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Economix: The Wageless, Profitable Recovery

June 30, 2011 by Leave a Comment

Economists at Northeastern University have found that the current economic recovery in the United States has been unusually skewed in favor of corporate profits and against increased wages for workers.

In their newly released study, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth.

The study, “The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009,” said it was “unprecedented” for American workers to receive such a tiny share of national income growth during a recovery.

According to the study, between the second quarter of 2009, when the recovery began, and the fourth quarter of 2010, national income rose by $528 billion, with $464 billion of that growth going to pretax corporate profits, while just $7 billion went to aggregate wages and salaries, after accounting for inflation.

The share of income growth going to employee compensation was far lower than in the four other economic recoveries that have occurred over the last three decades, the study found.

“The lack of any net job growth in the current recovery combined with stagnant real hourly and weekly wages is responsible for this unique, devastating outcome,” wrote the report’s authors, Andrew Sum, Ishwar Khatiwada, Joseph McLaughlin and Sheila Palma.

According to the Bureau of Labor Statistics, average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.

The authors said another factor explaining the weak performance for aggregate wages and salaries was the slow growth in weekly hours during the recovery. At the same time, worker productivity has grown just under 6 percent since the recovery began, helping to keep employment down while lifting corporate profits, the study said.

Professor Sum noted that the aggregate wage and salary figures exclude employer contributions to benefits and payroll taxes, while they include bonuses, overtime, commissions and tips.

He said that nonwage benefits rose in real terms by $27 billion during the first seven quarters of the recovery. “These small gains were exactly offset by a similar $27 billion loss in real wages and salaries over the same time period based on newly released data from the Bureau of Economic Analysis,” he said. “It was a wageless and jobless recovery.”

The study called that $27 billion loss in aggregate wages and salaries during the seven quarters after the recovery began “the first ever such decline in any post-World War II recovery.”

The study said that of the previous recoveries since the 1970s, the recovery following the 2000-1 recession was next worst in terms of the share of increased income going to wages and salaries. The study found that 15 percent of income growth went to aggregate wages and salaries in the six quarters after the recovery began following that recession, while 53 percent went to corporate profits. The growth in national income can also go to net interest, rental income or proprietors’ income.

The story was very different for the recovery that began in 1991. In that recovery, 50 percent of the growth in national income went to wages and salaries during the first six quarters after the recession ended, while corporate profits actually fell by 1 percent during that period.

With regard to corporate profits, the report noted that the preliminary estimate for the first quarter of 2011 was $1.668 trillion, an increase of $465 billion of just under 40 percent since the recovery began.

“Aggregate employment still has not increased above the trough quarter of 2009, and real hourly and weekly wages have been flat to modestly negative,” the report concludes. “The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders.”

Article source: http://feeds.nytimes.com/click.phdo?i=110c5f38268dbdf236fc5f18038e6bdb

Filed Under: Economy News Tagged With: , ,

You’re the Boss: Building a Web Business Brick by Brick

June 30, 2011 by Leave a Comment

Andrew Clancey (left) and Christopher Melton: A store may lose a lot of money.Courtesy of Any Old Iron.Andrew Clancey (left) and Christopher Melton: A store can lose money, but help the brand.
Tech Support

Someone strolling the Lower East Side of Manhattan is liable to spot a flier plastered with the face of a pugnacious Boston Terrier. That’s Monkey, the nominal guard dog of Any Old Iron, a year-old men’s clothing store that has quickly become a destination for shoppers, as well as a fixture on the local party scene. But what even most fans of the store don’t realize is that Any Old Iron is, in a sense, a gateway to a Web site.

A lot of companies these days are founded as Web businesses, and many physical stores end up growing substantial Web sales over time. What’s a bit unusual about Any Old Iron is that the company’s Web site has been intended as the main engine of the business from day one — even though almost all of the investment and attention has been focused on the store. “Our strategy is to build credibility and cachet through the store,” said Christopher Melton, an arts-oriented entrepreneur who helped found the company last year along with Andrew Clancey, a celebrity stylist. “We plan to open a second store in L.A. and then two more stores in other locations. And then from there it’s all Web.” Indeed, the Manhattan store isn’t even expected to be profitable on its own. In a sense, it’s a loss-leader — the rent money is really an investment in Web advertising, said Mr. Melton.

