April 23, 2024

Hollande Vows to Tackle Rising Unemployment, but the French Are Skeptical

PARIS — President François Hollande visited an employment center in France’s heartland this week, armed with promises to reduce record unemployment. That was not enough for Nathalie, a 50-year-old who has long struggled to find work.

News cameras captured the scene as Nathalie pushed her way in front of him and demanded to know what he was going to do for people like her. She had searched for a job to support herself and her children for more than a year without success, she said, and was now living with her parents.

“That’s why we’re here, to find solutions,” Mr. Hollande told her, looking slightly uneasy.

“No, but what are you going to do?” she persisted as Mr. Hollande tried to walk away. “I’m not hearing anything concrete.”

It’s a sentiment Mr. Hollande has been hearing from business owners, financial analysts and international bankers. He has spent his summer pursuing a daunting task of reassuring the French that the economy will exit from recession. He hopes to reverse a persistent rise in unemployment, which has marched steadily higher as France loses its economic competitiveness.

As part of a campaign to lift morale, he has pledged to create thousands of state-subsidized jobs. He pins his hopes on the signs of a recovery in his country and across Europe that suggest the economy might start to grow as early as next year. “It’s still fragile and precarious, but something is happening with the economy,” he said on Tuesday.

Still, despite a recent spate of positive data, France has made little progress. “We do not think that we will see growth strong enough to reverse the upward trend in unemployment just yet,” Ernst Young analysts said in a note to clients, referring to the euro zone. “So as far as households are concerned, the worst is not quite over.”

Last week, Mario Draghi, the president of the European Central Bank, sounded a similar note. Analysts, one after the other, repeated the same story. And each new report seems to deepen a sense of gloom among French households. “We must not succumb to self-criticism,” Mr. Hollande told the French in a speech last month. “For years we have been the most pessimistic country in Europe, in the world even. There are countries at war that are more optimistic than we are.”

In its report this week, the International Monetary Fund forecast that France’s jobless rate, which hit 11 percent in June, would climb to 11.6 percent next year before recovering slightly in 2015. Youth unemployment is close to 26 percent. For people like Nathalie, the situation is also painful: unemployment among people who are 50 years old or more has risen to 7.1 percent from 4.7 percent in 2008, before the financial crisis hit, according to the statistics agency Insee.

A big part of the problem is that few private sector jobs are being created. Many new jobs are on temporary contracts, which give employers more flexibility but often end with the worker cycling back onto the unemployment rolls.

Mr. Hollande, whose popularity is at a low in polls, has sought to counter the trend. In the spring, the French legislature passed a modest loosening of the country’s labor code designed to encourage hiring. And recently, after businesses objected, Mr. Hollande reversed a decision to raise the capital gains tax in a scramble to raise 20 billion euros for the 2013 budget.

The I.M.F. also suggested that the government stop raising taxes, and focus instead on reducing government spending, which makes up 54 percent of France’s gross domestic product, one of the largest levels in Europe.

But with the economy grinding ahead too slowly to create jobs, Mr. Hollande is using the state to get the task done. Crisscrossing France in recent weeks, he announced plans to cut unemployment by the end of the year, mostly by promoting government-subsidized work.

About 30,000 new playground assistants and classroom aides would be hired to welcome children back to school in September. A series of job training programs to match the unemployed with job vacancies is aimed at taking up to 100,000 people off the dole, at least while they are in the programs.

And on Saturday, in southwest France, Mr. Hollande said he would create 5,000 “jobs of the future” for unemployed people under 30 by the end of the year, by granting businesses 5,000-euro tax breaks for each person they hire.

Rather than hope, however, the announcement appeared to unleash a wave of cynicism.

Whether Mr. Hollande convinces the French remains to be seen. On Wednesday, a survey released by the polling company Ifop found that 84 percent of French people said they did not believe he would be able to reverse the rising unemployment by the end of the year.

Article source: http://www.nytimes.com/2013/08/08/business/global/hollande-vows-to-tackle-rising-unemployment-but-the-french-are-skeptical.html?partner=rss&emc=rss

Bucks Blog: Americans’ Attitudes Toward Owning a House Have Changed

A home for sale in Glenview, Ill.Associated Press
A home for sale in Glenview, Ill.

Even as the housing market improves, Americans seem more willing to embrace renting as an alternative to homeownership, a new survey on housing attitudes from the MacArthur Foundation finds.

Many Americans still say they have a strong desire to own their own home, but the overall appeal of renting compared with owning is changing, the survey found. Fifty-seven percent of adults believe that “buying has become less appealing,” and 54 percent believe that “renting has become more appealing” than it was before.

