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Timesizing News, February 2-28, 2010 +Mar.1-2
[Commentary] ©2010 Phil Hyde, Timesizing.com, Box 117, Harvard Sq PO, Cambridge MA 02238 USA 617-623-8080


2/28-3/01-02/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Nice work if you can share it: an unemployment solution - If Congress is serious about addressing unemployment, it will act on bills that aim to strengthen work-sharing programmes, by Dean Baker, 3/01 Manchester Guardian via guardian.co.uk
    WASHINGTON DC, United States - The housing bubble and subsequent crash were the result of extreme incompetence on the part of the country's top economic policymakers. Somehow these people could not see, or did not care about, the dangers of an $8tn housing bubble.
    Unfortunately, economic policymaking is not like most jobs where workers get fired when they make serious mistakes. In economics, they just keep getting promoted. Therefore, the people who sank the economy are for the most part the same group of people still designing policy today. Now this group of incompetent economists is telling the rest of us that we are going to have to endure five more years of high unemployment.
    However, the rest of the country should not be forced to suffer even more just because those determining economic policy cannot do their jobs. We know how to get the unemployment rate down. Keynes taught us more than 70 years ago that we just have to spend money to eliminate mass unemployment. People work for money, if the government spends, people will work. It's pretty straightforward.
    But, the deficit hawks seems to have largely closed this route. Members of Congress somehow think that they are helping our children by putting their parents out of work.
    Fortunately, we can even find a way to create jobs that can keep the deficit hawks happy. It's called "work-sharing". The basic point is so simple that even an economist can understand it.
    Instead of paying workers to be unemployed – in the form of unemployment benefits – we pay workers to stay employed, but work fewer hours.
    [Great soundbyte, Dean!]
    In effect, to avoid one worker from being laid off, several workers put in somewhat less time on the job and take a small cut in pay. Germany and the Netherlands have used this path to keep their unemployment rates from rising even though they have experienced steeper downturns than the US.
    The way the system works in Germany, a firm will cut back the hours of its workers by 20%. The government then replaces 60% of the lost pay (12% of total pay). The firm is expected to kick in 20% of the lost pay (4% of total pay) and the worker ends up taking home 4% less pay.
    In this scenario the worker ends up working 20% fewer hours for 4% less pay. This can mean, for example, that the worker ends up working a four-day week instead of a five-day week. Given the savings on work-related expenses, like transportation and childcare, most workers would almost certainly end up better off under a work-sharing arrangement than they are now.
    While the economy is past its period of rapid job loss, a huge number of workers still lose their jobs each month through the economy's normal job churning. Each month, companies lay off or fire close to 2 million workers. These job losses are largely offset by hiring by other firms, so that the net change in jobs has been a small negative in recent months. However, if we could just reduce the rate of job loss by 10%, then it would be equivalent to creating an additional 200,000 jobs a month or 2.4 million jobs a year. This would get us back to full employment in two years, rather than five or six, as is currently projected.
    There are other potential benefits from work sharing. The reduction in work time could give companies an opportunity to adopt more family friendly work practices. For example, they could adopt a policy of paid family leave or paid sick days on a trial basis during the downturn.
    There would also be environmental benefits to reducing work hours. Suppose everyone worked a four-day week so that we reduced the number of commutes by 20%. This would substantially reduce the amount of greenhouse gas emissions associated with getting to and from work. The fact that Europeans tend to work far fewer hours than we do is undoubtedly one of the main reasons that their per person carbon emissions are about half of the US level.
    There are already 17 states that have work-sharing programmes in place. There are bills in both the House and Senate that would strengthen these programmes and give support to other states to set up their own programmes. If Congress is serious about addressing unemployment, it will act on these bills.

  2. 2,000 Furloughs Linked to Impasse in Congress, by Carl Hulse, 3/02 NYT, A15.
    WASHINGTON DC - The United States Department of Transportation said it furloughed 2,000 workers on Monday as a politically charged impasse over unemployment benefits interrupted spending on a handful of federal programs and escalated tensions in Congress.
    Senator Jim Bunning says he will withdraw his opposition to the jobless aid legislation if stimulus money is used to pay for it.
    With no quick resolution in sight, Democrats characterized the decision by one Republican to block the jobless aid and highway construction financing as an example of the practical consequences of regular opposition by Senate Republicans.
    “When we talk about the cost of inaction, it is more than just rhetoric,” Senator Harry Reid of Nevada, the majority leader, said as the Senate convened Monday. “It comes with dire consequences. The Americans who woke up this morning without the benefits they need know that better than anyone else.”
    In an effort to end the stalemate, Senator Jim Bunning, the Kentucky Republican who is insisting on a point of parliamentary procedure to block the legislation, offered to lift his objection if an agreement was made to use unspent economic stimulus money to cover the $10 billion cost of the unemployment aid, which would go to those who have already exhausted their benefits.
    “We cannot keep adding to the debt,” Mr. Bunning said Monday. “It’s over $14 trillion and going up fast.”
    But Democrats balked, saying that Republicans had not been concerned about requiring Bush administration initiatives to be paid for and that the unemployment aid amounted to an emergency.
    The loss of highway money could be resolved this week if the House passes a separate $15 billion measure meant to spur job creation, but some of the programs tied up in the Senate blockade, like a cut in Medicare fees paid to doctors, could take a while to disentangle.
    Democrats are compiling state-by-state lists of the impact of the Senate impasse, viewing it as a vivid way to talk about the costs of Republican opposition.
    Department of Transportation officials said the temporary furlough without pay would primarily affect workers at the Federal Highway Administration, the Federal Motor Carrier Safety Administration, the National Highway Traffic Safety Administration and the Research and Innovative Technology Administration. Those programs were paid for out of the highway trust fund, which needs to be renewed.
    Transportation Secretary Ray LaHood said the furloughs would halt at least 40 major construction projects around the nation because inspectors would be pulled from jobs on federal land.
    “As American families are struggling in tough economic times, I am keenly disappointed that political games are putting a stop to important construction projects around the country,” Mr. LaHood said.
    [Ah, wasn't the "stimulus" last year supposed to INCREASE these jobs? And it gets worse -]
    Besides the highway spending, other programs that expired as of Sunday night included loans for small businesses, the federal flood insurance program, subsidies to help the unemployed buy health insurance and an agreement that allows satellite television services to carry some broadcast channels.
    [America in chaos.]
    A law shielding doctors from a 21 percent cut in Medicare fees also lapsed, but the Obama administration took steps to shield doctors temporarily.
    [Yep, gotta help the rich no matter what!]
    The federal Centers for Medicare and Medicaid Services said it would hold claims for services provided in the first 10 days of this month, so doctors would not see the cut in payments.
    In a notice to doctors, the Medicare agency said it was working with Congress to avoid disruption in the delivery of health care services and payment of claims. If Congress takes action by March 12, it said, the holding of claims “should have a minimum impact on provider cash flow.”
    What Mr. Bunning is doing is using his right as a senator to object to a request for unanimous consent to pass the series of program extensions already approved by the House. Democrats could begin the process of bringing the measure to a vote to override his objection, but they say that could consume days and they have already opened debate on a broader economic bill.
    Mr. Bunning had been acting on his own in blocking the Democratic request to pass the legislation extending the programs for one month while Congress worked on a more permanent solution. But on Monday he drew some support from fellow Republicans who backed his demand that the costs of the programs be covered from unspent economic stimulus funds.
    “Why pile on the deficit if we have this store of money available?” asked Senator Jon Kyl of Arizona, the No. 2 Republican in the Senate, who suggested that Democrats were eliciting repeated objections from Mr. Bunning to score political points.
    Unless Mr. Bunning relents, it appears that the added unemployment pay will lapse for tens of thousands of people.
    The broader measure the Senate is now considering would extend the added unemployment benefits and health insurance help through the end of the year and renew more than $30 billion in business tax breaks. But it could take days to pass the Senate and then will have to be considered by the House.
    Mr. Bunning was not happy about the increasing attention he was receiving. ABC News reported that the senator, who was overheard swearing on the Senate floor last week, made a vulgar hand gesture when approached by one of its staff producers about the standoff.
    Mr. Bunning showed no sign on Monday of changing his position, saying he would not allow Democrats to slip the stopgap measure past him.
    “I will be here,” he said.
    [Senators fiddle while America continues its cascade of crashes, devoured by its topmost tiny circle of wealth and their black hole of unlimited crushed-together trillion$.]

    Robert Pear contributed reporting.

  3. Web Wealth, by Reid Kanaley, 2/28 Philadelphia Inquirer via philly.com
    WASHINGTON DC, United States - Many people have been pushed into part-time jobs during these hard times. Others prefer shorter hours. These sites explain many of the issues that workers face along with shorter hours.
    Part-time problems. An article from the Economic Policy Institute looks at "the continuing problems with part-time jobs." Even this pre-Great Recession study found that the rise in part-time employment posed serious problems, including spotty or nonexistent benefits, and diminishing opportunities for advancement. It is surprising, then, that the article proposes expanding part-time opportunities, and adding prorated benefits, as a means of solving the problems.
    http://go.philly.com/parttime1
    Part-time rights. Find out about your rights as a part-time worker here at the FindLaw site. One important thing to know is that, like an applicant for a full-time job, you may be able to negotiate many terms of your part-time employment during the hiring process. For example: Besides pay, what other benefits may be available to you, and at what cost to you, if any? Under what terms might your position become full-time? How would you be compensated if your hours go beyond the schedule you agree to?
    http://go.philly.com/parttime2
    Part-time or full-time? We wish the Department of Labor could do a more user-friendly job on the part of its site explaining part-time employment. But the subject is just too . . . subjective. This page can't answer the question of how many hours constitute part-time work. "This is a matter generally to be determined by the employer," it says.
    http://go.philly.com/parttime3
    Full-time money? A Good Housekeeping article profiles women who were making good money putting in part-time hours. Who knows how they've fared through the recession? But the many tips here could help you imagine new possibilities. One woman started a contractor-referral service after remodeling her home. One became a part-time professor. Another worked from home on commission, booking travel for clients. Each example comes with "smooth-transition" tips.
    http://go.philly.com/parttime4
    Contact staff writer Reid Kanaley at 215-854-5114 or rkanaley@phillynews.com.

  4. Focus budget on creating jobs: Think-tank, by Norma Greenaway, 3/01 Canwest News Service via MontrealGazette.com
    OTTAWA, Canada — A hike in the GST, a higher tax rate on Canada's wealthiest residents and a halt to promised corporate tax cuts are among measures proposed in an "alternative" federal budget released Monday.
    The budget plan, prepared by the Canadian Centre for Policy Alternatives, advocates billions of dollars worth of continued "stimulus spending" and targeted tax increases over the next several years as the best way to put Canadians back to work while also reducing the deficit.
    "There is much talk the recession is over and that we're on the path to recovery," Bruce Campbell, director of the left-wing think-tank told a news conference. "While it may be true that we're seeing signs of a statistical recovery, the human recession continues."
    Campbell said job creation should be the top priority in the federal budget that Finance Minister Jim Flaherty will unveil Thursday. 
    Armine Yalnizyan, the centre's senior economist, said panic over the deficit should not distract the country from zeroing in on the No. 1 problem — more than 1.5 million unemployed Canadians.
    "Canada needs a job plan because Canada has a jobs crisis," she told reporters.
    Yalnizyan shrugged off news that the economy had grown by a better-than-expected five per cent in the final quarter of last year, dismissing as "fantasy land" any notion economic growth alone will make the structural deficit disappear.
    Under the centre's plan, the estimated deficit of $56 billion for this fiscal year would rise to $64.5 billion next year before dropping in stages to an estimated $3.14 billion in 2014-15.
    The current jobless rate of 8.3 per cent would fall to 6.7 per cent within two years, spurred by annual stimulus spending of $15 billion a year for investments in everything from arts and culture and research to health care and communications infrastructure.
    Among other things, the alternative budget would:
    -Raise the tax rate to 31.5 per cent from 29 per cent for those earning more than $250,000 a year, beginning in 2011;
    -Raise the corporate tax rate back to the 2006 level of 22.1 per cent by 2012 from the current 18 per cent.
    -Fully tax capital gains and stock options;
    -Increase the GST to six per cent from five per cent on July 1, 2012;
    -Cancel the registered education savings plan, which allows money to be put aside for a child's higher education to grow tax free; and also cancel the Canada Education Savings Grant, under which the federal government provides anyone who invests in RESPs with an amount equal to 20 per cent of yearly contributions to a maximum of $500 per child.
    -Cut the defence budget by $6 billion over five years, returning it to pre-9/11 levels of funding.
    On the spending side, it proposes fattening and extending employment insurance benefits by 26 weeks and pumping billions of dollars in to everything from national prescription drug and child-care plans to affordable housing, and direct grants to post-secondary students.
    The centre's proposal echoes also calls from environmental groups to focus on creating "green" jobs.
    In a separate appeal, the Green Budget Coalition, an umbrella group of 21 Canadian environmental and conservation groups, is calling on the government to focus spending on three areas: protection of ecosystems and biodiversity, investments to clean up freshwater, and new investments in renewable energy.
    The coalition says the government could create thousands of jobs by renewing a popular incentive program for renewable power that has helped encourage a boom in the wind energy industry.
    Senior government officials say Flaherty's budget will provide details for $19 billion worth of spending for the second and final year of the government's stimulus package.
    The government has indicated it plans to pay special attention to jobless Canadians in the budget, probably by enhancing training opportunities and by extending a popular work-sharing plan.
    There has been no public suggestion, however, that it's considering raising personal or corporate taxes.
    Yalnizyan said the centre's budget plan is an attempt to "open the space" for politicians, the media and Canadians to replace the decades-long narrative about the need for "tax cuts" with the need for targeted tax hikes.
    "We won't have the world that we grew up in and that we want to bequeath to our children if we don't pay a bit more," she said.
    With files from Mike De Souza.

  5. Freezing companies review prices and cut hours, 2/28 (3/01) Radio New Zealand via radionz.co.nz
    WELLINGTON, N.Z. - Meat companies are being forced to review prices and shorten their hours as farmers hold onto their sheep and cattle to fatten them up.
    The Taylor Preston plant in Wellington says low stock numbers have forced it to have a no-kill day on Monday, for the second time in a week. Some night shifts have also been cut.
    Chief executive Simon Gatenby says steady rain this year has resulted in more feed than usual and farmers are preferring to hold back their stock for better returns.
    Mr Gatenby says Taylor Preston has to keep its livestock prices competitive to attract stock into the plant.
    The Meat Workers Union says some freezing works have been open for as little as two or three days per week over the past four weeks.


2/27/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Physician work hours linked to reduced fees, by Paul Govern, (2/26) Vanderbilt University News via mc.vanderbilt.edu/reporter
    NASHVILLE, Tenn. - Physicians have steadily decreased their work hours over the past several years as both commercial and government health care payers have sharply reduced the fees they've offered for physician services.
    [Great! - let's have some well-rested physicians for a change.]
    That's the lead finding in a report published this week in the Journal of the American Medical Association (JAMA) by a three-author team that includes Vanderbilt's Peter Buerhaus, Ph.D., R.N., director of the Center for Interdisciplinary Health Workforce Studies at the Institute for Medicine and Public Health.
    News of the strong association between decreased work hours and reduced fees might give pause to policymakers in Washington, D.C., as they contemplate a looming U.S. physician shortage and scheduled reductions in Medicare spending for physician services.
    [Stop whining and bust open the quietly constructed bottlenecks on access to medical skills in this sicksick country, starting with the sicksick medical establishment and trickling into the grotesque megagoiter of insurance companies!]
    “We think the fees are clearly part of the explanation for the decreased work hours. The two trends are marching together and are quite probably related,” Buerhaus said.
    Joining Buerhaus for the report were David Auerbach, of the Congressional Budget Office, and Dartmouth University's Douglas Staiger, the report's lead author.
    Sorting through federal survey data, the JAMA authors found that physicians maintained steady work hours from 1976 through 1995, averaging approximately 55 hours per week. But from 1996-98 to 2006-08 — the report uses three-year moving averages — physicians cut back weekly hours from 54.9 to 51 hours, a 7.2 percent decrease.
    During the same period, physician fees dropped 25 percent (after adjustment for inflation), as reflected by fee schedules used by both government payers and representative commercial payers.
    “The rate of the fee decrease may surprise many people. We've heard doctors complaining about fees for some time now, but we hadn't previously tracked the change for physicians overall,” Buerhaus said.
    The authors state that weekly hours for the rest of the U.S. workforce changed comparatively little over the same period. Attorneys cut back their hours by 2.4 percent and engineers cut back by 1.4 percent, while nurses increased their hours by 1.6 percent.
    Weekly hours worked by resident physicians decreased the most, from 65.7 to 59.3 hours, a 9.8 percent drop that the authors attribute to the imposition in 2003 of limits on resident work hours.
    For non-resident physicians, the decrease was 5.7 percent, from 52.6 to 49.6 hours.
    “What's so striking about this trend is that it applies across so many categories: physicians young and old, male and female, self-employed and non-self-employed,” Buerhaus said.
    For one year, 2001, the authors also examined how fees and work hours varied across 319 metropolitan areas. They found that physicians working in cities where fees were below the median put in fewer hours (less than 49 hours per week) than physicians in cities where fees were above the median (more than 52 hours per week).
    The JAMA report might well deepen expectations of a physician shortage. Demand for physician services will increase as baby boomers age and rates of chronic disease rise. Demand will likely also increase if more citizens are able to obtain health insurance coverage.
    Buerhaus said workforce analysts agree that a shortage is coming, but it's been difficult to form firm estimates. Estimates place the current number of physicians working in the United States at between 600,000 and 650,000. Mainstream estimates of a shortage range from 49,000 within 10 years (Health Resources and Services Administration) to between 124,000 and 159,000 within 15 years (Association of American Medical Colleges).
    While the association with fee decreases is very strong, the JAMA authors don't rule out other potential influences on physician work hours. In particular they note the rise of managed care in the 1990s, bringing decreased autonomy and lower satisfaction for physicians.
    The authors were unable to source credible physician income data for use in their analysis. Buerhaus said further studies will be needed to address a range of unanswered questions about additional forces that may underlie the trend in physician work hours.

  2. Taking a second job: Is it worth the hard work? b y Stephen Womack, DailyMail.co.uk
    LONDON, England - Hundreds of thousands of workers have taken on second jobs to survive these difficult times. Figures published earlier this month indicate that there are 2.8 million workers who have been put on short-time working or have had their overtime cut, and many are trying to make up the shortfall.
    Kate Philip, a chartered financial planner with adviser Independent Women in Edinburgh, says: 'We are seeing more clients with "portfolio" careers. It is part of a shift to more flexible working lives. Sometimes, people take on a second job for a particular reason. I've seen a couple of clients starting second jobs to pay down debts, using all of the extra income to reduce credit card bills.'
    Richard Coleman, from Eastbourne, East Sussex, has found that a second job is essential to keep the income flowing. Richard, 32, works four days a week for a contracting firm and goes to college for one day a week as he trains to become an electrician. Richard Coleman
    Long days: Trainee electrician Richard Coleman boosts his income by helping at a shelter for mentally ill people
    He says: 'Last year there was work around and I was kept busy. But in the past few months there have been fewer contracts and work is scarce.' He is boosting his income doing evening and weekend support work for those with mental illness living in sheltered housing.
    Richard, who is engaged to teacher Stephanie Smith, 33, says: 'The days can prove long. I might finish the electrical work at 4pm, have a quick shower, then I am out again for 4.30pm, working until 10pm or midnight.'
    Taking another job means extra cash but it can have implications on your existing employment, the tax you pay and insurance. The key issues to consider include:
    Employment contracts
    Before even thinking about extra work, check your existing contract. Many firms have clauses that set out rules for second jobs.
    Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development, says: 'Look to see if your contract says anything about the hours and locations you have to be available for work. This might limit your ability to take on other roles.'
    There are often clauses to stop staff working part time for a competitor.
    Emmott says that even if there is nothing in your contract, there is an implied duty of 'mutual trust and confidence'. He says: 'This means not doing anything that brings your employer into disrepute. I doubt a local authority would be happy with a teacher who takes on a second job in a strip club, for example.'
    On a practical level you also need to be aware of the physical toll that a second job can take.
    Tax and benefits
    It is easy to overestimate how lucrative a second job will be. Your take-home pay in a second job will be lower because your tax-free personal allowance (currently £6,475 a year) is usually allocated to your first job.
    Take someone earning £20,000 a year in their main job. They will pay £2,705 a year in income tax and £1,570.80 in National Insurance - a combined 21.3 per cent of pay.
    If the same person takes a second job paying £20,000 a year, they must pay a further £4,000 in tax and £1,570.80 in National Insurance, which is 27.8 per cent of earnings.
    Matt Coward, tax director at national accountant PKF, says: 'The pay-as-you-earn system is designed around the idea of one person, one job. In theory it can cope with extra jobs, but keep a close eye on things.'
    When you take on a second job, make sure you get a P46 form from your new employer and fill it in. This will tell the company's tax office that you already have an employer and should allow Revenue & Customs to calculate the correct tax code.
    Basic-rate taxpayers should expect to see a BR code on their second job - which means all income is taxed at 20 per cent. Even when you have told the Revenue of your circumstances, double-check any tax code you are issued. There have been big problems this year with coding errors for those with multiple jobs or pensions.
    Coward adds: 'Anyone with two jobs will probably find they will have to fill in a self-assessment tax return.'
    Those receiving child tax credits or working tax credits should think twice before taking on a second job.
    Tax credits are calculated on your estimated income at the start of the year and the extra income from a second job will reduce your future entitlement. But to keep the system simple, you are allowed to earn up to £25,000 extra before your credits are reduced in the current tax year.
    Philip says: 'In some cases the loss of tax credits may be a disincentive.'
    Insurance
    Insurers should be told about a change of jobs or part-time work. Twin occupations can affect premiums when you apply for new life, health or medical insurance. However, a new role will not change what you pay for existing policies, even if it is classed as a high-risk job.
    Jennifer Gilchrist, product development manager of Scottish Provident, says: 'If you claim on income protection insurance, we would assess your ability to do both jobs. It may be that you are fit to do one, but not the other so we would look at a proportionate claim with part of your income paid.'
    Car insurers must also be told - driving to appointments, making deliveries or leafleting will raise premiums.


2/26/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. MiVT: Colorful company, WCAX.com
    BURLINGTON, Vt. - Alan Newman looks surprisingly sedate when he steps out of his office at the *Magic Hat Brewing Company in South Burlington. But that changes when he pulls on a purple mane of feathers. "Is that better?" he chuckles.
    Magic Hat organizes the annual Mardi Gras parade in downtown Burlington. Newman jokes, "How many times can you dress as outlandishly as you want and still be underdressed?"
    "Whatever the climate is, people come out and have a good time," he beams, eager to add even more sequins and feathers to his getup for the big day Saturday.
    But behind the beads and the mask, you'll find a businessman more serious than he lets on. "My father always offered me an allowance, and I turned it down," he remembers.
    Newman had a newspaper route growing up in the New York City area, then jobs folding rags and fitting rental tuxedos. "I'm basically unemployable! I'm not a good employee," he laughs.
    The baby boomer's refusal to conform made him fit right in when he moved to Vermont. Newman says, "I've been in Vermont since 1970. And I suspect I'll probably die here some day -- hopefully not too soon!"
    He worked a handful of marketing jobs, and even tried real estate before a homebrewing buddy inspired Newman to launch Magic Hat 16 years ago. "Beer was kind of an accident," he says. By sales volume, the company is now the number one craft beer in New England.
    Magic Hat christened a new manufacturing line just last year at its South Burlington headquarters, doubling its capacity. It can turn out 400 bottles a minute to quench the thirst of customers in 26 states.
    But Newman admits, the expansion has brought some hiccups, namely, "Learning how to balance workloads with perishability."
    The ability for so much output has forced Magic Hat to tweak shifts affecting some of its 73 workers. It from time to time has to cut hours or add more depending on changing demand for freshly-bottled beer.
    Newman has high hopes for craft brewing. "It's the only category in the alcohol sector that's experiencing significant growth in today's economic climate," he explains.
    He says his company is enjoying double-digit growth. The beer industry as a whole has seen a flurry of acquisitions, including last year's takeover of Otter Creek Brewing by another "Made in Vermont" brand, The Long Trail Brewing Company.
    Reporter Jack Thurston asks, "Do you think one day some big company like Molson is going to come calling on you, looking to scoop you up?" "God bless! Let 'em come," Newman answers.
    He continues, "I get asked this all the time. It's never been on the table. If someone comes tomorrow and writes a stupid check? Well, I'm getting old, how much longer can I do this thing? But today, the goal is to continue doing what we're doing, doing it the way we're doing it, get better at it, and grow our customer base."
    Alan Newman still loves drinking and serving beer, and he samples brews wherever he goes. "I'm a beer fan!" he exclaims.
    This businessman who loves a good party seems to have found the perfect job, even though he makes it look like it's not work at all. "I love what I do!" he beams.

