "law."
I have a clearer understanding of "justice," perhaps because I worked my way
through the concept early in my career. Justice, I concluded, does not
exist. People do not rally to justice, although they regularly invoke it.
What moves them is injustice. When expectations are not met, a shrill cry
goes up. When expectations are fulfilled, normally nothing is said.
This led the philosopher Hans Kelsen to say that justice is social
happiness. It is an aspiration that varies with time and place, as
expectations vary. There was no expectation 100 years ago of a 35-hour work
week, medical coverage, paid holidays, full employment or a lawyer for those
too poor to retain one.
[This guy is apparently quite ignorant of social history. There was plenty of discussion of shorter workweeks 100 years ago and much progress was made in the first two decades of the 20th century toward shorter hours. See our history of the American workweek.]
Justice is a work in progress. Our ideas of what the
good life is evolve.
What is less perceived is that law and justice often conflict. Both are
human creations - abstract fictions - administered by men and women deciding
The lawyers and judges who inhabit this abstract yet terribly real world
seem to fall on one side or the other of a great divide. One side stresses
the paramount importance of the legal system and of societal interests; the
other stresses the impact on the individual - if there is no justice for the
individual whose case is being decided, then justice does not exist.
The System Protector says, "Look, I am not certain that the individual is a
terrorist, but I won't take the risk of releasing him because the danger to
the system is too great." The Citizen Protector replies, "There can be no
justice for this individual if he is kept in prison when there is no
credible evidence that he is a terrorist."
System Protectors always frame the issue in terms of the impact of their
decision on the legal system. Citizen Protectors frame the issue in terms of
the consequences of the decision on the individual whose case is being
Instances of this Great Divide are the stuff of history and contemporary
problems. They range from a woman's right to an abortion to the rights of
the Guantánamo prisoners to a refugee's right to asylum.
A classic example is that of a client losing an important right because his
lawyer missed a deadline. The law is full of deadlines, dates by which
certain things must be done upon penalty of losing the right to do
something, such as filing an appeal or beginning a lawsuit. Should the
individual be deprived of his right in such instances? What if his lawyer
missed the deadline but was not at fault?
During a long period of American history, the rights of blacks were denied
by the System Protectors on the grounds that the system could not bear the
burden of change. The Citizen Protectors asserted that there could be no
justice if the law treated an individual unjustly.
The same debate animated the controversy over providing free legal counsel
to a person too poor to afford a defense lawyer. For the System Protector,
the cost of providing counsel to poor people would be too great for the
system to bear. For the Citizen Protector there could be no fair trial for a
poor person who had to defend himself alone.
During what might be called the Golden Age of the U.S. Supreme Court, when
the dissenting minority of Justices Warren, Black, Douglas and Brennan grew
into a majority with the later additions of Justices Goldberg, Fortas,
Marshall and Blackmun, Citizen Protectors dominated the Court, and for over
a decade a series of decisions strongly protecting the individual were
They ranged from providing every person accused of crime with a lawyer to
the desegregation of schools and eventually every aspect of American society
in which government was involved, and to prohibiting the use of involuntary
With the arrival of Justice Burger and later Justices Rehnquist, Scalia, andThomas, the pendulum began to swing to the other side. Today the individual
almost everywhere in the United States confronts far less sympathetic
judges. The Supreme Court sets the tone. During the same period that the
Court was moving out of its Golden Age to a harsher system-oriented
jurisprudence, decisions began to emerge from a new court moving into its
own Golden Age.
Over the past four decades the European Court of Human Rights, based in
Strasbourg, has slowly but steadily built up a body of cases strongly
protecting the rights of the individual. The judges focus on injustice as
perceived and felt by the individual.
Citizen Protectors dominate this Court, as they did the U.S. Supreme Court
during the era of Chief Justice Warren. The significance of the case law
developed by this European Court has not garnered the media attention that
it merits. During these decades the torch of enlightened judicial
decision-making quietly passed from America to Europe, and this major shift
has been barely noticed.
American lawyers could do worse than to look to the cases coming out of this
European court for help in making their arguments before state and federal
judges. The ghost of Earl Warren lives in Strasbourg.
Ronald P. Sokol practices law in Aix-en-Provence. He was formerly a lecturer
at the University of Virginia Law School and is the author of "A Handbook of
Federal Habeas Corpus" and "Justice after Darwin."
- 7/16 German stocks advance, led by shares of Infineon, SAP, MAN, by Chris Fournier in Frankfurt (Cfournier3@bloomberg.net) & Sheenagh Archey (email@example.com), Bloomberg.
FRANKFURT - German stocks rose, led by chipmaker Infineon Technologies AG after Samsung Electronics Co. said quarterly profit almost tripled on demand for chips, screens and mobile phones....
MAN AG (MAN GY), Europe's third-largest truckmaker, added 38 cents, or 1.3
%, to 28.91 euros. The company is seeking to extend the work week to
40 hours without extra pay for employees, Chief Executive Officer Rudolf
Rupprecht told the Financial Times Deutschland in an interview....
- 7/16 Commissioners pledge to consider tax increase, by Jack Storey, Sault Ste. Marie Evening News, MI.
SAULT STE. MARIE, Mich. - Chippewa County Commissioners talked their way around
the county's ongoing budget crunch for nearly two hours at a special session
Thursday before addressing the matter at hand.
Meeting in special session before a small audience made up primarily of
county employees, commissioners reviewed recent budget struggles and the
handful of measures taken to reduce an estimated $610,000 operating budget.
The apparent purpose for the special Thursday session was to discuss four
proposals to increase county taxes, presented to commissioners for
consideration. Clearly reluctant to raise the tax issue, commissioners spent
the bulk of the lengthy session concentrating on various means for cutting
costs or increasing county revenue.
Not until after a motion to adjourn was defeated late in the session did
Commissioner Richard Timmer raise the tax increase proposals presented to
Earlier in the session, County Controller Tim Dolehanty presented the group
with a detailed three-year forecast of deficits ranging from more than
$900,000 in 2005 to nearly $1.3 million in 2007.
Dolehanty cautioned the group that his forecast was only a projection and
that projections usually grow increasingly inaccurate the farther in the
future they range.
In the ensuing discussion, Commissioner Don Copper several times stated his
belief that county spending has outrun the county's means for several years
running. While not addressing the sensitive tax issue directly, Cooper said,
"I don't think it's a revenue problem as much as it is an expense problem."
Cooper cited a handful of narrow spending practices as examples of his view
that the county's budget should be sliced further.
Commission Chairman Earl Kay fended off a largely inaudible list of detailed
questions posed by county employee Debbie Sirk. In a sharp exchange, Sirk
appeared to concentrate heavily on spending by the county commission itself,
eventually singling out travel, per diem payments and the fully-paid health
insurance each of the seven commissioners can claim as an employee benefit.
Kay declined to answer Sirk's questions in the public session but promised
the county employee detailed written answers if she would submit them in
Kay also suggested a list of measures, several of them adopted or proposed
already, as the preferable means for addressing the county's shortfalls.
Those measures include a five-day employee "furlough," a cut in unused
employee sick leave payouts at retirement, a universal 35-hour work week and a hiring freeze at the courthouse.
Reviewing a long list of detailed county revenue sources, Kay noted that the
vast majority will remain "flat" through the three-year projection period
used by Dolehanty.
Kay and Cooper exchanged angry words on one occasion, when Cooper referred
to his suspicion of "waste and fraud" in county spending.
"There are things we can do but we just don't want to do," Cooper said at
One of the things commissioners clearly did not want to do on Thursday was
talk about the tax proposals before them. Timmer finally brought the matter
to the fore in the only substantive motion placed before the panel during
the long session.
Saying an increase in taxes is not the only measure the county must adopt to
balance its books, Timmer convinced the group to vote on a generalized tax
Leaving aside the four specific tax proposals before them, the group voted
6-1 to "consider" a tax increase as part of the board's ongoing effort to
balance its budget.
The four tax proposals placed before the group on Thursday included two
seeking a one-half mill in the county levy for operating expenses and two
seeking a one-mill increase. The four were framed as ballot proposals for
submitting to the voters in August or in the November general election.
Commissioners agreed they have until Aug. 10 to place a tax question on the
ballot this year.
- 7/16 Settlement reached in BJ's probe - Warehouse chain pays 233 workers overtime, by Kimberly Blanton (firstname.lastname@example.org), Boston Globe via boston.com.
BJ's Wholesale Club Inc. has paid $320,000 in overtime wages to 233 workers in its chain of warehouse stores in a settlement with the US Department of
The government said yesterday the settlement with the Natick company
resulted from its investigation into a position known as ''club personnel
manager" common in BJ's Wholesale's 151 stores. The club personnel manager
typically performed tasks such as entering employee work schedules into the
computer, answering employees' questions about benefits, and making sure job
applications are properly filled out, the Labor Department said.
For two years BJ's ''improperly classified" the position as exempt from
federal overtime-pay requirements, the department said. ''Clearly this job
did not rise to the level of administrative exempt status," said department
spokesman John Chavez, reading a document from the investigation into BJ's.
BJ's director of human resources, Thomas Davis 3d, said in a statement that
company executives ''disagree with the DOL's findings" but agreed to the
voluntary settlement ''to avoid the expense of litigation." The company's
settlement ''makes no admission of liability for any violations," he said.
The settlement stems from a 2003 investigation by the Labor Department. BJ's
said that after government investigators initiated an examination of one
store, the company agreed to undertake an internal job audit of all club
personnel managers. ''BJ's cooperated fully," the company's statement said.
The federal Fair Labor Standards Act requires that employers pay overtime at
a rate of time and a half to hourly and some white-collar employees who work
more than 40 hours per week. But high-level administrative, professional,
and management jobs, usually salaried, are exempt from federal overtime
Club personnel managers at BJ's earn $14.93 per hour, on average, Chavez
said. The settlement amounts to $1,373 in back wages, on average, for each
worker and covers the pay period from Oct. 6, 2001, through Oct. 4, 2003.
BJ's personnel managers put in about five hours of overtime in a typical
work week, the Labor Department said.
[Chronic overtime = biggest economic recovery-buster.]
The department declined to specify what sparked the investigation; it said
no known lawsuits have been filed against BJ's in this matter.
Federal regulations on overtime pay have been at the center of controversy
between labor groups and the Bush administration over what types of jobs
must be paid overtime. In March, the administration proposed changes to the
regulations that were attacked by critics for severely reducing the number
of workers eligible for overtime pay. The new rules become effective Aug.
One regulatory change would raise the pay level at which low-wage employees
are guaranteed overtime to $23,660 or less, up from $8,060 currently,
unchanged since the 1970s. Labor advocates said that while the ceiling would
rise, making more people eligible, other regulatory changes would make it
easier for employers to classify certain types of positions as exempt from
overtime rules. Both sides have wildly different estimates of how many
workers would be affected.
Jim Leonard, a former Labor Department attorney, said the higher pay ceiling
would benefit thousands of low-paid workers. But other changes ''take away
from 6 million employees" who would become exempt, said Leonard, a
consultant to the liberal Economic Policy Institute in Washington.
The Bush administration estimates 6.7 million salaried workers would gain
protections under the new regulations.
- 7/16 Domestic air passengers drop 5.8%, by Kim Rahn (email@example.com), Korea Times, South Korea.
[Not a happy fate for an air passenger. Hey, they could have said "plummet." Best choice, "reduce" - because dieting would be easier on the planes.]
The number of domestic air passengers declined by more than 5% in
the first half of this year from last year, driven by the launch of the
bullet train and the prolonged economic slump.
The number was estimated at 10.15 million passengers during the
January-June period, down 5.8% from the same period in 2003,
according to the Ministry of Construction and Transportation on Friday.
Among the cities severely affected by the high-speed train, the route
between Kimpo and Mokpo saw a 60.7% decrease in the number of
passengers from 48,800 to 19,200, while the Kimpo-Taegu route reported a
38.9% fall, Kimpo-Pusan 15.6%, and Kimpo-Kwangju 14.3%.
After the bullet train began operating on April 1, the number of passengers
using Kimpo-Taegu route declined significantly by 71.3% to 97,500
from 339,800 of the same period of last year.
The number of passengers flying between Kimpo and Pusan also decreased by
28.6%, and between Kimpo and Kwangju by 23% for the last three
months compared to the same period in 2003.
However, as more people traveled abroad during the first half of the year,
the number of passengers flying from local airports to Incheon International
Airport to take international flights has surged.
The Pusan-Inchon route saw an 86.3% increase in passengers compared
to last year, while the Taegu-Inchon route has had a 77.1% increase
Also, with the gradual implementation of the five-day workweek, more people
are visiting Cheju Island [big island off the southern tip of Korean peninsula]. The number of passengers between Ulsan and Cheju
has increased by 107.2% and that between Wonju and Cheju by 81.7%.
A total of 5.35 million people visited the southern resort island during
the first six months of this year, 1.6% up from last year.
``The number of domestic air passengers will further decline, due not only
to the bullet train but also because of the establishment of new highways
and local roads,'' an official of the ministry said.
- 7/16 What works - All work, no play? It doesn't pay - European companies get it, but when will their workaholic American counterparts? Longer hours don't always add up to better work, by Jeffrey Pfeffer, Business 2.0.
A few months ago, I was having lunch in San Sebastián, Spain, with a group
of senior executives from some of the region's top companies. In a dining
room at the University of Navarre, we chatted through three courses of food
and a couple of bottles of excellent wine. OK, I know what you're thinking:
Indulgences like that - along with long vacations and short workweeks -
are why European companies don't "measure up" to their U.S. counterparts [by U.S. measures]. After all, we have the hardest-working employees in the world!
[This is anything to boast about? What about our rivals for this title in Bangladesh and Haiti?]
Americans work more hours a year than employees in any other industrialized country,
and earn just 12 vacation days a year - three of which they don't take. Women in the United States are also taking shorter maternity leaves than they used to....
- 7/16 Public sector wage settlements drop in May - 2.9% decline is the first fall in a decade, by Simon Tuck, The Toronto Globe and Mail, B4.
OTTAWA - Public sector wage settlements fell in May for the first time in a
decade, and some economists say the tumble could be a sign that government
workers will likely not enjoy the same pay hikes in the foreseeable future
as their private sector counterparts.
According to new statistics from Human Resources and Skills Development
Canada, base rate wages in new public sector labour contracts signed in May
were on average 2.9% lower than the agreements they replaced. Those
contracts, which affected 80,090 workers, marked the first time since
October, 1994, that public sector settlements in any month led to an overall
The May plunge was due largely to a health sector contract in British
Columbia, which called for a wage cut of 11% for 43,000 employees
and a 1.5-hour extension of the workweek....
The figures, which in May produced an overall wage drop of 0.6% for
both sectors, include only organized labour settlements....
