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Timesizing News, April 2009
[Commentary] ©2004-12 Phil Hyde, Timesizing.com, Box 117, Harvard Sq PO, Cambridge MA 02238 USA 617-623-8080 * indicates an outside website
4/30/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Franklin proposes tax hike, furlough end, by Dave Williams, Atlanta Business Chronicle - Bizjournals.com - Charlotte,NC,USA.
Atlanta Mayor Shirley Franklin’s $541 million budget proposal for fiscal 2010 would end the city’s work furloughs, including for police and fire fighters, but also would raise taxes to achieve that and other goals.
[Raise taxes on whom? If it's on anyone but the rich, she's going to worsen the downturn in Atlanta.]
Franklin presented her budget recommendations to the Atlanta City Council on Thursday. The $541 million is $32 million less than the city’s fiscal 2009 budget, which expires June 30.
“This budget addresses short-term financial challenges and sets the stage for long-term financial stability,” Franklin said.
The budget calls for eliminating furloughs imposed on city workers last year along with hundreds of layoffs to help offset a deficit. All city employees would return to a 40-hour work week.
It also would raise salaries 10 percent to restore a pay cut to general fund employees, including police and fire fighters.
[Sounds good from the conventional viewpoint, huh? - but it masks a huge retreat to layoffs, and the only reason it's here in the Hope section is that it demonstrates fluctuation of the workweek in the other, the upward direction, and after nearly 70 years of workweek rigidity...]
However, to meet that and other goals, Franklin proposes cutting the general fund workforce to about 3,900 employees, which represents a 30 percent cut in the number of general fund employees from more than 5,600 in 2001.
[So here we have a reversion from timesizing to downsizing, which will greatly deepen the downturn in Atlanta.]
She also proposes raising the property tax rate by 3 mills to a total 10 mills. On a home in the city worth an average $240,000, this would equate to $20 more a month, or $240 more a year, in property taxes.
The 3 mill rate increase is consistent with millage rate increases during previous recessions. During both the 1991 recession (2 mill increase) and the 2001 recession (3 mill increase), millage rates were increased in response to declining revenues.
Franklin noted city’s population is now at a record level of more than 500,000, resulting in increased demand for city services. But the city’s revenue is down as demand has risen.
“Despite the fact that the city has seen an $88 million reduction in revenues as a result of this historic recession, we have a responsibility to ensure that basic municipal services are delivered,” Franklin said. “We have reduced spending through the furloughs, layoffs, and other measures. However, we must increase our revenues if we are to return our public safety and other core services to full-time operation.”
The city council will review Franklin’s proposed budget over the next six weeks. If approved, the changes would take effect July 1.
- BASF reports steep fall in 1Q net profit, By GEORGE FREY, AP via Forbes.com - NY,USA.
German chemical company BASF SE reported first-quarter net profit fell 68 percent as sales sank because of the recession and said it would cut at least 2,000 jobs this year.
[We are still in the primitive days for humanity - still without basic workweek fluctuation, whether keyed to offset underemployment, low income, or low sales - still jerking ourselves around by the livelihood - pathetic rude beasts, we - biodegradable organic robots with an attitude problem and more than a dash of sado/masochism masquerading as Rugged Individualism.]
Ludwigshafen-based BASF ( BF - news - people ), the world's largest chemical company by sales, said Thursday net profit for the January-March period was down to euro375 million ($499 million) from euro1.2 billion in the first quarter of 2008.
Sales fell 23 percent to euro12.2 billion from last year's euro16 billion.
BASF said it faces enormous challenges, and expects "a decline in sales ... and an even greater decline in income from operations" in 2009. The effect of integrating Swiss chemical company Ciba Holding AG is also expected to hit BASF's results this year.
BASF has also said that integrating Norwegian energy exploration company Revus Energy, acquired late last year, will also have a negative impact this year.
"There is currently no sign of a reversal of this trend, and we do not consider temporary topping of inventories in some regions and industries to be signs of a sustainable turnaround," Chief Executive Juergen Hambrecht said.
The company "will restructure and, where necessary, close or sell plants and sites that cannot ensure the company's long-term competitiveness," BASF said in its outlook. "The company will cut at least 2,000 positions by the end of 2009."
BASF, with a global work force of about 97,000, did not specify where the jobs would be cut. It said it experienced lower sales and profits in all regions.
In November, BASF said it would shut a total of 80 plants worldwide and cut production at 100 more.
Earlier this month, BASF said it was reviewing where in Germany it will introduce shorter work hours starting June 1, and has indicated a production facility at its Ludwigshafen headquarters will see hours cut. German staff has already been shuffled to different production sites to keep them working.
Already more than 4,000 people now work on shorter shifts at eight sites in Europe. Another 3,000 are expected to join them.
The company said it was pushing through other ways to reduce costs and speed up business processes, in hopes it will be able to improve earnings by more than euro1 billion per year starting in 2012.
BASF said first quarter agriculture product sales improved 21 percent to euro1.1 billion, thanks to higher volumes and price increases, as the new growing season got off to a strong start in Europe and North America. The agriculture division's operating profit improved 31 percent to euro340 million.
BASF, which also explores for and refines oil and natural gas products, said its oil and gas segment sales improved 4 percent to nearly euro4 billion, but the division's earnings declined 26 percent to euro725 million, due to factors including falling oil prices and lower exploration prices.
The company said the chemicals division's sales decreased 45 percent to euro1.4 billion because of lower volumes and prices, but the unit still made an operating profit of euro74 million.
The company's plastics division saw sales decline 39 percent to euro1.5 billion and reported a euro30 million operating loss - partly blamed on idle capacity at its polymers division, and dramatic overall sales declines.
Investors were cheered by BASF's efforts to counter the crisis. Its shares were up 7.5 percent at euro28.60 in Frankfurt afternoon trading.
4/29/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- WARNING TO WATER CUSTOMERS: Rate hike alternative kept open, By HENRY BREAN, Las Vegas Review-Journal via lvrj.com - Las Vegas,NV,USA.
The valley's largest water utility is running out of places to cut costs and might need to raise its rates if the economy continues to tank, officials said Tuesday.
The warning came during a public workshop on the Las Vegas Valley Water District's proposed budget for the next fiscal year, which begins July 1.
No rate increase has been proposed, but water district General Manager Pat Mulroy said the possibility can't be ruled out.
And unlike last year's rate increase, which targeted mainly high-volume users in an effort to curb waste, this one could hit everyone.
"You can only cut so far," Mulroy said, adding that any increase would be intended to bring in money rather than encourage conservation.
"It will be to survive financially," said Dick Wimmer, deputy general manager for the water district.
Like many public entities, the district prepared itself for a revenue decline, but the severity of the financial downturn caught the utility by surprise. As Mulroy put it, "This is more than a slowdown; this is a crash landing."
Since 2000, the district's customer base has expanded by 53 percent, but total water use has remained essentially flat because of conservation and, more recently, the faltering economy and sharp rise in housing vacancies.
The water district saw applications for new service fall to 1,139 last year, down from a peak of 24,078 in 2005.
In the past four months alone, the district has had to refund $2.2 million in connection charges to developers who have canceled their construction plans.
Utility officials now expect to sell about $39 million less water this year than they projected when the current budget was drawn up.
"We're seeing a dramatic reduction in our revenue streams," said Finance Director Cary Casey.
As a result, the district has cut its current budget by $11.5 million. The proposed budget for the next fiscal year would reduce spending by an additional $11.7 million to $332.5 million.
The Clark County Commission, which serves as the water district's board of directors, will hold a public hearing on the tentative budget at 9:45 a.m. May 18.
Tom Collins and Chris Giunchigliani were the only commissioners to attend Tuesday's workshop.
Even with the cuts, the district could end up siphoning $8.1 million from its reserve fund during the next fiscal year. That would leave the district with about $85 million in reserve.
Without a healthy reserve fund, Casey said, the district might lose the strong credit rating that allows both the district and the Southern Nevada Water Authority to borrow money for major capital projects.
The Las Vegas Valley Water District is the largest member agency of the Southern Nevada Water Authority, which serves as the region's wholesale water supplier. Mulroy serves as general manager of both entities.
Other water district cost-cutting moves for the coming year include a four-day workweek for most employees, minimal travel, deferred vehicle replacement and the elimination of all cost-of-living raises.
Most, if not all, of the district's 1,504 full-time employees still will be eligible for performance-based merit raises and longevity increases during the upcoming fiscal year. Overall, though, the district expects to reduce its payroll costs by 2.5 percent, or about $3 million, from the current year.
About 75 vacant positions will be left unfilled. Roughly 157 paid interns, contract employees and temporary workers already have been, or soon will be, let go.
That part was hard, Mulroy said, but "it was the only way. Our mission is to save every permanent job that we can."
The reason is simple, she said: Bad economy or not, the district must keep water flowing to about 1.3 million valley residents, a task that involves the operation and upkeep of 4,600 miles of transmission lines, 51 pumping stations and 900 million gallons of storage.
The belt tightening also extends to the district-owned Springs Preserve, where spending will be cut by $2.5 million over the next fiscal year. Because the sour economy is expected to cause a 45 percent drop in ticket and retail sales, however, the preserve is still slated to cost the district almost $8.5 million.
That's up more than $160,000 from this year's subsidy of $8.3 million, but down from the $10.2 million the district shelled out for the $235 million attraction during its first year of operation.
Mulroy said she is hopeful the water district will be able to get through the upcoming fiscal year without having to discuss a possible rate hike.
"We're going to monitor this very closely to see what the economy does," she said. "Hopefully we'll see a rebound in the next year."
Contact reporter Henry Brean at firstname.lastname@example.org or 702-383-0350.
- German labour minister plans new relief for firms, Reuters via Manchester Guardian via guardian.co.uk - UK.
BERLIN - German Labour Minister Olaf Scholz will later on Wednesday outline plans to grant firms added relief in the economic crisis and extend the period in which the state can subsidise shorter staff working hours.
In a move aimed at reducing lay-offs in Germany, Scholz will propose that the Federal Labour Office can subsidize wage bills for workers on reduced hours for up to 24 months rather than 18 months at present, sources in his ministry told Reuters.
Under legislation recently agreed by the ruling coalition, the Labour Office pays workers' share of their social security contributions if they are put on reduced hours or "Kurzarbeit."
The Labour Office can pay the employers' share too if affected staff are put on training courses during the time off.
In a meeting with top employers' representatives and union leaders on Wednesday evening, Scholz will propose that the Labour Office takes on employers' share of social security contributions from the seventh month of Kurzarbeit onwards.
The Labour Office pays workers 60 percent (or 67 percent for those with children) of the net wage lost due to Kurzarbeit.
Scholz does not need parliamentary approval to extend the period of subsidized [shorter] working hours, though lower house support is likely to be needed for the planned amendments to how social security contributions are paid for.
(Reporting by Holger Hansen; writing by Dave Graham; editing by Ron Askew)
[More background -]
Germany’s Economy to Return to Growth Next Year (Update3), By Tony Czuczka and Katya Andrusz, Bloomberg.com.
The German economy will return to growth next year after its steepest decline since World War II, the government said, providing Chancellor Angela Merkel with campaign ammunition as she seeks re-election in September.
Europe’s largest economy will grow by 0.5 percent in 2010, rebounding from a slump that will add more than 1 million to the ranks of the unemployed through next year, the Economy Ministry said today. The contraction this year will be 6 percent, almost three times the 2.25 percent contraction forecast in January.
“We see a good chance of stabilization or even a slight recovery of the world economy during the course of next year at the latest,” Economy Minister Karl-Theodor zu Guttenberg told reporters in Berlin. “A global economic revival will be helpful particularly for us, just as the decline hit us particularly hard.”
The government outlook for next year, more optimistic than the International Monetary Fund and Germany’s leading economic forecasters, adds to evidence of recovery that may bolster Merkel’s Christian Democrats and their Social Democrat coalition partners as they prepare to contest Sept. 27 national elections. Both parties, in coalition since 2005, gained in a poll today.
For Merkel, “if she’s clever about it and conveys the sense that an upswing may lie ahead, she can profit,” Manfred Guellner, head of polling company Forsa, said today in an interview. “An upbeat mood like that before the election will clearly benefit Merkel and the CDU,” as her party is known.
Merkel said today that policy amid the global financial crisis must “give globalization a human face.
‘‘We have to have an economic policy that serves the people,’’ she told a meeting of European Christian Democrats in Warsaw today. ‘‘It is our task now to ensure that we Europeans come out of the crisis stronger than we went in.’’
The euro rose against the dollar before declining to $1.3256 in Berlin from $1.3149 yesterday. Germany’s benchmark DAX index closed up 2.1 percent at 4704.56 in Frankfurt. Siemens AG, Europe’s largest engineering company, earlier reported a bigger-than-expected jump in second-quarter earnings.
Even so, the government forecasts that Germany, the world’s No. 1 exporter, will see foreign sales plunge 18.8 percent this year before rising 0.9 percent in 2010. Unemployment, which reached 3.4 million in March, will rise to an average 3.72 million this year and 4.62 million next, providing the government with its ‘‘biggest challenge,” Guttenberg said.
Labor Minister Olaf Scholz, a Social Democrat, is pushing for an agreement with unions and employers that would allow companies to put workers on shortened shifts for 24 months instead of 18 months as at present to avoid job losses.
The government forecast for growth next year contrasts with an IMF prediction of contraction of 1 percent. For this year, the IMF said April 22 that the German economy will shrink by 5.6 percent compared with 4.1 percent in the U.K., 2.8 percent in the U.S. and 3 percent in France. Guttenberg said that it is harder to forecast than usual during the crisis.
Guttenberg, a member of the Christian Social Union, Bavarian sister party to Merkel’s Christian Democrats, said Germany’s stimulus measures to date are “exemplary at the international level.”
Merkel and her Social Democrat Finance Minister Peer Steinbrueck have already ruled out expanding the 82 billion-euro stimulus agreed under two separate programs. “We’ll let current measures take effect,” Merkel said April 22.
Oskar Lafontaine, head of the anti-capitalist Left Party, said the government’s talk of recovery is premature and its refusal to boost stimulus spending is “irresponsible” as workers, retirees and welfare recipients suffer.
‘Relying on Hope’
“The government is relying on hope,” he said in an e- mailed statement. “It’s openly counting on other countries to pull the German economy out of the mud.”
[Dream on! That makes two of the three biggest economies by GDP (US+German) that are whining for some deus ex machina instead of putting their own house in order with fluctuating adjustment of their workweeks against unemployment or weakening consumption. Pathetic! Ruehrend!]
The coalition parties gained in a Forsa poll today at the expense of the opposition. The Christian Democrats and the Christian Social Union, which fight elections together, gained one percentage point to 36 percent, while the Social Democrats led by Foreign Minister Frank-Walter Steinmeier rose two points to 25 percent.
The Free Democrats and the Green Party each lost one point, to 15 percent and 9 percent respectively, and the Left dropped two points to 9 percent, according to the poll of 2,500 voters conducted April 20-24. The margin of error was 2.5 percentage points.
To contact the reporter on this story: Tony Czuczka in Berlin at email@example.comKatya Andrusz in Warsaw at firstname.lastname@example.org
Last Updated: April 29, 2009 15:39 EDT
- European Retail Sales Decline Least in 11 Months (Update2), By Jana Randow, Bloomberg.com.
European retail sales declined the least in 11 months in April after government stimulus packages improved consumer confidence, the Bloomberg purchasing managers index showed.
The measure of euro-region sales rose to 48.4 from 44.1 in March when adjusted for seasonal swings. It has stayed below the 50 mark, which signals contraction, since June. The index is based on a survey of more than 1,000 executives compiled for Bloomberg LP by Markit Economics.
To combat the worst slump since World War II, governments across Europe have sought to revive growth with packages such as tax breaks and incentives to buy cars and home appliances. While cooling inflation may boost households’ spending power, the impact may be limited as rising unemployment takes its toll.
Consumer spending “was really resilient in the first quarter and is partly being helped by incentives,” said Nick Kounis, chief European economist at Fortis Bank in Amsterdam. “Rising unemployment will stop any meaningful recovery.”
Retail sales in Germany, Europe’s largest economy, fell at the slowest pace since May 2008, Markit said. Sales also declined at a slower pace in Italy and France. A separate report today showed that European confidence in the economic outlook increased for the first time in 11 months in April.
The euro extended its advance against the U.S. dollar after the reports and was at $1.3238 by 10:52 a.m. in London, from $1.3149 yesterday.
Consumer confidence in France and Italy rose unexpectedly in April and held steady in Germany, according to reports published this week. Governments in all three countries are making payments to consumers willing to trade in old cars for new models.
Respondents to the survey reported that sales were aided by “better weather and car scrapping incentives,” and an “improvement in consumer sentiment compared to recent lows,” Markit said in today’s report. From year earlier, euro area sales increased, boosted by the timing of Easter, it said.
Praktiker AG Chief Executive Officer Wolfgang Werner said on April 22 that sales improved this month after the home- improvement retailer’s first-quarter operating loss more than doubled from a year earlier.
Business confidence is also strengthening in Europe. Germany’s Ifo index rebounded more than economists forecast from a 26-year low in April, reflecting hopes that the recession may ease later this year. French business sentiment rose for the first time in 13 months and Italian confidence also improved.
The European Central Bank has lowered its benchmark interest rate to a record low 1.25 percent and indicated that it will reduce it again next month. On April 3, President Jean- Claude Trichet said consumer price indexes “could be negative in the months to come before going up again” in the second half.
While the retail sales decline was smaller in April, retailers again missed their sales objectives, today’s report showed. They expect to beat targets in May although they were more cautious than in the previous month, Markit said. A sub- index of expected sales against planned sales in May fell to 52.4 from 55.8.
Retailers’ profitability also worsened in April, while employment declined for a 13th month, albeit at a slower pace.
“Market conditions are tough and they will remain so,” Carrefour SA Chief Financial Officer Eric Reiss said on April 16. The company, Europe’s largest retailer, said it will introduce a budget range next month to help reverse declining sales in its domestic French market.
Spending may continue to decline as companies reduce employees’ hours or cut jobs. Air France-KLM Group, Europe’s biggest airline, may cut its workforce by 3,000 in the next two years. Robert Bosch GmbH, the world’s largest car-parts maker, has more than half of its 114,360 workers on shorter weeks.
The International Monetary Fund this month cut its outlook for the world economy to predict a 1.3 percent contraction this year. The euro-area economy will shrink 4.2 percent, it said.
Unemployment in the euro area will rise to 11.7 percent next year from 7.5 percent in 2008, the Organization for Economic Cooperation and Development said last month. The 16- nation economy will contract 4.1 percent this year and recession will extend into 2010, it forecast.
To contact the reporter on this story: Jana Randow in Frankfurt email@example.com.
Last Updated: April 29, 2009 05:58 EDT
4/28/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Penton Cuts Work Week to 4 Days, Slices Salaries, MediaBuyerPlanner.com - Elkton,MD,USA.
Penton Media has cut its workweek to four days for the summer, beginning the week before Memorial Day and running through Labor Day.
Paychecks are also being cut, with the reduction being spread out in smaller increments through the end of the year, to “reduce the immediate financial stress,” Sharon Rowlands, chief executive, wrote in a memo obtained by Folio.
The first quarter was the “toughest in my business career,” Rowlands wrote, pointing out that a number of the company’s properties reported results significantly below the same period last year, and well below budget.
The declines came not only from losses in print advertising, but also from declines in events and online revenue. Penton online revenue is a “long way behind the industry” and is not showing growth....
Penton’s marketing trade magazines include Direct, Multichannel Merchant, Promo and Chief Marketer.
Magazine advertising spending is expected to slip 11% this year, per ZenithOptimedia latest predictions. eMarketer is predicting steeper declines for magazines, saying print ad spending will slip an 16.2% in 2009.
- Daimler posts dire loss and cuts wages, The Local - Hamburg - Hamburg,Germany.
German luxury car and truck maker Daimler posted a stiff first-quarter loss Tuesday and warned sales would "decrease significantly" this year. Some 60,000 workers will also see their wages cut by nearly 9 percent.
Daimler said it had suffered a net loss of €1.28 billion ($1.66 billion), against a profit of €1.3 billion in the same period a year earlier.
Sales fell 25 percent in the first three months of 2009 to €18.7 billion, while the group's operations showed a loss of €1.42 billion, a statement said.
"The Daimler Group's total revenue is likely to decrease significantly in the full-year 2009" from the previous year's level of €95.9 billion, it added. And "earnings in the second quarter are expected to be significantly negative once again," Daimler said.
Shares in the automotive group plunged by 5.40 percent to €25.90 in midday trades on the Frankfurt stock exchange, while the DAX index of German blue-chips was off by 2.57 percent overall.
Like other auto groups, the maker of Mercedes Benz cars and trucks has been slammed by the global collapse of automobile markets.
Daimler said it had "initiated measures designed to adjust costs and avoid expenditure across all divisions" and at its headquarters in Stuttgart, southern Germany.
The plan should provide cost savings of €4 billion a year, said Daimler, which employed 263,819 people at the end of March.
Daimler boss Dieter Zetsche recently refused to rule out job cuts at the company, which suffered from "sharp drops in unit sales at Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz Vans in the first quarter of 2009."
But 60,000 workers already putting in shorter hours would no longer be compensated for the 8.75 percent reduction in time on the clock.
The automotive division nonetheless expected to post positive earnings in the second half of the year, the statement said. Daimler said it had earned €449 million from the sale of property at Berlin's Postdamer Platz, and €102 million from the transfer of shares in the European aeronautic group EADS.
But the group also booked charges of €491 million in connection with its holding in the distressed US car maker Chrysler, a former Daimler division. Another $700 million in charges was expected before Chrysler was finally separated from Daimler's books.
On Monday, Daimler said it would give up its 19.9 percent stake in Chrysler and forgive outstanding loans from the struggling firm, which must draw up a viable plan this week to continue receiving US government support.
Looking ahead, Daimler said it would launch its "smart" city car in China and Brazil this year, but that in general, "lower volumes are anticipated above all in the markets of the United States, Western Europe and Japan."
AFP/The Local (firstname.lastname@example.org)
- Gary Shilling – Economic Forecast and Current Market Opportunities, Author: Robert Huebscher, GuruFocus.com - Plano,TX,USA.
Gary Shilling is President of A. Gary Shilling & Company, the economic consulting and investment advisory firm he founded in 1978. Dr. Shilling is well-known for his forecasting record, having correctly predicted major economic events over the past several decades. Beginning in 2002, he warned his clients that the housing market "has taken on self-feeding, bubble dimensions that will sooner or later collapse," and continued to sound this warning through 2007, when his predictions came true. Dr. Shilling publishes a monthly newsletter, Insight, which is available from his web site or by calling 888-346-7444. He is the author of several books, the most recent of which, Deflation, is available....
You’ve been forecasting deflation for some time, and the March CPI numbers validated these forecasts – the first deflationary month since 1955. Can you summarize the major forces in the economy that will continue to keep the CPI numbers in negative territory?
In the short term - for the duration of this recession, which will be at least another year - four very deflationary forces are at play.
First is the ongoing weakness in commodity prices, which takes time to work its way through the system. Crude oil prices are translated quickly to pump prices, but price increases in petrochemicals - which are used, for example, to create plastic parts that go into consumer electronics - take time before their impact is apparent in finished goods. We are getting hit by the collapse of commodity prices, not just from crude oil, although that is the most conspicuous.
Second are excess inventories, which are the mortal enemy of price increases. Manufacturers and retailers must cut prices to get rid of inventories. Right now, merchandisers are cutting prices on spring goods before they are out of their boxes and on the racks. They over-ordered and didn’t anticipate demand would fall off a cliff.
[No, they ordered appropriately and didn’t anticipate demand would fall off a cliff.]
The most interesting phenomenon, which we are now seeing for the first time since the 1930s, is wage cuts and shorter hours.
[Where has this guy been? Wages have been sinking for 30 years. Oh I forgot. He's been in Tex-ass. Remember Monty Python: 'The most interesting thing about King Charles I is that he was 5 foot 6 inches tall at the start of his reign but only 4 foot 8 inches tall at the end of it.']
In the post-World War II period, the only way employers could cut costs was to lay people off. Under high inflation, employers used another method of controlling labor costs, which was to freeze pay or raise pay less than the rate of inflation. Now, however, there is no inflation and we are back to the 1930s, when deflation reigned. To lower costs, you must get rid of people or cut hours. About 6% of employers have cut wages or hours in the last year, and another 10% plan to do so. This is less than the number of employers that have had layoffs, which in the 20% area, but it is growing and it is highly deflationary.
The fourth and final deflationary force is excess capacity in the economy. The Commerce Department has an interesting measure, which shows the excess capacity versus demand across the economy. An interesting and powerful relationship is apparent, which shows that excess capacity reduces the CPI with a six-month lag.
For the duration of this year, deflation is the odds-on bet.
Our fiscal and monetary policies are aimed at creating inflation, through further stimulus packages, expanded money supply, or debt monetization. Many say the government will continue on this path until it creates inflation. Why do you believe the government will be unsuccessful?
Your question implies that the government is trying to recreate inflation, and I don’t think they are. Paul Volcker and Federal Reserve Vice Chairman Donald Kohn have been debating this issue. Kohn said the Fed is targeting 2% inflation, and Volcker objected, saying that the Fed is "telling people in a generation they're going to be losing half their purchasing power." Volcker was saying you either want inflation or you don’t, but the Fed is saying it would rather risk a little bit of inflation. Our government has not achieved a clear consensus on whether it should create inflation.
Deflation becomes self-perpetuating. Consumers see prices decline and delay purchases, which forces retailers and manufacturers to cut back production and labor costs, which drives prices further down. This is the reverse of inflationary expectations.
As far as policy is concerned, the government is trying to resolve the financial crisis and is dealing with an unfolding list of problems as it tries to rekindle economic growth. So far, these efforts have not been very effective. Despite the stimulus, the economy is not growing, and public sector efforts are being offset by the private sector.
Some believe the economy will take off, with consumers regaining confidence and resuming spending, excess liquidity triggering increased lending, and all this will fuel inflation. I don’t think this will happen, and I expect much lower growth in the economy. My estimates are GDP growth of 2% annually over the next decade, as compared to 3.6% during the big salad days of economic boom from 1982-2000.
What are your reasons for this economic decline?
I see five factors inhibiting economic growth.
[Search in vain for any mention of 'the de-leveraging of the employment sector.' It's as if jobs are completely unnecessary in these geniuses' image of 'economy.']
What if you are wrong and the economy starts growing – will we still face deflation?
- First is the de-leveraging of the consumer sector, which was on a leveraging tear for three decades. This was obviously manifested in the housing boom, but it also caused the saving rate to run down from 12% in early ‘80s to 0% as of recently. Consumers relied on savings and home equity to finance their children’s education. When stocks fell apart in the tech bubble collapse, housing took over. That era is over and consumers’ borrowing power is gone. Stocks collapsed a second time. There have been four stock market declines of 40% or more since 1900 – and two were in the last 10 years. The decline in the saving rate added 0.5% to GDP growth - and that is over. Consumers have maxed out their credit cards. Post-war babies have not saved, and they need to save. Their kids have left home and, if they’re like me, they don’t have as many smashed-up cars to replace. I am looking at increased savings of 1% per year for the next 12 years, which will work through the economy with a multiplier effect that will knock GDP down by 1% per year..
Like the consumer sector, the financial sector is de-leveraging, after having been on a leveraging binge for three decades. A lot of that leveraging was financial fluff, but it did finance important goods and services. Growth in Eastern Europe and the Baltic region was financed by Western banks. Banks are going back to spread lending, which we can see now, for example, in the recent announcements by Bank of America. With skill, luck, hard work and unlimited free government money, they can’t fail. Their balance sheets are still terrible, though. We don’t know how much bad paper they have and we can’t figure it out. Apparently, the banks don’t know either, and were making calculations until the last minute before releasing their numbers. Going back to spread lending will have a big negative effect on economic growth, but is hard to quantify.
Third, we are at the end of the commodities boom. Big commodity producers were spending at a high level, as were smaller countries like Zambia, Peru and Chile, who produce copper. During the boom, buyers lost while producers won, and now the reverse is true. But the buyers are the big industrial countries, so the countries suffering now are the smaller ones. Oil is a very minor part of our GDP, but for Saudi Arabia it is everything.
Increased government involvement has decreased economic efficiency. Banks are wards of the state. They are not interested in taking risk, just in preserving their empires. Government intervention stifles initiatives, and it never quite works. Wall Street will figure their way around regulations, and Sarbanes Oxley is the prime example.
