Sunday, June 10, 2012

Global Crisis Hits Europe, US & Asia

The economic financial crisis is getting worse and spreading within the European countries, the U.S., Middle East and Asia regions. More young graduates leave the colleges and universities during the poor economic crisis, they begin to experience tougher time to get full-time jobs while those who lose  their jobs, they find more difficult to find the next jobs as well. However, many of the workers aren't feeling secured with their current jobs as they fear of losing their jobs and incomes at anytime during this economic crisis. 

Even though there are a lot of news reported that more jobs are created for the past few months but the employers become more picky in choosing the right candidates to fill the jobs. The employers prefer to search for candidates with working experiences rather than hiring fresh graduates. As such, more fresh graduates are ended up working for part-time jobs or jobs which don't require degree qualifications.

So, how long do we need to wait for the global economic recovery or to get out from this worse economic recession? This would probably take about a decade or more to pull out from the recession. Even the former US President, Bill Clinton appears in his recent interview with CBS Evening News, he explains that "Over the last 500 years, whenever there's a financial system collapse, it takes 5-10 years to return to full employment. And if you have a financial collapse and a real estate collapse, it's almost always out there at 10 years." Nothing can be solved within the short period as we are depending for a great solution to resolve the European huge debt crisis and strengthen the global economic crisis with effective ways.

Global economy at risk as US, Europe and Asia slow

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The global economy's foundations are weakening, one by one.

Already hobbled by Europe's debt crisis, the world now risks being hurt by slowdowns in its economic powerhouses.

The U.S. economy, the world's largest, had a third straight month of feeble job growth in May. High-flying economies in China, India and Brazil are slowing, too.

Fears of a global economic downturn have sent investors rushing toward the safest possible investments: U.S. and German government bonds. As a result, the interest rate on the 10-year U.S. Treasury note has hit a record-low 1.46 percent. The rate on the German 10-year bond is even lower: 1.17 percent.

"Treasurys are at 1.46 because people are freaking out," says Mark Vitner, senior economist at Wells Fargo Economics.

The gravest fear is Europe. The most urgent threat is that in mid-June, Greek voters will reject the terms of a $170 billion bailout -- which called for painful budget cuts -- and abandon the euro. The move could ignite economic and financial chaos as Greek debts shift from denominations in euros to Greek drachmas of uncertain value.

Yet the global economy's troubles go well beyond Greece. Here's a look at the global economy's vital signs:

American employers added just 69,000 jobs in May. Since averaging a healthy 252,000 a month from December through February, job growth has slowed to a lackluster average of 96,000 a month.

On Friday, after the government issued the May jobs report, the Dow Jones industrial average sank 275 points. It was the Dow's biggest loss since November, and it's now down 0.8 percent for the year.

The dismal news suggested that the U.S. economy is enduring a midyear slump just as in 2010 and 2011.

Unemployment rose to 8.2 percent from 8.1 percent in May as 642,000 more Americans poured into the work force, and only 422,000 more people got jobs.

The jobs report came out a day after the government said the U.S. economy grew at just a 1.9 percent annual rate in the first three months of 2012. 

That's a meager pace nearly three years after the recession officially ended in June 2009. And it's too slow to generate many jobs or to lower the unemployment rate. In good economic times, the rate would be below 6 percent.

Many U.S. companies are finding it more efficient to invest in machinery, not people.

"We're not hiring, and we're not replacing" workers who leave, says Joe Glenn, who runs Glenn Metalcraft in Princeton, Minn.

His sales jumped 40 percent last year. Yet Glenn's shop has kept employment flat at about 35 workers. He's added more computer-controlled metalworking machines and robots to load the raw material into them.
"We're producing as much as we were with a lot less manpower," Glenn says. "And I don't foresee that those jobs are going to come back."

Other companies are reluctant to hire until they feel more confident that their customer demand will keep growing. Adding to their uncertainty are Europe's troubles and America's dysfunctional politics.

For now, some key sectors of the U.S. economy remain positive. Americans are buying more homes, suggesting that the housing market is on the mend. U.S. builders have increased their spending on home and commercial construction.