- 7/16 Ayer fire chief introduces 3 new firefighter/EMTs, by C. David Gordon, Ayer Public Spirit, MA.
AYER, Mass. - When the Fire Department reduced its full-time
firefighter/emergency medical technicians' (EMT) work week from 56 hours to
42 hours, it decided to seek the most highly trained EMTs to work the
[= Timesizing in the service of fuller employment = A Good Thing.]
The difference in ability to provide a range of assistance in a medical
emergency is indicated in the training period required for each qualifying
level of EMT. According to Fire Chief Paul Fillebrown, some 120 hours of
specific training is required for EMT Basic, between 200 to 300 hours of
training for EMT Intermediate, and a nearly year-long course to be licensed
as an EMT-Paramedic.
The decision to hire paramedics who also qualify as firefighters came, the
chief told selectmen recently when selectmen ratified the appointments of
the three new men, with the goal to provide "the best patient care for the
citizens of Ayer."
Prior to Nashoba Valley Medical Center's hiring paramedics for its
ambulance, the chief said, a department would have to go to Emerson Hospital
or Leominster to find paramedics. Today, Nashoba Valley [M.C.] "is not always
available," Fillebrown said....
A total of 56 applicants for the three positions came in: 42 basic EMTs,
four intermediates and 10 paramedics. The focus narrowed to the 10
While Ayer's on-call firefighters would ordinarily be a first source for
new full-time firefighters/EMTs, on-call members who had applied only had
basic EMT qualifications. "It's hard to get an on-call firefighter to attain
[the paramedic] level," Fillebrown said....
The selection of the final three was "a tough decision." These three,
Fillebrown said, "rose above the others," each stressing as important
"personalized service for the residents of the community." The one who was
available to be personally presented to selectmen was John Bresnahan, not
related to the town's Chairman of Selectmen Paul Bresnahan.
A chaotic schedule each had in their previous position was a main reason
they wanted to join to Ayer department. Previously in Ayer, full-time
firefighters would serve a 24-hour shift and then have two days off. Now,
all will have a 24-hour shift and three days off. Under the previous Ayer
schedule, given the constant build-up of calls for services, Fillebrown said
he was concerned that "firefighters/EMTs don't get seven or eight hours of
- John Bresnahan has been a paramedic since 2002 with the Ashburnham Fire
Department. He has been an on-call firefighter for the Westminster
department and has served as a substitute teacher at Oakmont Regional High
School. Bresnahan is enrolled in a fire science degree program at Mount
Wachusett Community College. Both the interviewing team and selectmen noted
his experience as an Eagle Scout.
- Timothy Shea of Fitchburg is the most experienced paramedic, having served
with the Westminster Fire Department since 2001 and been an on-call
firefighter with Lunenburg since 1994. He was trained at the Massachusetts
Fire Academy. He also worked part-time for Anderson Funeral Homes in Ayer.
- Jeffrey Swensen lives in Gardner at the Ashburnham town line. He also has
been a paramedic since 2002 and an EMT since 1997. A full-time
firefighter/EMT with the Ashburnbham Fire Department, he has also served on
the Townsend EMS.
Each paramedic, he said, has the option of working on off-time [chaos returns] for a private ambulance service, which can help them keep their paramedic skills
up and licenses current.
As newcomers to the department, the three have salaries on Step 1 of the
regular firefighters' salary scale, $35,900, with an additional $2,000
stipend, the same as that afforded EMTs with intermediate certification.
Each of the firefighters may qualify for other stipends, depending on
specific training they acquire.
7/17 France Faces Changes in Global Economy
ABC News - 21 hours ago
France Faces Changes in Global Economy
French Workers Face New Reality in Global Economy With Fierce Competition,
Long Work Hours
The Associated Press
VENISSIEUX, France July 17, 2004 — In the birthplace of the people's
revolution, French workers are renowned for revolting against threats to
their lavish vacation, retirement and health benefits.
Strikes, virtually a ritual here, have paralyzed the nation's
transportation, interrupted the Tour de France cycling championships and
extinguished the lights at President Jacques Chirac's palace.
But the "workers' paradise" is not immune to the harsh realities of a global
economy where competition is fierce and work hours long.
Nowhere is this clearer than at the Robert Bosch GMBH plant here, where many
employees seem willing to accept unprecedented concessions like working more
than 35 hours a week! to save jobs.
The 820 workers at Bosch's factory are voting on whether to accept new
contracts increasing their weekly hours to 36, cutting bonuses and freezing
salaries for three years.
If at least 90% agree, Bosch France has said it will cancel 190 of
300 planned job cuts and avoid compulsory layoffs for the rest. If workers
reject the deal, financial director Eric Bazile said the company would
transfer a new diesel pump production line to the Czech Republic.
Bosch is the first company to issue such an ultimatum in France and more
startling than the demand, the workers in this laborers' haven are accepting
The reasons are not simple. But like other industrialized nations, France
has to come to terms with the need to compete in a global economy where
there is no shortage of workers willing to take home lower wages.
Most of the 10 new member nations in the European Union trade bloc including
the Czech Republic are in Eastern Europe, where the work force is hungry for
employment. If France does not move quickly, the jobs could move east in
"This has to end us competing with the last country that joins Europe. If
this is what they made Europe for, it's not worth it," said Rene Fraresso, a
representative of the militant General Confederation of Workers union at
But Bosch workers in this town outside the southern city of Lyon appear to
be accepting the company's deal.
"If it's the only solution why not? If that guarantees all the jobs, for me
one hour is worth it," said Bosch employee Deniz Ozant, 27, as he pulled out
of the parking lot. "Sometimes they give us bonuses, and sometimes we have
to give something. We are well protected, so it's worth it."
At the offices of the union, known by its French abbreviation CGT, the
prevailing mind-set was grimmer and angrier.
The CGT says Bosch is taking an ominous step that could ultimately threaten
cherished social protections and benefits especially the law setting the
French workweek at 35 hours, which employees had felt protected them.
"Workers want to keep their jobs, but not at any price," said Guy Fernandez,
a CGT official at the factory. "It's acceptable if it were paid, but it's
not paid. This is blackmail. Bosch gave them no choice. This undermines the
Bosch's strong-arm demand attracted widespread attention in France on
Thursday, when phones rang off the hook and journalists streamed into CGT
offices. But union officials conceded they were fighting an uphill battle,
as the vast majority of workers were expected to accept Bosch's offer.
In addition to the cold facts of global economics, the change of outlook
appears to be influenced by national soul-searching since last summer's heat
wave, which killed as many as 15,000 people, mostly the elderly.
The reasons so many were left to die in the unbearable heat, are far from
clear, but one of the factors blamed in a study by the Health Ministry was a
sacred institution in France: the summer vacation.
In August, nearly everybody in France from the neighborhood baker to the
president clears out of town. The health establishment is no different: with
patients gone, doctors close and head for the beach, and hospitals close
down whole sections.
Heat wave sufferers said they couldn't get in touch with doctors, and
hospitals had fewer beds available. The elderly often were left to fend for
Leisure time is sacrosanct in France workers get at least five weeks a year
vacation plus 11 national holidays but the stunning death toll last summer
led the French to consider a radical plan to help pay for better elderly
care: Make people work on a national holiday.
The Health Ministry study also said France's 35-hour workweek was partly to
blame, as it had cut into hospital staffing. It meant health care workerswho remained on the job in August were overwhelmed, Anne-Marie Le Gloannec
of the Paris-based Center for International Studies and Research said.
"One of the explanations is fact that you have the 35-hour week in the
health sector, so the pressure on those who are working is enormous," she
said. "Everyone is aware that the 35-hour week is a pretty bad idea."
Chirac opposed the 35-hour law when it was voted in under the previous,
Socialist-led government. But in a televised interview Wednesday on the
French national holiday of Bastille Day he said the law would remain in
place not wanting to touch off a major strike while his popularity is in a
slump. But he said changes are necessary to give companies greater
7/17 Negotiate for Fewer Hours After Proving Value of Your Skills
Washington Post, DC - 9 hours ago
Carving Out Your Own Part-Time Niche
Negotiate for Fewer Hours After Proving Value of Your Skills
By Rebecca R. Kahlenberg
Special to The Washington Post
Sunday, July 18, 2004; Page K01
Carol J. Weil, a lawyer at the Department of Health and Human Services and
a mother of two, enjoys working four-day, 20-hour workweeks that allow her
to be home when her children get out of school.
"I have no need for day care," she said. After holding a full-time job at
the department for four years, she started working part time in 1992
following the birth of her first child.
Finding a part-time professional job has become easier as more companies
offer flexible work schedules. A 2003 Hewitt Associates study of salaried
employee benefit plans at 975 major U.S. employers found that 74% of
employers in the sample offered some kind of alternative work arrangement
and 46% offered a part-time option.
The majority of people who pursue part-time positions are women. They do so
for a variety of reasons, but most often do so to have more time with their
children, said Meredith J. Moore, director of research at Catalyst, a New
York nonprofit research and advisory organization that focuses on women in
Still, some men choose to work part time. John Dawson, a manager at Fannie
Mae, switched to a four-day workweek in 2001 when he turned 55. After
working at the company full time for 15 years, he wanted more time for
Establishing a strong track record as a full-time employee makes it easier
to bargain for part-time work, said Cynthia Fuchs Epstein, author of "The
Part-Time Paradox: Time Norms, Professional Lives, Family and Gender"
(Routledge, 1998). Longtime workers establish loyalty and develop a good
relationship with management. You have a particularly good chance of
attaining a part-time job at your current workplace if you develop a
specialty that puts you in demand there, if you have a loyal clientele who
will press to keep you, or if you are able to bring in new business, she
But don't expect to keep the same job when you move to part time. Amy Broda,
an institutional marketing manager at Calvert Group, a Bethesda mutual fund
management firm, wanted to reduce her full-time work schedule to four days
after her first child was born in 1996. She knew it was unrealistic to
propose keeping her existing job in a part-time capacity, so she proposed
creating a new position that she could do in fewer hours, she said.
After a few rounds of negotiation, the proposal was accepted. "I had a lot
of knowledge about the company . . . and Calvert did not want to lose that
knowledge and the experience I had there," she said.
It is harder, but not impossible, to find or create a part-time position
from outside an organization. To start, job seekers can research lists of
the best companies to work for, published by associations as well as
magazines such as Fortune and Working Mother, said Marian Stevens, human
resources talent team manager at Fannie Mae. Likewise, when looking at
companies on the Internet, see whether they boast flexible work options or
commitment to work/life balance.
Another suggestion is to apply for a full-time job, then, if it's offered,
negotiate for it to be part time instead, advised Natalie R. Gahrmann, owner
of NRG Coaching Associates in New Jersey and author of "Succeeding as a
Super Busy Parent" (Infinity Publishing, 2002). Doing so is not unethical,
she argued. It is similar to negotiating for any other employee benefit.
Sometimes it's a matter of being in the right place at the right time.
Estelle Alexander, a senior research information specialist at the nonprofit
AARP in the District, became aware of the part-time position she holds while
serving as a consultant there.
Keep in mind that part-time jobs can have drawbacks. You may not advance as
quickly as if you worked full time, as it's harder to be seen by management
when you have less of a presence in the office, said Dennis Truskey,
director of human resources at Calvert Group.
"You would need to have a very progressive manager and a stellar career" to
climb at the same rate, he said.
But for Weil at HHS, the benefits outweigh any negatives. Of her 20-hour
workweek, she said: "It's a great arrangement, a win-win."
7/17 The End of Welfare?
Newsweek, NY - 8 hours ago
The End of Welfare?
A quiet social revolution is underway in Germany
By Stefan Theil
July 26 issue - Beneath its perpetual sense of malaise, a quiet revolution
is sneaking up on Germany. Two weeks ago the upper house of Parliament
passed the final phase of Chancellor Gerhard Schröder's Agenda 2010, the
landmark reform package aimed at getting Germany back on the track to
growth. So far, the measures have been mostly superficial, hardly shaking up
the country's ingrained culture of entitlement. But the new law, to take
effect in January, packs an unprecedented punch. It no less than eliminates
Germany's long-established system of virtually lifelong unemployment
benefits, shifting up to 2 million recipients onto the far less lucrative
welfare rolls. Full unemployment benefits will be cut from 32 months to 12.
Some Germans are calling it "the end of welfare as we know it."
That may be premature. But there's no overstating the importance of what's
happening. Since last year, all of Germany's 16 Länder, or state
governments, have reversed a decades-old trend toward cutting working hours.
Instead, they've increased civil servants' workweeks from 38 hours to as
much as 42—with no additional pay. In late June, Munich-based Siemens hiked
hours from 35 to 40 at its mobile-phone plants. Companies like
DaimlerChrysler and truckmaker MAN say they'll follow suit. Two thirds of
German workers—who have labored the least and cost the most in the world—now
say they are willing to work longer for less if it means they keep their
jobs. For the German weekly Die Zeit, it's no less than "a German
As with any revolution there promises to be blood. Germany's unions are dead
set against the changes. Last week, 60,000 workers at DaimlerChrysler held
warning strikes to protest management's plans. But Germany's unions aren't
as powerful as they used to be. Membership is down from 11.8 million in 1991
to just 7.4 million, and a majority of Germans no longer see them as a
beacon of workers' rights but as a destructive impediment to reform.
The big question is what comes next. By themselves, the changes will not get
Germany's 7 million jobless back to work. Schröder has avoided urgent issues
such as loosening the work rules that make companies loath to hire, or
reforming the wasteful system of subsidies for the formerly communist East.
His strategy seems apparent: hope that the first round of reform yields
results before the 2006 election, while steering clear of fresh controversy.
That's unlikely to help either him or Germany. The new welfare law will prod
people to look harder for work. "But to revitalize growth and create jobs
the government's reforms are not enough," warns Jochen Pimpertz at the
German Economics Institute in Cologne. Still, real change is finally
underway. And it appears Germans are ready to accept the consequences.
© 2004 Newsweek, Inc.
7/17 Highest-paid executives see compensation slide
Houston Chronicle, TX - 8 hours ago
Highest-paid executives see compensation slide
Houston decline runs counter to national trend
By TOM FOWLER
Copyright 2004 Houston Chronicle
The faces may be familiar, but the dollar figures next to many of Houston's
100 top-paid executives aren't what they used to be.
For the second consecutive year, ConocoPhillips Chairman and Chief Executive
Officer Archie Dunham topped the list. But his $16.8 million pay package is
down nearly $40 million from 2002.
Nabors Industries Chairman and CEO Eugene Isenberg — a top four finisher in
four out of the last five years — ranked second with a $15.8 million
package. That's down more than $6 million from 2002, according to data
compiled for the Houston Chronicle.
The compensation doesn't all come in take-home cash, but it's still a hefty
The average cash salary and bonus for the top 100 executives was $1.3
million, or $636 per hour based on a 40-hour workweek. CEOs insist the
workday for them is 24/7. But it would take a person earning $50,000 per
year, or $24 per hour, 26.5 hours to match the average wage executives earn
in one hour.