The final factor is protectionism, which is growing rapidly. Protectionism started in the financial sector. Officially, the recession started in December 2007, but I date it to early in that year. The “subprime slime” began when HSBC took a $1.7 billion write-down in February, which was the first phase of the meltdown. The second phase began in June 2007, when the two Bear Stearns hedge funds collapsed. After that, nobody trusted anyone. Protectionism began to show up first in the financial area. In October 2008, Ireland guaranteed the deposits of six major banks. The rest of European Union said Ireland was gaining an unfair advantage, but other countries promptly followed suit. The UK went one better. With Gordon Brown under pressure from Northern Rock’s collapse, not only did the UK guarantee deposits but bank loans as well. After first planning to use the TARP to buy toxic assets, Henry Paulson said he would use it to inject money into banks, spurring a competitive race to provide the best protection for financial institutions. On a global level there was competitive protectionism in the financial arena. Then began phase three - the retrenchment of the US consumer – which started in Q4 of 2008. Protectionism heated up in the goods and service side of the economy. We saw this in the “buy American” provisions in the Obama stimulus plan. We banned trucks from Mexico, and they retaliated by imposing tariffs. These measures will slow growth and, if its gets serious, it will cut off growth.
Even if I am wrong, and the economy revives more rapidly, there are a couple of offsets that will prevent liquidity from turning into inflation.
Central bankers are unequivocally opposed to inflation. When they take their jobs, it is as if they are injected with anti-inflation DNA.
[They are unequivocally opposed to fraud too, but that doesn't stop them from practicing it with some other partition of their minds.]
I have no doubt - and Ben Bernanke has said this - that if things take off, the Fed will yank back liquidity hand-over-fist.
[Ben Bernanke is one of the major banksters - he has zero street cred.]
Private sector weakness is offsetting everything going on in the public sector. Derivatives were a source of liquidity - for example, to finance housing - but de-leveraging is cutting the outstanding amount rapidly. Credit default swaps are half the size of what they were a year ago. Even adjusting for double-counting, the amount of derivatives outstanding is huge compared to total G-7 money supply. So the liquidity that’s disappearing with derivative destruction swamps any the central banks can or will create.
In late January you wrote that it is “way too early to get back into U.S. stocks.” Is that still your recommendation? What signs are you watching to determine when US equities will be attractive?
Stocks anticipate the economy. It’s normally five to six months before the end of a recession that they hit their low point. If we are right that the economy will bottom a year from now, then stocks will bottom late this year. Since stocks are a leading indicator, the question is what leads this leading indicator.
Three things must happen to clear the path for stocks to recover.
First, we must eliminate excess housing inventories. Even with weak housing starts, we still have two million extra houses (over and above normal levels) left over from the building boom that started in the late 1990s. Depressed prices mean destruction of home equity and reduced consumer purchasing power. It encourages walk-aways, which results in foreclosures, and perpetuates a self-feeding destructive cycle.
If nature runs its course, it will take until the end of next year to get down to where home prices will level off. We need another 15% decline (for a 37% total decline) in housing prices. Half of homeowners with mortgages - about 25 out of 50 million people - will be underwater, to the tune of one trillion dollars. This problem must be solved. Richard LeFrak and I wrote an op-ed piece that appeared in the Wall Street Journal, where we argued that we should sell foreclosed houses to foreigners who want permanent residence in this country. Instead, our approach has been to dump these houses on the market at prices that are reduced by 40-50%, which drags down all home prices. Clearly, this is not a good solution.
Second, we must deal with additional financial problems that are surfacing. So far, our problems have been related to residential mortgages, but consumers are treating payments on other kinds of loans – credit cards, auto loans, home equity loans, student loans – as discretionary. Financial responsibility is going out the window. The TALF is supposed to deal with this, and we will see if it really works. As it stands, the Fed can buy only AAA-rated paper, but the problem lies in paper that is not rated AAA.
[No, the problem lies in all the liars' loans aka toxic assets that are still labeled AAA.]
Commercial real estate (except for hotels) is suffering from overbuilding. We have excess capacity in warehouses, malls, and offices. Sublease space is competing with new space. Hotels are facing declining occupancy. The underlying problem was refinancing that added leverage, and a lot of this debt is coming due and will be difficult to roll over.
Markets still face a problem with junk bonds (which are now at 18% spreads) and leveraged loans. Delinquencies and charge-offs are just getting under way. Holders of these securities have not anticipated the write-offs that will come.
Third, the fiscal stimulus is too small to break the cycle of lack of consumer spending, inventory build-up, production cutbacks, and unemployment. This cycle feeds on itself. The fiscal stimulus funds a lot of Obama’s social agenda - with spending on health, education, and the environment - but only about $200 billion is spent on infrastructure. Putting money into circulation will not do the job. We will need to come back mid-year with a rock-hard asset stimulus to put money into circulation and break cycle of consumer retrenchment.
Another thing is important here – normally, recovery begins with a revival of housing [no, a revival of jobs] as the Fed cuts interest rates (which can no longer happen) and ends with inventory liquidation (but the collapse in consumer spending will swamp any inventory reductions this time around). In past recessions, consumer spending has not declined at all. The decline now is greater than in any post-war recession, and will swamp any inventory reductions.
We will have a sluggish recovery at best.
What is your target for the S&P?
I am on record with a target of 600 on the downside for the S&P 500, based on my forecast of $40 in operating earnings and a generous multiple of 15. I made that projection last November when the bottom-up analysts’ forecast was $83 and the top-down forecast was $62. They are closing in on me. We have another 25% decline to hit the bottom, which I expect in the later part of this year.
A year ago you offered 13 investment strategies for 2008, and in hindsight they were very prescient. Can you discuss some of the strategies you are recommending for 2009?
Every year, in the January issue of our Insight publication, we offer our investment strategies. Last year, 13 out of 13 worked well. Probably a lot of luck was involved, but someone in my office calculated the odds of batting 13 out of 13, and it was one out of 8,192, so it is more than just dumb luck. We updated this in January. A number of our ideas from a year ago are pretty well exploited. For example, investors can no longer profit from the collapse in the subprime market or from the decline in Treasury bond yields. Thirty-year Treasury bonds have been one of my favorite asset classes since 1981 when yields were 14.1%. Yields went to 2.6% at the end of last year, and investors in this asset class, which is supposedly only suitable for conservative investors, earned a 42.5% total return. That is over. Another fully exploited asset class is junk bonds, as charge-offs haven’t leaped but spreads have.
Stocks are going down, but I am still bullish on the dollar – it is the best of a bad lot. The dollar will fill its traditional role in a global recession, where people run to it for a safe haven. Looking across the major currencies, there are reasons why they will be weak. The problem with the Euro is its “one size fits all” design in the face of countries with divergent economies. The southern countries (Italy, Spain, and Greece) are weak economically and are issuing debt. That debt will be downgraded and there is a threat they will abandon the Eurozone. The Euro will be driven down to 1.0 from 1.3 against the dollar.
The UK has a huge financial sector that is in trouble. The financial sector accounts for 15% of the UK employment, versus 5% of our workforce. Canada, Australia, and New Zealand are being hit by weak commodity prices, which hurts both the volume and prices of their exports. The dollar against all of those currencies looks interesting.
I am cautiously recommending high-grade municipal and corporate bonds. They have rallied nicely since the beginning of the year, but downgrades – not defaults – are a tricky problem there.
There will be downward pressure on homebuilding and housing-related stocks, consumer discretionary stocks, commodities, and emerging market debt and equity.
What is your personal asset allocation, at an asset class level?
The best way to answer that is to look at how we run our portfolios, which is on the basis of strategies.
We are long the dollar, short stocks, and long Treasury bonds.
A lot of these are the same trade.
Last year only three asset classes went up: Treasury bonds, gold, and the Yen.
Everything else went down.
There is so much hot money that it ends up on same side of every trade at the same time. Investors bail out of bad ideas at the same time to preserve capital.
What about gold?
I am agnostic on gold.
4/27/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Cutbacks close Skutz Falls to summer camping, By Peter Rusland, BCLocalNews.com - Victoria,BC,Canada.
Campground closures and shorter hours affecting three of Cowichan’s provincial campgrounds have regional directors crying foul.
Cowichan Valley Regional District’s electoral services committee is set to fire off a letter to the parks ministry this week.
It’ll demand Skutz Falls campground be reopened, after being closed indefinitely this year, and overnight camping be resumed at Koksilah Provincial Park.
Camping at 43-site Stoltz Pools campground is open between May 15 and Sept. 15, a period former area director Joe Allan believes is shorter than last year.
CVRD staffer Brian Farquhar said the region’s letter would urge provincial parks brass to reverse its decision in light of rising recreational demands in tough times.
“We’d like as much camping as possible given how popular our region is. Any closure will have some effect.”
Friday’s Times Colonist daily said a shorter tenting season in 45 parks will help save the ministry about $24.3 million.
CVRD brass is also concerned the provincial letter offers sketchy details about the closures, noted Ian Morrison, director for Cowichan Lake South-Skutz Falls.
“Security and partying at Skutz Falls was part of it. But with a tough economy people are doing more holidays close to home, so closing camping facilities is a big issue.”
Environment Minister Barry Penner was unavailable for comment Friday at press time, as was regional parks manager Don Closson.
Meanwhile, Allan said Cowichan’s park closures might not have much impact.
“They’re not like (large, full-service campground) Gordon Bay,” he said.
“The major camping time is the May 24 long weekend to Labour Day.”
Campsite reservations can be made at www.discovercamping.ca.
- Cartier cuts working hours as demand dwindles, Reuters via guardian.co.uk - UK.
ZURICH - Richemont, the world's second-largest luxury goods group behind LVMH, is cutting working hours at its main Cartier factory as the economic slowdown dampens demand for pricey timepieces.
Employees in watch production at the top-end brand will work at 40 percent for a three-month period starting in May, a spokesman for Richemont said.
"In this way, we can retain the staff and production flexibility whilst avoiding a build up of finished goods inventory. We do not want to lose any of our employees," he said.
Cartier had already introduced shorter worker hours at its smallest factory in Switzerland earlier this year.
Cartier has 1,100 employees in its watchmaking operations in Switzerland, spread over three sites at La Chaux-de-Fonds, Villars-sur-Glane and Meyrin, the Richemont spokesman said. Swiss newspaper L'Agefi reported around 500 employees would be affected.
By 1131 GMT, shares in Richemont had fallen 4.3 percent to 20.28 Swiss francs, underperforming a 2 percent drop in the DJ personal and household goods index.
Demand for Swiss watches has tumbled in recent months as the economic crisis and looming job losses have made consumers reluctant to splash out on luxury treats.
Swiss watch exports dropped 26.6 percent in nominal terms compared with the same period last year, Swiss March trade data showed, with the greatest decline in the highest price segments.
(Reporting by Silke Koltrowitz and Katie Reid ; Editing by Rupert Winchester)
4/26/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Somerville MA - City studies all options in budget crisis - , by John Laidler, Boston Globe, GN1.
[...all options except cutting the workweek, even though Somerville has done it in the past... - but at least they're considering furloughs -]
Somerville Mayor Joseph A. Curtatone says the city is looking at an array of potential savings and revenues, including layoffs, as it seeks to close a projected $11.3 million budget shortfall for the next fiscal year.
"Everything is on the table. We are going to be as creative as possible," Curtatone said in an interview last week, "creative to find new revenues, creative to examine our staffing . . . and creative to identify new efficiencies."
City officials say the projected shortfall is the result of an anticipated sharp drop in state aid to the city and a continuing rise in certain costs, notably health insurance.
The House Ways and Means Committee fiscal 2010 budget plan released April 15 would cut the two key non school local aid accounts by a combined 32 percent over original fiscal 2009 levels. For Somerville, that would mean a $9.7 million loss of aid. Under Governor Deval Patrick's budget proposal issued in January, Somerville's aid cut would be $8.5 million. Both the House and governor's plans keep school aid level.
Curtatone said the city is projecting its healthcare costs to rise by about $3.1 million, which would roughly wipe out all of the additional revenue the city would generate through raising taxes the allowable 2.5 percent limit. (The state Proposition 2 1/2 law caps annual increases in the local tax levy to 2.5 percent plus revenues from new growth).
The city's fiscal crunch will be the subject of a public forum the Board of Aldermen's Finance Committee is holding Tuesday at 7 p.m. in the aldermanic chambers in City Hall.
"We want to give everybody a sense of where we're at right now and how we got there," said Maryann Heuston the committee chairwoman and Ward 2 alderwoman, referring to the city's financial situation. But, she said, the meeting is also intended to seek citizen input into how to address next year's shortfall.
"We want to know what's important to people so if we have to make tough decisions, we don't just make them from our perspectives as elected officials but from a general community perspective," she said.
Already this year, Somerville was forced to close a $3 million budget gap for this fiscal year resulting from a midyear cut of that amount to its local aid.
Curtatone said the city was able to eliminate that deficit without layoffs or major service cuts through cost savings it began implementing last fall in anticipation of the cuts. Included was a freeze on filling all noncritical personnel, and closely monitoring all purchases and contracts.
The mayor, who was president of the Massachusetts Mayors Association in 2007 and 2008, is outspoken in calling for the state to show greater leadership in addressing the fiscal plight of municipalities.
"Cities and towns understand we all have to make sacrifices. There just isn't enough revenue," he said. "But what we need is leadership and partnership. And that means we need every level of government, from the governor to the Legislature to cities and towns, to rally together to identify opportunities" to revive economic growth.
Curtatone said the House budget would return cities and towns to 1987 state aid levels. "And while cutting the legs out from under cities and towns, it is not giving them the flexibility the [state] has to manage fixed costs such as healthcare . . . or options to raise revenues locally via a hotel or meals tax, which takes the burden off the property tax payer . . . So it's a very frustrating scenario."
"The budget process is not even close to being complete. We have a lot more work to do. . . and I see our municipal officials as our partners in that process," said state Representative Carl Sciortino, a Medford Democrat who represents Somerville and sits on the House Ways and Means Committee.
"These clearly are difficult times for all our families across the state as well as state and local government, and we have a shared responsibility to meet the needs of our constituents, which includes addressing the needs for new revenue at the state and local revenue," he said.
Sciortino noted that that there are many House members, himself included, "who have been advocating . . . for passage of the Municipal Partnership Act, which would give cities and towns the tools they need to raise revenues at the local level, and I expect and believe that needs to be part of the solution."
In attempting to balance next year's budget in Somerville, Curtatone said the city will be assisted by a finance advisory committee he established in January that includes local business leaders and financial analysts.
"It's going to be a multitiered effort, involving identifying new local revenue sources, more efficiencies such as perhaps consolidating departments or personnel to deliver the same programs, or outsourcing different services in the city," Curtatone said. "In some cases, there could be cuts or staffing reductions where it make sense in terms of consolidations."
Anticipated funds from the federal stimulus package, including money for education and community policing, will be part of the solution for next year, Curtatone said.
He said the city has also asked its collective bargaining units - in negotiations over new contracts or revisions to existing ones - to accept a wage freeze and a one-week furlough next fiscal year. The police patrolmen's union has agreed to it and negotiators for the superior officers' union have agreed to it, subject to ratification by its members. Negotiations are continuing with other unions.
- Marches, sit-ins, violence ... the workers are now comrades - As economic hardship brings disillusion and destroys jobs, Observer writers report on the global wave of direct action, from 'bossnappings' to riots, by James Doran, Kathryn Hopkins and David Gow, The Observer via The Manchester Guardian via guardian.co.uk - UK.
More than a century and a half after Karl Marx and Friedrich Engels urged the workers of the world to unite, there is still little sign of the proletariat seizing control of the means of production. But since the credit crunch erupted in 2007, plunging two-thirds of countries into recession and costing millions of people their savings and livelihoods, workers of the world have been united in anger. And from the streets of China to the rooftops of north London, from Monaco to South Korea, they are willing to show it - in strikes, protests and sometimes violence.
Worker power has been in retreat for over a decade, swept aside by laissez-faire capitalism and rampant economic growth. But today, every country that reaped a share of the benefits of globalisation is feeling the lash of what the Bank of England governor Mervyn King has called "an unprecedented and synchronised downturn ... around the world".
[...'unprecedented' except for the Great Depression and every downswing of the long Kondratieff Wave before that ever since the start of the Industrial Revolution...]
Many of those affected are now venting their fury in public. Across eastern Europe, there have been waves of riots by angry voters who were promised an economic miracle when their countries joined the European Union, but instead have been riding an extraordinary and unsustainable credit bubble that has now burst, leaving many in the clutches of the International Monetary Fund. In Hungary and the Czech Republic, governments have been overthrown by public protests.
But it's not just politicians who have aroused the wrath of the people: capitalists - until recently more envied than despised for their riches - are also in the firing line. Attacks on disgraced ex-RBS boss Sir Fred Goodwin's home last month over the size of his pension pot are being echoed in a wave of "bossnappings" and riots across the world, as workers discover that much of the prosperity of the past few years has been illusory.
"The bosses treat us as prats, so we're acting like prats," said Quentin, a worker at a threatened British-owned adhesives plant in Bellegarde-sur-Valserine, during yet another French "bossnapping" incident, which ended after two days this month. Derek Sherwin, head of Scapa Europe, felt the full wrath of his employees - and improved his payoff offer before being set free.
Angered by the terms of their redundancies as firms switch production to low-cost countries in the depths of the recession, hundreds of French workers have employed this tactic in at least eight incidents this year. Ten days ago, the Moselle town of Woippy became briefly famous when more than 100 irate workers detained five managers at a plant belonging to Hewlett-Packard subsidiary FM Logistic in protest at the plant's closure. "We've had it up to here," said Bruno, a union spokesman.
Traditionally militant France approves of such tactics, according to a recent poll showing 30% in favour and only 7% against, with almost two-thirds expressing some sympathy. And French employers' organisations such as Medef are reluctant to intervene, even though bossnapping carries a potential prison sentence of up to 20 years.
Even the Eiffel Tower has not been immune from the growing wave of protests: it closed for the day earlier this month in a strike over pay. Now France is bracing itself for one of the biggest demonstrations since the war, and certainly since May 1968, on 1 May - Labour Day. In a warm-up, more than 1 million people took to the streets on 31 March.
Across the Rhine, Germany is in the throes of, arguably, a worse downturn than France. But, so far, workers and their unions have been remarkably quiescent, in keeping with the years of pay restraint accepted as firms restored their competitive edge after the country entered the euro at too high a rate.
But the worm could be turning as up to 2 million are put on short-time working - a possible prelude to losing their jobs - and the country heads for 5 million unemployed or more. On 8 April, hundreds picketed Daimler's annual general meeting in Berlin in protest at pay cuts of up to 14% for 73,000 white-collar staff and shorter hours.
Most believe that a reprise of the failed revolutions of 1919, the recession-driven fascist violence of the 1930s, or even the 1968 unrest in Paris, is unlikely. But some are hedging their bets.
David Gow in Brussels
The giant inflatable rat is a common sight around New York city. The 20-foot blow-up rodent is the symbol of union protest and is usually found in front of a building site or office block where organised labour has been shut out.
But the rat is on the move, as protesting has become something of a national pastime in America during the past fortnight, with fist-wavers from the left and the right joining a sort of collective march for rights and justice.
The biggest protest marches came on 15 April, the deadline for filing taxes across America. Thousands of Republican and other right-wing protesters, some dressed in colonial wigs adorned with tea bags, rallied all over the country against the Wall Street bailouts and federal financial stimulus packages funded with taxpayers' money.
Their unusual garb was, of course, a reference to the Boston Tea Party in 1773, which sparked the American Revolution, when angry New Englanders dumped boxes of tea into Boston harbour in protest at taxes levied by the British.
Elsewhere though, the real victims of the recession were out in force, protesting against job cuts and other more traditional causes. Hundreds of American Airlines ground workers and mechanics rallied on 14 April to protest against bonuses being paid to executives at a time when jobs are being cut.
Thousands of local authority workers have been staging strikes too, such as the group in Camden, New Jersey, that blocked roads and bridges to protest against cuts. The police and fire department turned up when the march reached City Hall, but did not break it up. Instead, they joined in.
James Doran in New York
About 10 million migrant workers have lost their jobs in China as the global economic crisis continues to hit the country hard. Worker protests have been spreading rapidly as the situation worsens, but the government is keen to prevent them escalating into civil unrest.
Beijing has dipped into its mountain of savings to undertake one of the biggest fiscal stimulus packages of any country in the world, in a desperate attempt to prevent millions of young people ending up on the scrapheap, but many are still showing their anger at the widespread redundancies.
Four hundred workers from a textile factory in Chongqing district blocked roads and disrupted traffic in front of their company headquarters in protests over unpaid wages. Workers at the demonstration complained they had not been paid for more than three months. Jindi, their employer, cannot afford to pay its staff because of falling demands for textiles.
Meanwhile, up to 1,000 workers from a factory in China's northern Hebei province marched in protest over job cuts, corrupt management and inadequate pay. The demonstrators set off on foot and by bicycle towards Beijing to present a petition - a traditional form of protest - but were persuaded by the local government to turn back.
In Hunan province this month, hundreds of taxi drivers went on strike over rises in the fees they have to pay each month to taxi companies. Eleven people were arrested after reports of disorder and of violence being used against some strikebreakers and their vehicles.
The dire economic situation has led some to take even more drastic action: one worker blew himself up in an office over unpaid wages of £450. Han Wushun had said he was owed the money after working for a road and bridge construction company.
Twenty-six days ago, car parts maker Visteon sacked 560 workers at plants in Enfield, Basildon and Belfast with less than an hour's notice. The company invited staff to come back to the premises next day to pick up their belongings; the staff took them up on that offer and have stayed there ever since.
The Enfield and Basildon workers have been forced to picket outside the factory gates after a court order was issued, but the Belfast workers remain on the roof. They say they will not move until they are issued with an adequate redundancy package, and have picketed Ford showrooms, demonstrated outside managers' homes and travelled around the country to rally support.
Similar worker occupations have been springing up all over the country as more and more businesses slash jobs. Sacked workers at Prisme Packaging in Dundee have been staging a seven-week sit-in at their former employer's office after they were made redundant without holiday pay, pay in lieu of notice or outstanding wages. Their case is slightly different to Visteon's because the Prisme workers want to reopen the business as a co-operative venture, whereas the Visteon workers want a better payoff.
There was also a seven-week-long occupation at the Waterford Crystal visitor centre in Kilbarry, Ireland, which ended last month after a plan to keep 110 full-time and up to 50 part-time jobs was accepted.
Many union leaders believe that if the Visteon occupation is successful, it may encourage others. Keith Flett, chairman of Haringey TUC, says: "I think if the [Visteon workers] actually win, we will see a big spread of this kind of thing."
As well as sit-ins, an increasing number of other worker protests have also been taking place. At the end of January, there were wildcat strikes at oil refineries in response to oil company Total bringing in foreign workers amid fears of mass job losses. More protests broke out at the end of March when unemployed construction workers staged a demonstration outside a new E.ON power station on the Isle of Grain in Kent in response to jobs going to workers from overseas.
Even bank workers have jumped on the bandwagon: in February, around 20 of them - brandishing placards bearing the slogan "Remember us? You've put our jobs at risk" - protested outside parliament as the Treasury select committee questioned four former top bankers over their role in the financial crisis.
Ciaran Naidoo at trade union Unite says: "There have been a number of protests this year and obviously it's a reference of peoples' growing insecurity and their demands for action from the government."
Unite is organising a "March for Jobs" in Birmingham on 16 May, where thousands of workers from an array of companies, including Jaguar Land Rover, are expected to demonstrate.
Back at the Prisme Packaging protest, hopes were high at the end of last week: the workers announced they had a tentative deal with an investor, were going into business for themselves, and were therefore ending their occupation. Their statement read: "We said at the beginning of this that we were little people who had refused to be little any more. We are proud of what we have achieved."
4/25/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Mall of Abilene fields talk of shorter hours - Some tenants say idea of cutting back operating hours is counterproductive, By Daralyn Schoenewald email@example.com, Abilene Reporter-News - Abilene,TX,USA.
Are they or aren't they?
It's a question swirling around the Mall of Abilene, from store employees to business owners -- is the mall going to shorten its hours or not?
Many mall store owners and employees said Friday that mall management has asked for feedback on changing the shopping center's hours from 10 a.m. to 9 p.m. to the reduced hours of 11 a.m. to 8 p.m.
Mall general manager Steve Majors said it's "totally false" that the mall will be cutting its hours of operation. Messages seeking comment from the mall's marketing department were not immediately returned Friday.
Some store owners aren't happy about the idea and say it will further hurt their business, which they say already is suffering after the mall implemented "family friendly hours" that prohibit people under 18 from entering the mall from 5 to 9 p.m. on Fridays and Saturdays unless they are with an adult. When family friendly hours are in effect, unaccompanied minors are only allowed in Premier Cinema 10 and the Stargate arcade.
"It's not a good idea," said Alicia Orduna, of the Mall of Abilene Jewelry Repair store. "Closing at 8 p.m. is not a good idea."
Orduna said that between the implementation of the "family friendly hours" and the struggling economy, she is the most worried about her store and its employees as she has been in the 10 years her store has been open for business.
Shortening the mall's hours is a big concern, she said.
One store owner, who declined to be named, said she believes the mall should open earlier, not close earlier.
"Eight o'clock, I recommend," the store owner said, "but 10 a.m. is good, too."
In the end, the store owner said, she will follow what ever changes management implements.
Michial Ratliff, who opened the Gamerz Dome in early December, said a change in mall hours could harm his business.
It appears that mall management cares more about the corporate stores like Dillard's than the locally-owned stores, Ratliff said.
"Their intentions are good, but they aren't balanced," he said.
Ratliff said he is still upset over the "family friendly" hours that restrict minors from coming into his store after 5 p.m., especially because the majority of his younger customers are respectful people.
"It would be nice if the mall had a membership card (for minors)," he said. Parents could sign a form saying it's OK if their children are at the mall after 5 p.m. and that the membership would be revoked if the minor did not adhere to a set of rules, Ratliff added.
Majors told the Reporter-News earlier this month that occupancy at the mall is at more than 80 percent and that year-to-date sales are three percent above the same period last year.
In the most dramatic instances, small changes can help businesses keep their doors open as consumer spending falls and unemployment grows, experts said.
"If having a business open an extra hour is more of a cost than a benefit, it's a pretty easy decision to cut back on hours," Virginia Commonwealth University marketing professor David Urban told The Associated Press earlier this month. "In the big scheme of things, consumers are already cutting back dramatically on dining, travel and other non-necessary expenditures to stay afloat financially. So in a sense, they are doing the same things in their personal lives that retailers are doing in their business lives."
Cutting back mall hours in California and 11 other states began last month for the 55 malls in the United States owned by Westfield Group. Most of those malls now open half an hour later and close half an hour earlier during the week. Some close an hour earlier on Sundays.
At three Central Florida malls owned by Westfield, that means stores will open at 10:30 a.m. during the week and close at 8:30 p.m. The decision was made to help tenants, many of whom are struggling with falling sales as shoppers dramatically cut back spending.
Walgreens, the nation's largest biggest drugstore by sales, is in the midst of scaling back hours at about 10 percent of its nearly 1,600 24-hour pharmacies to cut costs. The Deerfield, Ill.-based company wouldn't say how much it hopes to save through the effort, which began late last year. Pharmacies across the country are affected.
This report contains material from The Associated Press.
- Spokane County Cuts Hours 15%, By: Jim Camden, 4/24 The Spokesman Review via spokesman.com - Spokane,WA,USA.
Union votes to cut pay 15%. Dozens of Spokane County employees are taking a 15% pay cut to avoid anyone being laid off. Employees of a Spokane County department will switch to a 4 day work week.
Demand is down on construction projects. So now the department is making cuts.
Instead of lay offs the employee’s union decide to shoulder the burden as a whole. Everyone will take a 15% cut.
A union staff representative says there are a majority of people not at risk for the layoffs who still voted to save jobs.
The changes will affect about 40 people. The department will also reduce their work week to a 4 day work week. The department will now operate on a 32 hour week Monday through Thursday. The union also agreed to a week long furlough.
Each union employees’ health benefits, vacation, and sick time remain untouched despite the cuts.
The decision will be reviewed every month. The temporarily deal lasts through January of next year.
Community Comment Posted by JeanieS
I don’t know about you, but I would gladly take a cut in pay rather than be laid off. Both my sons have been laid off recently and my brother has been essentially laid off from his self-employed job as a contract software engineer because the main company he works for doesn’t have the job requests they did in the past. One son just recently bought his little start-up first home. My brother just finished building his house and now fears he will lose it.
We have all spent the last several years spending like we have no tomorrow, living beyond our means, buying toys and high-end products that could easily be replaced with low-cost items. Now we are paying the piper. But instead of losing our job totally - wouldn’t it be more efficient for both the employer and the employee to cut pay by a small percent?
4/24/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Mobile aircraft firm trims worker hours, goes to 4-day work week in economy slowdown, AP via WHNT.com - Huntsville,AL,USA.
MOBILE, Ala. (AP) — One of Mobile's largest employers, Teledyne Continental Motors, says it will cut the hours of its employees as the maker of piston airplane engines struggles with low demand for its products.
President Rhett Ross says the company, which employs 400 people at its Brookley Field Industrial Complex headquarters, will put employees on four-day weeks, and could close entirely for five weeks during the rest of the year.