Auto sales just posted their best May since 2008. Manufacturing activity continues to grow, and so does consumer spending, which drives about 70 percent of the economy.

Borrowing rates for consumers and businesses have never been lower. Tame inflation has given the Federal Reserve leeway to keep interest rates low. 

And gasoline prices have been sinking. The national average is now $3.61, and experts predict further drops in coming weeks.

Still, unless Congress and the White House reach an agreement by year's end, federal taxes will jump and deep spending cuts will kick in. Should that happen, the Congressional Budget Office says, the economy would likely fall into another recession.

Given the size of the U.S. economy, further weaknesses could worsen the slowdowns in European and Asian countries that depend on sales to American consumers.

Unemployment in the 17 countries that use the euro is already at 11 percent, the European Union's Eurostat office reported Friday. It's the highest rate since the euro was introduced in 1999.

European countries have been struggling with their debt crisis for three years. Three nations -- Greece, Ireland and Portugal -- have already required bailouts because of unsustainable levels of debt.

Austerity has been the main prescription for the crisis. But spending cuts and tax hikes are causing economies to shrink across the eurozone.

In a blunt warning, European Central Bank chief Mario Draghi last week called the euro currency union "unsustainable" without stronger political and financial ties among eurozone countries.

The fear is that Greece will drop the euro, and other weak countries, such as Spain and Portugal, will be forced to follow. Financial chaos could rage across Europe.

Spain is facing punishing borrowing costs on bond markets because investors fear it won't be able to pay its debts. Prime Minister Mariano Rajoy declared Saturday that his government will stick with harsh austerity measures as long as necessary.

But Spain's unemployment is already 24.4 percent. For those under age 25, unemployment is 51.5 percent. Businesses are being crushed.

"This shop has been here for close to 100 years, and I've worked here for 48 years," says Manuel Cabrejas, a salesman at a cushion store in Madrid whose shop windows were covered in signs saying, "Closing down sale, big discounts, everything must go."

"For the last two years, we have only just been covering running costs," Cabrejas said. "It's time to let go."

Since the global recession ended in 2009, the world economy has been fueled by rising powers in the developing world led by China, India and Brazil.

Now, all three are running into trouble.

China's manufacturing weakened in May, according to surveys out Friday. 

Factory output was the weakest in three months.

Some economists say China's economic growth will fall to an 8 percent rate in the April-June quarter. That's high by Western standards, but it would be the weakest growth for China in nearly three years. In response, China is rolling out an economic stimulus program.

Having rebounded strongly from the recession of 2007-2009, China's economy grew a sizzling 10.4 percent in 2010 and 9.2 percent in 2011. For the past two years, it's helped drive global growth. Australia and other Asian countries have come to rely on Chinese markets for their exports.

India is suffering an even sharper slowdown. Its economic growth slowed to a 5.3 percent annual rate in the January-March quarter, the lowest in nine years. Output from India's factories has declined. Its consumers have seen inflation -- which has averaged 9.2 percent a year since the start of 2010 -- devour their wages.

"It's beyond anything that we would have imagined," said Samiran Chakraborty, head of research at Standard Chartered in Mumbai. "Real wages are falling ... The consumption slowdown along with the investment slowdown has been a double-whammy for the GDP number."

As recently as last year, Indian politicians were claiming their economy could rival China's and surge into double-digit growth, lifting hundreds of millions out of poverty in the process.

Instead, India is mired in a deepening crisis of confidence. Asia's third-largest economy is widely regarded as performing below its potential.

Indians are losing hope that their country's fractious political system will deliver the policies that might unlock a rebound -- investments in roads, ports and other projects and lighter regulations to attract more foreign investment.

One encouraging corner of Asia has been Japan's economy, the world's third largest. It grew at an annual rate of 4.1 percent in the first quarter of 2012 as it recovered from last year's earthquake and tsunami. But factors that could crimp expansion, such as weaker European demand for Japanese exports, have raised fears that Japan's growth will slow or even stall.