Decline in pay not tied to company performance
With the average Houston executive's pay package 19% smaller than
last year, the city is bucking the trend nationally. Overall, pay grew 9
%, according to a BusinessWeek survey.
"It's a bit surprising to see total compensation drop as much as it did
because Houston companies had pretty good performance last year," said Chris
Crawford, managing director of Longnecker & Associates, an executive
compensation consulting firm that compiled the data for the Chronicle. "It
seems companies here are doing more with less."
The mismatch between improved performance and smaller pay may be a
continuation of the backlash against the excesses of the late 1990s — when
executive pay skyrocketed because of huge stock option grants — and the
recent spate of corporate scandals.
"This is likely a knee-jerk reaction to a lot more government oversight and
investor scrutiny," Crawford said.
One big name absent from the list this year is Continental Airlines Chairman
Gordon Bethune, who plummeted from No. 7 in 2002 to No. 214 with $1,018,544
in total compensation. The drop was due mainly to Bethune turning down $2
million in incentive payments last year.
Energy industry execs moving up pay ranks
Some energy industry executives moved up the list.
Kinder Morgan's Deborah Macdonald is once again the only woman in the top
100, moving up from No. 74 last year to No. 15.
New to the top 10 is EOG Resources CEO Mark Papa, who ranked No. 7, up from
No. 17 last year.
And four spots in the top 10 were held by Reliant Energy and Anadarko
Petroleum, which both placed both their incoming and outgoing CEOs in the
Company executives typically dread annual pay surveys. Pay information is
readily available in public filings with the Securities and Exchange
Commission, but employees and shareholders rarely look them up on their own.
Newspaper reports are often seen by companies as little more than a way to
But it's not just publishing the big numbers that bothers executives, it's
readers who see these totals and assume their take-home pay is higher than
it really is. In most cases, only a portion of the total compensation
reported is actual cash that an executive can put in the bank.
Salary and bonuses are typically in cash. And many of the items under the
"other" column are perquisites, or "perks," which include everything from
extra life and health insurance coverage to use of company jets and
employees for personal business.
Stock and stock options biggest items in package
But the biggest items in the pay packages are usually stock options and
restricted stock, items that executives can't profit from for several years,
if at all.
Options are the right to buy a share of stock at a fixed price after a year
or more if certain performance targets are met. The value reported for stock
options granted in a given year is an estimate based on a widely used
formula known as the Black-Scholes Model.
While the model, based in part on the past performance of the stock, can be
accurate, the options are worthless if the company's stock price drops below
the option price in the future.
More often than not, the options are exercised and the stock can be sold for
a profit, but it may not be as big a profit as predicted when the options
Take the $11.1 million pay package for BMC Software's Bob Beauchamp, ranked
No. 5 on the list. More than $9.2 million of that is in stock options that
he can't convert into stock for at least a year from the date they were
granted. Even then only one-quarter of the options would be available to
cash in. Beauchamp has no guarantee those options will be worth anything in
Some companies are starting to reassess their generous use of stock options.
Options were designed to put management in the same situation as the average
investor, but critics believe they encourage executives to lie or exaggerate
information shortly before the options mature in order to boost the options'
Those claims are at the heart of many of the recent accounting scandals.
Companies make more use of restricted stock benefits
Companies are turning instead to restricted stock — actual shares of stock
that can't be sold unless the company meets certain performance goals over a
period of time.
Out of the top 100, 45 executives received some form of restricted stock,
with Kinder Morgan, Crown Castle International and Newfield Exploration
among the most consistent users.
Institutional investors applaud the increased use of restricted stock
because it puts management on the same footing as shareholders.
Not only will they see the upside gain when the stock price rises, but they
will also experience the loss if the stock price drops.
7/17 DaimlerChrysler Labor Dispute Closes Plants
Deutsche Welle, Germany - Jul 17, 2004
DaimlerChrysler Board May Take Salary Cut
A 10% salary cut for CEO Schrempp?
To help defuse a growing labor dispute over longer working hours for
employees, top managers at carmaker DaimlerChrysler appear ready to accept
large salary cuts. The company had threatened to move jobs to save costs.
A day after striking workers shut down DaimlerChrysler plants in
Sindelfingen and Untertürkheim to protest the company's attempts to squeeze
labor costs, the carmaker's board members signaled they would sacrifice part
of their own pay if workers agreed to a longer workweek. The Bild am Sonntag
newspaper reported the top executives had offered to take a 10% cut
DaimlerChrysler spokesman Thomas Fröhlich could not confirm a figure that
board members were willing to accept, but he said they were in principle
ready to consider such a measure so long as the labor dispute was resolved.
"I can confirm that the board wants to do its part in the context of an
overall solution," Fröhlich told the Reuters news agency on Sunday.
Production at DaimlerChrysler's two factories in the southwestern state of
Baden-Württemberg was halted on Saturday, as almost 15,000 workers downed
their tools to protest the company's attempts to get employees to work
longer hours without compensation.
The labor conflict was sparked last week after DaimlerChrysler's threatened
to shift production of its new Mercedes C-Class sedan away from Sindelfingen
to Bremen and South Africa if unions do not agree to trim ?500 million ($615
million) in labor costs. Such a move could result in the loss of 6,000 jobs
Industrial trade union IG Metall slammed the move as "blackmail" and railed
workers to strike. Some along the picket line had signs with slogans such as
"It's War!" The escalating rhetoric between labor and management alarmed
German Chancellor Gerhard Schröder to the point that on Friday he felt he
needed to urge both sides to continue working for a resolution of the
Schröder said the heated atmosphere was "an example of the loss of a culture
that I still believe in, that is that those involved don't insult each other
publicly and both sides certainly don't threaten one another."
DaimlerChrysler CEO Jürgen Schrempp told the Welt am Sonntag news paper that
he expected a resolution "soon" and that both sides were engaged in
The latest efforts by DaimlerChrysler come as several big German firms look
for ways to lower their labor costs. Foremost among the measures is the
attempt to move workers back to a 40-hour workweek.
Last month, Siemens said it would not to move thousands of jobs to Hungary
after unions agreed to abandon its 35-hour workweek. That deal has led
several other German companies, heavy truck maker MAN, to debate similar
A responsibility to employees?
The head of Schröder's Social Democratic party, Franz Müntefering, on
Saturday accused company bosses of trying to take advantage of the moment to
pressure unions and workers. In an interview with the Berliner Zeitung
newspaper he said firms had a responsibility to their employees that
precluded them from callously changing their production sites.
"The way they are taking is wrong. Germany's future does not lie with cheap
wages," Müntefering said. "We have to avoid ending up with blind, total
However, Angela Merkel, the head of the conservative opposition, took a much
more sanguine look at the growing discussion over labor costs. She told the
newspaper that it was only logical for DaimlerChrysler to seek locations
that offered the company lower production costs. She also warned the unions
against seeking wage increases that were too high and would make German
companies less competitive globally.
"In light of globalization there is a real danger that wage deals that could
cause more production to be moved abroad," Merkel said.
DW staff (mry)
7/17 "Help, lifeguard!" - State DEP seeks lifeguards for three swimming areas, by Cynthia Baran (firstname.lastname@example.org or (860- 664-41180), Journal Register via Middletown Press, CT.
With vacancies at three swimming areas in the state, the Department of
Environmental Protection has put out a call for qualified applicants.
It’s a good opportunity that could lead to bigger things, such as a career
caring for the environment at state parks, forests or fish hatcheries, said
Pamela Adams, the DEP’s director of state parks.
"It’s a way of getting your foot in the door (of the department)," Adams
said, noting that some people who started working as lifeguards for the DEP
while in college and came back summer after summer eventually went on to
full-time careers in the department.
Although the DEP kicked off the summer season Memorial Day weekend with a
full complement of lifeguards at all state swimming areas, some have left to
take other jobs, leaving the department with five vacancies.
There are openings at Wharton Brook in Wallingford, Squantz Pond in New
Fairfield and Black Rock in Watertown.
"July is our busiest time of the year and we are looking for qualified
life-savers to help keep the public safe at our beaches," said Tom Morrisey,
acting chief of the Bureau of Outdoor Recreation.
The pay is $8 to $12 per hour depending upon experience and qualifications.
"We monitor what other lifeguard positions are paying and we stay
competitive," said Adams.
National standards for lifeguards require candidates to have valid
certificates for lifesaving, cardiopulmonary resuscitation and first aid
from the American Red Cross or other affiliated organizations. Adams said
the DEP does not pay for the courses.
Filling lifeguard positions seems to run in cycles, Adams said. Some
summers, there is no difficulty; others, the DEP is scratching for
Two summers ago, the DEP was forced to cut back on the number of lifeguards
as a result of state budget woes. It also cut the workweek from 40 hours to
In 2001, the authorized lifeguard strength at Hammonasset Beach State Park
in Madison, the state’s largest beach, was 18. In 2002, it was down to 13.
This year, the numbers are back to 15 and the workweek is back up to 40
The weather also is a factor. If it’s raining, DEP lifeguards, typically,
don’t work - and don’t get paid. However, Adams noted, some lifeguards do
other work at state parks on rainy days....
Anyone interested in a DEP lifeguard position should call William Mattioli,
DEP water safety coordinator at (860) 424-3200.
- 7/18 Smaller stores add Sunday to the work week, by Brandi Davis & Web staff, News 14 Carolina, NC.
Sundays are no longer reserved for just worship and family-time.
More store owners have found they can't afford a "day of rest".
In Fayetteville, many merchants say they have to open on Sunday to compete
with large retailers.
After 25 years in business, Bob's Wine Shop on Raeford Road has added Sunday
to the work week again.
They opened on Sundays a few years ago but stopped because business wasn't
Owners recently decided to give it another try.
The Pallie Dollar Store is also open seven days a week to compete with major
Owners say their customers appreciate it.
"A lot of times when they go to church they get out and they're looking for
things to do and places to go and they can come here to Pallie Dollar," said
owner Georgette Reed.
The National Retail Federation says Sunday is now the third busiest shopping
day of the week.
- 7/18 Plan could cut cherished vacation time - Workers in France weigh longer work week to save jobs, by Pamela Sampson, AP via Lexington Herald Leader, KY.
VENISSIEUX, France - In the birthplace of the people's revolution, French
workers are renowned for revolting against threats to their lavish vacation,
retirement and health benefits.
Strikes, virtually a ritual here, have paralyzed the nation's
transportation, interrupted the Tour de France cycling championships and
extinguished the lights at President Jacques Chirac's palace.
But the "workers' paradise" is not immune to the harsh reality of a global
economy in which competition is fierce and work hours long. Nowhere is this
clearer than at the Robert Bosch GMBH plant, where many employees seemwilling to accept unprecedented concessions - including working more than
35 hours a week - to save jobs.
The 820 workers at Bosch's factory are voting on whether to accept new
contracts increasing their weekly hours to 36, cutting bonuses and freezing
salaries for three years.
If at least 90% agree, Bosch France has said, it will cancel 190 of
300 planned job cuts and avoid compulsory layoffs for the rest. If workersreject the deal, financial director Eric Bazile said the company would
transfer a new diesel-pump production line to the Czech Republic.
Bosch is the first company to issue such an ultimatum in France. And more
startling than the demand is that the workers in this laborers' haven are
Like other industrialized nations, France has to come to terms with the need
to compete in a global economy in which there is no shortage of workers
willing to take home lower wages.
Most of the 10 new member nations in the European Union trade bloc -
including the Czech Republic - are in Eastern Europe, where the work force
is hungry for employment. If France does not move quickly, jobs could move
east in droves.
In addition to the cold facts of global economics, the change of outlook
appears to be influenced by national soul-searching since last summer's heat
wave, which killed as many as 15,000 people, mostly the elderly.
The reasons so many were left to die in the unbearable heat are far from
clear, but one of the factors blamed in a study by the Health Ministry was a
sacred institution in France: the summer vacation.
In August, nearly everybody in France from the neighborhood baker to the
president clears out of town. The health establishment is no different: with
patients gone, doctors close and head for the beach, and hospitals closedown whole sections.
Heat-wave sufferers said they couldn't get in touch with doctors, and
hospitals had fewer beds available. The elderly often were left to fend for
Leisure time is sacrosanct in France - workers get at least five weeks of
vacation a year plus 11 national holidays - but the stunning death toll
last summer led the French to consider a radical plan to help pay for better
elderly care: Make people work on a national holiday.
The Health Ministry study also said France's 35-hour workweek was partly to
blame, as it had cut into hospital staffing.
[KE - This article demonstrates the need to make the shorter work hour
movement truly international. A handful of countries choosing shorter work
hours become subject to all kinds of noxious pressures.]
- 7/18 The Franco-German Alliance Against Market Freedom, by Grant M. Nülle, Mises.org.
Since the Second World War, the deep-seated enmity between France and
Germany, whose governments waged war against each other thrice in less than
a century, has been exhausted.
Restrained from resuming their fratricidal tendencies by the bonds of the
corporatist European Coal and Steel Community, eventually superseded by the
European Union (EU), the countries no longer contemplate warfare as a means
of settling bilateral disputes. Rather, these two founding members of the
EU's original six have cooperated quite closely in forging today's common
market encompassing 450m people, a twelve-country currency union and a
As their markedly similar postwar social market systems reel from the
onslaught of globalization and the economic consequences of the rampant
interventionism championed by its architects and stewards, the Franco-German
axis has been reinvigorated. Unwilling and unable to scrap the welfare
state, the political establishments on both sides of the Rhine are jointly
mounting a tenacious offensive against all suspected assailants, domestic
and foreign alike.
France's postwar interventionist architecture is alive and well. Government
spending comprises half of the economy. Though down from levels in previous
decades there are roundabout a thousand firms in which the state boasts a
controlling share. One out of five employed citizens toil on the public
payroll. Sclerotic labor markets, typified by the 35-hour workweek, are
jealously guarded by militant trade unions.
['Scerotic', perhaps, but more favorable to labor than American or British labor markets and therefore sustaining more domestic demand per capita than either of them.]
Despite a reprieve from 1997 to 2000 when 1.6m jobs were created (ten times
the amount generated during the two preceding decades) amid America's
credit-induced bubble, unemployment is again edging up, approaching 10%. In
fact, a net hemorrhaging occurred last year, as 67,000 jobs were lost
(although many thankfully were public sector). A bevy of income, payroll and
indirect taxes help to underwrite increasingly indebted, unsustainable, and
unwieldy pay-as-you-go social security system, state-funded health insurance
system, and assortment of other government handouts.
In Germany, the situation is even worse. Anemic growth, less than half the
average posted by the EU as a whole, has characterized the
post-reunification period. Excluding the ten eastern and central European
countries that joined the "Ever closer union" May 1, German per capita
income would actually fall below the Union's average.
