Employment

Central banks have no choice but to keep the faith

20 Jul 2017

ECB chief Mario Draghi and Bank of Japan boss Haruhiko Kuroda have spent trillions of euros and yen without generating much inflation. Nor is it clear when a pick-up in growth will feed through into prices. Yet they are obliged to insist their policies will work eventually.

BBC stars will gain from radical pay transparency

19 Jul 2017

The UK public broadcaster has named everyone who earns more than 150,000 pounds a year. The main conclusion is that valuing TV presenters is guesswork. As with chief executives of listed companies, disclosing compensation will just enable them to demand even higher wages.

Britain learns how not to think about work

12 Jul 2017

A review of the UK “gig economy” suggests some jobs have conditions that make them little better than having no job at all. Others appeal much more than pay levels would suggest. Employment data does not capture the difference. Developing countries have known this for decades.

Retail click jobs can brace only so many bricks

5 Jul 2017

The next decade threatens to doom U.S. workers at the likes of Macy's, Staples and Foot Locker. E-commerce should offset a good portion of the losses. Even assuming a healthy 40 pct increase in such roles, though, a Breakingviews analysis suggests some 600,000 jobs may vanish.

Head-office heave shows Tesco’s weak hand

28 Jun 2017

The British supermarket is cutting a quarter of staff at its headquarters. This should help with plans to remove 1.5 billion pounds of costs and hit an ambitious 3.5 pct-4 pct margin target. Job losses are an unfortunate symptom of Tesco's limited pricing power.

Draghi’s hints have more clout than Yellen’s deeds

28 Jun 2017

ECB chief Mario Draghi had more market impact by alluding to higher rates than Fed Chair Janet Yellen did by hiking them two weeks ago. That fits a recent pattern: central bankers who have yet to tighten policy are more apt to upset expectations – and that’s what moves prices.

Germany can jump growth hurdle courtesy of Brexit

27 Jun 2017

Europe’s biggest economy is expanding so quickly that there’s a growing dearth of skilled labour. The shortage may be severe enough to depress the long-term growth rate, the Bundesbank says. One way to plug the gap is to attract EU workers who no longer feel welcome in Britain.

Brexit one year on: an alternative history

23 Jun 2017

It has been a year since Britain voted narrowly to remain in the EU, a (fake) bank CEO writes in a memo to staff. Few expected uncertainty would linger so long after the referendum. Austerity and populism point to challenges in the UK. Thankfully, the euro zone looks attractive.

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.