Unemployment

Economists still lack a proper understanding of business cycles
Unemployment

Economists still lack a proper understanding of business cycles

THE aftermath of the 2007-08 financial crisis ought to have been a moment of triumph for economics.
Lessons learned from the 1930s prevented the collapse of global finance and trade, and resulted in a downturn far shorter and less severe than the Depression.
The aim of those studying the macroeconomy has always been to understand the economy’s wobbles, and to work out when governments should intervene.
Governments used both monetary and fiscal policy with gusto in the years after the second world war to maintain full employment.
Yet the Keynesians’ heavy-handed approach never sat well with classically minded economists.
In the years that followed, Keynesians regrouped, borrowed ideas from their critics and built “New Keynesian” models (on which much modern forecasting is based).
Many neoclassical economists rejected the “New Keynesian consensus” and worked along separate lines.
The gap between many neoclassical economists and the New Keynesians running central banks remained unbridgeable.
In a speech in 2005 to central bankers, Raghuram Rajan, an academic who later ran India’s central bank, warned of the risks building within the financial system.
There has been progress since the crisis.

Armenia’s unpopular president makes himself prime minister
Unemployment

Armenia’s unpopular president makes himself prime minister

But the unpopular Mr Sargsyan, whose second (and final) consecutive term as president expired on April 9th, was just kidding.
On April 17th the national assembly, stacked with loyalists, elected him as the country’s new prime minister.
Even many members of the biggest “opposition” group voted for him.
If imitation is the sincerest form of flattery, Vladimir Putin must be smiling.
Around 10,000 protesters in Yerevan, the capital, took to the streets before the vote, chanting “Reject Serzh!” Police used tear-gas to disperse them.
With hindsight Mr Sargsyan’s intentions have long been clear.
Constitutional changes he enacted in December 2015, which take effect this month, grant the prime minister nearly all the powers previously held by the president.
Get our daily newsletter Mr Sargsyan insists that a parliamentary system will strengthen democracy.
Many Armenians are unconvinced.
Armenia’s IT sector is the fastest-growing part of the economy, making up 7% of GDP in 2017, but it is mainly known for its cheap labour.

European countries should make it easier for refugees to work
Unemployment

European countries should make it easier for refugees to work

Mr Salha registered with a temporary-job agency, but the local government told him working would mean losing housing and other subsidies.
Even among refugees who arrived in the Netherlands in the late 1990s, only 55% were in the workforce 15 years later, compared with a rate among natives of 80%.
Yet the Dutch unemployment rate is under 5%, and last year 40% of Dutch construction firms said they were struggling to fill positions.
In particular they needed electricians, like the redundant Mr Salha.
Germany does a better job of co-ordinating asylum-claim processing with refugee housing, language and job training, and job placement.
43, issue 11 “The Economic and Social Outcomes of Refugees in the United States: Evidence from the ACS”, by William N. Evans and Daniel Fitzgerald, National Bureau of Economic Research, 2017, Working Paper 23498 “The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results”, by Michael Clemens and Jennifer Hunt, Center for Global Development, 2017, Working Paper 455 “The Labor Market Effects of Immigrants: New Analysis Using Longitudinal Data”, by Mette Foged and Giovanni Peri, American Economic Journal: Applied Economics, 2016, Vol.
Labour market policies for refugees in five Northern European countries”, by Patrick Joyce, The Ratio Institute, 2018, Working Paper No.
The case of Kakuma, Kenya”, by Jennifer Alix-Garcia et al., Journal of Development Economics, 2018, vol.
130 “The Effect of Refugee Inflows on Host Communities: Evidence from Tanzania”, by Jennifer Alix-Garcia and David Saah, The World Bank Economic Review, 2010, vol.
96, issue 2

Jobless claims fall slightly to 232,000 in late April
Unemployment

Jobless claims fall slightly to 232,000 in late April

The numbers: The rate of layoffs in the U.S. fell slightly in April and clung near a 45-year low, reflecting a booming jobs market in which work is easy to find and companies are scrambling to find help.
Initial jobless claims dipped 1,000 to 232,000 in the week ended April 21.
Economists surveyed by MarketWatch had forecast a 230,000 reading.
The more stable monthly average of claims rose a scant 1,250 to 231,250, the government said Thursday.
The number of people already collecting unemployment benefits, known as continuing claims, fell by 15,000 to 1.86 million.
What happened: Claims rose sharply in New York and California, but those increases were offset by declines almost everywhere else.
The number of people applying for unemployment benefits each week has fallen to levels last seen in the early 1970s.
Big picture: Bright as can be.
Job openings are near a record high, unemployment is at a 17-year low and scattered but growing shortages of skilled labor are forcing companies to increase pay or improve benefits to attract or retain employees.
: “Given the size of the labor force and the typical pace of employment churning, it is hard to imagine that claims could go much lower,” said Thomas Simons, senior money market economist at Jefferies LLC.