Employees were told earlier this week, and the schedule begins May 4 for hourly workers.
The local operations already laid off more than 80 workers in the last year.
Information from: Press-Register, http://www.al.com/mobileregister
- Brevard County considering 4-day work week to save money, by Rick Neale, Florida Today via TCPalm.com - West Palm Beach,FL,USA.
VIERA, Fla. — Brevard County officials may close most of their facilities on Fridays to save money during tough economic times.
The Brevard County Commission is struggling to bridge a projected 2009-10 funding shortfall of $25 million to $53 million. Facing dwindling property tax revenues and other funding losses, departmental directors are preparing budgetary scenarios that reflect 20 percent and 40 percent funding cuts.
"We've looked at four-day workweeks. Could we close down buildings for a day?" Interim County Manager Stockton Whitten told commissioners during a budget workshop Thursday.
Commissioners did not publicly discuss the closed-on-Fridays scenario, nor were potential cost savings released. In theory, the county's roughly 2,200 full-time employees would work two fewer hours a week, and the county would reduce operating expenses by shuttering offices on Fridays.
County workers would rather switch to 38-hour, four-day workweeks than take unpaid furloughs, according to early results of an anonymous survey.
Whitten said he plans to submit a balanced-budget proposal to commissioners in June, after which detailed debate will arise. Assistant County Manager Mel Scott described four-day workweeks as a serious, valid option to reduce payroll costs.
Brevard Community College permanently implemented four-day workweeks in August after successfully experimenting the previous two summers. Officials said closing Fridays reduced sick leave, lowered staff turnover and saved more than $267,000 in energy costs during the 2007-08 school year.
Conversely, Cocoa City Hall launched an ill-fated six-month pilot program in 2006. Residents complained that they could not pay water bills or obtain other services on Fridays, and the city council canned the idea.
Early results from the employee survey included more than 800 respondents, Assistant County Manager Frank Abbate said.
Employees picked their favorite out of three cost-cutting scenarios:
- Work four 91/2-hour days a week (428 workers liked this option the best).
- Take 13 furlough days a year, including mandatory time off between Christmas and New Year's Day (268 workers).
- Take 11 unpaid holidays, plus two furlough days a year (115 workers).
Meanwhile, county budget cutbacks continue to materialize:
Operating hours have dropped by 17 percent at the Melbourne Public Library, with other libraries likely to cut hours as well.
County officials will save $1.2 million in personnel costs by merging the planning-zoning and permitting-enforcement departments.
4/23/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- To Save Money, States Turn to Furloughs, By KATHARINE Q. SEELYE, 4/24 NY Times hardcopy.
In Iowa City, the Johnson County Courthouse will be closed every other Friday because of cutbacks in the state budget. [photo caption]
Licenses for same-sex marriages were supposed to be issued in Iowa starting this Friday. But because of a crimped state budget, court employees will be on mandatory furlough that day and the courts will be closed. Gay couples cannot start filing for their licenses until Monday.
As they try to cope with gaping budget deficits, at least 15 states from every region — like Alabama and Georgia in the South; Arizona, California and Washington in the West; and Massachusetts, New Hampshire and New York in the Northeast — are in various stages of considering or carrying out furloughs.
“This may very well be the most widespread use, or consideration of use, at least since the emergence of the post-World War II economic boom,” Robert Bruno, professor of labor relations at the University of Illinois, Chicago, said of furloughs.
But furloughs can be a problem for states in a way they may not be for a private company where demand for a product has dropped. Government services remain in even greater demand in a weak economy. Furloughs often mean fewer workers handling a larger load. For instance, there are already signs of disability claims piling up in seven states.
“The word ‘furlough’ sounds nice and fluffy, like, ‘This isn’t painful, we aren’t doing layoffs,’ ” said Hetty Rosenstein, director of the largest state-worker union in New Jersey.
[Or like 'furbelow' - glad colleague Kate surfaced THAT association - it's been floating around in our subconscious ever since this latest spate of furloughs started, and if we spellt furlough the way we spell plough/plow, it would get even closer = furlow.]
There, an appeals court last week upheld a plan to make state workers take two furlough days by June 30, the end of the fiscal year, and 12 more in the next fiscal year.
“But,” Ms. Rosenstein added, “furloughs are fundamentally a cut in pay. And furloughs are a cut in service. If you don’t have people working, the work isn’t going to magically get done.”
[So redefine "full time" downward where it should be with our higher levels of worksaving technology, HIRE MORE PEOPLE thus cutting the general gross labor surplus, and thus restoring or raising general wage levels, and thus restoring and growing our consumer base and ending the recession with penache.]
The longest state furloughs so far appear to be 24 days in Alabama, the same number that had been proposed in Minnesota.
Private companies, too, are increasingly turning to furloughs as they try to ride out the recession.
[The recession ain't ending until we standardize and generalize timesizing instead of downsizing. (Just how do the corporate geniuses think they're going to have a finite recession to 'ride out' when they're still cutting the workforce and the consumer base instead of merely cutting our arthritic, frozen and obsolete concept of 'full-time workweek' which hasn't been adjusted since 1940?]
A Watson Wyatt survey released this week found that 17 percent of 141 companies surveyed had imposed furloughs in April, up from 11 percent in February.
[Here's hoping that the Take Back Your Time initiative in Seattle refocuses from longer vacation legislation to shorter workweek legislation now that furloughs amount to mandatory unpaid longer vacations which are having much less downturn-reversing effect than all the mandatory shorter workweeks in cutting the labor surplus and deconcentrating the huge concentration of moola among the muffled morons in the topmost brackets.]
Furloughs of public employees can affect critical services like police and fire protection, prison guard duty and hospital care. Unions in Minnesota say that proposed furloughs there would have cost more than they would have saved, due in part to lost services.
For the most part, it is too soon to judge the impact of furloughs on the delivery of public services. But there are early signs of a ripple effect.
One stark example is at the Social Security Administration, a program paid for by the federal government but administered by state workers. Officials said this month that in seven states, 2,700 of those workers had been furloughed, further delaying the processing of tens of thousands of disability claims, which already take an average of 488 days to resolve.
[Well, the once-great USA already holds the title for the biggest incarcerated population in the world. Betcha we find we've got the biggest 'disabled' population in the world as well, once someone comes up with the figures. And it would be soooo much more sustainable just to make earning a living easier than cadging a living - by cutting the workweek till everyone has a piece of the natural, market-demanded employment no matter how short a workweek it takes - wages rise with the end of job-desperate labor surplus - and we can get government OUT of the business of employer and charity of last resort (but increasingly in a downturn, FIRST resort).]
Services in several California counties were already curbed because of layoffs before the state instituted furloughs for the first time in its history in February, when it ordered 90 percent of its 238,000 employees to take off two days of unpaid leave per month.
Now, for example, at the Orange County Social Services Agency, Herman Martinez, an eligibility specialist and president of the local unit of the American Federation of State, County and Municipal Employees, said the agency could not keep up with applications for public assistance, which have only grown in the economic downturn. “It’s a whole can of worms for us to try to service the most needy and vulnerable clients,” Mr. Martinez said.
In Iowa, furloughs have delayed the start of same-sex marriages by only one business day but they have also reduced the time that the public has access to the courts. All courts are closed every other Friday through June, which means clerks are falling behind in their caseloads. To help them make up for lost time, their offices are closed to the public early on Tuesdays and Thursdays.
“That gives them an opportunity to catch up with paperwork,” said Steve Davis, a spokesman for the state’s Supreme Court, “but it further limits access of the public to the court.”
Furloughs allow companies and agencies to keep valued employees, are easier and faster to start than layoffs and are not as demoralizing, analysts say. Workers often accept them because they are presented as the only alternative to layoffs, and in some cases, they have no choice.
[Furloughs are a form of timesizing instead of downsizing. They are not the best form. The best form is the five-phase Timesizing program which is designed to be as gradual and market-oriented as possible.]
In New Jersey, the state worker unions are angry that they did not have the chance to negotiate the state’s cost-savings package, which was imposed unilaterally, as it was in California. In New York, Gov. David A. Paterson has said that if the state employee unions do not agree to concessions, he will lay off about 9,000 of the state’s 200,000 workers.
“Conditions have gotten so hard that employees who would have been less inclined to accept furloughs have a sense that there’s a permanent economic restructuring going on, something deeper and more lasting, and that means employees have fewer options,” said Mr. Bruno, the labor relations professor. “The power has shifted to the employer, and employees are more desperate.”
While employees often worry that furloughs will not actually prevent layoffs, some have been able to negotiate better job security. State union leaders in Connecticut have tentatively agreed to unpaid furloughs as part of a package that would guarantee no layoffs for two years.
Utah has found an alternative to furloughs, one already used by many city and county governments. Utah’s state workers have been on a mandatory four-day workweek since August in a program started as a way to try to reduce energy costs. Salaries have not been cut because offices are open an hour earlier and close an hour later.
[Utah's four-day workweek is not timesizing because it's still just an overlong, 1940-vintage, 40-hour workweek, repackaged.]
“We’re just repacking how we do the 40 hours,” said Jeff Herring, Utah’s executive director of human resources.
But Mr. Herring said the move had reduced costs in many ways: overtime payments and absenteeism are down, for example, and online services have been expanded, which has cut the waiting time at places like the Division of Motor Vehicles. Employee morale is up, internal surveys say, but the energy savings have not been as great as anticipated.
[Forget Utah - it's not doing anything significant by way of adjusting our workweek down to where it should be for our much higher levels of worksaving technology. Utah, so far, is just a distraction.]
President Obama’s economic stimulus package could eventually relieve some of the pressure on state budgets. But for now, states are relying more on furloughs, though their long-term value is still being assessed.
“Furloughs can save you money and help you avoid layoffs, at least initially,” said Alan Ehrenhalt, editor of Governing magazine. “But employees do lose income, services are disrupted, and it turns out you can’t really close all the things on Friday you thought you could.
“So the savings aren’t as great. [As what?] And you’re not solving any long-term problem.”
[You are if you switch from furloughs to shorter workweeks on a continuing basis, because you cut the labor surplus, raise general wages and centrifuge the black hole of money in the top brackets, now so massive they can't even find sustainable investments let along spend it.]
An earlier version of this article stated incorrectly that Gov. David A. Paterson of New York was considering furloughs as part of the concessions he is seeking from state workers. Furloughs have not been part of the public discussions.
A version of this article appeared in print on April 24, 2009, on page A1 of the New York edition.
- Is it so necessary to lay off the employees? Consider alternatives first, Ecommerce Journal - Boston,MA,USA.
Unemployment is a devoted companion of crisis. According to the latest statistics revealed by The World Factbook the unemployment rate in world grows and today we have the following picture: Australia - 5.70%, Canada - 8.00%, People's Republic of China – 9%, Germany - 8.60%, Israel - 6.80%, Italy - 7.10%, Japan - 4.40%, Netherlands - 3.90, Russia - 8.10%, South Korea - 3.50%, United Kingdom - 6.50%, United States - 8.50%.
As we can see the situation is not funny at all. Thousands and even millions of people lose their jobs due to the crisis. Hundreds of employers have to lay off their workers because they cannot provide normal working conditions for them. However it is not so simple just to sign a paper and to fire a person. Any employer has to pay dismissal compensations that sometimes ruinous and wasteful for the weakening businesses. And here the employers start to find out their own ways to escape paying those compensations. So, for example during the Great Depression Pella, a known manufacturer of windows from Iowa had its employees wash and rewash the windows it could not sell. Today’s employers also keep up with the Joneses. According to the report of Business Week even such giants as FedEx, Dell, and Motorola seek for the ways to cut their expenses for layoffs. Instead of firing their workers company management decided to cut their salaries that allowed the companies to cut the expenses and to save their employees. So, FedEx has announced the reduction of wages by 5% for common employees and by 10% for management team. Fred Smith, CEO of FedEx will lose 20% of his $1.5 million salary. And FedEx is not the only company that did it. So, according to Peter Cappelli, director of the Center for Human Resources at the Wharton School of Business a 5% salary cut costs less than a 5% layoff because there are no severance payments.
One of the leading providers of technologies, products, and services for mobile communications Motorola has also found its way to cut the expenses. So, in addition to some layoffs the company has announced that it won’t increase salaries of its employees till the end of the current year in any country where it present. Having frozen wages the company cut some expenses to keep more employees.
Dell has also tried to find its own way to fight the crisis and layoffs. The company management has asked the employees to take to five days of unpaid vacation, and offered voluntary severance packages. A global hiring has also been frozen.
Another computer giant Hewlett-Packard Co. has cut salaries by 2.5% to 20% and reduced contributions to employee 401(k) plans. Last year, HP asked employees to take unpaid vacation days and extended a planned holiday shutdown to two weeks.
Some state governments even make the decision easier with a program called WorkShare, which allows companies to reduce employees' work hours and make up the difference through unemployment benefits. "We would have had to take more draconian measures, such as more layoffs, were it not for this program," says Mel White, a vice-president at Portland (Ore.)-based Classic Exhibits, which makes displays for trade shows.
So, Business Week reports that Chinese accounting giant Ernst & Young has suggested its 9,000 employees to take one month of unpaid leave during the first half of this year and about 90% of them have agreed to those conditions. According to Bin Wolfe, head of human resources for the region, this action helped the company to cut payroll costs by 17%.
Another interesting example showing mother wit and bright management skills. Matt Cooper, VP of a California-based recruiting company Accolo has offered its employees to take 5 days of unpaid leave in last quarter, in turn there will be no salary cuts until March. It was promised that if some big deals come through, the pay cut will be lifted.
In mid December Best Buy has offered 4,000 corporate employees a buyout. The voluntary plan included 7.5 months of severance pay along with one year of health care, life insurance and outplacement services to those who leave the company in mid December till January 5th. Employees whose age plus years with the company reach 60 were offered 12 months of severance, reported Gizmodo. 500 employees have agreed with those conditions.
Some employers prefer not to lay off their workers and not to cut their wages. They cut their working hours. So, Nucor, a known steelmaker has cut factory time for many of its 22,000 hourly employees. On the days they're not making steel joists, though, workers are paid their base salary to perform maintenance or take classes, reported Business Week.
UK-based KPMG also decided to cut working hours and offered 4-day week for 13 weeks and voluntary 1 to 3 month sabbatical at 30% pay. The Financial Times suggested its employees to work 3 days a week over the summer.
Cisco Systems has offered the 8,500 employees whom the company fired earlier the following deal: instead of a severance package, affected employees can receive a third of their salaries, all benefits, and stock-option awards while working for one year at a not-for-profit group already associated with the company.
415 Productions offered either an overall 5 percent pay cut, or a four-day work week reflecting the appropriate decrease in pay.
However, some employees appeared to be even smarter. Instead of laying their workers off they found a temporary work for them. So, Vermont's Rhino Foods, which produces cookie dough for Ben & Jerry's ice cream, has sent 15 of its factory workers to nearby lip balm manufacturer Autumn Harp for a week to help it handle a holiday rush. The employees were paid by Rhino, which then invoiced its neighbor for the hours worked. "It's a lot easier to just do the layoff," said the company president Ted Castle. "But in the long term, it's not easier for the business," he added.
Another way to avoid painful lay offs is training. Luxury Retreats, a villa rental agency in Montreal, shuffled 8 of its 75 employees from areas such as product development to sales..
However, not only pay cut can save the employees from being laid off. A known telecommunication company Sprint Nextel has cut its expenses for office supplies. Now all the employees share the stationery and feel happy not being cut off.
So, as we see there are a lot of ways to escape mass layoffs. And sometimes they can really be avoided. May be instead of kicking the employers should think hard and fire those counselors who advise to fire a great number of people to cut the expenses. There are lots of other humane measures and they should be considered.
- EU steel makers say demand to be almost halved, Associated Press via Forbes - NY,USA.
Europe's demand for steel will be halved in the first six months of this year as the global economic slump hurts key sectors such as car builders and construction, EU steel makers said Thursday.
Eurofer - an group representing ArcelorMittal SA, ThyssenKrupp AG, Corus Group and others - said the European Union industry has been hit hard by falling exports and tight credit supply.
"The outlook for the steel-using industries in 2009-2010 is very grim: all sectors will be seeing strongly reduced output levels, particularly in the first half of this year," it said.
Steel is used to build cars, machinery and household goods and to construct buildings and bridges. A slump in consumer demand has decimated car sales while the bursting of a housing bubble has caused the construction sector to contract sharply.
Eurofer said steel users are still saying that they have far more stocks of steel than they need and this meant that orders at steel mills would stay "at unprecedented low levels for the time being."
"The latest forecasts show apparent steel consumption falling by 40 to 45 percent year on year in the first half of this year and by almost 30 percent in the whole of 2009," it said.
It saw no joy ahead, saying its outlook for 2010 was depressed and real steel consumption would remain low even as some customers ordered new steel as stocks ran out.
It said some planned economic stimulus programs might help by paying for more infrastructure and public buildings such as schools and hospitals but that the impact on steel makers would be small as demand remained low in other sectors.
Eurofer last month said that one in six steel workers have lost their jobs or are working shorter hours. It claims some 72,000 jobs or 17 percent of the European Union's 440,000-strong steel work force have been hit by the downturn.
4/22/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Pick one: Pay cut, furlough or reduced work week, by Judi Hasson, FierceCIO.com.
While managers are struggling to keep their IT shops lean and avoid layoffs, there are plenty of ideas for what companies can do about the sudden shift of the economy. The Business Roundtable, a professional association for CEOs, told CIO.com that executives are open to alternatives in order to get through this recession without job loss. Here are a few of them:
* Nearly 60 percent would accept unpaid vacation days or one to two weeks of unpaid leave.
* 59 percent would accept additional unpaid vacation days or one to two weeks of unpaid leave (a furlough) if doing so gave them more job security.
* 47 percent would work fewer hours for less pay to avoid company layoffs.
* 41 percent would take a pay cut and continue working the same hours.
We would be interested in hearing your story, if your IT shop has initiated this kind of savings to avoid layoffs.
- Marlboro workers face 20% pay cut - One-day-a-week furloughs planned,
By ALESHA WILLIAMS, Asbury Park Press via app.com - Asbury Park,NJ,USA.
MARLBORO — Township employees will be working a four-day work week indefinitely as part of the Township Council's plan to shave $1 million off the 2009-2010 budget.
Residents will see a 2.3-cent municipal tax-rate increase if the Township Council adopts the budget it introduced at a special meeting Monday. The spending plan includes the one-day-a-week Friday furlough for blue and white collar employees, with white-collar employees keeping extended hours on their workdays.
The furloughs will amount to a 20 percent pay cut for blue-collar employees and an 11 percent reduction for white-collar employees.
For most white-collar employees, the plan will take effect May 1. Blue-collar employees will be off on Friday pending the state's approval of the furlough plan.
"We're doing what we have to do to make ends meet here," Mayor Jonathan Hornik said. "Our residents are feeling the economic strain of what's going on in the world. We're trying to strike a balance to get by this difficult time. It's a decision we've made to soften any kind of adverse effect on our residents."
"We are trying to make the government smaller, we are trying to make it more efficient," Hornik said.
He said the township had been considering a 36-employee layoff, but felt that proposal would impact municipal services too severely. The township this month terminated nine employees as part of layoffs planned since January, for a savings of $250,000.
Those layoffs had included three senior clerk typists, an official in the tax collector's office, a police records clerk, two public works laborers, a heavy equipment operator and a violations clerk.
The township will eliminate another $1.1 million this year by participating in the state's pension deferral program, the mayor said. Through that program, municipalities may defer half the funds they pay into the state's pension program into future years.
The $31.9 million budget, down from last year's $34 million budget, would be supported by an $18.8 million levy, up from last year's $17.9 million levy, Chief Financial Officer Ulrich Steinberg said.
The municipal tax rate would increase from 56.7 cents per $100 of assessed valuation to 59 cents. The owner of the average home, assessed at about $217,000, would pay $51 more than last year, Steinberg said.
He said a shortfall in revenue, resulting from a $1 million decrease in tax collection, contributed to the increase. The proposed budget would use $5 million of the township's $6.3 million surplus, he said.
"When things turn around in the world and the economy — and they will — we will be able to restore normally the operations of our local government," Hornik said.
Steinberg said changes may be made to the spending plan before a public hearing is held. The township has yet to set a hearing date.
Alesha Williams Boyd: (732) 308-7756; AWilliams@app.com
- Volvo to cut 1543 jobs as demand falls, Bloomberg via IrishTimes.com - Dublin,Ireland.
Volvo AB, the world’s second-largest maker of heavy trucks, will cut an additional 1,543 jobs in response to falling demand from transport clients and builders.
The Gothenburg, Sweden-based company will eliminate 655 jobs at its truck division, 125 in construction, 108 at its Penta boat-engine unit and 655 at its Powertrain engine parts subsidiary, Volvo said in a statement today.
The truck firm is a separate company to Volvo cars. The car firm is owned by Ford but has suffered its own problems and has been put up for sale by its US parent.
The company is also in talks with unions about shortening the workweek, Volvo said. The company cited a “sharp decline” in the global demand for heavy vehicles as a reason for the additional job cuts.
The reductions will affect workers in Sweden, Volvo said.
Volvo’s cuts announced today add to more than 1,800 employees it has made redundant at several divisions since the start of this year. Global truck sales have slumped amid the economic recession as transporters struggle to finance fleet renewals.
In February, Volvo truck sales fell by more than half. Volvo is scheduled to release first-quarter earnings and March truck sales on April 24th.
4/21/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Blacks and Joblessness: The Toll of Racism, by Tamara Turner, 4/20 Freedom Socialist Newspaper via ColorsNW.com - Seattle,WA,USA.
The U.S. economic upheaval - the worst since the Great Depression that began in 1929 - is destroying jobs, housing, retirement plans, healthcare, education and social services at every level. And once again, Black Americans are the most vulnerable.
As Louis Armstrong sang, “My only sin…is in my skin. What did I do - to be so black and blue?”
In the last year, the U.S. underwent its fastest annual drop in the employment rate in 54 years. Since December 2007, 3.6 million jobs have been lost and thus far in 2009, 700,000 more jobs have disappeared each month.
Official statistics put the February 2009 unemployment rate for all workers at 8.1 percent and moving rapidly to 10 percent and higher. Nearly 13.5 percent of Black workers are among them, almost twice the rate of White workers at 7.3 percent.
Counting workers whose hours were cut and those who can find only part-time jobs, an estimated 21.7 million workers - one in seven - are either unemployed or underemployed in the U.S.A. Nearly 42 percent of the jobless have been out of work for at least 15 weeks, with an additional 23 percent for at least six months. With four applicants for every job opening, over one million people have given up looking.
The Struggle for Good Jobs
In the 1930s, huge numbers of Blacks broke free of the segregationist, anti-union South and migrated north for jobs. Many found work in the auto industry, organized by the United Auto Workers (UAW). Unlike many unions at the time, the UAW did not bar Blacks from membership.
Fighting beside other autoworkers, African Americans won improved wages, pensions and other benefits. They created a “Black middle class” that could afford homes, cars and higher education for their children.
But, when the auto industry began to decline, so did the situation for Black workers, who for decades had found both more jobs and better jobs in the north. The heavy layoffs accompanying the current depression are having a devastating impact. Except in Chicago and Detroit, Blacks who work in manufacturing have been restricted to the worst jobs. Meanwhile, their share of jobs in manufacturing has gone down from 23.9 percent in 1979 to 9.8 percent in 2007.
Conservatives and many labor officials, as well, explain the manufacturing slump by saying these jobs have been “outsourced to other countries.” This helps bosses fan divisive anti-foreign sentiments among workers, but it is far from the whole truth. Technological advances and increased productivity have played a big role and so has the relocation of many union manufacturing jobs to companies in anti-union regions inside the U.S.
The manufacturing slump, combined with affirmative action in employment won by the civil rights and feminist movements, means that most Blacks today work in public service jobs - primarily in government, education and healthcare. Black women especially have benefited from opportunities for decent-paying white-collar jobs. They have consistently accounted for 15 to 18 percent of all women in unions, while Black workers in general are the most likely to be union members.
Unionization in the public sector is rising; 38.6 percent of union jobs are now in this sphere. Militant Black workers and other workers of color have played a crucial role in this development.
Nevertheless, Black workers are still clustered in lower-paying jobs. Case in point: in proportion to their numbers in the labor force, Black men work twice as often as White men in human services, the most poorly paid of the white-collar professions.
Racism Still at Large
[huh? - Try 'Racism Still Rampant']
Long past the abolition of slavery and passage of the 1964 Civil Rights Act, economic racism still flourishes. In 2007, the median family income of Whites was 62 percent higher than that of Blacks.
This relentless inequality is no longer based on law. But, ongoing racist processes, exacerbated by the whittling away of affirmative action, combine to perpetuate poverty. Black children born to parents in the bottom fourth of the income distribution have a 66 percent chance of staying there the rest of their lives. As conditions worsen, the majority of children of all colors face a grim future.
Attempts to make change are hamstrung by lies about poverty’s extent, causes and effects. For example, official U.S. statistics use a grossly flawed 50-year-old method to measure poverty. Last year, the government declared that a family of four with an income of $21,200 was below the poverty level. This supposedly was the status of 25 percent of Blacks as compared to 8.2 percent of Whites.
A more accurate gauge is the family budget measure, which is recommended by the Economic Policy Institute (EPI). Its yardstick includes the cost of housing, food, childcare, transportation, healthcare, medical emergencies, retirement savings and college tuition - the real things a household must pay for to be financially secure.
The result? EPI placed the 2008 poverty line far upward, at an average of $48,778 for a family of four. This calculation shows that 50 percent of Black families have insufficient incomes, as compared to 20 percent of Whites.
Home ownership also reflects racism: 47.2 percent of Blacks own homes compared to 75.2 percent of whites. Blacks and Latinos seeking to buy homes were 30 percent more likely than Whites to receive subprime mortgages with interest rates that jumped to double digits after two years. Studies prove that this was not primarily because of bad credit on the buyers’ part, but because of racial discrimination.
In the area of education, Blacks have fought hard to better the odds for their children. In 1970, 56 percent of working Blacks lacked a high school diploma; by 2008, this had dropped to 10 percent. During the same period, the proportion of Black workers with a bachelor’s degree or higher jumped from 16 to 56 percent. But, the racial concentration of poverty takes its toll on the quality of schools Black children attend, while gains in higher education are being eroded by the determined crusade against affirmative action.
Nowhere to Go but Up
The profit system depends on the exploitation of all workers and the super-exploitation of many. What’s needed is revolutionary change. History teaches that the first to push for that will be those who need it most: Black workers. For that very reason, they are in a position to continue leading the defense of their entire class.
Capitalism’s solution for workers with few economic prospects is either prison garb or a soldier’s uniform. Today, one in every 31 adults in the U.S. is in prison or on parole or probation. For Blacks, the ratio is one in every 11.
The situation is dire. Below are some reforms worth fighting hard for, reforms that would make immediate improvements in millions of Black lives.
* Reinstate and expand affirmative action.
* Create a massive public-sector jobs program at union wages, with training apprenticeships built in for people of color, women and young people.
* Reduce the normal workweek to 30 hours, with no cut in pay, to produce full employment.
* Provide a guaranteed annual income for those unable to work.
* Raise the minimum wage to reflect household budget needs.
* Restore Aid to Families with Dependent Children.
* Stop building prisons; offer unions and union wages for incarcerated workers.
* End home foreclosures, no evictions of tenants and end discrimination in renting and home loans.
The rise of Black Americans to true equality has the power to lift us all.
Contact retired medical librarian and former union negotiator Tamara Turner at firstname.lastname@example.org.
- An Update On Furloughs And Reduced Hours: New Guidance On Cost-Cutting Strategies Other Than Layoffs, by Alison S. Hightower, Eric Bellafronto, Barry Freeman and Bryan Smith, Mondaq News Alerts (registration required) - London,UK.
Last December, as the recession was beginning to deepen, Littler [Employment & Labor Law Solutions] published an Insight, Furloughs and Reduced Hours: Cost-Cutting Strategies Other Than Layoffs, discussing several alternatives to layoffs, particularly mandatory furloughs of exempt employees, mandatory use of vacation/PTO during furloughs, and reduced workweeks, based on the limited legal precedent available at that time on these subjects. Recently, the U.S. Department of Labor (DOL) issued three opinion letters that address some of these alternatives...
4/20/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Help us keep our current staff, say small businesses, ManagementToday.com - London,UK.
Should the Budget change tax laws to make it easier for small firms to retain existing staff?
That’s the view of the Forum for Private Business: the lobbying group is calling for a change to the Working Tax Credits Scheme, which would mean that staff in small firms that are working shorter hours would get an extra payment. The idea is this would make it easier for small employers to reduce their staff’s hours, rather than making them redundant – and since the state would have to pick up the tab if they end up on the dole, the FPB argues, it might even be cheaper for the Exchequer…
The Government has recently announced plans to subsidise firms who take on the long-term unemployed, but the FPB thinks we should also be worrying about those still in work. The Working Tax Credit scheme was set up to supplement the wages of low-income workers, but for over-25s, it only kicks in if you’re working more than 30 hours a week. The FPB argues that by widening this, employers will have more of an incentive to keep people on the payroll. The scheme shouldn’t be too expensive to implement since the administrative structures are already in place – and will allegedly pay for itself if 20% of these people kept their jobs as a result.
