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Timesizing News, July 13-16, 2004
[Commentary] ©2004 Phil Hyde, Timesizing.com, Box 622, Porter Sq, Cambridge MA 02140 USA 617-623-8080

7/16/2004   primitive timesizing & worktime consciousness in the news = glimmers of strategic hope - all are 7/15 from GoogleNews & are searched-screened-collected by *Ken Ellis (KE) of New Bedford MA (except #1 & 2 which are from the 7/16 newspaper hardcopy, & backup from recently- & soon-again-to-be-vacationing Alan Applebaum of Brookline MA), and excerpts and [comments] are by Phil Hyde (PH) unless otherwise initialed -

1. 5-day week boosts overseas travel, by Kim So-young (soyoung@heraldm.com), Korea Herald [South Korea].
   If you hope to travel overseas this summer but have only just started looking for information, you are probably out of luck and may have to choose a place other than your dream destination.
   Airlines and travel agencies say tickets to foreign tourist hotspots such as Tokyo, Beijing, Bangkok and London are almost fully booked for July and August, and any delay in picking a date may put you way down on the waiting lists.
   The ongoing economic slump seems to have weighed little on the holiday rush from Seoul, with industry watchers expecting a record number of more than eight million people traveling overseas this year.
   More than 4.1 million people toured abroad in the first half of this year, compared with 3.07 million during the same period last year and 3.35 million in 2002, according to the Korea National Tourism Organization.
   Expanded summer holidays following introduction of the five-day workweek this month are among the main reasons spurring an increasing number of people to sample exotic resorts in Southeast Asia, the charming streets of Europe or all-time popular neighbors such as Japan and China.
   "The five-day workweek, introduced in July to all companies with more than 1,000 employees, has allowed people to string together as many as nine straight off days, enough to make time-consuming overseas trips," said public relations director Joo Sang-yong at the tourism organization.
   "Also, the current trend suggests that a growing number of Koreans opt to travel abroad rather than choose domestic destinations."
   Seoul housewife Yoo Hyun-ok is one of those preparing to join in the overseas travel boom.
   "Our whole family has decided to go to Bangkok this month. I'm so excited about this journey because this is the first time all my family members can go abroad together," said the 45-year-old Yoo.
   Hana Tour Service Co., Korea's largest wholesale travel agency, reported a 30% increase in customers from the previous year, attributing the trend to what it called the "well-being frenzy" now sweeping the nation.
   "Despite economic difficulties, it seems that making an overseas trip at least once a year is emerging as a new trend," said Kang Woo-won at Hana's marketing department.
   "Travel expenses have become one of the priorities in household spending, and more and more people think it??s better to go to cheap and close Southeast Asian countries than, say, the local southern island of Jeju."
   Incheon International Airport expects to handle in July and August at least 80,000 outward-bound tourists a day, a record and a 20% increase from the previous year.
   "Overseas travel plummeted last year due to the severe acute respiratory syndrome, the Iraq war and nuclear threats from North Korea. But this year, the increase in the number of overseas travelers is explosive, thanks to the nationwide well-being frenzy and the five-day workweek," an airport official said.
   "Tourists must arrive at the airport at least three or four hours earlier, taking into account congestion at the airport and possible delays in boarding."
   Resorts such as Pattaya and Phuket in Thailand, Bali in Indonesia and Hong Kong are popular destinations this summer, further evidence of Korea's well-being craze, Kang said.
   "Travelers tend to prefer more relaxing and recreational trips than arduous ones. But the majority choose close countries in Asia, rather than Europe or the United States, suggesting their economic conditions are worse off in the wake of the consumer credit bubble burst last year," Kang said.
   About a quarter of the total overseas travelers headed for China in the first five months of this year, while 19% visited Japan and 8.5 percent chose Thailand, according to the national tourism organization. The United States and Europe accounted for 7.4% and 5.7%, respectively.
   Benefiting from this travel boom are sellers of picnic goods and digital cameras, and department stores are rushing to offer special summer sales featuring products such as swimsuits and sun glasses.
   Samsung Techwin Co., a digital camera maker, hopes to sell about 90,000 to 100,000 cameras between July and August, a 40% increase over the same period last year. Others have also revised their sales forecasts upwards.
   Hyundai Department Store is now offering swimsuits, sun glasses, sun block creams and beach sandals at 20-50% discounts.
   "I am planning to go to Phuket Island in Thailand this summer. Though my plane ticket and prices there are not that expensive, it will cost a lot when I buy new clothes and cosmetics and many more things I need for the tropics," said advertising consultant Choi Yoon-min, 24.
   [Ms. Choi better be careful & discreet if she's going to Phuket Island!]

2. Health Ministry to probe hospitals, by Shin Sung-sik , Joongang Ilbo [South Korea].
   SEOUL, S.Korea - The Ministry of Health and Welfare announced yesterday that it would select 20 to 30 hospitals nationwide and conduct an investigation into their working conditions.
   The ministry decided to begin the probe in response to a petition filed Wednesday by interns and residents working at hospitals with the National Human Rights Commission. The interns and residents asked the state-run body to look into what they called substandard conditions.
   "Working hours and conditions of sleeping rooms are some of the matters we are going to look into," said a ministry official. The ministry also said it would devise a general plan by October this year to deal with the problems cited by the residents and interns.
   Even though some hospitals have improved medical workers' working conditions by implementing the new, shorter five-day workweek, many work overtime while not receiving sufficient welfare benefits.
   A 27-year-old female doctor at a university hospital in southern Seoul was pressured to return to her residency as soon as possible after she had a baby in March 2002. Despite a law guaranteeing maternity leave of 90 days, her hospital ordered her to return to her job after only 40 days.
   "It was physically strenuous, but there was nothing I could do about it," said the doctor. "I don't think it will be possible for me to have another child.
   " According to results of a survey by the representative body for interns and residents, 51.4% of its members said they worked more than 100 hours a week.
   Analysts say the excessive workload has led to a drop in the quality of medical care. A 30-year old resident confessed that he had dozed off while stitching up patients after staying up the night before.
   Officials at the Korea Hospital Association, however, said it would be difficult to accept all of the demands by the interns and residents in light of the hospitals' financial problems. But they said that some of the requests were legitimate and that management and representatives of the medical workers have agreed to form a committee to discuss the matter.

3. Democratic breakdown - "Winner take all" system would be a step backward for Czech democracy, by senior analyst Steven Hill of DC-based *Center for Voting & Democracy & author of Fixing Elections: The Failure of America's Winner Take All Politics (in Prague recently on European speaking tour), Prague Post [Czech Republic].
   PRAGUE, Czech Republic - Over the past few years, a number of Czech leaders have said the country should consider adopting a "winner take all" electoral system in which representatives would be elected one geographic district at a time. A close examination of how democracy is working in the United States today shows that this could be a giant step backward for Czech democracy.
   American representative government is suffering a severe breakdown. Op-ed pages from the liberal New York Times to the conservative Wall Street Journal have made the case for an overhaul. For example, 90% of the district races for the 435 seats in the U.S. House of Representatives are grotesquely tilted in favor of one of the major political parties, the Democrats or the Republicans. The district lines have been rigged in such a way as to make most elections into pale farces of competition that would make the old Soviet Politburo proud. In the last U.S. congressional election, 99% of incumbents won re-election, usually by huge margins.
   As competition has decreased, so has voter participation, with only 38 percent of voters bothering to vote in the 2002 elections.
   State government elections are even worse. The district races are so noncompetitive that of more than 7,000 races, 40% lacked a candidate from one of the two major parties because party leaders judged it impossible to win. That's 2-in-5 races where there was neither even a nominal race nor a political debate for voters to think about.
   But the problems created by the American electoral system do not end there.
   This method has fostered severe regional Balkanization where entire regions of the country have become political fiefdoms for either the Democrats or the Republicans. The American political map now is referred to as "Red vs. Blue America" (red for Republicans, blue for Democrats), like regional combatants in a political and cultural war that has become increasingly tense. Political monocultures have resulted in these regions where debate and discussion of innovative ideas has virtually ceased.
   The fundamental problem with the "winner take all" electoral system is that it grants representation based exclusively on geography - on where you live rather than what you think. Voters from widely divergent views are expected to share a single representative, an increasingly impossible task in our modern pluralistic world. In a "winner take all" system, one side wins the election and everyone else loses. Entire states in the United States sometimes have representatives from only one political party. Millions of Americans living in the wrong district or state rarely cast a vote for a winning candidate or party.
   Red and blues
   These defects of representation based on geography also infect the American presidential system. The election for president is not a national election at all. Rather, it's an election of 50 individual states, with the winning candidate needing to win electoral votes allocated to each state based on a complicated formula that gives more electoral votes per capita to low-population states such as Wyoming and Idaho. This bias in favor of low-population states favors the Republican Party and its candidates. That explains why George W. Bush won the electoral vote and the presidency in 2000, even as Al Gore won a half-million more votes nationwide. Bush won more of the low-population states that have three, four and five electoral votes. Because of the political geography in Red and Blue America, the Democrats need to win more votes than the Republicans to win the presidency. It's like having a foot race in which one side begins 10 steps ahead of the other.
   In addition, most of the 50 states are solidy part of Red or Blue America.
   We already can foretell for the 2004 presidential election which candidate, Bush or John Kerry, will win approximately 35 of the states. The contest will be decided in a mere 15 battleground states. Campaign ads and candidate visits already are being concentrated in these states, while voters in the rest of the nation largely are being ignored.
   Yet even within the 15 battleground states, not all voters will be courted by the candidates. The two party/two choice system is susceptible to manipulation via modern campaign techniques such as polling and focus groups. The candidates and their operatives can figure out which groups of voters are sure to vote for them, which voters never will vote for them and which are the handful of undecided "swing" voters. Most of the appeals target the last group, in what is know as the "swing-voter serenade." All other voters, and the issues they care about, are left on the political sidelines by this calculated slicing and dicing of the electorate. So what should be a national election for president this November will boil down to a handful of undecided voters in a handful of battleground states, with most American voters little more than bystanders.
   The "winner take all" nature of the two-choice system also fosters extreme mudslinging and hack attack campaigns. If I am running against you, I win as easily by driving voters away from you as by attracting them to me. The system encourages candidates to exaggerate their opponents' youthful indiscretions, previous political positions or other perceived weaknesses in an attempt to drive away voters. In this charged atmosphere, meaningful political debate about issues or the national future is virtually impossible.
   Not surprisingly, the kind of political dynamics fostered by the "winner take all" system turns off most voters. In the 2000 presidential election, a bare majority of Americans turned out to select the most powerful elective office in the world. Ironically, if people all over the world were allowed to vote in the U.S. presidential election, no doubt they would turn out in droves because they know how important that office is to what happens in their own country. But in the United States, we have difficulty mustering even half of the voters on Election Day.
   Finally, as the debacle in Florida showed during the 2000 presidential election, the United States is also plagued by second-rate election administration and infrastructure. Despite America's wealth, voting equipment there is inadequate, not even at the level of that used by India and Brazil for their recent elections. That's because there is no national system for election administration; instead the job is left to more than 3,000 counties scattered across the nation, with conflicting standards and practices. There are vast discrepancies in the quality of equipment, with poorer counties having old and antiquated machines. Newer touch-screen computerized voting equipment lacks a voter-verified paper trail and has caused great concern about election fraud and the security of ballots.
   Elec-tion administrators too often are selected because of political connections rather than their knowledge in running elections, and training of poll workers is inadequate. A "revolving door" has resulted in state regulators going to work as lobbyists for the very election-equipment corporations they previously regulated.
   Falling standards
   This is no way to run a democracy. Without a real democracy in the United States, Americans are falling behind their European counterparts in standard of living. More than 45 million Americans have no health care, several states have infant mortality rates equal to that of Russia and millions are unemployed with no safety net. Americans now work an average of 42 hours per workweek and work nine weeks more per year than Western European workers for the same standard of living. Wages are inadequate, so people survive by accumulating a mountain of debt, with Americans now more indebted than at any time since the stock market crash of 1929. Huge government deficits at federal and state levels have resulted in severe cutbacks in education, transportation and senior care. Homelessness is rampant, especially in cities.
   A functioning democracy is a prerequisite to having an economic system that works for everyone, instead of just a handful of the rich and powerful. But in the United States we have a failing democracy based on antiquated 18th-century political institutions. Most Americans - indeed the entire world - is paying the price.

4. Another win for the guards, Santa Maria Times [CA].
   Gov. Arnold Schwarzenegger, whose tough-guy movie persona helped get him elected last fall, has turned out to be a bit of a softy when it comes to negotiating deals - especially with the state's prison guards union.
   The guards were due to receive a whopping 10.9% pay increase this year, thanks to a sweetheart deal approved by former Gov. Gray Davis. It was part of an arrangement that guarantees the guards as much as 37% in pay increases over a five-year period.
   [In a struggling 'recovery'? Ridiculous!]
   Deals like that are among the reasons California continues to wallow in a budget deficit, which this fiscal year - even with billions in borrowed funds - is expected to range from $7 billion to $10 billion.
   Schwarzenegger made a general promise before he took office to cut the deficit, and specifically to get concessions from the prison guards union, vowing to get back as much as $300 million in pay raises from the union.
   Another campaign promise broken. Instead, the governor brokered a deal with the prison guards that has them giving up about $108 million in raises this year, but, in exchange, the union and its members will reap benefits for years to come.
   The proposed deal, for example, protects prison guards from layoffs for the next two years, guarantees increased health-care benefits worth $5 million a year, a shorter work week for union leaders [huh?], and breaks the earlier 10.9% raise into three increments of 5% each.
   One union leader characterized that last part as "trading a dime for three nickels." And even though the guards have agreed to defer part of that one-time $300 million raise, it appears the governor's deal all but guarantees they will get the full 37% condoned by Davis.
   Schwarzenegger sure drives a hard bargain.
   Don't expect any toughness from the Legislature, which must sign off on the governor's deal as part of the budget-approval process. The guards union spends an average of $2 million a year on legislative races, helping the campaigns of lawmakers now being asked to crack down on the union. Not likely.
   Once again, the California Correctional Peace officers Association has demonstrated its ability to out-maneuver our elected officials. We're not sure how much longer California taxpayers can afford deals like this one.
   [It's unions like this that help destroy unions in America.]