  2. Companies Cut Costs, Spur Competitiveness Through Flex Life Programs, by Gary Stern, Investor's Business Daily via investors.com
    NEW YORK, N.Y. - Change is the only certainty in life and business.
    Flex life programs at companies began as safety valves to ease pressure on overworked employees. Work schedules and sites are rearranged to offer workers more flexibility. Now these programs have morphed into tools to cut costs, curb downsizing and retain employees in tough times.
    A 2009 Families and Work Institute survey said that 94% of companies are keeping or upping their use of flexible work arrangements to manage costs, noted Ellen Galinsky, president of *Families and Work Institute, a New York City-based non-profit research group. At the same time, 86% of workers rated flexible programs as a key way to manage work and family life.
    You can temporarily furlough workers, for instance, to cut salary costs and nix layoffs.
    Firms also let employees telecommute to keep them from quitting.
    But flex life requires a delicate balance. If done well, work/life programs increase productivity, raise morale and minimize staff cuts. If dumped on employees, these same programs can backfire and cause enmity.
    Flex work arrangements, including employees working 80% of the time at 80% pay or taking a month or two off for sabbaticals at reduced pay, achieve dual purposes. These programs "keep engagement high in a period where it's a struggle to make business successful and it's a way to manage labor costs," Galinsky said.
    For example, companies that furlough staff for several weeks or reduce schedules from 40 to 35 hours a week, cut salary costs. Most employees view these steps positively because they feel it's better to face pay cuts than lose a job, Galinsky says.
    Anytime, Anyplace
    Flex life programs are playing a more pivotal role in people's lives because employees are increasingly family-centric, Galinsky says. Employees no longer believe in working blindly and at all hours for a company when downsizing and right-sizing have become the norm. What's more, employees in their 20s have been raised in a "work anytime and anyplace" environment and want flexibility on the job.
    The way employers follow through on these programs can decide their success. If flex or furlough programs are imposed on employees, without their involvement or input, they often backfire and trigger resentment. If workers participate in setting them up and have a say in how they're organized, they usually prove effective.
    At Image One, a company that helps other firms reduce printing costs, co-owner Rob Dube says that "energized, satisfied employees are more productive."


2/25/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Gentle Giant Moving Company Named Independent Mover of the Year, Somerville News, p.2.
    Moving and Storage Company Gentle Giant Moving Company, an award winning local and long distance mover based in Massachusetts, has been named "Independent Mover of the Year" by the American Moving and Storage Association (AMSA).
    The Independent Mover of the Year Award, or "the Indy," is presented each year by AMSA to one moving company for outstanding achievements as a service provider and significant contributions to the moving industry. The Indy will be presented to Gentle Giant CEO Larry O'Toole in recognition of his company's employee retention and development programs, 80% customer repeat and referral rate, and noted philanthropic involvements.
    Indy award recipients are selected for their role in enhancing the image of the moving and storage industry through hard work, dedication to customer service, and commitment to quality practices. Gentle Giant was chosen from among dozens of nominees based on accomplishments in all of these areas. Specifically, the Moving and Storage Company retained nearly its entire employee base during the most recent recession despite significant economic challenges, by offering structured work-sharing and temporary furloughs and instituting other operational efficiencies, in which every employee in the company participated. The company also manages the Gentle Giant Charitable Foundation which it uses to channel contributions to numerous charitable causes aligned with the company's mission and values. Gentle Giant maintains a stable profit margin despite market conditions that have forced numerous moving companies out of business.
    [Inserted from web version -]
    Gentle Giant Moving Company has been in business since 1980. Over the past decade the firm was honored with the Better Business Bureau's International Torch Award for Marketplace Ethics and won the Best of Boston award from "Boston Magazine" nine times. The Moving and Storage Company's innovative employee development and communications programs earned it a place on the "Wall Street Journal's" list of Top Small Workplaces in 2007, the first year the award program was implemented by the newspaper in partnership with Winning Workplaces.
    "As we celebrate our 30th year in operation, I want to congratulate every Gentle Giant employee, each one a leader in his or her own right, for achieving this distinction," said Gentle Giant Founder and CEO Larry O'Toole. "I am grateful to AMSA for this opportunity to highlight the amazing attitude of our Gentle Giant team and the determination of our employees to win customers for life and raise the bar for the moving industry with every move that we perform."

    Gentle Giant has also earned the right to participate in AMSA's ProMover program, which helps consumers easily identify a quality, professional mover.
    "Congratulations to Gentle Giant," said AMSA President and CEO Linda Bauer Darr. "The company has set highest standards and is committed to community involvement. I'm delighted to see a member as deserving as Gentle Giant get such recognition." 
    The Indy recipient is selected by a panel of industry experts. The award will be presented at a ceremony at AMSA's Annual Conference & Expo happening in Phoenix, Ariz. on Feb. 23, 2010.
    About Gentle Giant Moving Company, Inc.
    Founded in 1980, Massachusetts Moving Company Gentle Giant is a premier residential and commercial mover, offering local, interstate, and international service. Named one of the Boston Business Journal's Best Places to Work in Massachusetts in 2004, 2005, and 2006, winner of the 2006 International Torch Award for Marketplace Ethics by the Better Business Bureau, winner of the Better Business Bureau's Torch Award for Excellence in 2002, 2003, 2005 and 2008, nine-time winner of Boston Magazine's "Best of Boston," six-time winner of The Improper Bostonian's "Boston's Best Moving Company" award, seven-time winner of the Angie's List "Super Service" award, and 2007 Top Small Workplaces award from the Wall Street Journal and Winning Workplaces, the company's services include craning, piano moving, complete packing and unpacking services, and other related services. Gentle Giant offers storage facilities and dispatches crews from its sixteen offices in Massachusetts, New Hampshire, New York, North Carolina, Rhode Island, Virginia and Washington State. For more information, please call (617) 661-3333.

  2. Pryor work-share legislation gets first hearing, by Ryan Carter, Record Herald,Washington,OH via RecordHerald.com
    COLUMBUS, Ohio - Legislation introduced by State Rep. Ray Pryor (D-Chillicothe) that would help workers and employers in this tough economy had its first hearing Tuesday in front of the Ohio House Commerce and Labor Committee.
    House Bill 432, or Work Share legislation, allows companies to reduce the hours of their employees rather than lay off workers and those working fewer hours would be eligible to receive partial unemployment benefits for their lost time, according to Pryor, who represents the 85th District.
    "I strongly believe that this type of program, if established, will help protect the job security of workers throughout the state who employers would prefer not to lay off but due to the fact no program like this currently exists in Ohio, employers have no other option," Pryor told committee members during his testimony as sponsor of the legislation.
    "I believe that Work Share will not only secure Ohio jobs, but will also save the state of Ohio money. Instead of having recently laid off employees apply for full unemployment benefits, they will only need to receive partial benefits from the state while still continuing to receive pay from their employer as well," he said.
    Eighteen others states have implemented some form of work share legislation.
    "As you all know, jobs are of the utmost importance right now," Pryor said during the hearing. "With thousands of Ohioans looking for, or out of employment right now, Ohio cannot afford to lose any more jobs."
    Pryor said the 18 states that implemented some form of a work share program have had a significant increase in the number of employers wishing to take part in their programs.
    "Based on experiences in other states, work sharing provides benefits to both employers and employees; an alternative to laying off skilled workers for employers facing a temporary decline in the business cycle and job security for employees," he said.
    Pryor's legislation will be scheduled for further hearings before the House Commerce and Labor Committee.

  3. Peterson Flak David Walker Agrees On Spending to Jump-Start Economy, by David Dayen, Firedoglake.com (blog)
    David Walker, the former head of the GAO and a Comptroller General in the past, is part of the Pete Peterson deficit scold apparatus; in fact he’s one of the most visible members of that cabal. He has gone on speaking tours and become the public face of the proposition that we are spending out of control and must cut entitlements (you know, for our children). Therefore it’s really interesting to see him partner with Larry Mishel of EPI to give a coherent explanation of why we need deficits right now.
    President Barack Obama is in a difficult position when it comes to deficits. Today’s high deficits will have to go even higher to help address unemployment. At the same time, many Americans are increasingly concerned about escalating deficits and debt. What’s a president to do?
    The answer, from a policy perspective, is not that hard: A focus on jobs now is consistent with addressing our deficit problems ahead [...]
    With more than a fifth of the work force expected to be unemployed or underemployed in 2010, there is an economic and a moral imperative to take action. Persistently high unemployment drives poverty up, makes it harder for families to find decent housing, increases family stress and, ultimately, harms children’s educational achievement. For young workers entering the workforce, the current jobs crisis reduces the amount they will earn over their lifetime.
    In deep recessions, businesses tend to make fewer critical investments in research and development that can improve our economy’s productive capacity over the long term. Entrepreneurs usually find credit hard to obtain if they want to start a new business. These factors hurt U.S. global competitiveness and growth potential.
    That’s why we agree that job creation must be a short-term priority. Job creation plans must be targeted so we can get the greatest return on investment. They must be timely, creating jobs this year and next. And they must be big enough to substantially fill the enormous jobs hole we’re in. They must also be temporary — affecting the deficit only in the next couple of years, without exacerbating our large and growing structural deficits in later years.
    It must have been like drawing blood from a stone to get Walker to agree on this. But he’s saying here that we need a stimulus big enough to fill the demand shortfall, in the near term. That’s not at all what lawmakers are saying on Capitol Hill or even the White House, but here’s the leading deficit scold in the country saying it.
    Since conservatives and so-called deficit hawks are disingenuous about what they want to actually cut, we can conclude that the only serious people concerned about the deficit want to INCREASE it in the short term.
    First-time jobless claims went up yet again last week, to the highest number since November. The jobs crisis hasn’t ended at all, and we’re already eight million-plus in the hole. We need to come up with actual solutions instead of $15 billion dollar band-aids. The push on work-sharing – with bipartisan support from economists – is a good place to start.

  4. All about work-sharing in Canada, Toronto Globe and Mail via theglobeandmail.com
    According to Service Canada, work-Sharing is an adjustment program designed to help employers and workers avoid temporary layoffs when there is a reduction in the normal level of business activity that is beyond the control of the employer. The measure provides income support to workers eligible for Employment Insurance benefits who work a temporarily reduced work-week.
    Work-Sharing Agreements must be agreed upon by both employee and employer representatives, and approved by Service Canada.
    Work-Sharing is about:
    * helping employers retain skilled employees and avoid the costly process of recruiting and training new employees when business returns to normal levels; and
    * helping employees maintain their skills and job by supplementing their wages with Employment Insurance benefits for the days they are not working.
    --------------------------------------------------------------------------
    * The Federal government's work-sharing program
    * Globe Online discussion: Canadian workers cozy up to job-sharing
    * Feature story: Work-sharing - Buying jobs and buying time' - Participation quadruples in work-sharing program as companies look for alternatives to layoffs


2/24/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Recession tactic: The mini-shift, by Sue Shellenbarger, Wall Street Journal, D4.
    YUCALPA, Calif., U.S.A. - Laid off in the depths of the recession and unable to find another full-time job, writer Tamara Rice pieced together a new kind of workday for herself: three to five "mini-shifts" lasting one-and-1/2 to three hours each.
    For more than a year, Ms. Rice shuttled back and forth as many as 10 times a day between writing and editing assignments and personal and family activities. Starting at 8 a.m. in her Yucaipa, Calif., home office and ending as late as 10:30 p.m., she struggled to keep all her mini-shifts straight. Sometimes, she says, she crashed into a mental wall, wondering, "OK, what am I doing now?"
    Ms. Rice embodies a little-noticed effect of the recession: the incredible shrinking work shift. Cast off by mainstream employers or unable to find the job flexibility they need in a corporate setting, millions of workers are taking multiple part-time or freelance jobs, jumping back and forth repeatedly between work, other pursuits and more work. These weird workaday schedules are creating new time-management and other challenges.
    [Hey, better that American management skills swing over to time-management instead of continuing with mergers and downsizings of high-wage older employees in favor of non-consumer robots or minimum-wage twenty-somethings!]
    The trend is reflected in federal jobs data. People in the "involuntary part-time" job category—those who would like to find a full-time job but can't—surged during the recession to a high of about 6.6% of the work force last fall from about 2.2% in 2000. And the average workweek for private-sector, rank-and-file workers last October hit the lowest level since the government began keeping records in the 1960s, at 33 hours.
    Fueling the mini-shift trend is an explosion in Web sites for freelancers, which enable skilled workers in a wide range of fields to sell their services easily in part-time chunks. On Elance, a freelance Web site, 700,000 workers list their services, nearly triple the 2006 number of 235,000. On another such site, oDesk, where Ms. Rice works, workers have soared to 480,000. And on FixYa.com, experts offering product troubleshooting and repair advice have risen in the past year to 250,000 from 100,000.
    Some people work mini-shifts by necessity. Mike Lockier, a Eugene, Ore., programmer and broadcast engineer, hasn't been able to find work as a programmer, and he was laid off from his broadcast engineer job. To create full-time work, he pieces together construction and repair jobs for clients he gets from Craigslist.org or referrals. Then he moonlights on FixYa.com, answering users' email and instant messages in shifts ranging from two hours to all night. He would rather have a full-time job, he says, but patching together mini-shifts pays the bills.
    Others work this way by choice. Ann Pechaver's workweeks add up to about 35 hours, but they are intricately constructed in blocks of three, four or five hours. The Burlington, Vt., mother of two, a part-time college professor and consultant, divides her workdays into seven chunks, including three or four blocs devoted to work. She starts at 5 a.m. with a two-hour shift for one of several public-relations clients. After getting her two children, 7 and 9, off to school, she works another two to five hours, teaching, working with clients or serving as an elementary-school science-teaching volunteer. She spends evenings with her family, then finishes the day by working as late as midnight.
    While some, including Ms. Pechaver, say working mini-shifts fosters cognitive agility, all the mental gear-shifting invariably creates hurdles for the human mind. "The hardest thing I do is transitioning, taking off one hat and putting the other on," Ms. Pechaver says. Standing before a class of college seniors, her brain sometimes stalls while in a state better suited to her kids' schools. She has addressed her students as "boys and girls," she says, rather than her customary "ladies and gentlemen."
    "The brain just can't toggle back and forth" indefinitely, says Julie Morgenstern, a New York corporate productivity consultant and author. So much task-switching can result in a kind of cognitive stall-out she calls "mental gear-stripping."
    To ward off that kind of brain freeze, Ms. Morgenstern says mini-shifters need to be "hyper-organized," keeping track of all their commitments on one central calendar and planning work shifts as far as three days ahead, so they will be ready mentally to shift gears. She advises setting aside time both to prepare to resume an undertaking and to wrap up details at the end, taking notes if necessary so it's easier to pick up the thread later.
    Melissa Caouette, a Farmington, Conn., single mother, sometimes feels overwhelmed as she jumps back and forth among part-time jobs and volunteer positions. She has developed some tactics for avoiding a mental stall-out. To save time, she splices grocery shopping between her mornings at school as PTA treasurer and her midday part-time job as a waitress. She stashes the grocery bags in the restaurant cooler and puts the car keys right next to them. That way, she says, she can't absent-mindedly drive away without her groceries.
    A major pitfall of mini-shifting is the lack of "clear edges" between work and personal time, which can gradually erode R&R until "your life gets out of balance in a very significant way," Ms. Morgenstern says. "You don't know what to do with yourself other than work." As a remedy, mini-shifters should "fill gaps with well-planned-out activities that re-charge you."
    Laura Wellington, a Ridgewood, N.J., entrepreneur, divides her day among four offices from which she runs three businesses—a computer-consulting company, a financial-systems business and a maker of a line of "Wumblers" toys and educational media. Her day starts and ends in her home office, often encompassing five mini-shifts of work lasting one to three hours. Between shifts she cares for her five children or commutes among the three other offices.
    "Every two months or so, I find myself beginning to forget things. Sometimes I even break down crying," Ms. Wellington, a widow and single mother, acknowledges. At such times, she will "pull back and fully recharge," taking her children to the coast for a weekend.
    Another risk is reduced output. "Almost any time we switch between doing different tasks, we will be less efficient than if we focused on a single task," says Russell Poldrack, professor of psychology and neurobiology at the University of Texas, Austin, and an authority on multitasking. Ms. Pechaver estimates she loses about a half-hour a day of productive time from shifting back and forth.
    To guard against inefficiency, Peggy Duncan, an Atlanta personal productivity consultant, advises setting quantitative objectives for your work and assessing your progress frequently.
    In a year spent working mini-shifts, Ms. Rice, the California writer, says she hit many of these obstacles. And without many opportunities for deep thought about her work, she found herself lacking her usual long list of creative ideas for clients. "I was working in such short bursts I didn't have time to process what I was doing," she says.
    This month, she is testing a return to a traditional workday. She has reduced her client load a bit and overhauled her schedule into one six-hour shift. For her, at least, this traditional approach seems so far to be working; she has become passionate about her work again.
    Write to Sue Shellenbarger at sue.shellenbarger@wsj.com

  2. Work-share program that cuts hours vs. jobs could grow, by Paul Davidson, USAToday.com
    WASHINGTON, D.C., U.S.A. - A program that encourages companies to avoid layoffs by reducing workers' hours could be expanded to nearly half the states this year.
    Legislation this year in at least seven states would create work-share programs in Colorado, Hawaii, Ohio, Oklahoma, New Hampshire, New Jersey and Pennsylvania, growing the initiative for the first time in decades.
    [They missed Illinois (10/20/2009 #1), which would bring the total to 17+8= 25 = fully half the US states this year.]
    Seventeen states already have programs in which employers can cut the hours of all or most employees in lieu of layoffs. The workers get jobless benefits to recover part of their lost wages.
    [Temporary funding from jobless benefits will have to be switched to permanent funding from a totally disincentivating tax on overtime profits relative to hiring-in WITH a 100% exemption for OT-targeted hiring +/- training. Companies that "need" to destroy the economy by chronic overtime in the age of automation need to be pushed into extinction before they "extinct" us all.]
    Work-sharing lets employers avoid the costs of severance and of training new hires when the economy rebounds. For workers, it eliminates the trauma of layoffs and helps preserve morale.
    [Any "rebound" is going to be purely an artifact of data selectivity and doctored indexes. This depression can do nothing but lengthen and deepen till we enforce the 40-hour workweek non-stiflingly and adjust it downward as much as it takes to achieve full employment and markets in the Age of Robotization.]
    The number of employers in the programs soared last year as the recession deepened and the jobless rate climbed to 10%. A record 166,000 jobs were saved in the 17 states that offer the option vs. 58,000 in 2008, according to the National Association of State Workforce Agencies.
    [These figures ignore all the indirect job-saves thanks to averting the negative domino or cascade effect aka the negative of Keynes' multiplier effect.]
    "The program has played an important role during this recession, and it should be available to workers in more states," says Neil Ridley of the liberal Center for Law and Social Policy.
    How the program works: If a firm slashed 20% of its workforce, employees earning an average $800 a week would receive $400 in unemployment insurance. With work-sharing, if all employees' hours were cut 20%, each would earn $640 in wages, plus $80 in unemployment.
    Jobless benefits [ie: unemployment trust funds] pay about half of lost wages. Many states make employers keep health care and other benefits for affected workers. In New York, 46,000 employees participated last year vs. 15,000 in 2008.
    A bill by Sen. Jack Reed, D-R.I., would fund work-sharing for two years, [and another bill by Rep. Rosa DeLauro, D-Conn.3d,] keeping states from further straining unemployment trust funds. It was not included in a job-creation bill passed by the Senate Wednesday.
    [A major error - yet another case of failure to learn from history that sharework is sustainable while makework is not. But passing the unsustainable strain of funding worksharing from the unemployment trust funds to the mind-boggling US national debt and deficit is not a big improvement. Worksharing needs to be redesigned into sustainable timesizing via ideas such as a confiscatory tax on overtime profits with a complete exemption for OT-targeted training&hiring, meaning smooth, automatic and pervasive overtime-to-jobs conversion (followed by moonlighter-inclusion and workweek-versus-unemployment adjustment...).]
    The program likely would not make sense for firms that don't expect sales to rebound for years and don't depend on skilled workers, says Doug Holmes of the National Foundation for Unemployment Compensation & Workers' Compensation.
    [Yes it would. It would make sense for all firms, because basically all firms are in this same position - the depression is permanent without this program - there is no other foundation for sustainable recovery because "robots don't buy their own output," and as downsizing firms keep on downsizing, higher skilled workers get cheaper and more desperate - but the consumer base and all dependent markets (ie: ALL other markets) shrink and shrink and shrink. We do this now or we undergo a massive population collapse and the legendary, feared Return to the Caves. There is no choice. We can't maintain forever into the Age of Robotics a frozen or rising pretechnology workweek, with mounting government makework and charity and debt and deficit and taxpayer liability.]
    *The Gear Works of Seattle, which makes gears for wind turbines, sliced workers' hours 20%, skirting layoffs for about 15 of 93 employees, says executive Mike Robison. Machinist Robert Foster, 38, who worked four-day weeks for 10 months, says, "I like it vs. the alternative."