He had observed that some of the big, high-fashion retailers operated small stores in SoHo, a chic shopping area where sky-high rents make it difficult to turn a profit. So why bother? Because the SoHo presence serves to build the brand in the eyes of the fashion-conscious and pays off for the companies in increased sales at other locations and on the Web. “A store may lose a lot of money,” said Mr. Melton, “but it helps make the brand’s whole system profitable.”

Why couldn’t a tiny start-up think the same way? As it turns out, Mr. Melton and Mr. Clancey had a role model. Friends of theirs in Britain started a couple of small clothing stores in fashionable areas outside London and parlayed the attention they got into success on the Web. So Mr. Melton and Mr. Clancey opened up Any Old Iron to offer men’s clothes from British fashion labels that connote a “distinctly English sartorial dandyism,” as the company’s promotional literature puts it (the store’s name comes from an old English song). It’s a niche they have pretty much to themselves.

Step one in their scheme was building up the cachet of the store. To do that, the entrepreneurs used their fashion-celebrity contacts and party-throwing capabilities to establish the shop as a place to be seen on weekend evenings. They’ve struck up relationships with other shops and restaurants in the area to steer customers each other’s way and have won precious spots on the places-to-shop lists wielded by influential concierges at nearby hotels like the Thompson Lower East Side, boosting out-of-town shoppers to 40 percent of their walk-in business.

Part of the store’s appeal is the flair of the four employees. To keep them feeling the spirit without busting the bank, Mr. Melton trolls the online service MarketSharing — a Groupon clone that sells stuff for small-businesses — to find discounted group-bonding activities like dodge ball and local cruises. “The cheesier the better,” he said.

Meanwhile, Mr. Melton and Mr. Clancey are slowly moving toward building their Web business. But after putting up an edgy first iteration of their own site, Mr. Melton and Mr. Clancey were approached by Farfetch, an online retailer that showcases the goods of various high-fashion boutiques. They jumped at the chance to be one of the featured retailers — the store strategy was paying off! — and revenue from Farfetch quickly dwarfed those from their own site, even bringing in sales from places like Qatar. But Farfetch takes a hefty cut, and now Mr. Melton, after letting his own site languish, is eager to improve it and drive more traffic to it. “We don’t have to let Farfetch offer everything we offer,” he said. He and Mr. Clancey have budgeted $15,000, tops, for a site redesign. And they want to bring in a consultant to help explore search-engine-optimization strategies to improve their placement in searches. “We’re just limited in how much we can spend on this right now,” said Mr. Melton.

Besides bringing in more traffic, Mr. Melton wants to bump up the sales conversion rate for the site from the roughly 5 percent it averages now. One way to do that, he thinks, is to work in more images of and references to the store, so that people who come to the site after visiting the store will recall the experience and slip more easily into buying mode. He also plans to integrate information about the labels and designers throughout the site so that the products are tied to stories and the site feels more personal.

Finally, he wants to keep the site feeling fresher by showcasing new merchandise. To that end, he and Mr. Clancey are switching to iPhones to take advantage of apps like Kyte that will let them snap a picture of a new shirt or shoe when it comes in the door and post it to the site with a tap on the screen. “It doesn’t get easier than that,” said Mr. Melton.

You can follow David H. Freedman on Twitter and on Facebook.

Article source: http://feeds.nytimes.com/click.phdo?i=2706cf82e5fb604b4422e28949951e92

Filed Under: Small Business Tagged With: , ,

You’re the Boss: Is America Really the Land of Entrepreneurship and Small Business?

June 30, 2011 by Leave a Comment

You’re the Boss offers an insider’s perspective on small-business ownership. It gives business owners a place where they can compare notes, ask questions, get advice, and learn from one another’s mistakes. Its contributors also interpret news events, track political and policy issues, and suggest investing tips.

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Article source: http://feeds.nytimes.com/click.phdo?i=84ad79722c6060ee59f3b8661caecd6b

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Optimism on Greece Pushes Stocks Higher

June 30, 2011 by Leave a Comment

Greek lawmakers passed an austerity bill that would allow international lenders to release more emergency loans. Meanwhile, in Germany, banks and insurance companies joined the government in a plan to roll over holdings of Greek debt. The news added to optimism about averting a widespread European debt crisis, which has sent markets higher since Monday.

However, a report on claims for American jobless benefits was less encouraging. Worries about the economy and job growth have pushed stocks lower since late April.

Major indexes could eke out a small three-month gain as a volatile quarter comes to a close. The Dow was up 0.6 percent for the three-month period ending in June, but the Standard Poor’s 500-stock index was down 0.5 percent.