Unemployment remains a chief concern, as the tally breaches double digits at
10.5%. Hemmed in by restrictive hiring and firing laws, excessive labor
influence over company decisions and subjected to confiscatory and Byzantine
taxation schemes, German firms find business conditions inimical to
commerce. Accustomed to Ludwig Erhardt's postwar soziale
Marktwirtscharft - Europe's social market template and the Bismarckian welfare
apparatus before it - Germans are loath to part with government provision and
administration of fallaciously dubbed "public services" and a robust social
Moreover, reunification has taken its toll. Since 1989 over $1.5 trillion
has been transferred from West to East, to overcome the economic
deterioration that befell the latter while shackled by communism.
Unsurprisingly, the imposition of the West German social market and transfer
of government-directed subsidies failed to have their desired effect;
unemployment in the East is twice as high as the West and economic growth
has been even slower. Ironically, for beleaguered East Germans, they junked
one interventionist straitjacket only to don another.
Since its debut, German Chancellor Gerhard Schröder's highly touted Agenda
2010, a program of health, welfare and unemployment transformations have
featured more substance than style. Unveiled in March 2003, the reform
package was crafted to jumpstart an anemic economy and the Social Democratic
Party's (SPD) poll ratings, which had been receding since its narrow victory
in the September 2002 general election.
To his credit, Schröder's SPD-Green parliamentary governing coalition
implemented a few positive measures in 2003. Thanks to Christian Democratic
support in the Bundesrat or upper federal chamber, approximately $18bn worth
of tax cuts have been implemented in 2004 and the Meisterzwang that
regulates artisans' qualifications was loosened a bit. Firms employing less
than ten workers (previously five) are now exempt from the most stringent
regulations governing termination. Beginning in 2005 unemployment benefits
will not be available indefinitely nor can redundant laborers refuse job
offers without incurring a cut in entitlements[i].
Nonetheless, these token reforms, approved only after protracted
parliamentary carping, scarcely scratch the surface of the daunting task
ahead. Firing employees and the accompanying litigation often takes as long
as two or three months in Germany compared to the two to four weeks in
relatively liberal Anglo-Saxon countries like America and Britain.
State-inflicted distortions in the French and German labor markets become
apparent when one notes that as demand burgeons in these countries employers
actually confront severe labor shortages, despite high jobless figures. In
2000, for example, when vacancies in both countries reached all-time highs,
unemployment stood pat.
Relaxing statutory restrictions on opt-outs from industry-wide wage accords,
a fixture of German industrial relations, were shelved by the SPD. Numbering
close to 60,000 these corporatist concords negotiated by trade unions and
employers are notoriously generous to the former on one hand and limit
individual firms' ability to adapt to its unique business environment on the
Furthermore, Schröder has declined to alter the Mitbestimmung, or
co-determination of company decisions exercised by management and labor
jointly. The Workers' Representative or Betriebsrat is available to a staff
of more than five and wields considerable influence over performance bonuses
and employee assignments.
In the same vein, the German Federal Labour Agency, the entity charged with
placing redundant workers into employment, has not improved. Another example
of German corporatism - the agency allots equal shares on the federal and
regional governing boards to labor, business and government personnel - this
bureaucratic creature is inefficient at best. Last January its head was
summarily sacked for his dodgy dealings with contractors and extravagant
expenditures (especially office furnishings), which did not mesh well with
the 6.5% of gross wages paid by both employer and employee and
appropriations from general taxation that fund the agency's $66bn budget.
Taking it to the street
Not to be outdone, France launched its own reform package in mid-2003,
"Agenda 2006", spearheaded by the current Prime Minister, Jean-Pierre
Raffarin. Mirroring the Teutonic raft of proposals, the Gallic version seeks
to reduce unemployment benefits, address public pension and healthcare
financing, liberalize labor markets and cut taxes.
From the outset, the center-right government was able push through a modest
reform to the country's public retirement system, requiring many state
employees to wait 40 and later 42 years, rather than the previous 37.5, to
draw a full pension.
Raffarin's ability to outlast the barrage of public demonstrations was
indeed impressive. The last centre-right prime minister who attempted to
tinker with pensions as part of a broader bid to slim a bulging budget
deficit in 1995, Alain Juppé, encountered fierce opposition, which spilled
over into a defeat in the 1997 general election. France's trade unions,
especially the politically intimidating and socially influential
public-sector unions do not hesitate to spill out onto the streets to defend
their privileges as agents of the state.
Notwithstanding Raffarin's intestinal fortitude, France's overly generous
social security system is far from being on sound footing. The average
pensioner enjoys an income almost exactly on par with a working compatriot.
Dubbed répartition, current workers foot retirees' payouts to bolster
solidarity between generations, the philosophical underpinning of the
pay-as-you-go system. Nevertheless, as pensioners' ranks swell and the
number of laborers dwindles, the system will succumb to insolvency. Already
running billion dollar deficits annually, the social security time bomb has
yet to be addressed by the French government.
Similarly, France's state-run health insurance system is a fiscal albatross
and a moral hazard. The system defrays about three-quarters of medical costs
(the rest covered by private firms), encouraging the French populace to
visit the doctor even for the slightest ailment. Although the health
system's service is quite good, but grossly overused, the state-administered
insurance system is expected to post a deficit of $15.5bn this year and
almost $30bn by the end of the decade[ii]. Raffarin has not even tabled
proposals on this issue, much less scrapping the 35-hour workweek, a policy
that is estimated to cost the French economy billions of dollars in lost
output per annum.
The introduction of a shortened workweek in 1999 precipitated other
interventionist quagmires, including severely complicating calculation of
the minimum wage by posing the question of how to implement an automatic
11.5% rise in remuneration for French workers who were to receive the same
pay while working for less hours. To alleviate the cost pressures on
employers and employees the state has overtly subsidized both parties, all
at the cost $16bn per year. In July, the French minimum wage will rise by
5.8% and the full 11.5% increase will be phased in with a concomitant
cessation of payroll subsidies a year thereafter, unfortunately leaving both
flagrant étatist measures in place.
Taken together the French and German governments' attempts at overhauling
the welfare state have halted as the meager reforms undertaken have yet to
materialize into brisk and sustained economic growth. Rather, Raffarin and
Schröder's parties have been stung by voter restiveness, with the
Frenchman's center-right party being all but displaced in every French
regional election in late March. His Teutonic counterpart was drubbed in
June's European Parliament elections garnering only 21.5% of the vote, the
worst performance for the SPD since 1949.
In France, the backtracking is evident, as the country's electorally
vulnerable president, Jacques Chirac, ordered his government to table a
$15.4bn plan to tackle high (especially youth) unemployment and increase
public housing. Crafted by the "super-ministry" of "social cohesion"
(another poll-dictated idea) the program will provide training to 800,000
unskilled youths, create 300 job centers and build 40,000 new low-income
housing units. This brilliant plan has been advocated despite the fact that
French welfare expenditures - second only to Sweden in the EU - have actually
seen youth unemployment rise and long-term unemployment triple in the past
Dogged by declining poll numbers throughout their reform jaunt, the ruling
parties in each country have attempted to overshadow, if not forestall their
paltry efforts, by blaming other individuals or organizations, domestic or
foreign, for their countries woes and actually have taken positive steps to
protect their enfeebled economies from leaner competition.
The involuntary confiscation of property practised by governments is
inimical to liberty and economic growth, no less so when businesses are
compelled to foot the bill. Compulsory contributions induce German and
French employers to pay non-wage payroll charges approaching half of gross
wages. The simple German corporate tax level is about 39% and France's 34%.
Compare these exorbitant rates to Ireland (12.5%), Latvia, Cyprus and
Lithuania (all 15%), Poland and Slovakia (19%), or low-tax leader Estonia,
which waives levies on reinvested earnings. Even Austria, heretofore a
bastion of corporatism, will reduce the basic corporate tax level from 34%
to 25% starting in January in a so far successful bid to market the country
as an enterprise-friendly and skill-fertile gateway to the low-wage, low-tax
countries of Central and Eastern Europe.
Hamstrung by high wages and high taxes - two-third of the world's tax
literature originates in Germany - politicians are lambasting their eastern
and southern neighbors any chance they get. When the president of the German
federation of chambers of commerce and industry suggested earlier this year
that domestic firms should consider relocating operations to Eastern Europe
instead of waiting for government reforms to arrive, his advice was promptly
condemned as "unpatriotic" by Schröder, who has apparently been following
the Kerry ("Benedict Arnold companies") campaign.
In late April 2004, the chancellor's finance minister, Hans Eichel, labeled
the commerce - accommodating tax rates as "dumping" and threatened to deprive
the ten new Eastern and Central European entrants into the EU their share of
$397bn in regional aid slated to be doled out between 2007 and
2013. Although Eichel is right to try to limit his country's contributions to the EU budget (Germany is the Union's primary paymaster), especially onpatent subsidies, his linkage to corporate taxation smacks of a
Reeling from high-profile business defections to its south, Bavaria's
government has been accused of inveighing against advertisements running in
the province that tout Austria's attractive business environment.
Backed by France, the German government recently pressed for an EU-wide
minimum corporate tax rate - mooted at 20%. Claiming that EU regional aid
bankrolls Eastern Europe's low tax rates Eichel disingenuously assured the
EU leaders that a minimum tax rate, "would in no way stand in the way of
competition between member states." Fortunately the new EU Constitutional
Treaty, hashed out by member state heads of government during the third week
of June, preserved unanimity on all tax decisions, thereby preserving rate
disparities across Europe.
. . . and spend
As members of the EU's monetary union, Paris and Berlin are obliged under
the Stability and Growth Pact (SGP) to prevent annual budget deficits from
exceeding 3% of GDP and the sovereign debt-to-GDP ratio eclipsing 60%. The
German government insisted that budgetary rigor and sanctions mechanisms be
explicitly enshrined in the 1997 Maastricht Treaty as its price for junking
the country's beloved D-Mark in favor of joining a new currency with chronic
budget busters like France and Italy.
Ironically, the country most adamant about fiscal austerity has violated the
pact not once but three years running (including 2004). France has been
commensurately profligate, failing to balance its last 23 budgets and
breaching the 3% plateau every year since 2002. Like Berlin, Paris will
certainly do so again in 2005. The aforementioned deficit in France's public
health insurance system coupled with an upsurge in defence spending at
Chirac's urging accounts for the bulk of the fiscal shortfall. In 2003,
Paris registered a deficit of 4.1% of GDP and the stock of government debt
climbed to 63% of GDP - the worst deterioration of state finances in the EU.
After three successive years of above-3% budget deficits, France and Germany
were slated, pursuant to the SGP's Excessive Deficit Procedure, to lodge
interest-free deposits of approximately $3.6bn and $4.8bn, respectively, at
the European Commission which would be converted into a fine the following
year and distributed to member states with sounder finances on a pro rata
basis. Unapologetic in their transgressions, France and Germany's finance
ministers managed to suspend the procedure in November 2003 over dinner with
their fellow exchequers in the European Council, many of whom are poised to
breach the SGP themselves.
On July 13, the European Court of Justice will deliver its verdict on
whether member states illicitly froze the sanctions mechanism. Pitting the
Commission against the French government, Hearing C-27/04 Commission v.
Council (heard April 28, 2004) and the subsequent ruling will greatly
determine if Germany and France's flouting of the rules underpinning the
European monetary union will spell the death knell of the embattled and
much-derided stability pact[iv].
Not satisfied with emasculating the sanctions mechanism, the German
government, supported by Italy, Poland, and Greece, all impending fiscal
miscreants under EU rules, managed to dilute the clauses governing sanctions
in the new EU Constitution. In effect, the European Commission - the guardian
of EU treaties - will continue to merely determine when countries contravene
the SGP and posit enforcement responsibility with member states (finance
ministers). (The SGP and Excessive deficit procedure will explored fully by
this author in an upcoming article).
Cheap Credit, Now!
Since leaving the SGP in abeyance, France has complemented Germany's
constitutional assault on the pact by publicly railing against it and
enlisting other EU countries to do likewise. In May, Britain's Chancellor of
the Exchequer joined his Franco-German counterparts in penning a letter to
the Financial Times advocating relaxing sovereign debt strictures and
adjusting fiscal targets to individual structural and cyclical conditions in
each member state.
In the same vein, Sarkozy joined Italian Prime Minister Silvio Berlusconi in
early June to blast the European Central Bank's (ECB) monetary stance. Not
content with an abysmally low borrowing rate of 2% - an historic European
nadir - the two politicians have argued for further interest rate cuts and
criticized the bank's cardinal mandate to ensure price stability over
The critique that the ECB (ironically headed by a Frenchman) impairs
economic growth - propagated by European politicians and economists and
regurgitated by journalists - is quite convenient for it pins blame on the ECB
for member state woes (particularly Franco-German ones) rather than the
growth-inhibiting social market systems. Berlusconi has gone one step
further in recommending the creation of a "political committee" to guide the
central bank's monetary policy - a proposal as unlikely to be adopted as it is
to solve France and Germany's problems.
Bailouts, takeovers and regime change
Alongside Paris and Berlin's efforts to junk the stability pact, imprint a
uniform tax rate across the EU and demand mean credit, the duo are seeking
to halt the decline of their industrial sectors by fashioning national
champions. France was naturally the first to revive this concept, as the
country's industrial policy going back to Colbert in Louis XIV's court has
consistently aimed at employing state resources to turn vibrant domestic
firms into internationally competitive outfits, and to ensure that infirm
ones remain French instead of being acquired by a fitter foreign group.
Proclaiming that, "It is not a right for the state to help industry. It is a
duty." French finance minister Nicolas Sarkozy hammered out a deal with the
European Competition Commissioner, Mario Monti, to rescue Alstom, the French
engineering group that employs 75,000 workers. Although the finance minister
substituted a $900m loan the ministry lended the domestic firm last autumn
for an equity stake roundabout 31.5%, Alstom will have to make only minor
disinvestments, leaving its core and politically sensitive competencies
The Paris-Brussels accord on the state bailout has spilled over into other
areas, notably takeovers. The German engineering group Siemens - keen on
acquiring Alstom's turbine division - was miffed by the deal. Emboldened by
the new lease on life, Alstom's chairman refused to attend a June 1
Franco-German political summit alongside his Siemens counterpart, helping to
nix a gathering that would follow-up the announcement of joint government
strategy to forge European companies capable of withstanding international
On May 13, Schröder and Chirac had proclaimed their intention "to formulate
a joint industrial policy aimed at creating a framework for mergers and
joint-ventures between major German and French corporations." From the
outset the "national champions" strategy has been an exclusively French
undertaking, as the country's finance ministry pushed the Franco-German
pharmaceutical company Aventis into a hostile bid from French rival
Sanofi-Synthélabo, despite the prospect of a friendly offer from Novartis, a
Paris's blatant determination to prop up a domestic firm even at the expense
of German companies has rankled Chancellor Schröder, who has characterized
Sarkozy as "extremely nationalistic" and deeming his sideling of Siemens as
"annoying." That is not to say that the Paris has been entirely
uncooperative. In November 2003 - the same week the SGP was frozen - Germany,
with tacit French approval, gutted line-by-line an EU-wide takeover
directive that would have removed national barriers to cross-border
takeovers, something Berlin could not accept.