  3. 'Worksharing' bill an intriguing idea, (2/25) NashuaTelegraph.com
    KEY POINTS - BACKGROUND: The state Senate is expected to vote next week on a bill that would introduce 'worksharing' to New Hampshire. CONCLUSION: Encouraging firms to reduce the hours of workers rather than laying them off – while supplementing the worker’s wages with unemployment benefits – has proven to be successful in other states.
    CONCORD, N.H. - Would you rather get laid off and collect unemployment benefits or have your hours reduced and be able to supplement some of that lost income with state money – and maintain your health insurance coverage to boot?
    For most workers, that would seem to be a no-brainer. And it might not be such a bad idea for the state, either.
    Welcome to Gov. John Lynch’s “New Hampshire Working” initiative, which is intended to help businesses retain workers – and for workers to retain their jobs – in the wake of the Great Recession.
    The bulk of Lynch’s program is incorporated into SB 501, a Senate bill championed by Sen. Margaret Hassan, D-Exeter, and co-sponsored by 14 senators,
    including Greater Nashua Sens. Betty Lasky, D-Nashua, Peggy Gilmour, D-Hollis, and Betsi DeVries, D-Manchester, who also represents Litchfield.
    And it’s certainly off to a fast start. Several hours after the governor testified in favor of the bill at a public hearing last Thursday, the Senate Commerce, Labor and Consumer Protection Committee voted 5-0 to recommend the bill. The full Senate is expected to endorse the legislation March 3 and send it over to the House of Representatives.
    While this program would be new to New Hampshire, the concept has been around for quite a while. Generally known as “worksharing,” it is believed to have originated in California back in 1978.
    Four years later, Congress voted to amend the Federal-State Extended Unemployment Compensation Act of 1970 to include a provision encouraging states to enact what it called “short-time compensation programs.
    Since that time, 17 states have adopted worksharing programs, including Connecticut, Massachusetts and Rhode Island.
    And, as one would imagine, the number of businesses participating in these programs has grown significantly since the economy went sour several years ago. In Massachusetts, for example, the number of businesses enrolled in the program rose from 31 to 458 between 2008-09, boosting the number of participating workers from 621 to 10,127.
    Worksharing offers a number of benefits to employers looking to cut costs, such as retaining skilled workers and eliminating the need to recruit and train new workers when the economy recovers. As for workers, they get to keep their jobs, most of their pay and their health insurance coverage, if provided.
    The amount of pay would vary from state to state, depending on unemployment compensation formulas and the reduction of hours.
    Currently, a laid-off New Hampshire worker earning $450 a week would be eligible for about $250 in unemployment benefits. Under this program, that same worker would get two checks – one from the employer, one from the state – that would total about $370, or more than 80 percent of the original pay.
    We are less enthused about a second part of Lynch’s program, whereby state job agencies would develop a plan to assess the skills of the newly unemployed – in essence, an assessment test.
    Frankly, we don’t believe that’s a good use of the state’s time or money, nor do we believe an employer is going to make a decision on whom to hire based on whether a candidate has the state’s stamp of approval.
    While we are anxious to see the Office of Legislative Budget Assistant’s yet-to-be completed fiscal analysis of the bill, conceptually the worksharing aspect of the bill appears sound.
    As U.S. Department of Labor study conducted in 1997 – some 15 years after the federal law was changed – found that employers were pleased with the program. The study also found that worksharing didn’t negatively impact the solvency of the states’ unemployment trust funds.
    In fact, the biggest complaint voiced by the authors of the study was that states weren’t doing enough to publicize it.
    We suspect that won’t be a problem here should the state Legislature move to adopt this worthwhile program.

  4. Scottish councils warned to reduce costs, by Andrew Bolger, (2/25) Financial Times via ft.com
    [Probably means town councils rather than EU-style works councils.]
    STRATHCLYDE, Scotland, U.K. - Scottish local authorities have been warned they will need to reduce their costs by around 25 per cent over the next few years because of significant public expenditure cuts planned by the UK government.
    This warning came as the University of Strathclyde’s Fraser of Allender Commentary forecast that Scotland would see growth of only 0.6 per cent this year – but could yet face a double-dip recession.
    Paul Brewer, senior partner with PwC, which supports the report, predicted Scottish councils would find it “exceptionally challenging” to cope with budget cuts and successfully maintain services at the level their electorate expected.
    Mr Brewer said much of local authority spending was locked in for significant periods – and councils’ hands were effectively tied by spending commitments such as pension liabilities, Private Public Partnership funding arrangements and statutory obligations to provide certain services.
    “This inevitably means that the solution will involve significant restructuring and potentially sharing of activities such as back office and support functions in order to minimise any reduction in the range and extent of services,” he said.
    Professor Brian Ashcroft said a weak recovery for the Scottish economy was in prospect, supported by a gradual improvement in the growth in exports and investment.
    “But, given relatively flat household and corporate spending, the ending of quantitative easing this month, and the likely continuing sluggishness of bank lending, the prospect of a further fiscal tightening in 2010, all increase the risk of a double-dip recession later this year and perhaps next,” he said.
    His report said the Scottish economy was in a better position than it was a year ago – but business sales and optimism trends in the fourth quarter were not as strong as the third quarter.
    “There is concern that the Scottish economy faltered in the fourth quarter and this concern has carried over into the first quarter of this year with weaker retail sales data than south of the border, and unemployment, in the latest data for the final quarter of last year, rising at a faster rate, not only than the rest of the UK, but also western Europe,” it said.
    While Scottish gross value added has fallen by 6.1 per cent over the recession, the number of employee jobs had fallen by only 2.7 per cent. To the extent that it is easier to cut labour hours via short-time working than it once was, employers might be less likely to make workers redundant in the short run.
    [There's a sign of solid hope!]
    But the report added: “It is arguable that a flexible labour market also makes it easier to dispense with the services of workers. If the recession is expected to persist, or the recovery expected to be very sluggish, then job shedding could pick up and unemployment continue to rise.”


2/23/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Docs cut work hours as primary care shortage looms, AP via 10 Connects via wtsp.com
    CHICAGO (AP) -- Doctors are steadily cutting back on their hours and some experts believe that may worsen the health care situation.
    [Why are six-year-trained doctors doing primary care in the first place? Why isn't this the province of three-or-four-year-trained primary-care nurses? Do Americans really want overtired and overworked people looking after them, people on the tenth or more hour of overtime?]
    According to an analysis in the Journal of the American Medical Association, average hours dropped from about 55 to 51 hours per week from 1996 to 2008. Researchers say that's the equivalent of losing 36,000 doctors in a decade.
    The decline in hours is said to have occurred among all groups of physicians.
    [At last, physicians are smartening up, cutting the Superman act and getting more rested response-ability to Americans' healthcare problems!]
    Work-hour limits for residents, or doctors in training, were introduced in 2003 and brought down the average. But when researchers removed the resident doctors -- those in training -- from the analysis, they still found a nearly 6 percent decline in work hours.
    [Health and balance begins to return to sick and workaholic American medical practice!]
    Payment issues may have played more of a role. The overall decrease in hours coincided with a 25 percent decline in pay for doctors' services, adjusted for inflation.

  2. We must speak with one voice. by Sue Scott, Evening Gazette via nebusiness.co.uk
    ONE North East outlined its ambitions for the region at an exclusive Evening Gazette event last week. Scores of industry leaders gathered to hear how the regional development agency aims to deliver results for the region.
    TEES VALLEY, England, U.K. - Nearly three months after Tees Valley won a £60m payout from Government and the regional development agency to tackle its growing economic crises, a flurry of announcements is set to see the first cash delivered to businesses.
    Last week, Lord Mandelson turned the tap on to the tune of almost £4m to protect apprentices, broaden re-training opportunities and encourage individuals with business ideas to put them into practice.
    He followed that today with another £5m aimed largely at the North and South Tees process sector to part-fund investment in energy cost-cutting measures - a sorely needed initiative to help put them on a more competitive footing with rivals in the rest of Europe.
    The remaining £50m is still to be earmarked.
    But at an exclusive presentation to business and industry leaders hosted by the Evening Gazette on Friday, One North East pledged to deliver it as quickly as state aid rules allowed, while any barriers to achieving the aims of the Tees Valley Industrial Programme over the next two years would be demolished just as speedily.
    However, it needed a new “spirit of partnership” between the public and private sector to be effective, said director of business and industry Ian Williams.
    During a wide-ranging presentation, development agency chiefs - who won significant concessions from central Government over the rules about distributing Treasury-matched cash - urged companies to come forward with projects deserving support.
    In return they pledged to speed up the bureaucratic process, remove some of the more unrealistic targets associated with Government handouts, and get to the heart of problems stunting and even reversing growth in the Tees Valley.
    RDA chief executive Alan Clarke said it was a part of the region that had been particularly badly-hit during the back end of the recession, where job losses had only been minimised by companies implementing short-time working more widely than in any previous downturn.
    [Unbeknownst to participants, that's probably the most hopeful thing in this whole article.]
    Corus’ decision to mothball its Teesside Cast Products plant, which began at the weekened, was “particularly bad news” he said and contributed to the “real challenges” facing Tees Valley.
    But he added: “Difficult as it is at the moment, we have to present a positive, compelling view of the future; if we do not, businesses will simply not come here.
    “In that respect I applaud the Gazette’s Talk Up campaign.”
    He added: “I think Tees Valley needs to speak with a single voice.
    “We need a united front and a common purpose.
    “If we do not do that it will count against the Tees Valley - and I will roll up my sleeves in respect of that.”
    Setting out the detail of the eight-point programme, which is intended to leverage more than £8bn of private investment into the area on the back of which 3,000-4,000 jobs could be created over the next four years, Mr Wiliams said it was not “free money” but was intended to be used as a catalyst for further investment.
    “It doesn’t mean we will support every project that comes this way but it is up to the private sector to come forward with its proposals.
    “These opportunities do not come along very often and there is no other region I’m aware of (that has reacted like this) in the face of what is clearly a significant issue.
    “We see advanced manufacturing and processing industries as key to Tees Valley going forward but there is a clear acknowledgment that we need to create jobs in the short term.”
    Tees Valley Industrial Programme
    Nearly £4m for apprentices and retraining of Corus workers and other victims of recession
    Accelerated support and more relaxed criteria for awarding more than £1m to help individuals start their own business
    Help for companies, especially engineering firms, to identify alternative markets and sectors and reduce reliance on core activities
    Collaborative projects to identify new feed stocks for the process sector to reduce reliance on petrochemicals and improve sustainability
    £5m of match funding for energy efficiency programmes mainly at the Wilton site
    Cash to prepare Tees Valley as a test bed for a fully integrated carbon capture and storage plant, described by Ian Williams as “financially horrendous and technically difficult”, but also an asset with which to attract global business
    More flexible approach to state-aided investment projects, de-risking and stimulating private sector buy-in
    Release of strategically-valuable regeneration land to encourage joint ventures with the private sector.

  3. BoE's Tucker points to risk of 'inflation bottlenecks', by Daniel Pimlott, Financial Times via ft.com
    LONDON. England - The UK economy faces the threat of stagflation as it moves out of recession if robust growth does not return quickly, Paul Tucker, the Bank of England’s deputy governor, has warned.
    In a reversal of the normal trade off between growth and inflation, where faster rises in prices come as the economy heats up, slow growth in the recovery risks causing deeper permanent damage to the supply side of the economy and thus bringing higher inflation sooner, Mr Tucker said in a speech on Tuesday.
    [Still the gapingly naive supply-side fallacy from a deputy governor of the Bank of England! No wonder they tanked their nation along with the flock of gulls on Wall Street.]
    The problem stems from what Mr Tucker said was probably a “temporary” shock to the supply capacity of the economy generated by the financial crisis.
    After the collapse of Lehman Brothers, companies’ access to credit was severely curtailed, forcing them to cut back on production, while confidence also plummeted, eating into demand.
    Although the situation has improved since then “companies seem to have temporarily suspended part of their capacity,” for instance by putting employees on short time working or closing a production line.
    [So would this BofE deputy governor have companies continue unmarketable production, on the assumption that "If we build it, it will sell"? If this were true, recessions would never happen. This is Say's Fallacy, still often known as "Say's Law." (By contrast, the fallacy that's often known as the "Lump of Labor Fallacy" is actually the Shrinking Employment Law.)]
    Unless demand recovers strongly, this halt to supply could easily become permanent – so that when the economy does get going demand for goods could run up against limits on businesses’ ability to supply, driving up prices and wages.
    [Well, it ain't gonna recover at all unless people like Tucker start supporting a restoration of the consumer base by the redefinition of our overall, technology-shrunken amount of market-demanded human working hours from "40" hour chunks labeled "full time job" to "35" or "32" or "30" hour chunks labeled "full time job." Of course, we could start just by enforcing our 40-hour maximum, but we should do it not with a stifling prohibition of overtime work but with a smart design that prohibits only personal money-motivated overwork while unleashing those who love their "work" and have therefore deflationary incentive.]
    However, if the economy can be returned to growth more quickly and more businesses begin to restart production, the amount of economic slack could actually prove greater thus producing unusually low inflation.
    “If demand recovers robustly, firms are likely to bring some capacity back on line. If, on the other hand, demand proves anaemic, then suspended-capacity is more likely to be permanently scrapped,” Mr Tucker said.
    “Under the first scenario, inflationary pressures could be weaker than would otherwise be the case in a recovering economy. Under the latter scenario, inflationary pressures would be greater than otherwise in a stalled economy.”
    The desire to spur a more powerful recovery in order to avoid the permanent depletion of companies and the labour force’s ability to supply goods, services and labour presents a dilemma for the Bank, as it also faces inflation currently well above target.
    Mr Tucker said that the Bank would need to be “especially alert” to any signs of inflationary pressures building up during the recovery, and said there was a risk on inflation “bottlenecks” as demand returned but supply did not necessarily keep up.
    While the Bank was confident that the current blip in inflation to 3.5 per cent in January would prove short lived, judging it to be the result of a rise in VAT, petrol prices and sterling weakness, he said that “we can’t, and aren’t, comfortable about it”.
    As well as the risk that more supply capacity has been destroyed than the Bank initially suspected. Mr Tucker warned that there was a risk that the Bank had underestimated the extent to which the weaker exchange rate would feed through to higher prices, that commodity prices would be pumped up because of surging Asian economies.
    In the same speech, Mr Tucker also said that it was possible that the Bank’s key policy rate would be lower after the recession than it had been before. He pointed to the likelihood that there could be a persistent rise in the margin that banks charge for credit over government debt – known as the risk-free rate. This could be the result of higher costs of funding, a heightened sense of the risks of default compared to before the crisis, or more demanding regulation in the future.
    But he said these higher charges imposed by banks could be offset by lower interest rates set by the Bank of England. At the moment the Bank has set interest rates at 0.5 per cent, the lowest in the Bank’s history dating back to 1694. Rates had averaged more than 5 per cent in just over a decade before the crisis.
    “In plain language, the Bank’s policy rate might on average be lower in future than during the [monetary policy] committee’s first decade,” he said.


2/21-22/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. FDL Book Salon Welcomes Dean Baker, False Profits: Recovering from the Bubble Economy, by: David Dayen, 2/21 FireDogLake.com (blog)
    [Welcome Dean Baker, and Host David Dayen...]
    False Profits: Recovering from the Bubble Economy
    Let me tell you my story about reading this book.
    I spent some time last month in San Francisco for a little thing called the Prop 8 trial (perhaps you’ve heard of it?), which happened to coincide with the worst week for liberalism in recent memory. In the space of a few days, Martha Coakley failed in Massachusetts; the Supreme Court opened the spigot on money in politics with the Citizens United ruling; Air America signed off; and on and on. What’s more, it rained pretty much every second that week in San Francisco, and I spent most of my non-courtroom time huddled on a street corner waiting for a MUNI bus. I’ve often joked that in the movies, rain always symbolizes rain, but in this case it accurately symbolized the general mood of progressives circa mid-January 2010. The gloom represented the lost year for the progressive agenda; an economy saddled with millions of Americans jobless and seemingly no plan to get them back to work; a moribund legislative branch bound by arcane rules and processes that frustrated action; an executive branch aloof and adrift; and a judiciary branch that might as well have their own personal corporate sponsorships. Most of all, progressives were wondering where the fight had gone from their political leaders, how the steadfast and resolute nature of Truman, Roosevelt and Kennedy, could lead to the tepid mush that passed for boldness today.
    My literary accompaniment for this week was the book False Profits by Dean Baker, which dared to name names about the elites most responsible for the biggest economic crisis in generations. In the book, Baker highlights the trillions of dollars they squandered, the suffering they caused, the mistakes they made and continue to make, and asks the obvious question: “Why do these people still have jobs?”
    It was oddly comforting.
    Because Dean Baker, armed only with facts and common sense, actually presented a simple and coherent argument, actually offered solutions, actually held the responsible parties accountable and actually vowed not to forget about their transgressions.
    You know, like a Democrat is supposed to do, in the theoretical model of politics that inhabits our best hopes.
    Baker, the co-director of the Center for Economic and Policy Research, pens a fairly simple message, broadly described – our elites have failed, and yet they somehow remain elites. Make sure you understand this phrase before embarking upon this book – “the eight trillion dollar housing bubble.” Baker points to this as entirely responsible for the economic collapse, and provides the economic underpinnings for such a claim, so rarely heard in Washington debates about spending and deficits.
    In Baker’s retelling, the Federal Reserve Board and the Treasury Department, specifically Alan Greenspan, Ben Bernanke and Henry Paulson (featured on the cover as the “false profits” of the title), allowed the housing bubble to grow unchecked, ignored and even encouraged the reckless mortgages that intensified risk, and were caught completely off-guard by the eventual meltdown. Stripped of their home equity wealth, consumers could not ring up the purchases that fed the national economy. Foreclosures and a glut of vacant housing on the market devastated the construction industry. The write-offs and toxic securities at the banks brought them to their knees. Baker says this was completely predictable:
    “None of this is complicated or mysterious. Anticipating this disaster didn’t require brilliant insights or complex models. In fact, a good student in an introductory economics course would have possessed all the knowledge needed to see this train wreck coming.
    However, the political elites do not want the official story to be that simple. They don’t want the public to know that the people holding the top economic policy positions are incompetent, corrupt, or both. By burying the story in complexity, these elites are trying to confuse the American public.”
    It’s perhaps unsatisfying to chalk up a recession which has caused so much pain and suffering to the fact that a few people in key positions simply didn’t do their job well. But that’s Baker’s thesis statement, and he proves his point over and over using simple math and common sense, making the complexities of financial and housing policies seem perfectly obvious. Baker attacks the usual excuses from the elites – that they needed more regulatory tools (actually, the Federal Reserve had plenty of authority to crack down on the housing bubble) or that they lacked a “systemic risk regulator” (the Federal Reserve is quite well-equipped to serve in this capacity), and comes back to his core point constantly – that any economic “expert” who created this much havoc through sheer negligence doesn’t deserve the title, let alone their job.
    Most important, Baker goes beyond identifying the central problem but articulates innovative solutions for both the jobs crisis and the reforming of the financial sector. Baker, an idea factory for stimulus, follows the principles of Keynes while offering new ways to introduce those types of demand-side stimulus measures. Baker endorses ideas you’ll never hear from other liberals, such as: subsidies for local transit agencies to encourage low-cost ridership; public funding for clinical drug trials (which could lower the cost of prescription drugs and allow generics to be sold more immediately); New Deal-type funding and support for writers and artists to post copyright-free work on the Internet; and a work-sharing tax credit that would pay companies to reduce worker hours at the same salary, allowing for more hiring. Some of Baker’s previous ideas, like transitioning homeowners facing foreclosure into renters of their own properties or instituting a financial transactions tax on stock purchases, have begun to gain traction, with Fannie Mae implementing a modified “own to rent” program, and global financial leaders talking about financial transaction fees.
    I’m pleased to have Dean Baker with us today to talk about his book. Heck, I’m pleased to have read it when I did, considering the faith it gave me that somewhere out there, liberals still know how to come up with policies that solve problems, and how to call incompetence what it is.
    Related posts:
    1. Happy 10th Birthday CEPR, Dean Baker & Mark Weisbrot!...

  2. Cantwell Fights to Expand Work Share Program to Preserve Jobs and Keep Washingtonians Working, by Press Office (Cantwell), 2/22 LakeStevensJournal.com
    WASHINGTON, D.C. re WASHINGTON State – Today, U.S. Senator Maria Cantwell [D-WA] announced her support for legislation that would help struggling businesses keep their employees on the job through a federal program known as ‘work share.’ The Keeping Americans Working Act provides a cost-saving alternative to employers that need to cut payroll costs. Instead of laying off workers, employers can reduce the number of hours worked by individual employees. The program allows employees on reduced hours to collect unemployment insurance benefits to compensate for lost income while continuing to receive their benefits.
    Washington state has the nation’s second-largest *work share program in place saving tens of thousands of jobs.
    [So who has the largest? (by what measure?)]
    This bill would support and expand programs like Washington’s by providing 100 percent federal funding for 26 weeks of benefits. 
    “In 2009, work share in Washington state showed a 357 percent increase and saved more than 27,000 jobs – the second highest total among the 17 states nationwide that offer work-share benefits,” said Cantwell. “Washington has proven that work share works. With the federal assistance provided by this bill, the work share model used in Washington can be expanded and replicated in other states. In these tough economic times we must do everything possible to support businesses still fighting to keep their doors open and their employees on the job. Work share allows businesses to keep handing out paychecks instead of pink slips.”
    Work share in Washington has already saved 27,342 public and private-sector jobs, placing the state at second in the nation of total jobs saved by the program, according to the Department of Labor. Currently, 51,000 Washingtonians are eligible to participate in the program for up to 52 weeks of benefits.
    Information about the program is available online at www.esd.wa.gov and searching “shared work,” or by phone at 800-752-2500.

  3. New Employment Insurance [EI] Web Videos Improve Service to Canadians, 2/22 Marketwire via Benzinga.com
    SIMCOE, Ont., Canada - The Honourable Diane Finley, Minister of Human Resources and Skills Development, today announced the launch of the new Employment Insurance (EI) self-help Web videos now available on the Service Canada Web site.
    "The Government of Canada is making it faster and easier for Canadians to get their benefits," said Minister Finley. "Through these Web videos, Service Canada staff guide clients through the online Employment Insurance application process."
    The Government of Canada is continually searching for new and innovative ways to improve its delivery of programs, services and benefits to Canadians. Through Service Canada, the Government is providing better access and faster, friendlier services.
    Intended to complement the existing information available on the Service Canada Web site, the ten new Web videos cover topics such as setting up your own "My Service Canada Account," "Applying for Employment Insurance," "EI Rights and Responsibilities" and "EI Special Benefits," to name just a few.
    This initiative is part of the Government's commitment to make the EI program more responsive and more supportive for Canadians. In January, Employment Insurance special benefits were extended to self-employed people.
    Other temporary measures the Government has undertaken to help those hardest hit by the economic downturn through Canada's Economic Action Plan include providing longer EI benefits, more efficient service and support for training, and protecting jobs through *Work-Sharing agreements. The Government has also frozen EI premiums for 2010 at the same rate as 2009.
    What is great about the Web videos is that they will help people avoid some of the most common errors made when applying online. This new initiative is designed to bring more Canadians online and to better prepare clients to self-serve.
    Service Canada continues to deliver on its goal to provide Canadians with one-stop, personalized service they can access however they choose-by Internet, by telephone or in person.
    For more information on the Web videos and on other government programs, services and benefits, contact 1 800 O-Canada (1-800-622-6232), TTY: 1-800-926-9105; go online at www.servicecanada.gc.ca; or visit one of over 600 points of service in communities throughout Canada.


2/20/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Flexible Working Hours Have Positive Effect on Health, TopNews.us
    [This has the smell of a study that is trying hard to keep saying Flexible working hours and not Reduced working hours.]
    DURHAM, England - A study carried out by Durham University has found that working flexible hours has a positive effect on workers' health and enables them to get more rest in bed each night.
    According to the researchers at Wolfson Research Institute based at Durham University, “In our study, we found numerous benefits if individuals are allowed to have an input into their own working patterns”.
    The results also showed that in the 16,000 people reviewed as part of the survey, no adverse effects were experienced.
    Commenting on the results, a spokesman from the Trades Union Congress said, “Both personnel and management can experience the advantages of workforce mobility”.
    "[Overworking] leads to stress, which can ruin the little time that overworked staffs do get to spend with their family," he remarked.
    [Did some editor really have to insert this reference to overlong working hours here or did the researchers actually fail in their attempt to stick to slamming just inflexible working hours?]
    According to Dr. Clare Bambra, of the Wolfson Research Institute at Durham University, “Flexible working has a positive impact on health issues such as blood pressure, mental health and sleep”.
    "These findings certainly give employers and employees something to think about. Being in control of how and when we work is good for us and has clearhealth benefits”, she added.
    "Employees who are able to adapt their work schedules to fit in with their wider lives feel better".

