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Timesizing News, August, 2010
[Commentary] ©2010 Phil Hyde, Timesizing.com, Box 117, Harvard Sq PO, Cambridge MA 02238 USA 617-623-8080


8/29-30-31/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments, despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. German official unemployment rate stable at 7.6%, 8/31 Agence France-Presse via AFP.com
    FRANKFURT, Germany — The German unemployment rate was stable in August at 7.6 percent of the workforce, official figures showed on Tuesday as the number of people seeking work edged slightly lower to 3.188 million people.
    "The clear rebound of the German economy continues to translate positively onto the jobs market," a labour agency statement said.
    The fall from an unadjusted figure of 3.192 million, the figure used as a public reference, meant the jobless rate was unchanged from July as Europe's biggest economy powers out of its worst post-war recession.
    The adjusted rate used by economists was also 7.6 percent in August, but the corresponding number of unemployed declined by 17,000 people, the federal labour office said.
    That was slightly below a forecast decline of 20,000 compiled by Dow Jones Newswires, but nonetheless showed continued improvement as firms rehire to meet stronger foreign and domestic demand.
    It was the 14th monthly decline in a row and left the unemployment rate at close to a two-year low point, Capital Economics senior European economist Jennifer McKeown noted.
    "While unemployment is still rising elsewhere in the euro-zone, the German labour market has been particularly resilient, thanks initially to the Government's 'Kurzarbeit' subsidy scheme, but perhaps now reflecting the underlying economic recovery," McKeown said.
    The German government had subsidised shorter working hours to help companies make it though the global economic downturn, but most companies have now put staff back on full-time hours.

    Germany posted record quarterly growth in the second quarter of 2010 thanks to strong exports and a pick-up in domestic consumption underpinned by improving job prospects.
    German Economy Minister said in July that the number of unemployed could soon fall below three million.
    "The impressive performance of the labour market can only become a real success story if it eventually leads to a pick-up in private consumption," ING senior economist Carsten Brzeski said.
    "All ingredients are in place for this to happen now."

  2. HR European news roundup – August 2010 - A selection of the latest European HR news from the Federation of European Employers (FedEE), 8/29 (30/8) Expatica France via expatica.com/fr
    LONDON, England - EU: Demographic trends over the next 20 years
    Demographic projections carried out by the European Commission's statistical agency 'Eurostat' suggest that the European Union's (EU) population will increase by 5 percent over the period 2008-2030. Most western European states will increase their populations, but declines will occur in Estonia, Latvia and Lithuania, as well as in many regionswithin Bulgaria, Germany, Hungary, Poland, Romania and Slovakia.
    The age profile of populations is likely to change significantly in all EU regions. The median population age across the EU as a whole was 40.4 in 2008, but it will rise to 45.4 by 2030 and almost a quarter of regions will have a median age higher than 48 years. The lowest median age (below 38.8 years) will exist in the IIe de France, Brussels, southern and eastern areas of the Irish Republic, and the UK regions of Greater London, Greater Manchester, the West Midlands, West Yorkshire and Northern Ireland.
    Germany: Economic growth outstrips the rest of Europe
    Business confidence in Germany in July reached its highest point in three years on the back of a 2.2 percent rise in Gross Domestic Product between Q1 and Q2 0f 2010.
    Much of Germany's success is based on its strong export markets and its labour market initiatives. Major improvements have been made in labour flexibility during recent years and although the short-time working scheme (Kurzarbeit) has been a costly investment by the state it has helped industry to retain its core workers.
    [Not as costly as USA's failure to preserve its consumer base and employment basement - but the U.S. has so much more self-anesthetizing news and media chauvinism.]
    Trade unions have also focussed on job security rather than preserving real income levels.
    [Focus on full employment however short a workweek it takes, and market forces will look after real wages and income levels as employers compete against one another for good help.]
    Much uncertainty, however, remains and there is a real danger of the German economy overheating. Much of its export-led growth has been due to strong demand from China and trade unions are now switching their attention to wage demands. Negotiations are due to commence in the steel industry on 27 August and trade unions are unlikely to settle for less than a 3 percent rise over the coming year. A pay demand of 5 percent has recently been submitted ahead of negotiations in the tobacco industry and whatever deal is reached there will have an impact on the entire food and drinks sector.
    [Higher domestic wages, stronger domestic spending and greater independence from exports.]
    Netherlands: Fines imposed on individual executives
    The Chairman of the Netherlands Competition Authority (NMa) has warned employers that in future, company executives may be fined for operating cartels and in other cases where there is an abuse of market power. Hitherto it has only been companies that have been subject to financial penalties, but a facility has existed for some time to impose fines of up to EUR 450,000 on executives found to be responsible for anti-competitive behaviour.
    The imposition of criminal penalties upon individual executives is currently being considered by the lower house of the Dutch parliament. However, the NMa chairman would prefer the option of disqualifying errant top executives from holding company directorships and further developing the clemency option to encourage whistleblowers.
    Other European news in brief
    Croatia
    Employees in Croatia were paid, on average, HRK 7,662 (EUR 1,056) gross per month in May 2010. This translates to an average net pay level of HRK 5,277 (EUR 727).
    Finland
    Agreement has been reached between the Federation of Finnish Technology Industries and The Finnish Metalworkers' Union on minimum sectoral pay increases covering the next two years. The overall increase will be 1 percent, with an additional 0.5 percent payable to individuals on a merit basis. The increase will be payable from October 2010, after which further negotiations will take place during the summer of 2011.
    Irish Republic
    The Irish High Court has overturned an important Labour Court Judgement on fair wage payments. The case concerned the employment of private-sector employees alongside publicly funded employees. Under the terms of an EU Directive (97/81/EC) part-time workers are entitled to be paid effectively the same hourly rate as full-time workers. However, the court found that the point of comparison for pay purposes were other private sector employees. Thus, the fact that publicly funded employees received higher pay and additional benefits than their privately funded counterparts was not considered a relevant factor for setting the pay, terms and conditions for privately employed part-time workers.
    Norway
    Growth in the Norwegian job market is reaching 2007 levels in some sectors. During the second quarter of 2010 the number of unfilled vacancies rose by 64 percent in tourism, 47 percent in oil gas and offshore operations and 46 percent in IT and telecoms. However contraction took place in two sectors-- banking and finance (-9 percent) and construction (-3 percent).
    Poland
    In July 2010 companies in Poland paid their employees an average gross monthly salary of PLN 3,433.32 (EUR 870). Only PLN 14 (EUR 4) of this was due to payouts under profit sharing schemes.
    Russian Federation
    The Russian ministries of health and finance are currently drawing up proposals for raising the state retirement age. The plan to be presented to the government later this autumn will provide a phased increase in the retirement age, bringing the minimum age up to 60 years for women and 65 for men.
    United Kingdom
    Average weekly earnings in the UK's private sector were GBP 420.00 (EUR 513) in June 2010. This was 1.2 percent higher than in June 2009. Over the last year the biggest increases in weekly earnings were in manufacturing (+3.5 percent) and the public sector (+2.9 percent).
    The number of people registering with the UK's National Apprenticeship Service (NAS) rose from 22,550 in April 2010 to 41,940 in July 2010. The principal driving force for applications has been the high unemployment rate amongst 18-24 year olds. There were 707,000 unemployed people in this age group in May 2010 and their unemployment rate was over twice the national average.

  3. Less Work, More Life, by John de Graaf, 8/30 Progressive.org (Sept issue)
    [Way to go, John!]
    SEATTLE, Wash. - Shorter working hours—the roses of “Bread and Roses” fame—are part of a long and progressive American tradition. A famous Dorothea Lange photo from 1937 shows a National Association of Manufacturers billboard on a hardware store. It reads: WORLD’S SHORTEST WORKING HOURS—THERE’S NO WAY LIKE THE AMERICAN WAY! A bill passed the U.S. Senate in 1933 that would have made the official workweek only thirty hours long. Presidents from FDR to Richard Nixon called for reducing working hours.
    In our time, feminist and women’s groups, including MomsRising.org and the National Partnership for Women and Families, have led the way in promoting work-life balance policies, demanding paid family leave, paid sick days, and flexible hours. Congressman Alan Grayson of Florida has introduced a bill calling for mandatory paid vacations, guaranteed by law in almost every country. The United States joins Burma and a handful of others that don’t offer this basic benefit.
    . . . . We seem faced with a choice between environmental disaster or massive unemployment. Unless, of course, we slow down by reducing working hours and sharing the work. Half a century of economic growth has not increased our happiness. More free time might well do so. It will certainly improve our health.
    Americans will exercise more, sleep more, garden more, volunteer more, spend more time with friends and family, and drive less. We need full employment, but not by returning to the unhealthy overwork of recent decades. . . .
    Progressives would do well to advocate reduced working hours instead of demanding unsustainable growth. . . . Reducing work hours and sharing available work is essential for our families, health, economic security, and the environment.
    [More compelling than this plea-for-mercy type of argument is the fact that if you can only get one of labor's two traditional goals, higher pay and shorter hours and you get higher pay, you wind up with neither because you're just tacking an unsustainably high price on a surplus commodity, yourself, but if you can only get one and it's shorter hours, you wind up with both because you've cut the labor surplus and harnessed market forces on your side in raising the price of a commodity that's become scarcer, namely labor hours relative to currently demanded employment hours. No more 5000 resumes coming in for every 5 job openings.]
    It’s time to get on with it.
    John de Graaf is a documentary filmmaker, director of Take Back Your Time (www.timeday.org), and co-author of “Affluenza: The All-Consuming Epidemic.” His new book, “What’s the Economy For, Anyway?” will be published by Bloomsbury Press in 2011.
    This is an excerpt from the cover story of The Progressive's September issue. To read the entire story and to subscribe for a year's worth of The Progressive for $14.97 (a huge discount!), simply *click here.

  4. Kurzarbeit, "living-dead capitalism," and the future of the Left, by Greg Evans, 8/30 blitzy.cz
    {For this article only, Phil Hyde's comments are in parens { }, not the usual square brackets [ ], which this article uses frequently for its own purposes. (This article threaded back into archives on 8/26/2012.)}
    PRAGUE, Czech Republic - The announcement by the Czech Social Democratic Party (CSSD) last summer that, if elected, they would institute a policy of kurz-arbeit (“short-work”) was a rare instance of a Czech socialist party publicly embracing the concept of a shortened work week, an idea which has been floating around and experimented with in varying degrees in Western Europe for a number of years now, especially in France. Even so, it was a tentative embrace. Kurzarbeit is, true to its successful German model, a short-term, recession-related measure in which a workplace, instead of laying off some workers while the rest continue to work full-time, have all the workers work a three or four day work week (the resulting difference in pay being made up, if the worker agrees to undergo job training on their days off, by the government).
    But if the influential, and recently deceased, French social philosopher André Gorz was correct, the reduction of the workweek is not just a short-term, recession-related issue for the European socialist parties but the key to their survival, and indeed the survival of the Left in general.
    {And Left shmeft, it's also key to the survival of the Right (Lever Bros., Kellogg's, Filene's, Nucor, Lincoln Electric, SAS, VW, Merkel...) because it's actually a centrist common-sense strategy that's the key to the survival of any and all economies in the robotics age.}
    The reason? The increasing automation that we experience all around us -- on assembly lines, in banks, even when we call a company for information – is symptomatic of a radical and profound change in the economic and political landscape, one which the Left, trapped in the inertia of its own mental categories, has completely failed to recognize.
    {Oh I LOVE it! But unfortunately, it's not just the Left that's trapped in the inertia of its own obsolete mental categories. It's EVERYONE. People just don't realize how far mechanization-automation-robotization has gone. Even my mother-in-law is still parroting the old myth that technology creates more jobs than it destroys. And it's not technology itself that's doing the destroying - it's the general downsizing response to technology that absolutely needs to be replaced by timesizing = cutting the workweek instead of cutting the workforce and all those dependent on the workforce, both together constituting the consumer base and providing the basic fast and huge monetary circulation that's the basis of all economic dynamism and growth or even just survival. By downsizing in response to technology, we have set out on the self-defeating path of trying to get upsizing (growth) by downsizing - it ain't happening and it ain't gonna happen, so we definitely need to move on from temporary bandaid Kurz-arbeit to permanent sustainable Timesizing. Don't get it? Check out "Millions of unemployed face years without jobs - Economists fear recovery will leave more behind than in past recessions" on 2/21-22/2010 (#1).}
    The crux of Gorz’s argument is that the chronically high levels of unemployment that Western Europe has been suffering from since the 1970s -- and which have since deepened and spread to the former East Bloc countries and now the United States -- is not indicative of a) a series of short-term economic problems, b) the failure to apply the proper neo-liberal policies to free up the market economy and thereby create jobs, or c) the failure to apply neo-Keynesian policies to stimulate and regulate the economy and thereby create jobs. Rather, it’s indicative of the disintegration of a whole economic system – i.e. capitalism in its classical sense – and of the fact that this disintegration has broken the “continuity of two centuries of history, marked by the expansion of industrialism and the spread of commodity relations.” The failure to solve the problem of high unemployment (even with extended schooling, early retirements, sabbaticals, and generous vacation benefits helping to reduce the number of workers on the payrolls) isn’t then, according to Gorz, any more surprising than was the failure of the communist governments of the former East Bloc to solve their fundamental economic problems. Which is to say, just like them, we are trying to reform or revive an economic system that is, in essence, “dead.”
    Given the seeming dynamism that the post-1989 changeover has brought to the economies of the former East Bloc countries, Gorz’s contention that we are now living under a “living-dead capitalism” might not seem, at first glance, particularly evident. But we must not, if we are to understand Gorz’s argument, confuse an economy based on the sale of consumer goods and fueled by short term speculative capital (often invested in the service sector) – the one we’ve been living under and calling capitalist -- with a true capitalist economy, which is to say, an economy fueled by long-term capital investment in industrial production.
    According to Gorz, capitalism in its true sense started to disintegrate in the West in the aftermath of World War II thanks, in part, to its very success. It had, that is, “ceased to be propelled by a spontaneous dynamic of demand, reliant on what Marxists have always called ‘basic needs’: those whose non-satisfaction is synonymous with destitution.” Instead, with the most basic needs of its own populations having been met, it was faced with the need to create a “subject for the object”, of a demand for the supply. “From the mid-1950s onwards," Gorz continues, "the centers of capitalism were faced with the necessity to produce consumers for their commodities, needs to match the most profitable products. Following its spontaneous, capitalist dynamic, production had ceased to correspond to preexisting needs: in as much as such needs persisted (notably in housing, sanitation and public health) their satisfaction was not profitable, or not sufficiently so, for capital. And, conversely, the most profitable products did not match unsatisfied needs: these needs had to be created .” [footnote 1]
    Capitalism, then, was no longer operating according to its classical principle that a need leads to a demand which leads to a product being produced to meet that need. Instead, a technocratic superstructure developed that oversaw the advertising campaigns, urban planning, and other forms of social engineering necessary to create new needs, and the dynamic of need was no longer spontaneous. This resulted, during the 1960s, in late capitalism's golden age, in which rising wages and levels of consumption combined with full employment to create an era of prosperity that is now the ideal to which many party political programs in the West strive to return, and in the East strive to achieve.
    But this very prosperity soon led to a further crisis, as rising wages and full employment caused a falling rate of profit -- especially once the extra needs that the technocracy had created were largely satisfied and supply began to outstrip demand. Employers first responded to this in the late 1960s by trying to increase the productivity of their existing work force with a speed up of work, but when the workers successfully resisted this neo-Taylorism with sabotage, wildcat strikes, and high absenteeism, “the big companies chose headlong flight: setting up subsidiaries in the Third World, launching new product lines, investing in productivity and capacity.”[p. 11] And, with the coming of the digital revolution, the “investing in productivity and capacity” increasingly meant automation. This, according to Gorz, is when another pillar of capitalism -- the link between labor, the creation of value, and consumption -- began to collapse. Which is to say: the increasing automation of services and industry undermines “the basic premise of industrial capitalism itself. This premise – on which the concept of ‘value’ is based and which gives rise to the ‘law of value’ that, for Marx, was the cornerstone of capitalist reasoning – is that the wage pays for labour to meet the needs which labor generates in those who supply it.” [p. 44]
    Hence, “living-dead” capitalism. For, if the number of workers who create value is continually decreasing and the majority of people therefore work in the service sector, where they are, in essence, allotted a share of the earnings from the increasingly automated factories; and if a technocratic super-structure attends not only to the distribution of these earnings, but the creation of new needs, so that the factories can continue to produce consumer goods – can we still call this capitalism? Except, that is, in the broadest sense that the corporations are privately owned?
    For the Left this living-dead capitalism has profound consequences in that the increasing automation is making impossible the traditional socialist dream of full employment (rigidly defined as five 8-hour work days per week for all who want or need it), and therefore the possibility that they can successfully institute programs, upon being elected to office, to make this dream into any kind of reality. The logic of this traditional approach was well-stated by Stanislav Grospic, member of parliament for the Communist Party (KSCM) when, in a recent interview in Hálo noviny, he stated that "it is necessary to back long-term state investments, especially into the transportation infrastructure, if need be also into the energy infrastructure, because this will create jobs. It is an absolute mistake that our current government contemplates cutbacks or the elimination of such funding. At the same time it is necessary to back the sciences, research and development, and education. These are driving forces which can maintain and potentially even increase employment. These measures will not only have a short-term effect, but also a long-term one, because they will create new jobs."
    But Gorz would counter that this approach, which was a logical and effective response to the Great Depression, will not be similarly effective in solving the problems of unemployment, underemployment, and marginal employment in our current economic crisis.
    To see why we need go no further than the German province of Saxony. In 2004, after 14.1 billion euros of investment, including massive government subsidies, the region's 300 now fully modernized chemical makers were producing about the same volume of chemicals as the region had produced in 1989. The problem, from the traditional Left’s point of view, was that they were doing it with a tenth of the employees. And this trend is not new, nor by any means confined to the modernization of former communist industries, as is shown by a study quoted by Gorz (F. Vester, Ballungsgebiete in der Krise ) which showed that DM 1,000 million invested in industrial plants would have generated two million jobs in 1955-60 and 400,000 jobs in 1960-65. From 1965-70 the same sum would have destroyed 100,000 jobs and from 1970-75 would have destroyed 500,000 jobs.[p. 30] Or, as Allen Sinai, chief global economist at the research firm Decision Economics, recently told the New York Times regarding the rising tide of unemployment in the United States: “American business is about maximizing shareholder value. You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”
    Taking this process of automation to its logical and ultimate conclusion, as Wassily Leontief, the Nobel Prize winner for economics in 1973, did in the following citation, helps illustrate the conundrum that the Left faces, especially regarding its need for a more militant and imaginative incomes policy :
    Adam and Eve enjoyed, before they were expelled from Paradise, a high standard of living without working. After their expulsion they and their successors were condemned to eke out a miserable existence, working from dawn to dusk. The history of technological progress over the past 200 years is essentially the story of the human species working its way slowly back into Paradise. What would happen, however, if we suddenly found ourselves in it? With all goods and services provided without work, no one would be gainfully employed. Being unemployed means receiving no wages. As a result until appropriate new income policies were formulated to fit the changed technological conditions everyone would starve in Paradise.
    Though we are still far from the scenario of full automation described by Leontief, automation has already become prevalent enough so that we can now see the first glimmerings of its realization, especially in the chronic problem of unemployment. And, by not addressing this issue directly, the Left is helping to ensure that we will, in Gorz’s words, “Exit Right” in one of two forms. The first form might be called the Thatcherite, or neo-liberal, form, in which, as automation abolishes workers – and thereby abolishes buyers – we will see the law of the market work effectively “and the relative prices of automation’s products fall sharply – towards a value equal to the maintenance, reproduction and operating costs of automated plant and equipment. The wage bill becomes negligible, the workforce tiny. Permanently employed workers become a narrow social stratum, alongside vast numbers of unemployed.” [p. 31] Though we have, especially in the USA, seen a tendency toward this model in cities like Detroit and Youngstown, Ohio, where large sections of the population live in deep poverty in the shadow of decrepit industrial and manufacturing plants – Gorz believed that the “monopolies and cartels [would] prevent massive price-cutting, and the products of automation (like the sale of ‘non-material goods’) [would] bring in huge profits. These profits, however, prove impossible to reinvest (that is, to accumulate as capital) because production requires less and less capital and distributes very little in wages, and thus does not generate expanding effective demand. So a large proportion of profits will have to be redistributed to enable commodities to be purchased, and to prevent the economy from collapsing.” [footnote 2] Thus profits become a revenue stream and consumption a duty to keep the economy going, a reality reflected in George W. Bush’s statement in the wake of 9/11 that the most important thing Americans could do was to keep going to the mall and buying consumer goods.
    The Right, backed by the corporations, will be quite happy to have us continue to live under the incomes policy that they are, de facto, determining, and which is entirely to their benefit. The Left’s current approach, in which they continue to deny the need for a radical restructuring of the current incomes policy, means that they will essentially become an accomplice to the “Exit Right” scenario described above. Specifically, their energies and talents will be consumed in fighting neo-liberal elements to ensure that the working-class will be allowed to endure its increasing levels of unemployment with some dignity (i.e., that they be granted endless re-training programs leading nowhere, extended unemployment benefits, continued health insurance, etc.).
    In this context the CSSD’s kurzarbeit is nothing more than a tentative acknowledgement that there might be some other solution to the unemployment problem besides the current Left program of striving for the (no longer realizable) goal of everybody working a forty-hour work week; however, besides the fact that it is very much a temporary measure for the economic crisis, one of the key points of the program, which states that “the employees shall receive training in their days off and thereby get 100% wages while at the same time improving their qualifications, and with that their value in the marketplace,” shows that the CSSD remains trapped in the logic of living-dead capitalism.
    The same could be said for the Green Party (SZ) who, as a part of their program “The Green Path from the Crisis,” propose “twenty successful and helpful measures -- insulation of homes, electrical supply, recycling of waste materials, public transit, and schooling -- which would create 70,000 new jobs...” to which, however, they quickly add, “in the Czech Republic there could soon be almost half a million people without work thanks to the economic crisis,” so clearly the problem of unemployment is in no way solved by these green jobs. What then follows is the standard litany of proposals, more investment, better training, more education, decent unemployment benefits, respect for the unemployed, and some job-place flexibility to allow parents to better care for their children. But, in spite of the fact that “the Green Party mainly wants to work on the reduction of long-term unemployment,” there isn’t a word from the party that pursues “policies with a view to the next fifty years, not just the next five months and from election to election,” about a reduction in the workweek, not even a mention of kurzarbeit. So with the Green Party it would seem that living dead capitalism – though with an ecological tinge – would be solidly in place for at least another half century.
    Nor does the Communist Party (KSCM) succeed in going very far beyond this traditional left litany of solutions. While it’s true that, in another interview, Grospic indicates that the KSCM at some point proposed a permanent 36 hour work week at full time pay, this is not mentioned in the KSCM's on-line and campaign literature. There, everything points to that happy land where everyone can work full-time (that is, five full days a week even if, perhaps, they are proposing that it be a seven instead of an eight hour day). Gorz, one imagines, would probably have criticized the KSCM for not fully absorbing the implications of Marx’s Grundrisse , especially in regards to the nature and implications of technological change. Especially since there is an interesting article about just this topic on their website, in which František Neužil writes that "The process of liberating living labor from the control of dead labor, when automatization of production has, for example, the form of a flexibly roboticized industrial system, has for Marx not only a productive dimension, but a social-economic one as well… In the Grundrisse Marx sketched a perspective of the evolution of civilization, in which free time becomes a measure of social wealth and the growth of free time can be, from the point of view of the direct production process, considered as the production of fixed capital, in which this fixed capital is man himself."
    Similar to the Social Democrats (CSSD), the Czech Trades Union Congress (CMKOS) backs kurzarbeit , but then neglects to mention either it, or the general idea of a shorter workweek, in their official program ("Program of CMKOS for the period 2010 – 2014"). Instead they write, for example, that "CMKOS will push for policies and measures which will back economic growth by way of innovation and an increase in the competitive efficiency of the economy, which will aim at a lowering of unemployment, more jobs and a growth in the real income of the populace,“ or “it will demand that the state will increase and expand requalification programs so that it will become the engine for an active policy of employment and improve the employability of job applicants and the skill and knowledge of employees.”
    So none of the parties offer what Gorz would consider the necessarily transformative vision that offers an “Exit Left” solution. What would such a solution entail? Broadly speaking, Gorz argues that the Left must rediscover its roots in the early worker’s movement – and many of the ideas espoused by that movement --, as “we are now reaching precisely the point that was foreseen by the first prophets of post-capitalism [e.g., Ricardo and his followers, and later Marx] when, beyond bourgeois society and nascent industrial capitalism, they predicted a different social order – one where the efficacy of technology would abolish work, the logic of capital and commodity relations, to reveal ‘disposable time’ as the measure of ‘true wealth.’” [pp. vi-vii]
    Gorz, writing in 1983, points to the fact that the citizens of the 1980s could, thanks to the increased automation of production, all essentially work part-time if they lived at the consumption levels of the 1960s. And, by part-time, we are talking about under twenty hours a week. Or, to take a more recent and even more dramatic example, since the Saxony chemical plants mentioned above now produce the same amount as they did in 1989 but with only a tenth of the workers, the same could therefore be done with the same number of workers as were there in 1989 working only a tenth as much. Of course here the implications regarding the “liberation from work” become quite radical. And even if we grant that these two examples are, by themselves, rather reductionist, they are nonetheless illustrative of the transformative potential that automation offers.
    Which is to say that we could all work part-time and live quite comfortably. And to anyone who fashions themselves a Leftist (CSSD, KSCM), trade unionist (CMKOS), or visionary of a better society (Green Party), and whose reaction to such a scenario is to dismiss it for technocratic reasons or because they are appalled at the thought of what the slovenly common man or woman would do with all that extra time, then they should consider the possibility that they are a contradictio in adjecto (that is, in this context, a progressive without belief in progress, or at least in any more progress). There are, of course, problems and complications to such a libratory scenario, and how Gorz (and others) address these would have to be the topic of another article; but if the only alternative to pushing for such a scenario is for the Left to “wait, forlornly, for the future to give us back the past, for the economic ‘revival’ or ‘recovery’ that will provide full employment, for capitalism to rise from its death-bed, for automation to create more jobs than it eliminates,” it might behoove the Left to rediscover its visionary roots in the early worker's movement.
    Footnotes:
    [1] Gorz, André, Les Chemins du Paradis (Galilée, 1983), the citations are from the English translation: Paths to Paradise: On the Liberation From Work (Pluto Press, 1985)
    [2] In part, I believe, this would happen through massive, speculative investment in the service sector, in which investors try to find new market opportunities. As an example, this is apparently what happened in Tucson, Arizona, where there are 23 tanning salons even though the sun shines more there in December than it does in the Czech Republic in July. Therefore we can say, in the language of "postindustrial" capitalism, that when somebody found and took advantage of this market opening and started offering this absurd and unnecessary service, they "created" wealth and jobs.