5. Empire State index climbs in July - Report shows state factory business conditions improved, accompanied by uptick in price pressures, Reuters via CNN/Money.
   NEW YORK - Business conditions in New York state factories improved substantially in early July, though that was accompanied by a pick-up in price pressures, a survey said on Thursday.
   The Federal Reserve Bank of New York said the business conditions index of its Empire Manufacturing Survey climbed to 36.5 in July, after dipping to a revised 29.9 in June.
   The Empire State prices paid index rose to 56.0 in July from 52.1 the month before. Some 56% of respondents reported an increase in prices while none saw a decline.
   The prices received index edged back slightly to 18.9 from 20.5 in June.
   "Price indexes remained quite high; respondents reported ongoing escalation in prices paid and prices received, and voiced their expectation that this pattern would continue over the next six months," the Fed said.
   The number of employees index rose to 14.0 in July, partly reversing June's fall to 12.8, the Fed said. The average workweek index remained volatile, jumping to 23.5 from 10.7 in June.
   [An AVERAGE workweek of only 10.7 in June??! What are we counting as "employed" now, ONE hour a week?]
   The new orders index accelerated to 29.4 in July from 26.2 in June, while shipments rose to 34.7 from 33.1.
   The index measuring expectations for business conditions six months ahead, eased slightly to 53.9 in July from 54.2 in June.

6. Renovating by moonlight - Homeowners accept odd hours to land busy contractors; waking up with the roofers - A partner [Alex Dahlgren] in a Dallas remodeling firm says that at about 20% of his jobs, workers are still on the site at 2 a.m. , by Nancy Ann Jeffrey, WSJ, W8.
   ...and...his overtime costs are up 70% from last year....
   [So, another incompetent manager without workload allocation or scheduling skills but with plenty of suicidal workload concentration proclivities.]

7. Business hits at Chirac for not 'reforming' 35-hour week, by Jo Johnson, Financial Times [UK].
   PARIS - Business leaders in France criticised Jacques Chirac yesterday for taking a timid and incoherent approach to 'reforming' the 35-hour working week after the French president ruled out revoking the law that introduced the controversial measure.
   Mr Chirac announced in his annual Bastille Day television interview on Wednesday that he did not seek to change the popular law. Saying the "legal working time is and will remain 35 hours", he called for companies to be given "more freedom to adapt to the market".
   At the same time, however, he accused companies such as Robert Bosch, the German car parts group that is asking some of its French workers to agree to amend their contracts or risk seeing jobs move to the Czech Republic, of putting France on a "slippery slope".
   Ernest-Antoine Seillière, chairman of the Medef employers' lobby and an outspoken admirer of Nicolas Sarkozy, the finance minister, who has championed an overhaul of the 35-hour week, said he "did not understand" how reform would be possible without changing the law.
   Mr Seillière said: "If we want companies to be able to negotiate their way out of the 35-hour week, we must change the law. It must say, 'the 35-hour week applies unless there is a consensus inside the company to the contrary'. This would give us the freedom the president wants."
   The 820 workers at Bosch's car components factory at Venissieux near Lyons had until Tuesday midnight to post their votes on a plan to extend their hours to 36 a week for no extra wages. Those who do not reply are deemed to support the move to work the extra hour.
   Unless 90% of workers agree to the new arrangement, which will lower costs by 12%, 300 jobs devoted to end-of-life product lines will be cut. Production of a new diesel injection system will start in the Czech Republic, where labour costs are 40% lower, Bosch says.
   The vote is the first of its kind in France and could set a precedent for a gradual de facto reversal of the 35-hour week. As of yesterday, 71% of Bosch's Venissieux workers had voted to change their contracts, with 3% opposed.
   "Because of the delays to the postal service over the Bastille Day holiday, it is possible that a definitive result will not be known until Friday or perhaps Monday," said Bernard Bonnet, director of communications for Bosch in France.
   The plan has won the backing of the majority CFDT union, but has been opposed by the communist-dominated CGT and by FO, which represent about 30% of the plant's staff, Mr Bonnet said.
   Bosch employs 10,700 people in France at 20 sites across the country.

8. French business leader faults Chirac on 35-hr week, USA Today via Stuff.co.nz [New Zealand].
   PARIS - France's top business leader faulted President Jacques Chirac yesterday for not going far enough when he called for more flexibility in the country's 35-hour work week.
   Chirac announced in his annual Bastille Day television interview that he did not seek to change the popular law but to ease some of the restrictions which critics say make French companies uncompetitive.
   "To say we won't touch the law, it's non-negotiable, well, I just can't understand that," said Ernest-Antoine Selliere, head of the MEDEF employers' association.
   "The 35-hour workweek is not just a slippery slope," he told RTL radio, repeating a phrase Chirac used in his interview.
   "It's a chute towards economic decline one day or another." Chirac has come under strong pressure to change the workweek law brought in by the previous Socialist government in a vain attempt to cut unemployment. He has hesitated because trade unions threaten to oppose any change in the law.
   The pressure has mounted now that workers at a Robert Bosch car parts factory near the French city of Lyon voted on Tuesday whether to work longer hours in an effort to save jobs. If, as seems likely, they backed the move, it could set a precedent.
   A similar deal in Germany caused controversy last month. After threatening to move 2000 jobs to Hungary, industrial giant Siemens agreed with the IG Metall union to lengthen the work week to 40 hours from 35 without wage rises at two plants.
   Selliere said longer working hours were urgently needed now.
   "It's better to work more to save your job than to work less and lose it," he said.
   The employers' leader said Chirac should have gone further in proposing ways to get unions and firms to ease restrictions on work time. Chirac gave no indication how far he thought the work time limits should be loosened.
   "If, as the president says, we want negotiations on the company level to break out of the 35-hour workweek, we have to change the law," he said.
   He suggested the law should made 35 hours the default working time rather than the legal guideline and let companies negotiate a different standard if they wanted.

9. [generally in Germany, mediablitz for longer hours hypes on -]
   Longer week is on its way for Germany, by Christian Baumgaertel, Business Report [South Africa].
   FRANKFURT - German workers, weakened by rising unemployment and the longest economic slump since World War 2, are losing a battle to defend their 35-hour work week as companies led by Siemens and DaimlerChrysler threaten job cuts.
   "It's already the 12th hour for the German economy," said Conrad Mattern, the chief economist at Activest Asset Management in Munich. If agreements at Siemens and DaimlerChrysler, the nation's two biggest corporate employers, set a precedent, "then that's an incentive for companies to invest in Germany again".
   DaimlerChrysler, the world's largest maker of luxury cars said this week it might move 6 000 jobs from Mercedes plants in southern Germany unless unions agreed to E500 million (R3.77 billion) in cuts.
   The IG Metall union, Germany's second largest, organised protests against the cuts yesterday. The union expected 80 000 workers to take part in the protests, which included stoppages, spokesperson Frank Stroh said. "Either E500 million or 6,000 jobs - we call that blackmail," he said. "Production has stopped."
   Unions are under pressure after Siemens three weeks ago extracted an agreement at two German phone factories to extend the work week to 40 hours with no additional pay to save 2 000 jobs. Linde, a maker of forklifts and industrial gases, and tourism company Thomas Cook have also said they might ask staff to work longer to cut costs.
   Germany's economy hasn't grown more than 1% in any of the past three years. Unemployment has risen to 9.8% from 7.6% at the end of 2000.
   Manufacturing workers in western Germany put in about 18% fewer hours than their US counterparts in 2002.
   Union leaders oppose a return to 40 hours, saying it may mean job cuts and further depress consumer demand because people who work longer hours for less money are unlikely to shop more.
   Juergen Peters, the head of IG Metall, has vowed to defend the 35-hour week. Peters estimated that extending the work week nationwide would push the number of unemployed to over 6 million, from the current 4.4 million.

10. [more specific, 'quick pic' -]
    DaimlerChrysler AG, WSJ, A6.
    DaimlerChrysler AG CEO Juergen Schrempp expressed confidence that the carmaker and its German workers will reach agreement on a cost-cutting deal, despite a new round of protests that shut down some Mercedes-Benz plants for several hours Thursday. Thousands of DaimlerChrysler employees protested the company's efforts to extend work hours and eliminate some rest breaks at the main Mercedes plant in Sindelfingen, located in Baden-Wuerttemburg. DaimlerChrysler has said the changes would save E500m ($619m) and make the plant more competitive with its other German locations.
    [More suicidal money-saving at the sacrifice of employment and consumer markets, not to mention quality of life. And since when does a company have to compete with its own other locations? The rationalizations for ruining the German economy by cannibalizing its consumer base are getting ever more absurd.]
    • A union spokeswoman said 60,000 workers participated in a walkout that lasted about 5 hours, preventing the production of about 600 cars.
    • A spokeswoman for the company said [only] 25,000 workers too part [and] the impact was much fewer than the 600 vehicles stated by the union....
    [They can't even agree on what's happening right in front of them yet Schrempp is expressing confidence about reaching agreement of a cost-cutting deal?? Here's the Times version's headline -]
    Dispute disrupts Daimler in Germany - Seeking to protect an hourly break, by Mark Landler, NYT, W1.

11. [specific, & more details ('slow pic') -]
    80,000 strike at German DaimlerChrysler, BBC News via UPI via Washington Times [DC].
    SINDELFINGEN, Germany - As many as 80,000 DaimlerChrysler metalworkers struck across Germany Thursday, protesting cost-cutting measures and threats of outsourcing.
    German union IG Metall organized the one-day strike, which involved 20,000 workers at Daimler's largest plant in Sindelfingen, Germany, and smaller groups at plants across the country, the German newspaper Die Welt reports.
    Daimler leadership has called for 500 million euros ($619 million) in savings at Sindelfingen and threatened to move production of the new C-Class to Bremen or South Africa if suitable cuts aren't accepted. Such a move could result in 6,000 fewer jobs at Sindelfingen.
    Workers in Bremen get three fewer vacation days than Sindelfingen employees.
    Uwe Werner, IG Metall's Bremen head, said he disapproved of threats to move jobs within Germany, which he said pits plants against each other.
    German labor battles, which often involve short-term strikes, have become heated recently. Industry representatives have called for longer and more flexible workweeks and less restrictive hiring and firing policies. Unions largely oppose such measures although a small number of workers has accepted longer workweeks in exchange for guarantees their jobs will not be sent abroad.

1. [32% offer jobsharing, but only in the small print? -]
   Workers' pay hikes still small, by Diane E. Lewis (dlewis@globe.com), Boston Globe [MA].
   The economy is 'gaining ground' [our quotes], but don't expect big raises anytime soon. US workers will receive modest pay increases of just 3.3% this year, the same as last year, according to a survey of nearly 1,600 employers released yesterday by Mercer Human Resource Consulting, the national benefits consultancy.
   The data suggest that employers, who could face a rise in health insurance costs of 10% or more next year, are choosing to hold the line on wages even as the economy is 'starting to improve'.... "From 1994 through 2001, annual pay increases ranged from 4.1 to 4.4%, but they dipped below 4% in 2002 and they have remained there since," said Steven E. Gross, head of the firm's compensation consulting practice in the United States. "Employers are seeing 'some signs of an improved economy' this year, but they are not ready to commit to higher pay increases yet."
   However, the wage increases are still higher than inflation. Currently, pay increases are about 1% above the annual inflation rate, down from 2% during much of the 1990s....
   [The increment by which inflation exceeds wage increases should be the bump-up from centrifuged unearned income minus the depletion of spending by the concentration of income, earned and unearned, but we suspect that most of it is just higher gas and energy prices thanks to the oilmen in the White House and their Saudi croneys.]
   Fewer companies said they planned to freeze pay this year. The number of employers who reported wage freezes dropped to 5% in 2004, down from 12% in 2003, according to the survey.
   Executives will receive raises of 3.7% in 2004 and 2005, according to the survey. Managerial staff can expect 3.4% more this year, and an increase of approximately 3.5% next year. Technical and professional staff will see their checks rise 3.4% this year and 3.5% next year. Pay raises for clerical and technical workers will average 3.3% in 2004, increasing by 3.5% next year. For nonunion hourly workers, pay raises will average 3.3% this year and 3.4% in 2005.
   Gross said as the 'rebound' builds, many companies will be rethinking their stance on pay raises in a push to keep good workers and attract new ones. Some industries, however, will continue to hold the line on pay increases and may even freeze wages. Those industries include business services, computer software services, education, legal and accounting consulting services, and utilities [anything left?].
   Gross said US firms are relying on one-time monetary awards or noncash awards rather than the lucrative bonuses, perks and salaries prevalent during the dot-com era [those, of course, are only for CEOs]. Of the employers polled, for example,
   • 72% are offering recognition awards this year, with no cash compensation;
   • 55% are offering one-time cash awards;
   • 33% are offering stock options or other forms of equity;
   • and 32% provide job-sharing arrangements, said Gross.
     [So job-sharing is included on a list of noncash "awards" now??]
   Some US employers are moving toward competency-based pay, meaning workers are rewarded based on performance....

