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.
Review: The demise of unions and the rise of Trump 11 Apr 2017 The new Broadway hit "Sweat," about a Pennsylvania steel plant’s closure, offers insight into the forces that put the U.S. president in office. Yet economic insecurity need not necessarily have fueled nativism. The dwindling power of organized labor is a compelling contributor.
China’s Netflix-to-Tesla still awes investors 7 Apr 2017 LeEco's $2 bln purchase of U.S. TV-maker Vizio is reportedly stalled. That would add to a list of setbacks. But shares in LeEco's flagship listed unit still command a big premium to giants like Tencent. It takes a lot to shake Chinese investors' love of concept stocks.
Linde’s erratic unions test Germany’s formula 3 Apr 2017 The gas maker's workers are challenging a $65 bln merger with Praxair they previously seemed to support. Germany's system of handing enormous power to unions works because they mostly use it wisely. In this case, pushing too hard could backfire in more ways than one.
Review: A flawed compass for post-Brexit Britain 31 Mar 2017 The vote to leave the European Union exposed a new political fault line, David Goodhart argues in “The Road to Somewhere”. The solution is for cosmopolitan elites to share more power with those left behind. The tension is real, but the distinction too broad to be a useful guide.
PPG bid for Akzo fails narrative and maths tests 24 Mar 2017 The U.S. paint and coatings maker says cost savings and the benefits of scale justify a $24 bln offer for its Dutch rival. It’s hard to tell a more visionary tale in a low-growth sector where consolidation is the way to stay ahead. But PPG’s synergy targets don’t add up either.
Akzo shareholders, beware the double-Dutch defence 22 Mar 2017 The maker of Dulux paint says a sweetened $24 bln approach by U.S. rival PPG is bad not just for shareholders but the community, customers and employees. It’s hard for a suitor to counter those claims. If such defences become the norm, expect fewer takeovers and lower valuations.
Japan’s tight-fisted bosses face pay reckoning 17 Mar 2017 Staff are due another year of tiny pay rises. That reflects deep corporate caution, and will not help generate healthier levels of inflation. But the balance of power is ripe to shift in employees' favour, leading to more robust wage growth and easing a big headache for Japan.
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.
Britain needn’t fear SoftBank’s pass-the-parcel 8 Mar 2017 The Japanese tech group may shift part of its stake in British chip designer ARM to a $100 bln fund forged with Saudi Arabia. If SoftBank and ARM's board retain control, commitments over UK jobs should be upheld. A more international shareholder base may extend ARM's clout.
Nationality of Vauxhall’s owner is a red herring 6 Mar 2017 The sale of GM’s European operations to French carmaker PSA Group has caused fresh concern over its plants in the UK. Yet irrespective of the owner, the key risk for automotive jobs in Britain is Brexit. A stronger Peugeot may even have more patience with Vauxhall than GM.
Slower China growth plan begs for labour reform 6 Mar 2017 Beijing has set a GDP growth target for 2017 of 6.5 pct as it seeks to revive stalled reforms and cut industrial overcapacity. Yet the leadership still wants unemployment below 4.5 pct. This aggressive goal, alongside an inflexible labour policy, could create new problems.
VW can regain trust with sweeping pay reform 22 Feb 2017 The troubled carmaker plans to overhaul its ill-designed executive pay scheme. This is an opportunity to start rebuilding shareholders’ confidence. Essential changes include turning managers into entrepreneurs, introducing pay clawbacks and giving investors more say on pay.
China bankers: an asset with diminishing returns 9 Feb 2017 Mainland rainmakers are becoming a headache. Global banks still need them to navigate China’s corporate waters. But sudden disappearances of corporate and financial tycoons make high-flying staff a risky commodity. Compliance costs are rising, while their potential is shrinking.
Tokyo is no economic enemy for Trump 6 Feb 2017 Japanese Premier Shinzo Abe is preparing a big package of U.S. investment and job creation to placate the president. Trump's claims of deliberate yen devaluation are wide of the mark. But Tokyo has little choice but to respond, even though it is already an important U.S. ally.
MNCs need sharper edge in China talent wars 17 Jan 2017 Multinationals are losing the battle for top Chinese talent. Local firms poached almost a third of executives who changed jobs in the past five years, while only 10 percent went the other way, a survey finds. Still, MNCs retain one big advantage: a career escape from China.
Britain’s true income gap is between young and old 11 Jan 2017 Labour Party leader Jeremy Corbyn's clumsy plans to rein in executive pay overlook an inconvenient fact: UK income inequality has fallen. Since the crisis retirees have done better than workers, though. Tackling the tensions caused by this divide makes a better political target.
It’s past time for Japan to tackle overwork 6 Jan 2017 A suicide at a top advertising firm shines an ugly spotlight on Japan's dangerously long hours. Relaxing a culture of workaholic conformity won't be easy. But official plans to curb overtime are a good start. And a better work-life balance would bring real economic dividends.
Germany’s thriving job market no solace for Merkel 3 Jan 2017 Unemployment has fallen to its lowest since 1981, and the number of people in jobs is at a record. Chancellor Angela Merkel presided over this happy state but will struggle to leverage it in upcoming elections. Voters are more focused on less predictable flows of migrants.
Trump’s job spin pales beside Obama’s recovery 29 Dec 2016 Some 8,000 new roles at Sprint and OneWeb touted by the U.S. president-elect already were planned, part of a bigger pledge by investor SoftBank. Economic activity is creating 180,000 positions monthly. To keep that going much longer will require more than Trump's double-talk.