8/27-28/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments, despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Holland provides valuable lesson on temp workforce - Under the Dutch system, temporary doesn't equal disposable, by Natsuko Fukue, 8/27 JapanTimes.co.jp
    AMSTERDAM, Netherlands (alias Holland) - Mijke van Welsenes, a 38-year-old government official in The Hague, cut back to working part time when her son was born six years ago.
    "It was possible because many women and men at work shifted to part time" after having a child, she said.
    But despite working four days a week, van Welsenes holds the same status as a regular worker and makes the same hourly pay, though it's for 32 hours a week instead of 40. She gets every benefit full-time workers receive.
    Regardless of working part time, full time or on a temporary basis, workers in the Netherlands feel secure and protected by the social safety net even during a recession, she said, thanks to the laws that guarantee equal treatment.
    [This is GRRRREAT for domestic consumer confidence and spending - and cuts Dutch dependence on imports and the nitwits elsewhere who are destroying their consumer bases via their employment basements!]
    Some labor policy experts say Japan, where nonregular workers have to work in unstable conditions, can learn from the Dutch approach called "flexicurity," a combination of flexibility and security.
    Numerous companies ln the Netherlands utilize the system, considering it a mechanism to stay competitive.

    For example, at Fujifilm Manufacturing Europe in Tilburg, about 450 to 500 of its 795 employees are factory workers, 14 hold temporary positions and 128, mostly women, work part time, according to President Peter Struik.
    While Japanese companies hire temp workers to reduce costs, Struik said that is not the case in the Netherlands.
    "It's expensive to hire temporary workers" because they are protected by Dutch law, he said. "Cheap labor is difficult in Holland.
    [Why? You actually value one another?] We have to do it differently" [why "have to" - what's the compulsion? your historic "man against the sea"?] to stay competitive with factories in Japan, the U.S. and China.
    What the company tries to do instead is enhance internal flexibility, Struik said.

    [The prevailing idea in many other countries that you can treat like disposable surplus alias garbage the very fount and source of your business, people - whom you hope will all buy from you, is crashing. Holland has found an unusual solution = beef up part-time (bottom up). Timesizing simply redefines full-time downward and requires conversion of overtime into jobs (top down). So Anders Hayden's generalities about the Netherlands years ago were true. Thanks again, Anders! (Folks, buy his book, *Sharing the Work, Sparing the Planet.)
    We hunch that the Dutch bottom-up approach is not easily reduplicable elsewhere because it depends on the unusual historic solidarity of the Dutch: small lowland nation against the sea, small nation against giant Spanish Empire, little old Dutch East India Co. against big new British East India Co., two little Boer free states against several big British African colonies and the entire British Empire... "Circle the wagons!"]
    "If you want to implement flexibility, people should be able to work in a different location of our factory," he said, noting that keeping skilled people keeps a firm competitive.
    Fujifilm in Holland also offers training for workers that is useful both inside and outside the company to increase their marketability, so they can find a job easily when they have to leave Fuji, he said.
    By contrast, a sense of security is a luxury not afforded to many Japanese flex workers. After the global financial crunch hit Japan in winter 2008, thousands of temporary factory workers lost their jobs. Many were thrown out onto the street because their layoffs included losing their company dorm housing.
    Many factory workers were doing the same jobs as regular workers, but their wages remained low and they were kept as disposable ranks for years even though the Worker Dispatch Law states that firms have to offer an open-ended contract after keeping temps on for three years.
    But in the Netherlands, flex workers are by and large not treated as a cheap disposable workforce, experts say.
    For example, based on Holland's collective employment agreement, temporary workers should at least earn the minimum wage, which is equivalent to ¥877 per hour. But in Japan, where the minimum wage differs by prefecture, the national average is just ¥713, the Health, Labor and Welfare Ministry said.
    According to policy adviser Leonie Oosterwaal at ABU, the Dutch association of temporary worker agencies, only 5 percent of agency workers get the minimum wage. The rest make more.
    Still, there are seasonal workers at Dutch farms who are exploited, said Laura Spangenberg, ABU public affairs consultant.
    "Workers from Bulgaria or Romania accept jobs at a lower rate, but they never complain because they're working illegally," she said. "They're afraid of losing their jobs."
    But Oosterwaal said Dutch law stipulates that temp agencies must pay the same wages that the contracted companies give their employees performing the same function.
    And thanks to the Flexibility and Security Act enforced since 1999, temporary workers in Holland are automatically eligible to sign an open-ended contract with their agency after terminating three fixed-term or 36-month contracts.
    Kanta Owada, a professor at Shiga University specializing in the Dutch and French labor systems, said the automatic shift to full-time status stabilizes the employee's work situation. "It will be an advantage for companies," he said.
    "Hiring more temp workers may be beneficial for companies, but chasing short-term profit will reduce worker motivation and ruin their livelihood," Owada said.
    According to the labor ministry, more than 70 percent of 28,783 nonregular workers in Japan who responded to a questionnaire in 2007 said they were earning less than ¥200,000 a month. And the number of nonregular workers is increasing. They made up only 22.8 percent of the labor force in 1998 but 33.7 percent in 2009, figures from the Internal Affairs and Communications Ministry show.
    Criticizing the current situation for temporary workers in Japan, Owada said Japan should also implement a law that enables temp workers to automatically have an open-end contract after several continuous fixed-term contracts.
    Equal wage levels for all workers engaged in the same function would also provide a sense of security, he said.
    The Netherlands managed to implement equal treatment, including wages, among workers by introducing the Working Hours Adjustment Act in 2000, which bans discriminating against workers depending on their hours.
    Owada argues that the Japanese concept of equality is just a formality and only applies to equal opportunity, thereby neglecting the low income of part-time and temp workers.
    But he said the labor ministry began to acknowledge in its latest white paper that the disparity between regular and temp workers has accelerated due to this inequality.
    "Finally they are aware the reform is necessary" to provide equal treatment to workers, he said.

  2. Finally, the housing meltdown makes sense, by Martin Wolk, 8/27 msnbc.com via lifeinc.msnbc.msn.com
    Our friends at ProPublica have come up with the latest in a series of investigative stories shedding light on the obscure world of Wall Street derivatives that were at the heart of the housing bubble and collapse.
    The story, by investigative reporters Jake Bernstein and Jesse Eisinger, focuses on how Merrill Lynch and other financial outfits “created fake demand” to prop up the market for so-called collateralized debt obligations, or CDOs.
    Trying to understand the “daisy chain” transactions that lined pockets on Wall Street -- and made it easy to get a mortgage – can be some pretty heavy slogging. But just as they did with their previous investigation into a hedge fund called Magnetar, ProPublica and their partners at NPR’s Planet Money leaven the mix with comedy.
    In the Magnetar case, the producers behind the story commissioned a pretty hilarious Broadway-style song, “Bet Against the American Dream.”
    This time around, there is a great comic strip explaining how CDOs work, along with this very funny video from Auto-Tune the News, titled *“Bankers’ Song – We Didn’t See It Comin'." Suddenly, it all makes sense.
    Martin Wolk is msnbc.com's business editor.
    Discuss this article
    archangel 3:16 [ie: John 3:16?]
    Mortgages were made easier to get by allowing lending houses like countrywide greater access to the market and keeping the Fed rates extremely low. The derivative market while partially to blame more because of poor oversight and false grading of mortgage bundles was not the driving factor behind the melt down. Slow downs in the market causing employers to cut hours and jobs took people living paycheck to paycheck over the cliff into default on mortgages that they had no business receiving in the first place. People leveraged on their homes in excess of 100% value because of home equity prior to the deflating of home prices bailed on mortgages rather than pay them. The short sell and the default became regular occurrences driving the number of junk lending instruments in play to catastrophic numbers. We are still bailing out Fannie and Freddie from all the junk debt instruments they were forced to buy to keep the toilet from flushing. Huge debt run up by irresponsible consumers, over inflated housing prices, and credit to easy to get were the cause for the melt down. Now that the banks are tightening up, things should ease to a more stable position eventually but in order to keep the economy running Washington, not the Fed, needs to do something about the high unemployment rates aside from looking astonished and saying they miscalculated.
    ...


8/25-26/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments, despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. "Were You Born on the Wrong Continent?": America's misguided culture of overwork - Germany's workers have higher productivity, shorter hours and greater quality of life. How did we get it so wrong? by Alex Jung, 8/25 Salon.com
    Since the start of the recession, the number of unemployed in the U.S. has doubled. Those who are fortunate enough to still have jobs are often working longer hours for less pay, with the ever-present threat of losing being laid off. But even before the recession, American workers were already clocking in the most hours in the West. Compared to our German cousins across the pond, we work 1,804 hours versus their 1,436 hours – the equivalent of nine extra 40-hour workweeks per year. The Protestant work ethic may have begun in Germany, but it has since evolved to become the American way of life.
    According to Thomas Geoghegan, a labor lawyer in Chicago and author of *"Were You Born on the Wrong Continent?: How the European Model Can Help You Get a Life," European social democracy – particularly Germany’s – offers some tantalizing solutions to our overworked age. In comparison to the U.S., the Germans live in a socialist idyll.
    [Socialism is a burgeoning maximum of stifling peripheral controls. Adjusting working hours downward as we adjust worksaving technology upward is on the path to the opposite = a stable minimum of liberating central controls, ideally just one, a single all-sufficient control = the Holy Grail of economic designers, so well designed and centrally positioned in the “body economic” that it can supersede all other regulations (since all modern governments are 66-75% makework, pork and patronage, trying to make up for the decades of jobs lost to waves of tech productivity vs. frozen pre-computer work weeks). “Wartime prosperity” happened because war removed all those wage-and-market-depressing surplus working hours the stupid way = killing and maiming employees and potential consumers. And war has become too efficient for our side to create that wage-and-market-boosting labor shortage back home anyway. We’re cornered. We HAVE to cut workhours now because nothing else is working. Counter-intuitively, wages will rise because – no more 500 resumes clamoring for 5 job openings, all underbidding one another. Horrors, maybe we’ll have to turn all our lip service to Freedom and Liberty into the scariest but most fundamental freedom of all = more, financially secure free time. But doesn't "the Devil find work for idle hands to do"? Maybe for impoverished disemployed hands. Crime rates tend to track unemployment rates. But it's the leisure industries that occupy highly paid, shorter-hours hands on their generous time off, as demoed by France's experience 1997-2001 when they cut 4 hours off their 39-hour workweek and French unemployment went from 12.6% in 1997 to 8.6% in 2001 before the U.S.-led recession hit France.]
    They have six weeks of federally mandated vacation, free university tuition, nursing care, and childcare. In an attempt to make Germany more like the U.S., Angela Merkel has proposed deregulation and tax cuts only to be met with fury on the left. Over multiple trips spanning a decade, Geoghegan decided to investigate how the Germans were living so well, and by extension, what we might be able to learn from them.
    Salon spoke to Geoghegan over the phone about Germany's luxurious worker benefits, our own dysfunctional attitudes towards work, and how we can make our lives more like theirs.
    People in the U.S. often pride themselves for working more than our European counterparts. Why do we work so much in the first place?
    There aren’t any historical or cultural reasons for it. Americans famously had more leisure time than the Japanese back in the 1960s. I would say if you did a survey of most people who are in their late 50s or 60s, they will tell you that they take fewer vacations than their parents did. Now why did that change? It wasn’t because of the Pilgrims. People work hard in America, but there was a period where leisure time was increasing. I quoted Linda Bell and Richard Freeman in an article they wrote about what happened during the ‘90s. There was nobody to stop you from working longer. There was no government check, there was no union check as there is on excessive work as there is in Germany or elsewhere in Europe. These institutional checks are gone. So people feel like lab rats: "If I work an extra 10 minutes over the person in the cubicle next to me, then I’m less likely to get laid off." It’s a very rational response.
    Aren’t we at least more productive by virtue of the amount of time we’re putting in?
    No. Look at their productivity rates. They’re like ours. I think we understate our hours and they overstate them, because they take so much time off and sneak off early from work. If the productivity rates being reported are officially the same, and if they’re understating and we’re overstating, they’re probably working more efficiently than we are, and maybe the fact that they’re taking time off has something to do with that.
    Why is it useful to compare ourselves to the Germans?
    Germany has the highest degree of worker control on the planet since the collapse of the Soviet Union. When I saw German labor minister Günther Horzetzky in April of 2009, he said "Our biggest export now is co-determination." He meant that other European countries were coming up with versions of it.
    How did Germany become such a great place to work in the first place?
    The Allies did it. This whole European model came, to some extent, from the New Deal. Our real history and tradition is what we created in Europe. Occupying Germany after WWII, the 1945 European constitutions, the UN Charter of Human Rights all came from Eleanor Roosevelt and the New Dealers. All of it got worked into the constitutions of Europe and helped shape their social democracies. It came from us. The papal encyclicals on labor, it came from the Americans.
    But the Germans have a lower GDP than we do. Doesn’t that mean that our quality of life is better?
    One day we’ll get beyond that and see that the European standard of living is rising. You can pull out these GDP per capita statistics and say that people in Mississippi are vastly wealthier than people in Frankfurt and Hamburg. That can’t be true. Just spend two months in Hamburg and spend two months in Tupelo, Mississippi. There’s something wrong if the statistics are telling you that the people in Tupelo are three times wealthier than the people in Germany. Despite the numbers, social democracy really does work and delivers the goods and it’s the only model that an advanced country can do to be competitive in this world. I mean that not just in terms of exports, but in terms of being green at the same time. That we can raise the standard of living without boiling the planet shows how our measure of GDP is so crude.
    What are we missing when we measure the GDP?
    We don’t have any material value of leisure time, which is extremely valuable to people. We don’t have any way of valuing what these European public goods are really worth. You know, it’s 50,000 dollars for tuition at NYU and it’s zero at Humboldt University in Berlin. So NYU adds catastrophic amounts of GDP per capita and Humboldt adds nothing. Between you and me, I’d rather go to school at Humboldt.
    So much of the American economy is based on GDP that comes from waste, environmental pillage, urban sprawl, bad planning, people going farther and farther with no land use planning whatsoever and leading more miserable lives. That GDP is thrown on top of all the GDP that comes from gambling and fraud of one kind or another. It’s a more straightforward description of what Kenneth Rogoff and the Economist would call the financialization of the American economy. That transformation is a big part of the American economic model as it has morphed in some very perverse directions in the last 30 or 40 years. It’s why the collapse here is going to take a much more serious long-term toll in this country than in the decades ahead.
    Who is better off in a social democracy like Germany?
    Social democracy is good for the middle class even more than it is for the poor. We’ve got it completely backwards here. It’s the relatively educated and well-to-do that do well on European socialism. What’s the cash value of Humboldt education to people who are high school grads? Zero. For the German upper middle class, it’s worth 50,000 a year. That’s the difference. You have to remember, even if there’s universal healthcare, the more educated people always use the system better than the less educated people. They know how to make it work for them.
    By some measures though, it's good for everybody. America has this wonderful freedom and openness and this ability to create yourself out of nothing. We’re just much more individualistic a country. I think we have overdosed a little bit on that, but I share that. I’m an America and I’m glad I was born in the U.S. and I always will be. But in terms of receiving the benefits of economic growth and both in terms of enjoying life and enjoying the richness of life in a developed country both in terms of private goods and public goods, quality of life that comes from that and leisure, I think Germany has an enormous amount to teach us.
    Can we adopt this German working life in the U.S.? Is it even feasible?
    We do things that are more socialist than Europe does, but we don’t call it that. We have some things left over from the New Deal that a lot of European social democracies aren’t even close to, like time-and-a-half for overtime and social security. The single biggest single-payer socialist medical system in the world is in the United States: Medicare. Untouchable. Defended by Republicans. But it’s more socialist than the German health care system. The problem with it is that it coexists with several other systems that are not socialist at all and just pay scandalous windfalls to private vendors.
    The whole system is just grossly inefficient. All of those European countries have one system. There’s cost control. There’s no cost control here; there are four or five systems competing simultaneously. To get cost controls, we’re going to have to have one system of payments for everybody. Now either we go to a free market system or a German insurance system or a single payer system. Although I don’t understand how it could happen at the moment, I just see no alternative in the long run except that the U.S. goes single payer across the board. Not because I believe in single payer over these other systems but just because of the facts on the ground. You’ve got to have one system and we aren’t going to trash Medicare. That will never happen.
    Thomas Friedman’s "flat world" theory predicts that in the future, all countries will be competing on an equal playing field -- paving the way for highly-populated countries to dominate the world economy. Do you agree with him?
    How does he explain the existence of Germany? What country has the highest exports in the world today? It’s the country with the highest wage rates and union restrictions. Germany has become more of a power, not less of a power as the world has become more global. Our problem isn’t competing with China, it’s competing with Germany in China. We’re so focused on China all the time, and low-wage assembly stuff, that we’re missing what’s going on. It’s Germany that’s going in and selling stuff in China that we ought to be selling that would hold down the trade gap between the U.S. and China. It’s not China’s fault; it’s Germany’s. But no one wants to talk about that. Because that would raise questions about the whole U.S. model: Why is this high-wage country beating us? Why are the European socialists beating us? It’s too subversive an idea so we don’t allow in the discourse.

  2. Oklahoma amends its UI law regarding the Shared Work Unemployment Compensation Program, 8/25 CCH via hr.cch.com
    OKLAHOMA CITY, Okla. - Oklahoma has amended its Employment Security Act as follows:
    Shared Work Unemployment Compensation Program. As used in this act:
    “Normal weekly hours of work” means the lesser of 40 hours or the average obtained by dividing the total number of hours worked per week during the preceding 12-week period by the number 12.
    “Participating employee” means an employee who works a reduced number of hours under a shared work plan.
    “Participating employer” means an employer who has a shared work plan in effect.

    “Shared Work Unemployment Compensation Program” means a program designed to reduce unemployment and stabilize the work force by allowing certain employees to collect unemployment benefits if the employees share the work remaining after a reduction in the total number of hours of work and a corresponding reduction in wages.
    The Commission may adopt rules and establish procedures necessary to administer the program. An employer who wishes to participate in the Shared Work Unemployment Compensation Program must submit a written shared work plan to the Commission for approval. As a condition for approval, a participating employer must agree to furnish the Commission with reports relating to the operation of the shared work plan.
    The Commission may approve a shared work plan if it regularly employs at least 100 employees. In addition, the plan may only reduce the normal weekly hours of work for an employee in the affected unit by not less than 20% and not more than 40% and must apply to at least 10% of the employees in the affected unit and at least 50 employees within the company.
    An employer that is assigned an experience tax rate of 5.4% or greater for a calendar year will be ineligible to participate in the Shared Work Unemployment Compensation Program for that calendar year.
    Benefits paid under a shared work plan will be based on benefit wages of the participating employee and charged to the participating employer.
    The Commission may terminate a shared work plan for good cause if it determines that the shared work plan is not being executed according to the terms and intent of the Shared Work Unemployment Compensation Program.
    No shared work benefit payment will be made under any shared work plan for any week that begins before January 1, 2011.