Occasional rows aside, the German and French governments have coordinated
their positions closely, especially on the composition of the European
Commission, the EU's executive body. Rebuffed in their attempts to plant
Belgian Prime Minister Guy Verhofstadt, a continental-minded politician
viewed as sympathetic to Franco-German plans for a regulations-laden Europe,
as the Commission President, Messrs. Chirac and Schröder acceded to the
compromise candidate, Portuguese premier José Manuel Durão Barroso. No
sooner had the free-market oriented (relatively speaking) and Atlanticist
Barroso been confirmed, did France and Germany publicly demand important
economic portfolios in the new Commission that will take office this autumn.
While Barroso cannot begin allocating jobs until later in July, Paris is
eager to land the competition dossier, as that office has routinely arrested
France's state-directed bailouts, mergers and protection of monopolies
benefiting the likes of Crédit Lyonnais, Bull, the leading French
computer-maker, Alstom and government-owned Electricité de France.
Germany covets the new "Super Commissioner" for industrial and economic
affairs job. Essentially a Commission vice-president, the post would oversee
all economic portfolios. At the same time, Sarkozy has called for the 12
nations that use the Euro to elect a permanent chairman for their informal
"Eurogroup" of finance ministers to streamline economic coordination and
serve as a powerful counterweight to the Commission, the ECB, and non-Euro
The leitmotiv of the Franco-German personnel proposals is clear. With their
nationals entrenched in Brussels, Paris and Berlin's proxies can press the
countries' agenda on tax harmonization, monetary policy, budgets and
competition and pre-empt proposals hostile to their interests at the EU
level. If two of the continent's premier economic laggards were to acquire
their desired portfolios, what little creditability EU leaders' have to
transform the Union into the most competitive marketplace in the world by
2010 would be dashed completely.
Dark clouds, a ray of optimism
Since late March, France's tentative steps toward market liberalization have
slowed to a crawl. Nicolas Sarkozy, the rising star in French politics who
was named finance minister in April, has spent more time artificially
bolstering demand and cultivating "national champions." Threatened with
mooted legislation mandating price reductions, French retailers and their
suppliers agreed on June 17 to cut prices on many items beginning with a 2%
reduction in September and another 1% in January, just one sign of resurgent
"France will not be a big economy if it just has banks, insurers and
services. We also need industrial groups," is a constant refrain from the
finance minister, who made victorious stops to some of Alstom's rescued
Unfortunately, Sarkozy's ambition to replace France's immobilisme (inertia)
with volontarisme (shaping one's destiny) by reining in state spending and
scrapping the 35-hour workweek are unlikely to be enacted given serious
political and economic constraints. Anxious to succeed Chirac (who is
equally determined not to see it happen) as president in 2007, the finance
minister must rely on every short-term trick in the government's playbook to
sustain domestic demand, whether through state spending, protection of
national firms or altering prices or wages by fiat. Sadly, as the most
economically liberal minister of the center-right French government Sarkozy
is still more wedded to state interventionism than any contemporary in
Tony's Blair's Labour cabinet[v].
In Germany, Agenda 2010 is politically unpopular and the segments of society
that stand the most to benefit - businesses - have yet to see reform tangibly
improve their lot. Schröder has vowed to push his reform package onward,
though admitting to party supporters at a June 15 rally - in the unoccupied
parliament building of the defunct East German regime of all places - that not
all facets of his plans were the "right and appropriate answer."[vi]
The chancellor's replacement as SPD chairman, the trade union-palatable
Franz Münterfering, has indicated that original proposals concerning higher
corporate taxation, a minimum wage, and a new state health insurance system
portend a reversal, if not abandonment of Agenda 2010. The fact that not a
single economist sat on the Hartz commission, a body that advised the
government in 2002 on how to boost job creation and tackle the sclerotic
labor markets, testifies to the German political establishment's inability
to even comprehend the nature of the country's economic ills.
On the other hand, adherents to the Austrian School can take heart that some
labor unions employing German manufacturing are beginning to appreciate the
unremitting burden state interventionism places on domestic
competitiveness. In late June, approximately 4,000 Siemens employees agreed
to abandon the country's own cherished 35-hour workweek to prevent the
engineering firm from shifting at least half of their jobs to Hungary.
Quite obviously only market participants - not the state - will salvage liberty
and the country's standard of living.
As for France, at least President Chirac admitted on Bastille Day a year ago
"We have lived for too long with the idea that the state was always right,"
adding, "We must move out of this impasse . . . the state cannot decide
- 7/18 DaimlerChrysler labor rebels at proposed cuts - DaimlerChrysler says it needs big cost savings to save jobs; union members cry an American-style foul, by Joseph Szczesny, Servihoo[?].
DaimlerChrysler workers in Germany appear headed for a major showdown over
plans for future of the big Mercedes-Benz complex in Sindelfingen, the
industrial suburb of Stuttgart that long has been the home of the
Mercedes-Benz car group.
More than 60,000 workers across Germany put down their tools last week in a
protest over the company's plans to lengthen the standard work week. The
protest followed comments Monday by Juergen Hubbert, the head of the
Mercedes-Benz Group, that the company was looking needed to cut the cost of
operating the Sindelfingen plant by $618 million.
Hubbert said without the changes to the work practices at the plant,
DaimlerChrysler might have to cut as many as 6000 jobs in Sindelfingen and
move production of a new C-Class, the group's most popular model, to other
plants and Germany and perhaps South Africa.
The protests spread well beyond Sindelfingen and drew in workers from
Untertuerkheim on the other side of Stuttgart; Mannheim; Berlin; Düsseldorf;
Erich Klemm, the head of the DaimlerChrysler works council and vice chairman
of the company's board of supervisors, told a crowd of workers outside the
Sindelfingen plant that the union was prepared for fight. The language was
unusually sharp for a labor dispute in Germany where the legal system is
designed to force employers and workers to compromise.
IG Metall, the German metalworkers' union, has been very protective of the
35-hour work week.
"These are not negotiations - this is a brutal attempt at blackmail," Klemm
said, according to wire service reports. "It appears as if the
(DaimlerChrysler) board is no longer primarily interested in saving money
but rather in launching a full-frontal assault," said Klemm, who in April
was instrumental in blocking Wolfgang Bernhard's appointment as head of the
Changing Germany for good?
[Or for ill?!]
The confrontation also could have wide-ranging implications for the auto
industry as whole in Germany. DaimlerChrysler is the largest private
employer in Germany and its personnel policies influence policies at other
companies throughout Germany.
German executives have complained for years that labor costs inside the
country are the highest in the world and suppliers have been shifting jobs
and investment to factories in Eastern Europe where wages are lower and the
work week is longer.
With the Germany economy stalled, unemployment rising and competition from
Eastern Europe and China threatening to take away more jobs, Germany's top
executives appear to have decided the time is ripe to push for sweeping
Only last month, Siemens, which operates plants worldwide and has gradually
reduced its manufacturing base in Germany over the last two decades, has
squeezed out a new agreement with unions at two Germany plants. The
agreement require employees to work 40 hours per week at the same pay they
got for working 35 hours per week under the old contract.
Union members have generally gone along with the 1998 merger that created
DaimlerChrysler but IG Metall officials have been wary of signs that the
company was borrowing what it considered American-style management practices
such as ultra-lavish compensation packages.
The fact that compensation of DaimlerChrysler's top executives have
escalated sharply since the merger is certain to increase tension at the
negotiations on a package of cost-reductions at Sindelfingen and other
Mercedes-Benz Group plants.
Only last year, the dislike of American-style management practices helped
fuel an internal dispute inside IG Metall that led to the election of
Juergen Peters as the giant union's top leader. Peters is considered a
hardliner and in a speech in Dearborn, Mich. , also made it clear that he
was no fan of globalization driven by American rules.
- 7/18 European consumers reluctant to boost spending, surveys show, Bloomberg.
[European consumers don't have any more to spend, because despite shorter worktime than the rest of the world, they still don't have short enough worktime to absorb their high official unemployment and get employers bidding against one another energetically enough to centrifuge income out of the top brackets and into the hands of the millions who spend it immediately, create stronger demand, and bolster the only thing that counts, marketable productivity.]
Italian consumer confidence probably fell this month
and French shoppers kept a rein on spending in June as unemployment
prevented an economic recovery in the euro region from gaining pace, surveys
of economists showed.
An index of Italian confidence may have slipped to 99.5 in July from 99.9 a
month earlier, according to the median of 19 economist forecasts in a
Bloomberg News survey. French spending probably rose 0.4% in June,
the smallest gain in five months, from May and German investors' confidence
may have dropped for the seventh month in eight in July, separate surveys
Euro region growth is being driven by U.S., Chinese and Eastern European
demand as companies including KarstadtQuelle AG, Germany's largest
department store operator, cut jobs, keeping unemployment at a five-year
high and prompting consumers to save rather than spend. The International
Monetary Fund forecasts that the economy will expand at less than half the
U.S. rate this year.
``We need to wait for a recovery in employment to support incomes and
consumption,'' said Lorenzo Codogno, an economist at Banc of America
Securities LLC, who expects a ``weak'' job market rebound in 2005. ``We will
continue to see an unexciting recovery, but a recovery nonetheless'' in the
France's statistics office, Insee, will release the spending report on
Thursday and the Rome-based Isae institute publishes its Italian consumer
confidence release a day earlier. Germany's ZEW Center for European Economic
Research publishes its monthly report on investor confidence tomorrow.
At 9%, unemployment in the euro region is the highest since 1999.
KarstadtQuelle said earlier this month it will shed 4,000 jobs by 2006 to
respond to falling demand. In France, manufacturers such as Nestle SA have
shed 236,300 jobs since the first quarter of 2001 to boost profit.
Concern about job prospects is causing some consumers to save money,
restraining the pace of growth. Between 2000 and 2003, the savings rate rose
to 10.7% in Germany, from 9.8%, and to 15.1% from 14.4
% in Italy.
``Consumption has to accelerate if the recovery is to move up another
gear,'' said Michael Dicks, chief European economist at Lehman Brothers
Holdings Inc. in London. Growth in the euro region will reach 1.7%
this year compared with 4.6% in Japan and 3.4% in Japan,
according to the IMF.
The European Commission, the European Union's executive arm, on Thursday
lowered its third-quarter growth forecast for the euro region, suggesting
consumer spending has failed to strengthen as much as it anticipated. The
European Central Bank has left interest rates unchanged for more than a year
to nurture the economic recovery. The U.S. Federal Reserve raised interest
rates for the first time in four years on June 30.
For now, foreign demand is propelling euro region growth. Exports from
Germany, the region's largest economy, gained for the sixth month in seven
in May. Royal Philips Electronics NV, Europe's largest consumer-electronics
maker, said last week global demand helped its semiconductor unit return to
profit in the second quarter. Infineon Technologies AG, Germany's biggest
chipmaker, reports fiscal third-quarter earnings on Tuesday.
In Germany, the most protracted economic slump since World War II has
emboldened companies to seek longer hours from workers without additional
pay. Economists including Elga Bartsch at Morgan Stanley and Juergen Michels
at Citigroup Inc. said in research reports this month that longer working
hours will help boost economic growth and close the gap with the U.S.
Siemens AG, Germany's largest electronics and engineering company, last
month extracted an agreement from unions at two German phone factories to
lengthen the work week without additional pay. DaimlerChrysler AG has told
workers at two Mercedes plants in southern Germany that they must agree to
cost reductions or face the loss of 6,000 jobs.
DaimlerChrysler executives will meet with the company's works council on
Tuesday and Wednesday. The disagreement has hurt production of some 2,800
cars, according to IG Metall union estimates. MAN AG, Europe's third-biggest
truckmaker, is also seeking a return to the 40-hour work week without extra
Germany, Europe's biggest economy, was reliant on exports for growth in the
first three months of this year as consumer spending failed to increase for
a fourth quarter. Retail sales in May had their biggest drop since November.
The lack of consumer demand has reduced executive and investor confidence
in the prospects of a recovery. The ZEW index probably slipped to 47 in July
from 47.4 last month, according to the median of 38 economists in a
Bloomberg News survey.
- 7/18 Local firms see benefits of flexibility, by Dana Schowalter (email@example.com or 252-6492), with Patrice Kohl, Wisconsin State Journal, WI.
Jill Weigel of the Lindsay, Stone & Briggs advertising, marketing and
public relations agency says she appreciates the firm's flexible approach to
scheduling. [probably a photo caption, photo probably by Leah L. Jones]
Stephanie O'Neal says she works more efficiently when she's at the office
because her employer, Lindsay, Stone & Briggs, lets her take Fridays off
during the summer. "I think I'm a better worker," O'Neal said about her working habits when she
has a flexible schedule. "I find myself trying to be more organized and
looking ahead further."
A more efficient and motivated work force is one of the benefits of the
flexible scheduling that some Madison-area companies offer their workers,
especially in the summer.
At Lindsay, Stone & Briggs, an advertising and public relations firm at 100
State St., employees feel valuable because of the company's flexibility,
said Jill Weigel, media manager. The agency's willingness to accommodate its
employees says, "'We can't spare you,'" she said.
An increasing number of employees have been taking advantage of flexible
scheduling time at Epic Systems, 5301 Tokay Blvd., said Andy Geisler, a
member of the internal training team at the software company.
Though flex scheduling has always been part of the philosophy at Epic,
Geisler said he has been fielding more questions in recent years from
employees interested in the program.
Flexible scheduling policies vary among companies and can range from
allowing employees to choose their own daily starting time to giving workers
the option of taking extended time away from the office.
"New hires are surprised that there is that latitude," said Jennifer
Peterson, a human resources employee at Epic. "If they need to be off for an
appointment, they don't need to use vacation or sick time" because they can
make up the hours at another time, she said. But she pointed out that
employees must still work a full workweek and be available for customer
"Our philosophy is that people do their best work when they are relaxed, and
they are more relaxed when they are at home," Geisler said. "So we try to
make the office as much like their home environment as possible."
Auto Glass Specialists, 1200 John Q. Hammonds Drive, also offers its
employees scheduling flexibility.
The policy at the call center says that employees must be in the office
between 9:30 a.m. and 2:30 p.m. for peak customer service hours, but staff
members are able to work within their departments to accommodate each
person's preferred start and end time, said Dave Gaspar, director of human
Not all employers that offer this benefit have a written flex-time policy.