It’s part of a wide-ranging package of measures that the FPB wants to see on Wednesday. As well as the usual stuff about keeping a closer eye on the banks, it also wants the Government to – inter alia – cut small business corporation tax, freeze the minimum wage and statutory redundancy pay, scrap the increases in fuel duty, NI and business rates and make it easier for small firms to win public sector contracts (a long-held beef). But with the Chancellor likely to need tens of billions in extra revenue to plug the deficit gap, we’ll believe it when we see it...
- Labor institute alarmed over firms’ cost-cutting schemes, DavaoToday.com, Philippines.
The Ecumenical Institute for Labor Education and Research, Inc. (Eiler) has expressed alarm over the recent survey showing companies have resorted to reducing workers’ benefits and working hours to cut costs in the light of the global financial crisis.
Eiler deputy executive director Anna Leah Escresa-Colina said that cutting benefits that workers must enjoy is a breach of legal safeguards to providing fair wage and incentives, not to mention a disregard of their long-fought struggle to get these benefits.
A recent study conducted by Australia-New Zealand, British, Canadian and European Chambers of Commerce in the Philippines showed that 25 percent of local and foreign firms surveyed resorted to measures aimed at reducing incentives to Filipino workers. Twelve percent resorted to reducing benefits while another 13, to reducing bonuses to cut costs. Another 12 percent resorted to implementing flexible workweeks.
The said measures breach certain provisions under the Labor Code that state guidelines on providing such benefits as leaves, overtime and vacation pays, according to Escresa-Colina.
Results of the study were discussed during a recent forum on the flexible workweek. The report added that the forum was conducted to “help local and foreign businesses make wiser decisions about their employees and their businesses in general.”
Eiler believes that these alternative schemes leave workers with no choice but to accept the time and amount of benefits their employers set for them, along with making the economic crisis as an excuse to maximize profits and reduce overhead costs at the expense of cutting their much-deserved benefits.
[The more they redistribute wealth from employees to themselves, the weaker they make their markets and their investments. And if they don't start cutting hours without cutting pay, there's going to be waaay more produced by robots than can be bought by humans.]
Escresa-Colina reiterated her concern over the support of Department of Labor and Employment (Dole) for flexible workweeks and other salaries- and benefits-reduction schemes. Local and foreign companies apparently have Dole’s blessings in taking advantage of the Filipino workers.
The Eiler executive director earlier said these measures clearly exposes [the Dole's and the government's] impartiality to the owners of capital and not to its makers”, a violation of the state’s responsibility to safeguard the rights and welfare of laborers.
4/19/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Food for Thought: Managers were told to hire but weren't told how -- My Biggest Mistake, By Bonnie Matthew, as told to Plain Dealer reporter Marcia Pledger, Cleveland Plain Dealer via blog.cleveland.com,OHIO, USA.
Plain Dealer reporter Marcia Pledger writes this weekly feature about the obstacles small business owners must overcome. To reach her: email@example.com or 216-999-4813.
Bonnie Matthew and Robert Hufgard, co-owners of Food for Thought, said their biggest mistake in running an 18-year-old business came from a growth spurt. A sales increase is a wash if it's all going toward labor costs.
You only get one chance to make a first impression. It's a cliche. But it's true, especially in the catering industry.
I started this business 18 years ago when I was looking for a job. At one point in my life, I thought I wanted more-normal hours, away from the food industry. I got normal hours but hated not working in the food industry. I just quit one day and started doing volunteer work with a tennis league until I could figure out my next move.
I ended up putting in a proposal to cater an annual luncheon for 350 people, and I got the job. My business partner, Robert Hufgard, and I figured out a long time ago that you get repeat business when you strive for quality, consistency and cooperation. We've managed to keep that client since we started, and we expanded our business primarily with lots of corporations, hospitals and sales representatives. Unfortunately, we were in business a long time before we learned that financial systems are just as important as focusing on food and service.
Six years ago, when business picked up considerably, in part by adding more special events, the first thing we thought about was hiring more people. We didn't want to take the chance of disappointing clients.
Our biggest mistake was allowing managers to make key hiring decisions without giving them proper tools and direction. We went from about 25 employees to 40 in the fall of 2003, and we didn't need that many people.
Catering boils down to food and labor costs. Similar to retail, our fourth quarter helps carry the expected slower first quarter. When we suddenly got more business than ever before, we asked our kitchen managers to hire more people. We didn't give them any guidelines because we didn't have any. Nor did we take a serious look at what existing labor could handle.
After the holiday season ended, even though sales were up, we came close to breaking even. We didn't even make a reasonable profit. It was frustrating. We were working really hard, and all of our food and overhead costs were the same. We've always had a diverse menu and served customers as far away as Youngstown and Mansfield, and all points in between Akron and Lorain. Yet we knew that if we didn't get a grip on labor, we would be in trouble.
We never stopped to put together a basic formula that involves dividing revenue by labor hours and coming up with a targeted number that would allow us to get the job done and be profitable.
Fortunately for us, some people left on their own. We were able to support the others with additional sales. As soon as we came up with a formula and got managers to buy into it, our business was more profitable. It also helped with morale and retention.
KA0 - We started sharing daily sales numbers with managers, and we started talking more to employees about what it takes to run the business. For instance, by telling managers that if we expect to generate $10,000 in a day's revenue, they have 200 hours to use . . . it helps them manage better. Their primary goal is to give employees at least eight-hour shifts. Sometimes they can schedule shorter shifts and bank the extra hours for upcoming special projects. Other times, they might just schedule 20 people for 10 hours.
[Flexible/fluctuating workdays and workweeks rule!]
Before we started sharing numbers, we ran the business more on feelings. If it felt as if we were starting to get too busy, we hired someone. Now we have a structured business with quarterly bonus programs. We used to meet with managers sporadically. Now we meet every Tuesday with eight managers to talk about the business and get input from them. Each of them has a direct impact on the company's bottom line.
When you run a structured business that allows managers and employees to give input on meeting quantifiable goals, it changes everything. For instance, one criteria for quarterly bonuses is helping with food costs. You're more likely to trim a cantaloupe closer when you know bonuses are tied to costs and profits. Employees are more productive and less likely to waste.
Having quantitative systems allows everyone to buy in. Bonuses are no longer subjective, and structure allows everyone to work toward goals.
- City of Toledo starts notifying 234 workers they'll lose jobs - Remaining staff’s week at 32 hours, By TOM TROY, 4/18 ToledoBlade.com - Toledo,OH,USA.
The Finkbeiner administration Friday began notifying 75 Toledo police officers, 17 fire civilians, and 142 general-fund workers to expect to be laid off beginning May 1.
Remaining city workers in general-fund departments will be reduced to a 32-hour workweek, which is in effect a 20 percent pay cut.
The mayor hopes the 234 new layoff letters hand-delivered Friday— on top of 75 police officers already notified of a layoff — will send a reality check to the police patrolman’s union and City Council.
“These are not steps I wish to take, but they are nonetheless necessary to balance the City of Toledo’s budget,” Mr. Finkbeiner said in a statement announcing the layoffs. “Contract negotiations will continue, but until our unions’ bargaining units recognize the need for concessions and shared sacrifice, these announced layoffs will continue as planned.
“I am again respectfully appealing to our union leaders and city council to join with us in reducing the number of layoffs through revenue enhancements and across-the-board payroll reductions,” Mr. Finkbeiner said.
The police department has about 615 officers.
Dan Wagner, president of the Toledo Police Patrolman’s Association, said the mayor’s goal is to break his union.
“The mayor’s trying to send a message: Concede to my concessions or you’re going to be without a job,” Mr. Wagner said.
But he said the hardball tactics from Mr. Finkbeiner are having the opposite effect.
“Our guys are so upset with what he’s done today that they’ve dug their feet in the ground and they’re not going to move,” Mr. Wagner said.
He portrayed the mayor’s layoff notices as an instance of the mayor interfering in negotiations, and he indicated that the union believes the administration is exaggerating the deficit.
“We don’t agree with the projections. Why should we give in to concessions that are based on erroneous projections?” Mr. Wagner asked.
Chief of Staff Bob Reinbolt said the union heads were told that layoff notices were unavoidable without across-the-board cuts.
“They’re looking for excuses not to sit down and bargain,” Mr. Reinbolt said.
The Finkbeiner administration is basing its revenue estimates on the projections of two University of Toledo professors who examined financial data to report in February that the city’s income tax would fall short of estimates made last year when the 2009 budget was proposed.
The November estimate of 2009 income tax revenues was $169.7 million. Professors David Black and Oleg Smirnov said the actual revenues will be between $140.7 million and $147.8 million.
That report spurred the city to plan for a $27.7 million deficit, which was recently reduced through cuts in spending to $20.7 million.
The union said its requests for supporting data have been rejected by the administration. The administration said the union is making information requests just to delay negotiations.
The administration has asked for 10 percent pay cuts, an end to city pickups of the employee pension contributions, and a contribution to health care.
With negotiations at a virtual standstill, both sides have agreed to begin meeting next Friday with a fact finder who will issue a recommendation.
Mr. Finkbeiner also issued a separate letter to all city employees asking them to care for each other and the citizens in this tough economic climate.
“We cannot balance this budget without your sacrifice. In good times, the city has treated us fairly. In tough times, we need to treat our citizens fairly as well,” Mr. Finkbeiner wrote.
The administration refused to release the names of those to be laid off because many of the letters have not been released, said the mayor’s spokesman, Jason Webber.
He said, however, that the notices apply to everyone funded through the general fund who is not in the safety forces or collecting trash.
They include Mr. Webber himself, as well as everyone else who works for the mayor, such as Mr. Reinbolt, who signed the letters, and the law director. It includes all other general-fund employees, who are found in human resources, plan commission, finance, neighborhoods, and other departments.
Mr. Webber said many of the 142 ultimately will be dropped from the layoff list, but at least 50 percent will be laid off.
Not included are City Council, Municipal Court, and any divisions that are funded by utility funds or street assessments.
Beginning May 4, all general-fund, executive exempt employees will begin a 32-hour workweek, which amounts to a 20 percent pay cut, the administration said.
Many city departments will open Monday through Thursday, except for Public Safety, Refuse, and Public Utilities.
One police sergeant who was waiting to find out if his name was on the list said the cutbacks are bad for safety in Toledo.
Ron Frederick, 38, a sergeant, said drug kingpins in Detroit, Chicago, and Cleveland know what’s going on.
“I think it’s a danger to the citizens of Toledo. When you don’t enforce the laws criminals tend to do very well,” Sergeant Frederick said. He said if he loses his job, he’ll move his family to a city where police officers are being hired.
“I’m not going to lose my house and jeopardize my family,” Sergeant Frederick said.
Contact Tom Troy at:firstname.lastname@example.org 419-724-6058.
4/18/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- End the recession by signing the 32 hour work week petition - Minneapolis Life in the Cubicle Examiner, by Dudley B. Dawson, Minneapolis Life in the Cubicle Examiner via Examiner.com - USA.
The recession frenzy is hitting new levels of hysteria. Businesses are laying people off, people are buying Hyundais only out of assurance, and this particular company is begging people to write about the bad economy. Even worse, other "legitimate" news outlets (CNN) can't finish a day without a story of some guy living the life of luxury who is now at rock bottom in a 2000 square foot granite-less home. The news has people going nuts. The real focus should be on real answers to today's real problems. The 32 hour work week accomplishes just that.
How does the news have us going nuts?
The news frenzy is feeding into all areas of life, including work. You are bombarded with comments that begin with "Well, in this economy..." or conversations that end with "Good luck in this economy!". The problem is that the everyday average American loves to exaggerate how affected they are by popular current events. The news brain wizards are fully aware of this. This isn't to say there aren't people who have unfortunately been dumped on due to bad times. But there are many that aren't affected but act like it. These are the people whose opinions flow with current events like a 10 year old boy's NFL jacket coincides with most recent Super Bowl winner. These people never look back on their life and realize:
a) OJ Simpson never became a threat to their personal life. Perhaps they shouldn't have cared so much.
b) When Princess Diana died, although you thought it would, the Royal Family never crumbled.
c) Gay people potentially getting married will not make your marriage less sacred. But Redtube already does.
What does this have to do with work?
Unfortunately, people who manage businesses also fall into the "everyday average American" problem. This is why you are stuck at the office at 7pm. When times are tough, their first thought is to make people work longer. These extra hours come as a result of businesses laying people off. Laying people off is a result of people not spending money. People not spending money is a result of many things, some of which is caused by watching Jim Cramer, Anderson Cooper (Pooper), and countless others pounding the recession down your throats.
But do the extra hours actually produce additional productivity?
If you take a look at the unscientific charts below which are based on hypothetical situations and educated assumptions, you'll see that extra hours don't always equate to added productivity.
In the *chart above, it's quite obvious that somewhere between 4-8 hours is the sweet spot depending upon the employee. Even more telling is that an employee who is working over 8 hours actually has productivity levels that fall well short of the productivity of someone working between 3-8 hours per day. This is likely due to job dissatisfaction which leads to active disengagement. Active disengagement ultimately leads you to this article.
To fully analyze the situation you must also look at the number of days an employee works. Most cubicle dwellers work 5 days a week but for most of us, Monday mornings and Friday afternoons are no-fly-zones. Productivity levels never get off the ground on Monday mornings and any resemblance of work comes to a quick end around lunchtime on Friday. The following chart explores productivity levels based on the number of days an employee must work per week.
As you can see from the *chart above, productivity levels climb steadily up through 2 days a week and slowly climb to a peak at 4 days per week. Adding a 5th day doesn't plateau overall output; it actually decreases it. If an employee knows they have to be at the office 5 days a week, they budget a certain amount of "play time" into their schedule. Unfortunately, "play time" budgets are drastically under estimated. The result is less productivity over a 5 day period compared to the 4 dayer who knows they've got limited time to get stuff done, thus reducing any "play time" budget risks.
Bottom line is that businesses are forgetting about the law of diminishing marginal returns. Increasing one variable doesn't always increase the other.
What does this all mean?
Based on the above information, it is quite obvious that establishing the 4 day, 32 hour work week as the standard work week will solve all of our nations problems. To prove it, the following is a list of four problems impacting our economy that can be resolved with the new standard work week of 32 hours over 4 days:
1. We need to reduce our dependency on foreign oil. There's no better way to reduce gas consumption than to cut work commutes across America by 1/5th. I estimate this will save the country at least a 7 trillion dollars per month.
2. We need to spend more money. If I'm at work on Friday, I can't spend any money. Giving every American an extra day to buy things will quickly stimulate consumer spending. Based on my estimates, sales of Charleston Chew will increase 95% (it's embarrassing to eat that stuff at work).
3. Companies will save money on utilities. This one also helps cut our dependency on foreign oil. Businesses can turn off the lights and turn down the A/C or heat on Fridays.
4. There are a lot of unemployed people that need jobs. If I'm only working 32 hours a week, I'm going to be participating in a lot of recreational activities...or at the very least I'll be watching way more TV. These people will eventually find work in these new hot economic climates.
What about the disadvantages of moving to a 32 hour work week?
There are absolutely no negative aspects to moving to a 32 hour work week. Pundits might argue, but their arguments are faulty. Here are some examples of these faulty arguments:
1. Over time, people will just ask to work even less hours. Eventually, people just won't want to work.
Exactly! Where's the negative part here?
2. Your charts are false. People produce more when they work more. There are marginal utilities at a certain point, but you've exaggerated for your own benefit.
Perhaps. But I don't see you providing any charts.
3. In order to compete with the low wages of budding superstars like China and India, we need to get it together and start working just as hard as them if we ever plan to continue as a dominant force in the business world.
Yeah yeah...I know... but I don't willingly place myself in a world in which I don't want to live. If it's gonna happen, it's gonna happen. Until then, I'm just gonna keep on truckin at 32 hours a week and stick with my plan. Eventually my plans always work.
4. People will still use gas on Fridays when they aren't working.
Yes they will. But that idiot sitting next to you at work who lives 72 miles away and drives a Yukon is going to stay relatively close to their depressing exurb.
5. Do you expect that employers will continue paying you the same amount of money even though you're working less?
I'm actually not working less. I'm just not as physically present at the office as much as I was during the 40 hour week.
As you can see, nothing can penetrate the 32 hour work week. This is why you must sign the petition form below. If we are able to get 10,000,000 people to sign this petition I'm going to personally deliver it to President Barack Obama and have him modify the Fair Labor Standards Act. This is how government works people. I still dream of a day in which both Friday and Saturday "feel like Saturday".
Forward this on to friends and have them come sign the petition and track the live results daily. The full list of petition members is available at the bottom of the article or view the live summary results by
- Hours cut for some county workers, By Jim McNally | Statesville R&L, (Statesville Record & Landmark) via www2.statesville.com - NC, USA.
Iredell County leaders have been saying for months that some county departments are going to get bitten harder than others by the economic recession.
Earlier this week, employees of the planning, zoning and inspections departments found out one-fifth of their work week is being devoured.
Starting next week, some workers will begin a 32-hour week.
"That's based on the workload," said Iredell County Manager Joel Mashburn. "With building and construction way down because of the economy, the workload in those departments is obviously reduced."
Mashburn said about 25 people will see their hours cut. Some of those in the affected departments will have their first unpaid day off on April 23 and the rest will begin on May 7. Mashburn said the individual workloads of the employees will be the determining factor of when they will have their hours cut.
"We hate to do this, but we have known for some time that the workload just isn't there," Mashburn said. "This is being done as a result of both the reduction in the workload and as a means of cost-cutting."
These cuts come in addition to a money-saving plan announced earlier this year in which most county employees will take five unpaid leave days. Mashburn said each of those days will save the county $130,000.
The county also earlier announced a plan to scale back the hours of operation at the Iredell County Public Library and to eliminate all part-time positions there. Additionally, Mashburn said last month, about 25 other positions will be cut over the course of time.
If and when the workload picks back up, the employees in the planning, zoning and inspections departments will be returned to 40-hour, five-day work weeks, Mashburn said.
County Commissioner Ken Robertson said the decisions the county has made so far have been the best choices on a list of bad ones.
"First of all, this is better than losing your job altogether," he said. "And when you look at this, there are only three things we could have done: lay people off; reduce hours; or raise taxes. None of those choices are good and we made the one we thought was best."
Robertson equated the matter to choices that military leaders have to make on the battlefield.
"With the enemy bearing down on you, you have to decide what to do," he said. "You could protect the left flank and lose 20 percent of your men or protect the right flank and lose 30 percent of your men."
Robertson said the actions taken so far have not been done in a "knee-jerk or hasty" manner when leaders decided where to make the cuts to shore up a budget shortfall caused by dwindling tax revenues.
"We looked real hard at this," he said. "And we saw that the number of people needing a ride to the hospital in an ambulance hasn't gone down and the number of houses catching on fire hasn't gone down. So you have to look at where this (economic conditions) is having the most drastic impact."
Commissioner Steve Johnson agreed with Robertson about the difficult choices county leaders are making.
"We're really trying to take measures to not cut people entirely out of work," he said. "So at least they can keep their insurance and other benefits."
Johnson is not overly optimistic about the current economic situation.
"This is as bad as I can remember it," he said. "This is worse than '81 and that was bad."
Robertson and Johnson also both said it could get even worse. And both think it is likely that more hour reductions and job cuts will take place before it turns around.
"I just keep wondering where the bottom of this is," Johnson said.
4/17/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Survey: Pay [& hours] cuts better than no job, South Florida Business Journal via Bizjournals.com - Charlotte,NC,USA.
More Americans are willing to sacrifice vacation days and take [hours and] ]pay cuts if it means saving their jobs, a new survey finds.
Nearly eight in 10 workers said they would be willing to work a compressed workweek,
[usually means eg: four 10-hour days, but here may mean eg: four 8-hour days]
while nearly 60 percent would take additional unpaid vacations or furloughs, according to the 2009 Annual Work+Life Fit Reality Check.
Nearly half of those questioned said would share their jobs with colleagues (48 percent) or take a cut in both pay and hours (47 percent).
A little more than four in 10 would take a pay cut, but work the same amount of hours [as before the paycut], or switch to a project-based contractor employment status (41 percent).
Just under a third say they would take a month or more unpaid sabbatical.
Among other findings:
* Ninety percent reported the recession has forced them to change their employment plans, with nearly half of them saying they're less likely to take a career break, for example, to care for children or aging relatives.
* When asked about the type of workplace flexibility they would like to use in the coming year, eight in 10 wanted the occasional opportunity to adjust their schedule (71 percent) or work from a location other than their office (57 percent).
* And of the 73 percent who said they'd like to make their work-life flexibility arrangement official, only 12 percent wanted to work fewer hours.
[because they're scared of an immediate-term paycut? This fear is is guaranteeing them a longer-term paycut because it's continuing the labor glut.]
The phone survey of 757 full-time employed adults was sponsored by Work+Life Fit and conducted March 26-30 by Opinion Research Corp. It has a margin of error of plus or minus 4 percent.
- Ask the pilot - Is pilot fatigue a menace to airline safety? By Patrick Smith, Salon.com - USA.
[Ah, wouldn't the pilot be the last one to ask about pilot fatigue???]
This is your captain sleeping ... er, speaking. Sorry, it's been a long day.
[Anyhoo, here's some worktime consciousness from an airline pilot (sorry, not a marine pilot for those of you, like me, who prefer a story where there's not so many thousand feet to fall).]
Passengers won't be happy to hear about it, but crew fatigue has long been a serious issue.
[Sorta like 'patients won't be happy to hear about it, but physician fatigue has long been a serious issue.' Funny how people with these jobs where being well-rested is specially important are the best employees at goosing their pay by hyping their workaholism and bottlenecking access to their skills.]
In February 2008, both pilots of a Go Airlines regional jet fell asleep over Hawaii, missing nearly a dozen air traffic control radio calls and overshooting their destination by 15 miles. Last June, the same thing happened on board an Air India jet headed from Jaipur to Mumbai. The plane continued past Mumbai for more than 300 miles before the crew finally woke up. The National Transportation Safety Board has cited fatigue as a contributing cause in several accidents, including the 1999 crash of American Airlines Flight 1420, at Little Rock, Ark. The MD-80 slid off a runway during a thunderstorm, killing 11 people, including the captain, who'd been on duty for more than 13 hours. At least two crashes involving cargo jets -- one at Guantánamo Bay, Cuba, the other in Kansas City -- have been blamed more directly on pilot tiredness.
The airlines and the Federal Aviation Administration are very resistant to the tightening of flight and duty time regulations. Some regulatory loopholes have been closed in the past few years, but even these small changes faced vociferous opposition by carriers and their lobbyists. During federal hearings in August 1999, on the heels of the Little Rock crash, John Meenan, vice president of the Air Transport Association, said to Congress, "There has never been a scheduled commercial airline accident attributed to pilot fatigue -- not one, not ever." That had to be one of the most jaw-droppingly disingenuous comments I've ever heard from an airline industry lobbyist. That there aren't more fatigue-related incidents is testament to the good job that pilots do under tough conditions, not a justification for legally sanctioned somnambulism on the flight deck.
Ask yourself this: Whom would you prefer at the controls of your plane on a stormy night, a pilot who smoked a joint three days ago, or one who had six hours of sleep prior to a 13-hour workday in which he's performed half a dozen takeoffs and landings? The first pilot has indulged in a career-ending toke; the second is in full compliance with the rules. I have to assume that the FAA realizes the foolery of such enforcement policies, but it nonetheless chooses to put its resources into drug testing and other politically expedient issues. Meanwhile it procrastinates, performing study after study and poring over data from NASA circadian rhythm experiments in an attempt to answer one of the world's most perplexing questions: Is exhaustion a detriment to job performance?
And frustratingly, most of the agency's focus has been on long-haul flying. The circadian-scrambling effects of a 16-, 17-, even 18-hour nonstop are indeed of concern. But it's also true that long-haul fatigue is comparatively easy to manage. These flights carry augmented crews and have spacious on-board rest facilities. Layovers are a minimum of 48 hours, typically at luxurious five-star hotels. The more serious problem is at the other end of the spectrum: short-haul regional flying.
Regional pilots fly punishing schedules, operating multiple legs in and out of busy airports, often in the worst weather, with short layovers at dodgy airport motels. Cockpit time doesn't present the toughest challenges, however. The real menaces are the long stretches of duty time, and the fact that legal layovers can be painfully short.
On a given workday, a pilot might log only two hours on the flight deck. Sounds like an easy assignment, except when those two hours come at either end of a 14-hour duty stretch that began at 5 a.m., most of which was spent waiting out weather delays and killing time in the terminal. Or, a pilot may have packed eight full hours of flying, making numerous takeoffs and landings, into that same span. Up to 16-hour shifts are possible, containing as many as eight hours aloft.
Now imagine multiple days like that, back to back. In FAA-speak, the layover buffers between duty spells are known as "rest periods," and they are subject to adjustment based on the number of hours a pilot has flown or been on duty. If a crew signs off in Chicago at 9 p.m., and signs on again at 6 a.m., that's a nine-hour rest period. Legal minimum rest can be as short as eight hours. That doesn't sound terribly abusive, until you start subtracting the time spent doing paperwork, waiting for the hotel van, driving to and from the airport, scrounging for food and so on.
A pilot is considered off duty anywhere from 15 to 30 minutes after his final flight of the day shuts down at the gate. With paperwork and other duties to attend to, his rest clock often begins ticking while he is still at the airport -- sometimes still on the plane! And, the next morning, it ends not in the hotel lobby, but back at the airport at the moment of sign-in. Once you account for the time waiting for pickups, the drives to and from the hotel, having to hunt down food, etc., what exists on paper as a 10-hour layover might include only five or six hours of sleep.
The ultimate horror is something called a "continuous duty" or "stand-up" layover. A crew signs on at, say, 9 p.m. and flies a single short leg, arriving at 11 p.m. The next leg isn't scheduled until 7 o'clock in the morning. The crew "stands up" until then, technically on duty the entire night, either trying to catch a nap at the motel, or slouching around the airport crew room. My copilot and I once spent a stand-up overnight dozing in the aisle of our Dash-8 turboprop on the tarmac in Bangor, Maine.
As I've recommended in this space before, the most productive step that regulators can take is eliminating transit time from what it considers "rest." In fairness to a pilot and his passengers, the rest clock should not begin to tick until the minute he latches the door of his hotel room and should stop ticking no later than the minute he checks out. But I doubt this will ever happen. For one thing, it brings ambiguity into how long a layover will last, and that is difficult for airlines to work with.
I also advocate that pilots be allowed cockpit naps, as regulations permit in Canada and certain other countries. Such a proposal is seen as radioactive by the FAA, unfortunately, and is kept off the table.
Meanwhile, keep in mind that drowsiness and fatigue aren't necessarily the same thing. Ultimately, this isn't a problem of pilots sleeping when they ought to be awake, but rather one of pilots who are awake when they'd be better off sleeping. Boredom and a light workload make it comparatively easy to nod off during a long trip, regardless of how well-rested a pilot might be. From a passenger's point of view, you're much better off with a pilot who naps for a few minutes over the middle of the ocean than with an exhausted, overworked pilot facing a low-visibility approach on a stormy night. The aforementioned Go Airlines incident aside, it's difficult for a regional pilot to fall asleep on the job. When flights are short and task-saturated, there isn't enough time.
Take it from me, life is much better at the major airlines, where bargaining agreements and company rules typically go above and beyond the government's more skeletal regulations. I have flown regional routes, back-of-the-clock cargo, mainline domestic and, more recently, long-haul international. In terms of fatigue issues, that list is in descending order. The latter two are by far the easiest and most civilized. Sure it messes up your circadian cycles, but I'll take a 12-hour red-eye ocean crossing followed by 72 hours at the Marriott any day over having to wake up at 4 a.m., fly six legs in a turboprop, then suffer an eight-hour break at the Holiday Inn Express.
Still, the battle is never completely winnable. I am always at least somewhat tired at the end of any long-haul flight. (I'm often asked how I deal with the effects of jet lag. Actually, I no longer identify jet lag as such. There is, instead, a post-flight weariness that comes regardless of the number of time zones crossed, time of day or direction.) Of course, being tired after a flight is less important than being tired before one. The most helpful thing I can do is nothing more elaborate than getting as much rest as possible prior to departure. En route, I drink lots of water, enjoy the view, and get up frequently to stretch.