  3. Our View: Legislators' self-rewarding vote distasteful, 8/26 Auburn Citizen,NY via auburnpub.com
    AUBURN, N.Y. - The Cayuga County Legislature pulled a fast one on the public Tuesday night.
    Despite a sharp public outcry against a shady plan to fatten the state pensions of many of its members — or, more likely, because of it — the Legislature passed the measure Tuesday night when nobody could possibly have seen it coming.
    The whole mess goes back to July, when the Legislature’s Ways and Means Committee OK’d a plan to shorten the workweek of members of the Legislature from 35 hours to 30 after somebody figured out that legislators could get more money that way.
    But when it came up for a vote before the full Legislature, there was so much disagreement over it that the resolution was tabled. From there, it went to the Government Operations Committee, which reversed course and voted to keep the workweek at 35 hours. The 35-hour workweek resolution then became part of the Legislature’s official meeting agenda for Tuesday night.
    But here’s where it gets really ugly. Just seconds before the 35-hour workweek came up for a vote Tuesday, legislator David Axton introduced an amendment to change it back to 30 hours. The amended resolution was then passed by a vote of 10-4, ending the process in the exact opposite way that anyone outside the whispering members of the Legislature would have expected.
    What does that say about how our Legislature chooses to govern? It says that the people in power don’t really care about what the people think.
    A controversial and hotly debated item such as this one should have proceeded through the normal and transparent means.
    All the members of the Legislature understand that, yet so many of them willfully chose to act otherwise.
    We’re disgusted by it — and county taxpayers should be, too.

  4. Bridge closes, businesses suffer.. - Port Wentworth merchants report fewer customers, dwindling sales as construction on Ga. 25 lingers, by Michael Atkins, 8/25 Savannah Morning News via savannahnow.com
    PORT WENTWORTH, Ga. - It's been a summer to forget for merchants along Ga. 25 in downtown Port Wentworth.
    One by one, they tell the same, woeful tale: Gone are the truckers and locals who once buzzed through their stretch of highway, stopping by for a sandwich or tank of gas, replaced since May by eerie silence and a pall of desertion.
    There's no tumbleweed, but there might as well be.
    "I'm down almost 60 percent in business - there used to be trucks every day," said Tony Patel, owner of City Line Gas, where sales have dropped nearly $800 per day. "We're all in limbo."
    The reason? In mid-May, work crews shut down the highway, just north of downtown, embarking on a lengthy project to demolish and rebuild the aged viaduct at Norfolk Southern Railroad.
    The closure has re-routed traffic - daily commuters and seaport-bound big rigs alike - to Ga. 21, essentially bypassing downtown Port Wentworth.
    The detour, coupled with an already tough economy, has proved devastating for local businesses, according to proprietors. Contractors, meanwhile, have reported delays that could push the project into next spring.
    Dramatic drop
    Former Mayor Tim Holbrook, who owns the Deli Mart, said sales at the diner have been down more than 50 percent.
    He opened a second location in Garden City to soften the blow, but he's cut hours that equate to two full-time employees.

    "We expected a drop, but I didn't expect this," Holbrook said. "There have been days where we haven't had one truck at all, because they can't get through."
    Still, Holbrook said he hopes to weather the storm.
    "We've been there 15 years, and we have an established clientele," he said. "I think once the road opens back up, we'll recover."
    The nearby China House, open since 1994, has experienced a similar downturn.
    "It's severe - they have isolated this town, and there's nothing we can do," owner Emily Tang said. "I don't want to close; we've been here so many years. We're just a mom-and-pop business. We're not a big giant that can cover all the losses."
    Bridge work wanes
    Few argue the bridge needed fixing.
    [Makework alert!]
    Built in 1939, its foundation remained sturdy, but decades of rumbling trucks had caused fissures at the top of the concrete overpass.
    The new structure will span 177 feet, with pairs of 12-foot lanes and 6-foot sidewalks.
    Yet the federal stimulus project has been mired by delays, most recently to relocate a waterline, according to Allen Morgan, general superintendent with Rogers Bridge Co., which is handling the $3.8 million project.
    [Great. An unnecessary federal project that taxpayers are being billed $3,800,000 for to "stimulate" the economy and it's killing the economy of the closest American town. Thankyou supporters of artificial public-sector makework instead of natural private-sector shared work.]
    Crews recently had to suspend work, he said, while the waterline issue was resolved.
    "It's been pretty slow," Morgan said. "If we get back on a regular schedule, it'll be March or April" before the highway reopens.
    Alderman Vincent Hogan, the city's mayor pro tem, said he'd noticed the project's lagging progress and fears further delays.
    "It would take an already scarce business environment," he said, "and turn it into a ghost town."
    'Nobody listens'
    Patel and others said the project's players should have worked to devise a plan to avoid the economic hit.
    He suggested somehow building the new bridge while keeping the current one open,
    or improving Crossgate Road to accommodate truck traffic.
    "Nobody listens," he said. "They don't want to listen."
    Tang said the detour is not just tough for the homegrown businesses. She pointed out trucks from South Carolina must travel farther to get on Ga. 21 and, ultimately, Ga. 307.
    "They should have built something temporary to keep traffic flow," Tang said. "Instead, they blocked the whole thing."
    Both said they hope the project wraps up sooner than later.
    Though the closure hasn't affected business at his downtown office, Don Adams, an operations manager for LDH Corp., expressed sympathy for the neighbors.
    "It's been a lot quieter - that's been nice," he said. "But I do hate it for them."

  5. Massey cleaners' hours cut, by Marika Hill, 8/25 Manawatu Standard via stuff.co.nz
    WELLINGTON, New Zealand - Massey cleaning staff have been told they must accept reduced hours or lose their jobs after a new contractor gave them the ultimatum.
    [If that's the way employers talk to employees in New Zealand, looks like NZ has let itself slip into a wage-depressing (and respect-losing) labor surplus there too.]
    About 60 cleaners are having their case heard at Employment Court in Wellington today to contest their dismissal with no redundancy by OCS Ltd, who took over the cleaning contract in July from Spotless.
    Service and Food Workers Union delegate Jude Young said the ordeal had been tough on staff and OCS had acted wrongly in giving staff an ultimatum to drastically cut their hours or lose their jobs.
    "We have been bullied, we have been pushed, but we have stood our ground," she said. "Morale is down, but we are fighting."
    Under the new OCS contract, cleaning hours were cut across the three Massey campuses, reducing workers' hours to part-time for 31 weeks of the year, with semester holidays off unpaid.
    The Manawatu Standard contacted OCS Palmerston North branch manager Steve Nagy, who declined to comment and referred our inquiries to the company's human resources manager, Clive Menkin.
    Mr Menkin has not returned phone messages seeking an explanation about the current court case.
    Faced with uncertain futures, about 10 staff have quit, and Mrs Young said Manawatu cleaners received letters from OCS last week asking them to accept part-time hours or face dismissal.
    "One [cleaner] doesn't want a mortgagee sale; many have young families, one has seven in the family – it's a big blow," she said.
    Most workers are paid about $13.15 an hour – 40c more than the minimum wage.
    Based on cut hours, the average worker's wage could drop from $526 to $329 a week.
    [The irony is that when done on a systemwide basis, hourscuts mean wage raises, not drops, because the wage-depressing labor surplus gets reduced.]
    The union has asked Massey Vice- chancellor Steve Maharey to intervene to stop the sackings.
    But Mr Maharey has angered the workers by agreeing to only meet with a national union representative, not the affected workers.
    "We're really pissed off because the union is about the people and Steve Maharey should know that," Mrs Young said.
    The cleaners also pleaded their case to Palmerston North MP Iain Lees-Galloway, who said OCS was using "bully tactics" by offering a take it or leave it deal.
    "It shows how vulnerable these workers are. They are in a low-paid, low-skilled job."
    Mr Lees-Galloway said the workers' plight reflects the Government's pressure on universities to cut costs.
    Massey University communication director James Gardiner said the university was looking into the issues raised by Massey staff and the cleaners.


8/22-23-24/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. While China Hits No. 2, Opportunity in America is Shrinking, 8/23 GLOBAL VIEWPOINT NETWORK/TRIBUNE MEDIA SERVICES via HuffingtonPost.com (blog)
    WORLD BANK, Italy - America was once known around the world for its pragmatic attitude in getting things done and looking toward the future. Now we've been overtaken by partisanship, political gridlock and short-termism.
    Today it is the non-ideological pragmatism and long-term political horizons of the emerging economies, notably China, that are showing the way. Nobel laureate Michael Spence, chairman of the independent Commission on Growth and Development associated with the World Bank, thinks there are lessons to be learned from their resilient bounce back after the financial crisis.
    I [Nathan Gardels] spoke with him last week in Italy.
    ------------------------
    Nathan Gardels: In your report on "post-crisis growth" you noted the "resilience" of China, which has bounced back to high growth after the Wall St. crash and is now officially the second-largest economy in the world.
    What are the key factors of China's resilience? Will China be able to keep bouncing back, or might the recessionary winds from across the Pacific cool things down?
    Michael Spence: China -- along with India and Brazil -- is going to get through this crisis pretty well and will be able to sustain its growth in the years ahead.
    China, in particular, is capable of sustained growth if it can properly manage structural change in several dimensions.
    First, China is going through a "middle-income transition" in parts of the country as earlier "growth drivers" in the export sector, notably low-wage manufacturing along the coast, die off and must be replaced with other drivers such as services. The domestic consumer will have to become more important so there is a better match between the productive potential of the economy and domestic demand.
    Second, China is going to have to get quite a bit more income into the hands of the household sector in order to drive growth from within the domestic market. That means getting away from the very high levels of investment in the corporate and public sector where the marginal return on investment is declining.
    Disposable income as a percent of GDP is low, and the savings rate is high, around 40 percent of GDP.
    Third, they have to get their current account surplus down in the global economy or they will get a bad reaction from outside, for example protectionism.
    If they can get the surplus down, that will help the global economy, but it will also help build domestic demand and household income.
    This is a complicated set of changes to navigate, but I believe the Chinese leadership is up to it. I've been able to listen in and participate in some of their internal discussions, and I think they are going in the right direction. Certainly there are interests that want to block these changes. But the same qualities that have enabled China's resilience so far -- a long-term horizon, decisive policy-making and consistent follow-through by a generally competent government -- bode well for the future.
    Because of their long time horizon there is a high level of understanding by the leadership that the economy has to evolve. Looking out at where they want China to be in 10 or 20 years, they know that an advanced economy cannot be based, as China is today, on labor-intensive process manufacturing for export.
    They have seen how South Korea has managed the middle-income transition. I'm sure they are intensively studying that experience.
    Gardels: With a nearly 9 percent annualized growth rate, Germany has picked up as the bright spot, a saver and strong exporter among the indebted consumer democracies of the West.
    Yet, some say this so-called "German miracle" is really "the Chinese miracle" since their dramatic recovery is mostly due to high-end exports to China.
    Are we seeing a "German miracle" from which rest of the West could learn? Or is it mainly due to a kind of "reverse coupling" where China is pulling Germany out of the doldrums?
    Spence: Germany is doing well for two related reasons. First, the export sector is very healthy. And that is the result of the fact that over the last decade Germany has gone through a major restructuring of its economy in which workers traded some income for more job security, greater flexibility of hiring and firing was allowed, and work-sharing (kurzarbeit) instead of layoffs during the downturn has enabled key companies to retain skilled workers so they can get back on track quickly as demand rises. All of these reforms have put German companies in a more competitive position.
    Second, as we've discussed, major emerging markets from China to Brazil have not only restored growth but are sustaining it. Germany's export sector is in a strong position to take advantage of that.
    So, the "German miracle" is what has enabled that country to benefit from the "Chinese miracle."
    Gardels: Where do you come down on the global debate between whether it is time to cut back and move toward austerity vs. continuing stimulus spending by governments?
    Spence: There are such large differences among countries that it is hard to come down on any one position. There is a difficult balance between maintaining enough support to avoid a deflationary downward spiral on the one hand, and the longer-term costs of high debts and deficits on the other.
    It is not surprising there is lively debate about this because there are good arguments on both sides.
    As far as the United States is concerned, I would be on the conservative side at the moment. On the fiscal stimulus side, we've done about as much as we can do. I'm very much in favor of extending long-term unemployment benefits because they are essential to protect people while at the same time providing a stimulus. If you are going to spend limited resources, this is a good place to do it.
    But, beyond that, the U.S. is in for a period of painful restructuring of balance sheets to deleverage decades of overspending by borrowing. That will take time to work through. I don't think you can accelerate the recovery by further government spending. It just won't yield much benefit.
    America has clearly not yet come to terms with the fact that a healthy long-term future depends on suffering short-term pain. As much as we might wish it, there is no painless recovery after such a long bout of overleveraging.
    That pain must involve both tax increases, partly to increase public-sector investment in infrastructure that has been way too low, and budget cuts in some government services to help further finance those same infrastructure investments. Tax cuts, only if they stimulate job creation, must also surely be part of the mix.
    What worries me most is that as we -- so far unsuccessfully -- try to gather the political consensus to take decisive action, opportunities for the younger generation are shrinking. They are going to pay a high price in the short and medium term.
    Gardels: Fifty years ago, California made the kind of massive public investments -- in a world-class university system, a vast road grid and canals to bring water from north to south -- that China is making today, from the world's fastest trains to the cutting edge of clean-energy technologies.
    Yet, as we speak, California, like the U.S. as a whole, is mired in debt and political gridlock. In your final Commission report, you write with China in mind that "Experience suggests that strong, technocratic teams focused on long-term growth can provide some institutional memory and continuity of policy" -- in short, effective government. "Leadership," your report says, "requires patience, a long planning horizon and an unwavering focus on the goal of inclusive growth."
    Perhaps the Western consumer democracies, where the feedback signals of politics, the media and the market all tend to steer society toward immediate gratification, could learn something these days from China?
    Spence: Yes, we could especially learn from the way they think about the evolution of the economy over the long term and then, in a pragmatic, non-ideological way, set about getting things done.
    Democracy makes it a much more complicated and time-consuming process to get from A to B, to build consensus, invest in and support those things that sustain long-term growth. It is not impossible to do that in democracies today, of course. Brazil has turned itself around, and India seems to be doing so. So there is something to learn from them as well.
    And, as you point out in the example of California, we were able to do that at one time in the U.S.
    But we've forgotten what it takes. Too often in some parts of the American political culture there is a narrative that simply says that "the government should provide stability and the private sector will take care of everything else."
    It doesn't work that way. And it never has, even in the U.S. It takes a commitment of resources and a long-term perspective. It is a bit like the way venture capital works. You don't know exactly how things will unfold, but you have to have a portfolio of projects to try to create and capture emerging opportunities.
    In the developing countries that are successful, they think more in terms of a complementary relationship between the public and private sector.
    Gardels: Is there a cultural issue here? Do societies dominated by a consumer mentality have the political gumption anymore to save and sacrifice for the longer term?
    Spence: I'm not sure I understand the underlying forces that have led us to short-termism and underinvestment. But I do know changing that is above all a political process of building consensus for responsible governance. Those who think all you need to do is cut taxes and everything else will fall in place are wrong.
    For a country of our level of income and wealth, the state of the infrastructure has become an embarrassment. Why can't we set a goal in America of having first-class infrastructure in 15 years?
    Gardels: You said recently, "I have this gnawing feeling about the future of America. When people lose their sense of optimism, things tend to get more volatile. The future I most fear for America is Latin American: a grossly unequal society that is prone to wild swings from populism to orthodoxy, which makes sensible government increasingly hard to imagine." You mentioned the Tea Party movement as one example.
    What can be done to prevent the U.S. from becoming like Latin America?
    Spence: I don't know how to get there politically. But I imagine there is still a non-ideological middle in America that is patriotic but not overly nationalistic. We were once a very pragmatic nation with the ability to compromise to move things forward.
    If we believe what we say -- that America is the land of opportunity for all and that is why people want to come here -- then we need the policies that will make that actually true.
    Many are worried about the stubbornly high U.S. unemployment rate, but believe we will get back to normal after the recession is over. But going back to where we were is not realistic.
    The emerging economies are going to be more than 50 percent of global GDP in the not-too-distant future. It is a changing world. We can't afford to stand still and settle for endless political gridlock.
    I think the U.S. can change, but, to be honest, I just don't see the political will at the moment.

  2. Canada PM Pumps Work Share at Michelin Plant, 8/24 TireReview.com
    WATERVILLE, N.S., Canada - The photo accompanying this article depicts a world renowned and respected personality [the Michelin Man]. Standing next to him is the Prime Minister of Canada, who of course is also highly respected, even if his global recognition is somewhat lower than the Michelin Man’s.
    Prime Minister Stephen Harper posed for this photo opportunity together with Bibendum during a visit to Michelin’s Waterville plant in the province of Nova Scotia.
    Harper’s visit was arranged to show off the results Canada’s state run “Work-Sharing Program” can achieve. The Canadian government describes Work-Sharing is an adjustment program designed to help employers and employees avoid temporary layoffs when a reduction in the normal level of business activity that is beyond the control of the employer occurs.
    “By joining the Work-Sharing Program in April 2009, the Michelin tire factory in Waterville avoided laying off 95 employees; 578 employees at the plant participated in this program,” reported the Canadian Prime Minister’s website. “This year the company has removed its hiring freeze and added 91 new employees to its ranks.” The 578 staff who volunteered to reduce their hours received the difference in their paychecks through employee insurance benefits.
    (Tyres & Accessories)
    [Compare earlier Michelin story on 8/18 below.]

  3. Sugar firm employees' hopes dashed, 8/22 Daily Nation via nation.co.ke
    NAIROBI, Kenya - A judge has dashed the hopes of West Kenya Sugar Company employees to have their working hours reduced to 44 a week.
    [More or less guaranteeing that Kenya is going to stay in the Third World...]
    In a decision, Industrial Court judge Paul Kosgei, said the reduction of hours from 48 to 44 will have serious repercussions on the productivity of the firm, given that it is operating below capacity.
    The judge added that the factory needed every support ahead of huge competition expected from sugar producers from the Common Market for Eastern and Southern Africa (Comesa) in 2012.
    The employees, through the Kenya Union of Sugar Plantation & Allied Workers, moved to court after the company reneged on a promise to reduce working hours.
    The court heard that it had been agreed through a collective bargaining agreement in 2009 that working hours would be reduced.
    But the company broke the promise after further consultations. It emerged that agents of the firm had not fully exhausted their consultations before striking the deal.
    Again, the workers borrowed from nearby sugar companies such as Mumias and Nzioa, whose employees work for 44 hours for six days.
    In reply, the company defended itself saying that unlike Mumias and Nzioa, theirs is a private company managed on different principles, adding that reducing the working hours would increase the company’s wage bill.
    The sugar firm added that neighbouring factories were supported by the government and some of their loans would be written off with support from the Treasury.
    It said also that it was faced with various challenges such as lack of sugarcane and the need to diversify its products, due to the upcoming competition from Comesa.
    An investigator from the Ministry of Labour confirmed the challenges including the fierce competition from the factories in the region.

  4. Public libraries: enablers of Americans' dreams, by Neal Peirce, 8/22 Seattle Times via seattletimes.nwsource.com
    It's amazing..that many of the nation's libraries are able to maintain the bulk of their services and adapt to growing needs during a recession, even in the face of snowballing funding cuts by their local governments. [or maybe they're actually not...]
    SEATTLE, Wash. - America's public libraries, fast turning themselves into "one-stop shops" for digital job searches, appear to be staging one of their great historic transformations.
    Responding to a rush of recession-time visitors, 88 percent of our libraries now offer access to job databases. And at least two-thirds of library staffs are helping applicants complete online job applications, according to a national survey by the American Library Association and the Bill & Melinda Gates Foundation.
    As for access to free wireless services, 82 percent of libraries now provide it — up from just 37 percent four years ago. In two-thirds of cases, the libraries are the only source of free Internet service in their communities.
    What's amazing is that many libraries are able to maintain the bulk of their services and adapt to growing needs during a recession, even in the face of snowballing funding cuts by their local governments. More than 55 percent of urban libraries are reporting budget cuts, and a quarter have felt obliged to cut hours or close branches. Fifteen percent reduced their hours of operation in 2009 — three times the number reported in 2008. And 50 percent report they have insufficient staff to meet their patrons' job-seeking needs.
    But they're not taking it quietly. In Indianapolis, neighborhoods around the branches facing possible closure became very active, holding read-ins, marches and letter-writing campaigns. In Camden, N.J., one of America's poorest cities, a fierce public outcry has followed the threat to close the entire library system.
    And when Los Angeles Mayor Antonio Villaraigosa proposed 37 percent cuts to his city's library budgets, advocates argued it would be the first time in the system's 138-year history that libraries would be open just five days a week. And they came up with a strong productivity argument. In 1978, when there were 61 L.A. libraries (there are now 72), 1,459 staff librarians served 6 million visitors. Under Villaraigosa's budget, they noted, there'd only be 848 staff slots — to serve 18 million visitors.
    The silver lining for communities, note library sources, is that threats of actual branch closures create such a strong pushback that most communities compromise with cuts that go no further than constriction in staff or branches.
    The reality, says Audra Caplan, director of the Harford County, Md., Public Library and president of the Public Library Association, is that the role of public libraries has changed dramatically in the past 10 to 15 years. And computers and job-search assistance, while highly significant, aren't the whole story.
    "We've turned ourselves into community centers," notes Caplan. "We have meeting rooms that get booked by community agencies, chess clubs, any not-for-profit. We bring in authors, we sponsor civic engagement-type programs. And we're attracting a larger share of the population — even teens, or parents with toddlers."
    So what about serious research? "It's still healthy," Caplan insists. She acknowledges Google and Wikipedia are popular on the available computers. But libraries also subscribe to specialized and sometimes costly subscription databases — business, legal, health and other — and electronically extend the access to even their smallest branches. As for books (remember them?), libraries' per capita circulation has increased roughly 20 percent over the past decade.
    And in a sense, libraries are as varied as America. Many provide specialized services, including translation and English instruction, to America's large populations of new immigrants. Some let patrons check out not just books but fishing poles, backpacks and garden tools.
    And central libraries, notes Robert McNulty of Partners for Livable Communities, can be "the great good place in the city" — as a literacy, Internet and special film center, or as a place for lectures, for local performing arts and exhibitions. Or as a coffeehouse. Or as an information center for visiting tourists, or a safe place for kids.
    Andrew Carnegie's original idea in founding his string of free public libraries, McNulty notes, was that they'd be gathering places for young people — that once drawn there, they'd learn to read. So Carnegie built a boxing gymnasium into one of his Pittsburgh libraries, a swimming pool into another.
    But right now, it's computer access that leads the library parade. "Beginning computer skills are especially important for dislocated workers," says Brian Clark of the Nashville, Tenn., Career Advancement Center. "Having computer skills," he suggests, "won't necessarily get a person a job. But it means the door won't be slammed in their face" — in other words, before they can even state their case.
    Opening doors? It's true that funds saved or restored to libraries may mean deeper, sometimes very painful cuts in other parts of city and county budgets.
    But what's more American than open doors? Seen this way, libraries have been enablers of generations of Americans' dreams. And with a little luck, they'll help pull us out of our current economic morass too.
    Neal Peirce's column appears regularly on editorial pages of The Times. His e-mail address is nrp@citistates.com


8/20-21/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Winning an overtime lawsuit but recovering less based on fluctuating workweek, by Nancy Sasamoto of Masuda Funai Eifert & Mitchell Ltd, 8/20 (8/16) Lexology.com
    CHICAGO, Illin. - Brenda Urnikis-Negro, the highest paid employee at a real estate appraisal firm, won her suit for overtime pay, but the federal court in Chicago used a method of calculating her damages that resulted in reducing her total recovery by more than 75 percent. On August 4, 2010, the United States Court of Appeals for the Seventh Circuit affirmed the Court’s use of the fluctuating workweek (“FWW”) rule, even though the employer was found to have willfully violated the Fair Labor Standards Act (“FLSA”). Urnikis-Negro v. American Family Property Services, (No. 06 C 6014).
    The defendant, American Family Property Services (“AFPS”), was a small business owned by a husband and wife. In 2004, business was booming and they hired the plaintiff to assist the owner and help review the reports prepared by the associate appraisers. Urnikis-Negro was hired at an annual salary of $52,000. The parties did not discuss the number of hours that she would be expected to work when she was hired and there was no written agreement regarding the terms of her employment. Throughout her employment until her termination in December 2005, Urnikis-Negro worked substantially more than 40 hours per week. In fact, the court found that she worked a total of almost 1,500 hours of overtime based on a 40-hour workweek, but she never was paid more than $1,000 per week as AFPS considered her to be an exempt administrative employee.
    The court’s finding that Urnikis-Negro was not exempt as an administrative employee under the FLSA is not surprising based on a review of her duties and authority. Essentially, the court found that much of her work was clerical in nature and that she was essentially a “glorified proofreader.” Moreover, she did not exercise discretion or judgment. Even though she may have made suggestions in various situations, she lacked authority to make changes without the approval of a certified appraiser.
    In its 45-page opinion affirming the lower court, the Court of Appeals provides an excellent discussion of the appropriate method of calculating damages in this case. The plaintiff was awarded $12,233 as overtime compensation, plus liquidated damages in an equal amount due to the finding of a willful violation of the FLSA for total damages of $24,466. The court also awarded attorney’s fees and costs in the amount of $95,130.71.
    Urnikis-Negro appealed because if her overtime hours were compensated at the rate of time and a half, she would have been awarded $55,893.75. With an award of an equal sum as liquidated damages, this would have brought her total damages to more than four times what she actually received.
    The Seventh Circuit found that the court’s use of the fluctuating workweek method set forth by the Department of Labor in its FLSA regulations was appropriate based on the factual finding that plaintiff’s salary was intended to compensate her for whatever hours she happened to work each week and not for a fixed amount, such as 40 hours. Pointing out that the lower court’s calculations followed an earlier decision of the U.S. Supreme Court, the appellate court held that where the employee’s hours fluctuate from week to week, the employer must calculate the regular rate of pay each week by dividing the weekly salary by the number of hours worked. The overtime pay would then be one-half of the regular rate because the employee has been paid the regular rate for all hours worked that week whether it was 35 or 60 hours. Under the FWW method, the more hours the employee works, the lower her regular rate of pay becomes, which results in a lower overtime rate.
    While the employer in this case could have been hit a lot harder than it was, we would still caution employers that they need to make sure their employees are classified properly and should understand that they could be found in willful violation of the FLSA even if they are paying someone a relatively high salary and that employee agrees at the time to being paid on a salary basis.