  2. US regulators told of Toyota concerns in 2004 - US safety regulators were notified in 2004 about a "trend" of accidents involving Toyota vehicles, it has emerged, by Angela Monaghan, Telegraph.co.uk
    BURNASTON, Derbyshire, U.K - In the latest development in the Toyota recall crisis, State Farm, the US insurer, said it had reviewed its records and found it had contacted safety regulators in 2004.
    It was initially thought State Farm had contacted the National Highway Traffic Safety Administration in late 2007, but the insurer went back to its records in light of the widespread interest provoked by Toyota's decision to recall millions of vehicles.
    State Farm's records have been requested by two congressional committees in the US which are investigating complaints about faulty accelerators, floormats and braking systems in Toyota vehicles.
    It came as Akio Toyoda, Toyota's president, prepared to leave Japan yesterday for the US, where he will appear before the House Oversight and Government Reform Committee on Wednesday after receiving a request to attend by the chairman, Edolphus Towns.
    Previously Mr Toyoda said that he would not attend the hearing, and would instead remain in Japan to handle the recalls from there.
    However, he received widespread criticism for what was considered to be a failure to accept responsibility for the crisis, and changed his mind after pressure from the US.
    Mr Toyoda, the 53-year-old grandson of the company's founder and president since last June, is expected to be in line for an intense grilling at the hearing.
    Ray LaHood, the US transport secretary, said that he was "very pleased" he would be able to meet Mr Toyoda next week, adding that the US government had no intention of reducing the pressure on the car maker.
    Confirming that he would attend the hearing, Mr Toyoda said: "I believe this is an opportunity for me to give a sincere explanation, which I have been doing in Japan, to send the message across the world. I will humbly take in any criticism against our compliance."
    In the UK, Toyota has confirmed it will extend a planned production shut down at its Burnaston assembly plant in Derbyshire.
    The plant will close for two weeks instead of one over the Easter period, and extended short-term working could follow.
    Toyota is also seeking to cut 750 jobs from its 4,000 strong UK work force, and has invited workers at Burnaston and at its engine manufacturing plant on Deeside to volunteer for redundancy [Brit.for 'layoff'].
    The redundancy process was announced last month and is scheduled to start in the summer. Compensation terms have yet to be settled.
    Toyota has said the cuts are part of a wider efficiency drive, and not a reaction to the recall crisis. Last year Toyota shed 300 jobs and closed one of two assembly lines in Burnaston. It also introduced short-term working through a work-sharing programme which involved a 10pc cut in pay and hours.
    The company is in discussions with its UK workforce about extending short-time working and is aiming to make a final decision on the pay and production package next month.

    • A woman has been awarded $23.4m (£15.1m) in a civil case against Ford Motor Company following an accident in 2007 which left her paralysed. Cynthia Castillo lost control of her 1997 Ford Explorer when the tread separated from her left rear tyre while she was driving on a US freeway.
    Her legal team said the car veered off the road and rolled three times down an embankment because of flaws in the vehicle's design. Ford's legal representation said the accident was caused by a worn-out tyre, but a jury returned a unanimous verdict in Ms Castillo's favour.


2/19/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Pa. workers with less hours could get benefits, by Jim Hook, Chambersburg Public Opinion via publicopiniononline.com
    HARRISBURG, Pa. - The Pennsylvania House and Senate are considering legislation that would allow workers who have their hours cut to collect partial unemployment.
    Sen. Rich Alloway, R-Chambersburg, and Rep. Dan Moul, R-Gettysburg, are co-sponsoring "shared work" bills in the Senate and House at a time when Franklin County's unemployment rate is 8.7 percent. A federal extension of unemployment benefits expires Feb. 27. Congress in December had extended the maximum benefit period by two months.
    A person who is laid off may qualify for unemployment benefits, but a person whose hours are reduced typically makes too much money to qualify for unemployment benefits, according to a spokesman with the state Department of Labor and Industry. The person working reduced hours would get about half compensation from the state for those lost hours.
    "This legislation could help struggling local businesses protect current employees until the economy recovers," Alloway said. "The rising unemployment rate and slow economic recovery make it imperative to protect every job we can."
    Employees hired back part-time from a layoff also may qualify, according to Alloway.
    "I think it's important to keep people employed, even if it's by reduced hours," he said. "I think we've made it through the worst part. If we hang on a little longer, we can get there."
    The Senate version (SB 1205) would allow employers to reduce normal weekly hours by no less than 20 percent and no more than 40 percent.
    The work share plan would be voluntary for employers and would have to be reviewed and approved by the union of any affected employees and the Department of Labor and Industry. At least two employees must be affected, and affected by identical cutbacks.
    The program would expire in five years.
    Sen. Chuck McIlhinney, R-Bucks and Montgomery counties, introduced the bill on Jan. 26.
    The House has two versions -- HB 2160, virtually identical to the Senate bill, and HB 2152, co-sponsored by Moul.
    HB 2152 allow employers to reduce hours 20 percent to 60 percent. The minimum number of employees affected must reflect at least 10 percent at a business. Rep. Douglas G. Reichley, R-Berks and Lehigh counties, introduced the bill Dec. 20.
    "Anything to keep people afloat," Moul said. "It's different than a welfare program. They are working people. I'm glad to try to keep them afloat in hard economic times. They aren't saying I need a hand out. They're saying I need a hand up. There's a huge difference in my opinion."
    Hard-working people did not cause the nation's hard times, he said. It's the fault of representatives in Washington, D.C., during the Obama and Bush administrations, he said.

  2. How Not To Create Jobs - Early retirement, work sharing and tax credits won't boost employmentby Bruce Bartlett, Forbes.com
    [Here's another brittle brain arguing to maintain the 1940 workweek forever. First a detour around Dennis's idea about Soc Sec -]
    Although economists are generally in agreement that the recession ended last summer, they also foresee a considerable period of high unemployment well into the future. This has led policymakers to look for new ways of creating jobs that go beyond the macroeconomic measures that were enacted a year ago. Unfortunately, some of these ideas aren't too good.
    Rep. Dennis Kucinich, D-Ohio, has proposed lowering the age to qualify for early Social Security benefits to 60 from age 62 for the first 1 million people who apply. He assumes that all the people who would take advantage of this opportunity are currently employed. Thus, according to him, the proposal would automatically lead to the opening up of 1 million job vacancies.
    This is not a new idea. As historian William Graebner has documented, the Social Security program itself was partly conceived in order to encourage older workers to leave the labor force so as to create employment opportunities for younger workers. That's why those receiving Social Security benefits were long prohibited from earning more than a token amount of wage income. However, there is no evidence that encouraging retirement or penalizing work by the elderly ever had more than a trivial effect on creating job vacancies. (See this study by the Social Security Administration and this study by the International Monetary Fund.)
    Indeed, the inadequacy of early retirement benefits has actually increased the labor force participation rate among older workers, according to an Urban Institute report. Those retiring at age 62 this year will receive monthly Social Security benefits 25% lower than those retiring at age 66. To be actuarially fair, the benefits for those retiring at age 60, as Congressman Kucinich proposes, would have to be even lower, thus making it very unlikely that his plan would induce much in the way of additional retirement among employed older workers. The only ones that would be attracted to it are those that are unemployed, which necessarily means that no vacancies would be created.
    Another bad idea making the rounds is work sharing. If the economy is not going to create enough jobs, some people argue, then maybe we need to divvy up the jobs we have more broadly. Reducing the standard workweek by 10% from 40 hours to 36 hours, so the thinking goes, would force employers to hire 10% more workers. Indeed, a British group is actually promoting the idea of a 21-hour workweek.
    Economists often refer to this as the "lump of labor fallacy." It rests on the idea that there is a fixed amount of work to do that can simply be spread among a greater or lesser number of workers.
    [Number one, the amount of urgently demanded human work is not fixed but declining as robotization proceeds. Number two, if you "spread" a fixed amount of work among a lesser number of workers, you're not spreading it, you're concentrating it and this direction of change has nothing to do with the declining employment truism which some braindead economists misname the lump of labor fallacy. This guy doesn't know what he's saying.]
    The problem is that the amount of income being produced would still be the same.
    [Not if you spread the work among more workers thereby absorbing the labor surplus and harnessing market forces in raising wages and spending and markets and marketable productivity and sustainable investment, thus engaging the multiplier effect in the upsizing of growth direction instead of today where it's operating in the downsizing direction.]
    While some unemployed workers would gain jobs and income, current full-time workers would become underemployed and see a reduction in their incomes.
    [Not if it's done on a system-wide basis, whether the system is a city, state or nation - once you reduce the labor surplus, market forces respond by raising wages, no minimum wage laws required. This is what happened in World Wars I and II when we cut the labor surplus by killing people, and in the plague years in Europe, and more intelligently, between 1840 and 1940 when we cut the workweek in half.]
    It's hard to see how this benefits the economy as a whole.
    [It does indeed contradict our current nostrums about the sacrosanct beneficial effects of hard work and long hours, and seems paradoxical to many people, but it worked from 1840 to 1940, particularly 1938-40 when we cut from 44 hours to 40 - it's working today in South Korea which is in the process of doing that same change - and it worked in France 1997-2001 when they cut from 39 hours to 35 and went from 12.6% to 8.6% unemployment.]
    Consequently, whenever work sharing has been mandated--several countries in Europe have done so--governments have insisted that weekly wages be unchanged.
    [No they haven't. There are all variations. The voluntary Robien Law in France left wage arrangements up to individual companies and one third prorated, one third stayed high, and one third came out somewhere in the middle.]
    In other words, a worker would continue to receive pay for 40 hours of work even though he was only allowed to work 36 hours.
    In such cases it is clear that that the government has simply forced hourly wage rates up by 10%, which is why Franklin Roosevelt opposed a bill that passed the Senate in April 1933 that would have reduced the standard workweek to 30 hours. He thought it made more sense to establish a national minimum wage instead, which became a key element of the National Industrial Recovery Act that was enacted in June 1933. (The current minimum wage dates from legislation enacted in 1938 after the Supreme Court struck down the NIRA.)
    [Don't tell me here's a mgmt consultant arguing for the stifling interference of a minimum wage instead of the flexible stimulus of workspreading!]
    Unfortunately, as we know from logic and experience, when the government raises the cost of employment the result is fewer jobs.
    [No we don't. Europe with its longer vacations and shorter workweeks has much more consumption per capita, stronger domestic markets, and greater sustainability than our American mgmt nitwits who think we can get growth (upsizing) out of downsizing the workforce and the consumer base - merely to maintain a 1940 workweek forever.]
    We even have recent evidence proving this fact. As University of Chicago economist Casey Mulligan notes, when the minimum wage was increased to $7.25 per hour from $6.55 in July 2009, there was an immediate falloff in the number of part-time jobs that were created. (In an earlier column I discussed the economics of the minimum wage in more detail.)
    [The minimum wage is the opposite of a maximum workweek and is indeed destructive.]
    Obviously, raising the cost of labor is not going to create jobs [it is in a design that directly converts overtime into jobs - no way it couldn't!], especially in an economy where there is still downward pressure on prices [because of downsizing instead of timesizing], which means that real wages are rising even if nominal wages aren't [what??? he's blithering!]. This has led some policymakers to suggest a tax credit for employers for each new job created.
    An employment tax credit for new jobs is also not a new idea. One was enacted during the Carter administration, revised by the Reagan administration and ultimately abolished by the George W. Bush administration. In practice it turned out to be very difficult to figure out what a new job was or prevent employers from gaming the system--firing a worker one day, rehiring him the next and claiming that a new job was created. Another problem was that many businesses, such as new startups, had no tax liability against which to apply the credit. Businesses also found the paperwork involved with claiming the credit to be more trouble than it was worth. Finally, a lot of tax credits ended up being claimed by businesses that just happened to be expanding employment for reasons unrelated to the credit. In effect, they were rewarded for something they would have done anyway.
    Various studies by the Labor Department, the Government Accountability Office and academic economists found that the targeted jobs tax credit was not an effective job-creation measure. Economist Gary Burtless of the Brookings Institution believes that it is probably impossible to design a jobs tax credit that can overcome the obstacles inherent in the nature of such a program.
    That hasn't stopped people from trying to figure out some way of using the tax code to spur hiring. The latest idea is to give employers a temporary credit against their share of the payroll tax. The Congressional Budget Office has examined this proposal and found that the cost in terms of lost revenue per job created would be very high because businesses could respond not by hiring new workers but by reducing prices for their output, increasing after-tax profits or simply rewarding existing workers.
    The payroll tax credit also suffers from all the same problems that made the targeted jobs tax credit ineffective. Economist Timothy Bartik of the Upjohn Institute notes that the more efforts are made to target the credit only to net new jobs, the more complicated it becomes and therefore the less attractive to employers. Dartmouth economist Andrew Samwick points out that if the federal government was capable of administering a program this intricate then there would have been more of an impact from the stimulus measures already enacted.
    Perhaps more importantly, under current economic conditions, any reduction in the cost of labor is unlikely to have much impact on employment because the fundamental economic problem is a lack of demand for business output. As Bill Rys of the National Federation of Independent Business recently put it, "At the end of the day, if you don't have work for the employee to do, there is really no reason to bring an employee in. It's a heavy cost to carry around if you're not generating any income."
    In the end the best way of creating jobs is to grow the economy by increasing the demand for goods and services. When the real gross domestic product is rising steadily, employers will have to hire more workers to increase production. As economist Mark Zandi recently put it, "Historically, changes in employment and unemployment closely follow changes in GDP."
    This doesn't mean we should necessarily reject targeted measures to increase employment, it just means that we are going to have to find better ways of doing so than the ones I have described.
    Bruce Bartlett is a former Treasury Department economist and the author of Reaganomics: Supply-Side Economics in Actionand Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. Bruce Bartlett's new book is The New American Economy: The Failure of Reaganomics and a New Way Forward. He writes a weekly column for Forbes.


2/18/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. SENTINEL EDITORIAL: A proposed partnership would keep workers working, The Keene Sentinel,NH via sentinelsource.com
    KEENE, N.H. - Ideally, the best jobs program involves just two parties — employers and employees. But there are times when governments can play constructive supporting roles in the jobs arena by, for example, launching worthwhile public works projects, helping workers build skills that employers need and giving financial incentives to bosses who hire.
    A second point about jobs programs is that they don’t necessarily aim for new hires; sometimes their purpose is to help prevent job losses.
    This second strategy — retaining workers — is one of the more appealing aspects of Gov. John Lynch’s jobs initiative that goes to a Senate hearing today. Senate Bill 501FN contains a provision that would help employers in an ailing economy cut back worker hours without cutting those workers entirely adrift and ultimately swamping the unemployment compensation system with claims for full benefits.
    Lynch’s proposal, which is contained in a package of steps he calls New Hampshire Working, would allow the payment of partial unemployment benefits to employees who remain at work but whose paid hours have been reduced for business reasons.
    The concept, called worksharing, is in use in 17 other states, and enables companies to keep hold on their trained workers when business slumps by helping keep them financially whole, with fringe benefits intact.
    The proposal comes with rules that prevent gaming the system — for example, seasonal and temporary part-time jobs don’t qualify, and employers must spell out the reason for, and expected duration of, work-hour reductions. Further, the proposal has been well road-tested in other states; it’s not an experiment with uncertain benefits to society.
    Importantly, worksharing is a short-term solution, as government jobs programs should be — helpful to breadwinners and businesses who find themselves in temporary binds, and a guard against overstraining the unemployment trust funds that all employers pay into. The plan deserves a serious look.
    [Worksharing is a short-term solution if and only if the recession is a short-term problem and the recovery is sustainable. However, there's absolutely no basis for sustainable recovery under an economic theory that responds to technological productivity by cutting jobs (and along with them, overall payroll and consumer spending and markets) instead of the workweek (and along with it, the wage-depressing labor surplus). But cheer up, worksharing can be modified into a long-term solution by changing funding to something relevant and sustainable like an overtime tax with an exemption for overtime-to-jobs conversion.]

  2. Why We’re Not Hiring Right Now, by Jack Stack, New York Times (blog) via boss.blogs.nytimes.com
    [Here's a downside to Missouri's worksharing program -]
    SPRINGFIELD, Mo. - The recession has been devastating to businesses of all kinds. But we at SRC just learned how its effects, which have already forced everyone in our company to make some tough decisions, might linger longer than we’d hoped. Let me explain.
    Back in August 2008, our automotive division faced a significant crisis. With our customer orders at a standstill, we were forced to find a way to bridge the gap until the market for our products returned. One resource we turned to in an effort to keep our 173 automotive associates on the payroll was an innovative shared-work program offered by the State of Missouri.
    The basic thrust of the program was that companies that chose not to lay off employees could nonetheless get help from the state’s unemployment insurance coffers. The program allowed us to pay our people for a four-day workweek and then tap the insurance fund for the fifth day. In 2008, we did this from August through December — until we got ourselves righted and landed some big new orders that allowed us to ramp up to full employment. By January 2009, we had all 173 associates working 40 hours a week.
    But there was a price that we didn’t expect. In November 2009, Missouri’s unemployment insurance board notified us of a rate increase. Until then, we were paying, on average, $250 a person each year for unemployment insurance. The state told us that the number was jumping to $706. In other words, we went from paying $44,000 a year for our 173 people to $125,000. Because we had tapped those funds, the state reassessed our contribution. Ouch.
    Fast-forward to today. We now have 178 people on the payroll and, as a result of the success of the diversification plans we put in place last year, our order board is surging. Based on our revised forecasts, we need to add 30 people to help meet our commitments for the first quarter. The rub is that $706 a person we would need to pay if we added the new associates — coupled with the uncertainty of how changes in the federal tax code could affect shareholders in S corporations, as well as the general confusion over health care costs. The question for us became, is the hit we would take to income worth adding new people? Or should we just pay overtime as needed to the people we already have?
    Obviously, this is an interesting wrinkle to the problems small businesses face in adding jobs in this economy. Everyone from the president on down is talking about how to add jobs, and we were in a position to do just that. But, we had to ask ourselves if it made financial sense to do so.
    This wasn’t a decision that I was going to make on my own. Instead, we posed it to the entire organization. This is one of those basic tenets of open-book management, which is that big decisions are best made from the bottom up. Everyone had access to the information and sufficient time to decide what was best for the company. We empowered the associates to decide.
    And our associates voted to schedule 50-hour workweeks rather than hire new associates — even if it means working five 10-hour days or maybe even working on Saturdays when needed. We’re just not going to hire right now because we don’t know what’s coming next. We hope something will be made clearer in the next 90 days as our country focuses on what is necessary to create jobs in America. Then we can re-evaluate our decision.
    [So the Missouri worksharing program backfired.]
    Jack Stack is founder and chief executive of SRC Holdings in Springfield, Mo. SRC is a collection of 37 businesses and 1,200 employees that make, among other things, race car engines and home furnishings.

  3. Toyota: We're not closing Burnaston, Burton Mail via burtonmail.co.uk
    BURTON, U.K. - Beleaguered giant Toyota has marked another turbulent day by moving to deny it is planning to close its factory near Burton.
    An article in yesterday’s Times reported that the car manufacturer was pondering a ‘temporary closure’ of its Burnaston plant because of a collapse in sales triggered by the company’s recall crisis.
    Toyota announced last month that it plans to cut one in five of the factory’s 3,500 workers because of plummeting production levels.
    However, a spokesman for the UK arm of the Japanese company told the Mail that it would not be closing any of its plants – except for an already announced Easter shutdown.
    She said: “Toyota Manufacturing UK is not closing its plants. We remain committed to producing vehicles in the UK.
    “In terms of non-production days we already announced in December, ahead of the recall, that we would have a period of non-production at Easter based on our forecast volumes and for Auris Hybrid preparation.
    “We have also operated a 10 per cent workshare arrangement (short-time working) since April 1, 2009 to handle the reduced volumes.
    “The vehicles that we are currently building are not involved in the recall activity, however, we will continue to monitor market demand and adjust accordingly.”
    Yesterday’s denial coincided with an announcement from the company’s president, Akio Toyoda, that the Corolla – the world’s best selling car – may be the next model in line for a recall because of possible power steering problems.
    Toyota’s quality control executive said the group was examining the issue and was considering a recall, adding that details of what may be wrong and the number of cars that could need repairs were still unclear.
    The Corolla has not been sold in the UK since early 2007, when the Auris model – produced at the Burnaston plant – took over.
    Mr Toyoda did announce that a brake-override system would be added to all new vehicles, cutting engine power when the accelerator and brakes are applied at the same time. Toyota cars will also be fitted with data-recording instruments of the sort that are already a feature of some cars in the US.
    He also denied the firm had tried to cover up its problems as he attempts to claw back trust ahead of congressional hearings in the United States next week which will examine if the company hid deliberately and knowingly hid safety problems from the public.
    He said: “We have not withheld information and we shall not do so in the future. I feel sorry that I did not appear in public earlier, but it was not because we were withholding information.”


2/17/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Taking the Nation's Temperature One Year After ARRA's Passage, by Pres. Linda Basch of the National Council for Research on Women, HuffingtonPost.com (blog)
    Today marks the one-year anniversary of the American Recovery and Reinvestment Act (ARRA). In its first year, ARRA has provided tax cuts to individuals, fiscal relief to states, and aid to those most directly hurt by the recession. According to the Council of Economic Advisors, the Recovery Act has added around 2.3% to real GDP growth and in August, it added one million jobs that would have been lost without the Recovery Act. That said, the national unemployment rate currently stands at an unacceptable 9.7% (which many experts say is a conservatively low estimate).
    Since the bill's passage, the National Council for Research on Women has been concerned with whether or not ARRA funding would reach communities most in need. Flaws in the recipient reporting framework required by the Office of Management and Budget, however, have made it nearly impossible to systematically track ARRA's impact on marginalized communities, such as low-income women of color and their families. Due to this gap in data reporting, we must rely on the eyes and ears of those on the ground, working with families and communities trying to survive the economic recession. We want to know how ARRA has impacted our economy at local, community, and household levels. To get these answers, we turn to the experts: our network and partners working to influence change. In this forum, they have provided their take on current recovery efforts and suggestions on how to ensure a more inclusive and vigorous recovery that leads to sustainable growth.
    Economist Randy Albelda says that even though ARRA has been an "economic lifeboat," it missed the mark in two important ways. First, "macho spin" has characterized human infrastructure as short-time aid to the states rather than long-term investment. Second,
    "ARRA missed a shot at making key changes to anti-poverty and workforce development programs despite temporarily spending more on them. The lackluster economic performance in the early 2000s, the lack of employer-based benefits in low-wage work, and this recession makes hollow the 1980s and 1990s poverty alleviation strategy of "get a job" directed at single mothers."
    Lauren Appelbaum, Research Director of the Institute for Research on Labor and Employment at the University of California, Los Angeles, said that "Revenue sharing with the states, direct job creation and worksharing are proven policies for preserving and creating jobs in a recession."
    Deepak Bhargava, Executive Director of the Center for Community Change, calls for a targeted, federally funded jobs program that reaches out to communities hit the hardest: women, people of color, single parents, and underemployed parents. Says Bhargava,
    "These programs restored dignity and self-esteem, provided real and necessary income, and created some of our most lasting and noteworthy public resources from which everyone has benefited. When designed carefully, jobs programs can significantly boost employment for those in immediate need and help stimulate an economic recovery that doesn't leave vulnerable communities behind."
    Both Sara Gould, President of the Ms. Foundation, and Yvonne Liu, co-author of the Applied Research Center's Green Equity Toolkit, see access to green jobs as key to the future economic security of women and people of color.
    As Juhu Thukral of The Opportunity Agenda points out, however, these measures may fail to reach the truly vulnerable--workers in the informal economy:
    "The reality is that many of the jobs saved or created by the stimulus package will be those from traditional labor sectors, like construction and education. Its impact on workers in the informal economy, such as domestic workers, sex workers, and agricultural laborers, remains to be seen, and may never be properly measured."
    However, it's not too late to make the changes needed for a successful and robust economic recovery. "The legacy of the American Recovery and Reinvestment Act is still unwritten," says Alan Jenkins of The Opportunity Agenda. And Linda Meric, Executive Director of 9to5 National Association of Working Women reminds us, "We all have a role. Monitor. Organize. Speak out."
    In these uncertain times, it is important that we seize the opportunity to develop a long-term recovery plan that builds a more equitable and sustainable economy. To secure a true economic recovery for all citizens, job creation efforts must ensure that women and low-wage working families have access to quality jobs through job training and inclusion in emerging sectors such as green jobs and that women are included in nontraditional sectors, such as construction and transportation. We must not forget the importance of long-term investments in education, health, and human infrastructure in boosting the well-being of our economy and communities. And we must think big on new ways to make our economy more inclusive of those traditionally left out of the equation, such as workers in the informal economy.
    Linda Basch on Twitter: www.twitter.com/NCRWorg

  2. Lufthansa Cargo Seeks 10 Percent Job Cuts - Airline cuts flights to match lower volume, revenue in 2009, by Bruce Barnard, The Journal of Commerce Online via joc.com
    Lufthansa Cargo plans to reduce its workforce by 10 percent in 2010 as it cuts freighter flights in response to the slump in the global air cargo market.
    Europe's second largest scheduled cargo airline said it will trim around 450 jobs worldwide entirely through voluntary early retirement, severance schemes and part time work.
    The planned job cuts follow steep declines in freight revenue and traffic in 2009 which pushed Lufthansa Cargo $300 million into the red in the first nine months of the year from a $240 million profit in the same period in 2008.
    The air cargo market recovered toward the end of 2009, but Lufthansa Cargo is expected to book a fourth quarter loss when parent company Lufthansa publishes its full year figures on March 11.
    Lufthansa Cargo boosted freight traffic by 18.6 percent in January from a year ago to 114,000 metric tons on surging Asian shipments to Europe even as it reduced the number of freighter flights by a quarter.
    But Lufthansa Cargo executive Peter Gerber, who revealed the job cuts, said the crisis in the cargo market is "not yet over.” The air cargo industry has lost four years of growth due to the global economic downturn and it will take time to return to traffic levels of 2007 or 2008.
    Lufthansa Cargo reportedly plans to raise freight rates by 10 percent from March 1 following increases of 20 to 25 percent in October that still left rates below 2008 levels.
    The carrier announced earlier that it will reduce short time working for 2,600 employees from 25 percent to 20 percent at the end of February.
    Contact Bruce Barnard at brucebarnard47@hotmail.com.