2. Top money managers are accumulating cash in their portfolios..., pointer blurb (to D1), WSJ, front page.
   ...amid what many see as a lack of investment opportunities.
   [Prime depression symptom. A concentration of money in the top brackets so astronomical that it actually suctions the spending power and markets away from its own current and potential investments. Shows a lack of centrifugal forces on the national and global income. Demonstrates cumulative effect of gradual dismantling and upward-diverting of money-centrifuging mechanisms over the years of relative peace since World War II, and particularly over the years since about 1970 when the post-war babyboomers hit the job market and the empowering labor shortage of the War became history. Here's the target article -]
   Holding pattern: Fund managers flock to cash - Top performers see little they want to buy in current market, by Jeff Opdyke, WSJ, D1.
   [This is classic. As in the Great Depression, it's not that the money's not there - it's just that it's not being used. It's all "under the mattress." This is a demonstration of the marginal utility of concentrated money, whether income or wealth or both, alias the dread Black Hole Economy, which cannibalizes its own consumer base and then wonders where markets have gone. The minimum necessary departure from status quo is to re-activate all the cash-starved consumers by rehiring all the earnings-starved laid-off employees, and the only way to do that it to quit straining to keep the entire workforce spinning its wheels for an obsolete 8-hour day and 40-hour week, frozen since 1940 despite waves of worksaving technology, and CUT THE WORKWEEK, spreading the vanishing market-demanded human employment across all who need it, like a shrinking pat of butter across a growing slice of toast. Cut the too-little too-late makework, whether civilian or military. Cut the rhetoric and sneering about some terrible Lump of Labor Fallacy, and CUT THE WORKWEEK. The 5-phase Timesizing Program is the most gradual and market-oriented way to do this. Here's the wonderful understatement of the Section C columnist -]
   Ahead of the tape - June swoon, by Justin Lahart, WSJ, C1.
   At the very least, the economy ran into a rough patch in June....

3. Workers in danger of losing overtime, by Steven Greenhouse, NYT, A19.
   Pointing to two studies finding that many workers will lose overtime coverage [ie: pay premiums] under new regulations, the Democrats and their labor allies said pResident Bush was shortchanging American workers.
   • A study released by the Economic Policy Institute, a liberal group, said 6m workers would lose coverage.
   • On Tuesday, three former Labor Dept. officials issued a report saying that almost every change the Labor Dept. made had expanded exemptions from the rules.
   Officials of the Bush administration said the Democrats and authors of the studies were distorting the rules.
   [But then, what would they say? The problem is that even if the Dems got everything they wanted in terms of overtime coverage, we still have a huge problem with our fundamental overtime design going into the Age of Robotics. We need a design that discourages ALL overtime - unless the parties to it, on both the employer and employee side, are using it to spread the worksavings of technology among the general population in the form of financially secure free time instead of economically anxious un- and under-employment. How can that be done? We need to convert overtime smoothly and automatically into training (preferably on-the-job training alias OJT) and hiring (preferably just-in-time, JIT, hiring). And how can that be done? One very simple way is a high tax on overtime, with a complete exemption for overtime-targeted JIT hiring and if necessary, OJT. The Timesizing Full-Employment Program breaks this into two steps, one for employers and one for employees.
   • For employers, Timesizing demotivates addiction to chronic overtime by taxing away 100% of any real or potential advantage they may have from using overtime relative to JIT hiring of either temps or permanent employees, whether part- or full-time - AND THEN by giving a 100% tax exemption to companies that hire or set up OJT in overtime targeted skills.
   • For employees, the Timesizing arrangements are similar, with provisions for overwork (cumulative overtime per person from all jobs or client sources) rather than simple one-job company-focused overtime. Also for employees, Timesizing has special provisions to buffer the difficulty individual employees would have setting up training programs in their bottlenecked skills.
   Together, these two elements, automatic adjustment of the workweek vs. un(der)employment as described in our comments on the previous story and automatic overtime-to-training&hiring conversion as described here, are the minimum necessary departures from our status-quo economic design to get us out of the long downward spiral of downsizing in response to technology and thereby cannibalizing our own employment base cum consumer base.]

4. [And here's an attempted rebuttal from a 'conservative' thinktank -]
   New overtime regulations: "Modernizing" outdated rules or eroding worker protections? [our quotes], by Kirk A. Johnson & Paul Kersey, WebMemo #535 via Heritage.org [DC].
   [Probably from the Heritage Foundation, a 'conservative' thinktank. We agree the rules are outdated. But Bush's changes just make things worse. Our overtime design is outlined in the comments to story #2 today, above.]
   The Economic Policy Institute (EPI) has released a report on the final overtime rules published by the U.S. Dept. of Labor last April. EPI has argued before that, if adopted, these overtime regulations would mean 'lower pay [and] longer hours for millions of workers'. These charges are simply untrue. The new regulation will, in fact, improve overtime protections for employees.
   The current regulation is antiquated.
   Before a worker may be considered exempt for overtime, there are three tests that must be met. First, the 'salary-basis' test specifies that a worker must be paid on a set salary; hourly employees who work more than 40 hours in a given work week are generally eligible for overtime. Second, the 'salary-level' test determines that any worker who earns less than a certain salary is automatically eligible for overtime, regardless of his or her job. Finally, a 'duties test' allows certain executive, administrative, and professional employees to be exempt from overtime based on the kind of work they do.
   The salary test has not been updated in nearly 30 years, and the duties test has gone even longer without any significant changes. One consequence of the lack of updated rules is that the minimum salary needed for a worker to be exempted from overtime is an absurdly low $155 per work week. The new regulation would raise the salary test to $455 per work week: any worker paid less than $455 per work week (or $23,660 per year) would automatically receive overtime protection, regardless of job duties.
   The new rules mainly simplify the duties tests, but make few substantive changes.
   Under the current rules, there are both short duties tests and long duties tests to determine whether or not an employee is exempt from overtime. Which test is administered depends on the employee's salary level. But because of the failure to update the regulation, the long test has become irrelevant and the 'short test' applies to all workers earning more than $13,000 per year. Under the new final rules, a single 'standard test' for each occupational category (administrative, executive, and professional employees) replaces all of the old tests.
   The new rules are particularly valuable for low-level supervisors. Under the current 'short test,' an 'assistant manager' who regularly supervises two other employees could be designated exempt from overtime. Under the new rules, supervisors must have the authority to hire and fire, or their suggestions in that arena must be given 'particular weight' in addition to the other managerial duties. This is a significant tightening of the executive duties test that will result in fewer exemptions.
   Similarly, for administrative and other office employees, employers will find it more difficult to deny overtime under the new rules. The regulation dictates that the employee, as part of his or her job duties, must exercise 'discretion and independent judgment with respect to matters of significance.'
   The new duties test for professional employees will have little, if any, effect on who receives overtime. The current rules state that the primary duty of a professional is 'work requiring knowledge of an advanced type' that is 'customarily acquired by a prolonged course of specialized intellectual instruction and study,' which is the same language used in the new rule. Both the old rule and the new rule make a narrow exception for cases where substantial experience exists, such as an attorney who did not attend law school. That type of worker may still be considered a professional.
   The new regulation means more employees will be eligible for overtime, not fewer.
   In their new study, EPI would have policymakers believe that some 6 millionwhite-collar employees would lose overtime protection were the new overtime regulation adopted. This is based on the flawed premise that many hourly workers would be converted to a salary-basis and denied overtime. Because the overtime rules are either the same or change so minimally, employers who would be inclined to attempt this would have already done so.
   According to a forthcoming analysis by The Heritage Foundation, nearly 1.3 million currently exempted workers who earn between $155 and $455 per week would receive overtime protection under the new regulation that they do not enjoy now. Because the new regulation makes it more difficult to exempt administrative and executive employees, more workers would be eligible for overtime protections.
   The only workers who may lose overtime protections because of the new regulation are certain individuals earning more than $100,000 per year. Most of these workers are executives or professionals who are not eligible for overtime, anyway. Even if all of these highly paid employees lost their overtime protection‹which is unlikely‹only about 272,000 workers would lose overtime, according to this same Heritage study. A more reasonable estimate would be that around 100,000 highly compensated workers may lose their overtime.
   Conclusion
   The new overtime regulation is a welcome modernization from the outdated rules that employers must currently use. Contrary to the Economic Policy Institute's assertions, the new regulation would ensure that more employees enjoy overtime protections, not fewer.

5. [And yet another article on US overtime -]
   House panel backs Bush overtime rules, by Anna Willard, Reuters.
   WASHINGTON - A divided U.S. House of Representatives committee on Wednesday backed the Bush administration's pending overtime rules for white-collar workers that a new report warned could cost at least six million Americans extra pay.
   On a party-line vote of 29-31, the Republican-led House Appropriations Committee defeated a Democratic amendment to a Labor Department spending bill aimed at blocking implementation of the overtime rules, set to take effect on Aug. 23.
   "This is simply an amendment that tries to protect the 40-hour work week," said Rep. David Obey, the Wisconsin Democrat who introduced the measure.
   The Labor Department proposed the regulations last year. In April, under election-year pressure, it scaled them back to cut overtime from fewer workers than initially planned.
   the rules expand overtime exemptions for white-collar workers under the 1938 fair labor standards act which created the 40 hour work week by guaranteeing overtime pay for each additional hour.
   The new regulations redefine eligibility for overtime protection based largely on whether they have exempted managerial duties and income level.
   The 40 hour work week would still stand for those eligible. But eligibility would change according to work duties and pay.
   Backers say the rules would update and clarify antiquated work regulations, while foes warn they would result in companies forcing employees to work longer hours without pay.
   The Senate has voted to block the implementation of the new rules, but the House has repeatedly refused to give its needed concurrence.
   The department has estimated about 107,000 people earning more than $100,000 could lose overtime protection under the revised rules and that "few if any" who earn less than that would lose the right to overtime.
   But a report released on Wednesday by the Economic Policy Institute, a liberal research group, found that "at least" 6 million workers will lose their right to overtime pay.
   "Under the new rules, workers who earn as little as $23,660 per year - about $5,000 above the poverty line for a family of four - can expect to see their jobs reclassified as ineligible for overtime pay," the report said.

6. '35-hour work week must be relaxed': Chirac, Agence France-Presse via Expatica [Netherlands].
   PARIS - French President Jacques Chirac said Wednesday he would ask his government to launch talks with employers and union leaders on ways to soften the controversial 35-hour work week.
   In a wide-ranging Bastille Day interview on national television, Chirac said that while the 35-hour week should remain the legal standard, "workers need more freedom, especially those who want to work more to earn more."
   "Businesses also need more freedom in order to better adapt themselves to the market and for development," the French president added.
   When asked about companies that have threatened to pull out of France if their workers refuse to accept a longer work week, Chirac replied: "It's a slippery slope on which one shouldn't allow oneself to be dragged."
   At the weekend, France's powerful Finance Minister Nicolas Sarkozy pressed for change in the 35-hour week in an interview with Le Monde newspaper, seen as a bid to mark out his own political positions ahead of Chirac's interview.
   Sarkozy said that employees should have the option of working longer hours if they want but pledged French workers would not be blackmailed into working longer hours.
   A reform of the law "should be based on one principle: freedom of choice, permitting those who want to work longer earn more."
   The previous Socialist government brought in the 35-hour week, replacing a standard of 39 hours, to create jobs but also to shake up narrow-minded labour practices by giving companies more flexibility about scheduling work. At the same time, workers had to curb pay demands.

7. Europe reluctantly eyes a longer work week, by David R. Francis, Christian Science Monitor.
   "Europeans work to live. Americans live to work." There's much to this adage, and even more so than decades ago.
   Between 1970 and 2002, hours worked per person rose by 20% in the United States. In Europe, they fell greatly. Hours were down most of all - 23.5% - in France with its legislated 35-hour week. Germans worked 17.1% fewer hours, according to a new analysis of 19 countries by the Organization for Economic Cooperation and Development (OECD), the Paris-based club of the world's richest nations.
   Europeans are now thinking that maybe they ought to work a bit longer. That's not because they don't enjoy their time off. The typical worker in Western Europe is entitled to six or more weeks of holiday and vacation days annually.
   But business, and workers to some degree, have become concerned about high labor costs forcing firms to take production and jobs out of Western Europe into Eastern Europe or other regions where wages are lower.
   In Lyon, France, this week, Bosch, the German tool- and car-parts maker, is demanding that its workers accept a longer 36-hour week and other concessions, or face seeing its jobs go to the Czech Republic.
   This type of demand, now more common, startles Europe, which is used to seeing hours decline, not increase.
   Europe also has a relatively high jobless rate. Using a standardized unemployment rate calculated by the OECD, Germany has a 9.8% jobless rate and France 9.4%. That compares with 5.6% in the US.
   German unions suspect that if they give employers "one finger, they will take the whole hand," says Ulrich Ramm, an economist at Commerzbank, Frankfurt, one of Germany's largest banks.
   Mr. Ramm nonetheless maintains that Germany needs "more flexibility" in its labor markets, that companies should be able to ask employees to work 50 hours some weeks if product demand is high, and only 30 hours if it's weak.
   Last week, Germany's upper house of parliament gave Chancellor Gerhard Schröder a key victory to pass the deepest cut in social benefits in half a century. The lower house had already approved the measure, reducing state benefits for the long-term unemployed.
   The OECD study shows that workers in five or so richest western European nations are approximately as productive as Americans while they are working.
   That may surprise many Americans, often thinking of themselves as especially productive in their work.
   When France switched to a 35-hour week, starting in 1997, the goal was to spread work around and reduce unemployment. But it hasn't worked out that way. French employers and employees reorganized their work to boost productivity decidedly.
   Beside, such nations as the Netherlands, Norway, and Sweden have managed both short official working hours and low unemployment rates.
   On the social side, though, French working mothers could look after their children on the Wednesday school half-day. Gym memberships soared, along with home improvements, gardening, and other hobbies and enjoyable activities.
   But business costs did rise. France's new finance minister, Nicolas Sarkozy, complained this spring that the 35-hour week was a financial disaster, costing the state huge sums.
   And because Europeans work fewer hours and retire earlier, their income falls short of that of Americans.
   The French, says Paul Swaim, an OECD economist in Paris, work about 30 percent less than Americans and that translates directly into about 30 percent less income. So French households may keep their cars longer and buy fewer TVs.
   Over the last 20 years, says Ramm, household income rose about 80% in the US and only 40% in Europe.
   The difference largely reflects the preference of Europeans for more leisure, not greater output per hour.
   It will be no surprise to working mothers anywhere that the OECD report finds "that long working hours are associated with greater perceived conflict between job and family responsibilities."
   In the US, a higher proportion of women work for pay than in Europe. Some 71 percent of the working-age population has jobs, compared to an OECD average of 65%.
   Ramm notes that at his bank, a big one with many thousands of employees, only 150 employees are older than 60. That's because retirement benefits are so lavish. For instance, at age 56, a worker can cut his hours in half and still receive 75% of his salary. And, laying off workers no longer needed in Germany is "nearly impossible," he says.
   Europeans hope for a happy medium on hours. Many American firms keep pushing their employees for more hours.