I also get a scheduled break. As many of you know, all commercial flights carry a minimum of two pilots -- a captain and a first officer. At my carrier, any flight over eight hours in planned duration brings along an extra first officer, designated as the "relief pilot." This allows for a rotating series of breaks, with each pilot spending roughly one-third of the flight relaxing or sleeping. (As for which of the two first officers gets the relief assignment, it usually comes down to recency -- that is, who is in greater need of a landing -- or else is determined by a coin flip.) Flights exceeding 12 hours carry both an extra first officer and an extra captain, allowing for even longer breaks.
Sometimes I sleep; sometimes I watch a movie or "Flight of the Conchords"; sometimes I work on columns like this one. As I apply the finishing touches to this story, I am at 34,000 feet over Brazil -- just approaching the Amazon city of Santarem, according to my video screen.
The luxuriousness of crew rest quarters varies among aircraft types. I fly a 767, which is generally too small for a dedicated bunk room or other self-contained quarters (a few 767s do have them; most do not), so instead we use a cordoned-off seat in business class, pictured here...
Wait, that's actually Singapore Airlines' new first class. Our premium seats are, let's just say, a little less posh.
On bigger planes, crews have the benefit of surprisingly comfortable quarters. They can be above deck, below deck or squirreled away somewhere in the main cabin, usually out of view. Here's the main bunk room on the new Boeing 777-LR, the world's longest-legged commercial aircraft. It's tucked into the forward ceiling, aft of the cockpit.
Singapore's 777s are outfitted like this, with rest facilities built into a removable lower-deck pod. The Airbus A340 uses this same concept, allowing for extra cargo space on shorter hauls. (Q: Where is the captain? A: He is sleeping in the cargo compartment.) Check out this Pullman-style configuration on an Etihad Airway 777-300.
Not all digs are so fancy. Here's a more Spartan, eight-bed unit in an older 747-400 operated by Northwest. If you're wondering why there are eight, it's because this particular area is used by the flight attendants. Ditto for this layout, seen on a KLM 747. F.A.s too are entitled to in-flight rest periods, though not always in beds like the ones shown; sometimes it's just a modified economy seat. Pilots and F.A.s usually have separate quarters; on the 747, the pilot bunks are in a small room on the upper deck.
The answer is no, so please don't ask.
And if now you'll please excuse me. That mysterious ding you hear midflight is often a wake-up call from the cockpit, to summon a slumbering (or typing) pilot back to work.
4/16/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- QC plans to ax 20 positions, cut $3.1 million, by Amanda Keim, EastValleyTribune.com - Mesa,AZ,USA.
[I bet you Canucks think QC stands for Quebec, eh? Not this time...]
Queen Creek would eliminate 20 full-time positions as part of an effort to cut $3.1 million for the next fiscal year under a budget plan that will be presented to a Town Council budget committee next week.
An average shortfall of $3.1 million is projected for each of the next five years in the $21.2 million General Fund. A slow economic recovery is expected for the area, so officials hope the one-time cuts will take a large chunk out of the expected deficits.
A big chunk of the cuts will come through employee compensation. Queen Creek would eliminate four unfilled positions and cut another 16, turning to voluntary retirements and buyouts before resorting to layoffs.
[Guess voluntary retirements, being a kind of worklife limit, amount to a kind of primitive timesizing too.]
The cuts would decrease the town’s General Fund budget by a third since October 2006. The fund now is expected to be $19.4 million.
Employees would have until May 7 to submit their names for a voluntary cut.
Volunteers would receive 12 weeks of pay plus one week for each year of service with a maximum of 20 weeks, plus nine months of health insurance benefits and 100 percent pay for accumulated sick time, said human resources director Bruce Gardener.
“If we can get participation in that plan, it will reduce or eliminate reductions in force,” Town Manager John Kross said.
If layoffs are still necessary, affected employees would get 12 months of pay plus six months of benefits, which is in line with last year’s layoff package, Gardener said.
There isn’t a particular group targeted for layoffs or buyouts, although public safety and utility employees won’t be affected. Specific positions not in public safety or utilities would be targeted for layoffs; employees would then be affected based on seniority.
Kross also acknowledged construction-related revenue is still weak and that could affect which employees are targeted.
“When housing and nonresidential construction is down, there is correlating staff,” Kross said.
Housing permits have plummeted from 1,200 in 2005-06 to 268 last year, with Queen Creek receiving about $5,000 per housing permit.
Queen Creek is on track to issue 150 residential permits this year, Kross said. Town staff projects 100 housing starts next year with a 10 percent increase in each of the next five years.
The town sliced $5 million from the General Fund last year, resulting in 17 layoffs and the cutting of 25 empty positions that had been frozen over the preceding 18 months.
Almost all of the layoffs affected employees who worked with building permits, Kross said.
Queen Creek will have 151 employees if the 20 positions are cut this year, a 30 percent decrease over three years ago, said Assistant Town Manager Patrick Flynn.
Last year’s cuts also included reducing employee pay and instituting a four-day workweek, which Kross is proposing to continue. Additionally, there will be no cost-of-living increase for employees, and merit-based raises will continue at 3 percent instead of 6 percent.
The town is also planning to suspend its youth soccer and basketball programs, eliminating $79,000 worth of part-time employment, the equivalent of 2.5 full-time positions, Kross said.
Kross told employees about the plan Thursday morning.
“I don’t know that it was necessarily surprising. We’re all being bombarded with bad news,” Kross said. “It’s never received well. This is affecting their lives.”
Mayor Art Sanders expressed regret for the staffing cuts.
“We’ve got so many great, talented people on staff right now,” Sanders said. “No matter what, we’re going to lose some. And I hate to see talent lay idle.”
Other measures, including furloughs, were considered, Kross said. However, staff estimated each employee would need to take 24 furlough days to achieve the budget reduction goal.
“There’s no way we believe we could deliver adequate public service to this community when you have six weeks of time off for each employee,” Kross said.
Queen Creek plans to cut costs and increase revenue in a few other ways if the council approves the plan, including publishing the About Town newsletter and Community Guide online only. It would also increase business license application fees by $5, institute a charge for liquor licenses and charge for parking at some town events.
- UF’s worst-case budget includes layoffs, program cuts, By Nathan Crabbe, Gainesville Sun via Gainesville.com - Gainesville,FL,USA.
The University of Florida released a worst-case budget plan Thursday that includes options such as hundreds of layoffs, the elimination of 10 academic and student-support programs and a four-day work week in the summer.
The options amount to more than $108 million in possible cuts, providing a menu of options for UF to consider when the state budget is completed. UF President Bernie Machen said he expects to present a final budget to the Board of Trustees in mid-May.
He said a lesser total amount of cuts is likely, but he’s still preparing for deep cuts and not counting on federal stimulus money to prevent layoffs.
“There’s going to be big cuts,” he said. “I’m pretty convinced of it now.”
While UF’s colleges already released their proposals for up to 10 percent reductions, the plan includes $35 million in newly announced options for university-wide cuts. They include consolidating 37 communication offices, which perform functions such as public relations for colleges, resulting in 111 staff layoffs.
The remaining $73 million includes $20 million in administrative cuts. Other possible cuts include the elimination of student-support services such as the Center for Leadership and Service and Multicultural and Diversity Affairs. Academic majors such as educational psychology and geological sciences could also be cut.
If all those plans were enacted, an unlikely possibility, they would result in 73 faculty and 306 staff layoffs. Another 369 positions that are vacant or have pending retirements would be eliminated.
State lawmakers are meeting to resolve differences between a Senate budget with about $30 million in cuts to UF’s funding and a House budget with about $90 million in cuts. Machen said those numbers don’t reflect the deeper cuts being made to UF’s base level of state funding.
The plans count on a proposed 15 percent tuition increase and around $40 million in federal stimulus money. The stimulus money will last only two years, so Machen said he’s not counting on that money to pay for recurring costs such as salaries.
The state’s economic downturn could last much longer, he said.
“This is not a one-year phenomenon,” he said.
The university-wide proposals include a new commitment from the University Athletic Association, which would provide an annual $6 million contribution to the rest of the university. Currently, the association contributes a varying amount of logo revenues and other athletic profits to UF each year.
Other university-wide options include:
* Offering voluntary retirement buyouts for employees at least 70 years old.
* Require faculty and staff to use their own vacation time for the four days that UF is closed between Christmas and New Year’s Day.
* Stop allowing faculty and staff to cash out 16 vacation hours in December.
* Cap at 240 hours the number of accrued vacation hours employees get paid upon termination. Eliminate sick leave pay-outs for those employees.
The plan includes proposals from UF’s colleges for up to 10 percent budget cuts that had been released earlier this month. Those plans include options such as eliminating the College of Journalism’s Documentary Institute and either merging the communication sciences and disorders program with another program or cutting it entirely.
Machen said he’ll pick and choose between the various options in forming a final plan.
“It’s possible that a college will get no cuts,” he said. “It’s possible that a college will get an entire 10 percent cut.”
UF’s overall plan also shows the amount of possible savings for a few items that aren’t being considered at this time. Three-week furloughs would save $40 million and an across-the-board 5 percent pay cut would save $40 million, according to the plan.
Machen said he’s not in favor of the ideas but wanted to present them to faculty if they wanted to use them to prevent other cuts. UF’s faculty union would need to approve those and other options.
While Machen wouldn’t wager a guess about the size of the final budget plan, he said it would likely be less than $110 million.
“Do we think it’s going to be that much? No,” he said. “Do we know how much it’s going to be? No.”
Nathan Crabbe can be reached at 338-3176 or email@example.com.
4/15/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- BASF to cut hours for up to 3000 Ludwigshafen staff in June, By: Mark Watts (+44 20 8652 3214), ICIS (subscription) - London,England,UK.
BASF at Ludwigshafen -- BASF is preparing short-time working for up to 3,000 employees at its Ludwigshafen, Germany, production hub as a response to weak demand, the chemicals major said on Wednesday.
“Capacity utilisation rates at many plants have remained very low since the beginning of the year, and there are no signs of a sustained improvement in orders from key customer industries in the foreseeable future,” said the head of human resources at the site, Harald Schwager.
The situation was being assessed unit-by-unit to determine which plants would introduce shorter working hours. The short-time working would take effect on 1 June.
“At the moment, around 600 employees in Ludwigshafen are working temporarily in other plants. Unfortunately, we are now reaching the limits of what is possible,” he added.
BASF said it would look at further measures if the situation does not improve in the second half of the year, including the extension of short-time working beyond production units.
The company said it would announce how many units and employees would be affected by short-time working by the middle of May. It was expecting between 2,000 and 3,000 staff to be affected out of the 32,800 working at the Ludwigshafen site.
“Employees will receive a net wage of approximately 90% as a result of short-time work compensation provided by the German government as well as a payment from the company under the terms of the collective wage agreement for the chemical industry,” BASF said in a statement.
“Rapid re-introduction of normal working hours is possible at any time, should demand for BASF products pick up,” it added.
["Normal" working hours in the age of robotics??? - that haven't been adjusted downward since before the technological age?! - How embarrassing for a self-styled "intelligent" species.]
At the end of 2008 BASF, the world’s largest chemicals producer, said it would shut down 80 production units worldwide on a temporary basis and run more than 100 at reduced rates, affecting approximately 20,000 employees worldwide.
The cutbacks are a response to a huge decline in demand for chemicals amid the global economic downturn.
- A Shorter Work Week, By Virginia Prescott, NHPR.org - Concord,NH,USA.
Americans have long been known as some of the hardest workers in the West. We put in longer hours and take fewer vacations than our European counterparts. But as layoffs grow in numbers, some thinkers are questioning the 40-hour work week, arguing that shorter work weeks could help companies avoid traditional layoffs. Can a country that scoffs at “social safety nets” ever embrace such an idea?
Our guest, Heather Boushey thinks so. She’s a senior economist with the Center for American Progress and an advocate for the shorter work week....[continued on radio/audio segment accessible via nhpr.org]
4/14/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Industrial output worse than expected, some analysts see bottom - Retail sales fall worst on record - Scrap subsidies in neighbouring countries help, By Jana Mlcochova, Reuters via guardian.co.uk.
PRAGUE - Czech industrial output shrank by nearly a quarter and retail sales fell far more than expected in February, strengthening the case for more interest rate cuts although some analysts said the data could signal the bottom.
February's industrial production plunged by 23.4 percent year on year, worse than a 19 percent decline forecast by analysts and a revised 22.8 percent fall in the previous month, the Czech Statistical Bureau said on Tuesday.
Retail sales fell 7.9 percent in their biggest drop since records started in January 2001, separate data showed.
The export-reliant economy has suffered from slumping demand in the recession-stricken euro zone. New foreign orders sank 23.5 percent, the data showed.
"It is no surprise after foreign trade and especially the decrease in exports. We are closely connected to the euro zone ... so the outlook for Czech industry is still darker and darker," said David Marek, chief analyst at Patria Finance.
"One positive point is the car scrapping subsidy in Germany and Slovakia. That could limit a further fall in industrial output in the months to come. This figure could be the last of the awful figures in the series."
The largest Czech company by sales, Volkswagen AG's Skoda Auto, resumed a five-day work week for most of its models as of March thanks to a rise in demand caused by the subsidy. Its March orders soared 30 to 50 percent from a ayear earlier.
"The numbers show the bottom was likely in the first quarter," said Jaromir Sindel, analyst at Citibank.
"The weakness will remain in the first half of this year and we should get to single digits... in the third quarter."
Manufacturers in the region could see a further boost in sales following a decision by the German government to sharply increase the scrap subsidy scheme, raising government funds for the incentive programme to 5 billion euros from 1.5 billion and extending it until the end of the year. [ID:nL783598]
RATE CUTS ON TABLE
The global financial crisis has filtered through to central Europe's once fast growing economies in recent months, with the Czech Republic showing a quarter-on-quarter drop in gross domestic product in the fourth quarter of 2008.
Data from the central bank showed the country's current account posted a surplus of 17.13 billion crowns ($856.9 million) in February.
That was far above forecast of 1.4 billion, thanks chiefly to an inflow of EU funds and a thin volume of repatriated profits as foreign investors booked lower earnings.
Analysts said the eroding picture illustrated by both the industrial output and retail sales data would give the central bank more ammunition to continue slashing interest rates.
"The data released today, both from industry and construction, and also retail sales data, is supportive to expectations that the Czech central bank may cut its interest rates by 25 basis points at its 7 May meeting," Radomir Jac, chief analyst at Generali PPF Asset Management.
The crown marginally weakened to 26.575 to the euro from 26.500 ahead of the data. It traded at 26.555 per euro by 0800 GMT.
(Editing by Andy Bruce and Jason Neely)
- Well-off chiefs turn to charity – (& below:) A fragile flexibility, By John Donovan &/or Richard Milne, ft.com.
Some chief executives, chastened by rising anger over executive pay and bonuses, are setting up charities, giving away money or waiving their salaries.
[Waiving their salaries while waving their donations?]
Senior managers at Porsche and Volkswagen, who made millions on the back of controversial share price gains, have led the way with charitable donations.
Wendelin Wiedeking, chief executive of Porsche, earned almost €80m (£72m) last year at the German sports carmaker, drawing scorn from some in Germany. He has set up two charities with €5m each to help needy families in the small German towns where he grew up and now lives. “Hopefully that will take the heat out of this debate and we can concentrate on doing our job,” he told colleagues last month.
Executives at VW who also benefited from wild share price movements in Europe’s largest carmaker agreed to give €2.5m to a civic foundation to help children. The donation, which amounted to 10 per cent of their gains from cashing in on stock options, was publicised by press release.
“We were very worried about the negative publicity of the top executives doubling their pay when the rest of the economy is doing so poorly but this was the perfect solution. Who can criticise giving money to children?” said one senior VW manager.
[Oh I donno - are we subsidizing reproduction in an age of exponentiating overpopulation?]
Some executives have responded to anger over their salaries by offering to work for a nominal €1 or $1. They include Rick Wagoner, CEO of General Motors [too late], and Postbank’s Wolfgang Klein, who had drawn scorn for earning €3.3m after taking government aid for the lossmaking German bank.
High-earning managers have long been a source of funds for charity. Philip Richards, co-founder of hedge fund RAB Capital, advocates paying a tithe to charity.
[Any complex system that relies for vital functions (as many economies do for the maintenance of employment and spending via the centrifugation of the money supply) on a capricious determinant (like charity) is lethally flawed.]
But not everybody agrees public displays of charity are the best way to win back the public trust that business leaders have lost. Alessandro Profumo, chief executive of Unicredit, one of Europe’s largest banks, thinks self-publicising philanthropy creates the wrong impression: “I think people should give to charity privately and not publicise it. It doesn’t create the right impression.”
[He's missing its whole point right now.]
Jorma Ollila, chairman of Nokia and Royal Dutch Shell, says it can help win back respect as long as it does not look like an afterthought. “The best thing is if you don’t do it after the facts but that it is an ongoing feeling,” he says. “Philanthropy is one way [to regain public trust] but it needs to be part and parcel of what you do every day.”
[No it doesn't. Corporations have no business ranging outside their mission and meddling in charity. If they've got extra money, they should be reinvesting it in their products or services (R&D), their employees (higher pay), their customers (lower prices), and their stockholders (dividends) - in that order.]
[Related article -]
A fragile flexibility, By Brian Groom, FT.com.
Unemployment is above 2m in Britain and heading for 3m. The number registering as jobless is rising faster than it did in the previous three recessions. Companies are cutting hours and freezing pay. As the pain spreads, fear of job losses is becoming the biggest issue on the political landscape. A much-hailed “flexible” labour market, built up over 30 years, is facing its sternest test.
“The flexible labour market was one of our stonkingly good competitive advantages and, if we don’t maintain that, we are dead in the water,” says Digby Jones, trade minister until late last year.
The Labour government, Lord Jones now says, is not doing enough to help companies retain their skilled workers during the crisis.
He has joined the chorus of voices in industry demanding wage subsidies to encourage companies to opt for short-time working rather than axe permanent jobs, in line with similar schemes in the Netherlands, Germany, France, Italy and Spain.
A cash-strapped government is resisting that idea, which it fears could be wasteful and inefficient. Nonetheless, Alistair Darling, the chancellor of the exchequer, is preparing a “Budget for jobs” next week that will direct whatever limited funds are available towards training and helping people back into work.
But what does labour flexibility really mean and how much might it help countries to come quickly through a recession? The UK, while more lightly regulated than some continental counterparts, is far from a free-for-all. There are laws against unfair dismissal and Labour has introduced a minimum wage, extra statutory holiday and more generous maternity and paternity leave. Sometimes it is described as an “Anglo-social” model.
John Cridland, deputy director general of the CBI employers’ organisation, cites four elements of flexibility: the ability to hire and fire easily; the ability to adjust wage levels; workers having skills that allow them to perform a variety of roles within organisations; and their being mobile enough to take jobs in different sectors or parts of the country.
“Traditionally in the UK we have relied on flexibility in hire-and-fire and wages to make up for weaknesses on the skills side. In contrast, Germany has less flexibility on numbers and wages but much more on skills and productivity,” he says.
To this can be added a relatively liberal immigration regime, which allowed the UK to continue its economic boom by recruiting migrants for hard-to-fill vacancies. That is becoming a source of tension as native and migrant workers fight for a smaller number of jobs.
Then there are the government’s “active labour market policies”, which combine stricter welfare rules with measures to encourage people back to work. The government plans to spend £500m ($732m, €557m) on “golden hello” recruitment subsidies for employers but is under pressure to launch a more extensive public job creation scheme.
In many ways the flexible labour market is working as it should. Workers have proved willing to accept pay freezes and shorter hours to save their jobs. At this stage, although unemployment is rising sharply, there is a two-way flow: a quarter of a million left unemployment in February and found jobs, a 20 per cent increase on a year earlier.
“I think the underlying labour market is performing reasonably well, though a big downturn like this is clearly going to put pressures on the system, particularly the welfare system, in the short-term,” says John Philpott, chief economist at the Chartered Institute of Personnel Development. “My hunch is that we should see quite a strong labour market recovery when the conditions allow, precisely because we have a flexible market and we don’t have too many underlying structural problems.”
Many analysts forecast job losses of about 1.3m during this recession. While this would be painful, Oxford Economics, a consultancy, points out that it would be below the 1.71m lost in the 1990s recession and 1.79m in that of the 1980s. This recession could, of course, be deeper. The European Commission puts UK unemployment at 6.4 per cent of the workforce, below the 7.9 per cent European Union average but rising faster than most.
Among employers at the sharp end, views about the health of the flexible labour market are distinctly mixed. Stuart Fell, chairman of West Bromwich Tool and Engineering, which makes pressed steel components for the motor industry, has benefited from being able to use workers from employment agencies in order to adapt to peaks and troughs. His workforce has come down from 146 to 73 since October but only 27 of the job losses were redundancies among permanent staff.
However, he fears unions will press the government to go further than it has agreed in implementing the EU’s agency workers directive, which it must do by 2011 - so that temporary and agency workers would not only be given the same basic pay and conditions as permanent staff after 12 weeks in a job but also rights in other areas, such as redundancy pay.
He is annoyed at the government’s failure to implement a short-time working subsidy or to adopt what he would consider an adequate industrial strategy and provide appropriate skills training - by which he means turning out fewer hairdressers and florists and more engineers. “The government is being a bit duplicitous when it says how wonderful our flexible labour markets are,” he says.
Ian Malcolm, managing director of Elring Klinger (GB), based in Redcar in north-east England, which makes engine components for European carmakers, says the market is “not working as well as it should be”.
[..and would be if he and other executives continued the downward adjustment of the workweek along with their upward adjustment of technological productivity. If they keep downsizing in response to technology, who do they think is going to remain to buy the maintained or enhanced production?]
He has cut his workforce from 130 to 87 and moved to a three-and-a-half-day week, but complains that the way the system of tax credits for working people and families is structured means staff can lose out if they go below 30 hours. Referring to the government’s recruitment subsidies, he asks: “What is the point in giving employers money to take staff on when the reverse is happening and we are having to lay off staff?”
Simon Topman, chief executive of Acme Whistles in Birmingham, which makes whistles for sports people, police and musicians, has deferred pay rises but so far staved off short-time working and redundancies. He complains about the cost of making people redundant, the risk of claims for unfair dismissal and increasing red tape.
James Reed, chairman of Reed, the recruitment company, sees a brighter picture. While permanent job vacancies handled by his business are 50 per cent down on last year, the market for temporary staff is holding up better - down by only 9 per cent in February compared with a year ago. Hours worked in human resources, science and technology and accountancy are going up.
“Employers want to keep their options open because uncertainty is so great. The flexible workforce works very well in helping them do that,” he says. But he warns: “Over the last decade there has been a lot of regulation, such as working time regulations. The flexible labour market has adapted very well to them. Whether that will continue in a very different environment is something we will find out.”
Trade unions have accepted pay freezes and short-time working where the alternative is redundancies. But Richard Exell, senior policy officer at the Trades Union Congress, complains that some business people are “talking up the number of pay freezes” and adds: “The last thing we want to do is anything that will dampen demand in the economy.” The TUC wants not only a short-time working subsidy but also, as part of a £25bn public investment stimulus it is seeking from Mr Darling in the April 22 Budget, a programme to create temporary jobs for the unemployed - like the “community programme” that was among the welfare-to-work successes of the 1980s.
Calls for such a scheme are growing. Lord Layard of the London School of Economics says it is “excellent” that the government is keeping up the intensity of advice for jobseekers and maintaining welfare rules, but argues that something extra is needed to avert a re-emergence of long-term unemployment. He and Paul Gregg of Bristol university are calling for a “job guarantee”, whereby fallback jobs would be provided for young people who have been unemployed for 12 months and adults unemployed for 18 months - jobs such as maintaining schools and hospitals or in social care. It would cost £2.5bn in 2010-11.
“Unless you do that, it is very difficult to maintain the whole welfare-to-work ethos. That in the end depends on being able to test a person’s willingness to work,” Lord Layard says.
Will Hutton, chief executive of the Work Foundation, a think-tank, says the government must act as employer of last resort and warns that unemployment could reach 4m or 4.5m. “If you are an unskilled 40- or 50-year-old or if you are 18-24, the labour market is not working for you,” he says.
Business organisations, meanwhile, fear recession will result in new regulation. David Yeandle, head of employment policy at the EEF manufacturers’ association, says: “There is a real danger that, because the City and the banking industry need tighter regulation, that message might spill over into other areas such as employment.”
Employers’ bodies cite pressure to improve redundancy pay, the question of when and how the agency workers’ directive will be implemented and calls for a significant increase in the national minimum wage from October, which they say would increase costs in hard-pressed sectors such as retail and leisure.
Horst Feldmann, an economist at the University of Bath, warns that the minimum wage, which has had a relatively benign effect since it was introduced a decade ago, will “bite more” in the downturn and increase job losses or prevent people from being hired. He adds: “I hope the UK keeps its fairly flexible labour regulation. Once we are through the trough of the crisis, countries with more flexible labour markets will perform better.”
‘We can do things that were impossible a few years ago’
Continental Europe has long been derided for the inflexibility of its labour markets. But there is little doubt that many companies across Europe entered the current downturn with far greater flexibility than in previous recessions - thanks to a wide range of devices.
These include government-backed schemes such as short-time working, a greater willingness from some trade unions to offer concessions - and new ideas such as “time accounts” that let companies make employees work more in the good times and less in a downturn, all for the same pay.
“We have much stronger labour flexibility today than we had traditionally in industry,” says Ingar Skaug, chief executive of Wilh. Wilhelmsen, the Norwegian shipping company. “There is a much better relationship between unions and management. People are prepared to take pay cuts voluntarily or reduce their hours.”
The closer relationship does seem to be focused around Germany and countries in the Nordic region where workers are involved in the running of the company through positions on boards. But companies across Europe are benefiting from extra flexibility.
Carlos Ghosn, chief executive of Renault and Nissan, says the crisis is helping to introduce measures once dismissed as unrealistic. “We can do things that a few years ago we could never have done. A shorter working week was not possible. Lower pay too. Europe is going to have to advance, to help people and companies,” he says. Such progress “is much needed in Europe and this crisis is helping to push that”.
The main measure that tens of thousands of companies across Europe are using is short-time working. From Cartier in Swiss luxury goods to the steel operations of ArcelorMittal in Bosnia, companies are embracing schemes that allow them either to reduce workers’ hours or lay them off temporarily while the state pays a proportion of their wages. In Germany alone, about 700,000 workers from 28,000 companies are in the scheme.
Virtually every European country except the UK and Greece has some kind of short-time working. But the concern is that it is designed to deal only with temporary dips in demand. If a dip turns permanent, companies have to fire those workers, often after months of inactivity. Wolfgang Clement, a former German economics and labour minister and now chairman of the Adecco Institute, frets that not enough is being spent on retraining workers while they are idle. An official at France’s CFDT union says: “We are concerned that temporary lay-offs are just a precursor to permanent ones.”
Jorma Ollila, chairman of Nokia and Royal Dutch Shell, worries that if the recession is deep, shorter working will run into problems. He is especially concerned about national budgets, saying: “It is a costly way for governments to buy time.”
If economies pick up sooner rather than later, many flexibility measures may hold. But if the recession drags on, do not be surprised, says one leading European businessman, to see “millions of job losses as reality catches up with business”.
4/13/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Official says state cuts are delaying U.S. benefits - Furloughs and layoffs lead to a backlog of Social Security Claims, by Robert Pear, NY Times, A11.
WASHINGTON — The nation’s top Social Security official says benefits for tens of thousands of people with severe disabilities are being delayed by furloughs and layoffs of state employees around the country.
The official, Michael J. Astrue, the commissioner of Social Security, said Sunday that “governors are hurting their own states, their own citizens, and increasing the backlog of claims” by furloughing workers who make disability decisions.
[So here we have another way in which shorter work time per person is happening anyway but in the worst way: in uneven, unstrategic ways that deepen the downturn.]
“The states’ response is completely illogical,” Mr. Astrue said.
State officials have announced furloughs, layoffs and hiring freezes to help balance budgets battered by the recession.
Claims are evaluated by state employees, but the federal government reimburses states for the salaries of those employees and pays the full cost of benefits for people found to be disabled.
“We pay the full freight,” Mr. Astrue said. “States do not save any money when they furlough or lay off these employees. They only delay payments to disabled citizens who rely on the monthly benefits.”
The cutbacks come as disability claims are rising because of high unemployment, the weak economy and the aging of the baby boom generation.
The Social Security Administration expects nearly 3 million new disability claims this year, up from 2.6 million in 2008. Each month the agency pays $12 billion in disability benefits to more than 13 million people.
Gov. Arnold Schwarzenegger of California, a Republican, cited “an unprecedented fiscal crisis” in ordering state employees to take off two days a month without pay through June 2010.
Dr. C. Richard Dann, a California state employee who reviews claims for benefits, said, “Claimants are not getting the service they are supposed to get.”
Dr. Dann said he had to take off every other Friday. “I can review about 20 disability cases a day, and I am off two days a month,” he said. “So I do 40 fewer cases a month.”
Aaron B. McLear, a spokesman for Mr. Schwarzenegger, said: “The governor has not made exemptions to the furlough order because he believes that the state government needs to cut back, just as every California family and business is doing. We hope the furloughs have a minimal effect on state services, but understand that services very well may suffer.”
