October 30, 2020

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

Economix Blog: Your Economic Outlook: Mixed Up

Screen shot of The Times’s interactive feature.

Contradictory data are nothing new in economics, but amid the slump in the United States and Europe, readers may find themselves paying increasing attention to indicators that seem to point every which way.

Corporate earnings in the United States grew in 2011 — but that growth has slowed. Household income has fallen farther since the recession officially ended in June 2009 than it did during the recession itself. The American economy gained 103,000 new jobs in September, according to figures released Friday, but unemployment remained high at 9.1 percent. And of course, all this information is available through more and more channels, media, devices and platforms.

With this in mind, The Times last week presented an interactive feature, “What’s Your Economic Outlook?” We asked readers to express their views on four topics: their job status, their upcoming spending plans, job prospects for the next generation and the state of the economy next year. Participants were asked to choose from a list of words to summarize their view, and to explain in a few words.

More than 5,600 completed submissions, and the results show a broad range of results. Some of the results were unsurprising: people who described themselves as unemployed were mostly more pessimistic than people with jobs. But the distinctions between groups were suggestive: respondents in their 60s seemed a bit more pessimistic about the next generation than did respondents in their 20s.

Even more notable, perhaps, were the comments that readers left to explain their views. Readers who seemed most optimistic often explained themselves with reference to plans they were following or had made. One wrote:

We scaled back our lifestyle years before the downturn, so this recession hasn’t affected us like people who are in debt.

Another:

We have budgeted well for upcoming expenses and I feel comfortable with our income streams.

Many comments from readers with a negative outlook described dire circumstances, and more than a few sounded a note of desperation:

Seven people used to do my job. Now there are only two of us. Nobody cares. Drowning.

And:

I have no money. Barely buying food. No help available for single men.

Many younger contributors saw their own opportunities as narrowing, with high levels of debt and few well-paying jobs:

Because previous generations have left my generation with crushing burdens and almost no safety net.

And:

There is nothing left for the next generation, only a small percentage will see the success of previous generations.

A few young contributors sounded an exuberant note about potential development:

There are so many incredible opportunities arising in new fields.

And:

Because my generation was raised to be innovative, and we will find a way to improve the current landscape.

In what could be interpreted as a sign of optimism, on the whole, contributors seemed to be slightly more hopeful about their own prospects — for work and for spending — than for the economy as a whole or for the next generation. That view jibes with some recent statistical evidence, suggesting that the disparity in outlooks reflects sentiments just as mixed as the other economic signals.

The full interactive feature will remain online.

Article source: http://feeds.nytimes.com/click.phdo?i=2d41b94d0710812a3e815bdd99ee9888

Economix Blog: The Bright Side of Unemployment?

On Thursday the Heldrich Center for Workforce Development released its latest report on the hundreds of unemployed workers it has been following (and surveying) for two years. As you might expect from the report’s title — “Out of Work and Losing Hope: The Misery and Bleak Expectations of American Workers” — the report’s findings are discouraging.

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

The typical jobless worker has been pounding the pavement for months and is running low on savings, friends and hope. Even the lucky workers who have found jobs are not exactly thriving, as most of the re-employed in the center’s survey have had to take pay cuts.

Even so, the report did manage to find some good that has come of its respondents’ unemployment spells:

DESCRIPTIONSource: John J. Heldrich Center for Workforce Development

The majority of the 675 workers surveyed in August — those whom the center was able to reach from its initial group of 1,202 workers first contacted in August 2009 — said they had worked on projects around the house.

A narrow majority (51 percent) also said they had “spent more enjoyable time” with their families as a result of being unemployed.

Smaller shares cited opportunities for self-improvement they had seized upon, such as additional education, training and volunteer work.

And a slim minority — 16 percent — even became “healthier through exercise.”

Clearly none of this means that all these workers would have been worse off if they’d kept their jobs. But it’s comforting to know that there has been a glimmer of silver lining for at least a few of the nation’s jobless.

Article source: http://feeds.nytimes.com/click.phdo?i=484b0a3716f1e776bc59ca854f6771ac

Room For Debate: Can Manufacturing Fuel a U.S. Recovery?

Introduction

General Motors Orion Assembly PlantFabrizio Costantini for the New York Times The General Motors Orion Assembly Plant in Lake Orion, Mich.