8. French President Jacques Chirac wants more flexibility in 35-hour workweek, by Kathryn Brumback, AP via MLive.com [MI].
   PARIS - French President Jacques Chirac on Wednesday said he would not seek to repeal the country's 35-hour workweek but wants the government and labor unions to reach an agreement on making it more flexible.
   "The legal duration of the workweek is and will remain 35 hours," Chirac said in a nationally televised interview on Bastille Day, the French national holiday.
   But a "new flexibility" is needed and must be negotiated, the president said.
   "Workers need more freedom, especially those who want to work more to earn more," he said. "Companies need more freedom."
   Chirac said he opposed the law when it was enacted under former Socialist Prime Minister Lionel Jospin because it was "authoritarian," adding that it has led to "inevitable negative consequences for growth and purchasing power."
   Marie-George Buffet, the former sports minister under Jospin and national secretary of the French Communist Party, said Chirac's call for more flexibility is "a considerable step backward."
   New measures would "oblige employees who want to live a little better to work longer," she told France-Info radio.
   Jean-Claude Mailly, secretary-general of the radical union Force Ouvriere, denounced Chirac's proposal as unacceptable.
   "We cannot accept that in hopes of earning more tomorrow it is necessary to work more," he declared on France-Info. "From the moment that this becomes a so-called individual choice, this means that in reality, the legal duration of 35 hours is called into question."
   Finance Minister Nicolas Sarkozy wants to let workers opt out of the 35-hour workweek and has been busy selling the plan as a chance for workers to earn more. He was rewarded earlier this month with an opinion poll showing that 59% of voters backed changes.

9. Sound off on courts' hours, by Elizabeth Neff, Salt Lake Tribune [UT] State court officials say Utahns should be able to do business at West Valley City's justice court and others like it five days a week.
   The Utah Judicial Council on Tuesday gave preliminary approval to a rule requiring all justice courts to be open Monday through Friday.
   In 2000, West Valley City went to a four-day workweek, opening its court from 7 a.m. to 7 p.m. Monday through Thursday.
   Faced with the threat of not being recertified by the council, the city's court went back to a five-day week in February.
   Now West Valley City residents and any other interested person can voice their opinions on the proposed five-day workweek rule during a 45-day comment period.
   Comments can be made online at http://www.utcourts.gov/resources/rules/comments/ or in writing by sending a letter to the Administrative Office of the Courts, 450 S. State St., P.O. Box 140241, Salt Lake City, UT, 84114-0241.

10. British and French troops fete Bastille Day in Paris, AP via USA Today via San Francisco Chronicle [CA]. PARIS (AP) - British troops led France's annual Bastille Day parade for the first time Wednesday to celebrate the centenary of the Entente Cordiale - the historic pact ending centuries of warring and hostility.
    Wearing their foot-high bearskin hats and scarlet tunics, members of the Queen's Grenadier Guards led 4,000 troops from both countries down the Champs-Elysees in the holiday commemorating the 1789 French Revolution.
    Crowds of bystanders watched from the sidelines as 300 military vehicles drove past and military jets trailed blue, white and red smoke, the colors of the French flag, across a cloudless sky.
    French Pres. Jacques Chirac observed the festivities from a grandstand at the Place de la Concorde, which anchors one end of the Champs-Elysees, France's most famous boulevard.
    He was seated beside members of his government and British Defense Secretary Geoff Hoon. Queen Elizabeth II visited Paris in April as part of events marking 100 years of cooperation between the two nations.
    Bastille Day commemorates the storming of Paris' Bastille prison by angry crowds in 1789, sparking off the French Revolution that rid France of its monarchy....
    Security was tight this year with nearly 5,000 police and plain-clothed officers patrolling the crowd. Subway stations along the parade's path were closed.
    After the parade, Chirac prepared for another Bastille Day tradition - the president's annual televised interview. He was expected to address tough issues from rising hate crimes to his stance on France's 35-hour workweek. The interview was touted as Chirac's best chance to breathe new life into his administration after bruising electoral defeats in recent regional and European elections....
    [Or to give it the 'coup de grace' since his attempt to dilute and weaken the 35-hour week is attacking the one place where France is indisputably leading the world = giving its citizens the most free time of any population on the planet, truly the leading candidate as the French cultural exception, since free time is the most basic freedom, the very foundation of liberty.]

11. Quarter-billion dollar cement plant set for Clark County, by Jennifer Shubinski , Las Vegas Sun, [NV].
    A cement company announced plans Tuesday to build a $250 million, 1.5-million-ton a year cement plant in Clark County on the Moapa Indian reservation northeast of Las Vegas. The Ash Grove Cement Co. plant would be built about 40 miles from North Las Vegas, just north of Crystal, on the Moapa Band of Paiute Indian's reservation, on the north side of Interstate 15....
    A local cement plant is key to helping ease the cement shortage that has gripped the Las Vegas Valley for the past few months and has plagued the industry off and on for years, industry officials said. Because of the current shortage, most local suppliers of ready-mix and concrete have shortened their work week from six to five days, continue to allocate supplies and are not taking on new customers....

12. Dilemma for economists, by Lee Chang-sup (changsup@koreatimes.co.kr), Korea Times [South Korea].
    SEOUL, S.Korea - These are hard times for economists who live on providing medicine for economic issues.
    In this time of unprecedented economic troubles, few Korean economists came out with convincing and workable solutions, although they are quite expert in pointing out the problems underlying the Korean economy, which had once been dubbed as one of the East Asian miracle economies.
    The dilemma also haunts policymakers who feel growing frustration over the ineffectiveness of their programs to put the economy on a track to recovery. Every Korean knows the inherent problems dogging the Korean economy. Growth potential has been seriously eroded and despite growth, job creation is quite marginal.
    [It's no longer a question of straining for job creation in an automating and robotizing world. It's merely a question of sharing the vanishing work on as gradual and market-oriented basis as possible; in short, Timesizing.]
    Economic polarization becomes more palpable, with exports growing fast against sluggish domestic consumption.
    Despite record profits and record-low interest rates, business investment is stagnant. A variety of economic stimulus packages failed to kickstart the economy.
    Ask many economists to outline problems haunting the Korean economy and they are quite accurate in pinpointing them. But ask them what the solutions are and they have few magic answers.
    Why no solution when they are accurate in diagnosing the problem?
    [He answers his own question - they are not accurate in their diagnosis. They're not even asking the right questions. This is a typical buildup of confusion prior to a scientific revolution, as described in Thomas Kuhn's "Structure of Scientific Revolutions." Kuhn describes how astronomers kept straining to square observations with their religious dogma that all seven of the then-known "planets" - in weekday order: Sun, Moon, Mars (Tiu), Mercury (Woden), Jupiter (Thor), Venus (Frigga), & Saturn - went round the Earth. They were right only for the Moon, and relatively for the Sun, and observations supported only their two orbits as approximate circles. For all the rest, little secondary circles called "epicycles" were needed to maintain the notion that they circled the Earth. Finally Copernicus revived Aristarchus' heliocentric concept and 'nailed' it. There are exact parallels between many of the backbends of the obsolete geocentric theory and major elements of today's prevailing economic dogma in terms of such articles of faith as "technology creates more jobs than it destroys" and "we should have nothing but ridicule for those who believe the Lump of Labor Fallacy" - the "crazy" idea that there is a fixed or declining pool of market-demanded human (not yet automated) employment which must be divided up among all members of the able-bodied population to avoid splitting the economy into workers and drones, Morlocks and Eloi.]
    1. Many analysts said the economy has grown large enough [probably means it's grown 'too large'] for the government to set the direction to which it wants it to go. Korea's economy is the fourth largest in Asia [after Japan, China, India] and the 11th in the world [after Spain].
       [Hmm, the 2004 Economist "Pocket World in Figures" places them as 13th, but maybe for purposes of this boast, they've added-in North Korea's GDP.]
    2. Second, the economy has been deregulated to such an extent as to make the government's policies less and less effective. It was not the intention of the government, but the public has a deep-seated distrust of the policies. In the worst case, economic agents react in an opposite way to what the government has intended. The case in point is the anti-speculation policy on real estate.
    3. Third, due to the dizzy pace of revolution and innovation in information technology and widespread use of the Internet, specific economic policy goes beyond the understanding of economists and policymakers. Traditionally, methods of reviving the economy either through a Keynesian stimulus approach or supply-side economic approach proved to be less effective.
    4. Fourth, many NGOs and interest groups have raised their voices on special issues, thus making it difficult to make important economic decisions. Thanks to progress in the democratization of society, the government can no longer impose its one-sided policy from top down.
    5. Fifth, lack of coordination between government agencies is one of the hindrances to economic growth.
    6. Sixth, another large variable is the China factor. Due to the strong emergence of the Chinese economy in the global economy, Korea can no longer chart its own economic policy.
    7. Seventh, there still seems to be confusion among both policymakers and investors on the nature of the Korean economy. Some still regard the economy as government-controlled while the others said the economy is now market-driven.
    8. Most of all, CEOs and investors are still searching to understand what directions the Roh Moo-hyun administration seeks to go in running the economy. For the past 16 months since Roh took office, policymakers and economists have squandered away their energy over the time-consuming ideological war over welfarism or growth.
    Perhaps the biggest challenge for Korea's policymakers and economic research institutes is that the global economy is changing so fast that both policymakers and economists at these research institutes have no clear understanding of the complexity that the rapidly changing global economy causes.
    Quite often, this lack of understanding allows policymakers and economists to lag behind Korea's cutting-edge businesses such as Samsung's electronic industry and Hyundai's automobile manufacturing. These businesses in turn tend to ignore policy decisions or recommendations made by policymakers and economists.
    President Roh had removed the post of the senior presidential secretary for economic affairs when he took office last year. As a result, the ceremonial function of economic policy coordination exists inside Chong Wa Dae and economic professors who have not been in the mainstream and whose specialty is welfarism encircle Roh.
    Many noted economists privately said they are quite cautious in suggesting alternative proposals out of fear they might anger Roh. ``Once you say a proposal which is not in line with Roh's economic policy, you are immediately blacklisted as a force of anti-reform. Even the government seldom arranges a meeting of economists to accommodate their views to boost the economy. The intellectuals in society are full of cynicism these days with their arms crossed,'' a Seoul economist said.
    [The development of worktime economics on this planet is way behind the curve. With intellectuals faced with the "from hunger" choice between downsizing capitalism and makework socialism, it's no wonder they're full of cynicism.]
    Everyone agrees that the economy is in a structural and serious dilemma. Unless we roll up our sleeves to kickstart the economy, Korea will be mired in a Japanese-style economic slump, which may last a decade.
    Deputy Prime Minister and Finance-Economy Minister Lee Hun-jae has repeatedly ruled out the possibility that Korea would face an economic slump like Japan's. His rejection reflects the view of many people who are afraid that Korea might be heading toward a long-term slump.
    Big firms accumulate big cash but they do not invest. Small- and medium-sized companies are fast losing competitiveness due to the protracted domestic slump and shortened workweek system and the tax office traces the wealthy to check whether they are speculators.
    [This is total malarcky - the shortened workweek system hasn't even been applied to small and medium sized companies yet - only to large companies of over 1,000 employees. And companies of any size in the leisure industries are currently experiencing a mini-boom thanks to the shorter workweek of the large companies.]
    Solving one economic problem creates another. It is also a fact that we will never run out of economic problems although the nature of them changes over time. But Korea-specific economic woes are so serious right now that they are frustrating both the economists and the people.
    [They're not Korea-specific - they're global, and they can be most simply solved by automatic overtime-to-training&hiring conversion and automatic un(der)employment-adjusted workweeks, no biggy.]