  2. Libraries in Meck took bigger cuts than many - County's cuts to library system came as nearby counties spent more or staved off reductions, by April Bethea abethea@charlotteobserver.com, 8/21 CharlotteObserver.com
    CHARLOTTE, N.C. - Since getting hit by budget cuts last month, the Charlotte Mecklenburg Library system permanently closed three branches, cut hours at others and laid off workers.
    But across the region, it's a different story.

    Most area county governments - the primary funding source for many libraries - are spending slightly more on their libraries in this fiscal year, which began July 1, than in the past fiscal year, according to an Observer survey of 13 regional county budgets.
    Lincoln County commissioners, for example, gave their library system about $35,000 more this year for materials, upgrades to its Internet system and an additional employee.
    Five of the region's systems are dealing with overall reductions. In some cases, including Mecklenburg, the cutbacks began earlier this calendar year.
    Nationally, about 15 percent of libraries say they've reduced their hours in the past year, a figure three times higher than the year before, said Sari Feldman, immediate past president of the Public Library Association.
    Even more libraries report having insufficient staff to meet growing demands, particularly from those seeking help to find work.
    North Carolina's state librarian Mary Boone and Mecklenburg library Director Charles Brown, however, say they believe Mecklenburg's cuts were the deepest in the state.
    "Everybody is having difficulties," Boone said. "But from what we were able to see, most people either got through them this year or made other concessions besides closing branches."
    Mecklenburg County commissioners' chair Jennifer Roberts said the comparisons do not surprise her because Charlotte's system offers a vast array of services and locations compared to smaller, more rural areas.
    Roberts, a Democrat, said Mecklenburg has the state's largest library system, and has traditionally supported its services at a higher rate than some other communities.
    But she said the county has also faced deeper state and local budget cuts than other areas, including $71 million in reductions in the 2010-11 budget.
    Mecklenburg hit hard overall
    That represented a 5 percent overall reduction in the county's $1.3 billion budget. At least one other regional county had a larger percentage decrease - Catawba, at 18 percent. Others were flat or saw a smaller decrease than Mecklenburg's.
    "I think that what we are doing is working as hard as we can to try to figure out how to restore some of those services in an effective and efficient way," Roberts said. "But that is a challenge in that we had deeper cuts in many areas."
    County commissioners cut many departments and agencies, though at varying levels. In setting priorities, libraries were ranked lower than schools and some social service programs, partly because library services are not mandated.
    As in many communities, cuts to the Mecklenburg libraries drew fierce criticism from residents. The outcry helped rein in some of the proposed reductions.
    The library lost about a third of its county funding, even after commissioners agreed to restore $3.5 million targeted to be cut. The reductions also were eased, in part, after Charlotte and other municipalities in the county chipped in $1.7million.
    The Observer compared library spending based on adopted budgets from 2009-10 and 2010-11. Those showing an increase were Alexander, Burke, Caldwell, Cleveland, Gaston, Lincoln, Rowan and Union. Those showing a decrease in spending were Cabarrus, Catawba, Iredell, Mecklenburg and Stanly.
    Last year's adopted budgets don't reflect any mid-year spending adjustments.
    Rowan County facing more cuts
    For at least one area county, cuts still loom.
    Even though Rowan has budgeted library spending that represents an increase over last year's adopted budget, administrators have suggested cutting hours at its three library branches to help deal with $900,000 in lost state lottery money.
    Rowan County Manager Gary Page said he wasn't left with many other options to revise the county's 2-month-old budget, with most money tied to schools, social service and health programs, sheriff and emergency services that can't be cut.
    No final decisions have been made, and Page said it's possible commissioners may not take up the issue again until after the November election. The county also could end up taking money out of its reserves to cover the lottery shortfall.
    Looking ahead, some leaders are worried. Even with some signs of improvement post-recession, the turnaround may take much longer for local governments.
    Iredell: Reduced hours, fewer books
    Steve Messick, library director in Iredell County, said he doesn't see his system having to repeat the kinds of cuts taken in the past few years. But he doesn't anticipate any real growth in money for several years.
    "At best, if we can hold our funding at current levels, we'll be doing well," he said.
    The past budget season was mixed in Iredell. Messick said the library system's overall budget was cut by about 16 percent, leading to reduced hours, layoffs of all 14 part-time employees, and cuts to its materials budget. The system may buy about 8,000 fewer books this year, and Messick is worried about the long-term impact.
    But Iredell leaders kept money to open the county's third library branch in Troutman, a joint project with the town in the works for years.
    "I think it's quite something to be happy about that we were able to open up that branch even in the middle of the budget cutbacks," Messick said.
    Like many systems, Iredell has stepped up its use of volunteers to shelve books or pick up duties of former workers.
    Volunteer labor prevented Cabarrus County from having to make cuts to its summer reading program, said library Director Dana Eure. Other systems have launched fundraising campaigns, or sought out more grant aid from the state or private organizations.
    Still, Feldman, the Public Library Association past president, said those efforts can't fully replace lost government money.
    "These are all ways to help us through a crisis," said Feldman, who also is executive director of the Cuyahoga County Public Library in Ohio. "But they don't solve the problem of delivering excellent library service in communities."


8/18-19/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Raymond to Add Jobs, 8/18 WBNG-TV News via wbng.com
    GREENE, N.Y. - A year and a half ago, a company in Chenango County was on the verge of laying off 100 workers.
    Now, it's looking to rapidly expand.

    Is this a sign that the economy's recovering?
    And how can other businesses follow suit?
    Here's Action News Reporter Leigh Dana.
    "Over the last few years, we've heard the devastating stories about people losing their jobs, waiting on long unemployment lines, and not being able to provide for their families.
    For many in the Greater Binghamton area, there's a sign that times are changing.
    The Raymond Corporation, which designs and manufactures fork lifts in Greene, is putting out the help wanted notice again.
    'Over the next two months the company plans to hire more than 100 new workers,' said New York State's Labor Commissioner, Colleen Gardner.
    A year and half ago, Raymond took part in the state's Shared Work program, which allows employers to avoid laying off workers by reducing their hours.
    The state pays their wage difference and it saved dozens of Raymond jobs.
    'That was February of 2009. And the Department of Labor was there to help. And now, in the summer of 2010, the department of labor is here again to help,' explained Gardner.
    Rather than talking about layoffs, its taking about jobs.
    Since January, Raymond's been actively hiring by taking advantage of On-The-Job Training, or OJT, through the Broome Tioga workforce New York as well as the Chenango-Delaware-Otsego Investment Board; where human resources found Brett Mowers, 23, a welder at the company.
    'It's a solid job, too, so it's always nice to have in the back of your head,' Mowers said.
    Raymond is looking hire across the board in manufacturing, assembling, welding, fabrications, shipping, receiving, stocking and even managers.
    But if you feel you don't have these skill sets, the OTJ training program will help you get there, so you might be hired, too.
    In Greene, [this is] Leigh Dana, WBNG TV Action News."
    Other businesses in the Southern Tier can also apply for the Department of Labor's statewide OTJ training program by visiting stateOJT@labor.NY.gov
    The Labor Department estimates the program will result in new jobs for more than 550 unemployed workers.

  2. Cotter city staff resumes 40-hour work week, 8/19 BaxterBulletin.com,MountainHome,Ark.
    COTTER, Ark. — City employees resumed 40-hour weekly shifts last week since the three-month long shortened work week was effective in cutting costs, Mayor Steven Raines told The Bulletin Wednesday.
    Raines said city employees, who were cut back to 32 hours of work May 10 due to the city's financial hardship, went back to 40 hours last week because cost-cutting measures taken, including the shorter work week, "were effective."
    Raines said the return to full-time work was an "administrative decision" of his to do so, just as the cutback of hours had been in May. He said the work-week cut had saved the city approximately $30,000 to $35,000 for the year.
    City employees all cooperated, trimmed their budgets, and kept expenses down. "I am real proud of them," Raines said. He said he believes the 40-hour week can continue "as long as our income stays the way it is."
    Raines, who voluntarily took no salary as mayor during the same time, said he resumed taking pay for his work as mayor also. The mayor's annual salary is $21,900. It was reduced to $1 a year.
    It is also his administrative decision to keep the Cotter City Hall open to the public just three days a week, Monday, Tuesday and Wednesday, he said. Open hours are 8 a.m. to 4 p.m. those three days.
    While City Hall is closed to the public on Thursdays and Fridays, the staff will answer all telephone calls, Raines said. City Hall can be opened to handle business that cannot be performed otherwise, he said.
    Cotter residents may use the outside drop box for water and sewer bill payments and court fines when City Hall is not open, or they may mail those items to P.O. Box 9, Cotter, AR 72626.
    In a regular city council work session Tuesday night, where council members discuss issues with the mayor and the public but take no action, items of discussion were:
    # Saturday Club's new design for an archway at Big Spring Park, now of metal rather than stone
    # A letter from accountant Brian Haas to the Arkansas Department of Natural Resources about completing Cotter Water Department's delinquent audit in the next few weeks
    # Sewer plant operation under the Gassville-Cotter Sewer Commission
    # Legacy Consulting's report of its employees' recent visit to Cotter
    # Upcoming events the Cotter Chamber of Commerce is planning.
    janelson@baxterbulletin.com

  3. Prime minister tours Michelin plant, by Sarah Keddy, 8/18 Kings County Advertiser via NovaNewsNow.com
    WATERVILLE. N.S., Canada - Prime Minister Stephen Harper visited the Waterville tire plant on Aug. 18 to showcase what the Work-Sharing Program can do. The Employment Insurance bridge last year helped Michelin “weather the storm” of the global economic crisis.
    In early 2009, Michelin North America president Dick Wilkerson said, “to put it politely, the North American tire market had cratered.
    “Major truck fleets were parking, and they were taking tires off those vehicles to supply the fleet. The decline in new supply was 45 per cent, and the replacement market was down 23 per cent - unprecedented, and we were in a very difficult position.”
    Michelin negotiated with Service Canada to start the Work-Sharing Program: 578 plant staff volunteered for reduced hours, with EI adding income support for the difference in their paycheques.
    Wilkerson said the program helped Waterville avoid 95 lay-offs.

    “We wanted to keep all our employees working, retaining their skills and knowledge, so when the market recovered, we could be ready to respond faster than the competition.”
    Production is now “in full swing.” The work-share started in April 2009 and ended in November; since January, the plant has added over 90 jobs.
    “This was a benchmark in progressive policy - it really helped us weather the storm,” Wilkerson said.
    Harper said the Michelin example, and Canada’s economy, represents well on the world stage through the economic recession and an “extremely fragile” recovery.
    “Canada’s economic action plan is government’s plan to protect workers - create jobs, and protect existing jobs as much as possible. We’re especially proud of the success of the work-share program here,” Harper said.
    “Lay-offs were looming - the stats were pretty bad, but the team banded together and covered almost 600 people. That paid off, and you all deserve credit for it.”
    Harper said continuation of the program in the 2009 budget worth $60 million brings the total investment to $220 million.
    Harper also announced continued $4 million support cost-shared federally and provincially for 19 projects under the Targeted Initiative for Older Workers program, including a 19-week transition program for 24 workers in Annapolis Royal offered through PeopleWorx.

  4. Vestas 2010 Guidance Slashed, Shares Sharply Lower, by Johan Anderberg +46-8-5451-3097; johan.anderberg@dowjones.com, 8/18 Dow Jones Newswires via Wall Street Journal via online.wsj.com
    STOCKHOLM, Denmark - Vestas Wind Systems A/S (VWS.KO) Wednesday slashed its guidance for 2010, driving its shares sharply lower despite the management's attempt to highlight the company's strong order intake.
    At 1114 GMT, shares in Vestas--the world's biggest maker of wind turbines--had fallen 19.6% to DKK253, after rising around 13% in the month leading up to the earnings results Wednesday. The shares remain far below a high of DKK692 reached in 2008, before the financial crisis hit and delayed projects in the wind power sector worldwide.
    Vestas said it now only expects an earnings before interest and tax, or EBIT, margin of 5% to 6% and revenue of EUR6 billion for the full year, against the previous forecast of 10% to 11% EBIT margin and revenue of EUR7 billion.
    The downgrade comes as the company's anticipated, but still not concluded, orders for delivery to the United States, Spain and Germany will now take place at such a late date in 2010 that they won't be recognized as income this year, Vestas said.
    Despite the downgrade, the Danish company said its second quarter order intake was 3,031 megawatts, the highest level ever recorded for Vestas. In just the last month, Vestas has scored a number of big-ticket orders, including its largest ever in the U.S. and in Australia.
    Chief Executive Ditlev Engel told Dow Jones Newswires that uncertainties about support measures in these countries had kept investors on the fence, but things are looking much better ahead.
    "It's always darkest before the dawn," Engel said in an interview, adding that he expects increased activity in the second half of the year compared with the first six months. "In 2010, it's going to be a lot like night and day for us."
    Engel said he wasn't worried that some of the anticipated orders might end up in the hands of Vestas' rivals.
    "We cannot guarantee it, but I am pretty confident these orders are going to go to Vestas," the CEO said.
    A commanding majority of analysts rated Vestas a buying opportunity prior to the Wednesday report, and it doesn't appear as if a flood of ratings changes will follow the Vestas profit warning.
    Goldman Sachs said the earnings and the outlook were disappointing, but added that the company's "significantly improved order book" offset the downgrade.
    Fondsfinans analyst Hakon Levy said the report was "very weak" and that the guidance reduction was "far worse than expected," but reiterated his buy rating.
    Vestas reported a second-quarter net loss of 119 million euros ($20.5 million) versus a net profit of EUR43 million in the same period a year earlier. A Dow Jones Newswires poll of seven analysts had forecast a net loss of EUR45 million.
    The company said its second-quarter operating loss was EUR148 million, compared with an operating profit of EUR78 million in the same period a year earlier.
    Revenue fell 17% to EUR1.01 billion in the second quarter from EUR1.21 billion a year earlier.
    Vestas said it will lay off 300 employees in Denmark and introduce work-sharing schemes at some factories in Europe, but the company still expects to grow its workforce by nearly 3,000 employees in 2010.
    That is down from a previous expectation for 3,400 new workers.
    Company Website: www.vestas.com

  5. O Frau Merkel, How Does Your Garden Grow? - A cheap euro, plus the “short work” plan, allowed the Germans to make lemonade from lemons - But tomorrow may be sour, by Scott Moore, 8/18 Miller-McCune.com
    [Another Anglosaxon commentator and media outlet crying sour grapes because they didn't think of cutting their workweeks instead of cutting their workforce (and their consumer markets).]
    LOS ANGELES, Calif. - Last week the German government reported a growth figure that should be the envy of the Western world, as long as most of the West struggles with mountains of debt while its citizens remain underemployed.
    [i.e., the foreseeable future, until the West questions a couple of its Articles of Faith, such as, the Forty Hour Workweek Should Last Forever (regardless of techology), and We Can Concentrate Any Fraction, However Large, of our Money Supply in the Top 0.01% of the Population and Things Will Just Keep Getting Better.]
    The number itself is boring, 2.2 percent. It’s the amount the German GDP grew in the second quarter of 2010, compared to the same quarter in 2009. That’s a record in Germany over the past 20 years — since reunification in 1990. If all four quarters were to expand at the same rate this year, Germany would be headed for an annual growth of something near 9 percent.
    Germany managed this trick without shedding as many jobs as the United States in the wake of the 2008 credit crisis. Angela Merkel’s government has been accused of shocking financial markets, mismanaging the euro and irresponsibly trimming its budget (with austerity measures) while America splashed out on bailouts and stimulus. Somehow, though, Berlin has done a few things right.
    What?
    ["What" arrogance - on the part of another insulting and envious American.]
    The first obvious boost was a quick drop in the euro’s value. Germans run their economy on highly engineered exports,
    [No they don't. They run it on domestic consumer markets like every other big economy. Only possible exceptions are city-states like Singapore and Hong Kong - and even they are going to have to move toward self-sufficiency as other economies reclaim the economic control and fine-tuning that they sacrificed for the Great Globalization Fad.]
    and a cheaper euro has moved German cars and machine parts around the world. Some people have wondered whether Merkel’s surprise announcement of a new fiscal regulation last May was bureaucratic boneheadedness or a deliberate ploy to keep the euro cheap, but David Marsh, author of The Euro: The Politics of the New Global Currency, doubts it was deliberate. “I think that’s a conspiracy theory. I think that’s going a bit too far,” he said. “But obviously it’s true that the Germans have profited enormously from a weak euro.”
    What Berlin did on purpose was a combined right-left punch of stimulus and job-preservation. The stimulus plan will be familiar to Americans because it was an Abwrackprämie, or “scrapping bonus,” paid to German drivers for turning in their old cars for new (to boost Germany’s all-important car industry) — which became a model for Obama’s “Cash for Clunkers” program.
    The other measure was uniquely German. A Kurzarbeit, or “short-work” plan, encouraged companies to reduce workers’ hours during the recession without cutting jobs. Under this measure the government paid workers a chunk of their salaries (between two-thirds and 90 percent) for days of the week when they did nothing. The companies saved the difference; the government picked up the slack.
    What also helped was a controversial reform under former Chancellor Gerhard Schröder (which probably cost him his job) to reduce welfare benefits overall. This austerity from a few years back helped the famously rigid German job market grow more adaptable. It now has “flexible labor schemes that allow [companies] to breathe with the economy,” according to Jörg Krämer, a chief economist at Commerzbank AG in Frankfurt.
    And the results are astonishing. While unemployment rose in the United States to 10.1 percent in 2009, it fell in Germany to 7 percent. Now more Germans have jobs as well as extra money to spend, which could set the stage (in such a frugal nation) for an even broader recovery.
    The hitch is that a worldwide recovery won’t be as dramatic for Germans as it could be for Americans.
    [But then, Germans don't need a dramatic recovery because they didn't have a dramatic downturn, like the geniuses who sacrificed full employment and markets to maintain their pre-computer but Sacred, Forty Hour Work Week.]
    German jobs, in other words, won’t come zooming back.
    [(A) As we mentioned, the Germans don't need to, and (B) neither will Americans, who desperately need to - but they'll try to cover it up by shouting the tiniest good news and ignoring the biggest bad, just like ye olde Pravda and Izvestia.]
    The Organization for Economic Cooperation and Development has predicted that Germany will have a “jobless recovery,” but that’s because the jobs have largely recovered. Germans are working less, without being poor or unemployed.
    They could be in trouble a few years down the road, because by preserving jobs, the government has also kept the economy from changing (painfully) in whichever direction it needs to move.
    [Does that include DOWN? - these commentators are truly nitwits!  DOWN is certainly the direction any economy "needs" to move-in when it retains a pre-computer workweek into the age of robotics.]
    Skilled machinists for BMW have kept their jobs, but there’s no guarantee that BMW will build quite so many gasoline-powered cars in a green-minded future. (Detroit also failed to retool for a new generation of cars, in part because of the Cash for Clunkers program.)
    Still, Berlin gambled well. Compensation schemes like Kurzarbeit are too expensive to keep in place for years on end, so Germany needed some sort of upswing this year to make its plan work.
    [Or, it needs to shift funding onto a sustainable basis, like a confiscatory overtime-profits tax with a complete exemption for OT-targeted hiring - and training where needed.]
    “If the economy does not pick up steam, it will catch up with us,” Burkhard Schwenker, CEO of the management consulting firm Roland Berger Strategy Consultants, told Spiegel Online at the end of last year. “But if the economy does recover, Germany, as an export-oriented country with strong companies, will benefit in particular.”
    In that sense the euro crisis was an unexpected boon.