Mr. Astrue has expressed “grave concern” over such personnel actions in letters to governors, including Jon Corzine of New Jersey and David A. Paterson of New York, both Democrats, and Mr. Schwarzenegger.
In a letter to New York employees last week, Mr. Paterson said he intended to lay off 8,700 state workers by July 1.
Peter E. Kauffmann, a spokesman for Mr. Paterson, said, “The governor is aware of the concerns raised by the Social Security Administration and will act carefully.”
The Social Security system is so clogged with disputed disability claims that some people wait years for hearings. The stimulus bill signed by President Obama in February provided $500 million to “reduce the backlog of disability claims.”
But the impact of such spending could be offset by state cutbacks. In a report last month, Patrick P. O’Carroll Jr., the inspector general of the Social Security Administration, said that at least five states accounting for 15 percent of all disability cases — California, Connecticut, Maryland, Massachusetts and Oregon — had decided to furlough some disability workers, freeze hiring or impose other restrictions. Social Security officials said about 10 other states were taking or considering similar actions.
The agency said it was looking for ways to avoid the delays. The federal government could, for example, take over work performed by the states, but such a change could probably not be made without action by Congress.
- Garlock looks to state for financial help, By Tracey Curry, MPNnow.com - Rochester,NY,USA.
Wayne County [Palmyra], N.Y. — Faced with continued financial hardship, Garlock Sealing Technologies is looking to the state to help it preserve jobs and remain competitive.
Company spokesman Jim Malvaso said Thursday the Division Street company is applying to take part in the state’s Shared Work Program. If approved, the approximately 350 members of the International Union of Machinists and Aerospace Workers would be cut back to a 32-hour work week, with a portion of the lost wages made up through unemployment benefits.
“This is another step for us to remain competitive and keep people employed in a difficult economy,” Malvaso said. “The Shared Work Program is something put out there, and we felt it was a good alternative for us at this point.”
For company officials to proceed, however, they needed buy-in from union leaders.
“It required the union to sign off on the program,” Malvaso confirmed. “They’ve been very supportive of it.”
Participating in the state program, he added, is a move that will give the company space to operate without laying off more people. In March, about 60 union and non-union employees — about 10 percent of Garlock’s workforce — were handed pink slips. Garlock avoided a strike in January when its hourly employees — 400 at the time — agreed to a three-year contract guaranteeing a 2 percent raise for the next two years and a 3 percent raise in the third year. The negotiations, company officials said, had no bearing on the decision to reduce the number of hourly workers, nor on the reduction of hours.
The company is undergoing a more than $30 million expansion project — supported by a 20-year payment in lieu of taxes (PILOT) agreement that began in 2005. The tax deal was an inducement to keep the company from moving out of state. The project includes the construction of new buildings and the demolition and renovation of others that were about 100 years old. A condition of the PILOT was the company staying in Palmyra and retaining at least 450 jobs. With the layoffs, the company still employs approximately 540 people.
For now, union employees will remain at a 40-hour work week until company officials find out if the state has approved Garlock for the Shared Work Program. Once the state gives the green light — expected by the end of April — workers would put in 32 hours and submit weekly paperwork to the company. Garlock would then send that paperwork to the state unemployment office so workers could be compensated for the lost hours. Under the program, workers can receive the unemployment supplement for 20 weeks. Benefits would not be affected.
Malvaso said that once the 20 weeks are up, or if the state denies the company’s request, Garlock officials would go back to the drawing board and reassess their options.
“It’s wait-and-see for us,” he said. “We don’t have a speculation on duration at this point. We are communicating the 20-week program. Once it’s up, we’ll re-evaluate at that time.”
- Norfolk State University To Reduce “Carbon Footprint” With Shorter Work Week, by Ronald Roach, Diverse via DiverseEducation.com - Fairfax,VA,USA.
Norfolk State University is allowing its employees to shorten their five-day work week to four days from May 11 to July 31 in an effort to lessen university energy costs and to reduce employee fuel consumption.
In the global climate change terminology officials say the shortened work week, which will require 10-hour work days from employees to meet their full-time obligations this summer, should shrink the ‘carbon footprint on the planet’ by the Virginia-based historically Black state university.
Sharon Hoggard, the interim executive director of marketing and communications at Norfolk State University, estimates that 80 percent of the school’s nearly 1,000 employees will be able to take advantage of the four-day work week. Certain employees, such as campus police officers, will continue to work their shifts over five days to ensure campus coverage that extends through the entire week.
Reducing university energy consumption “is something that’s not new to us. We’ve been working on this for quite awhile to lessen the university’s carbon footprint. And so this next step going to a four-day work week during the summer months is just another step in that effort,” Hoggard says.
School officials since early this year have been promoting the upcoming work week change, which has attracted local media coverage by TV stations and newspapers in the Hampton Roads region. In recent years, colleges and universities have been high-profile participants in the growing global movement dedicated to energy conservation and reducing carbon dioxide emissions that result from the burning of fossil fuels. Excess accumulation of carbon dioxide in the atmosphere is widely believed to contribute significantly to global warming.
“We started talking about this particular strategy last summer. Gas prices had shot up over $4 a gallon. And so president (Carolyn Meyers) asked the staff to put together a task force to look at this issue,” Hoggard recalls.
Norfolk State began aggressive efforts in 2005 to undergo energy efficiency renovations and campus facility upgrades. An $11 million energy system renovation, which included installation of a new HVAC system and other measures improving campus cooling, heating, lighting and water use, was completed in 2006. Energy savings from the 2005-2006 renovations are estimated to be $1.4 million annually, according to the university.
School officials believe that energy savings from the shortened work week will contribute to helping the university weather the current economic downturn which has diminished state funding. This academic year, Norfolk State was hit with a 5 percent cut in state funding, which amounted to more than $2 million. Hoggard explains that it is not known exactly how much the university will save this summer but that savings will be carefully studied and calculated to measure the impact of the four-day week. It’s believed the summer savings will at least be in the ‘tens of thousands of dollars’, she says.
4/12/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- As industry adjusts to new landscape, golfers can afford to be more finicky, By BILL NICHOLS (firstname.lastname@example.org), Dallas Morning News via dallasnews.com - Dallas,TX,USA.
Horror stories abound about golf courses shutting down, private clubs losing members and golfers playing fewer rounds.
Under this dark cloud of economic woe, captains of the golf industry gathered at the Northern Texas PGA education seminar in January. The session "Managing Through an Economic Downturn" sparked a wide array of innovative ideas, from reducing electric bills to using more electricity on water conservation.
But one common theme – retaining customers by adding value – resonated over the din. Bottom line: This is a great time to be a golfer, if you still have your job.
The doom and gloom of the economy has given rise to a buyers' boom in an industry that once seemed recession proof.
Looking for a good deal on a country club membership? Check the classifieds. Need a coupon for your favorite public course? A simple Web search will turn up plenty of options. Want a good deal on a set of irons? Just drive to the closest retail golf shop.
Texas was one of the few states posting an increase in rounds played last year, jumping 7.8 percent. One reason for the dramatic rise can be attributed to the record rains of 2007, which limited the rounds played. The national average was down 0.8 percent, according to PGA Performance Trak, which incorporates data from the National Golf Foundation and PGA of America. And the Lone Star State opened the year with a staggering increase of 35.4 percent over January 2008.
Still, industry leaders know changes must be made to sustain growth. An improved product will be vital to getting relief from this economic waste area.
"Status quo is going to be a tough place to survive from," said Paul Earnest, PGA director of golf at Four Seasons Resort and Club. "There's an entire realignment going on."
Ties to real estate
Storm clouds began hovering over golf before the recession as the boom in residential real estate development of the 1990s gave way to saturation in supply and stagnation in demand. Nationwide, the numbers of core golfers and rounds played have been declining since 2000.
Residential course closings have outnumbered openings for three straight years. Last year the housing market's decline resulted in 106 closures and 72 openings, the fewest openings in 21 years.
With more than 5 million jobs lost in the 16 months of the recession, leisure spending has taken a hit. People are working more and playing less. Time-starved families are taking a hard look at discretionary spending. Financial strains make it harder to justify monthly dues of $300 to $500.
Core golfers are still playing, but they are more value conscious. An avid player with budget concerns may trade down, reducing a monthly payment without sacrificing rounds. The trickle-down effect has magnified the importance of customer retention.
"With private clubs, we've seen more attrition in the last 18 months than we've seen in the last 10 years," said Dale Folmar, senior vice president of operations at Dallas-based Eagle Golf, which manages 80 courses nationwide, 18 in Texas. "If private club attrition increases, we're betting that some of them will move down to daily fees. Members at $100,000 [initiation fee] clubs will move to $80,000 level and so on. They'll just reposition themselves until the economy goes back up."
PGA pros face a challenge in working to improve their product while staying under budget. Costs for supplies and utilities have increased. With fewer rounds being played, courses are working harder for customer loyalty.
"Give them what they want or they'll find it elsewhere," Mark Viskozki, director of golf at Tangle Ridge Golf Club in Grand Prairie, told the NTPGA gathering. "The public guy is looking for the best possible experience for the least amount of money. You can't sacrifice on customer service. And you have to maintain the quality of the golf course."
Private clubs and resorts seem the most volatile. According to the National Golf Foundation, 15 percent of private facilities reported financial strains in 2008, and 29 percent of those clubs suffered attrition.
In Texas, private clubs reported a 6.5 percent increase in rounds played in 2008 while the national average dropped 0.4 percent. But Texas clubs have seen attrition in membership since the stock market fell in mid-September. Consequently, many clubs are reinventing themselves, or at least making changes, for the long term.
High-end Dallas clubs like Brook Hollow, Lakewood, Northwood and Royal Oaks have undergone recent renovations. Even ultra-exclusive Preston Trail (major remodeling) and Dallas Country Club (clubhouse) are making improvements.
The days of 18 holes followed by fine cigars, single malts and card games in the locker room are gone for the most part. These days, if you've paid a $75,000 initiation fee and $500 monthly dues, a spouse might wonder why there's no treadmill.
Industry insiders see clubs moving away from exclusivity and becoming more diverse. Many will cater to busy families by offering organized activities for children, casual dining and junior programs for golf, tennis and swimming. Courses will be altered for shorter rounds.
Some clubs have reduced initiation fees in hope of procuring "trickle-down" members. Everyone is exploring ways to boost revenue, which translates into good deals for the consumer.
"If you want to join a country club, now is the time," said Jim Hinkley, chief executive officer of Addison-based Century Golf Partners, which operates 26 courses in Texas. "It's easier to get in. Clubs are being more aggressive in offering reduced initiation fees."
Dallas-based ClubCorp, the world leader in private clubs with 170 facilities, has struggled with its business division. But golf properties have held strong. Increased attrition has been offset by a 20 percent increase in new memberships.
The overall number of rounds played in 2008 was 3.41 million compared with 3.43 million in 2007. January and February rounds increased 6 percent from the same period a year ago. ClubCorp has benefited from having family-oriented clubs with multiple activities. Its strongest region last year was Texas, where its 23 golf facilities boasted a 3 percent increase in rounds played. Guest rounds dropped, meaning people are keeping their memberships but tightening their Sansabelts on extras.
"There will always be a market for the exclusive golf-only clubs, the Dallas Nationals of the world," ClubCorp CEO/president Eric Affeldt said in an interview. "But the wave of the future is the family club. Our company has always been keen on expanding its appeal. As sports resorts instead of country clubs, we're appealing to more people."
Backed into a corner, PGA professionals are using creativity to escape. Some places are saving money by cutting grass differently. Tangle Ridge's Viskozki said he discovered it is possible to save money on electricity by charging carts in nonpeak hours.
At the Four Seasons, trimming the workday to seven hours has resulted in a 12 percent cut in payroll but has reduced layoffs and increased efficiency. Starting tee times were moved back from 7:30 to 8 a.m.
"There's a sense of pride that we'll battle this together," Earnest said. "Service and maintenance staffs came up with 50 ways to save money on the golf operation. We have to go back to basics and make sure we're doing it better."
Public courses benefit
Business is booming at Dallas' six municipal courses, which have seen 7 percent increases in rounds played since October.
The trickle-down effect can be seen in the lines running out the door at Dallas munis. The city enjoyed an increase in rounds of about 11,000 in 2008. L.B. Houston was doing 200-round days in the winter.
Don't mention doom and gloom to Jere Mills, the affable city of Dallas golf director.
"We're pinching ourselves right now," he said. "The bottom line is we are as busy as we've ever been."
- Champlin officials under fire over raises - They defended market adjustment bonuses amid hours cuts for lower-paid workers, By JIM ADAMS, 4/11 Minneapolis Star Tribune via StarTribune.com - Minneapolis,MN,USA.
Champlin made some tough choices to balance its 2009 budget in a tight economy, including combining a few jobs, slightly increasing property taxes and cutting four clerical workers' hours.
The City Council also chose to approve "market adjustment" raises totaling more than $15,000 for eight of the city's highest-paid staff. They are the city administrator, police chief, deputy chief, the computer system manager and four police sergeants.
Some employees and a former council member say it's unfair to give raises to well-paid staff while cutting the work week of lower-earning clerks, all women, by one day. One of the clerks, who has since resigned, claims it shows sex discrimination. The eight who received raises are all men, and each will earn more than $79,000 this year.
City officials denied her allegation and noted the four clerks retained full-time health benefits and no one was laid off. Council members said such adjustment raises are routinely made in its annual budget process for employees whose pay is below that of comparable metro area city jobs. The raises keep talented staff from going elsewhere, they said.
"We are doing what's best for the city and taxpayers," said Mayor Mark Uglem. "We regret we had to take other steps in the other positions."
The positions given a cut in hours were a payroll clerk, an engineering secretary, a utility billing clerk and City Clerk Roberta Carlotti, who had no comment. The four clerks will earn between $19,000 and $56,000 this year.
But payroll clerk Brenda Cunningham, who resigned in January, said she sent a memo about unequal pay treatment to city officials in December after the 2009 budget was adopted.
Cunningham quit because "I personally couldn't handle it anymore." She said "the citizens of Champlin should know that female employees' hours were being cut while top male employees were getting more than the regular cost-of-living raise."
City Administrator Bret Heitkamp noted that police sergeants and community service officers received adjustments last year.
"It's not a gender issue," he said. "Market adjustments apply to everyone: male and female, union and non-union, front line and management."
Heitkamp said when state aid cuts were looming last fall, city department heads were asked to review staff positions and classify them as critical, essential or discretionary. The heads recommended a cut in hours for the four clerks, he said, which the council approved. Three other employees were given broader duties, including some engineering workers, because of the drop in building permit requests.
Scott Swenson, who lost his reelection bid and left the council at year end, said he was the only council member to raise the pay equity issue last fall. "It's not fair that they get an increase when we are cutting staff hours and raising taxes on people," Swenson said. He also was a city public works employee until March when he was fired after he pleaded guilty to a misdemeanor DWI charge.
Council member Greg Payer said the council received an e-mail in early December from Heitkamp recommending that more than $11,000 in adjustments be made to the four managers' salaries. Payer said that amount was half the full market adjustment the council had agreed on by consensus earlier, before state cuts were clear. He said Champlin must pay competitive salaries or lose talented staff to other cities.
Finance Director June Johnston said the raises bring the jobs' pay in line with the average of the maximum salaries for each position in a survey by the League of Minnesota Cities of about a dozen metro area cities with populations from 20,000 to 30,000.
The league's Laura Kushner said many cities refer to their online survey to adjust job salaries every few years.
4/11/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Shorter hours, fewer stops could be ALEX's fate, By Cathryn Creno, 4/10 Arizona Republic via azcentral.com,USA.
Free circulator buses that travel 40-mile routes around Ahwatukee seven days a week may have shorter hours and stop less frequently in July.
A committee appointed to reduce the operating cost of the Ahwatukee Local Explorer, or ALEX, by 25 percent on Thursday agreed to stop the service about an hour earlier at night and start about two hours later on weekends.
In addition, ALEX would:
• Stop at designated locations throughout Ahwatukee every 40 minutes instead of every half-hour.
• Make one less trip to and from the 40th Street and Pecos Park-and-Ride lot on weekdays.
• Make fewer stops at the Pecos Community Center during the day.
Last month, the committee suggested changes to the Alex route. They included having Alex:
• run north and south along 48th Street instead of along 50th Street south of Ray Road;
• run east and west along Chandler Boulevard between 24th Street and Desert Foothills Parkway instead of along Liberty Lane;
• run east and west along Chandler between 40th and 32nd Streets instead of along Lakewood Parkway.
On Thursday, committee member Greta Rogers urged that the shuttle not run on Desert Foothills Parkway at all in order to save additional money.
"Those people aren't riding the bus," she said about residents who live in neighborhoods near the parkway.
But Rogers was quickly overruled by other committee members, who pointed out that cutting that portion of the route would eliminate stops by a post office and the Ahwatukee Family YMCA, facilities used by Ahwatukee students and seniors who lack other means of transportation.
The proposed cuts are part of Phoenix's effort to eliminate a $270 million city wide general fund shortfall this year. The changes will take effect July 27, when Valley Metro's public transportation schedules book is published again.
City staff will discuss plans to cut ALEX's route and hours at a public open house April 18 (more info about this in BOX). The committee is expected to make a final recommendation about the service cuts to the Phoenix City Council on April 30.
- The reason why people are overweight, by The Eternal Squire (eternalsquire) 4/11 1:41 AM, online reader responding to "Soda Tax, Food Policy and Politics" in 4/10 Washington Post via voices.washingtonpost.com - United States.
[A ray of sanity from a WP reader.]
The reason why people are overweight is that people are overworked. Even before The Second Great Depression started, worker's pay has stayed exactly the same relative to inflation as it has since the 70's. And that was allowing for the fact that during the 70's the 40-hour work week was what our business customs had achieved a consensus upon. Not so now. Anyone having a job left over given today's economic conditions is being forced to work 50 to 70 hours just to keep that job. We now have a culture of presenteeism ["face time"] where the true index of a worker's loyalty to the corporation is seen as the number of hours seen by the manager of the worker sitting in the cubicle.
[So conditions are going to extremes - those with fulltime jobs are pressured to go back in time from the 40-hour workweek (1940) to 50 (1925) to 60 (1890) to 70 (1865) but there are no guarantees, and if you get laid off anyway, you're suddenly flooded with financially insecure idleness, instead of the kind of financially secure leisure we'd get if we adjusted our definition of "full time" to reduced levels appropriate to our waves of automation and robotization.]
This decreases exercise and increases stress. The cost of housing is also unaffordable, causing commutes of 2 to 3 hours each way for a middle-class employee just to be able to afford a decent house for his or her family in a safe community with a good school district. So what choice does our poor worker have but to slink back home exhausted and have a meal that tastes pleasant (in other words, sugary or fatty since both are what flavor and savor depend on) in order to relieve the stress of yet another crazy day of work! And of course they are too stressed out to even exercise... I don't care what people say about exercise reducing stress, if people are too emotionally exhausted they will not exercise period. And think about it.. you almost never see a fat executive or business owner... because they are the ones who can afford to take the time to take work off the job and spend their 9 to 5 skiing in the mountains while daily threatening their subordinates with job loss if the code doesn't get finished on time. So what I think is that the would-be food police should get off of their sanctimonious gluttiei and instead look at issues such as the unconscionable divide between worker and executive work/life balance. We need to eliminate the definition of exempt personnel and make everyone work a maximum of 40 hours per week. People eat the food they need to eat, but they don't have the time to take the exercise to burn it off.
[A fundamental economic adjustment is being delayed when humans don't have time during the age of automation and robots - and it's organically related to the imbalance between investment money and marketable productivity to invest in. The link? We don't have time because we have so much job insecurity that we're putting in mega 'face time' to keep our jobs, and the lengthening workweek vs. rising technological productivity puts us in a weak, surplus position in the job markets and depresses our pay and benefits. Where's the money we should be getting, going? Right up the income scale to the top, where the unlimited $concentration on only 0.01% of the population who don't have time or reason to spend it means they're looking for sustainable investments, which requires marketable productivity, which is declining along with the consumer base and the national workforce that feeds it.]
4/10/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Reno increases fees for power, water, sewers, By Susan Voyles • email@example.com, Reno Gazette Journal - Reno,NV,USA.
Raising utility fees by 1 percent, answering medical calls from only some fire stations and asking employee unions to forgo raises in the next fiscal year were approved Thursday by the Reno City Council to close an $18 million revenue shortfall in the proposed $172 million budget.
The council wants the natural gas, water, sewer and electric fees raised in June, ahead of the July 1 start of the 2009-10 fiscal year, if possible.
Mayor Bob Cashell argued for 1 percent instead of increments of 0.5 percent proposed by Councilman Dan Gustin. Cashell said he is getting his revenue estimates from state officials and believes the gap could be $22 million.
"I apologize, but that's where I have to go," the mayor said.
Councilman Dave Aiazzi said the fee increases would help maintain services and staff instead of closing fire stations.
"We still have no idea what the Legislature is going to do," Aiazzi said.
Utility fees had not been raised in more than a decade. One percent would yield $4.9 million.
Councilwoman Jessica Sferrazza was the only opponent, saying people already are having trouble paying bills.
The 1 percent increases raise fees to 3 percent. Sparks and Washoe County are at the 5 percent maximum allowed by state law. The franchise fee for sewer service would be raised by 1 percent to the 5 percent cap.
The North Virginia, Skyline, Somersett and Stead fire stations would rotate from four-person fire truck crews to two-person medical crews that can deal with brush fires, Chief Paul Wagner said.
That would save $3 million by not replacing 12 retiring firefighters.
He said backup units would aid the short-staffed crews.
The council agreed to ask unions to forgo 2.1 percent raises scheduled July 1 and in January to save $6 million.
Last week, the council was leaning toward a reduced 38-hour workweek for nonsafety employees and no raises for firefighters and police officers. The council did not discuss the workweek change publicly Thursday after a two-hour closed session on labor issues.
Management and other nonunion workers would be asked to take pay cuts totaling $563,000.
"The 2.1 percent is the most logical," Sferrazza said after the meeting. "It puts everyone on an equal playing field."
If employee unions vote to keep their pay raises in the coming year, the council could cut all departments by 3 percent, resulting in 75 layoffs to save $5.5 million.
That option was "left on the table," Councilman Pierre Hascheff said.
The council agreed to work with Sparks, Washoe County and the regional planning agency to combine planning staffs and building safety departments. That could save $1.75 million a year.
In the meantime, building fees would be raised by 10 percent, putting them that much above county and Sparks fees. Planning fees, recently raised, would not change.
- Failing economy creates a nation of part-timers [= US & Canada] - [Canada =] Recession's main victims are full-time workers; Almost 80,000 of them lost their jobs last month , by Madhavi Acharya-Tom Yew & Ann Perry, Toronto Star via thestar.com, A1.
Ramon Pelaez is trying to make part-time work add up to a full-time living.
The 45-year-old native of the Philippines made about $15 an hour working full-time as a machine operator at Progressive Moulded Products Ltd., until the Concord firm went bankrupt last summer.
Since then, he has tried to find full-time work. Except for a brief stint as a full-time manager at a fast-food restaurant, he has had to settle for a string of part-time positions, at a nursing home, the post office and even helping other unemployed workers at a job resource centre.
"I feel lucky because my wife has a full-time job, or it will be really hard. I haven't stopped looking for a full-time job, but it's hard because everyone is looking for a full-time job," Pelaez said.
Indeed, Pelaez is far from alone. Full-time workers have become the main casualty of this recession, which has claimed 387,000 full-time positions since October. Over the same period, part-time employment has edged up by 30,000 positions.
Last month, Canadian employers slashed 61,000 net jobs, pushing the unemployment rate up 0.3 of a percentage point to 8 per cent, a seven-year high.
But behind that disheartening number lurks an even more dismal reality. Full-time employment dropped by 79,500 positions in March, a loss that some 18,000 new part-time jobs could not even begin to make up.
"In recessions, we typically see an increase in involuntary part-time work, so that is undoubtedly what we are seeing now," said Frank Reid, director of the University of Toronto's Centre for Industrial Relations and Human Resources.
Reid noted that part-time work has been increasing over the past few decades as more women enter the workforce. Declines in manufacturing jobs and increasing employment in the services sector have also contributed to growth in part-time work.
"There's a longer-term trend, which has been to see part-time work increasing, and then that's been exacerbated right now by a cyclical increase as well," Reid said.
Among the provinces, British Columbia posted the steepest drop in employment, with a net loss of 23,000 positions, followed by Alberta, which shed 15,000 jobs.
Ontario lost another 11,000 jobs last month. But its unemployment rate held steady at 8.7 per cent, since a larger number of people dropped out of the labour force.
Toronto's unemployment rate jumped half a percentage point in March to 8.8 per cent, based on a three-month moving average. On a one-month basis, the jobless rate actually nudged down 0.1 of a percentage point to 8.9 per cent.
The trend away from full-time work has left people like Pelaez scrambling to cobble together enough hours to make ends meet. Workers who have to settle for part-time positions also tend to enjoy less stability and fewer benefits than their full-time counterparts.
"Having a full-time job with full benefits is something that we all aspire to. When you lose that, it's not just the salary. You also lose all the other benefits that go with a full-time position," said Tam Goossen, co-chair of the Good Jobs for All coalition, an alliance of more than 35 community, student, labour and environmental groups in the GTA.
Overall employment has fallen each month since peaking in October, bringing the net number of lost jobs to 357,000. The decline in percentage terms – 2.1 per cent – is the largest over a five-month period since the 1982 recession, Statistics Canada noted.
Those precipitous job losses "have made it unambiguously clear that the Canadian labour market is weakening at a very dramatic pace," Millan Mulraine, an economics strategist at TD Securities, wrote in a research note. "And with the Canadian economy continuing to weaken, the outlook for labour market conditions remains very grim."
Some economists are forecasting Canada's unemployment rate will hit 10 per cent by next year. Economists at the Bank of Nova Scotia warned yesterday that job losses this year could reach 750,000.
The heavy employment losses last month were spread across many sectors, showing the recession has spread its tentacles through much of the economy. Manufacturing employment, which has been hit hard by massive layoffs in the auto industry, fell by another 34,000 positions in March. That brought total losses in the sector to 134,000 since October, the most among the major industry groups.
Construction also continued to feel the pinch, shedding 18,000 positions, while natural resources lost 11,000 jobs as the downturn hit Alberta's energy industry.
Nationally, job declines in March were less severe than in the first two months of this year, which saw heavy losses of 129,000 in January and 83,000 in February.
"The good news – such as it is – is that the job losses are not accelerating, and may even be starting to lighten," said Douglas Porter, deputy chief economist at BMO Capital Markets.
Prime Minister Stephen Harper yesterday downplayed Canada's unemployment numbers by holding out the hope of more jobs and even a shortage of workers when the economy turns around.
"Despite the unemployment we see today, the demographic reality is this; as soon as the recession ends our country will face a long-run challenge of labour shortage," he said during a speech in Edmonton.
Harper acknowledged Canada's jobless numbers "are bad news." But he also said that Canada is "relatively better off. I know it's tough to remind Canadians of this when unemployment is going up, but in the United States they are now over five million jobs lost since the recession began (there)," he told reporters.
Ontario Finance Minister Dwight Duncan warned, "there's no easy way out of this." He added that his government's plans to spend $32 billion on infrastructure projects over two years, including $5 billion from Ottawa, will help.
"We've had an awful year in terms of job loss in this province and across the country," Duncan said.
The fact that so many people are losing their jobs should prompt the federal government to make improvements to the employment insurance (EI) system, Erin Weir, an economist with the United Steelworkers union, wrote in an email commentary.
That call was echoed by Canadian Labour Congress president Ken Georgetti, who said the percentage of unemployed Canadians who receive EI benefits is declining.
"This should not be happening in the current environment. The EI system is not working for those who paid into it," Georgetti said in a release.
With files from Richard J. Brennan and Rob Ferguson
4/09/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Kane County IL eyes policy to allow unpaid days for workers, By BRENDA SCHORY, Kane County Chronicle via kcchronicle.com - Geneva,Ill.,USA.
GENEVA – Economic reality is going to hit Kane County workers as the county board will consider an employment policy to allow department heads the power to enforce a furlough plan to cut costs without layoffs.
Furloughs – an involuntary reduction in a worker’s workday or workweek because of a shortage of funds – would apply to 278 hourly, non-unionized workers, Board President Karen McConnaughay, R-St. Charles, said.
The county currently has a policy for layoffs and recalls. McConnaughay said the addition of a furlough policy is an opportunity to cut costs without layoffs.
The county is also considering a reduction of 5.5 percent across all county departments to reduce the budget by $3.8 million.
“When the private sector was beginning to feel the impact of the economy, we were six, nine, 12 months behind,” McConnaughay said. “When the private sector starts feeling a rebirth in the economy, we’re going to be lagging behind. We’re in this for at least another year. So the 2010 budget year, which is coming up ... is not going to be good news.”