Some managers choose to work independently with employees to accommodate
different schedules, including a compressed work week to allow for three-day
weekends or Friday afternoons off.
Humana, 4626 Frey St., is one company that gives supervisors the freedom to
work with employees to determine schedules.
"There is some flexibility in how you schedule your time and when you work,
as long as the work is getting done," said Mark Mathis, corporate
communications manager, who added that many employees work four 10-hour days
instead of regular Monday through Friday programs.
Phil Ouellette, chief financial officer at Lindsay, Stone & Briggs, said the
firm offers flex scheduling and extended absence benefits as a way to give
back to employees.
"In our business, the demands of the job can come in peaks," Ouellette said.
"Since we ask employees to be flexible on the needs of our clients, we try
to be flexible on the needs of our employees, whether it be going to the
doctor or taking a break."
"They are very appreciative of it," he said.
Gaspar and Ouellette agree that flex scheduling does not compromise the
level of customer service companies provide.
"Part of the requirement is that it must work with the department and the
individual," said Gaspar.
"There have been times where you have to figure out how you are going to get
the work done," Ouellette said. "We always look ahead to make sure the work
is going to get done and make sure the team can accommodate that."
Offering flex scheduling may help businesses that service customers in
multiple time zones, such as American Family Insurance, which services
customers across the United States.
"By giving people flexible scheduling options, we can have people who start
early for the Eastern time zone and people who stay later who can serve the
Pacific time zone," said Ken Muth, director of media relations.
- 7/18 [Metaphorical] Fireworks on Bastille Day - The French president is overshadowed on his special day, by Bruce Crumley, TIME Europe magazine.
Bastille Day is traditionally a time for the French President to shine. He
reviews military parades, pardons prisoners, hosts a swank garden party, and
gives a prominent television interview. But in last week's walkup to July
14, Jacques Chirac's star was eclipsed by fireworks from his outspoken,
ambitious Finance Minister, Nicolas Sarkozy. On July 11, Sarkozy gave a long
interview to Le Monde, in which he said France's 35-hour workweek should be
revised and that the country should hold a referendum on the proposed E.U.
constitution - initiatives that Chirac previously opposed, but embraced in
his Bastille Day TV appearance just three days later. In his TV interview,
Chirac also ordered Sarkozy to fall into line, with reminders that theirs is
a relationship in which "I order, he executes." Says Stéphane Rozès,
director of polling institute CSA: "Chirac's stern call to order has people
worried [the rivalry] could undermine the functioning of government if it
The antagonism is likely to grow, since Sarkozy makes no secret of his
intention to succeed Chirac as President in 2007, even though Chirac has not
yet ruled himself out of the race. A Sarkozy adviser admits he not only
expected Chirac's televised rebuke, but anticipated "something harsher,
given all the comments and challenges [Chirac] has failed to address for so
long." But instead of barking back, Sarkozy changed tack. Two days after
Chirac's Bastille Day rebuke, the President's former presidential dauphin,
Alain Juppé, resigned as head of Chirac's Union for a Popular Movement party
- clearing the path for Sarkozy's ascent. Too smart to express satisfaction
or vindication, Sarkozy preached humility, telling a conservative rally he'd
hold fire to preserve party unity. "I will not be the man who splits the
right," Sarkozy intoned, leaving Chirac looking the aggressor. "In the
interests of all, I won't say anything more." We'll believe that when we
don't hear it.
- 7/18 On the job: Pay raises likely to remain under 4% a year
Seattle Post Intelligencer, WA.
The economy is gaining ground, but don't expect big raises anytime soon.
U.S. workers will receive modest pay increases of just 3.3% this
year, the same as last year, according to a survey of nearly 1,600 employers
released last week by Mercer Human Resource Consulting, the national
The data suggest that employers, who could face a rise in health insurance
costs of 10% or more next year, are choosing to hold the line on
wages even as the economy is starting to improve. Next year, for example,
employers are expected to increase wages 3.5%, the fourth consecutive
year that pay raises will have averaged less than 4%.
"From 1994 through 2001, annual pay increases ranged from 4.1 to 4.4
%, but they dipped below 4% in 2002 and they have remained
there since," said Steven Gross, head of the company's compensation
consulting practice in the United States. "Employers are seeing some signs
of an improved economy this year, but they are not ready to commit to higher
pay increases yet."
However, the wage increases are still higher than inflation. Currently, pay
increases are about 1 %age point above the annual inflation rate, down
from 2 %age points during much of the 1990s.
Executives will receive raises of 3.7% in 2004 and 2005, according to
the survey. Managerial staff can expect 3.4% more this year, and an
increase of about 3.5% next year. Technical and professional staff
members will see their checks rise 3.4% this year and 3.5%
next year. Pay raises for clerical and technical workers will average 3.3
% in 2004, increasing by 3.5% next year. For non-union hourly
workers, pay raises will average 3.3% this year and 3.4% in
Gross said that as the rebound builds, many companies will be rethinking
their stance on pay raises in a push to keep good workers and attract new
ones. However, some industries will continue to hold the line on pay
increases and may even freeze wages. Those industries include business
services, computer software services, education, legal and accounting
consulting services, and utilities.
Gross said U.S. firms are relying on one-time monetary awards or non-cash
awards rather than the lucrative bonuses, perks and salaries prevalent
during the dot-com era. Of the employers polled, for example, 72% are
offering recognition awards this year, with no cash compensation. Fifty-five
% are offering one-time cash awards, 33% are offering stock
options or other forms of equity, and 32% provide job-sharing
arrangements, Gross said.
Some employers are moving toward competency-based pay, meaning workers are
rewarded based on performance.
- 7/18 Flexi-working ideal way to beat stress, by *Arden Healthcare, Gulf Daily News, Bahrain.
Work does not have to be so stressful, provided we set the pace, says
lifestyle expert Helen Evans. Stress is a major threat to our well-being and
it is on the rise.
People are working longer hours than ever and there are an increasing
proportion of households with both partners out at work.
Where just one parent works, it is often for excessively long hours, to make
Futurists throughout the last century foretold a coming age of leisure,
where computers took the strain, leaving us with times to ourselves to lead
a fulfilling life.
Nothing seems further from the truth today.
But it doesn't have to be like that. There is an option, a choice, a
solution. This solution revolves around how we organise our working life and
this is where flexi-working comes in.
The most commonly found forms of flexi-work arrangements are:
Before the benefits can be understood, it is important to clarify what is
meant by flexibility.
Does it mean primarily mean that the employees can flex their hours to fit
in other life commitments, or that the employees can better manage the peaks
and troughs in demand by flexible shift pattern.
The benefit of this system for the employees can be:
- Working flexible hours, not "Nine to Five" - five days a week.
- Working part-time.
- Working term-time [def'n?].
- Compressed working weeks.
Among the many factors that contribute to the rise of the flexi-working
phenomena, some of the key factors are:
- Better work life balance.
- Ability to avoid stressful commute times for journeys to work.
- Ability to have more control over time off (e.g: compressed working week,
- term-time working, part-time working and job share).
- For the employer, benefits include:
- Ability to meet fluctuations in demand.
- Ability to provide round-the-clock cover.
- Ability to retain valued staff when other demands on their time may be high.
- Ability to make more efficient use of facilities.
But things are never as simple as they seem. There are a lot of issues
revolving around flexi-working. The key issues:
- The shift from an economy driven by manufacturing towards one where services
and knowledge dominate.
- The convergence of information, telecommunications and computing systems.
- Changes in the population structure resulting in more older people and
dual-income couples in the workforce; employers' growing desire to contain
The solution lies in selecting the kind of flexi-working arrangement that
suits both the employer and employee, looking at the needs and wants of both
the parties involved. These can be:
- Trust and supervision.
- Communication between staff who work at varying times, and who may meet less
- Optimising use of the buildings (and car parks).
- Integrating non-core staff.
- Achieving fairness in benefits for all staff.
These are not, of course "magic wand" solutions. Particular arrangements
have to be put in place to ensure:
- Flexible Working: Arrangements for flexible hours can be of particular benefits for parents with younger children, who need taking to/from school, or people with other caring requirements. There are a wide range of models of flexible hours arrangements, which allow employees greater or lesser autonomy. Simply not having to be at the office at 9am can relieve much of the stress of domestic management. Travelling outside of rush hour can take stress out the beginning and end of the day.
- Part-time Working: For most people, there are times when working full-time causes excessive conflict with other life commitments. Part-time work should be an attainable option - without loss of benefits or becoming margialised in the organisation. Part-time work is particularly beneficial for people with substantial caring commitments, or who are returning to work after looking after young children.
- Job-share: This is a particular type of collective part-time arrangement, where an individual can be assured that the job is being carried out properly by someone else when they are not working. Organisations should look to part-time work and job-sharing as a means of retaining skilled staff whose skills might otherwise be lost.
- Term-time Working: Term-time working is a particularly family-friendly policy and which is suitable for more people than teachers. Many people take their holidays, or unpaid leave, or flex strategic absences
around school holidays. It has benefits for both employers and employees to formalise arrangements.
- Home-based Working: Working from home has many advantages for people with heavy domestic responsibilities. In the majority of instances, this is not full-time, but appropriate tasks can be undertaken from home, usually with productivity benefits. It is almost impossible to work effectively and care for children at the same time - but home-based working can make the organisation and management of childcare much easier and less stressful. It also enables contact with children at crucial times of their day, rather than dashing out of the house as they do and not being there when they return. A worker free of parental guilt may be a happier and more motivated worker. Home-based working combined with time-based flexibility can ensure that an employee is always equipped to get on with some work.
- Tele-centre Working: Alternatively, if employees have the opportunity to work locally, in local offices or tele-centres, this can help them achieve a more balanced lifestyle.
- The continuity of work.
- Adequate monitoring and supervision.
- Good communications with staff operating flexibly.
- Equitable arrangements for all staff (i.e. not implementing flexible
arrangements only for those with families).
- Protection of existing rights and benefits.
- 7/18 Continent guards its right to leisure - 'We are not in a race with the U.S.', by Katrin Bennhold, International Herald Tribune, France.
COPENHAGEN - In between mountains of suitcases and children racing each other
with luggage trolleys at the airport here, Maibritt Ditlev - her husband,
Anders, and daughter, Lotte, in tow - remarked that her whole country seemed
to be going on vacation.
"In Europe we like our summer holidays," she said, stressing that even a lot
of cash would not tempt her to give up their two-week trip to Iceland. In
fact, she also works part time because she treasures her time off.
"We have a nice house and can afford to go on two family holidays a year,"
she said. "What would we need more money for?"
This image of a casual West European work ethic tends to be viewed with
something just short of scorn among the world's other wealthy economies.
As Europeans like the Ditlevs happily continue to trade in income for a
slice of leisure time that would be unthinkable in the United States or
Asia, the gloomy headlines about the Continent's economic future have
Europe, the standard criticism goes, has failed to match America's economic
expansion for the best part of the past decade and has even begun trailing
Japan in recent quarters. Its citizens are on average almost 30%
poorer than their counterparts on the other side of the Atlantic, according
to income-per-capita data from the Organization for Economic Cooperation and
Development. Potential growth in the next decade risks being stuck at about
2% - one %age point below that projected for the United States.
Is Europe, which has about the shortest workweeks and longest vacations in
the world, doomed to lag behind, a victim of its penchant for ever more
leisure and an overly generous welfare state?
One response: If the answer is yes, then so what?
Rather than a failure to catch up with its more industrious competitors
because of faltering productivity growth, Europe's more modest income level
mainly reflects a series of policy choices that have tended to put a premium
on leisure and equality at the expense of greater wealth.
Over the past half-century, West Europeans have gradually opted to work less
and take longer vacations. They have put in place varying national versions
of public universal health care, education and retirement benefits. They
have set up a complex web of minimum income legislation, ranging from
unemployment subsidies to disability benefits and basic social welfare, in a
bid to limit the risk of destitution. These patterns, established over
decades, are now gradually being adopted by the generally much poorer former
communist countries of Central and Eastern Europe.
As Joaquín Almunia, a European commissioner for economic and monetary
affairs, put it: For Europeans, economic growth is a tool, not an end in
"We are not in a race with the U.S.," he said. "Our goal is not to grow as
fast as the U.S. or anybody else but to do what we need to protect our
economic and social model."
There is plenty to do to keep the system financed and the moral principles
underlying it alive, Almunia said on the margins of a conference last month.
The European Union faces challenges ranging from a stagnant, aging
population to chronic underemployment and the competitive pressures coming
from the new eastern member states and Asian growth centers like China and
India. It has already missed many of the targets it set for itself in its
bid to become the world's most competitive economy by 2010, as pledged at a
leaders' summit meeting in Lisbon four years ago. But for all the bad press
the European economy receives, it is so far not performing that poorly.
The growth in gross domestic product of the 15 members constituting the EU
before its May 1 enlargement lagged that of the United States by about one
%age point a year in the past decade. This was largely because the
region's population expanded at less than half the pace of that of the
United States. The average income per person actually grew at the same clip
on both sides of the Atlantic - at about 1.8% a year, according to
Kevin Daly, an economist at Goldman Sachs in London.
Contrary to conventional wisdom, West European productivity growth actually
outpaced that of the United States over the past 30 years: GDP per hour in
the EU is currently about 10% below the American level; in 1970, that
gap was closer to 35%, according to the EU's Ameco database. Some
countries, including France, now have productivity levels exceeding those in
the United States.
If Europeans are still poorer than their American counterparts, it is
because fewer of them hold jobs, and those who do have gradually reduced the
time they spend at work in roughly the same proportion as their productivity
gains over the past 30 years. Americans have been much more hesitant to work
fewer hours, keeping the tally virtually unchanged over the past 10 years
despite strong growth. The result: They work 18% more hours than
"You have to ask yourself who really is the odd one out," Daly said.
"Leisure is a normal good, and as you become richer, economic theory says
that you consume more of it."
The Atlantic, it seems, separates two radically different philosophies of
Polls show that Europeans are by and large happy to pay high taxes in return
for social services, and anecdotal evidence suggests that the concept of
well-being in Europe is less linked to material wealth than it is in
"It's a different mentality," said Kenneth Rogoff, an economist at Harvard
University and former chief economist of the International Monetary Fund.
Enjoying a coffee with a colleague at a brasserie in western Paris, Thomas
Levassor, 28, said he had worked in Silicon Valley as a software engineer
for three years but had chosen to come back to France to have a family.
"There is a window of maybe five years where the American lifestyle is great
- when you're young and healthy and ambitious and single," he said. "After
that, other things become more important, like culture and family, and then
you're much better off in France."
Giuseppe Roma, who conducts society studies at the Rome-based research group
Censis, said European shoppers were increasingly turning away from
status-quo purchases to spend their money on lifestyle products. The new
attitude, he said, is to care about the "real quality of life," meaning, I
may not buy Prada, but I will buy organic olive oil.