13. CUNA Mutual, union to talk again, by Mike Ivey (mivey@madison.com), The Capital Times [WI].
    Getting the two big guys together has helped bring progress in the bitter contract dispute at CUNA Mutual Group.
    Last week, the president of the OPEIU International, Michael Goodwin, flew from New York City to Florida to meet with CUNA Mutual CEO Mike Kitchen, who was vacationing there.
    [Two elements of very "bad juju" - union guy going way out of his way to meet with mgmt guy and mgmt guy doing work while on vacation.]
    When the two emerged from the closed door meeting, they announced a 30-day "cooling off" period [meaning things musta got pretty heated] and a commitment to return to the bargaining table.
    [So interrupting the vacation didn't work anyway. Watch and learn, everyone!]
    "Mike Kitchen rarely gets away but he left his family and drove halfway across the state of Florida to meet with Goodwin," said CUNA Mutual spokeswoman Syd Lindner. "I think it shows how important this matter and our employees are to this company."
    [Oh cut the crap - this just added a third element of very bad juju.]
    It's the first positive development since April, when nearly 75% of union workers rejected what the company had called its "best and final offer." [What's positive about it? Merely that they're going to meet again? Big deal!]
    A crucial point in the breakthrough was getting the AFL-CIO to call off an orchestrated campaign to lobby credit unions nationwide to potentially withdraw their business from CUNA Mutual. The company provides insurance and financial services to 95% of the nation's 9,500 credit unions....
    [Looks like the union is in a strong position this time.]
    The union [is] Local 39 of the Office and Professional Employees International Union. Local 39 represents some 1,400 workers at CUNA Mutual. With nearly 2,600 total employees here, CUNA Mutual is the second largest private-sector employer in Madison WI behind American Family Insurance.
    ..\..Jim Cavanaugh, president of the South Central Federation of Labor...noted that the insurer has long offered one of the best wage and benefit packages in the city.
    [What's this impertinent union guy flattering the employer for? It gets worse -]
    "You'd like to bring everybody else up to their level ... instead of going the other direction," he said....
    [Jim, shut your mouth till negotiations are over.]
    CUNA Mutual spokeswoman Lindner said the company still believes its offer is one of the best in town. The new contract would move employees from a 37-hour to a 40-hour work week but includes 4, 2 and 2% raises over the three years of the pact.
    [Any expansion of hours per person in a regional, national and global labor surplus is not the best in town but the worst in the world because it worsens the surplus and down-pressures wages further. Hopefully CUNA Mutual unions will realize this.]
    The company has recently modified its proposal, too, agreeing to maintain a popular longevity bonus system. It also agreed to allow additional flexibility for workers wishing to leave or arrive at different times....
    [Mere frills. CEOs with short-term smarts will offer anything to get a longer workweek, because they know it increases labor surplus and weakens labor unions. Of course, such short-term smarts are long-term 'dumbs' cuz they're shrinking their own markets.]

14. What's cooking in Collinsville? by Natalie K. Pollock, Connecticut Jewish Ledger [CT].
    COLLINSVILLE, Conn. - Something new is in the air in the quaint village of Collinsville.... Gail Case, proprietor of the Collinsville Baking Company...opened her 2,000 square foot, baked foods establishment about a year ago in an off-center location, and already people from as far as New Hartford and West Hartford have become regular customers.
    What are the odds that a nice Jewish girl from Fair Lawn, New Jersey, who worked as a physical therapist to please her parents, would find happiness as a baker in a little Connecticut town?... After several years working outdoors, she went back to school in 1987 at the University of Connecticut for an undergraduate degree in allied health and then a master's in physical therapy. She worked in her second career until last year, when the idea for a bakery began to germinate in her mind, and she quit her position as director of rehabilitation at the Cherry Brook Health Care Center.... She enrolled in the King Arthur baking program, and graduated convinced that there is a huge market and need for breads and cakes.
    The baking business is labor intensive, requiring many more hours than the typical 40-hour work week. Baking has to be done through the night so that the product can be ready for sale the next day.
    [Every self-important trade or profession likes to claim it requires "many more hours than the typical 40-hour workweek," but that's just because they're too backward or anal to realize that's why God created shift work. And here are the costs of ignoring that little scheduling invention -]
    Her children, Mason (10) and Sophie (12), are beginning to complain that they never see their mother any more, and when they do, she is usually tired. Case is hoping to find a partner with whom to share her workload.
    The Collinsville Baking Company opens its doors on Saturday, Sunday and Monday at 7 a.m. and the rest of the week at 6 a.m. The bakery closes at 7 p.m. every day except Sunday, when it closes an hour earlier. According to the proprietor, Saturday is their biggest sale day for bread....
    [Bottom line - she can't be that 'nice' a Jewish girl if she's routinely violating Shabbas and neglecting her children. Fourth Commandment, Exodus 20: Shesheth yamim ta'abhodh.... Six days thou shalt labor... - only six, even if you're self-employed - every Israelite c.1500 was self-employed and they still observed Shabbas.]
    Sometimes late at night, when she is putting in her umpteenth hour baking bread, she talks to her deceased mother. She asks her for advice and hopes that her mother is not upset that she followed her dream and went into the bakery business after all....
    [It doesn't take a psychic to sense that her mother will be a lot happier in heaven when her daughter does whatever she needs to do to stop neglecting the grandkids and take a least one day a week off! Just check with *Rabbi Arthur Waskau.]

15. 'Rock-bottom' budgets being prepared in Perry County, by Christi Mathis (mathis5@hcis.net, 618-357-8391), The Southern Illinoisan [IL].
    PERRY COUNTY, Ill. - Tempers flared, accusations flew but when all was said and done, no one had an easy solution for Perry County's financial problems Tuesday morning.
    After possible causes and possible budget cuts were debated, it all comes down to a directive issued by the county board. All Perry officials must prepare "rock- bottom" budgets for the remaining four months of the fiscal year and ask their employees to voluntarily accept rotating four-day workweeks or face layoffs around the county, board Chairman Wayne Bigham said.
    [ Timesizing versus downsizing.]
    "I think everybody knows the county is in bad financial shape and it's not going to get any better," Bigham said. "Mending the budget isn't going to make a whole lot of difference if people's jobs aren't cut. We can go to four days a week like the health department did when they had problems. If the offices don't want to go to that there will have to be layoffs. Money just can not keep going out for salaries when we don't have it coming in."
    [More Americans cutting taxes and then whining about the results. What a bore.]
    County officials said simply trimming expenses here and there won't resolve the problems. They noted four years ago the county received $600,000 from the state when Pyramid Park was expanded but that money has all been spent and the county is virtually broke. Earlier this month, the county borrowed $150,000 to cover expenses and the debt now stands at $345,000. The borrowing cap is $495,000 and that has officials really worried.
    "What everybody needs to understand is, it's going to come to the point where people are not going to get paid," Treasurer Bill Taylor said. "It could come as soon as the end of this month." "You've got to eliminate employees because that's where all the money is going," Bigham said.
    [Yeah, rich guys like board chairmen all love threatening other people's livelihoods. This one's truly a "big ham."]
    Several officeholders spoke of extensive cuts they have already made and the current barebones operations of their offices. State's Attorney David Stanton said he's already reduced staffing and in fact his office operated for $12,414.49 less than was spent in 1998-1999.
    "I believe I've cut my budget all that can be cut," Stanton said. "I'm spending less in my office than was spent five years ago. I've always been a team player and I know the budget situation. But if anybody else is below their budget of five years ago, I'll cut an equal amount."
    Sheriff Keith Kellerman and Coroner Paul Searby said their budgets have been cut and each offered the possibility of further small cuts but said nothing major can be done....
    [Finally, after all the whining -]
    County officials also said that after many years of holding the line, it's apparent there will have to be property tax increases to help balance the budget. How much has not been decided.
    In the meantime, the county board asked all county officeholders to prepare budgets with as many cutbacks as possible and then ask employees to voluntarily agree to four-day work weeks or face layoffs all over the county....

1. 5-day-week side-effects worry some workers, Joongang Ilbo [S.Korea].
   SEOUL, S.Korea - More than 30% of workers are concerned that the planned introduction of the five-day workweek might bring about a cut or freeze in their wages, according to a survey.
   [The more you cut the workweek, the closer you get to full employment, and the closer you get to full employment, the lower unemployment is (duh), the more job options every employee has, the more employers are disciplined by employee job mobility and the less likely"a cut or freeze in wages" becomes. So if you're worried about adverse effects of the current workweek cut, then FIGHT to change it from a one-time, permanent, rigid and arbitrary affair into a repeating, temporary, adjustible and unemployment-determined arrangement. The economy's lump of market-demanded human working hours is no longer fixed or growing but is now constantly diminishing partly by the cumulating effects of human experience ('practice makes perfect') but mainly by cumulating effects of work-saving automation, cybernetics and robotization. So FIGHT to redesign the workweek so that, as long as unemployment is too high or rising, the workweek slowly shrinks to squeeze out the market-demanded human working hours onto the entire able-bodied or even just able-minded population of potentially self-supporting consumers. That way you actualize your maximum domestic consumer markets and free yourselves from the vaguaries of export markets, which are beyond your control. And while you're at it, look into redesigning overtime so that its very incidence throughout the economy as workhours shrink, targets and triggers and funds and paces and gauges training (preferably on-the-job and just-in-time) and hiring.]
   Powerjob, an online job agency, said yesterday it had polled 715 wage earners in the first two weeks of this month about the planned reduction in the workweek.
   • 32% said they were worried about a cut in salaries.
   • 22% said they were concerned about economic burdens from the extra spending they would have to do to fill their expanded leisure hours.
     [Now that is a really big worry, isn't it?! With problems like this, who needs solutions!?]
     
   • 17% said they were worried that their employers could demand that they work harder.
     [But the smart ones would rather work harder in their smaller work time so they can play harder in their bigger free time anyway. They don't want to go through life in a haze. They want to 'drain the cup of their potential to the lees.']

2. Kerzner managers working fewer days, same pay, by Mindell Small, Nassau Guardian [Bahamas].
   Middle managers at Kerzner International, who sometimes worked six days a week, are now only required to work five days a week for the same pay.
   However, even though the reduction in the work hours is seen as a welcome gesture, some managers believe that they are now required to receive "time and a half" pay if they are asked to work on a sixth day.
   They maintain that since the maximum required days of work has been reduced from six to five, if they are required to work more than those five days, the extra day should be treated as "time and a half."
   Asked if they were being unreasonable and ungrateful, one manager replied, "No, we don't think so. We are just looking at the principle behind it. We understand what happened in the past and appreciate that there was no reduction in our salary when the days were reduced, but what happens now, when we work overtime?"
   "When we work on a sixth day, shouldn't that be considered overtime as a result of the new rules given to us."
   The manager then stressed that managers at the resort generally work more than eight hours a day in any event as they have to be responsible for their shift.
   The manager also said middle managers often have to be the "problem solver" as they have to remedy staff-related problems as well as solve guest-related problems so that they do not escalate to a point where upper management has to get involve.
   Ed Fields, Kerzner's vice-president of Public Affairs said the reduction in the workweek for managers is a positive move by Kerzner and a non-issue. He added that he could not understand why any manager would want to go to the media when the company is working in his or her best interest.
   He said, "We have decided to reduce the work week from six days to five days without reducing the pay so for example, if a manager was making $600.00 per week for 6 days, that person would still make $600.00, even though they would be working 5 days."
   Mr Fields further indicated that the issue had nothing to do with the company complying with the 40-hour workweek. He pointed out that soon after the law came into effect calling for a reduction in the workweek from 44 hours to 40 hours, Kerzner International worked out the "best formula" for its employees and fully complied with the law.
   The law was introduced as an amendment to the Employment Act 2001, which called for the workweek hours to be reduced from 48 to 44 on February 1, 2002, then to 40 hours on February 1, 2003.
   The former government indicated that it preferred to reduce the work hoursin one phase, from 48 to 40, but settled for a compromise and reduced the hours in two phases so that the disruptive effect in the workplace would be minimized.
   Overall, managers at the front desk, bell desk, housekeeping, guest services, VIP services and food & beverage departments are the highest paid when compared to other hotel properties on Paradise Island, the Cable Beach area, downtown, Freeport and the rest of the country.
   Kerzner International also recently gave its employees first preference in purchasing one million of its ordinary shares last month. It also offered to train its employees on the intricacies of trading in shares before purchasing.