The county has 1,340 employees.
Of those, 640 are hourly workers who belong to a union, 386 are exempt – which means they are salaried and do not get overtime – and 36 are elected.
Exempt, salaried employees who do not qualify for overtime – including professionals and managers – can have their pay cut or raises denied, she said.
McConnaughay explained that the county board cannot dictate furloughs; those decisions would go to department heads. Unionized workers’ pay or hours cannot be reduced unless they seek to be part of it.
Another aspect the board might consider is buying out older employees who are nearing retirement, she said.
When the county was in a high-growth mode, it received an extra cushion of cash from new development, McConnaughay said. With development at a virtual standstill now, that extra money is gone, and officials must cut costs without jeopardizing services.
“It looks like we’re looking at different options in a systematic approach,” board member James Mitchell, R-North Aurora, said. “My biggest fear is that 5.5 percent is not the end of the cuts.”
Another policy to be considered by the full board is one which requires department heads and elected officials to stay within their budgets.
Forest Preserve President John Hoscheit the board will need cooperation from elected officials in controlling costs and staying within their budgets.
“If you get 10 months into the year and you’ve spent your budget, we’re not going to pay your bills anymore,” Hoscheit said. “We don’t control how money is spent, but we have control over what money we’re going to provide.”
- Henkel: Currently No Short Time Work In Adhesives Unit, Dow Jones via online.WallStreetJournal.com (subscription) - USA.
FRANKFURT -- Germany's Duesseldorf-based Henkel KGaA (HEN.XE) Thursday said employees at its adhesives unit aren't currently working shorter hours, but it it remains an option...
[cutoff for subscription]
4/08/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Daimler annual shareholder meeting set to kick off, AP via Forbes.com - NY,USA.
Daimler AG hosts its annual shareholder meeting Wednesday with investors, analysts and others looking for hints about the company's profits, future business and whether it will scale back more production as consumers postpone buying new cars.
Like other German manufacturers in recent months, Stuttgart-based Daimler, whose products include cars under the Mercedes-Benz, Maybach, AMG and Smart brands, along with trucks and buses, reported a slowdown in demand and weaker sales. It has taken measures to scale back its output, including cutting back hours for thousands of workers.
On Tuesday, Daimler said its worldwide first-quarter sales fell about 23 percent with demand for its Mercedes-Benz and ubiquitous two-seat Smart brand slipping.
The company said the group sold 244,800 cars from January-March compared with around 318,000 cars a year earlier.
Daimler has already said it expects to post a first-quarter loss and will put more administrative personnel on shorter hours, reducing their pay.
Daimler said on April 1 that it hoped to save euro2 billion ($2.7 billion) in personnel costs by cutting work time for 73,000 workers - largely office and administrative staff - in Germany by as much as five hours a week, but that it did not plan to eliminate jobs.
Those plans are unrelated to the previously announced decision to put some 50,000 automotive production workers on shorter hours. Daimler has said it also plans to put another 18,000 commercial vehicle workers on shorter hours after Easter. German companies often reduce hours worked to scale back output.
Daimler's Mercedes-Benz cars division had sales of euro48 billion ($64.3 billion) in 2008, while the company as a whole had sales of euro96 billion. Daimler's Mercedes-Benz cars division includes the Mercedes-Benz, Maybach, AMG and Smart brands.
- Madeira Daily Blog and news, 4/06 madeira4u.com.
...'In The Clouds - ANAM register positive results for the first time, and reduce liabilities by €50 million'. The operating company for the airports of Madeira and Porto Santo has broken into profit for the first time ever, with an operating profit of €633 thousand, after reducing liabilities by €50.5 million. That is the first positive result for the company since it was established in December 1991. ANAM now has a mere €206 million to repay to national and international banks. Those loans are now unlikely to reduce further until 2014, when ANAM will have to make a partial repayment of a €50 million debenture loan. The total investments made by ANAM in the airports of the two islands, reached by the end of last year, €584 million in infrastructure changes. These have undergone radical changes and improvements, appropriate to receive support funding from the European Union. The company managed 2.57 million passenger movements in 2008, just 1,052 more than in 2007. Profits would have been even better if it hadn't been for the collapse of several airlines / tour operators last year, and the impacts of the 3rd (& 4th?) quarter economic declines. Whilst Madeira airport did it's bit for the positive figures, Porto Santo airport did the opposite, and it now under new shorter operating hours and undergoing cost cutting measures to reduce it's losses. ...
4/07/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Wichita must cut $6.5 million; fewer pool inspections among proposals, BY BRENT D. WISTROM, Wichita Eagle via Kansas.com - KS,USA.
WICHITA - The city plans to cut $6.5 million from this year's budget because of drooping cash flows attributed to the poor economy and state budget cuts. What that will mean for Wichita residents is still unclear, but City Council members will discuss options this morning.
Those include fewer water quality inspections at public pools; reduced hours for walk-in reporting at police substations; shorter hours at city-operated pools; and reduced grass and tree trimming.
Plus, there are scores of other cuts that most probably won't notice, at least for now.
Those include things like not printing as many documents now that many people read documents electronically, cutting back on city employee training and locking in cheaper health insurance.
The city also plans to put off several vehicle and equipment purchases.
Council member Jeff Longwell said residents may notice a few of the cuts, but the alternative is worse.
"They're not all attractive," he said of the cuts. "But we have to understand that it's better than going back to people who, in some cases, have lost their jobs and say, 'We've got to hit you a little harder.' "
City officials are largely mum about the details of how the proposed cuts might effect residents, but they plan to discuss it more at this morning's council workshop.
Pool, spa inspections
One proposal would cut pool and spa inspections by 30 percent.
The city conducted 2,158 inspections in 2007, 19 percent of which found health risks.
Last summer, the city logged dozens of cases of cyrptosporidiosis, a highly contagious disease transferred through fecal matter that can cause stomach cramps and diarrhea. In Sedgwick County, there were 77 cases.
Council member Sharon Fearey said the city will need to thoroughly analyze that cut.
"I think we're going to have to be real aware of that and watch it to make sure we are checking them often enough," she said.
Meanwhile, the city's parks and recreation department plans to reduce the hours at some of the city's 11 pools.
Which pool hours would be cut and when is not specified. No one from the city was available to discuss the specifics Monday.
One budget move will pluck $1 million from the extra $2.5 million council members added to the city's street maintenance budget last year.
But Public Works Director Chris Carrier said most of that trim may be offset by extra federal stimulus money that will likely be spent on three big street repair projects.
Those include reconstruction of Hillside from Ninth to 12th; Washington from Douglas to First, and Broadway from Central to Ninth.
"When it's all said and done, we'll actually have a little more," Carrier said.
Still, he noted, the council would have had to add at least $4 million to the budget last year just to keep the city's overall pavement quality index from decreasing.
The Parks and Recreation Department also plans to save $100,000 in contract labor by cutting back on park mowing cycles.
To compensate, it plans to shift some tree trimming employees to the grass during the summer. That means non-emergency tree trimming may be deferred.
Fearey said federal stimulus money given to the Workforce Alliance of South Central Kansas may lead to more temporary help from young, summer employees.
And she hopes the city can work around liability issues and have willing neighborhood associations and residents help mow and maintain small parks.
"I'm hoping that some people will step up and mow a park now and then," she said. "It wouldn't hurt me to go down and mow the park that's near me once a week or so."
Among other cuts is a proposal to close police substations to the public from 11 p.m. to 7 a.m.
Police officials declined to discuss that Monday.
"There is minimal traffic at the substations during these hours," a budget document says.
People would still be able to get immediate service by dialing 911.
Longwell said he doesn't know how much traffic the substations have during those hours. He said the city could probably do a better job of promoting fire stations as safe havens for people fleeing domestic abuse or similar situations.
Cuts are tough, he said, but there are also positives.
"This gives you that true incentive to re-evaluate everything and say, 'Is this working?' or 'Can we live without this?"' he said.
"There's always some good that can come out of tough times, and that's being more responsible with everyone's dollars."
Reach Brent D. Wistrom at 316-268-6228 or firstname.lastname@example.org.
- Labor pains, by IRWIN KELLNER, MarketWatch.com - USA.
PORT WASHINGTON, N.Y. -- If you're looking for signs that the worst of this recession is over, you won't find it in the labor force data.
[Not March's anyway.]
Don't take March's admittedly horrendous employment numbers as a sign that things are getting worse.
[Au contraire, do - and check out *this argument for unemployment as a leading indicator, and also "The ripple effect of layoffs - Factory shuts: Why it hurts a flower delivery man, Sunday Star of Toronto 4/12/2009, A1.
and see also 4/11/2009.]
They are not.
[Yes they are. This guy's just a happytalkin' cheerleader for the status quo. He's still doin' OK, so you must be too, or it's your fault.]
Indeed, looking at the labor force stats for clues is like looking through the rear-view mirror. They tell you where we've been -- not where we're going.
[Funny how the 'experts' are always trying to belittle the importance of the job market, but ... it's the foundation of the economy, not the financial markets because, no jobs, no wages, no spending, no marketable productivity and...no sustainable investments to sustain the financial markets. The 'experts' tend to forget about the 'marketable' part of 'marketable productivity' and just talk about 'productivity' as if "Say's Law" weren't actually Say's Fallacy: "If we produce it, it will sell." = doesn't matter if it sells at a loss! Looking at labor force stats, you're looking right out the front windshield, not the rear-view mirror.]
It may be true that nonfarm payroll employment is considered a coincident indicator of economic activity. However, in reality, employment is more like a lagging indicator. Here's why.
[No, it's anticipatory and causative, and we will demolish his Pollyanna-llke blindered arguments.]
When faced with declining sales, companies will naturally cut staff.
[Here's his first omission. He later talks about restoring hours without mentioning the original trimming of those hours here.]
They'll keep doing so until they realize that they are losing business -- not for lack of customers, but for lack of employees to service these customers.
[But generally, cutting staff by Company X cuts their customers' customers and requires more staffcuts by Company X. So it's only in restricted exceptional markets that Company X will find it's losing business for lack of staff instead of lack of customerss = not the general case.]
Needless to say, this revelation will not occur overnight. That being the case, like so many other parts of our economy, many businesses will overshoot. In other words -- they'll continue to slash payrolls long past the point where they should have stopped.
[No they won't = he thinks he in his ivory tower is the genius and businessmen on the frontlines are stupid.]
Employers usually don't add work hours until they are absolutely convinced that they need them.
[Suddenly we're talking about accordianing hours instead of jobs. Where did this come from? And employers' caution in re-expanding is another reason labor stats are leading, indeed causative, indicators, not lagging.]
When their mindset finally does change, they will first lengthen the workweek, using their existing staff.
After restoring the workweek to its usual level, employers will then ask their people to work overtime, since they might still be unsure that bottom has been plumbed. Only after their employees have maxed out on overtime will business begin looking outside for new staffers.
[Here's another causative retarding policy on recovery. Overworking existing employees instead of immediately hiring new staffers does less to spread wages, job security and consumer confidence.]
The first thing most companies will do is hire temporary workers and/or part-time employees. This way, if these people don't work out and/or the economy takes another turn for the worse, these temps and part-timers can be let go with few if any consequences for the firm.
[But many consequences for the firm's customers' customers - another causative retardant of recovery.]
At this point, the jobless rate -- another lagging [no, leading] indicator -- might very well peak out and begin to decline.
[So how can the 'experts' be so wrong? They ignore how low economy activity gets and jump on any time uptick from the depths to declare Recession Over, Recovery Begun - thus we get such contradictions as 'jobless recoveries' in the past few decades. The economy has been getting sicker and sicker but these cheerleaders are doin' OK and more concentrated media ownershp is doin' OK and so any tiny piece of good news is shouted from the front page while huge masses of bad news are ignored or buried on inside pages and inside sections. And as for the indicators, the unemployment indicator has been watered down several times in the last few decades to hide the bad news, which of course harms its functioning as THE leading indicator, but looking behind it to the other five types of employment data the BLS collects, some of them are less watered down - and 'coincidentally' less publicized.]
However, for this rate to really descend from the heights, businesses need to add to their permanent staff -- which they usually do, once they feel that better times have returned and are here to stay.
[Fewer and fewer American businesses are feeling that way - agriculture has shrunk, manufacturing has contracted, and now services are going.]
This process could take more than a year after the overall economy reaches its cyclical low -- the point ultimately designated as the end of the recession by the umpire of the business cycle, the National Bureau of Economic Research.
[Another bunch of cheerleaders yapping about cyclical business activity and ignoring the longer-term 'secular' contraction and deceleration as the employment base and the consumer base weakens, and focussing only on the bloated financial markets which finally suck in so much of the national income and wealth that they can no longer find the marketable productivity they need for sustainable investments at the off-the-scale levels that match the money they've consolidated. By constantly injecting new technology and freezing a 1940 workweek, they have fostered a deepening labor glut and wage decline, and vacuumed all the spending power out of the markets for the productivity they NEED to invest in. Brilliant, not.]
As a matter of fact, because it considers employment a coincident indicator, it actually took the Bureau 20 months to decide when the last two recessions ended.
[It should look at the cleaner crisper under-employment rate instead of the watered-down unemployment rate. This cheerleader naturally wants to declare an end to bad news as soon (and as often) as possible, again SHOUTING tiny good news while whispering or ignoring huge bad news - until he or someone close to him gets fired or outsourced.]
The November 2001 trough was announced in July of 2003 while the March 1991 bottom was not disclosed until December 2002.
A better sign that a recovery is nigh is spending by both business and consumers.
[No, because spending might be based on borrowing, and borrowing, as we've seen, is just a temporary fix.]
Companies might trigger an expansion by deciding that they need to rebuild depleted inventories and/or by upgrading their equipment.
For their part, consumers could open their wallets in response to easier money, lower interest rates and the plethora of price cuts that invariably accompanies a downturn in overall economic activity.
[If the wallets are empty, opening them means nothing.]
When goods and services get cheap enough, buyers will emerge.
[Again, 'cheap' doesn't matter if it's selling at a loss.]
Animal spirits like these are what end recessions. End of Story.
[No, full employment and job security and rising wages and consumer confidence are what end recessions, and we haven't seen that since the babybooomers entered the job market around 1970 and restored the labor glut of the Great Depression. Wages immediately stagnated. Housewives entered the job markets to help with the family income - and made the labor glut worse. CEOs sensed labor and market weakness so to stay macho and get the illusion of growth, they started the unending wave of M&As, mergers and acquisitions, and downsizing the overlap - increasing labor glut and downward pressure on wages, which started their secular decline. The Dems kept upping immigration caps and amnestizing illegals - that made it worse, expecially for wages of existing, legal minorities. And then CEOs discovered free trade and outsourcing to give the US employment base and its derivative consumer base the coup de grace. The dot-com bubble and the housing bubble gave us a stay of execution - and generally record levels of debt, government, corporate and consumer, but the Bush regime accelerated the concentration of the national income and wealth so much more in 8 years that the economy became grotesquely topheavy like a person with a huge skull-distorting brain cancer. The only way to arrest and reverse this tight concentration and spreading deterioration is systemic work sharing (of which Timesizing is the gentlest and most market-oriented version) - and followup programs.]
Irwin Kellner is chief economist for MarketWatch, and is Distinguished Scholar of Economics at Dowling College in Oakdale, N.Y. [= another economy-killing cheerleader, Killer Kellner]
4/06/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Los Angeles mayor calls for shorter working hours to save jobs, Xinhua - China.
Los Angeles Mayor Antonio Villaraigosa said Monday that he wants city workers to consider cutting their working hours to help avert the loss of hundreds of jobs.
At a news conference at the City Hall, Villaraigosa also proposed that city employees pay more toward their retirement benefits to help lessen the city's financial burden.
Recession-battered Los Angeles is facing a projected budget gap that could reach 530 million dollars, city officials said.
Calling for "shared sacrifice" by city employees at a time of crisis, Villaraigosa said that the city faces the possibility of losing 2,800 jobs even after deep cuts, adding that nearly 600 of the jobs could be saved if every city employee worked one less hour per week.
He further said about 1,300 jobs could be saved if workers cut back one hour per week and contribute 2 percent more toward their retirement benefits.
- Negotiating Flex Time With Employees, MainStreet - New York,NY,USA.
In tough economic times, many companies would rather cut back on employee hours, rather than layoff workers. Switching to a 32-hour workweek from a 40-hour workweek is a popular way many small businesses are cutting back on wages, without sacrificing health or retirement benefits for their workers. Additionally, many employees seek flex time to work around the changing needs of children, spouses, school and second jobs. As an employer, though, you have to be careful that negotiating flex time doesn’t take away from a productive work environment, or cause feelings of imparity among your office staff.
It is always best to negotiate privately and individually with your employees. No two employees will likely have the exact same needs, so these details are best worked out with a human resource person present and in a closed-door setting.
There are psychological benefits to giving your employees flex time, but you have to ensure that your work caliber is not adversely affected in the process. When recruiting new hires, be honest and open about your policy on flex time. Further, don’t single out flex time benefits for your “favorite” workers. If you can’t afford to give flexible hours to everyone in the same department, then don’t do it at all.
Avoid Giving Too Much
If an employee wants to come into work a little later and leave a little later on Tuesdays and Thursdays in order to avoid traffic, this is typically an easy agreement to achieve. However, when an employee with a shallow work history wants to telecommute from home three days out of the week, he is usually asking for too much. The key is to find a balance that will still allow your employee to accomplish all of their needs without sacrificing their quality of work.
A great way to draw the line in negotiations for flex time is to set rules. For example, some businesses institute “core time.” This is a window of hours that every employee must be on site in order to schedule and accommodate group projects. For example, this could be from 10am to 4pm. During this time, all of your workers are on site, which allows you to schedule company-wide activities without hesitation. Whatever flex time arrangements are made outside of this time is up to your discretion.
Things to Keep in Mind
Flex time is ideal for some people, but it simply doesn’t fit every type of business. If you operate a critical industry, such as a medical facility, flex time may not be an option. As a matter of fact, according to the U.S. Census Bureau and the U.S. Bureau of Labor Statistics, one in four employees are eligible for flex time, but only one in 10 actually utilize it.
4/05/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Is 4-day work week the answer in tough times?,
By Anthony Clark, Gainesville Sun via Gainesville.com,FL,USA.
With orders for mining rigs down, Sandvik Mining and Construction faced a dilemma. The manufacturer had to cut its employees' work hours, but didn't want the high-skilled workers to leave for other jobs before business picked up again.
Human resources director Donna Burdge called the local work force development board, FloridaWorks, which found[ed] the Short Time Compensation Program, a little known but growing program that allows Sandvik employees to work four days a week and receive unemployment pay for the fifth day.
[So far. we've seen stories on these programs from California (see 3/31/2009 #1) and Massachusetts (see 3/31/2009 #2) . We believe there are at least 38 states in all that have such programs.]
Unemployment pays about half of normal wages up to a maximum of $55 a day. For most of Sandvik's employees who earn $13 to $20 an hour, the maximum is less than half a day's pay. But the $55 plus another $25 a week in unemployment benefits from federal stimulus legislation is $80 a week they wouldn't receive otherwise.
The short-time program was created to help businesses keep employees by reducing hours instead of having temporary layoffs during slow times.
"Many of the employers calling us have a very specific skilled work force for their industry and they're just waiting for that next order," said Kim Tesch-Vaught, senior director of work force for FloridaWorks. "The fear is if you have to lay somebody off or downsize, what happens when you get that call? You want to get your work force back. This is a way to extend that period of time."
[This fear is probably less grounded during a recession when there are few job options and the likelihood is that laid off employees will still be available, but at least if's a fear that's motivating employers to stop fueling the downturn with more and more downsizing.]
Sandvik Mining is a division of the Sweden-based Sandvik global engineering group, which purchased the former Driltech Company in 1998 and its 42-acre mining drill rig manufacturing plant off County Road 235 in Alachua.
Even as the nation was well into the recession, orders for mineral drill rigs were up well into 2008 to fill the industrial world's seemingly insatiable demand for copper, nickel, iron, coal and gold.
But by the fourth quarter of the year, new orders were down 20 percent and customers were canceling existing orders and reducing investment plans for 2009.
The local plant responded by cutting salaries of office and salaried personnel by 4 percent. Starting March 2, 160 warehouse and production workers started working four-day weeks as their hours were cut from 40 to 32.
Employee participation in the program is voluntary. Burdge said buy-in has been slow but growing as the employees were concerned that it would make it easier to lay them off [nope, just the opposite], that they might lose benefits if they should need full-time unemployment, or just general skepticism about what hidden issues could be involved in a state program.
For the first week of eligibility, 20 employees had signed up, but last week that was up to 70, she said.
"Now that the checks are arriving and there's no strings attached, faith in the program is growing every day," she said.
Electrician Craig Ferrell Sr...said the pay doesn't totally make up for the lost wages but helps to keep paying his bills.
"I've never used anything and it's nice that there's something there for me when I need it. Hopefully I won't need full-time unemployment," he said with a nervous chuckle, "but it feels good to think that's going to be there, too."
Mandwell Hearn, a 26-year-old warehouse clerk, convinced co-workers to sign on to take advantage of the extra money.
"It's less of a burden for me having to worry about where I'm going to get that extra money, do I have to get a second job."
John Kent, an...assembler, is among the majority still not taking the benefit, saying the pay isn't enough to entice him.
"I'd rather take my chances on waiting until I'm completely unemployed [then this guy should be taught a lesson]. In the beginning, it's kind of like nickel and dime," he said. "I just think in eight or nine months, we'll be back on track, hopefully."
Sandvik is the first company in the Alachua/Bradford county work force region to use the short-time program. Burdge and FloridaWorks credit each other with working through the complicated program [here's a problem - Florida's program needs simplification] that will make it easier for more companies in the area to use it. FloridaWorks started working with a Bradford County company interested in the program last week.
Burdge is now a staunch advocate.
"In the middle of continued bad news, this is great news," she said. "For a human resources person, these are the fights you fight on behalf of your staff."
The bad news continued Friday with the Labor Department announcing that unemployment nationwide was 8.5 percent in March, up from 8.1 percent in February, with 663,000 newly unemployed adding to the 5.1 million jobs lost since the recession began in December 2007, with two-thirds of those in the last five months.
Employers are trying a variety of cost-cutting measures to avoid further layoffs. FloridaWorks Executive Director Angela Pate said she has heard of companies cutting budgets for travel, conferences and marketing.
Those that do cut hours are giving employees unpaid time off, shutting down for short periods, eliminating overtime and turning full-time jobs into part-time jobs.
Pate said employees given unpaid time off are eligible for unemployment pay for the time off. They are responsible for filing their own claims, unlike the short-time program in which the employer applies.
Burdge said Sandvik considered closing the plant for a week or putting employees on unpaid furloughs before deciding on the four-day work weeks.
Instead of avoiding job losses, however, she said the program is allowing Sandvik to delay layoffs, with about 50-60 jobs expected to be cut by early next month. She hopes that being able to delay layoffs, offer partial unemployment and leave laid-off employees with at least 44 weeks of full-time unemployment benefits will keep them around long enough to ramp back up when the orders pick up.
"So things aren't looking so bad if I'm unemployed for almost an entire year," she said.
"I just keep hoping for those phones to ring and to get those orders."
[Next step: redefine "full time" on a fluctuating basis and in the near future, fluctuate it downward till everyone is rehired and further downward till the unemployed are hired and we have Full Employment and high pay to centrifuge the dysfunctional Black Hole crush of money in the topmost tiny fraction of the population where it can't even find sustainable investments.]
- Unemployment scheme criticised by leading business groups - On the eve of the launch of a £500m scheme to help the long-term unemployed, business leaders warn that firms are struggling to retain staff,
by Toby Helm, guardian.co.uk - UK.
A flagship government welfare plan to give companies "golden hello" payments of £2,500 for taking on the long-term unemployed was undermined by the country's leading business groups last night on the eve of a high-profile launch by ministers.
In a highly embarrassing episode for James Purnell, the work and pensions secretary, the CBI and the British Chambers of Commerce said the much-trumpeted scheme was destined to fail because most companies were now focused on how to keep their existing workers in jobs, rather than thinking of creating new ones for the unemployed.
As part of a £500m plan to prevent victims of the recession joining the ranks of the long-term unemployed, Purnell said in January that payments of up to £2,500 would be given to any company that took on and trained someone who had been jobless for more than six months.
The scheme is due to "go live" tomorrow when ministers will announce how firms can bid for the right to participate and claim their "golden hello" money - and how the unemployed can register.
But as the jobless total has soared above two million, and job applications have begun to outnumber vacancies by 10 to one in parts of the country, opinion has hardened against the plans, with businesses instead demanding government measures to help keep their remaining employees in work on shorter hours.
Many employers also say they will not take on untrained people, even with the £2,500 incentive, because it would be unsettling for existing staff who are already worried about their job security if they were to see someone new taken on at a lower wage.
The CBI's deputy director general, John Cridland, said that the policy was misconceived at a time of deep recession. "It was a laudable aim, but difficult to implement when unemployment is rising so swiftly. Three months on, it is even harder to imagine this working as an incentive to employers who are struggling to survive during a recession."
Abigail Morris, policy adviser at the British Chambers of Commerce, said: "With unemployment continuing to rise sharply, companies are not in a position to think about recruiting new staff right now. Businesses are shedding staff.
"This would have been a valid welfare-to-work initiative in better times, but it is not a survival tool for small businesses during a downturn. If the government cannot make the details of this scheme work within three months then it should be scrapped and the focus, and resources, used to help businesses retain staff."
The broadside from business is the latest in a series of setbacks for Purnell as he tries to enlist the help of the private sector in getting the unemployed into work. His much vaunted Flexible New Deal, under which private training and employment companies would be paid "by results" for finding jobs for the unemployed, has stalled because the private sector says there is not enough money to be made because there are no jobs to be found.
Purnell is expected to say that £500 will be offered to companies "up front" for every long-term unemployed worker they take on, with another £500 after they have been in place for six months. A further £1,500 will be available to help companies train each worker.
A spokesman for the Federation of Small Businesses said he believed the government had its own doubts about the scheme as it had not been clear how and when the money would be paid.
The TUC general secretary, Brendan Barber, believed the policy "should help stem the flow of rising long-term unemployment" but added: "The most effective way to tackle unemployment is to prevent job losses in the first place. The TUC [Trade Union Council] wants to see a short-term wage subsidy scheme, similar to those already working well in Europe, which would help viable companies suffering from a lack of access to credit to keep staff on."
He also called for more resources to be given to jobcentres, which are struggling to cope with the workload resulting from the rise in unemployment to more than two million.
Government officials said the scheme would attract companies keen to find people to fill unskilled jobs, such as supermarket workers. They confirmed that an announcement would be made tomorrow and said that they expected major companies to be selected to take part later in the month.
The shadow work and pensions minister, Theresa May, accused the government of "announcing a different initiative every week that will probably never see the light of day".
She added: "What the country is crying out for is some clear, decisive action and leadership. Labour need to tackle the skills gap in the economy and allow people on jobseeker's allowance to immediately retrain, instead of having to wait 18 months."
[The Timesizing program's Phase 2 and Phase 3 deal with spreading marketable skills by mandated reinvestment of corporate overtime profits and individual overwork earnings to fund wartime levels of immediate OJT = on-the-job training or retraining.]
4/4/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Unemployment Jumps to 8.5 Percent, Economy Sheds 663000 Jobs - The age-adjusted unemployment rate is already above the 1982 level, By: Dean Baker, YubaNet - Nevada City,CA,USA.
The unemployment rate jumped to 8.5 percent in March as the economy shed another 663,000 jobs according to the Bureau of Labor Statistics. With the job loss reported for March, and upward revisions of 84,000 for the prior two months, the economy has lost an average of 684,000 jobs per month since November 2008.
The job losses continue to be heavily concentrated in construction and manufacturing, which lost 126,000 jobs and 161,000 jobs in March, respectively. The job losses in construction were widely spread across sectors as the non-residential sector is now losing jobs even more rapidly than the residential sector. Construction employment has fallen by 1,264,000 since its peak in 2007, according to the establishment survey. The household survey shows a decline in construction employment of 2.3 million jobs, accounting for close to 40 percent of the drop in employment during the downturn. The difference is likely explained by undocumented workers who don't show up on payrolls.
The disproportionate job loss in construction and manufacturing is reflected in the sharp gap that has opened up between the unemployment rates for men and women. In March, the unemployment rate for men jumped by 0.7 percentage points to 8.8 percent. It is now 1.8 percentage points above the 7.0 percent unemployment rate for women. A year ago, the unemployment rates for men and women were an almost identical 4.6 percent and 4.5 percent, respectively. The employment rate for men is now 68.2 percent, far lower than at any other point in the post-war era. In the 1981-82 recession, it bottomed out at 70.5 percent.