In Brazil, the economy practically stalled in the first quarter of 2012. It grew at just a 0.2 percent annual rate from the final three months of 2011, the government said Friday. That was below expectations of 0.5 percent growth. Flooding punished farmers.

But Brazilian officials, like analysts in China, also pointed to another culprit, one that shows how problems in one part of the world cause problems in another: The ongoing trouble in Europe is taking a toll on exports.

The region's trade is being hurt by the weakening global economy, particularly in Europe.

The United Arab Emirates' top economic official said Monday that the Gulf federation's economy will likely grow only about 3 percent this year amid a drop in oil prices. That would represent a slowdown from 4.2 percent growth in 2011.

The seven-state UAE federation is the largest Arab economy after Saudi Arabia. The United Arab Emirates said it's less optimistic about growth because of the oil exporter's close links to the slowing world economy.

AP Staff Writers Joshua Freed in Minneapolis, Harold Heckle in Madrid, Sarah DiLorenzo in Paris and David McHugh in Frankfurt contributed to this report.


Americans Cling to Jobs as U.S. Workforce Dynamism Fades

After 4 1/2 months of meetings, interviews and hand-holding, personnel recruiter William Rowe thought he had sealed the deal.

The senior executive of a major corporation Rowe had been courting finally agreed to take a top post at a venture capital-backed technology firm in California. Then four days after giving notice, the executive, who is in his 40s, had second thoughts about leaving the security of his company and returned to his old job.

Americans Spooked By Slump Cling To Jobs

Americans Spooked By Slump Cling To Jobs  
Homeowners wait in line to register at a Neighborhood Assistance Corporation of America Save the Dream event in Los Angeles. Spooked by the severity of the recession and stuck with underwater home mortgages, Americans are less inclined to leave their jobs and less willing to strike out on their own to build businesses, government data show. Photographer: Patrick Fallon/Bloomberg
Chart: American Mobility at All-Time Low
Chart: By the Numbers: U.S. Unemployment Figures

“He decided to go back to the mother ship” and not uproot his family to take a chance on joining a new firm, said Rowe, vice chairman of Pearson Partners International Inc., a search firm in Dallas.

The deepest economic slump since the Great Depression has left its mark on both job seekers and job creators, making them more wary about taking risks in a slowly recovering labor market.

Spooked by the severity of the recession and stuck with underwater home mortgages, Americans are less inclined to leave their jobs and less willing to strike out on their own to build businesses, government data show. Even with swelling profits, companies are holding back on hiring, complaining that they can’t find skilled workers for positions they do have open.

As a result, the labor market is losing some of the dynamism for which it’s long been known. And the trend predates the recession: An aging population and the growth of two-income households have reduced Americans’ mobility to about half of what it once was, while technological gains and globalization have led to a loss of middle-income jobs. The economic slump only exacerbated the loss of vigor.

‘Hollowing Out’

“The U.S. labor market is becoming more sclerotic,” said Harvard University Professor Lawrence Katz, a former chief economist at the U.S. Labor Department. “We’re seeing less gross job creation and job destruction, and we have a major hollowing out of jobs in the middle.”

The diminishing vibrancy matters because the less job turnover there is, the harder it is for others, particularly younger people, to find work.

Unemployment among 16- to 24-year-olds was 16.1 percent in May, about double the 8.2 percent rate for the population as a whole. Also holding them back are older workers staying on the job longer after seeing their savings eroded by the housing market bust and financial crisis.

Americans who are thrown out of work in such an environment also are finding it tougher to get jobs. The average duration of unemployment was 39.7 weeks in May, more than double the 18.8-week average since 1990 and not far below the record 40.9 level set in November last year. American employers added 69,000 workers last month, the fewest in a year.

Like Europe

“We have certainly moved” in the direction of Europe, with a less-dynamic labor market, Steven Davis, professor at the University of Chicago Booth School of Business, said in an email. He ticked off the similarities: “higher unemployment rates, longer unemployment spells, steep falls in the employment rate in the working-age population, a slower pace of worker flows, and a slower pace of job creation and destruction.”