Finland is killing its world-famous basic income experiment
Unemployment

Finland is killing its world-famous basic income experiment

While the experiment is still attracting attention internationally, Finnish decision-makers have already made a silent U-turn, scrapping plans to extend the project.
The Finnish government is now eyeing different social welfare solutions.
Instead of unemployment benefits, the participants now receive €560, or $690, per month, tax free.
Should they find a job during the two-year trial, they still get to keep the money.
Read Also: This Finnish guy gets a $600 per month ‘basic income’ for doing absolutely nothing While the project is praised internationally for being at the cutting edge of social welfare, back in Finland, decision makers are quietly pulling the brakes, making a U-turn that is taking the project in a whole new direction.
The initial plan was for the experiment to be expanded in early 2018 to include workers as well as non-workers early in 2018, but that did not happen – to the disappointment of researchers at Kela.
Without workers in the project, researchers are unable to study whether basic income would allow people to make new career moves, or enter training or education.
In recent years, a growing number of tech entrepreneurs have endorsed universal basic income (UBI), a system system in which every individual receives a standard amount of money, simply for being alive.
”When the basic income experiment ends this year, we should launch a universal credit trial,” Orpo told Finnish newspaper Hufvudstadsbladet, referring to a system similar to that currently in use in the United Kingdom, which collects a number of different benefits and tax credits into one account.
No official results of Finland’s basic income experiment will be published until 2019, after the pilot has come to an end.

Finland is killing its experiment with basic income
Unemployment

Finland is killing its experiment with basic income

While the experiment is still attracting attention internationally, Finnish decision-makers have already made a silent U-turn, scrapping plans to extend the project.
Instead of unemployment benefits, the participants now receive €560, or $690, per month, tax free.
Should they find a job during the two-year trial, they still get to keep the money.
While the project is praised internationally for being at the cutting edge of social welfare, back in Finland, decision makers are quietly pulling the brakes, making a U-turn that is taking the project in a whole new direction.
Without workers in the project, researchers are unable to study whether basic income would allow people to make new career moves, or enter training or education. “Two years is too short a timeframe to be able to draw extensive conclusions from such a vast experiment.
Entrepreneurs who have expressed support for UBI include Tesla and SpaceX CEO Elon Musk, Facebook co-founder Chris Hughes, and Google’s futurist and engineering director Ray Kurzweil.
These tech moguls recognize that UBI, as well as combatting poverty, could also help solve the problem of increased robotization in the workforce, a problem they are very much part of creating. “When the basic income experiment ends this year, we should launch a universal credit trial,” Orpo told Finnish newspaper Hufvudstadsbladet, referring to a system similar to that currently in use in the United Kingdom, which collects a number of different benefits and tax credits into one account.
No official results of Finland’s basic income experiment will be published until 2019, after the pilot has come to an end.

The net worth of college graduates with student debt is truly depressing
Unemployment

The net worth of college graduates with student debt is truly depressing

Though it’s likely that these young adults with college degrees will ultimately pay off their student loan burden, the report captures a moment in time when servicing student debt may pose an obstacle to this group’s other financial goals, like saving for retirement or a home.
“But these short term gains are barely making a dent on young people’s long term plans.” It’s hard to say exactly why the median net worth of young adults with college degrees dropped during this period, but Allison speculates that one reason may be that in 2016, student debt accounted for a larger share of overall debt for these young people than it did in 2013.
About 70% of bachelor’s degree recipients graduate with student loans.
The financial experience of today’s young adults is fundamentally different from what their parents went through.
What’s more, college is more necessary than ever to succeed in today’s economy.
The debt is part of what makes her skittish about buying a home one day, Williamson said.
Williamson said there are certain fields she knows she can’t enter because they don’t pay enough for her to cover her student debt and pay her other bills.
While young people trying to get their financial footing, like Williamson, feel these economic trends acutely, they’ll likely pose a challenge to the economy overall, Allison said.
What’s more, the high cost of education means that parents and grandparents are increasingly taking on student loans to help their kids pay for school.
“It’s not just a young adult problem,” he said.

