RE: [Futurework] Future of Work

[Harry Pollard]

Arthur,   The problem is that the falling jobs across the economy are hidden behind the rise of jobs in construction, so the overall jobs market doesn’t look bad.   When the land bubble bursts as it has always done, apart from the people caught with mortgages that far exceed the value of their houses, unemployment will hit the construction industry and the whole shebang is likely to collapse.   Although our greatly regulated economy may be rigid enough to withstand, or at least hold off the worst aspects of a crash, one notes how the S&L crash harmed us. Fortunately, Federal insurance filled the gap then – but was in part responsible for the land speculation that caused the S&L failures in the first place.   Of course, it is likely we would become another Japan where government controls stopped the crash (which at least would have led to a new start) but left the economy hanging in limbo for a decade or so – and which still isn’t out of trouble.   As you know, Classical theory suggests that after the land speculation crash, land prices fall to a point where production can resume again. Had that happened in Japan, I would suspect that the country would be thriving again riding the next upslope.   But there it hangs, twisting in the wind.   Harry   ******************************* Henry George School of Social Science of Los Angeles Box 655  Tujunga  CA 91042 818 352-4141 *******************************   From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Cordell, Arthur: ECOM Sent: Thursday, July 28, 2005 9:36 AM To: FUTUREWORK (E-mail) Subject: [Futurework] Future of Work   And now back to the Future of Work.   =========================================   Report on Business: Money & Markets EMPLOYMENT A new worry for lacklustre U.S. economy: Big job cuts; Report contradicts job growth consensus 28 July 2005 The Globe and Mail B12 English The summer has brought with it hundreds of thousands of job cuts in the United States, a barrage that could stall one of the slowest economic expansions in U.S. history. According to Challenger Gray & Christmas Inc., the slew of large, high-profile U.S. layoffs — which now number more than 200,000 since May — could signal an end to a lacklustre U.S. economic growth cycle that started just four years ago. “This could be a sign that the economy may have reached the tipping point of its expansion, and that we might soon move into the declining part of the economic cycle,” said John Challenger, chief executive officer of the Chicago-based executive-placement firm, which also tracks U.S. employment trends. He said the forces slowing the U.S. economy — rising energy prices, health care costs, interest rates and tougher global competition — are leading to massive layoffs among a wide array of U.S. companies. “If the summer surge proves to be the first sign of an eventual economic slowdown, this would be among the weakest expansions in recent times,” Mr. Challenger said. And while the “mega-cuts” might not filter down to the next labour report, he said they “might be a harbinger of more difficult job conditions in the next year.” The report certainly contradicts consensus expectations that the U.S. economy will generate 180,000 non-farm jobs in July. The unemployment rate, which peaked in June, 2003, at 6.3 per cent, is expected to hold steady at 5 per cent, the lowest since September, 2001. The next U.S. jobs report is slated to arrive Aug. 5. U.S. employers added 146,000 new jobs in June, up from 104,000 in May. Federal Reserve Board chairman Alan Greenspan has said the economy is in a period of sustained expansion and that the labour market is improving despite soaring energy costs, suggesting that U.S. interest rates will continue to rise. Mr. Challenger said the Fed will keep raising rates, because it is trying to build up some ammunition in the event that it needs to cut rates to battle the next economic downturn. “Certainly, if this slowdown becomes more manifest, they would not be able to justify any more interest rate hikes.” He said the slew of summer job cuts, and the fact that they are coming from a gamut of industries, is worrisome. “A growing number of white-collar job cuts could erode economic stability and the housing boom as these higher-income earners are unable to meet rising interest payments.” Although the summer months are usually light on staff reductions, nearly 200,000 were announced in May and June, the Challenger report said. Summer layoffs are currently on track to match or surpass those announced in the first four months of this year, a period of typically much-heavier downsizing. In the past 10 years, the number of job cuts between May and August were 20 per cent below the number announced in the first four months of the year, and 26 per cent below the number announced during the last four months of the year, Challenger said. But this year, staff cuts were up 42 per cent in May and 35 per cent in June from April, according to Challenger's research. “Five out of the six largest job cuts announced so far this year have occurred since May,” Challenger said. In addition, the Challenger report noted that most of the job cuts have been large, with individual companies cutting payrolls by more than 10,000 workers. Last Friday, Dallas-based paper company Kimberly-Clark Corp. said it plans to do away with as many as 6,000 jobs, mostly in North America and Europe. Employees of Rochester, N.Y.-based Eastman Kodak Co. are also bracing for pink slips. The money-losing photography company raised its job-cut target to between 22,500 and 25,000 workers from an earlier target of between 12,000 and 15,000. And Palo Alto, Calif.-based computer manufacturer Hewlett-Packard Co. plans to eliminate 14,500 jobs, nearly 10 per cent of its work force. In direct contrast, Canadian layoff announcements have been few and far between this summer. =======================================

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