David Bouchey was among those caught in the middle. Bouchey, of Aurora, Colorado, who lost his position as a financial analyst in 2007, said he thought he’d find work because of his experience and three post-graduate degrees.

“I’m overqualified for almost every job I apply for,”said Bouchey, 54. He, his wife and two sons live on about $1,000 a month in public assistance. “I never thought the economy would be this bad.”

Bouncing Back

Still, the economy has improved from where it was just a few years ago, when joblessness hit a 29-year high of 10 percent in October 2009. Private business payrolls are back to levels that prevailed when President Barack Obama took office in January 2009. Job openings rose in March to their highest point in almost four years, though they are still more than 20 percent below levels seen in early 2007, prior to the economic decline.

Many industries -- from leisure and hospitality to professional and business services -- have increased their payrolls since the recession ended in June 2009, according to Labor Department figures. Three of the areas most affected by the slump -- construction, financial services and government --still lag behind.

Manufacturing has added almost a half-million jobs since the start of 2010 after shedding more than six million in the two decades before. Lower energy costs in the U.S. -- courtesy of a surge in natural gas production -- and rising wages overseas, particularly in China, are contributing to what James Paulsen, chief investment strategist in Minneapolis at Wells Capital Management, calls a “manufacturing renaissance.”

Health Care

Huntsman Corp. (HUN), the world’s biggest maker of textile dyes, plans to increase production of ethylene and related chemicals in Texas and is evaluating additional expansion projects to take advantage of cheaper natural gas, Chief Executive Officer Peter Huntsman said in a May 1 interview.

The biggest job gains have come in health care as the aging population drives up demand for workers from nursing aides to surgeons. While the economy lost 7.5 million positions during the recession, health care expanded staff and continues to do so in the recovery. Together with social assistance, it will add about 5.6 million employees to become the largest job gainer by 2020, according to the Bureau of Labor Statistics.

Yet many of those positions, including personal care and home health aides, won’t require a high school education and so are unlikely to pay much.
“The first baby boomer just turned 65 last year, so when it comes to health-care jobs in America, we haven’t seen nothing yet,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.

In Middle

Americans at the top and bottom of the income scale have benefited the most from the improvement in the labor market. Those in the middle have stayed behind. Employees making above-average wages, including doctors and energy-industry workers, and those at the other extreme, including home-health aides and restaurant staff, have seen outsized gains in hiring since the jobs upturn began in 2010, according to economists at Wells Fargo & Co. (WFC) and JPMorgan Chase & Co.

That continues a decades-long trend that picked up speed during the recession. Academic economists Nir Jaimovich and Henry Siu found that 95 percent of the jobs lost during the slump were among workers who carried out routine assignments that could be easily automated. These jobs, which include office and administrative roles, bank tellers and machine operators, disappeared during the contraction and show “no recovery to date,” Jaimovich, a professor at Duke University in Durham,North Carolina, and Siu of the University of British Columbia in Vancouver, said in a paper published on March 31.

More With Less

“Companies have been driving, and continue to drive, for increased productivity, to do more with less, and the tool to do that is technology improvement,” said Jonas Prising, president of the Americas for Milwaukee-based ManpowerGroup, the world’s second-largest provider of temporary workers. “What are getting squeezed are the well-paying jobs with lower skill levels that used to give a middle-class income.”

Technological change has been a boon for those with the skills to exploit it. Job openings in the computer and mathematical fields outnumbered job seekers by almost four to one in April, according to the New York-based Conference Board.

Tyler Stalder, 24, found work in San Francisco’s technology industry shortly after he finished a one-year web-development fellowship with a nonprofit.

The computer programmer started working for Singly, a startup company, on March 2 after less than two months of job interviews. And he’s still being contacted by prospective employers trying to recruit him.

Uneven Recovery

The jobs recovery also has been uneven geographically. Only four states -- Alaska, North Dakota, Texas and Louisiana, all beneficiaries of the energy boom -- have reached or surpassed their previous peaks in employment, according to an analysis by economist Steven Frable of consultants IHS Global Insight in Lexington, Massachusetts. Some others, including New York and West Virginia, are close.