2/16/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Missouri bills would double weeks employees could claim partial jobless benefits, by Chad Livengood, News-Leader.com
    JEFFERSON CITY, Mo. - An effort to double the number of weeks workers can draw unemployment benefits for being laid off one or two days a week is making progress in the legislature.
    Currently, employees can draw jobless benefits for one or two days a week for up to 26 weeks if their employer participates in the *Shared Work Unemployment Compensation Program.
    Greene County Reps. Charlie Norr and Shane Schoeller have each introduced identical legislation to increase the number of weeks employees can draw benefits to 52 weeks.
    The House workforce development and safety committee held a hearing Tuesday on Schoeller and Norr's bills.
    Schoeller, R-Willard, said the program allows employees to keep their health insurance benefits while being laid off one or two days a week when business is slow.
    It also prevents those workers from becoming fully unemployed and drawing benefits from the state's unemployment insurance fund.
    "We're just really, I think, leveraging the program the right way, allowing folks to be able to stay gainfully employed," Schoeller said.
    Norr, D-Springfield, said the program is a win-win for businesses, too.
    "It's great for the employer in order to retain these much-skilled people," Norr said.
    Norr and Schoeller said business owners in Springfield have urged them to seek an extension of the number of weeks workers can participate in the program.
    Approximately 552 Missouri employers and 42,000 employees currently participate in the Shared Work Program, said Larry Rebman, director of the Missouri Department of Labor and Industrial Relations.
    Rebman said extending the number of weeks workers can participate to 52 could save an estimated $28 million annually to the unemployment fund that would be paid out if those workers were drawing a full unemployment check.
    The overall savings, however, would be small compared to the estimated $2.7 billion deficit the state's unemployment fund faces over the next five years.
    If the change is adopted, employees who exhausted their 52 weeks in a calendar year would be able to immediately start another year of benefits if their business meets the program's criteria, Rebman said.
    The legislation has the support of both business and labor organizations.
    Representatives from Associated Industries of Missouri, the Missouri Chamber of Commerce and Industry, United Steelworkers District 11 and the Missouri AFL-CIO testified in favor of the legislation.
    No groups or lobbyists spoke in opposition to the bills.
    Rep. Barney Fisher, chair of the committee, said the legislation will be tacked on to another unemployment-related bill -- House Bill 1544 -- in the Senate.

  2. Clariant reports progressively improving operating profitability and a strong cash flow during a challenging 2009, Trading Markets (press release)
    MUTTENZ, Switzerland - Clariant AG / Clariant reports progressively improving operating profitability and a strong cash flow during a challenging 2009 processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement.
    * Sales in 2009 down 14% in local currency and 18% in CHF
    * Operating income before exceptional items decreased to CHF 270 million in 2009 from CHF 530 million in 2008
    * Cash flow from operations improved to CHF 757 million from CHF 391 million in the previous year
    * Net debt reduced to CHF 545 million from CHF 1,209 million in 2008
    * As part of the ongoing asset network optimization program, further measures are being implemented, affecting production sites in Muttenz (Switzerland), Resende (Brazil) and Thane (India)
    * Outlook 2010: Clariant does not foresee a sustainable recovery of the global economy. As a consequence, Clariant expects sales growth in local currencies in the low single-digit range. The operating income margin before exceptionals is expected to rise above 6%. Cash flow from operations will remain strong but below the levels of 2009.
    CEO Hariolf Kottmann commented: "During the year we have successfully focused on generating cash, decreasing costs and reducing complexity. In an economic environment that is still challenging, we will continue to focus on our restructuring efforts. The aim remains to achieve sustainable above industry-average profitability by the end of 2010 and to create a solid platform for profitable growth in the years thereafter."
    Key Financial Data
    Fourth Quarter Full Year ------------------------------------------------------------------------------- in CHF million 2009 2008 % CHF % LC 2009 2008 % CHF % LC
    Sales 1 710 1 744 -2 2 6 614 8 071 -18 -14
    EBITDA before exceptionals 164 104 58 70 495 783 -37 -30
    - margin 9.6% 6.0% 7.5% 9.7%
    EBIT before exceptionals 107 42 - - 270 530 -49 -42
    - margin 6.3% 2.4% 4.1% 6.6%
    EBIT -23 -148 - - -20 229 - -
    Net loss -67 -207 -194 -37
    Operating cash flow 224 217 757 391
    Number of employees 17 536* 20 102** -------------------------------------------------------------------------------
    * as of December 31, 2009 ** as of December 31, 2008
    Clariant 2009 Performance
    Muttenz, February 16, 2010 - Clariant, a world leader in specialty chemicals, today announced sales of CHF 6.614 billion in the full-year 2009, compared to CHF 8.071 billion in 2008. This represents a decline of 18% in Swiss francs or 14% in local currency.
    The significant drop in sales reflected the severe economic crisis that affected all businesses across all regions. At the beginning of the year, sales were severely impacted by lower demand levels, resulting in significant capacity underutilization and leading to a depressed gross margin in the first quarter. As the year progressed, capacity utilizations rose as sales volumes improved quarter-by-quarter, therefore reducing capacity underutilization costs. In addition, the company took decisive measures to address production overcapacity such as temporary shutdowns, short time work or involuntary vacation. Through strong price management, Clariant was able to maintain sales prices at 2008 levels, while on the other hand raw material prices were lower. As a result, the gross margin for the full year was 28.2%, only slightly lower compared to the 2008 margin of 28.7%.
    In 2009, Clariant focused on the reduction of Sales, General & Administration (SG&A) costs. In absolute terms, SG&A costs decreased to CHF 1.47 billion from CHF 1.64 billion in the previous year. The SG&A cost in percentage of sales increased to 22.2% from 20.3% as a result of lower sales. Consequently the operating income (EBIT) before exceptional items reached CHF 270 million compared to CHF 530 million in the previous year leading to an EBIT margin of 4.1% compared to 6.6% in 2008. Throughout 2009 the operating income before exceptional items improved quarter-by-quarter.
    All divisions saw a slight recovery in demand in the second half of the year, although to varying degrees. Based on their decisive restructuring and cost cutting measures, they all contributed positively to the operational income before exceptional items.
    Restructuring and impairment costs amounted to CHF 298 million, mainly related to the first phase of site closures within the global asset network optimization program (GANO), and a reduction in headcount. The number of job positions was reduced to 17,536 from 20,102 at year-end 2008. The combination of the restructuring costs and the lower operating income led to a net loss of CHF 194 million compared to a net loss of CHF 37 million in the previous year.
    Cash flow from operations amounted to CHF 757 million. This was largely due to the stringent focus on net working capital - mainly inventory reduction and accounts receivable management. In the second half of the year, the progressive improvement of operating income before exceptionals increasingly contributed to the strong cash generation.
    Clariant significantly strengthened its balance sheet by increasing its cash position to CHF1,140 million compared to CHF 356 million in 2008. This included the proceeds of the CHF 300 million convertible bond launched in July. At the same time, net debt was reduced to CHF 545 million from CHF 1,209 million at the end of 2008. The company's gearing - net debt divided by equity - was at 29% by the end of 2009, significantly lower than the 61% at the end of 2008.
    Clariant Q4, 2009 Performance
    Clariant reported sales of CHF 1,710 million in the fourth quarter compared to CHF 1,744 million a year ago. All businesses continued to stabilize. At the regional level, Asia showed double-digit growth while all other regions remained at the depressed levels of the previous-year period.
    In local currencies, fourth quarter sales rose 2% compared to a weak quarter in the previous year. While volumes increased 8%, sales prices fell 6% and raw material costs were 14% lower. The underutilization costs were also lower than in the previous year quarter as a consequence of higher capacity utilization rates.
    As a result, the gross margin for the quarter reached 29.6% compared to 25.2% a year ago. The EBIT margin before exceptional items also improved to 6.3% from 2.4% in the fourth quarter of 2008.
    Operating cash flow reached CHF 224 million, up from CHF 217 million a year ago. Future cash flow is expected to be increasingly generated through the operating income line as savings from tight inventory management have already been realized.
    Global Asset Network Optimization (GANO) Update
    In 2009 Clariant started a program to optimize its global production network. First results were communicated to the public in November. Clariant announced today a second step of this program which effects the following locations:
    Clariant will transfer the Textile Dyes and the Textile Chemicals production from Muttenz, Switzerland, to locations in Asia. In addition, the Paper Chemical production will be moved to Prat in Spain.
    The optimization of the Textile production in Resende, Brazil, will lead to a partial plant closure.
    It will be proposed to the Board of Directors of Clariant Chemicals (India) Ltd to close the Balkum site in Thane, India.
    Approximately 500 jobs will be affected by these measures, of which roughly 400 in Muttenz, Switzerland.
    The closures and transfers will be completed between 2011 and 2013.
    Outlook 2010
    The company does not foresee a sustainable recovery of the global economy due to structural problems. Asia - in particular China - and Latin America will continue to provide positive impulses for the world economy, although it is unlikely that these impulses will be strong enough to significantly mitigate a flat or even negative development in Europe and the United States.
    Clariant expects 2010 sales growth in local currencies in the low single-digit range. The continued restructuring measures will improve the company's cost position, resulting in a positive impact on the operating result. The EBIT margin before exceptionals is expected to rise above 6%. Cash flow from operations will remain strong. The projected restructuring costs will amount to CHF 200-300 million.
    Reflecting the current uncertainties in the economic environment, the Board of Directors will recommend to Clariant's 15th General Assembly on March 29, 2010 to suspend dividends, grants or payouts to shareholders for 2009.
    Clariant confirms its target of a sustainable above industry average return on invested capital (ROIC) by the end of 2010.
    - end -
    Contacts
    Media Relations
    Mark Hengel Phone: +416146966 53
    E-Mail: mark.hengel@clariant.com
    Arnd Wagner Phone: +41 61 469 61 58
    E-Mail: arnd.wagner@clariant.com
    Investor Relations
    Ulrich Steiner Phone: +41614696745
    E-Mail: ulrich.steiner@clariant.com
    Clariant - Exactly your chemistry.
    Clariant is a global leader in the field of specialty chemicals. Strong business relationships, commitment to outstanding service and wide-ranging application know-how make Clariant a preferred partner for its customers.
    Clariant, which is represented on five continents with over 100 group companies, employs around 17,500 people. Head-quartered in Muttenz near Basel, Switzerland, it generated sales of CHF 6.6 billion in 2009. Clariant is organized into ten Business Units: Additives; Detergents & Intermediates; Emulsions; Industrial & Consumer Specialties; Leather Services; Masterbatches; Oil & Mining Services; Paper Specialties; Pigments; and Textile Chemicals. .
    Clariant is committed to sustainable growth, which is derived from its own innovative strength. Clariant's world-class products and services play a key role in its customers' manufacturing processes and add value to their end products. The company's success is based on the know-how of its people and their ability to identify new customer needs at an early stage and to work together with customers to develop innovative, efficient solutions.
    www.clariant.com
    [HUG#1384712]
    --- End of Message ---
    Clariant AG Rothausstrasse 61 Muttenz 1 Switzerland
    ISIN: CH0012142631;
    2009 Full Year Media Release Deutsch: http://hugin.info/100166/R/1384712/343423.pdf 2009 Full Year Media Release English: http://hugin.info/100166/R/1384712/343425.pdf Financial Review: http://hugin.info/100166/R/1384712/343424.pdf
    SOURCE: Clariant AG


2/14-15/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Chamber Corner, 2/14 Evening Observer via observertoday.com
    ..Feb. 24..\.. State Comptroller DiNapoli to visit Chautauqua County
    Government officials, educators, business owners, representatives of not-for-profit organizations, and the general public are invited to New York State Comptroller Thomas DiNapoli's presentation focusing on issues and trends impacting businesses and not-for-profits in Chautauqua County.... The event is free, but those planning to attend are asked to register to ensure that enough materials are on hand for everyone. To register or for more information call The Resource Center at 483-2344.
    ..March 2..\..Business assistance seminar
    The Chautauqua Job Service Employers Committee, Chautauqua Works and the New York State Department of Labor are presenting a program to alert businesses on assistance that is available, including the Southern Tier Incumbent Worker Training Grant, One Stop Center Programs, *Shared Work Program, Unemployment Insurance Experience Rating Tax, the Work Opportunity Tax Credit and Unemployment Insurance FAQ and Answers.
    The session takes place at the Clarion Hotel Jamestown, 150 West 4th Street, on Tuesday March 2nd. Registration begins at 11:30 and the program begins at noon. To register for this event contact Carolyn Bright at 851-2750 or e-mail usacgb@labor.state.ny.us. 
    ..March 12..\.. Legislative Breakfast to shed light on state budget
    Advance reservations are requested. Call the Chamber of Commerce at 484-1101 or 366-6200 to make your reservation.
    March 10..\..Manufacturers Association meeting
    ..This year's annual meeting will feature a presentation on health insurance by Tim Godzich, Co-founder of Liazon Benefits Inc. Godzich will give a timely presentation on national reform, consumer driven health care and the new health insurance program of the Chamber of Commerce and Manufacturers Association. Advance reservations are requested. Call the Chamber of Commerce at 484-1101 or 366-6200 to make your reservation.

  2. Toyota's UK employees face recall fallout, by Jonathan Guthrie, 2/15 Financial Times via ft.com
    UNITED KINGDOM, E.U. - The furore surrounding Toyota’s product recalls has added to the woes of the Japanese carmaker in the UK, where it employs about 10,000 people directly or through its dealer network.
    Toyota’s Burnaston plant in Derbyshire was already considering cutting 750 jobs in response to falling demand for cars. It may have to slash the headcount further if concerns over potentially dangerous accelerator pedals translate into significantly lower sales. Orders from UK customers have already fallen 7 per cent, the company said.
    David Bailey, an automotive expert at Coventry University, said: “[Toyota] has built its brand around reliability, so it is hardly surprising that it now has a problem.”
    But Garel Rhys of Cardiff Business School said if the recall was executed with efficiency and attention to customer service, “this episode could be forgotten in 18 months”. He added: “Toyota has built up a lot of goodwill over 50 years and it can stand bad news like this, if only for a while.”
    Toyota GB, the sales and marketing arm of the company, said its focus was on remedying the accelerator pedal fault in 180,000 UK vehicles, including the Avensis and the Auris manufactured at Burnaston. More than 8,000 Prius hybrids are meanwhile subject to “customer service action”, an intervention below a full safety recall, to fix a braking system fault.
    Jon Williams, commercial director of Toyota GB, said: “The key thing for the brand is encouraging advocacy and word-of-mouth recommendations from customers.” He said mechanics among the 5,500 staff at Toyota’s 182 dealers and 206 service outlets were working evenings and weekends to fix faulty pedals. Toyota aims to complete the recall in six to eight weeks, depending on the availability of cars whose owners may be out of the country.
    Miguel Fonseca, managing director of Toyota GB, based in Epsom, has apologised to customers in a video on the company’s website. Toyota is also considering increasing its UK advertising spend to help bolster its brand.
    The suspect pedals were made by CTS, a US company. A CTS subsidiary at Blantyre in Scotland supplies the pedals to the Burnaston plant. However, Mr Williams did not seek to blame CTS, saying: “Toyota owns the engineering and signs off on the quality of these components.”
    The recall looks set to dent Toyota’s sales just as they were showing signs of post-recession recovery. Sales of the brand, which ranks fourth in the UK with a 5 per cent market share, fell 12 per cent year-on-year this January to 7,346 although Toyota said this reflected strong sales last January. Annual figures from the Society of Motor Manufacturers and Traders show a steady decline from 118,493 units in 2007 to 102,612 units in 2009.
    About 30 per cent of Toyota cars sold in the UK are made in Burnaston, many with engines manufactured at a sister plant at Deeside in north Wales. The effect of slumping car sales in Britain and other European markets supplied by the factories is clear from the Companies House filings of Toyota Motor Manufacturing UK.
    In the year to March 31 2007 the company made a pre-tax profit of £12m on sales of £2.6bn. In the year to March 31 2009 the business chalked up a £192m loss on turnover of £2bn.
    Professor Bailey said: “Burnaston is a world-class factory and a key business in the supply chain in Derbyshire. It shows the positive side of foreign direct investment into the UK.”
    Toyota has spent about £1.15bn ($1.8bn) on the assembly plant and £700m on the engines business, which both began production in December 1992.
    Tony Walker, deputy managing director at Burnaston, said managers would study the impact of the recall on sales to gauge whether to cut production schedules. This year was already promising to be a tough one as a result of the ending of scrappage schemes in the factory’s key European market. One positive development is that Burnaston will start making a hybrid version of the Auris in the autumn.
    The factory’s production has fallen from 288,000 vehicles in calendar 2007 to 127,000 in 2009. The workforce has declined from 3,800 to 3,500. Last year, Toyota, in collaboration with labour unions, instituted a “worksharing” scheme under which pay and hours were reduced by 10 per cent. However, Toyota Motor Manufacturing UK is now seeking further cuts. “We have to make ourselves cost effective and productive for the long term,” Mr Walker said.
    The company plans to close one of its two production lines in August, on the basis that a single line can produce up to 170,000 vehicles a year. As a result there will be “slack” of 750 staff in the headcount, equivalent to £25m a year. Two weeks ago Toyota began negotiations with unions on eliminating this cost through voluntary redundancies, an extension of worksharing, or a combination of the two.
    This is a difficult time for Toyota’s UK employees and suppliers. Rides in the Burnaston factory on an electric train were once popular with fans of the carmaker’s “zero-defect” production system. It is hard to imagine there will be many takers until memories of the recall have faded. But previous product safety scares involving companies such as Cadbury and Mattel show that consumers can be more forgiving than the media coverage of brand owners would suggest.

  3. UK think tank: Move to 21-hour working week, by Chris Dade, 2/15 DigitalJournal.com
    An independent U.K.-based "think-and-do tank" has suggested that moving to a 21-hour working week could address a number of problems facing society today.
    LONDON, U.K. - The study [intro quoted below] by the New Economics Foundation (NEF) identifies overwork, unemployment, high carbon emissions and continuing inequalities as some of the problems that a shorter working week could help to solve.
    All Headline News cites parents being able to spend more time with their children and greater involvement among the population in "neighborhood or civic activities" as examples of what less time spent at work would allow people to do.
    And the Financial Times, noting that the average working week for full-time employees in the U.K. is 37 hours, believes that the NEF's proposal might lead to a "fulfillment" of the vision articulated by interventionist economist John Maynard Keynes in 1930. Speaking of people being able to enjoy "freedom from pressing economic cares”, Keynes - whose theory that deficit spending can be used to stimulate the economy has seemingly been the basis for many of the measures introduced by governments around the world during the recent recession - thought that by the beginning of the current century the typical working week would be down to 15 hours.
    However the Financial Times indicates that since 1981 households with two adults have actually seen their combined workload increase by six hours per week.
    Downsides to the reduced working week the NEF has acknowledged are possible are lower pay for those already poorly paid and employers unhappy at increased costs and less skilled workers available.
    Proposed solutions to those potential problems were a gradual rather than instant reduction in the working week, a higher minimum wage and incentivizing employers to take on more staff rather than offer overtime.
    The Guardian confirms that a spokesman for the Institute of Directors, an organization for business leaders with 55,000 members in the U.K. and contacts and/or a presence in many other parts of the world, explained that shorter working hours would affect the "continuity" upon which businesses rely.
    [We dare say that businesses rely much more strongly on markets, and until they replace downsizing with timesizing, businesses are going to continue to be downsizing their own customers' customers - in short, their own markets.]
    Nevertheless he added:
    Work/life balance for employees is something our members take seriously because they see benefits to people's lives
    In 2008 the U.S. state of Utah put all public sector workers on a four-day week, the result apparently being greater productivity from a happier workforce and less carbon emissions. Andrew Simms and Anna Coote were two of the study's three authors - Jane Franklin was the third - and Mr Simms observed that already "Job sharing is common practice … It's going to be increasing. Maybe we'll have less income and more time". Meanwhile Ms Coote is quoted by the Financial Times as saying that with a decrease in the number of hours spent at work we may well become:
    less stressed, more in control, happier in our jobs and more productive
    She continued:
    It is time to break the power of the old industrial clock, take back our lives and work for a sustainable future
    Just this month the global employment website Monster found in a survey, which appears to have been conducted in the U.K., that nearly a quarter of the people it questioned felt they were required to give work priority over their personal lives. 37 percent of respondents said their work was detrimental to their relationships.

    *The study - intro
    21 Hours, by Anna Coote, Andrew Simms & Jane Franklin, New Economics Foundation
    A ‘normal’ working week of 21 hours could help to address a range of urgent, interlinked problems: overwork, unemployment, over-consumption, high carbon emissions, low well-being, entrenched inequalities, and the lack of time to live sustainably, to care for each other, and simply to enjoy life.
    Programme Areas: Social Policy

    Moving towards much shorter hours of paid work offers a new route out of the multiple crises we face today. Many of us are consuming well beyond our economic means and well beyond the limits of the natural environment, yet in ways that fail to improve our well-being – and meanwhile many others suffer poverty and hunger. Continuing economic growth in high-income countries will make it impossible to achieve urgent carbon reduction targets. Widening inequalities, a failing global economy, critically depleted natural resources and accelerating climate change pose grave threats to the future of human civilisation.
    Twenty-one hours is close to the average that people of working age in Britain spend in paid work and just a little more than the average spent in unpaid work. Experiments with shorter working hours suggest that they can be popular where conditions are stable and pay is favourable, and that a new standard of 21 hours could be consistent with the dynamics of a decarbonised economy.
    There is nothing natural or inevitable about what’s considered ‘normal’ today. Time, like work, has become commodified – a recent legacy of industrial capitalism. Yet the logic of industrial time is out of step with today’s conditions, where instant communications and mobile technologies bring new risks and pressures, as well as opportunities. The challenge is to break the power of the old industrial clock without adding new pressures, and to free up time to live sustainable lives.
    [Actually, any rigid workweek system is inadequate for the future. We have homeostatic systems in every other area but we can't seem to imagine it in economics. Well, let's get with it. In 50 years every economy that survives will have a flexible workweek that gradually fluctuates against underemployment (UE). If UE slides up, the workweek slides down to compensate, and vice versa. The top of the workweek functions as a reinvestment threshold above which employers and employees who exceed it must reinvest overtime profits and earnings as smoothly and rapidly as possible in overtime-targeted hiring - and training if needed. The problem is designed to resolve itself - as in every other area of system design.]