Some economists say the Continent's social model is costing Europe dearly.
In a society that prides itself on egalitarian values, too many people are
either unemployed or altogether outside the labor market, doubly raiding
public coffers by not paying taxes and often receiving benefits at the same
The jobless rate in the EU's 15 old members rose to 7.8% last year,
compared with 6.1% in the United States, according to the OECD. More
striking, 36% of Europe's working-age adults do not hold a job, a
proportion that drops to 29% in America. Two-thirds of those in
Europe's so-called inactive pool of labor say that, given the right
conditions, they would rather work, according to surveys cited by Raymond
Torres, an employment specialist at the OECD.
Headlines about persistently high unemployment have also had a chilling
effect on household optimism about living standards and trimmed consumer
spending, slowing a major driver of European growth. With a rising number of
retirees, joblessness is also increasingly putting the Continent's
state-financed pension and health systems under strain: The combined burden
is forecast to rise to as much as 8% of GDP in most EU member states,
the European Commission estimates.
Martin Baily, who headed the White House's Council of Economic Advisers
under former President Bill Clinton, says the key for European policy makers
is to replace the concept of job security with that of employment security.
High minimum wages, coupled with high payroll taxes and strict job
protection laws, have priced low-skilled workers out of the labor market in
Europe's core economies, notably Germany and France, he said.
"The notion of social cohesion has tended to protect existing workers to the
detriment of those out of a job," said Baily, who is now a senior fellow at
the Institute for International Economics in Washington. "But that doesn't
mean that you have to dismantle the welfare state. There are European
solutions for European problems." Instead of an American-style anything-goes
labor-market, the Continent has its own success stories to learn from, Baily
said. Denmark, Sweden and the Netherlands have all increased employment
beyond even the levels recorded in the United States by conditioning
generous benefits on tangible efforts to return to a job.
Take Denmark, for example: A country with almost 80% union membership
and double-digit unemployment as recently as 1993, it boasts one of the
highest female and overall employment rates in the world. Unemployed
job-seekers receive 90% of their last salary (up to a ceiling),
counseling, training and financial help for relocating if a vacancy matching
their profile arises elsewhere. But if they fail to participate in the job
activation program, their benefits are immediately removed. All of this
comes at a cost to taxpayers: In total, Danish labor programs cost almost 5
% of GDP, compared with 3.1% in France and 0.7% in the
United States. But there are not only costs to a generous welfare state.
Europe has less child poverty, a lower incidence of illiteracy and a smaller
prison population than the United States, OECD statistics show. Europeans
also have a slightly higher life expectancy and can hope to spend more of
their old age in good health.
According to surveys conducted by the World Database of Happiness, which is
run by Ruut Veenhoven, a professor at Erasmus University in Rotterdam,
citizens in many European nations are more satisfied with their lives than
Americans and other more hard-working nations, like Japan, where people have
been clocking up even more hours than in the United States. More
significant, happiness in the United States and Japan has been flat over the
past 30 years but has risen in most West European countries.
"The welfare state is an efficiency device against market failure," said
Nicholas Barr, professor of public economics at the London School of
Economics. "It's a perfectly rational policy to accept lower output for
Americans may be unlikely to embrace Europe's welfare model, but sooner or
later the laws of consumer economics are likely to persuade them to resume
trimming their work hours in line with rising income, economists like Daly
and Rogoff say.
At the same time, recent soul-searching in Europe about relaxing some of its
labor legislation, coupled with agreements by some factory employees to work
more hours, suggests that the decline in working hours will slow on the
European side of the Atlantic.
As in the late 1980s, when commentators were promising nothing but gloom and
stagnation for the United States, they may have it wrong again.
According to Rogoff, there is a one-in-three chance that the European
economy will leap past that of the United States over the next 15 years.
Among the factors favoring Europe in the coming decades, he said, are fewer
lawyers in the economic system, who litigate away at a huge cost to
companies; a more moderate climate, with less need to heat in the winter and
air-condition in the summer; and most important, more modest defense
commitments, which are inflating an already ballooning budget deficit in the
But even if Europe stays behind, it might not be such a disaster for its
inhabitants. Jorgen Ronnest, director for international affairs at the
Danish Employers' Confederation, says it is healthy in a mature economy to
enjoy the fruits of labor.
"The main difference with the U.S. is that we spend more time enjoying
life," he said. "And if you look around, maybe we don't need more
refrigerators and more cars."
Tomorrow: A look at why Britain has been better than most of its neighbors
at replacing lost manufacturing jobs.
[Guesstimate: bigger labor surplus, lower wages and slower automation?]
- 7/18 More women drop careers for kids, by Ben Penserga (410-845-4648 or firstname.lastname@example.org), Salisbury Daily Times, MD.
SALISBURY, Md. - For years, Carla Schutles lived two lives - mother and
Salisbury University math professor.
Toward the end of her 10-year career, Schutles said the tug from both sides
became too great.
"I was never in the same place at once," said the mother of two children.
"At work, I'd be thinking about home, and at home I'd always be bringing
So in 2001, Schutles gave up her full-time position at SU to raise her
sons, Allen and Brian.
"Some colleagues said I was retiring, but I told them I was just changing
careers," she said. "I shouldn't really be calling it a career - it's a
But Schutles is not the only working mother to leave the office to raise
According to the most recent numbers from the U.S. Bureau of Labor
Statistics, the amount of working, married mothers with a child less than 1
year old has dropped from about 59% in 1997 to just about half now.
Grace Clement, a SU philosophy professor familiar with women's issues, said
working mothers have always contended with the duel focus of jobs and
"I think all women want to have a fulfilling job and be good parents at the
same time," she said. "But I think they're finding out if they concentrate
too much on the job, they end up becoming secondary parents."
Officials from Catalyst, an international research and consulting firm that
deals with women in business, said some female executives can clock anywhere
from 60 to 70 hours a week at their job.
And for the households with both parents working, the Families and Work
Institute states a combined workweek is up to 90 hours.
Those long periods away from her children was one of the reasons Schutles
decided to stop.
"I got to thinking that life was too short," she said, "and if I'm going to
commit to something, I going to do it fully."
But a growing sense of motherhood is not the only reason more women are
moving back into the role of homemaker.
Pamela Stone has been tracking the subject for years as she gathers
information for a book on professionals who have left their jobs to become
Although a renewed sense of being a mother plays into it, the sociologist
from New York City's Hunter College has also discovered that the flexibility
in the office is also a factor.
"These women value their children, but a majority would have continued
working," she said. "It's just that, after coming back from maternity leave,
they find they're being 'mommy-tracked' with jobs below their abilities,
which causes them to ask, 'Why I am I doing this?' "
The mothers who considered just working part-time are also surprised by the
amount of tasks they are faced with, Stone said.
"They found 'part-time' was in name only," she said.
If the family can afford to do it financially, some women do opt out.
Leslie Steen walked away from her job at the Caroline County Hospice seven
years ago to be with her children.
"I couldn't have done it without the support of my husband," said the St.
Michael's resident. "But I just decided that parenting was going to be a
However, Steen has not had to do it alone as a member of Mothers & More, a
7,500-member support group based in Illinois with about 180 chapters in the
Steen now meets with other mothers in the Mid-Shore chapter, who have
similar experiences with working and motherhood.
"It used to be just about women who have left their jobs to become mothers,
but its grown to more than just that," she said. "We deal with a lot of
other parenting issues now."
While recent statistics has pointed to a rise of professionals converting
into stay-at-home mothers, Stone said some women are still willing to juggle
the two lives.
"There's about three-fourths that remain professional," she said. "So while
numbers are down, we're not talking about a huge groundswell."
Melissa Canton, who recently moved to Fruitland from Delaware, said she'd
like to stop working, but has decided against it, for now.
"It's tough," she said. "I think about being able to better provide for my
kids, or being there for my kids."
Steen said she would consider working again when her children get older,
while Schutles has been back teaching one class a semester.
Still, the drive to get back full-time is something that Schutles does not
feel that strong about now.
"I really don't miss teaching," she said. "Besides, my kids only have one
- 7/18 Tentative contract for BC health science professionals - Two-year agreement contains no change in wages and benefits, National Union of Public & General Employees, Canada.
VICTORIA, B.C. - The Paramedical Professional Bargaining Association (PPBA) and
Health Employers' Association of B.C. (HEABC) have negotiated a tentative
collective agreement extending to March 31, 2006.
The proposed deal was reached July 15 under the terms of a framework
agreement negotiated June 10. The framework agreement stipulated that there
would be no net increases or decreases to wages and benefits for the
duration of the two-year agreement. It also set out terms allowing
discussions on a limited number of key issues.
"The bargaining committee is satisfied that we have achieved the best
agreement possible in the current hostile climate created by the
government," says chief negotiator Ron Ohmart.
"Health science professionals have been protected from a long list of
concessions proposed by the employer. We have preserved the 36-hour work
week. We have also ensured that problems with the bumping process created by
Bill 29 will not continue after the expiry of the legislation on Dec. 31,
2005," he said.
HSA's Board of Directors will meet early next week to review the tentative
agreement in detail and make a recommendation on ratifying the agreement.
Ratification meetings, where members will have an opportunity to vote on the
agreement, will be held in September.
Highlights of the tentative agreement include:
The Paramedical Professional Bargaining Association represents 13,000
health science professionals in the Health Sciences Association of B.C.
(HEABC/NUPGE), the B.C. Government and Service Employees' Union
(BCGEU/NUPGE), the Canadian Union of Public Employees, Professional
Employees' Association and the Hospital Employees' Union .
- no net increase to wages and benefits;
- no changes to health and welfare benefits;
- no changes to vacation, sick leave and severance provisions;
- retention of the 36-hour work week;
- posting language that allows displaced employees access to job opportunities;
- bumping language that will come into effect January 1, 2006, upon the
expiry of legislation introduced through Bill 29;
- administrative issues related to the unions' ability to represent
members in the workplace;
- contract language housekeeping issues.
- 7/18 BC arbitrator delays implementation of 37.5 hour week - Clear victory for health care workers attacked by Campbell Liberals, National Union of Public & General Employees.
VANCOUVER, B.C. - The arbitrator appointed to oversee the implementation of Bill
37, the Health Sector (Facilities Subsector) Collective Agreement Act, has
ordered a delay in the implementation of the 37.5-hour work week imposed by
the B.C. Liberal government of Premier Gordon Campbell.
In a clear victory for health care workers, arbitrator James Dorsey ruled
that the 90-day period to implement the extended work week begins on July
29. This means that the 4% hourly wage cut accompanying the 37.5-hour week
will be delayed until the end of October.
The arbitrator also ruled that health care workers who entered into local
agreements reached after September 2003 are eligible - after April 29, 2004
- for overtime based on the 36-hour week.
Bill 37 does not meet the basic test of fairness for health care workers,
says Jaci White, chair of the Facilities Bargaining Committee of the Britich
Columbia Government and Service Employees' Union (BCGEU/NUPGE).
Dorsey turned down a union bid to allow retention and recruitment wage
exemptions, subject to arbitration. He ruled Article 3.03 of the collective
agreement, dealing with legislative changes, does not compel health sector
employers to negotiate wage rates for affected workers.
The BCGEU will continue to work with health sector unions to convince the
government to treat front line health care workers with respect and dignity,
White said. Bill 37 is an attack on working British Columbians that deserves
to be rejected by the people of the province.
- 7/18 Take time to study overtime, by Diane Stafford (Business Desk, 1729 Grand Blvd., Kansas City, MO 64108; 816-234-4359; email@example.com), Kansas City Star, MO.
Millions of American workers are wondering how the new federal overtime
rules, scheduled to take effect Aug. 23, affect them.
The U.S. Department of Labor appears likely to make its revisions to the
Fair Labor Standards Act official next month, but many workers won't have
answers by then.
Several Democrat-led efforts to thwart the changes through congressional
action have come up short. There's slim chance of another attempt before
It's more likely that further congressional efforts to alter or quash the
rules will come in September, or perhaps after the November election, partly
depending on which political party triumphs.
For now, many employers are scrambling to look at job definitions and
compare them to the new regulations. Their purpose is to decide which
workers should be entitled to overtime pay for hours worked beyond a 40-hour
workweek and which workers may be exempted.
For many in the U.S. work force, the more-than-yearlong debate has been
ignored or considered someone else's problem.
On the one hand are about 20 million U.S. workers who currently are
considered exempt from overtime coverage. Conveniently but insufficiently
classified as "salaried" or "managerial," these workers don't earn overtime
pay and aren't worried about being denied what they don't have.
On the other hand are workers who considered working longer hours a fair
enough tradeoff if they earned time-and-a-half overtime pay. For them, a
possible change in pay status is worrisome.
The proposals' critics say up to 70 million workers could be classified as
exempt just by reading job titles proposed in the new exempt categories and
not even considering "duties tests" and other qualifications for exemption.
Be aware, though, that doesn't mean that will happen.
In some instances, decisions about who's eligible for overtime will be made
on an individual basis. In others, whole job groups will be reclassified by
employers after consultations with human resource officers and attorneys.
In the short run, labor and employment law attorneys have varying
interpretations of the new language. But they do agree that years of case
law are needed to flesh out the intent and meaning of such terms as "team
leader" - and that's just one of the new exempt-category terms.
The regulations are lengthy and complex. Many economic research
organizations and academicians have pored over them. All concur that
revisions to the decades-old rules were much needed, but there's sharp
division as to whether workers will be abused because of the changes.
If you're concerned about a possible change of status, you owe it to
yourself to wade through the regulations, which were published in the
Federal Register, and find paragraphs that seem to be relevant to you.
The rules are posted online at www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm. Look for the headline FairPay Resources in the right-hand column, and click on "Preamble," "Regulations" and "Economic Report."
Local readers who don't have Web access may call Norma Conrad, Labor
Department public relations officer in Kansas City, at (816) 426-5481.
Conrad offered to mail copies on request.
- 7/18 EU's growth may generate investment, by Thomas Watterson, The Christian Science Monitor via Seattle Times, WA.
If you're wondering whether new investing opportunities still grow in old
Europe, consider this: In March, Germany's largest electronics company,
Siemens, threatened to relocate 2,000 jobs to Hungary to reduce labor costs.
After long negotiations, however, IG Metall, the powerful union, gave in on
what had been an immovable position: the 35-hour work week.
Late last month, in exchange for a two-year guarantee not to relocate jobs
and to invest more than $36 million in new factories, workers agreed to work
40 hours a week with no additional pay.
IG Metall's unprecedented concession may lead to longer hours not only in
Germany but across Europe, analysts say. And that may signal the start of a
restructuring that makes European stocks and the mutual funds invested there
more attractive, says Ray Mills, portfolio manager of the T. Rowe Price
International Growth & Income Fund.