Sixteen states still have fewer than 95 percent of their prerecession job levels, Frable said in a report on May 21. Alabama, Arizona, Florida, Michigan, Rhode Island, and Nevada are behind previous peaks by 7 percent or more.

Unemployment rates also vary widely -- from 11.7 percent in Nevada, one of the regions most hurt by the real estate bust, to 3 percent in North Dakota, the center of the shale gas expansion and the state whose economic health improved the most last year, according to the Bloomberg Economic Evaluation of States. Hiring has been so frantic in the Great Plains state that the McDonald’s Corp. restaurant in Dickinson at one point was offering $300 signing bonuses.

Staying Put

In the past, such geographic disparities would have been ironed out as Americans flocked to where the jobs were. Labor mobility has long been a major source of strength for the U.S. jobs market when compared with Europe.

That is less the case today. About one in 10 Americans currently move each year, according to James Manyika, director of the McKinsey Global Institute, the research unit of consultants McKinsey & Co. That’s well below the roughly one in five average that prevailed from 1945 through about 1990, he said.

The percentage of Americans who changed residences between 2010 and 2011 fell to a record low of 11.6 percent, from 12.5 percent the previous year, according to Census Bureau figures. That compares with 17 percent in the recession of 1990-91.

The image “of the highly mobile American worker is not as true as it used to be,” Manyika said.


The rise of the dual-income family is one reason, he said: When both partners are working it’s harder to coordinate a move. More recently, the collapse in house prices has played a role in damping mobility, he added, although Davis said that research suggests the impact of that is small. More than 11 million households owed more on their mortgages than their homes were worth in the fourth quarter of last year, according to data provider CoreLogic, and would face losses if they opted to sell to move elsewhere for work.

While Americans are more willing to leave their jobs for other opportunities than they were at the depth of the recession, they still have a way to go before they regain the confidence they exhibited prior to the downturn.

The so-called quit ratio -- which measures the number of people voluntarily leaving their jobs as a proportion of total employment -- stood at 1.6 percent in March. That’s up from a low of 1.2 percent almost three years ago, yet still well below the 2.3 percent peak seen in late 2006.

Not Changing

“We just haven’t had people changing jobs enough,” said Betsey Stevenson, an assistant professor at the University of Pennsylvania’s Wharton School in Philadelphia and a former chief economist at the Labor Department. “We need to see people have the confidence to quit their job and find a better one and create an opening for someone else.”

The jobs recovery hasn’t been strong enough to convince many Americans to re-enter the labor force and start looking for work again. The labor participation rate -- the share of working-age people holding a job or seeking one -- stood at 63.8 percent in May, just above a three-decade low of 63.6 percent the previous month.

A portion of those who have dropped out of the labor force have gone on disability. The number of workers receiving Social Security Disability Insurance from the government jumped more than 20 percent to 8.7 million in May from 7.1 million in December 2007, Social Security data show.

Fewer Startups

The dwindling dynamism of the U.S. labor market also shows up in the willingness of Americans to strike out on their own. The nation’s business start-up rate -- the number of new firms as a proportion of all companies -- fell to a record low of around 8 percent in 2010, according to the latest data available from the Census Bureau. That’s down from about 11 percent in 2006, before the economic slump, and a high of 13 percent in the 1980s.
The longer-run decline is partly due to the aging of the population, according to the University of Chicago’s Davis. More recently, tighter credit in the aftermath of the financial crisis also may be discouraging start-ups, he said.

That’s got big implications for the labor market. Research by University of Maryland Professor John Haltiwanger found that start-ups and young firms account for a disproportionate share of job creation, exhibiting what he calls an “up or out”dynamic -- they either grow fast or they fail.

It’s that kind of vibrancy that has helped make the U.S. economy great, said Stevenson.

“What makes the U.S. different is that we are mobile,”she said. “We find where we are going to be the most productive and we get there.” Signs that such dynamism is on the wane are“very concerning.”