2/13/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Tax break could help - Incentive to rehire the unemployed is centerpiece of Senate jobs bill, (2/12 6:10pm) BuffaloNews.com
    WASHINGTON, U.S. - Senate Democrats are pushing for a job-creation bill designed to send another shot of stimulus into a still-weak national economy. As its centerpiece, the bill — facing delays from the Presidents Day holiday and Washington’s need to dig out from Eastern Seaboard blizzards — has a proposal by Sens. Charles Schumer, D-N.Y., and Orrin Hatch, R-Utah, to provide businesses tax incentives for creating new jobs.
    Stimulus spending hasn’t worked particularly well in terms of creating jobs. What recovery there is remains largely a jobless one, with very little change on the horizon. The administration expects the recovery to add about 130,000 new jobs a month this year, but it takes about 100,000 just to accommodate new job-seekers entering the work force. Improvement definitely is needed, so this proposal is worth a shot.
    The incentive plan is simple and practical. It’s also relatively inexpensive on the scale of stimulus spending, and addresses some of the problems that programs such as this have had in the past. To be sure, the incentives are likely to work mostly on the margins — many businesses remain unable or unwilling to hire at all, so incentives may be used mostly to add a few more workers to hiring plans that were going to take place anyway. But even that’s a gain.
    The estimated cost of the program is about $10 billion, which would fund incentives for another estimated 80,000 to 180,000 jobs over the course of a year in a U.S. economy that has lost 8.4 million jobs since the start of the recession.
    Tax experts and business leaders may have a point when complaining that companies are unlikely to hire workers just to receive a tax break. Increased demand for products, more work and more revenue drive the need for more workers, not a nudge from the government. But nudges help.
    The “Hire Now Tax Cut” proposal would provide businesses of any size help in hiring workers who became unemployed last year or early this year. There would be a tax cut, provided the workers hired have been out of work for a minimum of 60 days. Businesses would be able to avoid paying the employer’s share of Social Security taxes on those workers for the rest of 2010, and the longer the business keeps a worker on its payroll, the greater the tax benefit. And the plan adds a bonus — an additional $1,000 credit on a business’s 2011 tax return — for any eligible employee remaining on the payroll for a continuous 52 weeks.
    Moreover, businesses would be able to put the basic benefit immediately into cash flow, without having to wait until 2011 to receive a tax credit. And there are some built-in protections for newly hired workers, so that they don’t wind up as part-time workers doing full-time work; eligible workers would have to be hired for a minimum of 30 hours per week.
    Business owners’ family members would be excluded, and the payroll tax reduction would be for private-sector jobs only.
    Both the affordability to taxpayers and the incentive for businesses to hire workers earlier in the year, in order to gain greater tax benefits, should win this proposal more bipartisan support.
    Schumer has it right when he talks about focusing on the problem of long-term unemployment by hiring back workers who lost their jobs in this recession — restoring a company’s work force can help worker morale, ease workloads and increase production. If a business uses a direct incentive to do that for itself, the results also eventually can help the economy.
    Critics of the proposal contend that the incentive is simply too little to spur real hiring, and the effect will be minimal given the huge scope of the employment problem. But this effort — which also extends some existing tax breaks and unemployment benefits, and includes subsidies to help the jobless continue paying health insurance premiums — could help at least some struggling American families, and despite last-minute bickering still has a chance to serve as an example of bipartisan effort to get something done. We wouldn’t discount the value of that, either.

  2. Call to slash long working hours - An economic research institute in Britain has suggested reducing the working week to 21 hours, BBC via (2/14 8:30am AEDT across dateline) ABC Online,AUSTRALIA via abc.net.au
    LONDON, U.K. - The New Economics Foundation says the cut in hours would help tens of thousands of people find jobs, and give a break to those suffering from work-related stress.
    One of the authors of the report, Anna Coote, says the long-hours culture should be tackled.
    "If people spend less time at work and more time at home and doing other things ... being better parents, better carers, better citizens, it would be good for all of us," she said.
    "We are sort of locked into this long hours culture, which means we work to earn and we earn to consume and we consume more than we need on the whole. We need to get out of that pattern."


2/12/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Schumer-Hatch: Money for Nothing, by Dean Baker, TPMCafé (blog) via tpmcafe.talkingpointsmemo.com
    WASHINGTON - It's great that the Senate is prepared to do something to help create jobs. Unfortunately, its most likely course of action, the Schumer-Hatch tax credit will probably create almost no jobs.
    The basic deal with Schumer-Hatch is provide a tax credit equal to the 6.2 percent employer side of the Social Security tax. This credit would last for the rest of 2010. If the employee is kept on the payroll for a year, then the employer gets an additional $1,000. Only workers who have been unemployed for at least 60 days are eligible for the credit.
    There are two basic problems with the credit. First, there are more than 4 million workers hired every month already. A firm could get the credit for any hires among these 4 million who has been unemployed for 60 days, even if they would have hired the person anyhow. This is a lot of money for nothing.
    The second problem is that the credit is far too small to provide any significant incentive to hiring. We know from a vast body of research on the minimum wage that employment is not responsive to moderate changes in the cost of the labor. This is why a a 15-20 percent increase in the minimum wage does not lead to any measurable impact on employment.
    If a 15-20 percent rise in the cost of labor does not reduce employment, then no one can believe that a 6.2 percent decline in the cost of labor (only for the rest of 2010) would increase employment. In other words, there is little reason to believe that the Schumer-Hatch tax credit would create any noticeable number of jobs. It truly is money for nothing.
    We can boost jobs with the right tax credits. Germany and the Netherlands have managed to keep their unemployment rate from rising in this downturn by promoting work-sharing. They give firms tax credits to keep workers employed at shorter hours rather than laying them off. In Germany and the Netherlands workers are experiencing this downturn as longer vacations and shorter workweeks.
    We could do that here if we weren't determined to waste money. (Work-sharing is even good for the environment -- if we could ever get the environmentalists to think about the environment.) Anyhow, for now it looks we have to throw out money in the garbage with Schumer-Hatch. Where are the deficit hawks when we need them?

  2. Call for 21-hour week, by Brian Groom, Financial Times via ft.com
    LONDON, England - The UK should make a radical move towards a 21-hour working week, breaking the standard pattern set in the industrial age and fulfilling a vision put forward 70 years ago by John Maynard Keynes, a think-tank report urges on Saturday.
    The *New Economic Foundation proposes deep cuts in working time – currently averaging 37 hours a week for full-time workers – as an answer to social divisions and environmentally damaging over-consumption.
    [And, ah, what about un- and under-employment?]
    It admits such a bold step would encounter stiff resistance, particularly from employers, even if introduced gradually. But it argues that shorter hours will soon become inevitable to deal with problems including overwork for some people alongside too much unemployment.
    [Aha, at last we mention unemployment.]
    Spending less time in paid employment would also allow people to pursue their increasing interest in growing their own food and making their own clothes, as well as caring for the sick and disabled and taking part in neighbourhood activities, the report says.
    In 1930 Keynes, whose interventionist economic policies have become newly popular in the recession, envisaged that by the start of the 21st century people would be working only 15 hours a week, having gained “freedom from pressing economic cares”.
    Hours have dipped slightly during the recession as employers such as BT, British Airways, Ford, Honda, JCB and KPMG have introduced various forms of shorter working time to preserve jobs. Part-time work has grown while full-time jobs have diminished. 
    But since 1981 two-adult households have added six hours – almost a whole working day – to their combined weekly workload, the report says. Today almost 2.5m people are unemployed, meaning some are overworked while others lose their jobs.
    The result, says the foundation, is that family life and neighbourhood networks are diminished, with painful consequences that get lumped together as “broken Britain”.
    The report acknowledges there would be problems in moving to a 21-hour week, including the risk of increasing poverty by reducing earnings of the low-paid and resistance from employers because of rising costs and skills shortages.
    It suggests hours should be reduced over a number of years, alongside other measures such as more skills training, a higher minimum wage and incentives for employers to take on extra staff rather than using overtime.
    “We could even become better employees: less stressed, more in control, happier in our jobs and more productive. It is time to break the power of the old industrial clock, take back our lives and work for a sustainable future,” said Anna Coote, co-author.
    France’s maximum 35-hour week, introduced in 2000, produced mixed results and two years ago the Sarkozy government changed the law to allow employers to impose longer hours. [Mixed results? Unemployment was 12.6% in 1997 when it was voted in and companies began adjusting to it. Unemployment was 8.6% in the spring of 2001 when it was finally fully implemented and the US-led recesssion still hadn't hit France. They cut four hours off their workweek, from 39 to 35 hours a week, and got four percent less unemployment. That's one percent less unemployment for every hour cut from the workweek, same as the U.S. got when they cut from 44 hours to 40 hours a week between 1938 and 1940 and unemployment went from 19.0% in 1938 to 14.6% in 1940. Mixed results? And never mind we did it from 1840 to 1938 when we nearly cut the workweek in half from over 80 to 44 hours a week. You want to go back to 80 and see the unemployment figures?]
    But the report cites other examples, including a trial four-day week for public sector workers in the US state of Utah in 2008-09, which was popular with employees and cut carbon emissions.


2/11/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Local pols sound off on budget, by Gordon Glantz, Norristown Times Herald via TimesHerald.com
    When Gov. Ed Rendell on Tuesday presented state lawmakers with a $29 billion spending plan that would devote more money to schools, prisons and health care for the poor while taxing the sale of many services for the first time, Rep. Matt Bradford, D-70th, felt validated after receiving a shout-out of sorts.
    “On a personal note, I’m pleased that the governor noted my work sharing legislation, House Bill 2160, as one of his legislative priorities that he would like to see passed this year. My proposal offers an innovative way to prevent increases in Pennsylvania’s unemployment rates, and, working with the governor, I will push for its passage,” said Bradford in a statement, “House Bill 2160, which is supported by both business and labor, would provide an alternative to increased unemployment by permitting employers to supplement payroll with state unemployment compensation, thereby preserving full-time jobs and benefits and mitigating the impact to the unemployment compensation fund.”
    Rendell’s overall proposal would increase spending by $1.1 billion, or about 4 percent, and relies on nearly $2.8 billion in federal stimulus money.
    The budget’s biggest surprise — an expansion of the state sales tax — came as part of Rendell’s plan to prepare the state for an expected “fiscal tsunami” after he leaves office: a combined $5.6 billion deficit from the 2011 expiration of federal stimulus money and a 2012 spike in pension obligations.
    Rendell is proposing reducing the state sales tax rate from 6 percent to 4 percent, but to extend it to 74 services and other transactions that are currently exempt, including many professional services, home electric bills, candy, gum and personal hygiene products. Such a plan would add more than $850 million a year to the state’s cash-poor treasury, while keeping intact some major exemptions, including those on groceries, clothing and prescription drugs.
    Leaders of the Senate’s Republican majority, however, pronounced the sales tax changes dead on arrival, and criticized Rendell’s proposal to increase spending at a time when his administration is also projecting a $525 million shortfall this year.
    They said they intend to press for cost savings by enacting pension, welfare and prison reforms, and would look first to cut spending.

  2. ArcelorMittal posts $1.07 b profit in Q4, TopNews.in
    ArcelorMittal, the World's top steelmaker, posted its fourth quarter profit of $1.07 billion slightly lower than expectation but its higher than profit of last three months i. e. third quarter of 2009 which was $903 million and well higher than loss of same quarter of 2008.
    The company posted a decline in the sales to $18.64 billion in the October December quarter of 2009 against the $22.08 billion in the same quarter last fiscal. But the sales were higher during the fourth quarter of 2009 in comparison to third quarter of 2009, primarily driven by higher volumes and average steel selling prices.
    Company witnessed increase in demand in the fourth quarter as the total steel shipments rising to 20 million tonnes from to 17.1 million tonnes in the same quarter of 2008 despite the global economic cries.
    Company's net debts were $18.8bn, compared to $21.6bn at the end of September 2009 and against the $13.7bn to the middle of 2008. According to the company this reduction in debts is linked to a big fall in costs with the help of its workers on short-time working and slashed in deliveries of raw materials which has given a relief to the investors, who at the beginning of last year had been severely worried by the company's borrowings.
    According to senior officials, the company is expected to post better results in the first quarter of current year due to higher shipments and increase in the capacity utilization to 70%, but sales and earnings remain an area of concern as it may get affected by the lower average selling prices and increased costs. Despite the increase in the demand of steel globally, the company expects the current year to be a challenging year.


2/10/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Where's Our Hopkins? by Harold Meyerson, Tapped (blog) via prospect.org
    Today, TAPPED will feature a series of guest posts on progressive solutions to the unemployment problem. Harold Meyerson is the editor-at-large for The American Prospect.
    As usual, the redoubtable Dean Baker has a slew of smart suggestions -- all of them Keynesian [except worksharing - unfortunately Keynes proposed makework instead] -- on how to restart our stalled economy. I particularly like his work-sharing suggestion, partly modeled on the German experience (and German unemployment is at least 2 points lower than ours just now).
    One area where we could clearly boost employment is our infrastructure, which, despite the ministrations of the Obama administration's first stimulus package, could still use several trillion dollars of fixing up, according to the nation's association of our civil engineers. Funding such a massive endeavor to scale would require the creation of a national infrastructure bank, a project that Felix Rohatyn has been championing for years, and that progressive Connecticut Democrat Rosa de Lauro has been stumping for in Congress. There's also no reason why states can't establish infrastructure banks of their own: Indeed, since states can't run a deficit, they have even more reason than the feds do to establish a job-creating, road-bridge-airport-building institution that functions independent of the state's yearly budget.
    All that takes time, of course, even as getting the stimulus dollars out to the states and cities have taken time. What our current recovery efforts are lacking is the speed and spirit of a Harry Hopkins -- FDR's job-creating whiz, who put 3 million people on the payroll of the Civil Works Administration in just 90 days in the winter of 1933-1934, fixing up and building military bases, airports, and roads; and then who did it again, with even larger numbers, in the Works Progress Administration from 1935 through 1938.
    [And FDR was so dissatisfied with the tax&debt-heavy result that by 1935 he admitted he should have got behind the 30-hour workweek bill that passed the Senate in 1933 and pushed it through the House = a worksharing approach - instead of blocking it and veering off into makework (WPA, CCC, NRA, TVA...) and socialism (minimum wage, workman's comp, social security, unemployment insurance...). By the time he realized his mistake, all he could do was bring out a 44-hour workweek maximum in 1938 and cut it two hours a year for two years, yielding the 40-hour workweek on Oct. 24, 1940 - yet it STILL WORKED to cut unemployment 1% for each hour cut from the workweek: 1938,39,40 = 19.0%, 17.2%, 14.6%. So forget Harry Hopkins. Where's Arthur Dahlberg - who wanted a 20-hour workweek in 1932.]
    The ideological obstacles to a neo-WPA are considerable today, but even if one were enacted, it's hard to imagine we could get it up and running as quickly as Hopkins did. We don't just haul off and build things today: Projects need the approval of many agencies, at all levels of government, that didn't exist back in the '30s. In a sense, both left and right have contributed to the obstacles to finding a swift solution to an economic crisis: Conservatives oppose the very idea of such a program, while liberals have created a series of checks on growth, generally sensible in normal times, that have the (largely) unintended effect of delaying anything resembling a Hopkins-like response to an economic crisis. That's one reason why it's taken so long to get the Obama stimulus funds spent -- at least, so long in comparison to the '30s. But with official unemployment in the construction sector hovering at 25 percent, it's time for a public jobs program that gears up with not-so-deliberate speed. And there are plenty of sectors where we could use such a program besides construction as well.
    One sector that particularly needs some help is manufacturing. The Obama administration is flirting with some very soft domestic content regulations in its jobs proposals. One such flirtation is its proposal to create a $5 billion tax credit for the domestic manufacture of green technology (a $2.2 billion credit in its first stimulus package was oversubscribed). This is most commendable, but with China still depressing the value of its currency on the low end, and with Germany maintaining its lead in producing high-end technology, American manufacturing needs all the help it can get to grow again. Creating a clear preference for American-made goods in the next round of stimulus spending would help revitalize a sector that's as efficient as any in the world, but that has waned as its government has failed to champion it. If we're serious about creating more exports, and more jobs, it's time for our government to help manufacturing.
    Posted by Phoebe Connelly on February 10, 2010 1:48 PM

  2. Cut back on councillors' special allowances, by Cllr G Horsfall & Ind Skircoat, Halifax Evening Courier via halifaxcourier.co.uk
    Town Hall, HALIFAX [minster town within metropolitical Calderdale], West Yorkshire, England - Calderdale expenses going up again, staff being cut, early redundancies, council workers salaries frozen, short time working, etc.
    What about councillors' allowances, all members to receive a basic allowance to compensate for inconvenience and telephone.
    But what about special responsibility Allowance. £200,000 paid out in 2008/2009. Why?
    The majority are working and don't attend day meetings.
    Stop the special allowances, all members, receive basic and all work on the same basis for the benefit of Calderdale.
    More money to help keep up services in Calderdale which are deteriorating at a fast pace.


2/09/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Governor Rendell Proposes Budget With No Tax Increase, More Money for Public Schools, Strategy for Jobs, Plan to Address Future Deficits - Health Care Funding for Seniors, Disabled and Children Remains Intact, Pennsylvania Office of the Governor via PR Newswire-USNewswire (press release) via PRNewswire.com
    HARRISBURG, Pa. -- With Pennsylvania finances still suffering the effects of the most stubbornly challenging national economy since the Great Depression, Governor Edward G. Rendell today proposed a fiscal year 2010-11 General Fund budget that spends $26.3 billion in state money, augmented by more than $2.7 billion in federal stimulus funds.
    Requiring no tax increases to balance, the plan holds the line on spending in most areas where cost increases are not mandated by law. It keeps the state on pace to meet its adequate school funding targets, and it continues Pennsylvania's commitment to meet the health care needs of seniors, those with disabilities, and children.
    It provides a blueprint to close the budget gap expected when federal stimulus funds are no longer available in 2011. Toward that objective, Governor Rendell proposed a plan to cut the state sales tax while broadening the tax base, to help cure a potential budget deficit beyond 2011.
    At $29 billion, the size of the General Fund in 2010-11 would increase by $1.15 billion, or 4.1 percent, over the current year. Spending of state dollars, however, would still be $2 billion less than in the 2008-09 fiscal year.
    "The budget that I introduce today is a budget that works. It keeps the cost of state government down while still investing in our future," Governor Rendell said. "It balances the needs of our citizens with the financial pressures that the national economic downturn has imposed. It readies our young people and businesses for the opportunities a reviving economy will bring."
    The Governor's 2010-11 budget contains administrative spending that is four percent lower than it was the year before he took office in 2002-03. If it had grown at the rate of inflation since that time, it would cost $458 million more to operate state government next year.
    Overall, Governor's Rendell's new budget reduces spending by an average of one percent in all areas other than Education, Aging and Long Term Living, Public Welfare, Corrections, Probation and Parole, and debt service.
    "We eliminated nearly 4,500 positions from the state payroll, and last year alone we reduced the size of the Commonwealth's fleet by 500 vehicles in the last year alone. We reduced government's energy consumption by 20 percent, a year ahead of schedule, and we are purchasing our energy smarter so that the state budget is not burdened by spikes in energy costs," Governor Rendell said.
    A Pew study of state finances, as reported in the Wall Street Journal recently ranked Pennsylvania seventh in the nation for fiscal stability. It was the only large industrial state and the only state in the Northeast to appear in the top 10.
    "Because of our success in keeping Pennsylvania's financial house in order, the recession is taking less of a toll here than in many other states," the Governor said. "Pennsylvania's unemployment rate is running below the national average and even further below that of other large industrial states. The tailspin of government revenue projections – the clearest indicator nationwide of the catastrophic effects that the recession has had on state governments – may finally be under control. Here in Pennsylvania, for example, state revenues are now running only two percent below estimate."
    Last year, the commonwealth faced a $3.2 billion revenue shortfall during the recessionary national economy. The Governor today estimated the gap for the end of the current year at $525 million.
    Investing in the Pennsylvania's People
    The proposed 2010-11 budget includes $12.3 billion for education, or about 42 percent of General Fund spending. More than $9.5 billion would go toward basic education, an increase of $448 million, or 4.9 percent. The basic education subsidy to school districts would grow by $354.8 million, or 6.4 percent, to $5.9 billion, as Governor Rendell maintains his commitment to the six-year phase in of adequate statewide education funding called for in the General Assembly's costing out study.
    The Governor noted that over the last seven years, the commonwealth has increased annual state spending for public education by more than $3 billion. In the process, it has enacted a school funding formula that is closing the "adequacy gap."
    Education Week recently said that in just six years, Pennsylvania moved from 24th place to 10th place in percentage of kids performing on grade level in 8th grade math. In reading it moved from 16th to 6th in the nation for the percentage of fourth graders reading at grade level. The Center for Educational Policy – a highly respected think tank in Washington -- found that from 2000-2008, Pennsylvania was the only state to show significant improvement in reading and math in every grade tested.
    "We have invested in our children, and they are rewarding us with rising achievement levels that are the envy of the nation," he said.
    Public safety, including soaring prison costs, continues to consume a rising share of the state budget. Governor Rendell proposed a $137 million, or 7.7 percent, increase for Correctional Institutions, plus a 7 percent boost for Probation and Parole. His budget also contained enough funding for a total of 4,400 State Police Troopers by the end of 2010-11.
    The difficult economic times also put mounting stress on the social safety net. The demand for Food Stamps is at an all-time high, with the number of Pennsylvania children and adults eligible increasing 19 percent to approximately 1.5 million people. The number of families receiving cash assistance grew by nine percent between December 2008 and December 2009, and in 2010-11 the Medical Assistance program will provide health care to more than 2.1 million Pennsylvanians, a 3 percent increase. The number of adults seeking adultBasic health insurance coverage more than doubled to 370,000 between January 2009 and January 2010.
    Cover All Kids would receive $437 million to provide health care for 208,555 uninsured children, an increase of $26.8 million and 10,300 children.
    In total, Medical Assistance and Long-Term Living would make up 21.7 percent of General Fund Expenditures, while other Public Welfare and Human Services programs would comprise 16.1 percent.
    While serving more people, the administration continues efforts to control costs with several proposed savings initiatives, including Increased Pharmaceutical Rebates ($102.5 million) Increased Pharmacy Efficiencies ($4.6 million) and Reduced Fraud and Abuse and Expanded Third Party Liability ($4.4 million.)
    Growing Jobs, Keeping Pennsylvania Competitive
    The proposed budget invests money in job creation and economic development strategies that have helped keep Pennsylvania's unemployment rate lower than the national average. Last year, Governor Rendell insisted on adequate funding for key job creation programs, despite the tight budget.
    "While our unemployment numbers are better in Pennsylvania than in many other states, job creation is still sluggish at best, and personal income tax revenues are not meeting our projections. We have much more to do to bring jobs to Pennsylvania and create a more prosperous economic future for our state," he said.
    He focused on alternative energy as one important area where Pennsylvania can achieve employment growth through the creation of green jobs. The state already ranks among the national leaders in that category, but the Governor called for enactment of higher alternative energy standards to remain competitive and attract future investment.
    "It's not just about energy, it's about jobs, and we must protect these opportunities by raising our alternative energy requirements as soon as possible," he said.
    He told legislators that he is eager to work with them to adopt the recommendations recently submitted by the Climate Change Advisory Group that they established.
    The proposed budget also continues to invest $650 million to help state companies and consumers lower their energy costs and develop renewable energy industries.
    It would dedicate $537 million to public infrastructure such as bridges, rail freight lines, small airports, high-hazard dams and flood related projects, in addition to basic Motor License Fund spending on highways and bridges.
    It also hikes funding for other job creation programs such as Opportunity Grants, Customized Job Training, Infrastructure Development and Infrastructure Facilities and Improvement Grants.
    On the subject of employment, he asked lawmakers to take advantage of the federal government's willingness to give the state hundreds of millions in additional funds to end its antiquated method of calculating unemployment.
    Nearly 30,000 Pennsylvanians would benefit from swift passage of Work Sharing legislation.
    Addressing the State's Long-Range Financial Challenges
    In addition to a balanced 2010-11 budget, the Governor also offered ideas to deal with the long-term financial problems facing the commonwealth, including the loss of federal stimulus money and sharp future increases in state and school district pension costs.
    For the Public School Employees Retirement System (PSERS) the commonwealth's contribution is expected to jump from $758 million in 2011-12 to $1.88 billion in 2012-13. Similarly, the requirements of the State Employees Retirement System (SERS) will climb from $531 million in 2011-12 to $1.77 billion in 2012-13, a combined one-year increase of $2.37 billion. Costs are forecast to continue growing over the subsequent decade, creating more than a $5 billion problem.
    The spike will result from retirement benefit enhancements approved before Governor Rendell took office, actuarial changes enacted in 2002-03, and steep declines in the investment markets beginning in the fall of 2008.
    Governor Rendell is proposing a plan to even out the skyrocketing future costs. The plan would return the systems to actuarial soundness with a "fresh start" by increasing employer contributions above the 2009-10 levels, and mitigating the 2012-13 contribution spike with a schedule of funding increases that are more incremental and predictable, much the way a homeowner would refinance a mortgage.
    To cope with the anticipated loss of federal stimulus money in 2011-12 and with the long-term uncertainties of a slowly recovering national economy, Governor Rendell proposed a restructuring of several taxes to begin in September, with the extra revenue to be directed toward a Stimulus Transition Reserve Fund. None of the additional taxpayer money raised between September 2010 and June 2011 would be used in the 2010-11 fiscal year, but would instead be set aside until at least July 2011.
    * The state Sales Tax rate would decline from six percent to four percent, but 74 items currently exempt would become subject to the tax. This would raise $531 million.
    * The Tobacco Tax would extend to cigars and smokeless tobacco, producing $41.6 million.
    * A new Natural Gas Severance Tax would raise $160.7 million.
    * Elimination of the one percent bonus that businesses receive for forwarding collected sales taxes to the state on time would produce $73.6 million.
    * A business reform tax package would generate $66.6 million. Pennsylvania would eliminate a loophole that currently permits three quarters of the corporations operating in the state to shield their profits from the corporate net income tax. In exchange for making the CNI fairer by applying it to all companies, Governor Rendell seeks to lower the rate from 9.99 percent to 8.9 percent. Pennsylvania would also lift the cap on the amount of net operating losses that businesses are allowed to carry forward into future years, and would adopt the single sales factor, charging companies tax on the amount of sales they have in Pennsylvania rather than the size of their workforce or their physical presence within the state.
    Changing the Way Government Works
    To help reduce the influence of special interests that have often opposed common-sense efforts at making the state tax code more equitable, the Governor called upon the General Assembly in his budget address to enact campaign contribution limits. He also pressed for a citizen commission that would oversee nonpartisan legislative redistricting every 10 years, and for replacing the election of state appellate judges with a judicial appointment system.
    He renewed his request to the General Assembly to create a quality unified health care plan for public school employees.
    "Such a plan is good for teachers and school employees, but it's also good for taxpayers because it gives us the opportunity to contain the annual growth in school districts' health care costs and ensure that tax increases for this purpose are kept to a minimum," the Governor said.
    Noting that many Pennsylvania electric utility customers are in line for hefty bill increases now that caps on rates are expiring after 10 years, he expressed a desire to see a fair plan in place to phase in those increases gradually.
    Governor Rendell emphasized the necessity of enacting a state budget on time by the end of the fiscal year on June 30, in the wake of last year's 101-day delay. He extended an invitation to legislative leaders to meet with him soon and often to discuss budgetary matters, and he urged them to begin negotiations in earnest by at least the beginning of May.
    "Ladies and gentlemen, we can disagree about what's in the budget, but let's agree today that we will get on with the budget and get it done on time for the people of Pennsylvania," he said.
    For more information, visit www.pa.gov.
    Media contact: Gary Tuma; 717-783-1116