In early afternoon trading Thursday, the Dow Jones industrial average rose 121.74 points, or 0.99 percent, to 12,383.16. The Standard Poor’s 500 gained 10.65 points, or 0.81 percent, to 1,318.06, and the Nasdaq composite index added 28.95 points, or 1.06 percent, to 2,769.04.

In Washington, the Labor Department said that slightly fewer people applied for unemployment benefits last week compared with the week before, but the level of claims was still high, at 428,000.

The previous week, applications had jumped to a one-month high. New unemployment claims have stayed above 400,000 for 12 straight weeks, a sign that companies are not hiring at a rate that can sustain job growth. The slowdown in hiring has caused concerns that the economy will take longer than expected to return to health.

Applications had fallen in February to a level that economists consider healthy, but surged in April to an eight-month high.

In Europe on Thursday, stock indexes also jumped after the Greek vote and German bank deal. Germany’s benchmark DAX index closed up 1.1 percent. The FTSE 100 index of leading British shares and France’s CAC 40 both rose 1.5 percent.

On Wednesday, strong signs Greece would pass its austerity bill and a Bank of America settlement over failed mortgage securities pushed stocks higher for a third straight day. The Dow rose 72.73 points, or 0.6 percent, to close at 12,261.42, and the S. P. 500 index rose 10.74, or 0.83 percent, to 1,307.64.

Article source: http://www.nytimes.com/2011/07/01/business/01markets.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Greek Parliament Approves Implementation of Austerity Plan

June 30, 2011 by Leave a Comment

The vote followed a momentous day on Wednesday, when members of Parliament narrowly approved the package of spending cuts, tax increases and the sale of government assets, as riots erupted in the streets surrounding Parliament.

The complex implementation bill passed, with all 154 of the ruling Socialists plus one conservative deputy voting yes, 136 against, and five blank ballots and four abstentions. The center-right New Democracy opposition party opposed the bill in principle, as it had the measures themselves, saying they included too much austerity and would not help Greece return to growth.

With Thursday’s vote, the spotlight shifts to Greece’s foreign lenders — the European Union, European Central Bank and International Monetary Fund — which are now expected to unlock $17 billion in aid that the country needs to meet its debt obligations through August.

Central Athens was calm on Thursday, a day after violent riots swept through the city, with police clashing with protesters who three firebombs and rocks through clouds of tear gas. Shops were open again after a two-day general strike and shopkeepers swept up broken glass.

The new measures include cuts in spending on health and defense, tax increases on heating oil and the self-employed and the privatization of about $70 billion in state assets.

Addressing Parliament ahead of Thursday’s vote, Finance Minister Evangelos Venizelos accused the main opposition New Democracy of “being scared of assuming their responsibility and lacking a counterproposal” to the government’s austerity plan. But he appealed again for cross-party consensus. “Will you join us and show that you’ve grasped the seriousness of the situation as they have in Portugal and Ireland,” Mr. Venizelos asked.

But his pleas fell on deaf ears. New Democracy leader, Antonis Samaras, who has rebuffed overtures by Prime Minister George Papandreou several times in the past month, stood firm, saying his party would vote against the implementation bill in principle — but would vote for provisions calling for privatizations and public spending cuts. Analysts have said the party’s populist stance has allowed it to score political points knowing the government would have to take the political risk of pushing the measures through.

At the last minute, the bill was altered to freeze the salaries of civil servants effective July 1, and to lower the ceiling below which income for individuals is tax-free to $11,600 annually from $17,400, with more lenient treatment for people with children.

Niki Kitsantonis contributed reporting from Athens, and Liz Alderman from Paris.

Article source: http://www.nytimes.com/2011/07/01/world/europe/01greece.html?partner=rss&emc=rss

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German Banks Agree to Roll Over Greek Debt

June 30, 2011 by Leave a Comment

The banks and insurance companies will commit to providing financing for a Greek aid package, Mr. Schäuble told a news conference in Berlin, according to Reuters.

The agency quoted him saying that as a minimum, the Greek debt held by German groups that matures by 2014 would be rolled over, or extended. He also said that 55 percent of Greek bonds held by German institutions would mature after 2020.

At the same event, the Deutsche Bank chief executive, Josef Ackermann, said a French proposal was being used as a basis for the German agreement, although modifications would be built into that plan.

German and French lenders are the biggest foreign holders of Greek debt. And the involvement of private creditors is seen as crucial in international agreement on a second bailout for the crippled Greek economy.