Australia’s jobs boom comes off the boil
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Australia’s jobs boom comes off the boil

SYDNEY–Australia’s jobs boom has come off the boil, raising fresh doubts about the outlook for consumer spending and GDP growth in the year ahead.
The economy added just 4,900 new jobs in March after a revised loss of 6,300 in February, with the unemployment rate continuing to hover around 5.5%, a level it has sat at for almost a year.
Full-time employment fell by close to 20,000 in March, the Australian Bureau of Statistics said Thursday.
For the Reserve Bank of Australia, it could mean the goal of reaching full-employment won’t be achieved soon, keeping wages growth benign, and heightening fears around record household debt.
If the job market experiences a sustained slowdown, it will almost guarantee the RBA keeps its benchmark cash rate at 1.5% well into 2019.
Tom Kennedy, economist at JP Morgan said recent job market trends suggest the RBA might need to rethink its forecast that unemployment will be closer to 5.25% in the second quarter.
Slowdown in hiring could quickly leak into softer consumer confidence, slowing spending, which accounts for 60% of the economy, creating a stiff headwind to GDP growth. “This release confirms there is still substantial slack in the labor market, indicating wage and price pressures are still some way away, and we remain confident that the RBA will remain on hold through 2018,” he said.
Still, some analysts think the cooling off will be temporary, pointing to strong business confidence and trading conditions as a guide to future hiring. “NSW wages haven’t budged yet with growth stuck at an insipid 2%,” Mr. Peters said, despite strong employment growth and a jobless rate below 5% in the state.

Zimbabwe fires 16,000 striking nurses for ‘politically motivated’ move
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Zimbabwe fires 16,000 striking nurses for ‘politically motivated’ move

Thomson Reuters HARARE (Reuters) – Zimbabwe said it had sacked 16,000 striking nurses as the new government seeks to keep a lid on labor unrest in the build-up to the first elections since the fall of Robert Mugabe.
The nurses walked out on Monday over unpaid allowances and other issues, leaving hospitals understaffed.
Vice President Constantino Chiwenga accused the nurses of staging a “politically motivated” walkout and said they would be replaced by retired and unemployed staff.
The nurses’ union told its members to stay calm as it considered its response.
The Zimbabwe Nurses Association (ZINA) said it had given its employer, the Health Services Board, until 1400 GMT on Thursday to reverse the mass dismissal or face legal action.
ZINA said it was open to talks with the government and that its grievances had not yet been resolved.
He did not say which political group he thought was behind the strike.
Mugabe regularly accused opposition groups of trying to undermine his government by encouraging the public sector strikes that punctuated his 37 years in power.
A doctors and lawyers union said the government decision was illegal.
President Emmerson Mnangagwa, who replaced Mugabe in November, will stand in elections set for July against a revitalized opposition Movement for Democratic Change party led by 40-year-old Nelson Chamisa.

Help-wanted ads point to Boston and D.C. area as top sites for Amazon HQ2
Unemployment

Help-wanted ads point to Boston and D.C. area as top sites for Amazon HQ2

Jeffry Boston and greater Washington, D.C., might be the most likely places for Amazon to build its second headquarters — if help-wanted ads are any indication.
One of the key determining factors for Amazon AMZN, +1.64% is expected to be the available supply of well-educated workers.
Amazon wants to be in a major metro area with a “strong university system” so it can fill thousands of jobs for computer engineers, marketing types, managers, accountants and the like.
Using online ads as a guide, the Conference Board’s economic research group found that Amazon’s listings for those sort of jobs are growing the fastest in the Boston and Washington, D.C., metropolitan areas.
Amazon has shortlisted not just the District of Columbia but also neighboring Northern Virginia and Montgomery County, Md., for the second headquarters.
Only the New York City region has more online listings in 2017 for the kinds of jobs Amazon is expected to create at its second headquarters, but those listings barely grew last year.
More and more companies complain about a shortage of skilled labor, and they now have to compete harder with each other to fill open jobs.
That probably helps explain why San Francisco, and neighboring Silicon Valley, was left off Amazon’s short list.
“If Amazon chooses to build their second headquarters in a city where they already have a large pool of workers who would fit well into a second headquarters, it can ease the challenge of attracting such talent from elsewhere, especially in a tight labor market,” the Conference Board researchers said.
Similarly, Amazon has invested some $38 billion in its Seattle headquarters over the past six years and added some 53,000 jobs, by some accounts.