8/15-16-17/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Labour markets - Save this job, 8/15 The Economist (blog) via economist.com/blogs
    WASHINGTON, D.C. - TYLER COWEN reads a New York Times piece on the roots of Germany's (considerabe) recent economic success, which contains the quote:
    A vast expansion of a program paying to keep workers employed, rather than dealing with them once they lost their jobs, was the most direct step taken in the heat of the crisis.
    And Mr Cowen says:
    I would describe this as a major, still uninternalized lesson of the recent crisis, with its roller coaster-rapid dips. In a highly specialized modern economy, it is much easier to prevent jobs from being destroyed than to create them again, at least assuming those are "good" jobs in the first place. (Yes, people thought they knew this but it's an even stronger difference than had been believed.) The U.S. auto bailout, for instance, worked better than did most of the stimulus program. Most of the Austrians would disown this point, but you can pull it right out of Lachmann's Capital and its Structure.
    Arnold Kling dissents:
    On the larger point, keep in mind that in an ordinary non-recession month 4 million jobs are destroyed and about 4.2 million jobs are created. Suppose that in a bad month of a recession, 4.0 million jobs are created and 4.5 million jobs are destroyed. Which of those 4.5 million jobs ought to be saved, because they might come back in a stronger economy? No one in Washington knows.
    The programme in question is Germany's kurzarbeit scheme, in which firms are encouraged to reduce hours across the board rather than sack workers, and reduced salaries are subsidised by the government. As a stimulative policy there is a lot to recommend it. But I think Mr Cowen muddies the discussion here with the difficult to judge statement that the auto bail-out "worked better" than did "most of the stimulus program". And in doing so he invites criticisms of the sort Mr Kling levels.
    The question, of course, is which jobs to save, and the irony of the situation is that had America had a robust work-sharing programme in place, it probably would not have saved Chrysler and General Motors. Reduced demand impacted all car companies, but not all car companies were thereby brought to death's door. Indeed, one of the great virtues of a work-sharing plan is that by reducing uncertainty and job loss it would have moderated the decline in consumer demand. This would have improved the fortunes of the more structurally sound carmakers (including, one supposes, Ford) and made the possibility of a GM bankruptcy seem less dire. A work-sharing programme may not be the ideal intervention, but it may well have rendered unnecessary even worse interventions like Cash for Clunkers and the carmaker bail-outs. And that's a strong point in its favour.
    And the difference in a formal work-sharing programme and a heat-of-the-moment bail-out is that it keeps the government out of the decision of what jobs to save. Washington can admit that it doesn't know which specific jobs no longer make sense, only that it's confident amid a credit crisis and demand shortfall that firms are unable to preserve jobs that would ordinarily be economical to maintain.

  2. Germany: On a roll, by Daniel Schaefer, 8/15 Financial Times via ft.com
    At the ready: galvanised steel at ThyssenKrupp's Duisburg works. A boom in German industry’s order inflow is spurring a new willingness by companies to invest in upgrading their facilities. (photo caption)
    FRANKFURT, Germany - When Peter Löscher, Siemens’ chief executive, told the Financial Times in May last year that Germany would emerge from the recession to “spearhead a fresh wave of industrial revolution”, it seemed a rash prediction. At the time, Europe’s largest exporting country was in the middle of its deepest recession in more than 60 years.
    Just 15 months on, Mr Löscher’s vision is becoming reality. The German export engine has surged back to life and is leading the continent out of the crisis, emerging faster from the downturn than many of its neighbours. Germany’s gross domestic product jumped 2.2 per cent in the second quarter from the preceding three months, taking the front rank in the eurozone. Friday’s data prompted several economists to predict that its economy will grow by at least 3 per cent this year.
    Production levels, exports and profits are rising rapidly in important sectors such as machinery, cars and chemical goods, while unemployment has reached the lowest level in several years. The strength of this “XL upswing” – as Rainer Brüderle, economics minister, calls it – is such that he clichéd German angst has evaporated. German businesses are basking in a summer optimism that contrasts sharply not only with the country’s oft-seen pessimism but also with the dark mood in the US and the uncertainty that pervades other parts of Europe. Business confidence in Germany last month reached its highest in three years.
    Yet there remain risks that threaten to derail the upswing – and not only because some sectors of the economy might be in danger of overheating. Growth is likely to slow in the remainder of the year, when government austerity measures kick in and companies’ inventory restocking is expected to wane. But many executives are even more concerned that Germany’s “new economic miracle” – as the domestic media call it – could really be a Chinese economic miracle.
    In large parts of the economy, from premium cars to textile machines, demand is being heavily driven by China – raising questions over the extent of the country’s dependence on a market whose growth has already started to slow.
    For now, however, German industrialists have plenty of reasons to be cheerful. Many plants are running at full speed again, some companies are expanding capacity and many are re-hiring contract workers. Orders in the engineering sector, Germany’s economic backbone that includes industrial giants such as Siemens as well as swaths of midsized family-owned companies, shot up by 32 per cent year-on-year in the first six months, following a drop of 38 per cent in the past year.
    The order boom is spurring a new willingness to invest. After several years in which companies squirreled away most of their cash, many are ready to replace old equipment and expand their businesses. SAP, the world’s largest business software maker, says its German sales grew at a double-digit rate in the first half of this year. “If you think about a company like SAP with such a mature brand and a well-founded marketplace growing at that rate, it speaks to the depth of the turnaround,” says Bill McDermott, co-chief executive.
    Several large manufacturers – from Siemens to companies such as Audi, the premium carmaker that is part of Volkswagen – are heading towards record profits this year, driven by a weak euro and a strong position in Asia. Daimler, Audi and BMW all reported record operating profit margins of more than 9 per cent in their luxury automotive businesses in the second quarter, thanks to rapidly rising demand for their high-margin top-class models but also helped by hefty cost cuts initiated in the past few years.
    “Germany is benefiting from its industrial strength and export power,” Siemens’ Mr Löscher says, pointing to the country’s technological edge in growth areas such as infrastructure and green products. Industrial products such as cars, machinery and medical devices make up almost one-quarter of gross domestic product – much more than in most European countries. Germany sold goods worth $13,681 (€10,728, £8,777) per head of population last year, far ahead of France and twice as much as third-ranking Italy.
    One reason is Germany’s openness to the world, says Hermann Simon, chairman of Simon Kucher & Partners, a German consultancy. “Germans go on holiday everywhere around the globe, whereas other Europeans tend to stay at home and do not get to know the world,” he observes.
    Certainly, German industrial groups were often faster than others in tapping markets outside Europe. VW entered China more than 30 years ago, for instance, sowing the seeds for today’s market dominance by the multi-branded carmaker. Some of the larger family-owned Mittelstand engineering companies, such SMS Group, a producer of metal processing machines, have been present in China for many decades.
    Mr Simon says German specialisation in high-quality market niches makes a lot of its industrial products indispensable: “Companies can postpone such investments but they cannot omit them altogether.” He points to Trumpf, the laser-cutting machine maker, saying: “If all machines made by Trumpf were suddenly to disappear, the global economy would simply collapse, as all sophisticated metal processing companies would have to close down their businesses.”
    The twin focus on market niches and exports – even small family-owned engineering companies often sell more than 80 per cent of their production abroad – has left German industry exposed to an amount of volatility that runs contrary to the country’s stability-loving mentality. Ulrich Reifenhäuser, owner of the eponymous plastics machinery maker, says of his experience in the past two years: “First we went into a brutal tailspin and now we are in the middle of a steep climb.”
    But after strengthening their competitiveness and radically improving their workforce flexibility in the past decade, most companies were able to cope with the roller coaster ride. Many businesses held on to their core staff during the crisis, helped by their own flexibility measures as well as a government-sponsored short-time working scheme where the state chips in for as much as two-thirds of wages lost when working hours are reduced.
    “Germany did a great job during the crisis. The consensus between employers and employees allowed managers to concentrate on business,” says Axel Heitmann, chief executive of Lanxess, a large speciality chemicals company. The main pillar of this consensus has been that trade unions such as IG Metall were willing to focus on job security instead of demanding pay rises during the crisis.
    This hibernation strategy came at the expense of a temporary drop in labour productivity, but it has paid off because it enabled companies to accelerate swiftly out of the slump. Reifenhäuser is a typical example. When orders more than halved in 2009, the group shed its 120 temporary workers and put large numbers of its 1,200 permanent staff on short-time working. As business came back forcefully this year, the group rapidly re-hired temps and switched back to full production and in some areas even special extra shifts.
    While the short-time working scheme known as Kurzarbeit will cost the German state €6bn ($8bn, £5bn) this year alone, it helped to keep unemployment at a low level throughout the crisis. This supported the population’s willingness to spend money, although consumption stayed at its usual low level. In July, unemployment stood at 7.6 per cent, one of the lowest rates in years.
    Flexibility measures such as Kurz­arbeit helped deal with most of the supply problems that had been dreaded at the initial stages of this apparently V-shaped recovery. While a few smaller suppliers struggled to meet demand in the first half of the year, most companies were quick to reinstate capacity. But some of the most cyclical areas, such as microchips, remain a problem. Infineon, the chipmaker, is for instance lagging behind on its production. In June, Audi and Porsche came close to having to halt car production in some of their plants after Harman Becker, their supplier of car stereos, ran out of the chips its units needed.
    “Such a fast recovery cannot go without friction. We had massive problems at the beginning but now production is running smoothly again,” says Mr Reifenhäuser.
    But what worries many industrialists is how lopsided the growth is towards Asia and other emerging economies such as Brazil, bringing a large part of corporate Germany into a dangerous dependence on the Chinese market in particular. “Without China we would hardly have seen this recovery – it’s a frightening trend,” says Hannes Hesse, head of the VDMA engineering association, adding that demand for textile machines is “almost exclusively” Chinese.
    The position is similar, if not quite so extreme, for carmakers. VW calls China its second home market but it really is its first: it sells more cars there than in Germany. Daimler says 20–30 per cent of its sales growth comes from China. But Dieter Zetsche, chief executive, rejects suggestions that it is becoming dependent on that market, saying: “We have a high profitability there but certainly do not have all our eggs in one basket.”
    But few doubt that a slowdown in China would hit the German economy harder than others. A number of German industrialists are already warning that the second half of the year will be tougher. “There is no reason to become overly optimistic ... We see a waning recovery in the US and Asia will grow more slowly in the second half,” says Jürgen Hambrecht, chief executive of BASF, the largest chemical maker in the world.
    China’s gross domestic product growth slowed from 11.9 per cent to 10.3 per cent in the second quarter from the first, reflecting government efforts to restrict bank lending. A continued softening would threaten to derail Germany’s export boom at a time when government austerity measures in Europe are upsetting growth prospects in its own backyard.
    “In western Europe and particularly in Germany, we expect demand to be weak in the second half of the year. And in China, there is also a chance for a soft cooling down in the second half,” says Hans Dieter Pötsch, VW’s chief financial officer.
    But such warnings cannot spoil the summery optimism in Germany. Many companies take heart from their overflowing order books, which provide a cushion for a time when the economy will lose momentum. Siemens, for instance, reported an €89bn order backlog last month, the highest in its 163-year history.
    “All over the place, we see a stabilisation of the global economy,” Mr Löscher says. “German companies are present on all international growth markets and can profit from this upswing.”
    ELEMENTS OF SUCCESS (sidebar 1)
    Germany’s economy is powered by its huge industrial sector, which makes up almost a quarter of its gross domestic product. Its industry employs more than 5m people, mostly at small and medium-sized enterprises, which account for 49 per cent of revenues. 
    Four sectors dominate Germany’s industry. Car makers come first, with €263.1bn in revenues and 18 per cent of exports. The machinery sector is next with €162bn in sales and 16.6 per cent of exports. Third and fourth are chemicals and electronics, which made €138.7bn and €121.3bn in revenues in 2009.
    CASE STUDY INFINEON (sidebar 2)
    ‘We are close to capacity ... This will persist until the end of 2010’
    Neubiberg epitomises Germany’s economic rollercoaster ride of the past two years. In this small town at the gates of Munich, Europe’s largest chipmaker has performed one of the most remarkable corporate turnrounds seen during the crisis. Infineon and its 26,000 employees peered precariously over the brink but ultimately managed to leap over the abyss.
    Looking at the Bavarian chipmaker’s performance this year, it is hard to imagine that the company was so recently in the middle of an existential crisis. The group, which supplies the automotive industry, industrial groups and mobile phone makers, expects a percentage revenue growth in the “mid to high 40s” for its year that ends next month and is aiming for an operating profit margin in the low teens.
    Demand from all over the world has risen so fast that Infineon has struggled to keep up. The group’s automotive customers now have to wait at least 20 weeks until receiving the chips, an unusually lengthy delay. “Since the end of the second quarter, our plant utilisation ... ranges between 90 and 100 per cent and it is therefore close to the capacity limit. This will persist until the end of 2010,” says Peter Bauer, chief executive.
    Twelve months ago, the company was raking up large losses amid a sharp downturn in demand in its core businesses and the bankruptcy of a spun-off subsidiary called Qimonda. Infineon’s share price fell to a low of €0.39 at one point, a fraction of its €35 listing price in 2000 when it was split off from Siemens at the height of the dotcom boom. A refinancing deadline loomed large.
    But just as many other German industrial groups have experienced, its fortunes turned within months. Along with a mixture of cost cuts and a €725m ($929m, £596m) capital increase that it managed to arrange, a rapid upturn in global demand brought the company back on track.
    This summer, the mood at Neubiberg’s main employer is as optimistic as ever. Not only did the group defy Germany’s biggest economic crisis in decades but it even paid down all its debt and now sports a net cash pile of €1.1bn that is making it ponder the acquisition of a smaller rival.
    Infineon’s shares have climbed by more than one-fifth this year to €5, far outperforming the Dax-30 index of which it forms part.

  3. Same Output + Fewer [Man]Hours = Economic Crisis? - Today’s economic crisis is less about the quantity of output than the distribution of income and leisure by Alejandro Reuss, 8/17 Dollars & Sense via dollarsandsense.org
    SOMERVILLE, Mass. - During the current crisis, real (inflation-adjusted) GDP per capita for the United States economy declined for six consecutive quarters. It has since increased for four consecutive quarters, though the figure for the second quarter of this year remains well below the pre-crisis peak. This might seem like an indication that real GDP per capita is a good measure of economic well-being. We’re in a severe crisis, everyone thinks things are bad, and GDP is down. Even though GDP has been growing again recently, we’re still not back to the level of prosperity before the crisis.
    Consider, however, that real GDP per capita for the second quarter of 2010 was higher than it was in the second quarter of 2005—and in fact for every previous quarter in U.S. history. Now, hardly anyone thinks that things are better in the United States today, economically, than they were in 2005—or that, excepting about three years between 2005 and 2008, things are better economically now than they have ever been before. It can’t be that our only problem is having fewer goods and services (as measured by real GDP per capita), since similar levels back in 2005 were not considered a disaster.
    One alternative explanation is that the level of GDP does not matter as much as the change in GDP. Maybe we’ve gotten used to higher levels of affluence, and now miss the extra goods and services. At first blush, that doesn’t seem like the issue either. The difference between the pre-crisis peak in real per capita GDP and even the trough of the recession is surprisingly small, less than 6%. Many people, counting on their incomes not only to remain at the higher (pre-crisis) level but to keep increasing, however, undoubtedly made spending decisions that are now difficult to reverse—like buying a house of a certain size and location or sending one’s children to a certain college. Even if the decline in incomes were spread evenly across the population, for those living close to the limits of their means, it might be difficult to “scale back.”
    Of course, the impact of the recession has not fallen equally on everyone, and that is much closer to the crux of the problem. The unemployed have borne the brunt of the recession. The official number of unemployed people in the U.S. labor force dipped below 6.5 million just before the recession, in the first half of 2007. Today, it stands at nearly 15 million. For the unemployed themselves, this means not only a loss of income but also of an important source of personal identity and self-esteem, of a major part of their social lives, and of future career prospects. For millions of others, mass unemployment means increased insecurity and anxiety about their own futures.
    Real U.S. GDP in 2009 was nearly the same as for 2006-just under $13 trillion. (The Bureau of Economic Analysis reports figures of $12.8806 trillion (in 2005 dollars) for 2009 and $12.9762 trillion for 2006). While these measures of total output produced are nearly identical, the figures for the number of workers employed and the number of work hours required to produce that output are strikingly different. In 2006, about 138.7 million workers (16 years and over) were employed, compared to only about 134.4 million in 2009. The total time spent at work, by all workers 16 and over, was about 18 billion hours fewer in 2009 than in 2006.
    Producing the same quantity of output in fewer hours means that labor productivity has increased. There are several possible causes: increased intensity or pace of work (or “speed up”), increased worker skill, improved production methods, or greater quantity or quality of tools used. During the current crisis, multiple factors may have been involved. High unemployment itself reduces workers’ bargaining power. Employers know that there are plenty of unemployed workers who are desperate for a job. Meanwhile, workers who do have jobs are desperate to keep them. This makes it relatively easy for employers to push down wages or demand a higher pace of work. It may also be that workers’ average skill level has increased, if for no other reason than that less-skilled workers are disproportionately represented among those laid off. There may also have been innovation in production methods and technology that explain part of this productivity increase.
    Increased productivity is not intrinsically a bad thing. It can mean being able to produce more goods—and a higher “standard of living”—without additional work hours. Increases in productivity have been a major source of economic growth in capitalist economies. As long as demand for goods and services keeps pace with rising productive capacity, productivity increases generally fuel rising real output. In principle, increased productivity can also mean being able to produce the same amount of goods in fewer work hours. Fewer work hours can mean more leisure time and a higher quality of life.
    The increase in productivity over the last few years, however, has not been matched by an increase in demand for goods. Overall demand now stands around the same level as a few years ago and at a significantly lower level than at the peak of the last boom, even as overall productive capacity has increased. The managers of capitalist enterprises do not set workers to produce goods just because they can, but because they (the managers) believe that this output can be sold at a profit. The decline in demand, then, means that some productive resources go unused—in the form of shuttered factories and idle machinery, and a dramatic decrease in employment and work hours.
    This decline in work hours has not been distributed sensibly or equitably among all members of the population—in the form of a shorter regular working week, more vacation time, or an earlier retirement. Therefore, we have the strange paradox that today the U.S. economy produces about as much output (real goods and services) as it did in 2006, and requires billions fewer work hours to do so, which sounds like a good thing. And yet, as a result, we find ourselves in a disastrous crisis—millions have lost their jobs and main sources of income, while uncounted millions live in fear of a similar fate.
    Karl Marx and Friedrich Engels wrote, over 150 years ago, that capitalist economies, in which goods are produced only if they can be sold, and will not be produced at all if they cannot be sold for a profit, had created a new kind of economic crisis: “an epidemic that, in all earlier epochs, would have seemed an absurdity—the epidemic of over-production.” Economic crises in previous societies, Marx and Engels understood, had been caused by an inadequate supply of goods, the results of drought, flood, war, and the like. In capitalist societies, for the first time in human history, there appeared crises as a result not of too little productive capacity, but of too much—“too much civilization, too much means of subsistence, too much industry, too much commerce.”
    Marx and Engels spoke of “too much means of subsistence, too much industry” with a sort of grim irony. They did not mean that there was really too much productive power compared to peoples’ needs or wants, but compared to their buying power (what later economists termed “effective demand”). It is certainly questionable whether endlessly producing more goods and services is really the key to making us better off—as opposed to enjoying greater leisure time, a more pleasant environment, greater economic security, less economic inequality, greater autonomy at work, etc. However, there’s no reason that the development of greater productive power must exact the enormous toll of human suffering that it can—and, very often, does—in a capitalist economy.
    Sources: Bureau of Labor Statistics, Labor Force Statistics (CPS), Table A-1, Employment status of the civilian population by sex and age; Bureau of Labor Statistics, Persons at work in agriculture and related and in nonagricultural industries by hours of work, 2006; Bureau of Labor Statistics, Persons at work in agriculture and related and in nonagricultural industries by hours of work, 2009; Bureau of Economic Analysis, Table 1.1.6. Real Gross Domestic Product, Chained Dollars (A) (Q); Census Bureau, Table 1. Monthly Population Estimates for the United States, April 1, 2000, to July 1, 2010; Karl Marx and Friedrich Engels, The Communist Manifesto.
    Alejandro Reuss is an economist and historian, and a member of the Dollars & Sense collective.

  4. Man Sues Over BlackBerry Overtime, from CANVAS STAFF REPORTS, 8/16 MyFox Washington DC via myfoxdc.com
    WASHINGTON, D.C. - Many workers check their BlackBerrys outside work hours and log in to check emails and complete tasks.
    But one police sergeant is suing the city of Chicago for two years of overtime back pay because he had to continue working on his BlackBerry well after finished his shift, NPR.org reported.

    Sgt. Jeffrey Allen's lawyer Paul Geiger argued that the Chicago policeman is owed serious compensation for all the extra work he completed and was required to put in on his mobile device.
    "What we are saying is he's using this mobile device at the behest of the Police Department very routinely and very often off duty and not being compensated for all the time spent on the device doing the city's work," said Geiger.
    According to NPR.org it is primarily public servants who are hourly employees who can qualify for putting in overtime on their BlackBerry devices.
    Meanwhile, Chicago Mayor Richard Daley has told the SunTimes.com the lawsuit is "silliness in time of economic crisis."
    "We'd have to take all the BlackBerrys away from public servants," he continued.
    This isn't the first case of working overtime on a BlackBerry and not getting paid for it, however.
    The Public Service Alliance of Canada union started including BlackBerry use into its contract negotiations in 2008, reported The Globe and Mail .
    "Our members are running into situations where they're not compensated properly for having to do work at home," said the union's regional executive vice president, Ed Cashman.
    And the SunTimes.com reported that last March a Milwaukee maintenance worker sued the property management company CB Richard Ellis for overtime work he was expected to complete on his BlackBerry.
    Former Washington, D.C., police officer Sean Rogers, who now heads up an arbitration firm, told the SunTimes.com that employers need to think about the hidden costs involved in handing out BlackBerrys to their employees.
    "I had one arbitration that involved 7,000 employees and they ultimately settled for something over $23 million," said Rogers.