A separate hurdle was passed Wednesday after Prime Minister George A. Papandreou of Greece won the passage of a bill setting new government spending cuts and revenue-raising steps.

Mr. Schäuble said that he was confident that an agreement on the terms of a new aid deal could be fleshed among euro-area finance ministers at a meeting July 3.

Under the complex French plan, banks agreed to roll over 70 percent of their Greek bonds falling due from July 2011 to June 2014, while pocketing the remaining 30 percent for themselves. Of the amount to be rolled over, just over two-thirds would be reinvested in new Greek securities with a maturity of 30 years that paid a coupon close to the current official interest rate on the loans to Greece.

The remaining securities, just under one-third, would be invested in a separate “guarantee fund,” consisting of zero-coupon bonds with triple-A ratings.

The Deutsche Bank chief, Mr. Ackermann, was quoted as saying Wednesday by Bloomberg News that financial companies would contribute to the bailout to help avert a “meltdown.” Banks would “offer our hand in a solution,” Mr. Ackermann said.

Commerzbank’s chief executive Martin Blessing, speaking in Berlin Wednesday, said German financial institutions had reached a draft agreement on participation in a Greek rescue, although there are still “a few hitches.”

Article source: http://www.nytimes.com/2011/07/01/business/global/01iht-euro01.html?partner=rss&emc=rss

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Robert Morris, Pioneer in Computer Security, Dies at 78

June 30, 2011 by Leave a Comment

Robert Morris, a cryptographer who helped developed the Unix computer operating system, which controls an increasing number of the world’s computers and touches almost every aspect of modern life, died on Sunday in Lebanon, N.H. He was 78.

The cause was complications of dementia, his wife, Anne Farlow Morris, said.

Known as an original thinker in the computer science world, Mr. Morris also played an important clandestine role in planning what was probably the nation’s first cyberwar: the electronic attacks on Saddam Hussein’s government in the months leading up to the Persian Gulf war of 1991.

Although details are still classified, the attacks, along with laser-guided bombs, are believed to have largely destroyed Iraq’s military command and control capability before the war began.

Begun as a research effort at ATT’s Bell Laboratories in the 1960s, Unix became one of the world’s leading operating systems, along with Microsoft’s Windows. Variations of the original Unix software, for example, now provide the foundation for Apple’s iPhone iOS and Macintosh OSX as well as Google’s Android operating systems.

As chief scientist of the National Security Agency’s National Computer Security Center, Mr. Morris gained unwanted national attention in 1988 after his son, Robert Tappan Morris, a graduate student in computer science at Cornell University, wrote a computer worm — a software program — that was able to propel itself through the Internet, then a brand-new entity.

Although it was intended to hide in the network as a bit of Kilroy-was-here digital graffiti, the program, because of a design error, spread wildly out of control, jamming more than 10 percent of the roughly 50,000 computers that made up the network at the time.

After realizing his error, the younger Mr. Morris fled to his parents’ home in Arnold, Md., before turning himself in to the Federal Bureau of Investigation. He was convicted under an early federal computer crime law, sentenced to probation and ordered to pay a $10,000 fine and perform community service. He later received a computer science doctorate at Harvard University and is now a member of the Massachusetts Institute of Technology computer science faculty.

Robert Morris was born in Boston on July 25, 1932, the son of Walter W. Morris, a salesman, and Helen Kelly Morris. He earned a bachelor’s degree in mathematics and a master’s in applied mathematics from Harvard.

At Bell Laboratories he initially worked on the design of specialized software tools known as compilers, which convert programmers’ instructions into machine-readable language that can be directly executed by computers.

Beginning in 1970, he worked with the Unix research group at Bell Laboratories, where he was a major contributor in both the numerical functions of the operating system and its security capabilities, including the password system and encryption functions.

His interest in computer security deepened in the late 1970s as he continued to explore cryptography, the study and practice of protecting information by converting it into code. With another researcher, he began working on an academic paper that unraveled an early German encryption device.

Before the paper could be published, however, he received an unexpected call from the National Security Agency. The agency invited him to visit, and when he met with officials, they asked him not to publish the paper because of what it might reveal about the vulnerabilities of modern cryptographic systems.

He complied, and in 1986 went to work for the agency in protecting government computers and in projects involving electronic surveillance and online warfare. Although little is known about his classified work for the government, Mr. Morris told a reporter that on occasion he would help the F.B.I. by decoding encrypted evidence.

In 1994, he retired to Etna, N.H., where he was living at his death.