3. Aviation issues: Controller crisis seen - Most air traffic personnel set to leave workforce before 2011, by Chris Jones, Gaming Wire via Las Vegas Review-Journal [NV].
   LAS VEGAS, Nev. - Airports such as McCarran International...need more air traffic controllers to keep pace with retirements and increasing workloads, said controllers such as Robert Marks...and Karl Keller....
   Staffing concerns are already the norm at McCarran, local controllers said Monday. Controller Troy Marty said 10 of the airport tower's 42 controllers could walk away by the end of 2006.
   The shortage is more immediate at Las Vegas' Terminal Radar Approach Control center, which picks up airborne traffic within a short distance of several local airports. Controller Karl Keller said his group now has just 35 certified workers, despite federal authorization for 56 such employees. "That translates to mandatory six-day workweeks," Keller said. "Last month we worked 600 hours of overtime and are projected to go 700 this month. We're busting our butts to keep things moving, but it's very frustrating"..\..
   A projected shortage of qualified air traffic controllers is threatening the safety and scheduling of America's aviation system, but a group of those now directing planes above Southern Nevada on Monday offered folks in Washington a simple solution to the nation's latest worsening transportation crisis: Go out and hire some new controllers....
   FAA regional spokesman Donn Walker countered, saying 44 workers are now in place at McCarran's tower with two more on the way; the local TRACON center has 42 workers now, Walker said, with 8 more to come. Despite their differences in figures, he said the FAA hopes to work with the unions and others involved to maintain current safety standards at McCarran and the nation as a whole..\..
   The United States now employs approximately 15,000 air traffic controllers, nearly 10,000 of whom are set to leave the work force before 2011, said Robert Marks, a San Diego-based controller and vice president of the National Air Traffic Controllers Association's Western Pacific Region. And unless more people soon enroll in a training process that takes two to five years to complete, there won't be enough controllers to direct the nation's growing aviation industry, he said.
   "This is a nationwide problem that we've been screaming about for years, and now it's upon us," Marks said at a press conference near the runways of McCarran International Airport. "Air traffic is coming back big time and ... it's going to be a recipe for disaster if we don't get busy."
   The system's looming disasters, Marks clarified, aren't likely to include "planes falling from the sky" but will instead result in extended delays - and their surrounding economic setbacks - when landing and taking off at U.S. airports.
   Several government agencies have acknowledged the current shortage, including Federal Aviation Administration [FAA] boss Marion Blakey, who said the looming staffing shortage could soon reach "tsunami" proportions.... Last year...the FAA asked for nearly 330 new controllers before that request was rejected over budgeting concerns. Despite the support this year of several key senators, including Nevada Democrat Harry Reid...the FAA has yet to ask Congress to increase the current work force.
   "To me, that's just baffling," Marks said. "A tired controller makes mistakes more easily. We're human beings."
   The FAA is now studying plans to add more controllers and expects to present it to Congress by the end of the calendar year, spokesman Paul Turk said Monday from Washington.
   Marks' union hopes the government will hire up to 1,000 new controllers per year for the next several years....
   Today's [shortage] of U.S. air traffic controllers is the product of President Reagan's 1981 decision to fire and ban the rehiring of more than 11,000 striking federal controllers.
   [This is what happens when a Republican betrays his small-government and no-intervention policies, especially when he throws his weight behind the strong and organized, management, against the weak and disorganized, labor.]
   Marks said that move cleared out three generations of experienced controllers and replaced them with a new generation of employees hired over a three- to four-year period that ended around 1985.
   [And all the result of Republican meddling in the free market.]
   The government requires controllers to retire by age 56, so that Reagan-hired crew is rapidly approaching the end of its working life. That's caused the pending "retirement bubble" that could affect up to half of the nation's 15,000 controllers by 2011, according to a recent report by the federal government's General Accounting Office; Marks said his union puts that total closer to two-thirds.

4. Mayor lauds union raises, by Dan Janison & William Murphy, Newsday [NY].
   NEW YORK, N.Y. - Most managers in the Bloomberg administration - from front-line supervisors up to commissioners and top-ranking deputies - will draw raises reflecting recent union settlements, it was announced yesterday. Mayor Michael Bloomberg disclosed the hike while announcing that more unions, representing about 10,000 employees, have now accepted contracts similar to those of the biggest labor group, District Council 37. Together, the latest round of raises will increase the city's payroll cost by $652 million a year once fully effective. "The city is committed to providing equitable salaries to its hardworking employees," Bloomberg said at City Hall. The agreements and personnel orders include a $1,000 lump-sum payment for current full-time employees due July 30; a 3% raise effective July 1 of last year for those then employed, and a 2% increase for those on the job now, effective last week. In exchange, unions agreed to lower starting wages for new hires; elimination of a "floating holiday"; curtailed annual and sick leave schedules; and limitations on shift differentials. The new agreements affect staff analysts, lawyers, probation officers, highway and sewer inspectors, communications workers and others. Probation officers agreed to change their work week to 40 hours from 37.5 hours, for added $570 payments, officials said.
   [Some unions are still being stupid and choosing money over shorter hours, choosing unnaturally high pay in a worsening labor surplus instead of cutting hours and surplus and fostering a pay-raising labor shortage.]
   Non-union management raises are carried out by executive order. Bloomberg said, "They will pay for [a settlement] in exactly the same ways. We're bringing in new management employees at lower rates with lower benefits, and we'll make sure they do more with less." At the top of the heap, most deputy mayors get $169,000; commissioners are paid $163,000. Reaction was predictably cool from union leaders who have yet to settle with the city in the current bargaining round. Patrick Lynch, president of the Patrolmen's Benevolent Association, said accepting the pattern would reduce starting pay and make it harder to retain good officers. "It's a perfect example of why no other major city in America uses this one-size fits all arrangement called pattern bargaining," Lynch said. Randi Weingarten, president of the United Federation of Teachers, said the pattern shouldn't follow for teachers, police officers and firefighters.

5. Point-Counterpoint - The end of cheap money era in the United States, by Chaklader Mahboob-ul Alam, theDailyStar.net.
   On the 30th of June, 2004, Mr. Alan Greenspan, the chairman of the Federal Reserve ( the Fed), who was appointed to this position by Pres. Reagan in 1987, finally announced an increase of ¼% ( from 1% to 1.25% ) in the US benchmark interest rate (also known as the federal funds rate at which banks charge each other for overnight loans).... A movement in the benchmark rate of the Fed...affects inflation, the labour market, the currency market and the economic growth in the US but also in the EU and the developing countries.... Unfortunately, higher interest rates in the US have a negative impact on debt-ridden developing countries as well because debt- financing and debt-repayments become more expensive.
   Although some analysts expected the European Central Bank (ECB) president, Mr. Trichet to follow the Fed policy, on the 1st of July, he completely discarded any such idea for the moment.... The ECB is forced to pursue this policy because of uncertain economic recovery in the euro area. In fact, in Germany, which happens to have the largest economy in the euro area, retail sales declined 1.5% in May. The fragility of this situation was further underscored by an unprecedented agreement between Siemens and IG Metal, Germany's most powerful union, under which the workweek was extended from 35 hours to 40 hours without an increase in the wages....
   [And this current fad of re-extending hours and re-concentrating the national workload and wages on fewer people will be sure to make retail sales decline further - not steadily, not smoothly, but 'merely' inexorably.]

6. Industry's upper hand at the negotiating table - Mercedes cars are made more cheaply in Bremen, Deutsche Welle [Germany].
   Siemens two weeks ago, DaimlerChrysler this week. The threat of moving jobs elsewhere has become an increasingly powerful weapon for industry at the negotiating table. Unions are alarmed.
   When DaimlerChrysler on Tuesday told workers they would move 6,000 jobs from their main plant in southern Germany elsewhere to save ?500 million, state union leader Jörg Hofmann saw red.
   The threats came just a few weeks after Siemens forced the country's powerful IG Metall union into getting plant workers to work longer for no compensation. Siemens had threatened to move 2,000 jobs to Hungary had IG Metall not agreed to the 40-hour work week.
   "What is happening right now is dramatic," Hofmann, who heads IG Metall in Baden-Württemberg told the Tagesspiegel newspaper. "Siemens encouraged them to attack us."
   "Us" refers to around 6,000 workers at DaimlerChrysler's main production facilities in Sindelfingen who could lose their jobs should unions and management fail to reach agreement on cost-cutting measures.
   Not working long enough
   [= an anachronistic phrase in the age of automation and robotics.]
   Daimler management wants concessions from the unions on cutting payment bonuses workers currently earn for working afternoon and late shifts. Workers at Daimler's plants in Baden-Württemberg work, on average, 30.1 hours a week, far too little for Daimler management at a time when some German companies are beginning to re-introduce the 40-hour work week.
   As a result, Daimler has threatened to move production of the C-class car (photo) normally built in Sindelfingen to either Bremen, where cars cost ?500 less to produce, or South Africa. Industry association heads have already warned workers not to block cost-cutting efforts.
   "Many jobs that could be saved, would be lost forever," said Dieter Hundt, the head of Germany's largest employer's organization, BDA.
   "Gun to the chest"
   The head of Mercedes Car Group, Jürgen Hubbert, has been meeting with Hofmann and chairman of the Corporate Works Council Erich Klemm to find a solution.
   Meanwhile, union leaders have ratcheted up the rhetoric in what they consider a dangerous trend.
   The deputy head of the worker's union Ver.di, Margret Mönig-Raane, told German television that Daimler's methods amounted to a "gun pointed at the chest - either you bend to satisfy our conditions or we move."
   Mercedes workers across Germany plan to take part in strikes on Thursday.
   Soothing nerves
   Chancellor Gerhard Schröder has so far struck a neutral tone.
   Already on bad terms with his traditional voter strongholds, the unions, Schröder said on Tuesday that "working hours should be looked at flexibly from branch to branch."
   Bernd Gottschalk, head of the powerful German Automotive Industry Association (VDA), tried to soothe frazzled nerves on both sides. Gottschalk said his association is against the idea that production can just as easily be moved abroad, as Siemens and Daimler have threatened, calling the notion "absurd."
   He also said the discussion on restructuring labor costs was not about introducing "Chinese or Romanian wages in Germany." Cutting bonus payments, on the other hand, should not be considered taboo by unions.

7. French workweek law under pressure, AP via Forbes.
   French President Jacques Chirac came under pressure Tuesday to say where he stands on the country's 35-hour workweek as Robert Bosch GMBH told its French workers to choose between longer hours and layoffs.
   [That's like choosing between layoffs now or layoffs later.]
   The German tool and car parts maker is the latest of several European companies to demand longer workweeks from staff, stoking fears on the old continent that short shifts and long vacations are becoming things of the past.
   But Bosch is the first company to issue such an ultimatum in France, where workers felt protected - until now - by the 35-hour workweek law introduced under the last Socialist-led government.
   The Socialists, now in opposition, are demanding that the government say whether and how it plans to reform the law.
   Addressing fellow lawmakers Tuesday, Socialist deputy Jean Le Garrec taunted Chirac's conservatives over their internal divisions on the issue, challenging the government to "take a unanimous position."
   Le Garrec also condemned what he called Bosch's "outsourcing blackmail."
   The 820 workers at Bosch's factory outside the southern French city of Lyon were voting Tuesday on whether to accept new contracts increasing working time from 35 to 36 hours a week, cutting bonuses and freezing salaries for three years - or be laid off.
   If at least 90% of workers agree, Bosch France has said it will cancel 190 of 300 planned job cuts and avoid compulsory layoffs for the rest. Otherwise, financial director Eric Bazile confirmed that the company plans to transfer a new diesel pump production line to the Czech Republic.
   Final results of the postal ballot are expected later in the week, but union officials said the vast majority of votes already received were in favor of the increased hours.
   Bosch's Lyon staff looks likely to follow the example of workers at a Siemens AG mobile phone plant in Germany, who agreed last month to work an extra five hours a week to avert threatened layoffs and outsourcing to Hungary. German automaker DaimlerChrysler AG, tire company Continental AG and gas and engineering group Linde AG are also talking to workers in some departments about longer hours.
   By sidestepping France's 35-hour law, Bosch has shown that the new vogue for such strong-arm negotiating tactics could spread outside Germany.
   Pierre Mazanovic, a lawyer advising the leftist CGT trade union in Lyon, said Bosch was sticking to the 35-hour week law on paper while demanding extra time unpaid from its staff.
   "It remains to be seen whether this can be challenged in court," Mazanovic said.
   Many French employers are pressing for the 35-hour law to be watered down and have hinted at possible outsourcing, citing competition from cheaper labor in eastern Europe and Asia and sluggish economic growth at home.
   EADS joint CEO Philippe Camus said last week that the European defense group may have to "outsource to find lower production costs" unless the government made changes to a law that had "drastically cut competitiveness gains made up to now."
   President Chirac said earlier this year that he didn't see a need for further legislative changes to the 35-hour workweek, after the government passed amendments to increase overtime limits.
   Since then, however, the issue has refused to go away, and Chirac is now expected to give some ground during his annual Bastille Day television interview on Wednesday.
   Nicolas Sarkozy - France's popular finance minister who does little to hide his own presidential ambitions - has rallied liberal members of the ruling party behind his own reform agenda.
   Sarkozy wants to let workers opt out of the 35-hour workweek and has been busy selling the plan as a chance for workers to earn more. He was rewarded earlier this month with an opinion poll showing that 59% of voters backed changes.
   In a full-page interview published by newspaper Le Monde just four days before the traditional presidential interview, Sarkozy repeated his call for a "deep 'reform' " [our subquotes] of the workweek law.
   "I think the public wants it and that France can't afford to ignore this debate," Sarkozy told the daily, adding: "The longer we wait, the more onerous and difficult it will be."

1. DaimlerChrysler warns of cutting jobs in Germany, WSJ, A6.
   ...Last month, GM announced that its German subsidiary, Adam Opel, would expand production of its new Zafira family car in Poland rather than at Russelheim, its main German factory. Similarly, the country's biggest engineering company, Siemens AG, recently, reached an agreement with its unions to increase weekly working hours to 40 from 35 - a deal that is expected to embolden other German manufacturers to seek similar concessions....