8/13-14/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Defying Others, Germany Finds Economic Success, by NICHOLAS KULISH, 8/13 New York Times via nytimes.com
    BERLIN, Germany - Germany has sparred with its European partners over how to respond to the financial crisis, argued with the United States over the benefits of stimulus versus austerity, and defiantly pursued its own vision of how to keep its economy strong.
    Statistics released Friday buttress Germany’s view that it had the formula right all along. The government on Friday announced quarter-on-quarter economic growth of 2.2 percent, Germany’s best performance since reunification 20 years ago — and equivalent to a nearly 9 percent annual rate if growth were that robust all year.
    The strong growth figures will also bolster the conviction here that German workers and companies in recent years made the short-term sacrifices necessary for long-term success that Germany’s European partners did not. And it will reinforce the widespread conviction among policy makers that they handled the financial crisis and the painful recession that followed it far better than the United States, which, they never hesitate to remind, brought the world into this crisis.
    A vast expansion of a program paying to keep workers employed, rather than dealing with them once they lost their jobs, was the most direct step taken in the heat of the crisis. But the roots of Germany’s export-driven success reach back to the painful restructuring under the previous government of Chancellor Gerhard Schröder.
    By paring unemployment benefits, easing rules for hiring and firing, and management and labor’s working together to keep a lid on wages, Germany ensured that it could again export its way to growth with competitive, nimble companies producing the cars and machine tools the world’s economies — emerging and developed alike — demanded.
    Germans steered clear of the debt-fueled consumption boom that many believe contributed to the financial crisis. During the recession, Chancellor Angela Merkel resisted the palliative of government spending that the United States and some European partners felt was crucial to restoring growth.
    The battle over how to navigate the financial crisis helps display Germany’s emerging post-cold-war identity as a country less tolerant of foreign demands and lecturing, one with a tenser relationship with European partners. Though Germany has plenty of problems to grapple with at home, it has also become less obsessed with its historical crimes and more enthusiastic about its economic model, its culture and its improved standing in the world.
    Jenny Wiblishauser, 33, a single mother in the southern town of Memmingen, said Germany’s financial prudence — and its willingness to ignore foreign criticism — made her proud. “Before, the Greeks would call us Nazis, and we would act vulnerable,” she said. “Now one says, ‘Well, I’m not driving there for vacation.’ ”
    Some critics in Europe say that confidence veered toward hubris in the contentious debate this year over shoring up the Greek government and restoring confidence in the troubled euro. In particular, the venomous contempt in the German news media directed at Greece raised significant concerns among allies that a more assertive Germany had emerged, said Thomas Klau, an expert on European integration at the European Council on Foreign Relations.
    “That was like a wake-up call to the rest of Europe that something had changed in Germany,” Mr. Klau said.
    In the process, the relationship between France and Germany has become fraught and mistrustful, calling into question the future of the project of European integration.
    As the latest numbers show, Germany is outproducing its neighbors by wider and wider margins, raising fears of a two-speed Europe that could render the common regional currency unstable.
    France’s economy grew at just a small fraction of Germany’s, 0.6 percent in the second quarter. Spain’s economy grew an anemic 0.2 percent, while Greece’s shrank 1.5 percent.
    If policy makers in Berlin are right and the turning point has been reached, they will look wise. If the fragile recovery cracks, as worrisome signs of a slowdown in the United States and a cooling down of Chinese growth may augur, they could still bear the brunt of the blame for doing too little to foster regional and global growth.
    Government officials here are confident they found the right approach, including a better solution to unemployment. They extended the “Kurzarbeit” or “short work” program to encourage companies to furlough workers or give them fewer hours instead of firing them, making up lost wages out of a fund filled in good times through payroll deductions and company contributions.
    At its peak in May 2009, roughly 1.5 million workers were enrolled in the program. The Organization for Economic Cooperation and Development recently estimated that by the third quarter of 2009, more than 200,000 jobs may have been saved as a result.
    The German economy’s comeback is visible in smaller towns like Memmingen, in the historic region known as Swabia. The brightly painted market square in this prosperous town is straight out of a German fairy tale, but it is beyond the medieval fortifications of the old town that Memmingen’s part in the nationwide rebound of employment, which Chancellor Merkel has likened to a “small miracle,” took place.
    After a record year in 2008, the family-owned firm Magnet-Schultz watched orders for its electromagnetic products plunge. Nearly one-third of the company’s more than 1,500 workers in Germany were put on the short-work program. Only 57 were laid off.
    The firm’s chairman, Wolfgang E. Schultz, whose grandfather founded the firm nearly 100 years ago and whose son Albert joined as a vice president in January, said that his goal was to maintain the company in the long term by losing as few skilled workers as possible. He promised to try to rehire those who were let go when times improved. Forty of those workers have been rehired already.
    German exports rose in June by 28.5 percent compared with the year before, the highest level since the financial crisis began to pinch in October 2008. The renewed boom for industrial companies like Magnet-Schultz has helped push the unemployment rate down to 3.4 percent in Memmingen, less than half the national average of 7.6 percent.
    “The government took the right steps in extending the short-work program because it bridged a difficult situation,” Mr. Schultz said in an interview.
    From the start of the financial crisis, Mrs. Merkel has been the leading advocate of fiscal austerity, a view that won out at the Group of 20 meeting in Toronto in June when the leaders of the world’s biggest economies promised to reduce their budget deficits.
    Despite Mrs. Merkel’s triumphs on the world stage, her government is struggling to reverse its plummeting approval ratings. Her stance reflects the will of a public that, despite the good economic news, remains stubbornly worried about the future.
    The very sacrifices that have made German products more competitive and helped the country outpace its weaker, less disciplined European partners — strict wage control, a retirement age rising to 67 from 65, lower welfare payments and eased hiring and firing — have resulted in a deep feeling of insecurity.
    Ms. Wiblishauser, the single mother in Memmingen, spent one month in 2006 on the scaled-back welfare program known as Hartz IV. Although working as an assistant tax consultant now, she said slipping back onto the rolls was her greatest source of dread. “It gives you an existential fear,” she said.
    Germany’s partners have cajoled, begged and demanded that the government in Berlin encourage more robust consumer spending, to combat imbalances among the countries that use the euro currency. But Ms. Wiblishauser said she found the prospect of spending to aid other European countries distasteful.
    Like many Germans, Ms. Wiblishauser said she was having a hard time seeing the benefits the country received from being a member of the European Union. “I would really like it if we were self-sufficient, like the Swiss,” she said.

  2. Minersville library, others get creative to deal with budget cuts, by Leslie Richardson (lrichardson@republicanherald.com), 8/14 Republican & Herald via republicanherald.com
    MINERSVILLE, Penn. - A carnival planned for Friday in the borough's library parking lot aims to provide a fun time for those who attend, but it is being held for a serious cause.
    After repeated state funding cuts, the Minersville Public Library must look to raise money to keep its doors open.
    The $28 billion state budget Gov. Ed Rendell signed July 6 reduces funding to the state's 474 public libraries by 9.1 percent - the largest cut since 2003-04.
    "Even though myself and the board of directors have continually warned our community of the dooming future of the library, they seem to just ignore the warnings and assume that it will just go on," Minerville Public Library Director Mary Grigalonis said in a recent letter to The Republican-Herald. "After the 2009 funding cut we were forced to close one whole day of operation along with cutting staff hours. Once again in 2010 we faced even further cuts and now must deal again with cutting more hours."
    The Minersville carnival will be held from 6 to 10 p.m., Grigalonis said, and will offer games, prizes, chances, a potluck auction, food and entertainment. In addition to the carnival, she said the library will host a used book sale and conduct its annual fund drive.
    Trouble is shared
    Other area libraries have taken a similar strategy to that of the Minersville library, and for the very same reason.
    Elaine Mykolayko, Frackville Public Free Library director, said the library cut its book budget last year 12 to 15 percent after it lost borough funding. They've sought cheaper utilities and delayed renovating the building in the hopes of finding matching funds to stretch what's left in their coffers.
    "With the state aid cut again and also getting less from the county, we are taking it month by month," she said.
    In the meantime, the Frackville library will participate in community events like the firefighters parade and Pumpkin Festival, selling balloons and cold drinks. The library also held a pie sale and is currently selling a Frackville 1939 DVD. It will also host a mystery dinner in the near future.
    "It's a lot of little stuff. Not that any of it will make us a lot of money, but everything helps," Mykolayko said.
    Tanya Savitsky, Ringtown Public Library director, said they have added the sale of a historic calendar to their fundraisers. The 2010 calendar contained old photos of the Ringtown area, and the committee is in the process of getting the 2011 calendar under way.
    "It did help offset some of the losses in funding," Savitsky said.
    Savitsky said a donation jar has been placed on the library counter as well, and patrons have been very generous.
    Making due
    Other libraries are also trying to cut expenses while creating additional fundraising options.
    In a previous story in The Republican-Herald, Pottsville Free Public Library Director Nancy Smink said overdue fines will be raised from 10 cents to 25 cents a day starting Sept. 1. She's also trying to raise funds through an Internet search engine called GoodSearch LLC, Los Angeles, a search engine that donates 50 percent of its sponsored search revenue to the charities and schools designated by its users.
    Jerry Teter, treasurer for the Mahanoy City Public Library said previously that the library was issued a small games of chance license and raises funds through raffles.
    Carol Hull, director of the Schuylkill Haven Free Public Library, said her library may have to reduce its hours.
    Savitsky said the Ringtown library has not cut hours, services or staff.
    Problems will persist
    Mykolayko and Grigalonis both said they don't think the economic state of public libraries is going to change anytime soon. However, while funds are down, they said patronage is up.
    "I've seen in the past three months an increase in library usage," Grigalonis said. "When the economy is down, the library is strong. People who can't afford computers are on the library computers looking for jobs, or the are reading the papers checking the want ads."
    Savitsky, too, said patronage has also increased in Ringtown.
    Mykolayko said the biggest increase in patronage has been from adults.
    "They come in to fax something, or to deal with a job by using the computer. They may not be able to afford a home computer or they may not be able to repair the computer they have at home," she said. "Its a direct reflection of what is going on in the community. It is good for us in that it gives us something to show what we are doing, that people really need us, but if we can't afford to have what the people want to read or what they want to use, we will outlive our usefulness."


8/11-12/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. How Work-Sharing Can Help Businesses, Boost the US Economy, and Save Jobs, by Alain Sherter, 8/11 BNET.com/blog/financial-business
    NEW YORK, N.Y. - Businesses that need to cut their staffing costs face the hard choice of reducing employee hours or laying people off. Yet in 20 states around the country, there’s a third option: work-sharing. The approach is saving jobs domestically and abroad. And with the U.S. economy slowing and unemployment edging up, it’s high time that Congress and the White House take action to encourage work-sharing nationwide.
    In a typical work-sharing arrangement, employees work up to 40 percent fewer hours per week and accept a small cut in pay. States use unemployment insurance funds to make up for a portion of the wage cut, while businesses are expected to kick in the rest.
    It’s a simple idea — distribute the diminished amount of available work across a company’s broader workforce. Work-sharing, while not painless, is good public policy because jobless benefits are used to encourage businesses to retain employees they would otherwise be forced to let go.
    It’s good for the economy, too, since unemployed people don’t spend, sapping consumer demand. Moody’s Analytics chief economist Mark Zandi [see 6/09-10/2010 #1] estimates that every dollar spent on a work-sharing program would add $1.69 to U.S. economic output.
    Business owners seem to like the concept. As Andrew Nowakowski, president of a Connecticut metal-working plant, told the NYT:
    It’s a lot better than layoffs. The alternative would have been to lay off three to seven workers, but that would mean that when things become busier, I’d run the risk of not having the trained people I need.
    The New Buffalo Shirt Factory, a small apparel maker in upstate New York with some 70 employees, participated in the state’s work-sharing program — and saved 25 jobs. The company, which regularly laid off workers to adjust for changes in seasonal demand, was also better able to manage its labor costs.
    In New York, any business with at least five full-time employees who have been eligible for unemployment insurance for at least four full calendar quarters can apply to participate in the program. To qualify, employers must meet several conditions. Employee hours and wages must be cut between 20 percent and 60 percent, and worker benefits may not reduced or eliminated, among other things.
    Results from the program are encouraging. More than 2,200 New York businesses participated in work-sharing last year, saving 11,000 jobs in the state, according to the WSJ.
    Although other states should explore work-sharing, similar initiatives in Europe suggest the policy could work on a national scale in the U.S. Germany, which like other EU countries fell into a deep recession following the financial crisis, has kept unemployment in check in part through its kurzarbeit, or short work, program.
    Under this system, a company reduces employee hours by at least 20 percent. The government replaces 60 percent of the lost wages, while the employer chips in with 20 percent. Workers must swallow a 4 percent reduction in pay, but it beats unemployment.
    The NYT cites the example of Trumpf, a German machine-tool maker, that has survived the downturn without laying off any of its 4,000 domestic workers. In the U.S., by contrast, the company had to dismiss 90 of its 650 employees.
    Why the difference? Part of the answer is that, in Germany, Trumpf could take advantage of government incentives to reduce worker hours rather than lay off people, a system known as short work. In the program, the government gives workers partial compensation for the lost wages.
    “We wanted to keep our well-trained people on board,” the Trumpf chief executive, Nicola Leibinger-Kammüller, wrote in an e-mail. “Short work helped a lot.”
    Companies in the U.K. have also used work-sharing to avoid layoffs. British Airways, Ford, Honda and equipment manufacturer JCB all reduced employee hours in 2009, reports the New Economics Foundation, a London think-tank. Accounting giant KPMG also allowed personnel to work a four-day week, with 86 percent of staffers opting for the shortened schedule.
    Work-sharing isn’t right for every business. Companies that have already pared their workforce to the bone are unlikely to benefit, for instance. It’s also questionable whether help should be extended to companies in sectors where economic productivity is unlikely ever to rebound. Such assistance should amount to a temporary, not permanent, subsidy.
    But such concerns shouldn’t outweigh the necessity of saving — and creating — jobs. Unemployment is severely hindering economic recovery, with the U.S. losing additional 131,000 jobs in July. Meanwhile, economist Dean Baker of the Center for Economic and Policy Research projects that reducing the employment-loss rate by 10 percent would create 2.4 million jobs a year. 
    This would get us back to full employment in two years, rather than five or six, as is currently projected.
    Two bills — H.R. 4135 and S. 2831 — are circulating in Congress that would expand state work-sharing programs. Members of the Obama administration have expressed support for the concept. What are we waiting for?

  2. Why Don't Americans Have Longer Vacations? - Explaining the gap between Europe and the U.S., for better or worse, updated 8/11 (from 8/04), nytimes.com/roomfordebate
    It's Even Worse Than You Think
    Thomas Geoghegan

    Updated August 11, 2010, 09:54 PM
    Thomas Geoghegan, a labor lawyer in Chicago, is the author, most recently, of “Were You Born on the Wrong Continent?: How the European Model Can Help You Get a Life."
    My brother scoffed: “You get a ton of vacation.”
    “Come on, I took a week in May.” If I then subtract the weekends I’ve worked just since May, I’m in negative numbers.
    But of his neighbors out in the burbs he said: “People don’t get any.” And this August, in this economy, even if they could take it, they don’t dare.
    Across the ocean, the Europeans are, of course, on vacation. But do all those Germans really work so much less than we do? I get frustrated with the international surveys. Let’s use the count of the Paris-based O.E.C.D., which is a pretty neoliberal bunch. They put us Americans at 1,841 “average” hours a year and the Germans at 1,473 hours in 2000 – and then put us at 1,804 hours a year and the Germans at 1,436 hours in 2006. But the International Labor Organization had a different count. And it’s all embarrassing to labor economists.
    So why should we take the disparity seriously?
    No matter who does the count, by whatever methodology, they all find a huge disparity. As a labor lawyer, I think the U.S.-Europe gap is understated. In the U.S., with no labor movement or government to enforce limits on hours, it’s impossible to get an honest count. Read Kim Bobo’s "Wage Theft," documenting the staggering number of Americans who work for free, extra hours, for no pay. Employers here turn in fictitious numbers. “Oh, but we have phone surveys to correct for it.” Come on: who’s going to rat on the boss on a cold call?
    Those supposedly idle Germans, with all that time off, produce more per hour than the worker-bee Americans.
    I leave out the white collar people in cubicles desperate to work an extra hour. Even in a good economy, one can hear Chainsaw Al somewhere in the building drawing near. Stay a little longer than the person in the next cubicle, and maybe like the Angel of Death, Mr. Chainsaw Al will pass over and descend on someone else.
    Meanwhile, in Germany, where the job of a works council is to make sure people get home in time to go to the theater, I think hours are overcounted. At first when I went to Berlin to write a book on Germany, I didn’t believe that people really left work on Friday after lunch. Well, they do. And if I just subtract 2:00 p.m. to 5:00 p.m., that raises the gap by over 150 hours a year.
    And what about all the work we do in America on Saturday and Sunday, i.e., work that doesn’t “count”? When I first went to Germany I couldn’t find a store open on Sunday over there.
    Likewise, it’s misleading to compare the public holidays. In Europe people actually stay home on public holidays, while in the U.S., in the case of Columbus Day or others, it’s just another day at work.
    In short, the count is off. And consider what the overcount of Europe’s hours and the undercount of our own say about each continent’s respective productivity. Right now, the economies of Belgium, Germany (West), France and the U.S. all hover at about same output-per-hour, the same productivity. But if by virtue of our respective scams we overcount Europe's hours but undercount our own, logic implies the Europeans are putting out even more per hour than our bean counters imagine.
    Yes, thanks to the six-week vacations, the nights at the theater on Tuesday night, the idle Europeans turn out more per hour than we worker-bee Yanks.
    But they would explode if they had to work U.S. type hours. Many years ago I knew a German woman who came to grad school at Northwestern. She said she flipped through the course catalog to get to the list of holidays. “I do not find so many!” she said it with that wail Europeans start to favor when they have to come here to work. Later in the year she complained of fatigue, exhaustion, etc. And of course it was obvious what her problem was. “Hey, Isabel, your problem is you’re trying to work U.S. type hours with German efficiency.”
    She stared.
    “You’ve got to stop,” I said. “You’re going to blow a fuse.”
    Look, if you’re in America, you have to pace yourself.
    An economist friend thinks that Europeans a few years ago were starting to work more like Americans. But since the discrediting of the U.S. model, they’ve gone back to being Europeans.
    Meanwhile, this August, in the shambles of that model, we’ll be working harder than before.
    The Numbers Are Squidgy
    Peter Baldwin

    Updated August 5, 2010, 01:47 PM
    Peter Baldwin is a professor of history at University of California, Los Angeles, and the author, most recently, of “The Narcissism of Minor Differences: How America and Europe Are Alike.”
    Let’s stick with the Germans as our example, that happy, fun-loving, easy-going nation of endless vacations. As Mr. Geoghegan points out they work less than we do. Indeed, they work less than almost everyone else in the industrialized world.
    Long vacations are not the only reason. It’s not only that the Germans who do work work little; it’s that so few of them work in the first place. German women, for example, to a remarkable degree still stay at home doing housework and minding the children rather than pursue careers.
    Also, the figures understate the German hours worked. Since the statistics simply divide the total numbers of hours by the total number of workers, and since a higher percentage of Germans work part time (22 percent) than do Americans (14 percent), the hours per worker in Germany are lower than if measured more accurately. Nonetheless, a difference undeniably remains.
    Perhaps Americans have collectively decided to work somewhat harder to be substantially better off.
    If we look at the time diary figures compiled by Michael Burda and his colleagues, which chart more precisely how people actually apportion their days, we see that Americans work 23 percent more than Germans in the marketplace. However, once we factor in household labor, the drudgery that allows us to function in the world, the difference in total work drops to 12 percent. And interestingly, the figures for time actually spent at leisure are almost precisely the same for the two nations.
    That Americans work 12 percent more than Germans seems to be the hard kernel that emerges from the statistics. Considering that for that 12 percent investment the American G.N.P. per capita is 32 percent higher than the German, this seems a defensible trade-off. Perhaps Americans have collectively decided to work somewhat harder to be substantially better off. Mr. Geoghegan’s anecdotes do not undermine the fact that even measured per hour worked, the Americans are more effective than the Germans (8 percent more, according to Labor Department 2008 P.P.P. figures).
    Even if Americans are Stakhanovites by German standards, is this just an issue of drones vs. butterflies? That more people work for more hours is not only a bad thing. Mr Geoghegan holds up his experience of not finding a store open on a Sunday in Germany as something laudable. For whom? For the vast majority of the population not employed in retail? For the 40 percent of German youth who are unemployed and might like a job, even on Sundays? Back in the days before the Germans liberalized opening hours, I can remember the quiet desperation in the lines that formed in front of Berlin supermarkets on Monday mornings when they finally deigned to open after a three-day weekend: a population held in thrall to the political power of its shopkeepers.
    And what about other examples of too little work being done? The lack of any help bagging your groceries once you are finally allowed to buy them? The fact that even at the best German universities' lectures routinely have 500 students, “seminars” 50?
    Another aperçcu into the German situation: standing in an endless line at a post office in Berlin at noon, which is when the employees there take their lunch break. Finally, a frustrated customer shouts out, why don’t you put more people on during lunchtime?
    Why don’t you come when there are fewer people, one of the employees bellows back from behind the counter.
    [Ah, cuz they're at work, duh - that's why they've come at LUNCH time...]
    What makes the German happy as a trade union member upsets him as a customer. It’s all too easy to romanticize an only dimly understood situation.

  3. BevMo Employees Say Hours, Benefits Being Slashed, 8/12 CBS 5 via cbs.com
    OAKLAND, Calif. - Employees at BevMo say shorter hours and slashed benefits are pretty tough to swallow in this economy, but the company says it is getting a bad rap.
    Catherine Cordero said she's been cut from full time to part time, with no more health benefits.
    "It's a struggle to live off 20 hours. My home's in foreclosure. It's just been really hard," said Cordero.
    Now there are calls to unionize. A rally Thursday in Oakland was organized by the United Food and Commercial Workers union and the teamsters.
    BevMo argues the unions are inaccurate and misleading in their claims about worker compensation. The company states it has over 500 fulltime employees eligible for healthcare and 401K plans in stores throughout California and Arizona.
    Officials said about 160 people, or roughly 10 percent of the workers, had their hours reduced as of this month, and they are being offered healthcare benefits through January of next year. Still, the majority of all workers are part time, apparently not that unusual for retailers.
    The union says the shift to downsize and use part timers has been going on since the 70's, but picks up speed when the economy slows down.


8/08-09-10/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Oklahoma Passes Shared Work Program, by Diane Cadrain, 8/10 shrm.org
    OKLAHOMA CITY, Okla. - Senate Bill 1970 creates the Shared Work Unemployment Compensation Program. Oklahoma is now the 18th [or rather, 20th] state to offer such a program, which allows employers to reduce the work hours of their full-time employees and the employees to collect partial unemployment benefits to replace some of their lost wages.
    “In this tough economy, businesses are being forced to make hard decisions,” said bill sponsor Sen. Jim Wilson. “My bill would allow employers to cut back hours without laying people off and those whose hours have been reduced can supplement their income with unemployment payments. The idea is that fewer people lose their jobs while keeping wages up at a level higher than a part-time salary.”
    Oklahoma’s program will not affect the Unemployment Insurance Trust Fund and will allow participating employers to retain skilled workers during an economic downturn.
    Employers wanting to participate in the program would have to submit written shared work plans to the Employment Security Commission for approval. Before approval, employers would have to agree to furnish the commission with reports relating to the operation of the shared work plan.
    Other states offering similar programs include Arkansas, Arizona, California, [Colorado,] Connecticut, Florida, Iowa, Kansas, Massachusetts, Maryland, Minnesota, Missouri, [New Hampshire,] New York, Oregon, Rhode Island, Texas, Vermont, and Washington.
    The Oklahoma State Chamber of Commerce supported the measure, which was signed on June 6, 2010.
    Diane Cadrain is an attorney who has been writing about employment law issues for more than 20 years. She is a member of the Human Resource Association of Central Connecticut.