In addition to his wife and his son Robert, of Cambridge, Mass., Mr. Morris is survived by a daughter, Meredith Morris, of Washington; another son, Benjamin, of Chester, N.J.; and two grandchildren.

Article source: http://feeds.nytimes.com/click.phdo?i=c6200e85ceb5c4434b2c1eb06e414108

Filed Under: Business News Tagged With: ,

Media Decoder: Randy Falco Named Chief of Univision

June 30, 2011 by Leave a Comment

Randy Falco, the chief operating officer of Univision Communications, was promoted on Wednesday to be the president and chief executive of the fast-growing Spanish language media company.

Mr. Falco was the unanimous choice of the Univision board of directors, according to its executive chairman, Haim Saban. The company had been conducting a search for a new chief executive since March, when Joe Uva exited.

Mr. Falco, a veteran of NBC and a former chief executive of AOL, joined Univision earlier this year. As the chief operating officer, he was in charge of “all revenue functions,” according to the company.

“Randy has over 30 years of relevant industry experience and has demonstrated his highly skilled leadership and strategic vision at Univision over the past six months,” Mr. Saban said in a statement. “We are confident in Randy’s ability to deliver on Univision’s goals and accelerate our growth as a leading multi-platform media company in America.”

In addition to the flagship Univision broadcast network, the company operates a suite of broadcast and cable channels and plans to start up three more. Cesar Conde remains the president of Univision Networks.

At recent events for advertisers, Univision has emphasized that demographic trends are on its side, as census figures have shown significant growth in the Hispanic population of the United States. At one such event last month, Mr. Falco said “there is a new American reality,” referring to Hispanics as the “fastest-growing consumer segment in our nation.”

“Univision’s close to 50-year relationship with Hispanics makes us one of the leading media brands in this country and the gateway to connect with this consumer,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=2b517ebc8c8acaaaa4fbe2e1f7a6b063

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Biography Gives Strauss-Kahn’s Allies a Forum

June 30, 2011 by Leave a Comment

The comments by the wife, Anne Sinclair, appear in a revised version of “Le Roman Vrai de Dominique Strauss-Kahn” (“The True Story of Dominique Strauss-Kahn”), which will be released in France on Thursday.

The biography was first published in May, a week before Mr. Strauss-Kahn was arrested on charges of attacking a housekeeper inside his Manhattan hotel room. The revision can be seen as an attempt to bolster his defense. (An English translation is under way.)

The author, Michel Taubmann, includes interviews with Ms. Sinclair, who is famous in France for having been a television journalist, and Mr. Strauss-Kahn’s sister, Valérie, as well as a denial from Mr. Strauss-Kahn regarding a French writer’s accusation that he had tried to rape her in 2003.

“The scene she recounts is imaginary,” Mr. Strauss-Kahn said in an interview with the author in March, two months before his arrest in New York. “Do you see me throwing a woman on the floor and being violent, as she claims it?”

The woman, Tristane Banon, has said publicly that Mr. Strauss-Kahn tried to rape her during an interview she was conducting with him in 2003.

Ms. Banon had given her account on a reality television show in 2007, saying that a politician, whom she later identified as Mr. Strauss-Kahn, had tried to rape her in a sparsely furnished apartment in Paris.

“He wanted to grab my hand while answering my questions, and then my arm,” she said. “We ended up fighting, since I said clearly, ‘No, no.’ We fought on the floor, I kicked him, he undid my bra, he tried to remove my jeans.”

The book also refers to a 10-page chapter about Mr. Strauss-Kahn that was deleted from a book Ms. Banon wrote in 2003. The interview-based book, “Erreurs Avouées,” or “Confessed Mistakes,” describes the mistakes made by a number of important figures in France, including the publicist Jacques Séguéla and the fashion designer Christian Lacroix. Citing the chapter, Mr. Taubmann wrote, “Ms. Banon doesn’t mention, at any moment, the slightest violence or inappropriate gesture from Mr. Strauss-Kahn.”

The text of the chapter, which was made available to The New York Times, is more ambiguous.

Ms. Banon wrote that Mr. Strauss-Kahn departed from what had been a businesslike demeanor.

“He tries to play with his charm, and would like us to play another game,” Ms. Banon wrote.

She added: “He wants to go fast. The ogre, he wants to devour his prey.”

At the end of the chapter, Ms. Banon wrote: “The only thing I want is to leave. I end up doing that … Thirty minutes later, I promise him in return that I’ll come back, which I never do.”