2. HR zeitgeist - Clock watching, HR Gateway [UK].
   ‘I like work: it fascinates me. I can sit and look at it for hours,’ wrote the author Jerome K Jerome. Few could really relish the thought of sitting down and watching someone work. Not because it is necessarily a strange thing to do, ask social scientists, but for two other main reasons. Firstly, given the UK’s apparent desire to ‘keep it dumb’ in many parts of industry and sustain a low-skill equilibrium, watching work could be intensely boring. Secondly, according to a new report last week, the UK tops Europe in terms of long working hours, so it is doubtful whether even the most resilient of watchers could keep up the pace!
   According to the Organisation for Economic Cooperation and Development (OECD), the average UK worker puts in 1,673 hours a year, 100 more than the EU average. Between 1970 and 2002, average working hours fell by 7% in the UK, it states - and this is mostly down to increased part-time working - compared to the 23% in France and 18% in Germany. Working time averages have ‘failed to move’ in the UK over the past few years. One could sensibly assume then, that the Working Time Regulations have not made a huge impact on the long hours culture.
   Some, of course, namely unions, would argue that this is because of the 48-hour opt-out in reality does not give workers a choice over how long they work. ‘Remove the opt-out,’ they cry. Employers counter this by claiming that choice for all is key in the debate and so we should keep the opt-out. As with education, however, debates over ‘choice’ – which could be argued as being an illusion anyway - hamper work on combating the true causes of the problem. Posturing between unions and employers over the opt-out is doing just this, claims the Work Foundation. Long working hours are part of our culture, it says, and debates over the opt-out are not going to help matters:
   ‘We are already too fixed on working time. [Hear, hear!] Of course it is important but promoting people because they work long hours, for example, is far too much a part of business culture. Unions and employers are not helping this debate by focusing on the 48-hour opt-out. We need to change working culture to focus more on performance. [Amen!] It is difficult to measure but it is also clear that firms are unwilling to tackle it. However, using length of time worked to measure productivity will not improve business performance, let’s move on,’ the Work Foundation’s Alex Jones told HRG.
   Good advice! The Working Time Directive is only a very small part of a very big problem. It is a simple fact that you cannot reduce working hours in an organisation without totally overhauling the way it views the nature of work. France tried it and found that all it got was shorter hours with no improvement in performance. This is because the workplace is a complex entity and the elements effecting the long hours culture in the UK are many and varied.
   Technological advances, desire for work-life balance, changing demographics, market demands and employee needs are all some of the facets we need to tackle. The UK needs to look at reorganising work and redesigning jobs to be more flexible. Time and management need to be totally rethought and we need to start realising that the level to which a person performs is more important than the hours s/he works. Our belief that longer hours equal higher productivity is only acting to serve up higher levels of stress and with it, absence.
   Six in ten employers have noted an increase in stress related absence over the year and the main contender for cause is increased workloads. According to the CIPD report, the only sector this year which was likely to see stress related absence remain at the same level was manufacturing, all other areas saw increases with very few seeing decreases – between eight per cent and 15%. Encouragingly, 75% of employers are starting to take action. Some of the tactics being used include improving work-life balance (61%), risk assessments (57%), training for managers and staff (55%) and staff surveys (51%). At least two of these can aid in reducing long hours working.
   Excessive work is dangerous for people and costly for business. People need breaks and holidays to get away....

3. Will Europe have to give up its 6-week vacations? by Mike Dolan, Reuters.
   [Or more broadly, will humanity, stampeded by 'competition' with the most backward, lowest-standard populations on the planet, gradually destroy its own quality of life, feature by feature? Is this really something we've never faced before? Or is it something we've faced and solved many times, but are now subjecting to selective forgetting - thanks to the near-sightedness, greed, Bush-modeled arrogance, outrageous aggressiveness, and downright power-tripping of some of the stupidest among us? - and our own boredom, confusion, cowardice, ambient guilt, - and stupidity?]
   LONDON - Blame fierce globalization, greedy bosses, cowed workers or just the facts of life in free market economies - but many Europeans are starting to accept they may have to work longer hours to safeguard their jobs.
   [Really? Or is this just a HUGE media run-up? a veritable mountain out of a mole hill?]
   Prompted by recent one-off labor agreements in Germany, public opinion shifts and a change of political gear in Paris, and Berlin, economists detect the winds of change and say the implications could be enormous for the future of the region.
   The euro zone is facing dire demographic trends which are likely to see its working population, and hence its economic capacity and potential, decline over the coming decade unless either output per worker or its income growth accelerates fast.
   [That is total and utter rubbish.   25% of Europe's population was carried off by the Black Death in 1348 and it created such a shortage of labor and rising wages that it centrifuged the national income out to the people who spent it immediately, and the rising demand elicited rising employment and the rising tide floated all ships, leaving even the wealthy better off than they were before.]
   Working harder - with or without extra pay - appears difficult to avoid.
   [Tommyrot. We live in an age of ever-accelerating automation and robotization. Working harder is not only no longer necessary. It's imperative that we DON'T, so we don't keep concentrating the vanishing human work on ever fewer people and shrinking our consumer base. Is this really so hard to grasp?]
   "The cases we've seen are still isolated events but they look like bellwethers of the future," said Paul Swaim, economist at the Organization for Economic Cooperation and Development. Swaim was one author of the OECD's 2004 Employment Outlook, which starkly illustrated the divergence in working time between Europe and the United States over 30 years.
   Since 1970, OECD data shows work hours per head in Germany, France, Finland and Spain fell by about 15% while those in the United States, Canada and New Zealand rose by 15%.
   Last year, average annual hours worked by employees in Germany, France and the Netherlands all came in under 1,400. The equivalent number for U.S. and Japanese workers was 1,777 and 1,828 and in Britain was about 1,650.
   Add the fact that Germany has the second highest labor costs in the world and the economic strain becomes clear.
   GROWING APART
   For generations, it was accepted that as societies became wealthier fewer working hours were needed and more leisure time was possible and desirable.
   [Wealth has nothing to do with it. Worksaving technology has everything to do with it.]
   But that consensus broke down in the 1980s.
   Business-friendly governments and supply-side economics in the United States and Britain pushed working hours higher again just as continental Europeans drove harder for a shorter workweek, either as a trade-off for wage restraint or as a way of prodding employers to create more jobs.
   The former approach accelerated long-tern growth at a price. The OECD ranks the United States, Britain, Canada and New Zealand as the four countries with the weakest employment protection laws of its 30 members.
   Continental Europe went the other direction. German unions forced manufacturing firms to accept a 35-hour week with a wave of industrial unrest in 1984. In 2000, France followed suit when Lionel Jospin's government enforced the same for all employees.
   ELASTIC SNAPS?
   Now, the elastic separating divergent trends between the big English-speaking economies and the euro zone may have snapped. Last month, industrial giant Siemens, while threatening to move thousands of jobs to Hungary, agreed with unions and workers in two German mobile phone plants to increase the working week to 40 hours from 35 hours for no extra pay. Workers at these plants and the IG Metall union agreed to an effective 12.5% cut in hourly wages to save their jobs.
   Dozens of other German firms are reported to be seeking similar pacts. Carmaker DaimlerChrysler is negotiating longer hours with more pay for some staff and thousands of public sector workers are being required to work longer.
   An opinion poll this month found 57% of Germans believed employers and unions should re-introduce the 40-hour week to reduce labor costs.
   [Labor costs would only be reduced if they re-concentrated the workload and laid people off, thus re-raising unemployment and costs of unemployment insurance benefits and all the costs 'downstream' from long-term unemployment.]
   Asked if they would work longer with no extra pay to secure jobs, 79% said "Yes." Even 63% of union members agreed.
   Unease about the working week is not limited to Germany. The French government has raised questions about the functioning of the 35-hour week as opinion polls show an appetite among workers for more flexibility at least.
   French Finance Minister Nicolas Sarkozy is advocating more freedom for workers to choose how long they work. European Union Trade Commissioner Mario Monti echoed that call this week.
   With euro zone unemployment at 9.0% and job creation still miserable during the fastest world economic expansion in 16 years, something seems to have started to give. EU data shows the average workweek for full-time employees across the euro zone rose 0.1 hours to 41.1 in 2003.
   "The euro area experiment of attempting to boost job growth via a lower workweek may be ending," said Juergen Michels, economist at Citigroup in London. "A more flexible approach to work duration - including a lengthening of working hours on a case by case basis - could become the norm in coming years."
   Michels said the changes may not boost jobs in the short-run but may prevent them going abroad. More secure employment may have improve dire consumer confidence and reverse a steep build up in the German savings ratio.
   More profitable firms will aid inward investment and growth, he added, and lower labor costs should keep interest rates low.
   And while some see acceptance of longer hours damaging Europe's core social and economic model beyond repair, others say flexibility now is the only way to protect the bulk of it.
   "Working more is the only way for Europeans to save what can still be saved of their social model - good quality healthcare services and decent pensions for all," said Eric Chaney, economist at Morgan Stanley in Paris.
   "It does not need a rocket scientist to see that, in order to fund pensions for a growing number of retirees and ever more costly medical services, Europe needs to grow income faster."

4. Daimler says 6,000 jobs may go if union doesn't accept $620 million cuts and go with savings accord, by Susanna Ray (sray7@bloomberg.net) & edited by Dan Stets (dstets@bloomberg.net), Bloomberg.
   DaimlerChrysler AG, the world's largest luxury carmaker, may cut 6,000 jobs from Mercedes' plants in southern Germany if labor unions don't agree to 500 million euros ($620 million) in annual cost-cuts by the end of the month.
   DaimlerChrysler proposed seven measures for workers to choose from to save the money from its C-Class Mercedes luxury cars and from its commercial vehicle division, Juergen Hubbert, the head of the Mercedes Car Group, said at a press conference at the company's Stuttgart, Germany, headquarters. A labor proposal to save 180 million euros a year is not enough, Hubbert said.
   ``We believe that we've met the employees'' with the proposals, Hubbert said. ``The alternative is that we have to say goodbye to 6,000 workers relatively soon.''
   DaimlerChrysler aims to cut jobs in Germany after new production processes reduced the number of employees needed to build the same number of cars.
   [The number of employees or the number of working hours? And if you keep answering "employees" you'll keep downsizing your own customers' customers and your own future markets.]
   Mercedes, which accounts for more than half of DaimlerChrysler's operating profit, is losing ground to Bayerische Motoren Werke AG and Volkswagen AG's luxury Audi unit due to an aging model line and concerns about quality.
   ``It's part of the game, with Mr. Hubbert saying, `If you don't accept this then we will transfer part of our production','' said Robert Pottmann, an analyst at M.M. Warburg who has a ``buy'' rating on the shares. ``At the end of the day, the unions are in a weaker position and I think they will accept Mercedes's offer.''
   [Then both labor and management will careen together from recession to depression.]
   Shares of DaimlerChrysler fell 38 cents, or 1%, to 36.14 euros in Frankfurt. The company's U.S. shares dropped 61 cents, or 1.4%, to $44.74 at 12:26 p.m. in New York.
   Moving production
   Hubbert said that if no agreement is reached, DaimlerChrysler may move its C-Class Mercedes production to plants in South Africa and Bremen in northern Germany, rather than keep it in Sindelfingen in southern Germany, and it may decide not to produce C-Class derivatives at all.
   [This is that famous job blackmail that stupid CEOs have been using for years. Back in the 1990s both Raytheon and Fidelity used it successfully on the government of Massachusetts to extort taxbreaks. The best response is to tell them to get out as fast as they can, and then put every obstacle you can in the way of their continued access to the markets in your jurisdiction that they are no longer supporting with employment.]
   Mercedes last year expanded its workforce to 104,151 employees from 101,778 workers at the end of 2002, according to the company's annual report. DaimlerChrysler as a whole had 362,063 workers last year, with 182,739 of them in Germany.
   Unions staged a strike Saturday at the Sindelfingen plant to protest cost-cutting efforts and plan a series of strikes lasting a few hours each at German plants on Thursday.
   ``We are determined not to change existing union contracts,'' said Erich Klemm, head of DaimlerChrysler's works council. Plans to cut holidays and work breaks are ``not acceptable.''
   Union offer
   The works council, which represents employees at the Mercedes factories, has offered to forego a 2.79% wage increase scheduled for 2006 worth between 180 million and 200 million euros, he said. Negotiations will continue tomorrow.
   Employees are being asked to agree to other cost-saving measures, including fewer breaks, less comp time for working extra hours, less extra money for working afternoon and evening shifts, an increased work week of 40 hours for some employees and greater flexibility in the location of temporary workers and apprentices, Hubbert said.
   ``As we cut the 500 million euros, we want to avoid a situation where the workers would have less in their wallets,'' Guenter Fleig, the company's board member in charge of human resources, said at the press conference.
   German labor costs, the highest in the European Union, are prompting companies to relocate production to markets including Eastern Europe, India and China. Siemens AG, Germany's largest electronics company, agreed last month not to cut jobs or build a factory in Hungary after unions accepted a longer work week with no extra pay for some employees.
   [And how long do you suppose that no-jobcuts promise will last? It didn't last long for either Raytheon or Fidelity in Massachusetts.]
   Daimler move
   ``Volkswagen often threatens unions with job cuts to try to exert some pressure, but it seems like a new tactic for DaimlerChrysler,'' said Michael Rachor, a fund manager at Activest Investment in Munich, which manages about $69 billion in equities, including DaimlerChrysler shares. ``This seems new to me.''
   Workers in Bremen are more productive than those in the factories in the southern German state of Baden-Wuerttemberg, where DaimlerChrysler's headquarters are located, Hubbert said. Bremen employees work 1.6 hours more per week than those in Baden- Wuerttemberg, where workers get five minutes' break for every hour and have three more holidays per year, he said.
   The different working conditions in Bremen amount to an extra two weeks' worth of production at the same cost as in the southern Germany plants, he said. The company could produce 1,200 C-class automobiles per month in South Africa and 300 in Bremen without additional investment in the plants there.
   Southern Germany
   While the 500 million-euro savings are being sought throughout Germany, with a concentration in the Baden-Wuerttemberg plants, any reduction in jobs would come from Baden-Wuerttemberg, Fleig said. The company employed 115,000 workers in Baden-Wuerttemberg at the end of 2003, said Nicole Ladage, a spokeswoman.
   Munich-based BMW, the world's second-largest maker of luxury cars, is renewing its lineup of vehicles to attract new and younger customers and overtake Mercedes as the world's largest luxury carmaker.
   Mercedes-brand worldwide vehicle sales in June fell 1.8% from a year earlier to 92,000 units, according to figures the company released last week. BMW-brand models' sales rose 20% to 97,865 vehicles.
   In an annual survey of automaking efficiency released in the U.S. last month, DaimlerChrysler's Auburn Hills, Michigan-based Chrysler division had the biggest improvement, cutting two hours off its average vehicle assembly time to 26 hours, according to Harbour Consulting. The industry average was 24.1 hours.
   Chrysler, which eliminated 7,800 jobs last year, doesn't plan ``major'' net job cuts in 2004 as it adds positions for the first time since 2001, Thomas LaSorda, the division's chief operating officer, said in March. The U.S. unit cut the workforce to 93,000 workers in November from about 118,000 employees three years earlier, Chrysler Chief Executive Dieter Zetsche said in January.