  2. Employers warn of 'jobless recovery', by Brian Groom, 8/10 Financial Times via ft.com
    LONDON, England - The UK’s unprecedentedly wide embrace of short-time working to save jobs in the recession has created spare labour capacity that will slow down job creation in the recovery, employers and economists warn.
    [Not if they keep the workweek at the short-time level or reduce it further.]
    UK monthly employment data, out on Wednesday, are expected to show a further fall in the number of people claiming jobless benefit, which has fallen for the last five months, reinforcing expectations that the economy is picking up steam.
    Companies say, however, that having retained more skilled staff than during previous recessions, they are better placed to meet new orders quickly, even if this does not create employment as rapidly as in the past.
    Had they sacked as many as they did during the 1990s recession, they would by now be caught short and struggling to rehire staff they had let go.
    [And wouldn't that be stupid and often impossible when experienced staff had found jobs elsewhere. And this idiotic journalist is LAMENTING this being caught short and this struggle??]
    KPMG, the professional services firm, reckons it saved £4m or the equivalent of 100 jobs by having nearly a quarter of its 10,000 UK staff on voluntary sabbaticals or four-day weeks at some point over the past 18 months. It says that helped it prepare for growth and expects to recruit 1,500 this year and 2,500 next – faster than employers in many sectors.
    Norton Rose, the London-based international law firm, also estimates it saved 100 jobs by having up to 600 of its 2,000 staff on four-day weeks or sabbaticals. It is more cautious about recruitment – hiring is in niche and growth areas, mostly overseas – but believes that the fairness of its scheme cemented staff loyalty and will make it more attractive to future recruits.
    Even British Airways, beset by cabin crew strikes and the worst trading conditions in the history of aviation, says it had a “fantastic response” to a voluntary scheme in which more than 7,000 staff took unpaid leave, part-time work or unpaid work, helping save £200m ($318m) from employee costs.
    Having also cut its workforce from 42,400 to 36,800 in two years, BA says: “It is essential that we achieve permanent changes to our cost base but this will allow for potential future growth, not prevent it. For example we have recently advertised for new cabin crew at more competitive rates.”
    Employment across the economy fell by less than 2 per cent during the recession, even though output dropped by 6.4 per cent. That means employers have been carrying substantial spare labour capacity, which they have coped with through a sharp rise in part-time work.
    The part-time workforce has swelled to a record 7.8m or 27 per cent of employees, compared with 23.4 per cent when comparable records began in 1992. More than 1m of these are working part-time because they cannot find a full-time job.
    Halfords, the car parts and cycles chain, plans to save more than £2m annually by switching to more part-time work. BA’s part-timers have increased by 5 per cent since 2008 as a share of its workforce.
    “Yes, there is spare capacity,” says John Cridland, deputy director-general of the CBI employers’ group. He does not think it “a sufficiently hobbling factor” that it will prevent the private sector absorbing some of the spare capacity from the public sector contraction, “but it will slow it down”.
    The CBI thinks unemployment, currently 2.47m or 7.8 per cent of the workforce, will peak at 2.65m next year – a more optimistic view than that of the Chartered Institute of Personnel and Development, which reckons it will peak at 2.95m in 2012.
    Mr Cridland says that the part-time trend “reflects a caution among employers that they spent a lot of time taking out costs and they don’t want to add to those costs too heroically”. He says a lot of manufacturers are thinking of adding a third daily shift, but will do it with their existing workforce and through overtime.
    When the downturn hit, carmakers such as Honda, Toyota, Vauxhall and Jaguar Land Rover led the way with pay freezes, shutdowns, shorter weeks and sabbaticals. Other industries followed and service employers found their own way of cutting working time.
    Short-time schemes in manufacturing have now largely ended, but at their peak were as prevalent as in France and Germany even without the benefit of government subsidies. “The fact that we didn’t have a prescriptive approach forced companies to be more innovative about what they did,” says David Yeandle of the EEF manufacturers’ federation.
    He too thinks that there is spare capacity. “It just reflects the fact that we are going to have, or at least we are beginning to have, something of a jobless recovery. We are not going to have the same recovery rates of taking people on.”
    White-collar short-time schemes are winding down too, though it may take time before the part-time trend is reversed. At KPMG, Michelle Quest, UK head of people, says its present schemes are likely to end in September but it is looking at ways of continuing part-paid sabbaticals. She thinks the schemes have encouraged interest in flexible working.
    At Norton Rose, Lak Purewal, head of human resources, thinks its scheme helped engender staff loyalty and prepare for recovery. “We didn’t want to be in a position where we were then going out and recruiting lawyers who we had let go during the downturn – particularly as we know from previous experiences that many other firms would be doing exactly the same,” he says.
    Cast study: Four-day week was key for manufacturer
    Stuart Fell, chairman and majority owner of West Bromwich-based Metal Assemblies, thinks a four-day week may have saved his company, writes Brian Groom.

    The maker of pressed metal parts for carmakers such as BMW and Nissan cut its staff from 146 to 73 in just 10 weeks after demand slumped by 60 per cent in October 2008, but even that was not enough. “The choice we had was either put people on a four-day week or have even further job cuts,” he says. “But we felt we had got down to a level of people where it would have been difficult to work out how you could ever recover.”
    So Metal Assemblies adopted a four-day week at 80 per cent of pay for three months last year. It did recover and is now back up to 120 staff. The short-time working helped Mr Fell hold on to workers such as toolmakers, engineers and robot programmers that were needed when orders returned. “You could say it saved the equivalent of 20 per cent of the 73 staff, or you could say that actually without being able to do that the entire company would have been in jeopardy, which was not far from being the case,” he says.
    He accepts that, having saved jobs, he is hiring fewer than he might otherwise have done. But, he adds: “It is also true that by hanging on to skills, when the market does start to pick up, we are able to respond quicker to grab the opportunities. We might not have been able to respond quite so well if we were busily trying to recruit.”
    Mr Fell is cautious about predicting jobs growth because that depends on orders. But he has just spent €400,000 (£332,000) on a new press, his biggest investment of that kind.
    He is an enthusiast for flexible working. Metal Assemblies has 40 different working arrangements, allowing staff to work hours that suit them. A third are women and many have childcare or other family responsibilities. By understanding their needs, he says, they are more likely to understand the company’s requirements.

  3. Oz in bid to lure 'bored workers', 8/09 The U.K. Press Association via google.com/hostednews/ukpress
    ADELAIDE, South Australia - An estimated 60% of British employees are bored with their jobs and almost three-quarters never leave their office during work hours, according to a study.
    The research is part of a recruiting drive to lure young Britons to Australia to fill positions as diverse as koala catcher, beer taster and shark tagger.
    Those bored with their work said it rarely pushed them outside their comfort zone, while 71% said they never had an opportunity to escape the office, the poll of 2,000 people for the Government of South Australia found.
    Among the most disgruntled are those in Wrexham and Coventry, which were identified by the study as the worst places to work in Britain based on wages and social life.
    Those most bored by their work come from Portsmouth, Chelmsford, Southampton, Cardiff and Oxford.
    The survey revealed the most boring job sectors to be electronics, administration, retail and call centre work.
    The South Australian Government has launched a new campaign to poach stressed and bored Brits, advertising a range of jobs "in stark contrast to the UK's long working hours, high taxes and increasing retirement age".
    It is hoping to tempt 18 to 30-year-olds with the promise of the the "ultimate work-life balance".

    Other jobs on offer are for a Fairy Penguin home remodeller on Kangaroo Island, a shark personality profiler at Port Lincoln and a "roo poo" harvester.
    All interested applicants need to do is fly to South Australia on a working holiday visa to be in with a chance of snagging their dream role, the government said.

  4. Pay and the FLSA: Avoiding 3 legal pitfalls, 8/09 HRmorning.com
    WASHINGTON, D.C. - Tight times have caused many employers to cut overtime, salaries and work hours to stay afloat. That’s understandable — and legal. But those actions can bite you back if you don’t fully understand the trickier points of the law.
    However, thanks to some guidance from the feds, adjusting pay and work schedules for exempt and non-exempt employees just got a little easier.
    We’ve broken down all the government-speak and compiled this list of legal do’s and don’ts to help make sure your company stays safe.
    What to avoid
    Here are three common mistakes employers make:
    Mistake #1. Considering everyone who’s paid a salary as an exempt employee. Just because an employee is paid a regular salary doesn’t make that person exempt from OT.
    To be exempt, employees must:
    * be paid at least $455 per week
    * be paid on a salary basis, and
    * perform exempt job duties.
    Note: There are three categories of exempt job duties — executive, administrative and professional. For a breakdown of what’s included under these duties, *click here.
    Mistake #2. Giving non-exempt employees comp time instead of OT. Employers cannot award comp time instead of OT pay for non-exempt employees.
    OT-eligible employees must always be paid one and one-half times their regular hourly wages for all hours worked beyond 40 in a workweek.
    [Dandy, except it incentivates employees to overwork, and as for employers, well, with a load of costly benefits per employee, it doesn't incentivate employers to hire rather than resort to overtime as much as it used to. Here's the improved Timesizing design (and for individuals) that adjusts the incentives to stop encouraging the wrong thing.]
    Mistake #3. Cutting exempt employees’ pay due to a lack of work. Generally, if an exempt employee is ready willing and able to perform his or her job, an employer can’t dock pay because business is slow.
    Note: If an exempt employee does any work during a workweek, the person must receive his or her full salary.
    However, there are two exceptions that allow employers to reduce exempt employees pay when business dies down:
    * If work is cut in full-week increments because there’s no work available. This usually occurs during holidays or common slow periods. But it’s important to announce the schedule as far in advance as possible so it doesn’t look like cuts are being made haphazardly.
    * If a formal short-week schedule is created. For example, it’s OK for employers to announce that for the four weeks in December, the company will be closed on Fridays and pay will be cut commensurately. But exempt employees must make at least $455 per week and receive advanced notice of the cuts.
    Warning: Some state laws are tougher than federal laws when it comes to making these types of cuts. It’s always wise to check with your state department of labor to make sure your cost containment strategies don’t violate state law.


8/06-07/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. USPS posts $3.5 billion third quarter loss, by Emily Long  elong@govexec.com, 8/06 (8/05) Government Executive via govexec.com
    WASHINGTON, D.C. - The U.S. Postal Service on Thursday reported a $3.5 billion loss in the third quarter of fiscal 2010, despite continued reductions in employee work hours and other cost-savings measures.
    According to Chief Financial Officer Joe Corbett, USPS' obligation to participate in federal benefits programs, including a $17 billion workers' compensation liability, was the "culprit" for increased expenses over last year. The Postal Service reported a $2.4 billion third quarter loss in fiscal 2009.
    "Given current trends, we will not be able to pay all 2011 obligations," said Corbett. "We can't continue to just keep losses where they are. We have to be profitable."
    Salaries and benefits account for 80 percent of the Postal Service's expenses, he said, adding the agency will continue to cut back on work hours. During the first three quarters of fiscal 2010, USPS cut 63 million work hours, or the equivalent of 36,000 full-time jobs.
    [The bad news here, of course, is the loss of 36,000 35-hr/wk jobs, which could have been saved by trimming the overall USPS workforce to a 25- or 30-hour workweek instead of sticking to 35. Otherwise the USA ain't gonna be the biggest economy much longer, or even a First-World economy.]
    The good news is that at least they're talking about work-hour totals across thousands of jobs, a stage we need to get to before we get the "radical' "new" idea of spreading those hours on a flexible basis to maintain our consumer base, which if we don't stop diminishing soon - via the "employment basement" - will leave us squarely in the Third World with lives not worth living and no sustainable productivity for our insulated and isolated super-rich to invest in. Money will become meaningless in the top brackets because there's so much of it, and meaningless (or virtually unknown) at the bottom because there's so little of it. Based on outdated 40-hr/wk, 50-wk/yr jobs, we get 2000 hours a year per job. So the 36,000 "full-time" jobs mentioned as cut would amount to 72 million hours a year total. To get 63m work hours, we can only allow 63m/36k= 1750 hours a year per job. That would mean 50 wks @ 35 hours a week, or 40 hrs/wk for 43.75 weeks. This tells us two things: (1) the USPS cut 63m work hours per year, which should have been specified in the article, and (2) the USPS was cutting 35-hour/week jobs, which should have been specified in the article because "full time" generally today is hardly as low as 35 hours a week, especially when our pundits ridicule France for that low a workweek even though it occasions considerably less employee burnout, boredom, sabotage and unemployment in France than our 40-hr-plus workweek does here. We have a lower unemployment rate, you say? Forget it. Our unemployment rate is a lot more sugared than theirs.]
    The largest reductions were in mail processing and customer service, followed by city and rural delivery.
    Despite losses, the Postal Service is on track to eliminate $3.5 billion in costs by the end of fiscal 2010 due to "process improvements," said Postmaster General John Potter during an agency meeting on Thursday.
    Louis Giuliano, chairman of the USPS Board of Governors, said lowering the $238 billion deficit depends on "corrections of things that probably shouldn't be," including reducing the number of delivery days and changing the agency's obligation to prefund its retiree health benefits at more than $5 billion annually. "The fact is, six- to five-day delivery hasn't happened, a change in health benefits funding hasn't happened, despite two years of work," he said.
    In recent testimony submitted to the Postal Regulatory Commission on behalf of the National Association of Letter Carriers, former USPS Chief Financial Officer Michael J. Riley wrote that eliminating Saturday delivery would be a "grave error" for the Postal Service. The proposal would cut valuable services and eliminate the agency's competitive advantage over other delivery companies, as well as "reinforce the negative stereotype of the Postal Service as an inefficient government entity rather than a vital service-oriented enterprise."
    "Contrary to the Postal Service's assertions, eliminating Saturday delivery is not necessary to improving its finances," Riley wrote. "Indeed, going to five-day delivery is not only unnecessary, but would be harmful to the long-term health of the Postal Service."

  2. Crow Tribe hit by budget shortfall, by Susan Olp, 8/06 BillingsGazette.com
    BILLINGS, Mont. - Hit by a budget shortfall, Black Eagle and the rest of the executive branch have wrestled with how to keep the tribe’s finances in the black. It has included cutting back a majority of the tribe’s work force to 32 hours a week.
    At the same time, he is hopeful that a tribal water rights settlement totaling $460 million will be passed by Congress in September. If agreed to by a majority of the tribe, it could boost the tribe’s infrastructure and finances.
    For the past month, Black Eagle’s focus has been on how to deal with the tribe’s $2.1 million budget deficit.
    Black Eagle said the tribe has felt the effects of the country’s struggling economy.
    “It’s because of the economic downturn that has created the situation for everybody in this country, not just us,” he said. “It can’t be singled out to just the Crow Tribe.”
    The tribe receives a guaranteed amount of money in federal grants and for federally funded programs, Black Eagle said. But revenue that goes into the general fund isn’t guaranteed.
    One has to do with tribal money handled by the Department of the Interior’s Office of the Special Trustee. The OST oversees all of the funds affiliated with the tribe’s trust property, trust land and trust assets.
    In particular is the tribe’s 107th Meridian Settlement, which has $85 million in principal that is placed in a special account for the tribe. The principal can never be touched, but the tribe receives quarterly interest from the money that is invested by the OST.
    “Those investments, because of the economy of the country, dropped from 6 percent to like 1 percent,” Black Eagle said. “So we lost money there.”
    The tribe also lost money when royalties from Westmoreland Resources, which mines Crow coal, were less than expected.
    Black Eagle and the other officers looked at a number of options to erase the deficit. The most severe would have been to lay off 165 people. Another one would have given an across-the-board pay cut and the third would mean a shortened work week.
    Of the estimated 900 tribal employees, only the 600 paid through the general fund are affected by the shortened hours, Black Eagle said.
    “We wanted to weather the storm and keep everybody working and not cut anybody’s hourly rate,” he said.
    In addition, the tribe secured a $1.5 million line of credit that will be paid back in the 2011 fiscal year, which starts Oct. 1.
    Whether employees will be restored to 40 hours a week depends on whether the economy turns around, he said. The ultimate answer to budget shortfalls is to increase tribal revenues, Black Eagle said.
    The first source may be passage of the Crow Indian Water Rights Settlement, which is pending in both the House of Representatives and the Senate. In the House the bill has had a hearing in the Committee of Natural Resources, and in the Senate, it has been reported out of the Committee on Indian Affairs to the full Senate.
    Black Eagle had hoped Congress would have approved the settlement before it recessed for the month of August, but he believes it has a good chance of passage in September and that President Barack Obama will sign it. It would then come back to enrolled Crow members for final approval.
    Black Eagle said tribal officials will work hard to get out information to members so they have a complete understanding of the proposal before they take part in a secret-ballot vote.
    Under the settlement, the tribe would be granted specific water rights, funding for irrigation and municipal water projects, the right to build two hydroelectric plants and market commercial electricity, and get a $19 million state severance tax settlement now held in escrow. All told, the settlement could add up to $460 million in money and benefits to the tribe, he said.
    “It basically secures the future of the Crow Nation for many, many generations,” Black Eagle said.

  3. Residents need to wake up, by Edward Williamson of Granby NY, 8/07 Fulton Valley News via valleynewsonline.com
    FULTON, N.Y. - Oswego County needs more concerned residents like Steve Burdick of Palermo.
    Steve is correct that our Social Services Department and Commissioner Frances Lannigan insists they are over worked. “That’s a laugh.” The State of New York’s report said our Social Services Department was under staffed so our county legislature hired more people. The department had 275 employees to begin with. Our Social Services Department commissioner was given a raise in excess of $105,000 and apparently neglected to review Erin Maxwell case.
    All we hear is the state won’t let them do this or that. Doesn’t our county have any back bone to do the right thing? Government at all levels has become too large with many perks to be paid for by the already over burdened tax payer. Many agencies in the county work 35 hours a week for 40-hour pay.
    [Nice that at least one county government (Oswego?) is still too large in the USA - all the others have been cast adrift by the federal government and wealthy taxpayers and had their budgets cut to the bone. Some dumbadumb 'Merkins are going to be parroting this partyline even when there's no government left...]
    Child abuse and neglect seems to be on the rise and much of it in an area where families receive public assistance. There are good families who need assistance, especially in hard times. However, public assistance should be monitored on a weekly basis; this would help eliminate some abuse and ill care of children.
    As first responders, to report a suspected case of child abuse, falls on our school system. Teachers receive training, which helps them to spot problems. The teacher or the principal should call the Albany Abuse Hot Line so an investigation can be started. The next step should be call county Social Services and make them aware. This apparently did not happen with Erin Maxwell.
    I personally, as a resident of Granby and Oswego County, wrote to the New York State Office of Child and Family Services, the New York State commissioner of education, the Phoenix Central School System, asking for the teachers’, nurse and counselors’ names who had contact with Erin Maxwell and her problems. To my amazement no one knows anything. Their comment, is, write to this agency or that agency. I wrote to the New York State Attorney General; their answer was they have no jurisdiction. Tell me who has the jurisdiction over agencies who do not do their job, but collect their lucrative pay and pensions, and I will contact them.
    More than Erin’s half brother should have been subject to some kind of action.
    For over five years, our Social Services Department watched Erin live in filth and in a cage. They did nothing to make her life better. How did the county handle their mistake? They gave the boss a large raise and more workers.
    Wake up residents of Oswego County and insist our government works for you!
    [Typical American - wants to cut government and get it to do more at the same time - "pass the free lunch" - never mind restoring graduated income taxes on the rich - "Oh the 'death tax' on the rich will hurt MEEE" - yeah sure. Remember the 1990s when they cut funding for all the mental institutions and halfway houses and released all the mentally ill onto the streets to swell the population of homeless? (+/- criminally insane and incarcerated?)...]


8/04-05/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. Capps Shoe gets military contract, recalls workers, 8/05 AP via WashingtonExaminer.com
    GRETNA, Va. — Capps Shoe Company Inc. has rehired 10 laid-off workers and plans expand its Gretna facility.
    Lynchburg-based Capps says it recently was awarded a new $29.6 million military contract to produce women's dress shoes at the Gretna facility.
    Plant manager Tim Huffman says Capps also plans expand the facility to produce high-end men's and women's shoes.
    Capps laid off 40 of the facility's 170 workers in June and reduced the workweek from five days to four days after the government delayed awarding the five-year military contract.
    The Gretna facility has produced the military shoes for 16 years.
    Huffman says the five-day workweek will be restored. He says Capps hopes to eventually recall all the laid-off workers.
    Information from: Danville Register & Bee, http://www.registerbee.com

  2. German recovery - Making short work of things, 8/04 The Economist (blog) via economist.com/blog
    [The Washington dateline here suggests that there are going to be some very fundamental misunderstandings of what's going on in Germany.]
    WASHINGTON, U.S.A. - Germany's economy suffered a steep decline in the recent recession, thanks largely to the impact of a crash in world trade volumes on its export-dependent businesses. Yet its unemployment rate never rose as high as America's, and for most of 2009 it declined steadily. The disconnect has generally been attributed to Germany's kurz-arbeit programme, in which firms are encouraged to reduce labour usage by trimming hours rather than jobs, while the government subsidises the wages of workers placed on reduced workweeks. The New York Times examines the result:
    Trumpf [GmbH], a machine-tool maker in the south German city of Ditzingen, managed to get through the recession without laying off any of its 4,000 German workers.  In the United States, Trumpf laid off 90 of the 650 workers...
    “We wanted to keep our well-trained people on board,” the Trumpf chief executive, Nicola Leibinger-Kammüller, wrote in an e-mail. “Short work [kurz Arbeit] helped a lot.”
    Many larger German companies also resorted to short work. Siemens, which at one point had 19,000 German employees on reduced hours, said last week that all were back working full time again. Siemens has 128,000 employees.
    It may even turn out that short work improved German competitiveness by encouraging workers to use the free time to improve their skills.
    Gabrieli Kiesel, quality expert at a Siemens plant in Erlangen, Germany, that makes factory automation equipment, used the extra day off each week to qualify as a meister, or master, in his specialty. He said he could live with the reduced pay, which amounted to 85 percent of his previous wages for a four-day week.

    There's a lot to like about the policy; it sustains private demand and reduces consumer uncertainty while reducing the incidence of the long-term unemployment that now afflicts the American economy.
    [They talk as if this approach is optional. It isn't if you want your economy to survive long into the future.]
    The downside to such a policy is that it reinforces the structure of the economy that prevailed prior to the recession.
    [Only nitwit anglo-saxon commentators would find the reinforcement of a non-recession economic structure a "downside." And meanwhile they're totally missing the non-reinforcement of the long pre-recession workweek. This suicidal mindset will make it easy for today's "first" to be "last" as we enter deeper into the Age of Robotics. How long will it take the U.S. and U.K. to realize that it was a SHORTER WORKWEEK that helped Germany recover fast in the context of more human-work saving technology than ever before in history?]
    Depending on the extent to which one credits structural factors in generating the recession, that's either no big deal or a huge negative.
    American adoption of a work-sharing programme wouldn't do much good at this point;
    [Nonsense - it would guarantee fast, market-oriented, sustainable recovery.]
    the big gains accrue during the period of falling demand, when firms are slashing away at payrolls.
    [Demand is still falling in America and firms are still slashing away at payrolls. What planet doth this "Economist" inhabit? Perhaps their eyes are dazzled with America's massive realms of market-distorting makework, both public- and private-sector.]
    At this point, Germany and America can simply stand back and watch the comparative experiment unfold, as the former considers the need for structural reform while the latter wonders how to put back to work the millions of labourers who have been off the jobs for a year or more.