  2. British economy not yet in safe waters, amid calls for stronger exports and manufacturing, Xinhua via English.EastDay.com
    LONDON, U.K. - The British economy has been hit hard by the recession with firm closures, job losses and short- time working, and the latest economic figures show it making a slow recovery -- but what will lead that recovery?
    Figures released on Tuesday by the Office of National Statistics (ONS) showed exports rose by 0.9 billion pounds, but imports also rose by 1.4 billion pounds. Britain's deficit on trade in goods and services was 3.3 billion pounds in December, compared with a deficit of 2.9 billion pounds in November.
    The widening trade deficit was unexpected by many economists, and points to a need for stronger manufacturing, among other areas, and exports.
    David Kern, BCC chief economist, said: "These figures show a further welcome increase in exports. However, imports have risen more strongly, the trade deficit has widened, and it is clear that the much-needed rebalancing of the economy towards export-led growth is not progressing quickly enough.
    "Given the favorable international environment for British exporters, with a competitive sterling exchange rate and global growth edging up, our overall trading performance is not strong enough," he said.
    But manufacturing alone is not a large enough sector to push the economy further out of recession. Professor Iain Begg, an economist at the London School of Economics, told Xinhua: "The industrial sector is barely 16 percent of the UK economy so that it can only have a limited impact. Instead it is the performance of private services that will be much more critical."
    The Confederation of British Industry's Lai Wah Co, told Xinhua: "For manufacturing, demand has increased and sterling has fallen substantially. We are now starting to see that competitive benefit come through. The sector is very optimistic about export prospects for the year ahead."
    Demand from foreign countries who had exited the recession earlier -- for Britain, it's principal export markets of the United States and the European Union -- is coming through now and should strengthen, said Co.
    "Services makes up the bulk of the economy, and Britain is now going through a period of rebalancing away from consumer spending, government spending and financial services driving the economy back towards manufacturing growth and trade growth," said Co.
    Eventually growth from private investment will feed through into the economy too, said Co.
    British Chambers of Commerce spokesman Sam Turvey, told Xinhua: "The manufacturing sector seems to be recovering. We are certainly looking to the manufacturing sector to pull us out of recession.
    "We have been saying for a long time the that we need export- led growth. There has been an over-reliance in the British economy on the financial sector and the public sector. It needs to be rebalanced."
    Some analysts expressed their cautious optimism over PPI figures. Producer Price Indices released at the end of last week by the Office for National Statistics showed manufacturers feeling confident enough to pass on some of their rising costs.
    PPI monitors the price changes of goods bought and sold by British manufacturers. Input prices are prices of materials and fuels bought and output prices, also known as 'factory gate prices, ' are prices at which goods are sold.
    Output price 'factory gate' annual inflation for all manufactured products rose 3.8 percent in January. Input price annual inflation rose 8.4 percent in January compared to a rise of 7.4 percent in December.
    Month on month the output prices measure for all manufactured products rose 0.4 percent in January, mainly reflecting price rises in petroleum products, other manufactured products and tobacco and alcohol. The index excluding excise duties rose 0.3 percent between December and January.
    The 'narrow' output prices measure, which leaves out volatile sectors, showed an annual increase of 2.5 percent.
    Month on month, the input prices measure of British manufacturers' materials and fuels rose 2.0 percent. The rise in the input index between December and January mainly reflected a rise in the price of crude oil, and to a lesser extent fuels and imported parts and equipment.
    The 'narrow' input prices measure rose 1.8 percent in the year to January. In seasonally adjusted terms the index rose 0.7 percent between December and January.
    Meanwhile, business insolvencies in Britain are falling and it is another indication that the economy is improving.
    The Insolvency Service, a government agency dealing with business insolvencies, reported last week that there were 4,566 compulsory liquidations and creditors' voluntary liquidations in total in England and Wales in the fourth quarter of 2009, seasonally adjusted. This is down 1.7 percent on the previous quarter and down 1.1 percent on the same period a year ago.
    Ric Traynor, executive chairman of Begbies Traynor Group a large recovery and insolvency firm, said government support measures are providing some relief to struggling companies in the short term, with more than 4 billion pounds of tax deferred, but they may exacerbate problems for some businesses as the need to repay debt catches up with them later in the year.
    "With tax and interest rates certain to rise, as well as increasing pressure on consumer spending, there is every reason to suggest that the insolvency peaks of this recession remain some way off," said Traynor. He added, "while business finance is expected to become more readily available during the first half of 2010, we anticipate a rise in the levels of financial distress during the second half of 2010, as temporary financial support measures are unwound."


2/07-08/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Rising employment number masks devastated job market - Analysts hail recovery but deeper probing reveals more precarious situation for workers, by Nat. Pres. Ken Lewenza of Canadian Auto Workers, 2/08 Toronto Star via thestar.com
    [Then Canada's employment numbers are as doctored and misleading as the U.S.'s.]
    Comic graph by Barrie Maguire of NewsArt shows employees falling down in a heap off a rising graph trendline.
    It's predictable. The minute the new Labour Force Survey results are released to the public each month, economists and politicians fall all over themselves making grand pronouncements about the health of our job market and direction of the economy.
    I could hear the champagne corks popping on Parliament Hill and Bay Street back in December when the monthly Statistics Canada jobs report card announced 79,000 jobs were created in November. BMO Capital Markets economist Jennifer Lee excitedly declared to the National Post: "Our economy is in recovery mode."
    More recent job numbers released Friday showed a growth of 43,000 in January, outpacing economist predictions 3 to 1. TD bank strategist Millan Mulraine considered these positive numbers a sign that Canada's economic recovery has "picked up considerable speed."
    Especially now on the heels of a deep economic recession, Canadians are looking for any glimmer of hope on the jobs front. They want to put the economic devastation brought on by overzealous speculators, government complacency and a deeply flawed global financial system behind them, as fast as possible.
    But I'm skeptical. These "good news" announcements just don't fit with the constant stream of messages I receive from workers anxious to share stories about the hardships they face.
    Parents tell me they can't put enough food on the table at dinner time. Older workers say they're exhausting their retirement savings and are at risk of slipping into poverty. Workers talk about the lack of decent full-time jobs and how quickly dignity fades when you're struggling with unemployment.
    The obsession with month-to-month job spikes could get us into a lot of trouble.
    We need to dig much deeper and look at a much broader landscape if we're going to understand what's really going on in our economy and come up with appropriate labour market policy – from short-term stimulus to long-term changes.
    We could start by looking at the full Labour Force Survey. There's a wealth of information, some of it hard to find, and some only made available to the public for a small fee.
    For example, the survey's "R8 Tables" take a broad approach to unemployment. Some consider this Canada's true unemployment rate. They include workers who aren't looking for a new job because they expect recall within six months. They also count "discouraged workers," who have given up hope of finding a new job.
    These folks don't show up in the main numbers released each month. They're among the hidden victims of the crisis. Back in April when official unemployment was 8 per cent, the R8 numbers were coming in at an incredible 12.4 per cent.
    What's more, the main survey counts everyone with part-time jobs as "employed" – even if they were forced to take a job that provides low wages, few benefits, no pension and erratic work schedules. In fact, part-time work made up nearly all of the job growth in January.
    But other survey tables reveal the extent to which Canadians are being forced to take part-time jobs involuntarily. Today, nearly 900,000 Canadians fall into this category. And the number has been rising over the past three years.
    The number of part-time workers actively looking for full-time work has skyrocketed by 184 per cent since 1997.
    A rise in involuntary part-time work is one clear sign that Canada's labour market is growing increasingly precarious, a phenomenon that isn't captured in the month-to-month figures.
    The explosive growth in temporary agency and contract work is also cause for concern. In the midst of a devastating recession, temporary work actually grew by 13,200 in Canada while permanent jobs fell off a cliff.
    "Self-employment" [our quotes, because this concept generally ignores whether or not you actually have any paying clients] has also been on the rise, increasing by 80,000 from December 2008 to December 2009. Although the Harper government tries to spin this as a positive trend, many choose self-employment because they don't have other options.
    Although you likely wouldn't know it, the Labour Force Survey is just one of many reports produced by Statistics Canada that provide us with information on jobs, and it has its own limitations: it doesn't even look at certain aboriginal and young teen employment.
    Other reliable job market reports include the company payroll-based Survey of Employment, Payrolls and Hours (SEPH). While the Labour Market Survey lumps people with more than one job together as "employed," the SEPH report counts each position separately.
    So we'll know better if employers are upping the share of part-time jobs and whether hours are up or down.
    Payroll data are not necessarily a better measure of Canada's job performance, but a different measure. And it's important we look at the job market from many angles.
    In fact, we should be taking notice of all kinds of reports. What about EI Work Sharing reports that show 180,000 Canadians still working short work weeks? What about publishing monthly EI exhaustee reports? What about various efforts to measure the quality of jobs, for example CIBC's Employment Quality Index? [Ken, what about your union and the labor movement in general doing something useful and fighting to redefine "full time employment" down to 35, 30 or 25 hours a week where it should be now we're deep in the Age of Robotics? What about fighting for enforcement of the 40 hour workweek on everyone for starters? What about making the workweek a market call by keeping it flexible and making it fluctuate against underemployment? Wake up, Ken. Start thinking outside the box for a change. The labor movement got the workweek cut in half from 80 to 40 between 1840 and 1940, but ever since then, it's been suicidally irrelevant - for all of us, union members or not.]
    By the time many of you read this you will have already heard a slew of politicians, policy-makers, bank economists and even labour leaders commenting on the latest jobs numbers and what they mean for our economy and its future.
    Let's avoid these surface-level pronouncements and dig deeper into the labour market numbers for a more detailed picture of Canada's job landscape.
    Despite what the headlines say, a new job isn't necessarily a good job. This is a crucial step in getting a more accurate reading of our country's economic pulse.

  2. ArcelorMittal looks to upturn potential, by Peter Marsh, 2/07 Financial Times via ft.com
    Lakshmi Mittal has had a good crisis – so far.
    The chairman and main owner of ArcelorMittal has come through the steep downturn in the steel industry having succeeded better than most in the sector in predicting its outcome, and with his reputation still in good shape.
    The world’s biggest steel producer is expected on Wednesday to announce a fall of about 75 per cent in its earnings for last year, while pointing to strengthening signs of an upturn.
    Even so, few in the industry expect Mr Mittal’s company – which is three times bigger in steel production capacity than its closest competitor – to relax.
    Jeffrey Largey, an analyst at JPMorgan, said: “Even though he can be confident that a recovery is starting to take hold, there is still some uncertainty about how strongly the [steel] business will pick up.”
    One of the problems is the subdued state of demand in most countries, apart from China – by a long way the world’s biggest steel producing and consuming nation.
    Last year steel output in China rose 13 per cent, against a fall of 21 per cent in the rest of the world.
    In 2009, China accounted for just over two-fifths of world steel production of 1.2bn tonnes.
    The fact that China’s steel output rose so much put a floor under global production which fell during the year by 8 per cent.
    Even though this is the biggest year-on-year decline in output since 1982, for much of 2009 observers feared the fall-off would be up to 15 per cent. That would have made the year the worst for the industry since the 1940s.
    During the downturn, ArcelorMittal has cut 40,000 jobs while putting tens of thousands of other employees on short-time working.
    But while not underplaying the seriousness of the problems, Mr Mittal has insisted for some time that most commentators were being too gloomy in their judgments about the pace with which demand would pick up.
    As far back as last July, the Indian billionaire said steel output in 2010 would probably rise 10 per cent.
    Although at the time this call was judged by many to be over-optimistic, it has in the past couple of months become roughly the industry consensus.
    According to analysts, the expected pick-up in demand this year is likely to keep steel prices relatively high. That should help to lift ArcelorMittal’s earnings before interest, tax, depreciation and amortisation for 2010 to about $11.8bn, double the $5.8bn expected for 2009. In 2008, ebitda came in at $24.5bn.
    But a worry for many is the feeling that – outside China – the expected upturn is being driven mainly by users of steel in sectors such as automotive and construction that are re-building stocks, rather than reacting to new demands from their own customers.
    To add to these indications of fragility, the relatively strong state of many Chinese steelmakers could well drive up the price of raw materials such as iron ore, squeezing the profit margins of companies around the world.
    China’s steel output this year is likely to rise by a hefty 7.3 per cent, according to Meps, the steel industry consultancy.
    Another concern – also linked to China – is that the country’s steelmakers will in the next year increase exports, as their production capacity starts to rise.
    According to Meps, net Chinese steel exports (exports minus imports) could this year reach 21m tonnes, seven times higher than the 3m tonnes last year. This extra activity could make life harder for Mr Mittal by pushing down global prices. “If I were Mr Mittal I’d be worried by this,” says Brian Levich, head of Metal Bulletin Research, a consultancy.
    ArcelorMittal earned plaudits from investors by reducing net debts by $10.9bn in the year to September to $21.6bn – and Mr Mittal will almost certainly want this movement to continue.
    At some time, however, he might be prepared to put this trend into reverse, in the cause of making further acquisitions that for 18 months have been on hold.
    Should the ArcelorMittal chief announce that he is hunting for deals again – a field in which he has previously made his mark – this would be guaranteed to send a signal that the still-flaccid steel sector was properly on the move.


2/06/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. *'Shared Work' program keeps workers on job, by Steve Giegerich, St. Louis Post-Dispatch via stltoday.com
    MAPLEWOOD, Mo. — An oversized photograph in the foyer of 85-year-old Sunnen Products captures the work force of the family-owned company as it stood in 2006.
    More than 500 employees are pictured in a shot taken on the precipice of what has since been labeled the "Great Recession."
    By last year, nearly 100 of those workers were gone, collateral damage in a downturn that battered sales of the company's precision honing, hydraulic and other manufacturing equipment.
    The toll might have been worse had it not been for "Shared Work," a long-standing state and federally subsidized program that allowed the company to pare hours instead of jobs.
    "It really helped alleviate some of the pain," said Steve Sutton, a supervisor in Sunnen's portable tooling department.
    Aiming to keep Shared Work as an alternative to layoffs across Missouri, an out-state legislator last month introduced a bill to renew the program. The measure introduced by Rep. Charlie Norr, D-Springfield, would also lengthen the terms of the Shared Work initiative from 26 to 52 weeks.
    Norr calls Shared Work, which he estimates saved Missouri's unemployment pool $33.5 million in 2009, beneficial for employers, employees and the state alike.
    "It's essential," Norr said in a telephone interview from his Jefferson City office last week. "It keeps them in business and allows them to use their work force more efficiently."
    Best of all, from the perspective of Norr and Missouri Labor Department Director Larry Rebman, the program saves the state money and spares workers the humiliation of unemployment.
    "When companies are forced to cut down on labor costs, often laying off workers is the easiest way to go. However, by participating in the Shared Work program, employers can demonstrate to their employees, during what has proven to be very difficult economy, their willingness to look for other options," Rebman said in a statement released through the department.
    Participating companies must first agree to the rules governing the program — most notably a pledge not to discontinue or reduce the amount of contributions to funds supporting employee health benefits.
    Once approved by the Missouri Department of Labor and Industrial Relations, a company is allowed to reduce employee hours.
    FRIDAYS OFF
    Sunnen chose to cut factory hours by 20 percent over six months in 2009. Company executives simultaneously agreed to cut their salaries by 20 percent.
    As a result, Sunnen production effectively ground to a halt each Friday for 26 weeks.
    In Shared Work, each hourly employee recoups a portion of his or her lost wages from the state unemployment fund. At Sunnen, that amount came to about $89, said Human Resource Director Lee Holmes.
    According to Missouri Department of Labor data, more than 450 companies, employing a total of 44,000 workers, enrolled in the program last year. The initiative is expected to assist 4,000 more workers this year.
    Holmes said adapting Shared Work was a no-brainer once Sunnen officials learned of the program's existence; long pre-dating the recession, it has been around nearly 20 years. Being a family owned business with a nonunion work force — binding organized labor contracts can complicate the process of moving into the program — made Sunnen's decision easier, Holmes added.
    Sunnen and other companies do not receive a tax credit for their participation in the program. The firms are, however, eligible for reduced contributions into the state unemployment insurance fund.
    Long-term, Shared Work cuts the cost of rehiring and retraining workers after the economy improves and business rebounds.
    Lonnie Haynes, with 13 years on the Sunnen factory floor, joined the corporate brass in the embrace of Shared Work. In the 1970s, Haynes observed the consequences of involuntary unemployment when his parents lost their jobs at the same time.
    "Seeing how we had to adjust our lifestyle, I didn't want my (three) kids to go through that," said Haynes.
    It didn't take long for Haynes to discover that regular three-day weekends spent with his children and other pursuits tended to outweigh the reduction in take-home pay.
    WORK ORDERS INCREASE
    Coincidentally, around the time Sunnen's 26-week foray into Shared Work was set to expire, orders for the company's products picked up by 6 to 8 percent ("Higher than projected," said a pleased Holmes).
    Lonnie Haynes consequently started working five-day, 40-hour shifts at the start of the new year. Haynes allows that it's nice to again earn a full week's pay.
    "I kind of miss those Fridays off, though," he smiled.

  2. *Shared Work program saves 20000 jobs in Washington, KNDO/KNDU via (2/05 late) kndo.com
    SEATTLE, Wash. - The Employment Security Department reports that more than 20,000 Washington jobs were saved because of Shared Work.
    Instead of laying off employees, the program cuts their hours. But the workers are then entitled to partial unemployment benefits which sustains their regular pay.

    Today I spoke with the General Manager of Dayco Heating and Air and he tells me this program has not only saved his workers, but will also save him thousands of dollars in the long run.
    "It will save us a lot of money finding and training new skilled workers costs thousands and thousands of dollars for the company," says Day. "But in this case we get to retain the skilled workers, they still get their weekly pay and when the economy picks up we can keep right on rolling."
    Day also told me if it wasn't for this program about 25% of his workers would have been laid off.
    Statewide, 51,000 employees participated in the program this year compared to 21,000 employees in 2008.


2/05/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. City of Watsonville faces $1.9 million deficit, by Donna Jones, SantaCruzSentinel.com
    WATSONVILLE, Calif.—With a projected $1.9 million deficit next year, Watsonville will be hard pressed to maintain programs let alone do anything new. City Manager Carlos Pala­cios delivered that message in advance of a City Council discussion of its strategic goals Thursday.
    This year's furloughs, which saw most departments cut hours and staff pay by 10 percent as part of a $4.5 million package of budget reductions, is stretching city resources as it is, and the unpaid leave will have to continue next year or the deficit will grow, Palacios said. Employees are experiencing the stress of the financial setback at home and increased workload on the job, he said.
    “We solved (this year's) budget problem, but the cost is our employees are struggling,” Palacios said.
    A more detailed financial report will be provided to the council Tuesday, but Palacios said the city is coming up $380,000 short in the current year, which ends June 30, and the deficit will grow. “The weakness is across the board,” Palacios said, sales and property taxes, rentals of city facilities, all are down.
    “(Administrative Services Director) Marc (Pimentel) and I thought we made the most pessimistic estimate possible,” Palacios said. 
    “The revenue came in even lower than that.”
    Despite the belt-tightening, the council accepted Palacios recommendation to move forward with three initiatives, one of which, a regional broadband upgrade would benefit public safety agencies as well as possibly spur economic development by providing companies with higher quality Internet service, he said. A consortium of government and educational agencies in Santa Cruz and Monterey counties is seeking a $40 million federal grant for the project.
    The council also agreed to hold a special session on economic development strategies and a joint meeting with the Pajaro Valley Unified School District.
    Assistant City Manager Marcela Tavantzis said despite financial constraints, the city has made progress on the goals and objectives of its 2009-11 strategic plan. Under revitalizing the downtown, for example, she pointed to the improvement to the facade of the ACE Hardware, an upgrade done with a city grant from federal economic development funds. She also noted the transforma­tion of a vacant lot next door to ACE into a small park, completed through a public-private partnership.