Mr. Strauss-Kahn’s team had pressured Ms. Banon to remove the chapter from the book. She refused, but her publisher overruled her.

In the chapter, Mr. Strauss-Kahn spoke about his involvement in a major political and financial scandal in 1998, although he was cleared of charges. But Mr. Strauss-Kahn’s communication adviser at the time, Ramzi Khiroun, explained in Mr. Taubmann’s book that the chapter was deleted to “avoid focusing attention on affairs he was wrongly accused of,” at a time when Mr. Strauss-Kahn was a rising member of the French Socialist Party.

Ms. Banon has made no public statement and refused all requests for interviews since Mr. Strauss-Kahn’s arrest.

Her lawyer, David Koubbi, called the revised edition of Mr. Strauss-Kahn’s biography a “mine-clearing and rescue operation” in favor of Mr. Strauss-Kahn.

Ms. Banon did not file criminal charges against Mr. Strauss-Kahn, but Mr. Koubbi has said that after the arrest in New York, she decided that she would.

Since the arrest, Ms. Sinclair has publicly supported her husband, who lost his job as managing director of the International Monetary Fund. She said in a statement the day after his arrest that she did not believe the accusations “for a single second.”

“I am certain his innocence will be proven,” she added.

In an e-mail sent to Mr. Taubmann five days after the arrest, Ms. Sinclair wrote that she had “no doubt on the merits, but still very worried.”

The new edition of the book also includes a new interview with Ms. Sinclair in which she describes her husband as “a good, honest and reliable man.”

“I believe in him more than ever. Our marriage is solid as a rock,” she said. “We’ll come out of this drama together, dignified and standing tall, hand in hand.”

Many of Mr. Strauss-Kahn’s supporters, including his sister, have rallied around him and proclaimed that he is neither a violent man nor someone capable of committing sexual assault.

“I know my brother,” Valérie Strauss-Kahn said. “I know he is incapable of being violent toward a woman.”

She acknowledged that she did not know anything about “what happened in New York,” but added that she could testify on “the values of our education, which are just the opposite of all physical violence.”

Article source: http://feeds.nytimes.com/click.phdo?i=f8967dc3c0626ee01b1b2218c712bf59

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Public Workers Strike in Britain Over Pensions

June 30, 2011 by Leave a Comment

Many schools were operating with skeleton staffs; some were shut altogether. Lectures and classes were canceled at an estimated 75 universities. Numerous government services were affected, including ports and airports, where up to 14,000 staff members of the agency that handles immigration and customs matters were due to walk out.

Other agencies, like the court system, social security benefits offices and unemployment centers had contingency plans to keep going, but might have to offer reduced service with managers taking the jobs of union workers, the government said.

The unions estimated that as many as 750,000 people would join the walkout.

The strike is the latest development in an increasingly bitter dispute between the affected unions — including the National Union of Teachers, the Public and Commercial Services Union, and the University and College Union — and the Conservative-led coalition government.

The government, whose austerity budget is beginning to take affect around the country, says that the current pension system is unsustainable and unaffordable. It has raised the working age and is now proposing that workers should pay a larger proportion of their salaries into their pension plans each month. The government has also proposed recalculating pensions so that they will be based not on a worker’s final salary, but on a “career average” salary, taking into account the worker’s entire working life.

Most workers can currently begin receiving their pensions at 60. One of the proposals being considered would see the age rise to 66 by 2020.

Brendan Barber, general secretary of Trades Union Congress, which represents many of Britain’s unions, said that the strikes were being held in large part by the deep public sector cuts already imposed by the government.

“Nobody wants to see our schools and job centers closed,” he told reporters. “But our resolve is strong, our determination is absolute and we will see this through until we reach a just and fair settlement.”

Francis Maude, the government minister in charge of pension policy, said since talks between the government and the unions were still going on, it was unacceptable for the teachers in particular to go on strike.

“It’s absolutely unjustifiable for parents up and down the country to be inconvenienced like this, forced to lose a day’s work, when they’re trying to go out to work to earn money to pay the taxes which are going to support teachers’ pensions,” he told the BBC.

Dave Prentis, leader of Unison, which has 1.3 million members and is Britain’s largest public-sector union, said that he had not yet balloted his members about going on strike. But he warned the government that that could change if they continued to be “treated with disdain.”

Article source: http://feeds.nytimes.com/click.phdo?i=eedcf3d6b41bd97740e3e8bacad48904

Filed Under: Business News Tagged With: , ,
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