My Self-Esteem a Mess Is Refrain for Spain’s Unemployed

Angel Navarrete/Bloomberg
Pablo Vega, who studied labor law and human resources at the Complutense University of Madrid, has never had a permanent job and envies former classmates that do.
Four years ago, Wendy Atkinson Navarro, 36, had a job, a husband and a home. Now, she is divorced, out of work and living with her mother near Madrid, a casualty of Spain’s recession that has driven unemployment above 24 percent and is unnerving young people.

Young Spaniards Join ‘TV Watchers Club’ as Recession Erodes Jobs

Pablo Vega said. “When people say, ‘Pablo, that’s life,’ it doesn’t make me feel better. I don’t feel better because everyone else is unemployed.” Photographer: Angel Navarrete/Bloomberg

Young Spaniards Join ‘TV Watchers Club’ as Recession Erodes Jobs
Angel Navarrete/Bloomberg
Pablo Vega, a former video-game tester for Electronic Arts Inc. who is forced to live at home because of his job situation, looks at a video game on his television screen in his living room in Madrid. Photographer: Angel Navarrete/Bloomberg

Young Spaniards Join ‘TV Watchers Club’ as Recession Erodes Jobs
Angel Navarrete/Bloomberg
Pablo Vega, left, a former video-game tester for Electronic Arts Inc. who is forced to live at home because of his job situation, smokes a cigarette while talking to his mother, Virginia, at their house in Madrid. Photographer: Angel Navarrete/Bloomberg

Young Spaniards Join 'TV Watchers Club' as Recession Erodes Job
Pablo Vega, right, walks his dog 'Mambo' in a local park with his brother Andres, center, and friend Alejandro. Photographer: Angel Navarrete/Bloomberg
“My self-esteem is a mess,” Atkinson said. “My nephew is 15 years old, and the only difference between him and me is I have kids. That’s how I feel.”

More than 4 million Spaniards are jobless in a double-diprecession that is hitting young people hardest. More than half of 15-to-24 year-olds are unemployed, and 37 percent of those 25 to 34 live with their parents. Rather than starting families and building careers, many young people spend their days playing video games and watching television. As their skills stagnate, they risk falling behind permanently, said Katherine Newman, a sociologist and dean at Johns Hopkins University in Baltimore.

“For the rest of their lives, they’re damaged,” said Newman, who has written about labor and families in Spain.“They don’t recover occupationally, their earnings are depressed for 20 years, they don’t marry at the same rate.”
Joblessness, combined with the destruction of household savings, “tears the social fabric apart,” she said.

Pepe de Uriarte, 32, an unemployed publicist in Madrid, spends his days looking for jobs online, preparing gazpacho, playing golf and watching television. He has memorized the afternoon broadcast schedule and calls himself “president of the TV watchers’ club.” If he doesn’t find another job before his 1,000 euro-a-month ($1,200) unemployment insurance runs out, he said he may end up moving in with his parents.

‘Peter Pan’

Like many young Spaniards, de Uriarte has never had a permanent job, instead signing temporary contracts that have ranged from two days to 10 months.

“I am still a little bit like Peter Pan, because I can’t plan,” he said. “I stopped my life when I was 25 years old. I can’t set up a family, I can’t buy a house, I can’t do anything.”

Spain’s system of temporary job contracts is at the root of its record unemployment, which is more than double the average of the 27 countries in the European Union, said Juan Dolado, an economics professor at the Carlos III University in Madrid.

Temporary contracts were created in the 1980s as a way for employers to avoid signing workers to permanent, full-time agreements, which required 45 days of severance pay for every year worked. Because temporary employees received only eight days’ severance, companies preferred workers on short-term contracts and, by 2007, they made up 33 percent of the Spanish workforce, Dolado said.

Temporary Jobs

More than half of Spaniards who lost jobs had temporary contracts, and most of them were under 40, Dolado said. Labor law reforms passed in February reduce the mandatory severance to 33 days for permanent contracts and, over time, will increase the required severance pay for temporary contracts, he said.

By making it easier to fire workers, employers will eventually be more inclined to hire them, Dolado said.