And nearly half of current homeowners (45 percent) say they can see themselves renting at some point in the future.

The survey was commissioned by the John D. and Catherine T. MacArthur Foundation. Hart Research Associates conducted telephone interviews of 1,433 adults from Feb. 27 to March 10. The margin of sampling error is plus or minus three percentage points.

The survey is part of the foundation’s “How Housing Matters” initiative, which finances research that explores “if and how housing leads to improved outcomes in child well-being, physical and mental health, education and economic opportunity.”

Despite improving indicators, like upswings in home values and building, many Americans remain unconvinced that the housing crisis is over. Nearly 8 in 10 believe the country is still in the midst of the crisis, the survey found. The effects of the housing crisis, combined with longer-term lifestyle changes, seem to have created a more realistic view of the risks and benefits of homeownership, Rebecca Naser, a vice president at Hart Research, said in a conference call about the findings.

The sentiment that renting is more acceptable is “quite pronounced” across the public, Ms. Naser said. “The world is changing, and renting is becoming more viable,” she said.

Two-thirds of adults now believe the focus of the country’s housing policy should be equally split between rental and ownership, rather than promoting one over the other, the survey found.

And 61 percent of adults now believe that renters can be just as successful as owners in achieving the “American dream,” the survey found.

How has the housing crisis changed your outlook on homeownership? Do you think renting is a viable long-term option?

Article source: http://bucks.blogs.nytimes.com/2013/04/03/americans-attitudes-toward-owning-a-house-have-changed/?partner=rss&emc=rss

Robot Makers Spread Global Gospel of Automation

Well, that wasn’t actually the word used this week at the Automate 2013 trade show held here through Thursday, but the sentiment was the same. During a presentation on Monday, Henrik I. Christensen, the Kuka Chair of Robotics at Georgia Institute of Technology’s College of Computing, sharply criticized a recent “60 Minutes” report on automation that was based on the work of the M.I.T. economists Andrew McAfee and Erik Brynjolfsson.

The two economists in 2011 wrote “Race Against the Machine,” a book that renewed the debate about the relationship between the pace of automation and job growth. They argue that the pace of automation is accelerating and that robotics is pushing into new areas of the work force like white-collar jobs that were previously believed to be beyond the scope of computers.

During his talk, Dr. Christensen said that the evidence indicated that the opposite was true. While automation may transform the work force and eliminate certain jobs, it also creates new kinds of jobs that are generally better paying and that require higher-skilled workers.

“We see today that the U.S. is still the biggest manufacturing country in terms of dollar value,” Dr. Christensen said. “It’s also important to remember that manufacturing produces more jobs in associated areas than anything else.”

An official of the International Federation of Robotics acknowledged that the automation debate had sprung back to life in the United States, but he said that America was alone in its anxiety over robots and automation.

“This is not happening in either Europe or Japan,” said Andreas Bauer, chairman of the federation’s industrial robot suppliers group and an executive at Kuka Robotics, a German robot maker.

To buttress its claim that automation is not a job killer but instead a way for the United States to compete against increasingly advanced foreign competitors, the industry group reported findings on Tuesday that it said it would publish in February. The federation said the industry would directly and indirectly create from 1.9 million to 3.5 million jobs globally by 2020.

The federation held a news media event at which two chief executives of small American manufacturers described how they had been able to both increase employment and compete against foreign companies by relying heavily on automation and robots.

“Automation has allowed us to compete on a global basis. It has absolutely created jobs in southwest Michigan,” said Matt Tyler, chief executive of Vickers Engineering, an auto parts supplier. “Had it not been for automation, we would not have beat our Japanese competitor; we would not have beat our Chinese competitor; we would not have beat our Mexican competitor. It’s a fact.”

Also making the case was Drew Greenblatt, the widely quoted president and owner of Marlin Steel, a Baltimore manufacturer of steel products that has managed to expand and add jobs by deploying robots and other machines to increase worker productivity.

“In December, we won a job from a Chicago company that for over a decade has bought from China,” he said. “It’s a sheet-metal bracket; 160,000 sheet-metal brackets, year in, year out. They were made in China, now they’re made in Baltimore, using steel from a plant in Indiana and the robot was made in Connecticut.”

A German robotics engineer argued that automation was essential to preserve jobs and also vital to make it possible for national economies to support social programs.

“Countries that have high productivity can afford to have a good social system and a good health system,” said Alexander Verl, head of the Fraunhofer Institute for Manufacturing Engineering in Germany. “You see that to some extent in Germany or in Sweden. These are countries that are highly automated but at the same time they spend money on elderly care and the health system.”