European funds have already shown some strength over the past three months.
They managed an average 1.2% gain, according to fund-analysis company
Lipper, in sharp contrast to Latin America (down 8.5%), China (down
9.3%), and emerging-market funds (down 9.5%).
Now, if other European companies can - even in a limited way - follow
Siemens' lead and restructure, there is a fair amount of potential for more
growth, experts say.
One of the main reasons for optimism is the expansion of the European Union
from 15 to 25 countries, which took place on May 1.
"That's a significant increase," says Gareth Lyons, a mutual-fund analyst
at Morningstar. "I think it just makes all of the countries a little more
competitive. Also, the mobility of labor makes it easier for companies to
hire from other countries in Europe."
Lyons also sees an improving attitude among corporate leaders. "There has
been a trend over the last several years to focus more on shareholders," he
says. For example, companies are becoming more open about their finances.
They are releasing more information, and doing it more frequently, he notes.
Another positive factor: The valuation of many European companies - the
price shareholders pay for the companies' current and projected earnings -
are generally more attractive than in the United States and much of Asia,
says Mills of T. Rowe Price. "Because there is a lot of potential there, the
valuations are much more reasonable."
Lyons agrees. "A lot of European multinational companies still trade at
good discounts to U.S. companies," he says. "We've seen certain companies
become big players internationally, like Nestle, SAP, and Vodafone. They're
now global players, as are some of the telecommunication hardware players
like Nokia and Ericsson."
Among industries, Mills' exposure to European energy companies is larger
than that of most of his peers. "I think oil prices are going to stay higher
longer than people think," he says.
Also, because more and more oil is coming from some risky parts of the
world, including Venezuela, Nigeria, Kazakhstan, and the Middle East, he
believes this will help keep oil prices relatively high.
While that's not great news for consumers, it will help oil-company stocks,
- 7/18 Personal space - Make your office a bit of home, by Jean Prescott (896-2376, firstname.lastname@example.org), Sun Herald via SunHerald.com, MS.
Scary as it sounds, most of us give nearly 10 hours of every 24 to work, the
average work-week having expanded to 48 hours since the turn of the
millennium. That means we spend more waking hours in offices and/or cubicles
each day than we do fishing or biking or kicked back in front of the
family-room TV. Before depression sets in, consider...how to make these
homes away from home - well - homier....
- 7/18 Company offers a cost-free benefit: days off, by Michael Kinsman (619=293-1370; email@example.com), San Diego Union Tribune, CA.
Like a lot of companies, Gen-Probe views employee benefits as a key to
recruiting and keeping the best workers.
But the San Diego biotech has found one unintended benefit from its 9/80
workweek program, which gives workers a day off every other Friday.
"We have a rule that we don't have meetings on Friday," said Roy Burchill,
Gen-Probe's senior director of human resources. "People look forward to
working on Fridays now because they know they won't be interrupted by
meetings and they'll be more productive."
Burchill said workers don't seem to mind working 9-hour days when they know
they'll be rewarded with a three-day weekend every other week. The 9/80 work
scheduled is regularly identified as one of the company's most valuable
employee benefits in worker surveys.
"The best part is that it really doesn't cost us anything," he said.
The competition to attract the best and brightest workers today has
companies everywhere focusing on employee benefits. And, in a world where
companies now search to offer as many employee benefits as possible,
Gen-Probe has struck a solid-gold vein. Cost-free employee benefits are only
dreams for some companies.
"It's really a Catch-22," said Ann Clark, whose San Diego-based Ann Clark
Associates runs employee-assistance plans for companies nationwide.
"Companies need to be competitive and provide as many employee benefits as
they can. At the same time, they have to control the costs of those
benefits. If the cost of one rises too much, something else has to be taken
Yet, there are benefits that cost relatively little and get resounding
approval from employees, Clark said.
Currently, pet health insurance, telecommuting opportunities, discounted
health club memberships or elder care planning assistance are frequently
among new benefits offered.
"We have an elder care referral program that is the most requested program
we have these days," Clark said. "Nearly everyone has a relative living far
away and they know that some day they may need help doing research finding a
nursing home or another service. It's a service that few people use, but
everyone seems to appreciate."
A survey this year of 459 companies by the Society for Human Resources
Management tracked 217 different employee benefits, or 21 more than it had
the year before.
While most benefits remained steady, some such as housing subsidies,
wellness programs and schedule flexibility are growing in popularity,
according to the survey.
12% of companies provide mortgage assistance for their
employees, compared with 6% four years ago, the survey found, while
58% of companies now encourage wellness programs for their workers,
up from 51% in 2000.
While most benefits held steady or increased this year, some slipped. Some
employers eliminated matching contributions of 401(k) retirement-savings
plans, while others scaled back their defined-benefit pension plans and
increased 401(k) matches.
In a tight labor market, benefit packages are often viewed as making your
company more attractive to potential hires. And, with a labor shortage
forecast in the next few years, most companies view their employee benefits
as a key component of their employee recruitment and retention.
"Everybody is looking at their benefits package because they want to make
sure they aren't being one-upped by another employer," said David Allen,
senior consultant with Tri-Ad, an Escondido benefits consulting firm. "They
feel that benefits make them more desirable as an employer and want to offer
as many as they can."
Most companies generally try to keep their employee benefit packages
equivalent to about 35% of a worker's salary. That means when one
benefit is added at a higher cost, another has to be eliminated or reduced
to contain the cost.
"You just can't be adding benefits," Allen said.
The most vexing component of employee benefit packages health care
coverage is also the most essential and one of the most expensive.
Companies have wrestled with double-digit increases in the cost of health
insurance for the past three years. And while prices have subsided somewhat
this year, another double-digit increase is expected next year, according to
Aon Corp., a giant risk-management and human resources consulting firm.
"While the rate of the increase is down, that doesn't mean it's much easier
to handle these costs," said Aon's Mitch Davis. "The medical trend rate the
past few years has still been eight times higher than the urban Consumer
Such cost increases have forced companies to choose between eliminating the
benefits, shifting the cost to employees or shopping for another provider.
Davis said elimination of the benefits is bad business, shifting the cost
irritates workers and shopping for a lower rate is a short-term fix.
That's why some companies have resorted to eliminating some medical
services, raising co-pays and deductibles to ease the price increases.
At the law firm of Luce Forward Hamilton & Scripps, administrative officer
Ray Berry said he has a budgeted a 15% increase for employee health
insurance premiums, which will be assessed in October.
"I don't know what it's going to be yet, but I certainly am praying that it
stays under that," he said.
Gen-Probe proudly touts that its employees don't have to contribute
anything toward their health insurance premiums.
Burchill said the company saves money by being self-insured, and the
company's 800 employees seem to understand there is a direct relationship
between their use of medical care and how much it costs the company.
"I think that's one of the reasons our cost increases have been below those
of other companies," he said. "The employees here seem to know that and
appreciate that they are not paying for that benefit."
- 7/18 In this 24/7 world, is Sunday still special? by Ted Anthony, AP via Seattle Times, WA.
[Isn't this story some 40-50 years too late?]
Once, within living memory, it was a day apart in many places: a 24-hour
stretch of family time when liquor was unavailable, church was the rule,
shopping was impossible and - in some towns - weekend staples such as
tending the lawn and playing in the park met with hearty disapproval.
But America changed, and it dragged Sunday along with it.
Although Sunday still means worship and family time for millions of
Americans, today it also means things it once didn't - 12-packs of Bud, the
NFL on TV, catching up with the week's accumulated errands, picking up CDs
at Best Buy, moving through a 24/7 culture.
"Today, for a lot of Americans, Sunday's just another day you have to go to
work at Wal-Mart," said John Hinshaw, a labor historian at Lebanon Valley
College in Annville, Pa.
The Virginia Legislature last week fixed a loophole it accidentally created
when, attempting to abolish old "blue laws," it gave workers the right to
take Sundays off as a day of rest. In the few days that the loophole was on
the books, employees across Virginia started telling their supervisors that
they wouldn't be coming to work on Sundays.
The legislative mistake was a quirk, nothing more. But its quick and
definitive correction by Virginia lawmakers summoned back in special session
illustrated how markedly Sunday's place in American culture has evolved.
In a land where the pursuit of happiness is part of the national charter,
Sunday's evolution attests to both Americans' harried lives and their
determination to wring every drop of fun out of every day of the week.
The Protestant notion of Sunday began to change in the 1800s with immigrant
laborers, many Roman Catholic, who saw things differently. Many were devoted
to "a Sunday that took a very different shape - church in the morning and
leisure in the afternoon," said Alexis McCrossen, author of "Holy Day,
Holiday: The American Sunday."
The 20th century brought pushes toward a shorter workweek, and a major
work-reform law passed in the 1930s created more down time and made Sunday
less pivotal - at the same time commercial culture really took hold.
"You have a commodification of everything in American life - our time, our
space, our experiences," McCrossen said. "And that puts a lot of pressure
... to open up Sunday because there's so much profit to be made on this day
that most people don't work."
Laws governing Sunday conduct - some dating to the 17th century - have
fallen. In some places, such as South Carolina, the changes created a
crazy-quilt patchwork that allows some stores to open at some hours while
In Maine, it wasn't until 1990 that voters repealed a law barring Sunday
shopping at supermarkets and department stores. In Texas, as late as 1985,
everything from kitchenware to air conditioners to curtains couldn't be sold
on two consecutive weekend days - a move designed to outlaw them on Sunday.
These days, it's unimaginable to many Americans, particularly younger ones:
A mall closed on Sunday? The supermarket unavailable? Even laws governing
Sunday alcohol, although still on some states' books, are falling away.
Today, 31 states permit Sunday sales of liquor, according to the Distilled
Spirits Council of the United States. In the past two years, nine states
initiated Sunday sales - including Massachusetts, where some of the earliest
moral-conduct laws were passed. New Jersey-based Commerce Bank has focused
an entire promotional campaign around doing business on Sundays.
One of the most ubiquitous characters in America's weekend landscape - the
Sunday paper, with its color-splashed comics, coupon pullouts and
paperweight girth - is changing, too. Sunday circulation dropped by nearly
596,000 in the past two years, according to Editor & Publisher magazine.
People say they lack the time for such languor even on Sunday.
"We've erased a lot of the distinctions between night and day, between
weekday and weekend," said Susan Orlean, author of "Saturday Night: In
America," a 1990 book. "Our notions of time and space are collapsing."
It's hard to imagine a place that knows more about Sundays than Parade, the
magazine that since 1941 has been inserted into Sunday newspapers - more
than 340 at last count, for nearly 36 million readers. Editor-in-chief Lee
Kravitz believes the American Sunday remains intact - even if the activities
"As our lives became busier, that's sort of taken over Saturday," he said.
"So we do those chores - all those things we have to do, banking, laundry,
housekeeping, shopping. Some of it has spilled onto Sunday. But for the most
part, I think Americans still protect the specialness of Sunday."
In 2000, a Parade-commissioned study found 70% of Americans say they
do what they want on Sundays. An overwhelming 90% like Sunday more
than or as much as any other day of the week, and 92% said they spent
time with family. The margin of error was 2%.
It seems, then, that what's changed about Sunday is not the idea - rest,
relax, recharge the batteries - but the content. While traditional
activities remain, the do-it-now culture of commerce and communication means
that downtime has been redefined upward.
"Maybe maintaining the idea of time having some relevance may actually
become more meaningful," Orlean said. "I'm not sure that people really want
to live in a universe in which there's no day and night, no week and
weekend. I don't know that that gives us anything."
- 7/18 More workers are being required to move for their jobs, by Sue Shellenbarger, WSJ via Bradenton Herald, FL.
More workers are facing a knotty work-family challenge: relocating for your
The summer moving season has sparked a boom in corporate transfers - one
sign that the economy, which has been giving mixed signals lately, is on
track for a recovery. Transfers are running 10 to 15% ahead of a year
ago, making this the busiest season since 2000, says Cris Collie, executive
vice president of Worldwide ERC, a nonprofit Washington, D.C.,
relocation-industry group. Total 2004 transfers are expected to rise 8 to 10
% from 2003, ERC says.
At the same time, family resistance to moving is at a four-year high; 83
% of companies that had employees turn down transfers last year cited
family reasons as an obstacle, says an Atlas Van Lines survey of 340
employers. That is up from 79% in 2002 and the highest since the 1999
dotcom boom. Mounting concern about the hardship transfers can cause kids
and marriages, coupled with declining employee loyalty, are feeding the
More than ever, it's time to speak up and negotiate for the family supports
you want during a transfer. While many employers cut back on relocation
policies during the recession and haven't restored them to pre-9/11 levels,
bosses increasingly are willing to provide perks on a case-by-case basis,
relocation managers and consultants say. Don't hesitate to ask for the
"softer" supports that can help families, such as counseling or time off.
Families almost universally underestimate how difficult it can be to
relocate. While a majority of families handle moves just fine, a significant
minority hit the rocks. Students who move frequently are 35% more
likely to fail a grade and 77% more likely to have behavioral
problems than children who stay in one place, a study several years ago
showed. For troubled couples, a transfer can be the last straw; many split
up rather than moving together, relocation counselors say.
An increasing number of couples are asking for, and getting, counseling and
job-finding help for the trailing spouse, relocation executives say. This
was an area of cutbacks in the recession.
Another negotiated perk: more househunting trips. It's common to ask for
more than one trip with your spouse; 1.5 is average, says Atlas, of
Evansville, Ind. More families also are asking for help with elder care,
especially moving an elderly relative who depends on the family.
The hottest relocation issue is finding the right schools for kids. About
one-fourth of employers have policies offering school-finding help, and
another 23% do so on a case-by-case basis, an ERC study shows.
Transferees also are asking for and getting neighborhood data and networking
help. Sirva, a Chicago moving- and relocation-services concern, is seeing
rising demand for its packages of data on schools, living costs, crime rates
and taxes, which it assembles for clients' employees to compare cities. If
your family just can't stomach the idea of a move, consider a commuting
setup. This means the family lives apart during the workweek, a pretty
unappealing choice. This works only for families who have, or are willing to
learn, great communications skills and the discipline to make time to spend
Still, an increasing number of families regard it as better than forcing
your kids to tear up roots. Only 3% of companies have policies
covering these setups, but an increasing number are approving them on an ad
hoc basis, the ERC's Collie says.
Click here for spontaneous cases of primitive timesizing in -
Feb.21-29/2004 + Mar.1
Jan.31 + Feb.1-10/2004
1998 and previous years.
For more details, see our laypersons' guide Timesizing, Not Downsizing, 'flung' into print as a campaign piece during the 1998 race for Joe Kennedy's empty Congressional seat. The handbook is available online from *Amazon.com.Top |
Questions, comments, feedback? Phone 617-623-8080 (Boston) or email us.