8/01-02-03/2010  bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (ecdesignr@yahoo.ca) unless otherwise initialed -

  1. In Germany, a Broad Recovery Is Under Way, by Jack Ewing, 8/03 NYTimes.com
    FRANKFURT, Germany - Norbert Reithofer, the chief executive of BMW, often boasted that he was among the first to start trimming jobs in 2007 when he saw a downturn coming in the automobile industry.
    On Tuesday, BMW hung out the help-wanted sign after reporting that its net profit rose more than sixfold in the second quarter.
    German exports are booming again and so is employment. The country’s unemployment rate is 7.6 percent, almost at the pre-crisis level, and down from 9.1 percent in January. Companies, including the electronics and engineering giant Siemens, the truck maker MAN or the carmaker Daimler, are ramping up worker hours. BMW said it was seeking 1,000 people in Germany to work in research and development as well as purchasing and sales.
    As a country adding workers, Germany’s image stands in stark contrast to five years ago when unemployment was above 13 percent, more than five million people were jobless and the country was a symbol of labor-market inflexibility.
    Germany’s unexpectedly strong economy is generally considered good news for the rest of Europe, which depends on German demand for its goods. So is the drop in joblessness, which should help increase consumer confidence and encourage Germans to take vacations in Spain and Greece, channeling euros to two places that need them.
    But Germany’s success is also a significant point of contention with leaders in France and other countries who believe that some of it comes at their expense. Germany exports far more than it imports, in part benefiting from easier access to credit than in the heavily indebted countries.
    Some economic experts argue that Germany’s economic policies are exacerbating tensions in the euro zone. “By cutting its budget deficit and resisting a rise in wages to compensate for the decline in the purchasing power of the euro,” George Soros, the prominent investor, wrote in a recent essay in The New York Review of Books, “Germany is actually making it more difficult for the other countries to regain competitiveness.”
    [What an idiot. George "Open Society" Soros blurts yet another piece of conventional stupidity that pushes the world toward closed society. No way does this wealthy rhetoric-heavy moron mention anything as intelligent as "other countries could also use worksharing to recover - like Germany," let alone, even better, "any country could modify temporary worksharing/Kurzarbeit into permanent timesizing and get as independent of exports and the whole competition to the bottom as they like."]
    Within Germany, there is a different set of questions about how long the export boom can last and when German workers, who have been remarkably restrained in wage demands, will start to clamor for a bigger share of corporate profits.
    “Fear of unemployment made workers more willing to accept concessions,” said Ralph Solveen, a senior economist at Commerzbank in Frankfurt. “That will certainly change in the next few years.”
    Amid the celebrating in German boardrooms, there is also nervousness about how long demand in Asia can continue to compensate for slower growth in Europe.
    “Naturally, we are pleased about the additional tailwind the economic upswing in some countries is providing us,” Mr. Reithofer, BMW’s chief executive, said on Tuesday. He added a note of caution, though, saying that the business environment remained uncertain.
    BMW, based in Munich, said Tuesday that its sales in China had doubled so far this year, helping profit in the second quarter rise to 834 million euros ($1.1 billion), compared with 121 million euros in the same quarter a year ago. BMW’s sales also rose 6 percent in the United States, and a weaker euro raised the value of the company’s dollar-denominated revenue.
    Surging earnings, also reported in recent weeks by companies like the chemical maker BASF and Deutsche Bank, partly explain why German hiring is bouncing back. But the jobs recovery also has roots in the changes that Germany has made to its labor market, and to the lessons that German companies learned from past crises.
    For example, Trumpf, a machine-tool maker in the south German city of Ditzingen, managed to get through the recession without laying off any of its 4,000 German workers. In the United States, Trumpf laid off 90 of the 650 workers.
    Why the difference? Part of the answer is that, in Germany, Trumpf could take advantage of government incentives to reduce worker hours rather than lay off people, a system known as short work. In the program, the government gives workers partial compensation for the lost wages.
    “We wanted to keep our well-trained people on board,” the Trumpf chief executive, Nicola Leibinger-Kammüller, wrote in an e-mail. “Short work helped a lot.”

    Many larger German companies also resorted to short work. Siemens, which at one point had 19,000 German employees on reduced hours, said last week that all were back working full time again. Siemens has 128,000 employees.
    It may even turn out that short work improved German competitiveness by encouraging workers to use the free time to improve their skills.
    Gabrieli Kiesel, quality expert at a Siemens plant in Erlangen, Germany, that makes factory automation equipment, used the extra day off each week to qualify as a meister, or master, in his specialty. He said he could live with the reduced pay, which amounted to 85 percent of his previous wages for a four-day week.
    “All in all, short work was a very good solution for me,” Mr. Kiesel, 33, said. “Without it I would have been more fearful about losing my job.”
    Klaus F. Zimmermann, president of the German Institute for Economic Research in Berlin, called short work “the most important stimulus program.”
    “You couldn’t generate exports; you couldn’t make the U.S. buy German products,” Mr. Zimmermann said. “You could support the work force.”
    German wage growth, though, has been nearly stagnant for the last decade, in part because companies increasingly used temporary workers during periods of high demands. Major cuts in unemployment benefits also increased the incentive for people with fewer skills to take low-paying jobs. The changes, in 2005, were the beginning of the turnaround in the job market but are still a sore point with labor representatives.
    “There are more and more people who earn very little or too little,” said a spokeswoman for IG Metall, which negotiates wages for 3.4 million workers in the metal and electronics industries, including Siemens. Workers are dismayed that their tax dollars were used to finance a bank bailout, but they are seeing little benefit for themselves while corporate profits soar.
    Still, the union emphasized job preservation, agreeing to keep wages unchanged this year except for a one-time payment of 320 euros.
    Walter Huber, head of personnel at Siemens in Germany, said he believed employer groups and unions would continue to cooperate. “We have developed a good basis for dialogue,” he said. “That makes me optimistic.”
    A version of this article appeared in print on August 4, 2010, on page B5 of the New York edition.

  2. Germany's recovery a 'minor miracle' - Unique scheme to bail out its work force has made the country the envy of its neighbours, by Doug Saunders, 8/01 Toronto Globe via TheGlobeAndMail.com
    LUDWIGSFELDE, Germany — At 3 p.m. on Wednesday, Andreas Schieve puts one last fitting on a Mercedes truck, hangs up his tools on the assembly line and attends a brief meeting to hand the line over to the night-shift workers. Then he walks out of the factory gates and into town, ready for another four-day weekend.
    Like most of the workers at the Ludwigsfelde Daimler-Mercedes plant, the 50-year-old man would rather not be forced to work three-day weeks about a third of the time.
    “It’s harder to make the rent payments and my wife and I don’t have extra money to save for holidays and new appliances,” he said while having a Chinese dinner at a shopping mall outside the plant, where he’s worked more or less continuously since 1976. His wife works as a cleaner.
    “But I do realize that it’s better than being laid off. It’s hard, but it’s not as if I’m in danger. We’re not living in Greece here.”
    While the rest of Europe is just beginning to crawl out of crisis and into the first tentative rays of growth and recovery, Germany is positively booming. Export sales are up dramatically, spurred especially by Chinese sales; consumer spending has returned sharply; banks and housing markets are unscathed – and, most significantly, while the rest of the continent and the United States experienced harsh job losses, Germany has actually seen unemployment fall this year to 7 per cent, below Spain’s boom-time level. 
    A big part of Germany’s resilience can be found in factory towns like these and in the weekly pay statements of workers like Andreas Schieve.
    In most other European countries, Mr. Schieve would have been laid off in late 2008, when the credit-driven economic downturn hit Europe hard and orders for this plant’s commercial trucks dried up. Orders fell from 60,000 trucks a year to around 30,000, and the work force should have been slashed to match – more than 1,000 layoffs.
    But Germany did something different. While its neighbouring countries spent hundreds of billions bailing out banks, financing infrastructure and stimulating the economy, Chancellor Angela Merkel’s conservative-liberal coalition government also took a very large, unique gamble by spending huge sums of money bailing out its work force.
    In a system known as kurz-arbeit, or “short-time work,” the German government pays up to two-thirds of the salary of employees who would otherwise be laid off, as long as they remain employed. The employer is expected to cover any hours actually worked and to keep up their pension and benefit payments.
    Starting in 2009, this formerly marginal scheme became the core of Germany’s recovery plan, and the number of Germans on kurzarbeit rose from tens of thousands to 1.5 million, costing the German government billions.
    The workers say they find their tenuous employment inconvenient and complain that the money is neither as good nor as predictable. Some of Mr. Schieve’s friends flew to Tuscany on long-weekend package vacations, only to be disciplined when the Friday shift was suddenly reactivated and they were nowhere to be found. But compared to other Europeans, they are extremely fortunate.
    For Germany, it has been a huge gamble, for if the economic downturn lasts beyond 2010, the cost of having millions of private-sector employees effectively on the state payroll will become unaffordable and counterproductive, triggering an even worse crisis.
    Yet it seems to have worked, to an amazing degree: Despite suffering an economic contraction of 5 per cent last year – during which unemployment doubled in the United States to 10.1 per cent and approached 20 per cent in Spain and Greece – Germany actually saw its unemployment rate fall to 7 per cent, its lowest point in 17 years.
    The system has driven up government debt sharply and means the German recovery won’t have the commensurate boost in consumer spending other countries will see. But German officials believe kurzarbeit has spared their country a far larger catastrophe and has allowed it to experience a boom in the midst of Europe’s slump.
    The logic works like this: If Mr. Schieve had been laid off, he and his wife would have been forced out of their three-bedroom rented house. The landlord, facing the depressed housing market of eastern Germany, would likely have defaulted on the mortgage. Meanwhile, the shops and services of Ludwigsfelde, a one-industry town, would have failed due to the layoffs and created their own defaults. Mr. Schieve and his fellow laid-off workers would have gone on welfare, costing the state large sums of money without generating any tax revenue.
    The mortgage defaults generated by Mr. Schieve and a million people like him would have driven several banks into insolvency, forcing much more expensive state bailouts. And their mounting social-assistance bill and vanishing income-tax payments would have created a chronic government deficit.
    This domino collapse is precisely what has happened in many other European countries, including Greece, Ireland, and Spain. It’s also afflicted the United States. Germany’s economy is hardly perfect, with record levels of debt, but it appears to have avoided the self-destructive vortex of unemployment, housing and banking shocks that have decimated other economies.
    Ministers in France and Britain said in interviews earlier this year that they were watching the German experiment nervously – and with some skepticism – to see if it would work; a failure of economic recovery during 2010 would doom it. Both countries had used short-time work programs in limited situations in the past 20 years, but had rejected the idea of a work force bailout as unaffordable.
    Ms. Merkel called the program crucial to the German recovery, which she termed a “minor miracle.” Some economists are more skeptical, pointing out that Germany, as the world’s second-largest exporter, was bound to have a stronger recovery when global trade revived; southern European countries are dependent on German exports and, therefore, on debt.
    Inside the offices of the Daimler factory, though, another benefit of the kurzarbeit program becomes apparent: It prevented the loss of industrial knowledge that has hurt countries like Britain.
    “For automobile producers, it’s very important that you have experienced and highly trained people – especially for Mercedes. If you lay them off, you have lost them forever,” said Bertram Caspari, head of the factory’s personnel department, who was told in 2008 that production would drop by half and that at least a third of the work force would no longer be necessary.
    “We did not fire a single person. Not one.
    This, he admits, was a “lucky coincidence” – the work force did dwindle by 500, but they had just enough workers on two-year contracts and due for retirement that this could be done by attrition; another 200 were transferred to a Bavarian plant that is booming, because it produces Mercedes cars for the Chinese market (Ludwigsfelde’s trucks are mainly sold in Europe). $
    Rather than simply putting half the work force on six-month kurzarbeit leaves (as some businesses have done), Daimler-Mercedes decided to go with rotating three-day weeks, in order to keep employees fresh and knowledgeable: Every day, there are 250 workers missing from the factory, but it is a different 250 each day.
    “If you are six months at home doing nothing, it changes your personality,” Mr. Caspari said. “You not only lose the ability to build this car, but even to get up in the morning and make it to work. There are good reasons to keep people active in the work system. You can bridge the time and keep hope.”
    This maintenance of hope seems to have been the secret of recovery in the European countries that have fared best in the wake of the crash.
    There is a notable division between countries that gave people work security by having lifetime-job guarantees and rigid labour markets – like Spain and France – and those that did so with more expensive, but more flexible, government safety-net programs, like Germany and Scandinavia.
    In the former countries, people excluded from full-time work contracts have suffered badly in the downturn, excluded from any form of employment, and an entire generation is finishing school who appear to be excluded from the work force entirely, or shifted into the part-time and informal labour markets for a decade.
    But the countries that have guaranteed easy hiring and firing – and government support when the market falls apart – have experienced the least distress.
    The Scandinavian countries have managed the crisis using a system known as “flexicurity,” in which companies can lay off employees easily, but the state provides unemployment insurance equivalent to full-time salaries so that nobody loses their houses or livelihoods. That system was based on the assumption that work would be easy to find, but it has prevented a catastrophe in the downturn (though it has led to mounting debt).
    In Britain, Prime Minister David Cameron is shifting the country’s welfare and unemployment insurance system to one that allows you to keep receiving benefits, at a lower level, as you move from full unemployment to low-wage or part-time work. Drawn from places like Germany and Denmark, it’s meant to turn the safety net into a work-support system rather than a poverty-maintenance system.
    It shows what Europeans have learned in their struggle with economic collapse: To keep a recession from becoming a catastrophe, the solution is not just in the bank headquarters but on the office floor and the kitchen table.

  3. Working hours grow longer, 8/02 Thomson's Online Benefits via thomsons.com
    LONDON, England - Flexible benefits that allow a greater work-life balance may be the need of the hour as working hours are found to be on the rise by a latest report.
    The number of hours spent by employees in the office is increasing as the market begins its slow climb out of the global economic recession, according to findings published by the Chartered Institute of Personnel and Development (CIPD).
    Owing to businesses implementing several cost-cutting measures during the recession, there had been an observed shift from full-time employment to part-time working arrangements.
    Methods to cut down on labour costs led to a further fall in working hours, with the overall number worked each week falling by 32.7 million.
    John Philpott, chief economic adviser at the CIPD, acknowledged that the decrease in working hours was a typical feature of the recession.
    He added: "But signs of an increase in long-hours working since the trough in hours in summer 2009 suggest that the fall in working time during the jobs downturn was a forced detox for Britain's workaholics, most of whom will be eager to start putting in the hours again once the economic recovery gathers steam."
    Posted by Michael Ewing

  4. British holidaymakers face travel chaos as Spanish air traffic controllers threaten strike, by Murray Wardrop, 8/03 Telegraph.co.uk
    MADRID, Spain - Hundreds of thousands of British holidaymakers face travel chaos after Spanish air traffic controllers voted to strike in a row over pay and working hours.
    The walkout is expected to begin in the third week of August causing maximum disruption to flights at the height of the summer holiday season.
    It is thought the industrial action could last for at least three days affecting more than 2 million airline passengers travelling to and from the country, including an estimated 300,000 Britons.
    The 2,300 controllers, who earn £167,000-a-year on average, are locked in a dispute with the Spanish Government claiming they are being forced to work excessively long hours.
    The USCA union, representing around 95 per cent of the controllers, held a ballot with 98 per cent in favour of industrial action.
    A government decree passed last week outlined changes to controllers’ working hours and reductions in overtime pay, prompting anger from union members.
    The USCA says some controllers will be forced to work up to 28 days a month, describing them as "the worst conditions for the profession in Europe".
    However, airlines and travel firms last night condemned the move warning that it would inflict severe damage on the tourist industry.
    The Spanish Airlines Association said the action would lead to massive cancellations of bookings and a switch by holidaymakers to destinations in other Mediterranean countries.
    Ryanair, the airline, called on the Spanish military to be drafted in to keep air traffic control services running.
    A spokesman said: “While air traffic control workers have the right to strike it should not affect the travel plans of millions of European passengers.”
    Spain's development minister Jose Blanco defended the new decrees, insisting they improved working conditions.
    He said the strike "lacked justification" and claimed minimal services will be maintained during the strike. That could mean up to 50 per cent of flights operating on strike days.
    The date for the strike has not yet been set but it is expected to start on August 18.
    In February this year the government slashed controllers salaries by around 40 per cent – cutting the average wage from £290,000-a-year to £167,000 – after it was revealed some enjoyed pay of up to £800,000-a-year.
    In Britain the same workers earn a basic salary of between £60,000 and £90,000-a-year, according to National Air Traffic Services.
    Spain is the UK's most popular holiday destination, with around 17 million Britons heading there each year.
    The Spanish Confederation of Hotels and Tourist Establishments warned that the strike would have "serious economic consequences" for the tourism industry, which accounts for 11 per cent of the country's economy.
    The tourist industry has been badly hit over the past two years by the economic recession and the weak value of the pound against the euro, which has encouraged Britons to look elsewhere for their holidays.

  5. It's crunch time for austerity and budget bills, by Haidee V. Eugenio, 8/02 (/03 dateline) SaipanTribune.com
    SAIPAN, Commonwealth of the Northern Mariana Islands (CNMI) - With less than two months to go before the end of Fiscal Year 2010 on Sept. 30, the CNMI Legislature has yet to pass the contentious austerity bill that will cut work hours from 80 to 72 per pay period, and the FY 2011 budget of $132 million.
    [Sounds like we're talking about a two-week pay period.]
    Gov. Benigno R. Fitial submitted his FY 2011 budget proposal to the Legislature by the April 1 deadline.
    “It's now up to the Legislature,” Lt. Gov. Eloy S. Inos said yesterday in an interview.
    House Ways and Means Committee chair Rep. Ramon Basa (Cov-Saipan) said he will be pre-filing the FY 2011 budget bill later this week.
    He said the budget bill, which has some 35 pages, “pretty much reflects the governor's budget submission.”
    “It's common practice that agencies ask for more than what the governor submitted for them. But we just can't accommodate everybody's request for more money,” Basa told Saipan Tribune.
    The CNMI government will be forced to shut down if no budget is enacted for FY 2011 following the ratification of House Legislative Initiative 16-11 in the Nov. 7, 2009 general elections.
    The initiative removed the provision for a continuing budget resolution and bars any withdrawals from the general funds except through legislative appropriations. It also suspends the salaries of lawmakers if no budget is passed on time.
    Austerity bill
    House Speaker Froilan C. Tenorio (Cov-Saipan) postponed yesterday afternoon the House session set this morning “because the austerity bill is not ready.”
    The session will be rescheduled either for Thursday or Friday.
    The Senate members of the Conference Committee on House Bill 17-45 have yet to approve the latest version of the austerity bill. 
    Basa said House members of the conference committee have already agreed to the latest version of the austerity bill, which gives agency and department heads the flexibility to cut work hours by eight per pay period depending on their agency's requirements.
    “We are ready but the House can't act on the bill without Senate members' approval,” he said.
    Basa's committee held a closed-door meeting yesterday afternoon both on the austerity bill and the budget bill.
    The lieutenant governor also met with senators past 4pm yesterday to talk about the Fitial administration's position on the austerity bill.
    “I felt we made the case, and our recent experience on the delay in the payroll.made the case. We're not out of the woods here, so to speak. And 2011 will bring greater challenge, but they're deliberating [on the bills],” Inos said right before meeting with the senators.
    Senate President Paul A. Manglona (R-Rota) said a vote on the austerity bill will be up to individual senator.
    The Senate is set to hold a session on Thursday morning.
    Inos reminded that the current austerity bill's version still does not include the unpaid holidays which are included in the governor's budget submission.
    “HB 17-45 is strictly just hour reduction. The missing part at least from the standpoint of the governor's submission is unpaid holidays. The budget must be balanced. If they can balance it with the austerity bill without the holidays, that's what we're working on. We're trying to balance the budget,” he added.

  6. A shorter working week would benefit society - Ending compulsory retirement is a good idea – but we can do more to create a sensible and sustainable work-life balance, by Anna Coote, New Economics Foundation via neweconomics.org
    LONDON, U.K. - Phasing out compulsory retirement must be a sensible idea. Providing for a right to retire at an age pegged to rising life expectancy may be a sensible next step. No-one should feel trapped in paid employment as the years advance beyond seventy, but – who knows – it may not be long before 70 is the new 60.
    The real problem lies with the whole idea of retirement as something that falls across our path like a tree in a storm. And that is because we have such fixed ideas about a ‘normal’ working life. Why should everyone be expected work at least eight hours a day, five days a week – and often much more? Why do we look upon the rise in ‘part-time’ employment as some kind of aberration, instead of a step in the right direction [of redefining 'full time' downward as technology takes over on assembly lines and service desks]?
    The new economics foundation is calling for a move towards a much shorter working week, over a decade or more, with a goal of 21 hours as the new standard. We start from the premise that a return to unfettered growth is not only unlikely, given the state of global capitalism, but also undesirable for developed economies because it is incompatible with reducing carbon on the scale required to keep global warming within manageable limits.
    That means finding ways to manage the economy so that it can flourish but not grow – remaining in a state of ‘dynamic equilibrium’. In these circumstances, we can’t expect an ever-expanding volume of paid employment. But as leading economists Tim Jackson and Peter Victor point out, instead of settling for high rates of unemployment, why not share the work out, with shorter hours for all allowing more people to join the labour force? No-one imagines this will be easy, but an incremental shift would leave time to put compensating measures in place – a higher minimum wage, more training, flexible working conditions and a gradual trade-off between pay increments and working time. These are explored in our recent report, 21 Hours, but there is still a lot of work to be done on the details of the transition.
    The benefits of a shorter working week could be very substantial. Think of it as a redistribution of paid and unpaid time. People who are currently out of work get a chance to earn a living. Everyone gets more discretionary time – so they have more freedom to play their part parents, carers, friends, neighbours and active citizens. It begins to make sense of the notion of ‘work-life balance’, which has proved so elusive – especially for parents and carers – in a long-hours culture. It could even help to realise some of the more honourable intentions of the ‘Big Society’ - how else, after all, are citizens and voluntary organisations to find the time to take more control over what happens to them at a local level?
    There is evidence that people who work shorter hours are more productive hour-for-hour, so that’s got to be good for business. And at the same time it helps to shift prevailing values away from high-rolling consumerism, where we work to earn, earn to consume and consume at the peril of our planet. We might give more careful thought to how much stuff we really need to buy and, therefore, why we need to work such long hours to earn the money to buy it.
    It would help to promote equality, both by lowering unemployment rates and by sharing paid and unpaid labour more equally between women and men. There would be less mental and physical ill-health, since both are associated with long hours as well as with joblessness. And it would transform the way we deal with later life. People who work shorter hours throughout their lives are less likely to burn out by 65. Down-shifting for older workers could be a very gentle affair, with no great contrast between ‘normal’ and pre-retirement patterns of work. Most people could go on working until well into their seventies, if they chose to do so, gradually reducing their time. The point is not to force people to work shorter – or longer – hours, but to change what we think of as the most sensible and sustainable way to lead out lives.
    Anna Coote is Head of Social Policy at the New Economics Foundation in London, UK.




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