While the most disadvantaged groups are feeling the effects of the downturn the hardest - the unemployment rate for African Americans is now 13.3 percent, which is also the rate for people without high school degrees - this recession is hitting everyone. The unemployment rate for workers with college degrees rose by 0.2 percentage points to 4.3 percent in March, almost a full percentage point above the peak for college grads in the last two recessions. While this rate is still just half of the overall average, it is double the 2.1 percent unemployment rate faced by college grads just a year ago. In other words, a college graduate is more than twice as likely to face unemployment today than a year ago.
Much of the impact of the downturn continues to be felt in shorter hours. The number of people involuntarily working part-time rose by another 400,000. Since the beginning of the downturn, this number has risen by 5.4 million workers. The reduction in hours is also reflected in the aggregate weekly hours series in the establishment data. This index dropped by 1.0 percent in March. It is down by 6.4 percent since the downturn began, the equivalent of the loss of 8.8 million jobs with no reduction in hours.
[Well, isn't it getting high time to adjust our definition of 'full time' to something a little more appropriate to our rising levels of high technology and productivity? We cut the workweek in half, 80 hours to 40, between 1840 and 1940, but we haven't touched it since. We're gettin absolutely no good out of technology while it's just giving us job insecurity instead of more of the most fundamental freedom, free time. We've got entire systems of factories right here in New England called 'lights out manufacturing' because there are no human employees at all so no need to leave the lights on. And who's going to buy the stuff all these robots are producing? Our two-working-parent families and single-parent families need more time to raise their own kids. Our banking system needs more watchdogs with more time to keep these 'banksters' from conflicts of interest and fraud of the sorts that are still bringing our civilization down. Let's redefine fulltime downward as much as we need to to zero unemployment and get started on under-employment. The reduction of the labor surplus will harness market forces in re-raising wages to pre-hourscut levels.]
There is little basis for any real optimism in this report as job losses continue to spread across sectors with the rate of decline accelerating almost everywhere. The financial service sector lost 43,000 jobs in March. Trucking lost 14,900 jobs, bringing job losses since October to 74,500 or 5.4 percent of employment in the sector. Retail trade lost 47,800 jobs.
Jobs in employment services fell by 88,400 in March, roughly the same rate of job loss in the prior two months. This sector has shed 905,000 jobs since the beginning of the downturn. State and local employment fell by 12,000 in March, a number that would have been worse without the stimulus package. Even the health care sector is weakening, adding just 13,500 jobs, compared with a 35,000 monthly average over the last year.
The employment diffusion indexes (showing the percentage of industries where employers expect to add workers over various time periods) are all at or near their lowest levels since the series began in 1994. Many analysts had seized on the fact that several February data reports were somewhat better than the January reports as evidence of an incipient economic turnaround. The improvement was almost certainly due to unusually bad weather in January depressing activity. This report shows the economy continues to sink rapidly with little hope of any improvement in the immediate future.
Dean Baker is Co-Director of the Center for Economic and Policy Research in Washington, D.C.
- County counsel may cut 4 lawyers, By Jeremy Pawloski, TheOlympian.com.
OLYMPIA, Wash. – The Thurston County Office of Assigned Counsel probably will have to lay off four public defenders because of budget cuts, raising the question of whether public defenders' caseloads in Thurston County will exceed recommendations set forth by the Washington State Bar Association.
The director of the county's Office of Assigned Counsel, Sally Harrison, said she is very concerned that if that happens, the American Civil Liberties Union could get involved.
High caseloads for public defenders are a concern for the ACLU because they raise the issue of equal justice and every defendant's constitutional right to a fair trial. If a public defender has too many clients, each client could receive less attention.
According to the Washington State Bar Association's Standards for Indigent Defense Services, "The caseload of a full-time public defense attorney or assigned counsel shall not exceed the following: 150 felonies per year; or 300 misdemeanor cases per attorney per year." The bar association also states that in certain circumstances, misdemeanor caseloads can exceed 400.
In 2005, the ACLU sent a letter to the Thurston County commission stating that misdemeanor public defense in Thurston County District Court was overburdened.
Officials at the ACLU in Seattle could not be reached for comment Friday.
Harrison said Friday that because of the county's ongoing budget crisis, she likely will to have to cut the number of public defenders in her office from 21 to 15. In addition, the six people who work as support staffers at OAC were going to move to a 30-hour workweek and have pay cuts to save a position from elimination, Harrison said.
A new county sales tax that goes into effect later this year could allow Harrison to apply to add a public defender to her staff, she said.
All county government agencies are being asked to make cuts, which affect almost every area of the courts. Thurston County Superior Court recently announced that it will not hold jury trials for six weeks in the rest of 2009 — one week each in April, May, September and November and two consecutive weeks in December. Thurston County District Court will hold regular jury trials with no service interruptions.
Thurston County Superior Court has saved one program from the budget ax: Pretrial Services, which involves supervision of out-of-custody felony defendants as they await disposition of their trials. Pretrial Services had been cut from Thurston County District Court's budget, but it recently was picked up by Superior Court, said Pretrial Services program specialist Kelley McIntosh.
McIntosh said the four staff members at Pretrial Services are glad their jobs were saved.
"It was a relief," she said.
Jeremy Pawloski covers public safety for The Olympian. He can be reached at 360-754-5465 or email@example.com.
- Saturday Quiz - April 4, 2009, billy blog...alternative economic thinking via bilbo.economicoutlook.net.
Welcome to the billy blog Saturday quiz. The quiz tests whether you have been paying attention over the last seven days.
See how you go with the following five questions. Your results are only known to you and no records are retained.
The only essential requirement for a sovereign currency is
___that it is accepted as a means of exchange.
___that it is the only unit in which tax obligations to the government can be extinguished.
___that it possesses intrinsic value which attracts people to demand it.
If the national government has been paying off debt
___it has more capacity to expand the economy should a recession arise.
___it has less capacity to expand the economy should a recession arise.
___its capacity to expand the economy should a recession arise is unaltered.
___to create sellers of real goods and services, so that the government can spend its otherwise worthless currency.
___to ensure the government has enough cash to fulfill its electoral mandate.
___to allow the government to run a budget surplus to provide for the future needs of the society.
The federal stimulus package will fail
___if it requires so much debt to be issued that it scares global financial markets.
___if it goes into the hands of people who merely save it.
___if it increases imports faster than exports.
Trade unions who advocate shorter hours (work sharing) as a national solution to rising unemployment
___should be applauded for their willingness to compromise which will also lessen the deficit stimulus that is required.
[The above choice is closest to the Timesizing view with the exception that no deficit stimulus at all is required when work sharing and spreading is carried out quickly, persistently and sufficiently.]
___are working against their members interests unless the workers total incomes are maintained and they persuade the government to run deficits sufficient to fill the spending gap.
___should be arguing for layoffs because they hurt less people and would lessen the deficit stimulus required.
4/03/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Job losses mounting, hours dwindling, by Ryan Carter, Pasadena Star-News via pasadenastarnews.com - Pasadena,CA,USA.
WEST COVINA, Calif. - The nation's unemployment rate rose to 8.5 percent in March, as businesses shed 663,000 jobs and slashed their hours to record lows in efforts to stay afloat, according to a government report released Friday.
The Bureau of Labor Statistics showed sharp and sweeping losses across all sectors, except healthcare as the nation's now year-and half recession continued beating down on the U.S. economy.
Since December of 2007, 5.1 million jobs have been lost, with almost two-thirds of those losses - 3.3 million - coming in the last five months, the Labor Department reported.
In March, the number of people without a job stood at 13.2 million.
That's an increase of 5.3 million workers who have lost their jobs since one year ago, when the unemployment rate stood at 5.1 percent. And it's the first time since July 1985, that less than six in 10 U.S. workers were employed.
Scott Cryer, of San Dimas, used to be one of the six employed. That's why Cryer was waiting in line at the state Employment Development Department's West Covina office to find out why he hasn't yet received unemployment benefits. He said he has been living off a cashed-out 401K.
"I'm just looking for something, anything, just to get by," said Cryer, who said he was laid off from his paid electrical apprenticeship more than a month ago. "I know a lot of guys that have been laid off. There's not a whole lot out there."
Locally, the numbers in several cities exceed the nation's average.
For instance, Industry has a jobless rate of (18.3), followed by Baldwin Park (13.7), El Monte (13.6 percent) and South El Monte ( 13.2), according to the state's data for February. Whittier's rate rose to 7.9 percent and Pasadena's was at 8.4 percent. And those numbers will continue to rise, economists said.
They're rising because the San Gabriel Valley's economy is driven by sectors taking heavy hits in the economy.
For instance, manufacturing nationwide lost 161,000 jobs in March, with a heavy toll in factory employment (1 million jobs) over the past six months. The construction industry lost 126,000 jobs in March, still reeling from the housing downturn.
Retail lost 48,000 jobs, since peaking in 2007. Since then, retail has lost an average of 44,000 jobs a month.
Transportation and warehousing lost 34,000 jobs nationwide in March as trucking, couriers and logistics companies found less cargo to carry. Healthcare remained a bright spot, spiking upward in March by 14,000 jobs. But that was less than the monthly average gain of 30,000 last year. "We have had to cut hours to staff and done what's necessary to be healthy," said Kevin Smith, owner of Dal Rae Restaurant in Pico Rivera. Smith is not the only one.
Total nonsupervisory employees worked an average 33.2 hours a week last month. That's the lowest since 1964, when the government started taking such records.
[That should be good news - that our worksaving technology is freeing us for more creative, less routine activities - and it would be good news in a timesizing economy.]
Businesses and governments have been slashing hours for months, forcing workers to take unpaid days off and shorter hours in an attempt to stave off mass losses.
[As we've been saying, 'unthinkable' workweek reduction is happening anyway. Why not systematize this 'timesizing, not downsizing' on city, state and federal levels and use it to arrest our freefall and then, push down a little more and squeeze out the nation's employment on a few more million un- and under-employed to reduce the labor surplus that's holding down wages, and centrifuge the national income and wealth out of the black hole of dysfunctionally, astronomically consolidated money in the topmost tiny bracket of the income scale.]
The lack of full-time workers has led to increases in the ranks of the underemployed. The underemployment rate - which includes people who were working part time but who wanted to full-time work, and those who gave up looking for work - was 15.6 percent in March. That was up from 14.8 percent in February and the highest since those records began in 1994.
Vincent Martinez, of Walnut, said his hours at Macy's were cut back severely after the holiday season.
"I am working, but it's like 15 hours or less," he said. "I'm trying to pay for school and living expenses. It's tough right now."
As the labor market shrinks, older workers are feeling the brunt of companies looking to cut costs, said Gary Kaplan, owner and CEO of Gary Kaplan & Associates, an executive search firm in Pasadena.
"There's a sense I can't get a job.... That 'I'm 55, I'm 58, who's going to hire me?' It's having a very negative impact on the workers being let go. There's a greater sense of hopelessness largely coming from older workers."
That's not to say the economy has been a picnic for younger workers.
The unemployment rate among teenagers was 21.7 percent among teens, down .1 percent from February.
Local and federal officials pointed to the government's economic stimulus package to get people working again.
"Today's numbers show that we have more work to do," Labor Secretary Hilda Solis said in a statement.
That work includes providing billions of federal dollars to extend and increase unemployment benefits.
The government has provided states with $7 billion in incentives to expand unemployment benefits and $4 billion for work training-programs, Solis said. Rep. David Dreier's lamented the government's report while adding that government spending to get the nation's economy going again won't be the answer.
He touted a job fair his office organized for next week as a way for some to find work.
The government's numbers come at a time when the economy has shown some glimmers of hope.
The Dow Jones industrial average climbed higher to end the week above 8,000 for the first time in nearly two months.
And despite the grim numbers, they were only slightly worse than analysts thought they would be.
The fact that they were in the ball park of what was expected deadened the impact a bit, said Sven Arndt, professor of Money, Credit and Trade at Claremont McKenna's Robert Day School of Economics and Finance.
"I think we're close," said Arndt, referring to a slow-down in the jobless rate by the end of the year. "We'll still see some bad news about unemployement numbers, but the rate they'll be lost will decline."
That will come as businesses hire again to restock depleted inventories, and stimulus money begins having an effect, he said. In the meantime, employment offices are a lot busier.
"They're backlogged," said Loris Allen, employment program manager for EDD, of delays in benefits. "They're doing the best they can to keep up." Allen said the West Covina office is now open on Saturdays, to help cope with increased demand for services. Reporter Bethania Palma Markus contributed to this story.
- Shorter week could save jobs, letter to editor by Ben Fredashay of Schenectady, Albany Times Union via TimesUnion.com - Albany,NY,USA.
Before being laid off not long ago, I suggested my employer shorten the work week to 35 hours and the work day to seven hours to save payroll costs. Alas, the employer didn't listen.
I'd like to suggest the same thing to all employers considering layoffs. Don't make the recession worse by creating more competition for scarce jobs. Don't increase the number of people seeking unemployment insurance payments.
Just reduce the work week to get the same savings that you would get from layoffs.
Employees, the reduced income will be better than no income when your unemployment benefits run out and there are still no jobs.
- German drug, chemical firm Merck to cut production, AP via PR-Inside.com (Pressemitteilung) - Wien,Austria.
German pharmaceutical and chemical company Merck KGaA said Friday it would curb pigment production in Germany, the U.S., Japan and China, while it expects 2009 to be a difficult year overall.
The company said it would put about 500 German pigment workers on shorter hours but didn't expect job cuts domestically. The 500 affected German workers are at the Gernsheim facility near Frankfurt.
Other pigment production sites in Savannah, Georgia, Onahama, Japan and Songjiang, China would also be affected by production cutbacks, but spokeswoman Phyllis Carter wouldn't say if that meant facility shutdowns, shorter hours programs or job cuts.
Speaking at the Darmstadt-based company's annual general meeting Friday, chief executive Karl-Ludwig Kley said demand for paint pigments had fallen sharply because of weak sales in the auto industry. «The trend continued unbroken in the first quarter of 2009,» Kley said.
«For the pigments business, we must assume that the previously agreed measures such as reducing overtime and vacation days within the scope of several idling phases will not be sufficient to adapt production volumes to the sharp decline in demand,» Kley said, offering no further details about the international sites.
German companies often institute shorter hours programs to answer weaker demand.
Merck didn't provide a detailed forecast for a «difficult» 2009, but said it would «rank among the winners.
After the acquisition of Swiss biotechnology company Serono two years ago, Merck said it had reached the size needed to be a market presence. «Beyond this critical mass, however, bigger does not always equal better,» Kley said, adding that the overall business model was sound.
[In fact, according to E.F. Schuhmacher, "Small Is Beautiful"!]
Merck KGaA in Germany is not part of Merck & Co. of the U.S.
Shares of Merck KGaA were 1.2 percent lower at E67.78 in Frankfurt afternoon trading.
On the Net www.merck.de
4/02/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Can These Jobs Be Saved?, By PETER GUMBEL, Time Magazine via Time.com.
JOB SEARCH: Men look for work at a Tokyo job fair. Japanese firms have cut recruitment [top photo caption]
If you had told hard-charging professionals in the City of London just a few months ago that they should take a 20% pay cut to work one day less per week, they would have likely mocked the idea as a French socialist plot to undermine the British economy.
[How clear can it get that there is no alternative to worksharing in the Age of Robotics unless we're willing to split the human species into workaholics and parasites? Notice how we've strained to package up Not Having a Life as attractive = "hard-charging professionals" indeed! - what a crock. More like "heart attacks waiting to happen."]
But when the U.K. arm of accounting firm KPMG recently asked its staff if they would be willing to reduce their workweek — and thereby save jobs — in the event that business dried up, an overwhelming 85% signed on. About 200 employees in the tax division have already shifted to a four-day week, says spokesman Gavin Houlgate, who claims the deal is a first for a British financial services firm. It's unlikely to be the last. "There's been quite a bit of interest from other organizations," Houlgate says.
[Can it get any clearer that the overblown financial sector has rejected the 'chief cornerstone' of all future economies and economics? First they spin government as too big, too inflexible, too inefficient and then they're begging for mega-bailouts from...government (and taxpayers - but they don't want to pay any taxes). Then they have to reverse their decades-long kneejerk scorn for work sharing. Remember the "Lump of Labor Fallacy." Well, it's lookin' a lot more like the Shrinking Employment Truism, ain't it! It was roundly rebutted by the Ford-Reuther Paradox anyway - Henry Ford (after new factory tour): "Let's see you unionize these robots!" Walter Reuther (labor leader): "Let's see you sell'em cars."]
As financial meltdown has turned into global economic crisis, the human cost in terms of lost jobs and displaced workers is growing at a terrifying pace.
[And all easily reversible by work sharing - and no, pay does not go down with hours; it goes down with what we've got with overlong hours, namely, overwhelming labor surplus. Cut the labor surplus with shorter hours (as we DID 1840 to 1940 when we cut the workweek in HALF from 80 to 40 hours) and you quit depressing wages with high unemployment, job insecurity and thousands of desperate resumes for five job openings.]
The International Labor Organization (ILO) predicts that 38 million people around the world could lose their jobs this year alone, sending unemployment rates in Europe and the U.S. into double digits for the first time in years and slowing — or in some places reversing — the massive jobs growth of recent years in Asia. Alarmed by the social and political consequences, governments, companies and labor unions in countries across the globe are scrambling to put in place a range of measures aimed at minimizing job losses.
For white- and blue-collar workers alike, shifting to shorter working hours and lower pay in exchange for tacit job guarantees is suddenly a no-brainer — not just in Britain, but also in Taiwan, Iceland and a swathe of other countries in Europe and Asia.
[And as more and more workers shift to shorter hours and the huge surplus of labor hours on offer in the robotized job markets dries up, market forces will flexibly, inexorably start restoring pay levels. And if we get smart and shorten working hours further, market forces will start raising pay levels to where they need to be so we can buy our own output, now that there's really nobody else to do it - chasing around the last patch of consumers with spending money around the world with increasingly unmarketable exports is another little game that's lookin stupider and stupider - let's call it...um...how about "globalization"? - yeah, how about "naive, premature globalization"?!]
Other schemes being tried include temporary work suspensions at factories, and even work-sharing programs.
[Oooh Nooo, Mr. Bill, NOT "work sharing programs"?!! It's the End of the World! The SKY IS FALLING! It's a dirty gooky commie pinko socialist PLOT except for the fact that so many capitalist CEOs and corporations have been quietly doing it for decades! Nucor Steel, Lincoln Electric, SAS, Kellogg's, Lever Brothers - see our working models page - and so many capitalists have recommended it, like Lord Leverhulme of Lever Brothers, W.K. Kellogg of Kellogg Cereals, Charles Filene of Filene's Basement, the Lincoln brothers of Lincoln Electric, Arthur Dahlberg who got rich from inventing the simple Parker Fountain Pen ink-refill system - check out our bibliography page.]
Two countries stand out as having the most developed and systematic approach: Japan and Germany, which both provide government subsidies to companies who keep on workers even though there's little or no work for them to do. [But at least 38 U.S. states have such programs, and many Canadian provinces - see our links page.] Both have recently extended their schemes. In Germany, the government now subsidizes companies and idled workers for a full 18 months, up from six months, and the number signing up for the so-called short-work programs is soaring. In February, 724,000 workers were registered, more than double the number in January and 20 times the number a year ago. Most of the nation's auto makers including BMW and Porsche have adopted short-work programs in some of their factories. In Japan, too, the number of workers who have applied to the "employment-adjustment subsidy" program leaped sixfold between December 2008 and January 2009, to almost 900,000.
But in this gut-wrenching downturn, the Germans and the Japanese are no longer alone. "It's happening a lot," says Raymond Torres, director of the ILO's International Institute for Labor Studies. "People are trading off their jobs for wage cuts and other measures." [Incoherent! They're trading off long job hours for a measure of job security.] There's even some anecdotal evidence that it's starting to happen in the U.S., where companies have traditionally not hesitated to lay off staff in a downturn; last month the New York Times announced a 5% pay cut for some of its staff in return for extra vacation days.
["Anecdotal evidence"? Please - this is one uninformed Times reporter!]
Torres and other labor experts say it's an open question whether these schemes make much of a difference. [Torres and other labor 'experts' seem pretty uninformed as well.] In the short term, they may well slow the rise in unemployment. [...with the potential of reversing it.] But if the current crisis continues, as many economists are predicting, at least for this year and probably into 2010, even pay cuts, work-sharing schemes and shorter working hours won't be enough to safeguard jobs. [Who says?] "The real issue is can it be sustained?" Torres asks.
[It was from 1840 to 1940 when we cut the workweek in half, from over 80 hours down to 40 - is Torres really this ignorant of the history of the American workweek???]
At the 30-nation Organization for Economic Cooperation and Development in Paris, chief economist Klaus Schmidt-Hebbel argues forcefully that governments should do more to retrain workers and overhaul their labor-market policies to ensure that once recovery comes [this the really questionable Article of Faith], new jobs are created in sufficient numbers [here's another Article of Faith - straining for artificial government job creation instead of just relaxing into sharing the vanishing natural market-demanded employment as we automate further] to swiftly bring the jobless rate back down again. But ask him about the German short-work measures, and he's skeptical. [...of course, because mainstream economists are true believers in Madison Avenue and The Gospel of Consumption - which ain't gonna last long in the Ecological Age.] "They can't stop rising unemployment," he says, "they just delay it."
[Purely a statement of faith, bad faith, on this 'chief economist's part.' Of course the German short-work measures can stop rising unemployment and even guarantee full employment, BECAUSE IT'S PURELY A MATTER OF RESUMING OUR CENTURY-LONG HISTORICAL WORKWEEK REDUCTION and redefining "full time" down to levels more appropriate for our ever-rising levels of technological efficiency. Get with the program, you self-styled 'experts'!]
Indeed, in its latest economic forecast released March 31, the OECD expects unemployment in Germany to rise from its current 8.6% to 11.6% by the end of 2010 — higher than many of its European neighbors — despite the special job-preservation measures.
[Then they need to go further, and there is no limit to how far they can go - full-time 30-hour workweeks, 20-hour workweeks, 10-hours, 10-hours every two weeks, 10-hours a month... - NO LIMIT to the most fundamental kind of freedom, FREE TIME - financially secure and sustainable by work sharing and the priority management skill of the future = suturing shorter and shorter shifts.]
The organization expects Japan's unemployment rate will also rise, although less dramatically, to above 5.5% next year from 4% in 2008.
[Japan already has plenty of worksharing programs at the municipal and prefectural levels - like Europe, all they need to do is realize what they're doing right and do a lot more or it.]
For all the economists' doubts, there's immense political pressure on authorities to do something to slow growing joblessness. Several national and regional governments are subsidizing job-preservation efforts along German and Japanese lines, sometimes for the first time. Regional authorities in Wales, for example, have just introduced an on-the-job-retraining scheme [just like Timesizing Phase Two and Phase Three] under which companies in trouble can receive a subsidy of up to $2,800 per worker if they keep them on the payroll and teach them new skills.
Where nothing else works, there's always political pressure. In India, airline Jet Airways reversed a decision to lay off 1,900 staff after the government made its displeasure known — and weeping victims melted Chairman Naresh Goyal's heart. "I could not sleep at night," Goyal confessed at a press conference. "I was mentally disturbed when I saw tears in their eyes." Civil Aviation Minister Praful Patel said he told Goyal that "the ministry would certainly not be very happy with the approach of Jet Airways."
[It's not like there is an alternative now that war and plague have become either inefficient or too efficient at creating the kind of perceived labor shortage with which alone, capitalism works well.]
Something similar happened in France last month when the French oil company Total announced the closure of two refineries, with the loss of 550 jobs. The move provoked a furious public outcry including denunciations from two government ministers, and the firm quickly backtracked, saying it had been a "communication error." For companies receiving government bailout money [look no farther than this for unsustainability], the pressure is even more intense: French President Nicolas Sarkozy has told Renault and Peugeot that the price for receiving subsidies during the crisis is that the auto makers cannot cut jobs in France.
[Now we've seen everything! That 'hard-driving' capitalist Bush-loving 35-hour-workweek-weakening Sarkozy has suddenly developed a 'pinko' concern for jobs?! Lord luvva duck!]
- Network aims to boost after-school activities, By James Thalman, DeseretNews.com.
Working parents in Utah aren't in grade school any longer, but there is one bell they must answer every day — the last one.
It is the official signal that the time between when the kids are let out for the day and when the folks get home from work has begun. The Utah Afterschool Network believes the bell is sounding an alarm to the community in general, which should be looking at after-school as what it is — as crucial as classrooms to a child's education.
A review of programs in place shows those hours are pivotal to a child's overall success in life, said Christine Forstner, the network's executive director, after a lunchtime gathering of business leaders with which the network hopes to forge an alliance over the next three years.
Education inside the classroom gets all the attention, but what students do outside of school hours has as much bearing on their success in school and later life, Forstner said. The situation is magnified by another fact: 84 percent of Utah children are in families with both parents working or in single-parent households. According to national studies, a child's school workweek is 25 hours shorter than their parents' workweek, and 80 percent of employees with children report missing work due to child-care scheduling issues.
[Hey, at least some places aren't overscheduling their children as much as they're overscheduling adults.]
[But here's an effort to keep children regimented longer (the Puritan/Protestant Work Ethic dies hard) -]
Despite research showing that efforts to increase school-related activities during the hours of 3 to 6 p.m. have an immediate positive effect on students, on the family, the school and the community, some 117,000 school-aged children in Utah are on their own at 3:15 p.m. every weekday. Only 25,000 are involved in after-school programs, according to the 3-year-old network, which has begun in earnest its campaign to double that number by 2012.
[How about going the other, the smarter way and letting parents out of work earlier so they can be parents?!]
According to network data, every dollar spent on after-school programs returns $8 of benefits in reduced crime, fewer high school dropouts and fewer teen pregnancies.
According to the U.S. Department of Education, students who spend no time in sanctioned after-school programs or extracurricular activities are at a 50 percent higher risk to use drugs, to do poorer in school and to get into trouble away from home than kids who do.
[Still arguing the wrong way, pushing for unsustainability...]
The benefits of after-school programs are almost automatic and immediate, car dealer and network governing board member Steve Brown told the group. He has seen results firsthand in Provo School District and has produced a short public awareness film highlighting after-school programs that advises the business owners, educators, community leaders and elected officials that it's time they get involved.
"You don't have to have something fancy," he said. "All you have to have is passion."
[Yeah, 'passion' is a good word - can cover a multitude of meanderings in the marshes of unsustainability. How about just resuming our historic workweek reduction and letting parents be parents again?!]
More information is available at www.UtahAfterSchool.org or by calling 801-359-2722.
4/01/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Chippewa Falls tech firm cutting hours for workers, AP via Chicago Tribune - United States.
The Chippewa Falls plant of TTM Technologies, Inc., is cutting the work week for its 900 hourly employees from 40 to 32 hours starting next Monday and continuing until at least the end of June.
TTM is the largest private employer in Chippewa Falls. The company, based in Santa Ana, Calif., is North America's largest manufacturer of printed circuit boards.
Chief Financial Officer Steven Richards said the plant already has cut about 90 temporary employees because of a lack of work.
It's also used temporary furloughs in response to the poor business conditions.
But Richards said reducing the work week allows more employees to share in the reduction while retaining workers for when the economy starts improving.
Information from: The Chippewa Herald, http://www.chippewa.com
- German Billionaire Cuts Worker Pay, Launches Yacht - The Wealth Report: Robert Frank looks at the lives and culture of the wealthy, WSJ Blogs via /blogs.wsj.com/wealth/.
German billionaire Reinhold Wurth has taken delivery of his shiny new 280-foot yacht, called “Vibrant Curiosity.” Normally, this would be cause for personal celebration.
But the launch came at the same time Mr. Wurth, who started in the screws business and then diversified into banks, solar energy and other businesses, ordered 1,250 of his 5,000 employees to take pay cuts of 15%. He also ordered them to work shorter hours. The company said the cuts were necessary given the global recession.
An article in Spiegel online, highlighted by Luxist, said Reinhold Wurth’s yacht cost $100 million to build. SuperYachtTimes.com says the boat, built by Oceanco in Rotterdam, has an owner’s stateroom, a VIP suite, three double-guest cabins and two twin cabins.
When Mr. Wurth invited guests to the recent launch party he asked them to remain “discreet about it,” according to the Spiegel article.
While the timing of the billionaire’s yacht launch and the cutting worker pay is hardly ideal, it should be noted that he probably ordered the yacht at least three years ago, when times were good. After paying much of the costs during the construction process, he probably figured it made no financial sense to send it to a covered dock for one or two years until the recession blows over (though perhaps that might have been advisable).
Mr. Wurth, a colorful entrepreneur who collects Picassos, rides a Harley and has a pilot’s license, probably figures that he might as well enjoy life while he can. Especially since he is partially retired from the company.
Still, in heavily unionized Germany, megayachting and worker cuts are a potent mix.
Perhaps he could generate some goodwill by inviting all the workers who got pay cuts to take a spin on the boat, maybe handing out “Vibrant Curiosity” T-shirts.
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