Pablo Vega Gonzalez, 28, has been unemployed since March, when his temporary job as a video-game tester for Electronic Arts Inc. (EA) wasn’t renewed. Since then, he traveled to Dusseldorf,Germany, to interview at Ubisoft Blue Byte, another video-game company, and was one of more than 200 people who applied for 20 cashier positions at a new supermarket. He was rejected by both employers.

“Feeling useless is very depressing,” Vega said. “When people say, ‘Pablo, that’s life,’ it doesn’t make me feel better. I don’t feel better because everyone else is unemployed.”

‘Very Frustrating’

Vega, who studied labor law and human resources at the Complutense University of Madrid, has never had a permanent job and envies former classmates that do.

“They are my friends, and I wish them well but you wonder why they have a job and I don’t,” said Vega, who lives at home with his two brothers and mother, a widowed pharmacist who cooks for them. Vega said he contributes to the household expenses when he can.

While most of his friends are living at home, “it’s very frustrating,” he said. “If you meet a girl, you hope she has a job and a flat. It’s difficult.”

The crisis in youth unemployment was exacerbated by the collapse of Spain’s once booming construction industry, which lured young people out of school for wages of 2,500 euros a month, said Fernando Fernandez, an economist at IE Business School in Madrid. Now, they’re back with their families, waiting in vain for another job that will pay that well, he said.

High Expectations

“They expect to get a job that is comparable and there is no way,” he said. “There’s a problem with expectations. You cannot expect to have no education and get those wages.”

Spain’s unemployed risk being permanently tainted in the eyes of employers if they are jobless for years, said Newman at Johns Hopkins.

“Their skills get outmoded, their qualifications are weak and they look really aberrant to employers,” Newman said.

More than 70,000 Spaniards took to the streets May 12-13 in protest of joblessness and cuts to social programs. The march was on the anniversary of a 2011 occupation of Madrid’s Puerta del Sol, the central downtown square, that lasted for weeks. People are angry that the government is slashing spending on education and health care while Bankia SA, the lender Spain nationalized on May 9, is asking for a 19 billion-euro bailout, de Uriarte said.

“Banks and politicians made us think the economy was very solid, but it was all based on housing and construction,” he said. “We thought we were much more rich and powerful than we were.”

Spain’s Economy

Spain’s economy is forecast to shrink this year and unemployment will continue to rise as the government cuts spending and banks tighten credit, the European Commission said May 30.

The country, the fourth-largest economy in the 17-nation euro area, is struggling to cut its deficit and rescue a financial system crippled with bad debt. Its banks are holding 184 billion euros worth of “problematic” loans and assets, according to the Bank of Spain, or 60 percent of all commercial Spanish real-estate debt.

Atkinson, whose father is English, has lived all her life in Spain. She was fired in 2010 from her job at LaSexta, a television station where she worked as an administrative assistant. She went back to school to become a nursery school teacher, got divorced and, with her two children, moved in with her mother, stepfather, brother and brother’s girlfriend in April after her unemployment benefits ran out.

Selling Car

Atkinson has failed to find a part-time job and is planning on selling her station wagon. Her mother has supplied her with a credit card for expenses and gives her instruction on how the household runs.

“Now we have discussions about how to set the dishwasher,” Atkinson said. “My son said, ‘You’re not in charge, your mother is in charge.’ It hurts.”

Her brother is planning on moving to Helsinki to open a Spanish wine store with his Finnish girlfriend, and Atkinson worries that her children will also one day leave Spain for better opportunities

“I don’t want my kids to go away,” she said. “But I don’t know how the future is going to be.”


ILO warns of youth unemployment 'crisis'

Young person looks for work (file image)  
The ILO wants governments to take the lead in creating work opportunities for young people (Source: BBC News)
Almost 13% of young people worldwide are out of work, and their situation is unlikely to improve for four years, a report by the International Labour Organization (ILO) says.

Many skilled young people are being forced into part-time and unskilled work, the report says. 

It warns of a "crisis" with more than six million people so disillusioned they have given up looking for work.

The ILO wants governments to make job creation a priority.