In the report presented Tuesday by the federation, the United States lags Germany, South Korea and Japan in the density of manufacturing robots employed (measured as the number of robots per 10,000 human workers). South Korea, in particular, sharply increased its robot-to-worker ratio in the last three years and Germany has twice the robot density as the United States, according to a presentation made by John Dulchinos, a board member of the Robot Industries Association and the chief executive of Adept Technology, a Pleasanton, Calif., maker of robots.

The report indicates that although China and Brazil are increasing the number of robots in their factories, they still trail the advanced manufacturing countries.

Mr. Dulchinos said that the United States had only itself to blame for the decline of its manufacturing sector in the last decade.

“I can tell you that in the late 1990s my company’s biggest segment was the cellular phone market,” he said. “Almost overnight that industry went away, in part because we didn’t do as good a job as was required to make that industry competitive.”

He said that if American robots had been more advanced it would have been possible for those companies to maintain the lowest cost of production in the United States.

“They got all packed up and shipped to China,” Mr. Dulchinos said. “And so you fast-forward to today and there are over a billion cellphones produced a year and not a single one is produced in the United States.”

Yet, in the face of growing anxiety about the effects of automation on the economy, there were a number of bright spots. The industry is now generating $25 billion in annual revenue. The federation expects 1.6 million robots to be produced each year by 2015.

Mr. Greenblatt said that one of the advantages of robots was they did not take breaks.

“My robots are going to work during the Super Bowl,” he said. “Do you know how popular I would be to ask my employees to work during the Super Bowl?”

Article source: http://www.nytimes.com/2013/01/24/technology/robot-makers-spread-global-gospel-of-automation.html?partner=rss&emc=rss

Chinese Manufacturing Slows Down

HONG KONG — The vast Chinese manufacturing sector appears to have contracted in July for the first time in a year, according to a survey released Thursday, adding to the mounting evidence that a series of official regulatory and policy measures is having the desired effect of cooling the red-hot Chinese economy.

The initial results of a closely watched survey of purchasing managers produced reading of 48.9 in July, the lowest level in 28 months — down from 50.1 in June, said HSBC, which published the index.

Readings below 50 represent contraction, so the slide below that level indicated that manufacturers had seen business slow markedly over the past few months, thanks to a combination of feeble global demand and tighter conditions at home.

For the past year and a half, policy makers have used a wide variety of tools to rein in booming growth and limit the rising prices that have accompanied it. Formerly free-flowing bank credits have become harder to obtain, for example, as banks were instructed to lend less.

Those measures have slowed the economy, but at a gradual pace that leaves room for still more tightening by Beijing in coming months, most analysts say.

The below-50 P.M.I. reading does not imply a “hard landing” for China, said Qu Hongbin, chief China economist at HSBC.

Industrial growth is likely to continue to decelerate in coming months as tightening measures filter through, Mr. Qu noted, but “resilient consumer spending and continued investment in ongoing mass infrastructure projects should support a G.D.P. growth rate of almost 9 percent for the rest of this year.”

The International Monetary Fund echoed that sentiment in its latest assessment of the Chinese economy
, published Thursday, noting that “China’s near-term growth prospects continue to be vigorous and are increasingly self-sustained, underpinned by structural adjustment.”

“Wage and employment increases have fueled consumption, the expansion in infrastructure and real estate construction has driven investment upward, and net exports are once again contributing positively to economic growth,” the fund said.

The I.M.F. projects 9.6 percent economic growth for China this year, and 9.5 percent expansion for 2012, in line with forecasts by many other economists. That is down from 10.3 percent last year, but well above what developed nations like the United States are managing.

But an aging population and gradually shrinking labor force risks fanning inflation in the longer term, the I.M.F. said, while low interest rates and a lack of places for savers to invest their cash mean there is a lingering risk of bubbles in the already hot property sector.

Those factors could lead to potential “significant risks” to financial and macroeconomic stability in China, the fund said, and it urged Beijing to address the challenges by raising interest rates further and allowing the renminbi to strengthen.

Beijing has so far relied heavily on so-called reserve requirement ratios for lenders as a policy tool. Successive increases in the ratio since early last year have gradually restricted the amount of money banks have been able to lend. Interest rate increases came into the policy mix relatively late: the central bank began nudging rates up again in October 2010.

“While the central bank’s monetary goals are the right ones, the means by which these targets are being achieved is moving in the wrong direction, relying on an increasingly complicated array of tools and administrative controls that will be difficult to effectively sustain,” the I.M.F. said in its report.

“The central bank should, instead, rely more on higher interest rates and open market operations.”

Article source: http://feeds.nytimes.com/click.phdo?i=203c39b99e0bd3b161f1914cb3746c55