Markets call Trump’s bluff with Indian IT rally 23 Jun 2017 The value of the top outsourcing firms has risen about 9 pct, or $12 bln, since the election of U.S. President Donald Trump. Investors have reason to doubt his hard talk on immigration, and to believe Premier Narendra Modi can help his counterpart see the mutual benefits.
Guest view: U.S. economy needs robust immigration 21 Jun 2017 Labor shortages and weak consumption reflect an aging population, argue Daniel Vajdich of risk consultancy Yorktown Solutions and investor Michael Trachtenberg of Union Place Partners. Japan's experience, they say, is precisely why U.S. lawmakers should embrace foreigners.
Hadas: Free university for all is good policy 14 Jun 2017 The UK Labour party promised to abolish the current tuition-plus-loan system for tertiary schooling. That’s normal in most of Europe. It’s also fair and enriches society, whereas student debt does the opposite. Clever use of taxation might offer an answer.
Political mess puts Bank of England on the spot 14 Jun 2017 Governor Mark Carney is not raising rates in response to a spike in inflation since it’s probably temporary and wages remain subdued. However, Britain’s fragile government will probably loosen fiscal policy. Though bond yields remain low, investors are showing signs of nerves.
Hadas: Misbehaving wages keep economists baffled 7 Jun 2017 Conventional economic theory says wages start to rise when labour markets tighten. It isn’t happening in the U.S., Britain, Japan or Germany. Many semi-plausible excuses and partial explanations have not solved the mystery. That leaves central bankers in a quandary.
Tight U.S. job market tests White House thinking 2 Jun 2017 Employers added 138,000 jobs in May, below projections. Unemployment is so low that a slowdown was inevitable. One problem now is supply, with baby boomers retiring. Boosting immigration and encouraging more women to work would help. Trump's policies so far act against both.
Trump’s fanciful budget relies on voodoo economics 22 May 2017 Paid parental leave and caps on repaying student loans sound appealing. But the rest of the president’s budget plan to cut $3.6 trln relies on pie-in-the-sky assumptions about employment rates and reforming Obamacare and welfare. It’s a non-starter even for a Republican Congress.
Britain’s joyless job boom is nothing to celebrate 17 May 2017 A record three of every four working-age Britons is employed. But prices are rising faster than wages, and a post-Brexit crackdown on immigration threatens to limit further expansions in the workforce. That makes declining productivity an even bigger cause for alarm.
Ford CEO chooses to appease investors over Trump 16 May 2017 Cutting a tenth of the $44 bln automaker’s salaried workforce is part of Mark Fields' broader goal to trim $3 bln of costs. That might seem rational to owners of Ford’s sagging stock. But it challenges a president fond of rhetorical claims that he is saving U.S. jobs.
Hadas: Solidarity is cure to Baumol’s cost disease 10 May 2017 William Baumol showed how differences in productivity put wage pressure on artists and other inefficient workers. The economist, who died last week, was right, but his analysis was too individualistic. The challenge is to find fair ways to share out the fruits of prosperity.
Hadas: Basic income is basically confused 3 May 2017 As new technology threatens job security, the dream of giving all citizens a simple payment is making a comeback. But the idea is too expensive to be practical. It also ignores the biggest drawback of modern welfare states: that lives are complicated and people are not angels.
Weak U.S. hiring looks like blip in steady economy 7 Apr 2017 For Donald Trump, who touted strong jobs growth in February, a mere 98,000 new positions last month was a reversal. The 12-month average is still over 180,000, though, and key unemployment rates declined. One month of data, good or bad, rarely tells the whole story.
Hadas: U.S. deaths are economic and social failure 29 Mar 2017 Americans are dying younger due to drugs, drink and suicide. The rise in such "deaths of despair" comes from the fatal interaction of a weak welfare system, inadequate healthcare and decaying communities. These national flaws also help explain the lack of a political response.
U.S. workforce could use some German engineering 16 Mar 2017 Donald Trump wants to bring back manufacturing jobs despite a lack of skilled labor. Executives advising the president point to the success of European apprenticeships. There are educational and cultural challenges in America, but it's a good time for more radical training ideas.
Payroll bump a fair wind for Trump economic agenda 10 Mar 2017 Employers added a healthy 235,000 jobs in February. Wages and participation also improved. Combined with buoyant investor confidence, the first payroll report of the Trump era gives the president momentum to push his ambitious fiscal plans - if he can focus on essentials.
Draghi is tugged towards tricky end of ECB easing 9 Mar 2017 The European Central Bank boss sees less need for more stimulus. It’s hard to say otherwise when inflation is on target and likely to stay near there. Yet Europe’s fragile economy makes ending asset purchases a treacherous task that he will want to postpone as long as possible.
Britain’s tax raid on gig economy misses the mark 9 Mar 2017 The UK budget means the self-employed will hand over more of their income. That eases one problem – the fact that gig workers pay lower national insurance rates. But it leaves intact a bigger issue, the difficulty of taxing contractors that drive the gig economy.
U.S. immigration crackdown bets the farm 22 Feb 2017 The new president is moving hastily to deport more illegal workers as part of his America-centric policy. In the process of trying to protect industries like manufacturing, stricter rules will hit an agricultural sector already suffering from labor shortages and falling profit.
UK government wakes up to downside of gig economy 17 Feb 2017 Work created by the likes of Uber flatters Britain's unemployment rate. That was convenient to politicians after the financial crisis. The less palatable implications of a surging gig economy are now dawning on Westminster – a potential 3.5 billion pound gap in tax receipts.
Presidential orders can’t fix slow factory hiring 3 Feb 2017 The U.S. economy notched 227,000 jobs in January, Obama's final tally. Trump vows to rev up the pace, especially in manufacturing, but automation is limiting the growth of that line of work. The president's bully pulpit is of little use in the face of that long-term trend.