It wants more training schemes, and also tax breaks for employers. 

"The youth unemployment crisis can be beaten but only if job creation for young people becomes a key priority in policymaking and private sector investment picks up significantly," said Jose Manuel Salazar-Xirinachs, executive director of the ILO's employment sector.

Since 2007, the number of young people without jobs has risen by four million - up from less than 12%, the Global Employment Trends for Youth report says.

Almost 13% of people aged between 15 and 24 - or almost 75 million - have no work, although this is slightly down on its peak in 2009.

In the European Union, one in five young people are looking for work, the report claims.

Some 27.9% of youths were unemployed in North Africa last year following the Arab Spring uprisings - a rise of five percentage points on 2010.
In the Middle East, the figure stood at 26.5% in the report's regional breakdown.

"Even in East Asia, perhaps the most economically dynamic region, the unemployment rate was 2.8 times higher for young people than for adults," the report said.

Detached from society
But, the ILO report reveals, the true picture of youth unemployment is even more pessimistic.

Many young people are extending their time in higher education because they cannot find jobs.

Others are taking part-time unskilled work because they cannot find work in the fields they trained for. 

The ILO says that more than six million young people worldwide have given up looking for work and are becomingly increasingly detached from society.

By not using their skills they are losing them, the report says, and if there is no improvement in the jobs market soon, they may be not only unemployed, but unemployable.

The ILO suggests offering tax breaks and other incentives to businesses hiring young people and offering more entrepreneurship programmes to help kick-start careers.


Full-time jobs are getting harder to find

Andrea Mulhearn Brobst wants a full-time job.

Despite having a four-year degree in business, she’s only been able to find a low-paying part-time retail job since she was laid off “from a real job at the beginning of this economic mess,” she said.

And Kathi Nguyen has been relying on temporary jobs since she lost her full-time corporate position in 2007. “It's just an extremely frustrating situation,” she said. “I want full-time.”

Unfortunately, finding a coveted full-time gig has gotten harder since the Great Recession hit, and last week’s May unemployment data showed the problem is getting worse.

The Bureau of Labor Statistics reported an uptick in the number of workers classified as “involuntary part time,” or those who’d rather be working a 40-hour plus week. The data shows the number of people working part time for economic reasons climbed above 8 million in May.

There are two types of employees that come under the involuntary part-time category: those who are working fewer hours because their present employer cut back hours due to business conditions, and those who just can’t find full-time jobs.

While the number of employees who saw their full-time work schedules cut by their existing employers stayed about even with last month, and declined 8.8 percent from last year; the number of workers who could only find part-time jobs rose about 12 percent to 2.6 million in May, and increased about the same percentage compared to the same month last year.

And since the recession began in 2008, the number of people who were part time because they couldn’t find a full-time position skyrocketed by 1.4 million individuals, or 117 percent, according to research by Heidi Shierholz, economist for the Economic Policy Institute.

“It’s probably more a story of job opportunities,” she said. “Desperate workers have to settle with what they can find.”

Companies are just not willing to take on many more workers in this economy, even though employers are starting to see signs of economic life.

“Employers are reluctant to add full-time, permanent employees and they’re looking for innovative ways to respond to business,” said Craig Rowley, vice president of human resource consulting company Hay Group.

The big question, he said, is how do they respond to an uptick in sales without adding fixed expenses such as permanent workers? “They look at temp workers and employing more part time employees,” he said.

While Rowley said companies will add more full-time workers as the economy continues to improve, the employment world is shifting to a more just-in-time model. “They are looking for a more flexible workforce,” he said, especially in retail and healthcare.

That flexibility, however, isn’t good news for workers who want full-time, permanent jobs.

“The constant fluctuation in hours from week to week means that workers face ongoing uncertainty about their earnings,” stated Nancy Kauthen, a sociologist and policy consultant in a 2011 report titled: “Scheduling Hourly Workers: How last minute, just-in-time scheduling practices are bad for workers, families and business.” “The financial instability alone can create tremendous stress for low- to moderate-income families who never know whether their wages will cover the monthly bills.”


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