Yes, the economic news is grim this week.

Stocks plunged on Thursday amid heightened fears that the United States may be headed toward a double-dip recession. Today’s monthly jobs report, though better than expected, is unlikely to ease those concerns. Earlier in the week, a key index reported that manufacturers recorded their weakest growth in two years in July.

But is there a bright spot in the manufacturing numbers? While the growth slowed significantly, the trend is still up: output increased a small amount, and the sector has been expanding slowly but steadily for 24 consecutive months.

Is it possible that manufacturing might help the U.S. economy recover and produce needed jobs? Or is domestic manufacturing — at least in the traditional sense — a relic of the past, incapable of rescuing the American labor market?

 Read the Discussion »

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Topics: Economy, labor, unemployment

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Article source: http://feeds.nytimes.com/click.phdo?i=aaf36e5800834a05c7261684a2d4a376

Economix: Reader Response: The Stigma of Unemployment

Economics doesn’t have to be complicated. It is the study of our lives — our jobs, our homes, our families and the little decisions we face every day. Here at Economix, journalists and economists analyze the news and use economics as a framework for thinking about the world. We welcome feedback, at economix@nytimes.com.

Article source: http://feeds.nytimes.com/click.phdo?i=a681336139033d2b75a838f72ffe0654

Germany’s Low Jobless Rate Stokes Inflation Fears

On a seasonally adjusted basis, unemployment fell below three million people for the first time since 1992, as Germany continued to benefit from strong exports of autos and other products.

The news came a day after estimates that inflation in Germany rose to an annual rate of 2.5 percent this month, well above the European Central Bank’s goal of 2 percent. The drop in unemployment also highlighted the divergence between booming Germany and slow growth in most of the rest of Europe.

Monetary policy in the euro zone is probably too loose for Germany, some economists say. But the European Central Bank cannot raise its benchmark rate too much without creating problems in the weakest countries, like Greece and Ireland.

“I see a long-term risk that Germany could overheat,” said Jörg Krämer, the chief economist at Commerzbank in Frankfurt. “It’s an ugly situation for the E.C.B.”

Earlier this month, the central bank raised its official rate to 1.25 percent, the first increase since 2008. The appropriate rate for Germany would be closer to 3 percent, Mr. Krämer said.

The euro has risen steadily against the dollar since January because of expectations that the central bank will continue to raise rates, in part because of the need to slow the German economy. On Thursday the euro rose to just short of $1.49, its highest level since the end of 2009, before falling back slightly.

Higher interest rates tend to push up the euro’s value by making it more attractive for investors to own euro assets.

As unemployment in Germany falls, companies may need to pay more to attract workers, which could further fuel inflation. , home to the carmakers BMW and Daimler, jobless rates were only about 4 percent in April. Companies report problems finding skilled workers.

Still, various factors could limit wage inflation. Mr. Krämer noted that most union wage contracts did not expire until next year. In addition, beginning in May companies will be able to freely hire people from European Union countries like Poland or the Czech Republic. And jobless rates in much of eastern Germany remain above 10 percent. All those factors could limit wage inflation.

However, Mr. Krämer said: “The time of ultralow wage increases in Germany is definitely over.”

Jean-Claude Trichet, the European Central Bank president, has consistently denied that there is any inherent problem in fashioning a monetary policy that fits fast-growing countries like Germany as well as poorer members of the euro zone.

Speaking to reporters earlier this month, Mr. Trichet said Germany’s return to growth after years of stagnation was good for its neighbors.

“We had an episode of a return to competitiveness, of hard work, and now we see the result of this hard work,” Mr. Trichet said in Frankfurt on April 7. “It is good for Germany and good for the euro area as a whole.”

While seasonally adjusted unemployment fell below three million, the absolute number of jobless people remained above that milestone, at 3.08 million. Economists consider the seasonally adjusted number to be a more reliable indicator of the strength of the economy.

In any event, the absolute number of jobless people will probably fall below three million next month, economists said.

Article source: http://feeds.nytimes.com/click.phdo?i=745d8ff4d20317212697ed62620dc27e

Letter: When Unemployment and Profits Are High

Opinion »

Cavett: In Defense of Offense

The bane of political correctness, in film, television, literature and life.

Article source: http://feeds.nytimes.com/click.phdo?i=0d08e2fd65837c23f74f523d49ff87b9