  2. Counting the cost of failure, MorningStarOnline.co.uk
    LONDON, U.K. - Figures, they say, can tell any story that you want them to and they are probably right to some extent.
    But, despite the efforts of the spinners of Whitehall and Fleet Street, the recent figures on insolvencies tell a story that can't be easily disguised.
    A record number of individuals were declared insolvent during last year, with 134,142 people losing the battle to keep their heads above the water line.
    It's the highest level seen since records began in 1960 and, given the almost unending series of closures, lay-offs, short-time working deals and heavily leveraged takeovers which rack up tremendous company debts and demand staffing cuts in the last year, you don't have to look far to find the reasons.
    People are being dropped into debt and unemployment by companies that will do anything to avoid corporate problems, including sacrificing their workforces, and they are being left there by a government so fixated on entrepreneurship and dodgy business creation as the way out that it sees no percentage in direct intervention.
    And at least one insolvency expert has warned that "we should expect to see a further rise of around 12 per cent in annual insolvency figures this year and these levels are likely to remain until at least 2012."
    So the nightmare will continue for a growing number of the unemployed and discarded. But it's not only personal insolvencies that should concern us.
    Company failures also soared to their highest level for ages when more than 19,000 firms succumbed to the recession last year.
    It's been 16 years since the figures have been that bad and these figures also show little sign of being the end of the story. The figure is a terrifying increase of over 22 per cent on 2008.
    And it's what industries the failing companies are situated in that should give major cause for concern.
    Because the rate of attrition in industries that should be leading the way out of recession is huge.
    We don't yet have the figures for the last quarter of 2009 broken down by industry, but the existing trend since 2007 is startling enough.
    Trading-related bankruptcies have soared. In manufacturing, the quarterly rate of collapse has nearly doubled, with more in the third quarter of 2009 than in the eight previous quarters combined.
    Be it rubber and plastics, metal fabrication or transport equipment, the collapse continues unabated.
    In construction, the picture is similar, with companies folding at twice the rate in 2009 as in 2007.
    In retail the decline is less obvious ,but still there.And we haven't seen the last by a long way.
    The Bank of England has paused quantitative easing for the simple reason that it hasn't worked and that's not surprising. The way the bank organised it, buying gilts was just putting money into pockets of banks which still refuse to loose the reins on borrowing.
    Little was reaching the firms that government is mistakenly relying on to revive the economy. In fact, their rate of collapse just keeps on growing.
    It is clearly time for far more direct intervention by government. Relying on a failed market economy is a thankless and rewardless procedure and cannot be allowed to continue.
    The government now theoretically has control over several huge financial institutions and it must start using them as vehicles of policy, directing investment where it is needed, not where speculators see fit.
    Potentially viable firms cannot be allowed to go to the wall at the behest of an uncontrolled and speculation-dominated economy, but growth must be directed consciously, without the randomness of a system that says "soak the workers or go under."
    It's long past time for direct intervention and an attempt to build a planned, reliable economy.
    The free market has failed, so let's not waste valuable time trying to revive a corpse.



2/04/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Court furloughs deferred, EmporiaGazette.com (subscr.)
    Federal stimulus money and an anticipated $5 million supplemental appropriation from the Kansas legislature have prompted the state supreme court to cancel most of the furlough days that had been planned through June 30.
    Fifth District Court Administrator Ruth Wheeler announced Thursday afternoon that the furlough scheduled to begin on Feb. 15 had been cancelled as a result of an announcement from Kansas Supreme Court Justice Lawton R. Nuss.
    Nuss today sent out a letter to all Judicial Branch employees to notify them of the change in plans...
    Nuss said that the Judicial Branch has been accepted into the “Shared Work” program for unemployment compensation...if furloughs do become necessary...

  2. Europeans Revitalize Plants to Save Jobs, by Nelson Schwartz, New York Times, B1.
    BERLIN, Germany — The soaring glass and iron Siemens factory here opened almost exactly a century ago. At first, it churned out electricity turbines, then munitions during World War II before being looted by the Soviets, which required it to be rebuilt at the dawn of the cold war.
    A Siemens factory in Berlin for manufacturing turbines. The company spent 500 million euros to develop the new turbines as part of a push into green technology.
    Today, it is manufacturing turbines again — except these models are among the most advanced in the world, each one able to power all the homes in this city of three million.
    “It’s not a museum; it’s a workshop,” said Michael Schwarzlose, a project manager at the plant.
    The same might be said for much of Europe itself, despite American suspicions to the contrary. European companies may not be as nimble as their counterparts in the United States, but in moving to preserve jobs through the worst global downturn since the end of the war, they have forged a different path toward recovery.
    They are making old plants more modern and effective rather than watching workers or companies deemed uncompetitive fall by the wayside.
    European companies have paid a price: lower profits and productivity than their American competitors. But as long-suffering American workers face the prospect of a jobless recovery, many analysts believe the European model may deserve another look.
    “American companies have been faster to adjust their work forces and quicker in protecting profit margins,” said Gilles Moëc, a senior economist at Deutsche Bank. But that does not mean companies on the Continent have fallen behind in innovation, experts say.
    Americans often assume newer, smaller companies are the engines of innovation and job creation — hence President Obama’s decision to make a $30 billion program to encourage small-business loans a centerpiece of his jobs plan.
    Europe, in stark contrast, often relies on its large companies to sustain both employment and a cutting edge in important industries. One crucial tool, along with such measures as work-sharing, is a reliance on environmental innovation.
    [Note Anders Hayden's book, *Sharing the Work, Sparing the Planet.]
    “The large incumbents in Europe, which might have been considered technological laggards, have used green technology and sustainability as a core new element of growth,” said Luc Soete, a professor of international economics at Maastricht University in the Netherlands.
    Some large companies are surprisingly resilient. The Siemens factory added 500 workers here in the depths of the economic crisis last year, beginning production of new gas-burning turbines that are the most powerful Siemens makes but emit substantially less carbon dioxide than older models.
    In Europe, fuel is heavily taxed, and there are substantial subsidies for producing alternative energy. Such incentives serve a dual purpose: supporting employment at green-oriented companies in the short term and, Europeans hope, giving their companies a strategic advantage when the global economy and demand pick up.
    At Siemens, for example, with revenue increasing 11 percent from 2008 to 2009, its broad green portfolio is now growing faster than its other businesses, Barbara Kux, the chief sustainability officer at the company, said.
    She points to the state-of-the-art products of the Berlin factory that manufactures turbines. “It’s part of sustainability, and it shows you think long term and are there to stay,” she said. “It gives you the chance to keep experienced people, to keep their knowledge in-house and develop a high level of loyalty and trust so they feel like part of a family rather than just doing a job.”
    The varying responses to the economic downturn come amid a fierce debate in the United States over whether the country is headed toward a more European economic model, given Washington’s huge support of big banks and the auto industry, as well as Mr. Obama’s proposal to overhaul the health care system.
    “The end result would be an America much closer to the European model of a social-welfare state, which prioritizes cohesion over innovation,” warned a recent article in National Affairs, a quarterly journal. The article was by Jim Manzi, a former software executive who is now a senior fellow at the Manhattan Institute, a conservative research group.
    While unemployment has soared to 20 percent and higher in European countries like Spain and Latvia, the relative success of other European countries in avoiding deep job cuts adds a new wrinkle to a longstanding trans-Atlantic argument.
    The overall European unemployment rate of 10 percent matches that of the United States, but northern and central Europe have fared much better, with joblessness at 4 percent in the Netherlands, and 5.4 percent in Austria, for example.
    Germany’s economy contracted 5 percent last year, yet its unemployment rate of 7.5 percent is actually down from two years ago. By contrast, the economy of the United States shrank 2.4 percent last year as unemployment doubled, to 10 percent, over the period.
    The ability of the German economy, the biggest in Europe, to stanch job losses despite a markedly deeper recession than that in the United States is “something of an economic miracle,” Jörg Krämer, chief economist for Commerzbank in Frankfurt, said.
    Much of the attention on saving jobs has focused on the government’s short-work program, in which taxpayers and companies share the cost of furloughing workers. But Mr. Kramer said the government-financed program of shorter workweeks was responsible for saving only about 20 percent of jobs.
    ["Only 20%?" Then a market-determined workweek would and should be even shorter, shouldn't it. Open up them imaginations of yours! The workweek is an arbitrary length. So arbitrate it shorter when free-market unemployment (= the deactivated portion of consumer base) is too large. And in our view, any number above frictional unemployment (ordinary job mobility) is too large when hyperinflation can be controlled without blocking growth.]
    “Half of this miracle [so now we've gone from "only 20%" to "the 20% miracle"?? what is this guy, schitzy?] can be explained because firms allowed workers to do less; they tolerated a 2.5 percent drop in productivity,” he added [uuh, how can hourly productivity drop when they've cut hours??]. “You can either cut workers or cut hours.” [no argument there = "timesizing, not downsizing"!]
    In the more flexible [and self-destructive] American labor market, where industrial unions are weak and contracts far less rigid [and consumer-base protective], companies responded more often by letting workers go, sharply cutting costs and preserving profit margins [and destroying consumer markets and guaranteeing further rounds of letting workers go...].
    [So we have more and more profits going to fewer and fewer richer and richer people with less and less marketable productivity providing fewer and fewer, less and less sustainable investments in a currency that is worth less and less to anyone but their own impoverished consumer base. How brilliant - not.]
    German companies not only reduced hours on the job, but they also made a decision to accept lower profit margins in the short term, Mr. Kramer said, a practice he called “labor-hoarding.”
    [You can either hoard labor (and markets), or hoard profits with less and less output marketability and investment sustainability, ie: more and more mere paper profits.]
    In Germany, profit margins have fallen to just 0.58 percent in the latest quarter, from 6.26 percent in the first quarter of 2008, according to Thomson Reuters Datastream. Similarly, French profit margins have dropped to 1.2 percent, from 6.5 percent. By contrast, corporate profitability in the United States has shrunk to 3.6 percent, from 7.8 percent.
    [But Germany and France still have a domestic consumer base and economic sustainability based on it, and the U.S. has neither and is looking to the third world (eg: China) to save it?! - pathetic!]
    Europeans hope that as the recovery picks up steam, European competitors will be well situated to take advantage of new growth opportunities while American companies will be required to rebuild their work forces.
    [There will be no recovery in either place, but Europe will be closer to a healthy steady-state economy and the U.S. will be continuing its downward spiral staircase of bubbles.]
    But if the feared “double-dip recession” does arise, the leaner profile of big companies in the United States could help them hold up better.
    [What nonsense - as if companies of any size can hold up with weakening consumer spending - and exactly what is the United States is providing wages to finance that spending??? And btw, when are we going to start highlighting indicators that cut the "double-dip recession" prozac and tell it like it is, a continuous, deepening downspiralling depression where the negligible upticks of the spiral path are being desperately seized-upon by impotent American economists to save face? Witness Larry Summers' "Worksharing is not the American way." What an idiot savant, ignorant of his own American economic history. America cut the workweek in half between 1840 and 1940. America passed a 30-hour workweek bill through the US Senate by a vote of 53 to 30 on April 6, 1933. America passed a 44-hour workweek in 1938 and cut it two hours a year for the next two years, giving us the 40-hour workweek in 1940. And hundreds of American companies cut hours, not jobs, every day in every recession. Wake the hell up, Larry Summers and your fellow dumb parasites, before you completely destroy your (and our) economic host-habitat.]
    European experts say that the varying strategies of companies during the financial crisis, and the different ways they treated their workers, ought to prompt a revision of the traditional American view that Europe’s social democracies are condemned to slow growth and high unemployment.
    [True, but it remains to be seen if the know-it-all American decision-makers behind the scenes can learn anything from anyone else. So far they've been pursuing a strategy of Suicide, Everyone Else First without realizing it.]
    “It’s not true that there is a correlation between how much you spend on social policy and welfare and economic growth,” said Paolo Guerrieri, a professor of international economics at the University of Rome I. “The best performing group — Denmark, Sweden, Holland, Germany — are exactly the kind of countries that shouldn’t be doing well according to the [negative] American stereotype of high taxes and high welfare benefits.”
    [And you don't need high sales, income and wealth taxes if you have high overtime taxes with a complete exemption for reinvestment in OT-targeted hiring (& training if needed). If your tax structure is designed to incentivate the private sector to recycle its own discards, meaning to quickly rehire its own disemployed, you can dismantle the 60-70% of all current governments' bureaucracies that is purely and solely devoted to compensating for private-sector downsizing.]
    Siemens is an example of the kind of European company that is leading the way.
    Although its global work force has shrunk over the last five years as it exited businesses like telecommunications and auto parts, that has not stopped it from making advances in facilities like its Berlin factory, even if the setting resembles “Metropolis,” the 1927 film from Fritz Lang.
    The 163-year-old company spent 500 million euros, or close to $700 million, to develop the new turbines being built at the Berlin factory as part of a push into green technology, which it broadly defines to include low carbon dioxide-emitting turbines and locomotives, solar paneling and wind technology, as well as air and purification equipment.
    Siemens managed to save its customers an estimated 210 million tons in carbon dioxide emissions last year, the equivalent of the amount generated annually by New York, Tokyo, London and Berlin combined.
    “The global economic crisis has actually allowed us to increase our green advantage,” Ms. Kux said. “It’s an opportunity to jump ahead, cut costs and improve our own resources.”
    [As we mentioned above, check out Anders Hayden's book, *Sharing the Work, Sparing the Planet.]


2/03/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Carcieri offers tax credit to create 5000 new jobs, by Cynthia Needham, Providence Journal via projo.com
    PROVIDENCE, R.I. - Pledging to create 5,000 new jobs and help business owners pinched by the recession, Governor Carcieri introduced a targeted small-business tax credit as part of his budget proposal Tuesday.
    The deal would give employers a $2,000 tax credit for each new full-time worker hired between July 1, 2010, and Dec. 31, 2011. The tax credit would apply for the year the hiring takes place.
    If approved by the General Assembly, the plan will cost the state $10 million in lost revenues. (That’s in addition to a separate proposal calling for the lowering of the minimum corporate tax from $500 to $250, at a cost of $11.5 million.)
    There are controls on the tax credit. The newly hired workers must have collected unemployment, received welfare benefits, or graduated from college in the previous 24 months.
    The employee must work 30 hours a week or more and earn at least 250 percent of the state’s minimum wage. Doing the math, that’s about $18.50 an hour, or close to $40,000 a year for a 40-hour-a-week worker. He or she must also be granted access to group health-insurance benefits, if interested.
    Finally, the business must retain the new employee for 18 consecutive months, meaning no seasonal or temporary hires. At the end of that period, the company’s total employment must be greater than it was prior to taking the tax credit, or it must be returned.
    The deal comes on the same day that President Obama traveled to Nashua, N.H., to roll out details of his own strategy to help local businesses through tax cuts and assistance to community banks. That includes a proposal to give small businesses a payroll tax credit of $5,000 for each new hire in 2010.
    Carcieri said it is his belief that Rhode Island businesses that qualify for the federal and the state credits would be allowed to take advantage of both.
    Small-business owners who learned about the governor’s Rhode Island-based tax credit Tuesday offered mixed reactions. Most applauded the administration’s efforts to lend a hand in tight times. But they also raised questions about the particulars of the program and the promise of 5,000 resulting jobs.
    “I think it’s a move in the right direction and I know what they are trying to do with the salary [provision] is create jobs for the middle class,” said Gail Ahlers, owner of Ahlers Design, a Pawtucket designer and manufacturer of corporate gifts.
    But with a minimum required salary of $40,000 a year and an 18-month commitment, she said, the benefit doesn’t add up.
    “You’ll be paying out $60,000 after a year and a half, plus benefits, so you figure this one employee costs you more than $70,000 and you get back $2,000? That’s not enough of an incentive,” she said.
    Other small-business owners said they worry about committing to long-term hires in the shaky recovery months and years to come. What if they hire someone and business declines and they have to let them go? Can they still keep the tax credit? The answer is no.
    Jeff Hirsh, owner of The Lobster Pot restaurant in Bristol, and a board member of the Providence Warwick Convention & Visitor’s Bureau, said the proposal, if imperfect, creates the right kind of job growth. “It seems like this is geared toward trying to boost employment of a higher caliber,” Hirsh said. “Hopefully that will encourage businesses that might be in the position to move, to stay here.”
    cneedham@projo.com

  2. Recession forces job cuts at Reifenhäuser, by David Vink, EuropeanPlasticsNews.com
    TROISDORF, Germany - Extrusion machinery producer Reifenhäuser is set to cut staff in its blown film extrusion machinery activities, according to news reports. The Troisdorf headquarters, where 60 employees will lose their jobs, will bear the brunt of the cuts, while another 18 jobs will go at the former Kiefel Extrusion plant in Worms that was acquired from Brückner Group in August 2009.
    In August 2009, Ulrich Reifenhäuser had referred to the “catastrophic development” in the plastics machinery market in 2009 and stated: “We are of course trying to strengthen ourselves through becoming leaner, with short-time working and cost cutting”. At the time, he did not link the acquisition with any redundancies [=naive or 'intentionally "naive" '?].
    Clearly, these short-time working and cost-cutting measures failed to prevent the job cuts that have been announced, suggesting that the blown film machinery has still not recovered from the economic recession.
    [The only reason short-time working alias worksharing failed is because the reduced workweek level was set by an arbitrary government program instead of by market forces acting through company revenues. Cleary this company did not reduce the workweek as low as market forces demanded.]
    However, Reifenhäuser did not respond in time for publication when contacted by European Plastics News.
    Ulrich Reifenhäuser told local Kölnische Rundschau newspaper that the company’s extrusion machinery business has simply halved since the 2007. Business in 2009 has not been good, with hardly any incoming orders between February and September, he said.
    As a result, Ulrich Reifenhäuser estimates that the company’s 2009/2010 turnover will come out at around €350m, around €100m lower than in 2008/2009. In August 2009, Edgar Gandelheidt, managing director of Reifenhäuser Kiefel Extrusion, estimated the combined Reifenhäuser Kiefel Extrusion blown film machinery as having annual turnover of €90m and a 25-30% share of the worldwide market.
    Wolfgang Schmitz is chairman of the works council at Reifenhäuser and told the local Kölnische Rundschau newspaper that “naturally each job loss hurts, but the purchase of Kiefel Extrusion has prevented a possible exit from blown film machinery in Troisdorf”.
    Schmitz said that the works council is in full support of the family owners’ commitment to the business. The company has a so-called 0-100-30-40 strategy programme for the future, standing for zero defects, 100% delivery time reliability, 30% more efficiency and 40% more growth over the next five years.
    As part of the programme, Bernd Reifenhäuser said that new machines have already been acquired, production processes improved and costs reduced in “co-operative discussions with suppliers”.
    The Reifenhäuser brothers say that the integration of Kiefel Extrusion proceeded faster than expected, leading to a strengthened innovation programme and additional engineering capacity. This should enable the company to come to the market with enhanced technology and to ensure the forecast 4% annual growth – “when the economy revives”.
    Once that happens, Reifenhäuser will again have a chance to fulfil its vision of closing the gap with its largest blown film line competitor Windmöller & Hölscher. Although Reifenhäuser has now cut 78 jobs, leaving still 798 at its Troisdorf headquarters, W&H announced in May 2009 even more drastic cuts of 350 jobs out of 1,650 at its Lengerich headquarters, where it produces blown film and flexographic printing machinery.


2/2/2010  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 (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. 17th Habitat home dedicated, GaylordHeraldTimes.com
    GAYLORD, Otsego County, Mich. - The Otsego County Habitat for Humanity has completed its 17th home. It is the home for which ground was broken July 22 in the Arrowhead Subdivision. The dedication was held Friday and the keys were handed to the new owner.
    “We were just so excited and happy,” said Connie Weston, who is committed to working on future Habitat houses. She will live in the three-bedroom home with her children, James and Tabitha.
    Pastor Thomas Mammoser of Peace Lutheran Church presided over the dedication, lighting a candle and blessing every room of the house. Habitat board member Pastor Jay Chambers opened the dedication with a prayer and board member Matt Kinsinger closed with a prayer. Also attending was Alice Yeoman, board president, and executive director, Donna Quandt.
    According to Quandt, this home was built much quicker than their average Habitat home, primarily due to the young men who worked 30 hours per week and were paid through stimulus funds from the federal government. Besides their wages, the men received training in building skills from the Habitat construction supervisor.
    [So here we are right back to the 30-hour a week makework (WPA and CCC) of the 1930s because we didn't push through market-determined working hours via automatic inverse-variation of the workweek against underemployment - to easily, directly and inexpensively maintain full employment for maximum markets and growth.]
    Quandt is hopeful that ground will be broken for their 18th home by next spring, depending on funding.

  2. PM Boc to address Chamber of Deputies and Senate, Financiarul.ro
    BUCHAREST, Romania - Prime Minister Emil Boc will be delivering a speech to the Senate and the Chamber of Deputies comprising the legislative priorities of the Government. Boc will start his series of speeches today at 17:00 hrs, local, before Senate and ends it on Tuesday at 10:00 hrs, local, before the Chamber of Deputies.
    At the weekend, following a meeting of the Democratic-Liberal Party (PD-L) leaders at Poiana Brasov, Boc said that one of the top priorities of the PD-L for the new parliamentary session will be the national education law built on the conclusions of a presidential think tank headed by professor Mircea Miclea. The prime minister also reiterated the need for urgent adoption of a fiscal responsibility law this March and of the public pension law this June.
    Boc also urged the opposition parties – the Social Democratic Party (PSD) and the National Liberal Party (PNL) – to vote on the constitutional amendments required to cut the number of parliamentary seats and switch over to a single-chamber parliament, as voted for in a November 2009 referendum. He underscored that cutting the number of parliamentary seats and turning to a single-chamber parliament is a major political objective of the PD-L in the time immediately ahead.
    He said among other priorities of his Cabinet are passing the code of criminal procedure and the code of civil procedure and continuing the ‘First Home’ programme. In relation to the ‘First Home’ programme, Boc said the Government will adopt the project by February 15.
    Among the normative acts about which Boc said require rapid submission to Parliament are an emergency ordinance concerning short-time working; modifying the minimum corporate tax and turning it into a mandatory tax restricted for some business areas; a draft law to aid through tax deductions companies that hire unemployed people, and using Government guarantees for job creation and investment generating projects.
    ‘In the area of social security, social pensions will certainly be indexed for inflation and we will seek a solution to grant financial aid to other seniors on small pensions by setting up a social security fund. We are also talking about ratifying a draft law concerning the rights of people with disabilities, who must be treated according to the international standards in force,’ said Boc.
    Boc also mentioned that talks will resume on the status of national minorities in Romania in the next parliamentary session. ‘The status of national minorities will be up for Parliament’s debate this next session and it will continue the talks that were interrupted in 2007,’ the prime minister said. Adjusting the Romanian legislative framework to the European legislation following the coming into force of the Lisbon Treaty concerning the place and role of national parliaments in the European decision-making process was also mentioned as another priority of the Boc Cabinet and the Democratic-Liberal Party (PD-L).




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