5. European Economies: French Production Rises 0.2% on Car Output, by Francois de Beaupuy (fdebeaupuy@bloomberg.net) & Simon Packard (packard@bloomberg.net), edited by Heather Harris (hharris@bloomberg.net) & Chris Kirkham (ckirkham@bloomberg.net), Bloomberg News.
   French industrial production advanced for the third time in four months in May, led by gains in the output of cars, chemicals and metals.
   Industrial production rose 0.2% from April, when it dropped a revised 0.3%, Paris-based government statistics office Insee said. The advance was less than the 0.5% median increase forecast by 24 economists surveyed by Bloomberg News. Declines in production of energy and consumer goods such as clothing crimped the expansion.
   ``It confirms that growth isn't strong, that it's sluggish, with a sluggish industrial recovery,'' said Marc Touati, chief economist at Natexis Banques Populaires SA in Paris.
   Exports are helping boost Europe's third-largest economy, while consumer demand at home slows, executives such as Frederic Saint-Geours, head of PSA Peugeot Citroen's Peugeot brand, said. French manufacturers said in a survey last month they were counting on orders from abroad to lift production.
   ``The French market remains rather lifeless,'' said Saint-Geours in an interview Wednesday.
   [Then cut the workweek some more and spread the vanishing work more widely. France still has nearly double-digit unemployment.]
   ``There is a pick-up in other European markets,'' such as Spain.
   Europe growth
   Consumer spending on manufactured goods, which helped France grow at 0.8% in the first quarter, fell for a second time in three months in May. Unemployment remained near a 3 1/2-year high of 9.8% and theinflation rate rose to a 12-year high of 2.8%.
   The slower-than-forecast industrial production underscores how Europe's economies are lagging the U.S. and Asia. The 12 nations sharing the euro grew by 0.6% in the first quarter, compared with 1% in the U.S. and 1.5% in Japan. At 9%, unemployment in the region is the highest since 1999 and almost twice the U.S. rate.
   In Italy, which buys almost a tenth of French exports, industrial production stalled in May, failing to increase for the fifth month in six. Strikes by workers at Fiat SpA, the country's biggest carmaker, and Alitalia SpA, Italy's national airline, in May and June disrupted manufacturing.
   Italy's economy may grow as little as 0.9% this year, making it the second-worst performer of the dozen nations using the euro, according to the Paris-based Organization for Economic Cooperation & Development (OECD).
   Car production
   Production of cars and parts climbed 1.1% on the month and output of industrial components such as chemicals, metals and computer chips rose 1.2%. Makers of consumer goods scaled back production by 0.5% and energy output fell 0.2% in May from the previous month, while food manufacturers trimmed production by 0.2%, today's report showed. Industrial production accounts for a fifth of French gross domestic production.
   Peugeot Citroen, Europe's second-biggest carmaker, said last week first-half vehicle sales rose 3.2% as demand from outside its main Western European market increased. French exports climbed to a 20-month high in April and the customs department releases trade figures for May tomorrow. ``Our target for this year is to beat our record for annual car sales,'' which was 1.955 million units in 2002, said Saint- Geours. ``We're well on track to do that.''
   L'Oreal SA, the world's largest maker of cosmetics, last week said sales rose 7.5% in the second quarter, paced by a 22% increase in revenue from Asia and even faster sales growth in Latin America and Eastern Europe. In Western Europe, sales rose just 1.7%.
   The OECD last month raised its forecast for global economic growth, predicting an 8.6% in global trade this year and a 10% rise next year.
   `Confident' in growth
   ``We remain confident that the recovery of economic activity will continue,'' European Central Bank President Jean-Claude Trichet said at a conference in Paris on Friday. ``Economic growth outside the euro region remains strong and this should promote euro region exports.''
   The French economy may expand as much as 2.4% this year, up from 0.5% last year, Finance Minister Nicolas Sarkozy...said in the upper house of parliament Friday. The government last September based its 2004 budget on projected growth of 1.7%.
   Sarkozy is pressing to overhaul France's law mandating a maximum 35-hour work week. He wants people to have a choice of increasing earnings by working longer hours. Cutting payroll charges on overtime would help boost wages without raising labor costs, the finance minister said.
   ``Must the 35 hours be 'reformed' [our quotes]? The answer is yes,'' Sarkozy said in an interview with Le Monde Saturday. ``The French wish it, and France can't afford to avoid this debate.''
   [As long as it's a true debate and not a frog march.]
   French manufacturing production, which excludes energy and food output,rose 0.5% from April, today's report showed. Industrial production climbed 0.8% in the March-May period from the previous three months, and increased 2% from a year earlier.
   ``There's a momentum triggered by U.S. and Asian growth,'' said Bruno Cavalier, an economist at Credit Agricole SA in Paris, before the report. ``Businesses see enough demand to invest. Foreign demand will remain strong this year.''

6. Fed says area manufacturing stays strong, Kansas City Business Journal.
   Manufacturing activity in the Great Plains and Rocky Mountain region encompassed by the Tenth Federal Reserve District - including Kansas - remained strong in June, the Federal Reserve Bank of Kansas City reported Monday.
   The year-to-year indexes for production and shipments reached record highs, and expectations for future factory activity increased solidly, the Fed reported.
   The net%age of companies reporting year-to-year increases in production jumped from 35 in May to 50 in June, the highest reading in the survey's history.
   Activity at durable- and nondurable-goods producing plants rose strongly.
   Most other year-to-year indexes of factory activity also were strong in June.
   The shipments and workweek indexes both increased to new survey highs.
   The indexes for new orders, backlog and supplier delivery time were down only slightly from the record highs reached in recent months.
   Plant managers' expectations for future factory activity in six months increased solidly in June after having eased in May.
   However, the future hiring and capital spending indexes both eased slightly after having fallen by a larger amount in May.
   Besides Kansas, the Tenth Federal Reserve District covers Colorado, Nebraska, Oklahoma, Wyoming, northern New Mexico, and Western Missouri.

7. KC Fed district's manufacturing stays strong, Kansas City Business Journal.
   Manufacturing activity in the Great Plains and Rocky Mountain region encompassed by the Tenth Federal Reserve District remained strong in June, the Federal Reserve Bank of Kansas City reported Monday.
   The year-to-year indexes for production and shipments reached record highs, and expectations for future factory activity increased solidly, the Fed reported.
   The net%age of companies reporting year-to-year increases in production jumped from 35 in May to 50 in June, the highest reading in the survey's history. Activity at durable- and nondurable-goods producing plants rose strongly.
   Most other year-to-year indexes of factory activity also were strong in June. The shipments and workweek indexes both increased to new survey highs. The indexes for new orders, backlog and supplier delivery time were down only slightly from the record highs reached in recent months.
   Plant managers' expectations for future factory activity in six months increased solidly in June after having eased in May. However, the future hiring and capital spending indexes both eased slightly after having fallen by a larger amount in May.
   The Tenth Federal Reserve District covers Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and Western Missouri.

8. Popular items for the five-day/week worker, by Hoon-Koo Lee (ufo@donga.com).
   On July 12, a department store in Seoul displays items that have become popular as a result of the recently-introduced five-day work week. As public enterprises and large corporations begin active participation in the five-day program, sales figures for leisure and sports commodities, including hiking gear, inline skates, bicycles, and outdoor cookware, are thriving.

9. Retooled Europe may fuel investing, by Thomas Watterson, Christian Science Monitor.
   If you're wondering whether new investing opportunities still grow in old Europe, consider this: In March, Germany's largest electronics company, Siemens, threatened to relocate 2,000 jobs to Hungary to reduce labor costs. After long negotiations, however, IG Metall, the powerful union, gave in on what had been an immovable position: the 35-hour work week.
   Late last month, in exchange for a two-year guarantee not to relocate jobs and to invest over $36 million in new factories, workers agreed to work 40 hours a week with no additional pay. IG Metall's unprecedented concession may lead to longer hours not only in Germany but across Europe, analysts say. And that may signal the start of a restructuring that makes European stocks and the mutual funds invested there more attractive, says Ray Mills, portfolio manager of the T. Rowe Price International Growth & Income Fund.
   CONCESSION: Siemens' German workers agreed to work more hours for the same pay.
   European funds have already shown some strength over the past three months. They managed an average 1.2% gain, according to Lipper, in sharp contrast to Latin America (down 8.5%), China (down 9.3%), and emerging-market funds (down 9.5%).
   Now, if other European companies can - even in a limited way - follow Siemens' lead and restructure, there is a fair amount of potential for more growth, experts say.
   Reasons for optimism
   One of the main reasons for optimism is the expansion of the European Union from 15 to 25 countries, which took place on May 1.
   "That's a significant increase," says Gareth Lyons, a mutual-fund analyst at Morningstar. "I think it just makes all of the countries a little more competitive. Also, the mobility of labor makes it easier for companies to hire from other countries in Europe."
   Mr. Lyons also sees an improving attitude among corporate leaders. "There has been a trend over the last several years to focus more on shareholders," he says. For example, companies are becoming more open about their finances. They are releasing more information, and doing it more frequently, he notes.
   "Europe has been a little slow to move in this direction," he says. "But because the shareholder base is so international, there's increasing pressure on these companies. They're competing more in a global marketplace than ever before."
   Another positive factor: The valuation of many European companies - the price shareholders pay for the companies' current and projected earnings - are generally more attractive than in the United States and much of Asia, says Mr. Mills of T. Rowe Price. "Because there is a lot of potential there, the valuations are much more reasonable."
   Lyons agrees. "A lot of European multinational companies still trade at good discounts to US companies," he says. "We've seen certain companies become big players internationally, like Nestlé, SAP, and Vodafone. They're now global players, as are some of the telecommunication hardware players like Nokia and Ericsson."
   Among industries, Mills's exposure to European energy companies is larger than that of most of his peers. "I think oil prices are going to stay higher longer than people think," he says. Also, because more and more oil is coming from some risky parts of the world, including Venezuela, Nigeria, Kazakhstan, and the Middle East, he believes this will help keep oil prices relatively high. While that's not great news for consumers, it will help oil company stocks, he contends.
   Winners over the long run
   Among the many funds concentrating on Europe, Lyons cites the Franklin Templeton Mutual European and Vanguard European Stock Index funds as two that have turned in decent returns over the long run.
   At the same time, he believes well-diversified investors should not ignore Asia just because it's been slumping lately. "It's important to have exposure to the Asian economies," he says "Also, Japan can't be ignored. That market is starting to turn around."

10. Warm up to just chillin', BaltimoreSun.com.
    "WHAT IF THEY realize they could do without me?" "What if my boss thinks I'm not giving 110%?" "How could I afford it on my budget?"
    These are just some of the reasons people give for not using their vacation days. The average American worker takes a mere 10.2 days of paid leave, says the U.S. Bureau of Labor Statistics. Workers surveyed last month for the travel Web site Expedia.com said they likely would not take three days of allotted vacation time this year, up from two days last year. One-quarter of them said they would take no vacation at all.
    That's too bad, because their lives might depend on it. Middle-aged women who took vacations very infrequently (once every six years or less often) had eight times the risk of having a heart attack or dying of heart disease than those who took vacations more frequently, according to a follow-up on the Framingham Heart Study, started in 1948. And middle-aged men at high risk for coronary heart disease who took frequent vacations were more likely to live longer than those who didn't, according to a 2000 study published in Psychosomatic Medicine.
    No one's suggesting Americans follow the European model of 25 to 30 vacation days a year, merely that they use all the time they are owed. And ditch the cell phone and e-mail check-ins, too.
    On vacation, people spend less time watching TV and more time reading, according to decades of research by the American's Use of Time Project at the University of Maryland. They spend more time mending fences and reinforcing family relationships. Their brains have a chance to take a different path, perhaps to make those serendipitous leaps and eureka moments that lead to big boosts at work or at home.
    Still, taking vacation time is a tough sell in America's hardscrabble work culture, especially in a soft, employer-friendly economy. And more and more people feel too much pressure to relax: 38% of adults say they "always" feel rushed; in 1971, only 22% said they felt that way, according to the University of Maryland project.
    Parents find that hours spent shepherding their kids to events, then feeding everyone and maintaining a household and its budget leave only small pockets of time during the day for other pursuits.
    But those pockets can add up: Free time is on the rise even during the work week, the Maryland researchers have found. And even a minute or two of quiet contemplation can work wonders.
    Recognizing and taking advantage of cool-down time whenever one finds it, then, is not a luxury but a key to a healthier life.

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