California youth struggle with joblessness
Another report on the dire impacts of the economic crash confirms its staggering impacts on California’s youth.
California WatchBlog’s Joanna Lin has the details here, along with links to a detailed report by California Budget Project:
In 2009, for the first time on record, employment was greater among adults nearing retirement age than among out-of-school youth. Sixty percent of Californians ages 55 to 64 were employed, compared to 58.4 percent of the state’s 16- to 24-year-olds, according to a recent report by the California Budget Project, a nonpartisan research group.
The shift is challenging for young people, who are left with fewer entry-level positions as older workers postpone retirement and movement up the job ladder slows, said Alissa Anderson, the project’s deputy director and author of the report.
And the longer someone of any age group is jobless, the more difficult finding work becomes. Nationally, fewer than one in 10 long-term unemployed people found work in a given month in late 2009. By contrast, more than three out of 10 people who were out of work four weeks or less found a job, the report said.
If they had jobs, young workers tended to be the “last hired and first fired” during the recession, the report said. Entering the labor market under such circumstances can stunt workers for years.
“Workers who graduate during downturns in the economy earn less per hour – both initially and over the long term – than their peers who graduate when the job market is stronger,” the report said.
And where more education traditionally meant greater employment opportunities, the report found that college degrees offered little protection for young workers in the recession.
The number of young, employed Californians with college degrees dropped from 85.7 percent in 2006 to 77.3 percent in 2009, the lowest rate on record, according to the report. Among older adults with college degrees, 81 percent were employed in 2006, and 78.5 percent had jobs last year.
CEO of stricken hospital exec pockets a bundle
Guese it’s just not banksters who take home fortunes while their businesses implode.
Reporter Rachel Konopacki of the Harford County, Maryland, Aegis, writes about one healthcare executive who’s doing very well indeed while his hospitals struggle on life support.
Harford County’s Upper Chesapeake Health lost $70 million because of bad bets in the derivatives markets two years ago, but still paid its chief executive more than $900,000 in annual salary and bonuses.
According to figures from their latest tax returns and from the state agency that regulates hospital rates, Upper Chesapeake Medical Center in Bel Air and Harford Memorial Hospital in Havre de Grace, hospitals owned and operated by nonprofit Upper Chesapeake Health Inc., posted huge losses in their fiscal year ending December 2008.
The losses were the result of an increase in non-operating expenses, according to the Maryland Health Services Cost Review Commission.
The hospitals had combined revenue of $254 million for the year, but posted a combined net loss of $61 million.
Uh-oh. Goldman Sachs still hooked on derivatives
Derivatives, those arcane financial “instruments” which are little more than arcane gambles on the future price of stocks, brought down the Wall Street and the nation’s biggest investment banks.
But now it seems that Goldman Sachs, the banking house most closely tied to
the Obama administration, continues with the speculative derivative plunge that almost brought it down.
From Edward Harrison at Credit Writedowns:
No wonder Goldman has resisted derivatives regulation so fiercely. A huge percentage of the firm’s revenue comes from these activities (hat tip R.W.). The Wall Street Journal is reporting that as much as a third of the firm’s revenue came from derivatives last year.
Goldman Sachs Group Inc. told the Financial Crisis Inquiry Commission that 25% to 35% of its revenue comes from derivatives-based businesses, according to a person familiar with the situation…
A memo sent to the panel Thursday night by the New York company included an analysis of derivatives-based revenue at Goldman from 2006 through 2009, said the person familiar with the matter. Based on the percentages provided by Goldman, such businesses generated $11.3 billion to $15.9 billion of the company’s $45.17 billion in net revenue for 2009.
Question: why is a report this important buried in late Friday news? Wouldn’t people like to know what was at stake for these firms regarding financial reform? Another question: why the range of figures? Surely Goldman knows how much revenue it generates from specific activities.
The analysis was based on a “best guess” of the main type of trading on each Goldman trading desk at the firm, said the person familiar with the matter.
So there you have it — a “best guess.” If it’s good enough for the commission, then it must be good enough for us. Goldman has received a major slap on the wrists in the form of a $550 million settlement with the SEC. But now, its back to making money – 25-35% in derivatives.
Clearly, this inquiry commission is just a charade.
Phoenix, a largely underwater city in the desert
Underwater, as in the folks who “own” most of its houses owe more on their mortgages than their houses are work.
From Housing Doom:
We’ve often seen Jay Butler, head of Realty Studies at ASU, give overly optimistic reports on the state of Phoenix real estate. That’s why when Butler says that 66%-67% of Phoenix homeowners are underwater, you know it’s bad out there.
Even the arms industry falling on hard times
The one industry in the United States that’s been booming these last few years both here and abroad has fallen on hard times.
Given that the largest single chunk of discretionary cash from the Congressional budget goes to the folks who make guns, bombs, and bombers, news that the arms merchants are falling on hard times can only spell more trouble for the ailing economy.
But never fear, bad economic times have a way of spurring arms sales in the long run, as folks learned after 1939.
From Thom Shanker of the New York Times:
The global economic recession significantly pushed down purchases of weapons last year to the lowest level since 2005, a new government study has found.
The report to Congress concluded that the value of worldwide arms deals in 2009 was $57.5 billion, a drop of 8.5 percent from 2008.
While the United States maintained its role as the world’s leading supplier of weapons, officials nonetheless saw the value of its arms trade sharply decline in 2009. This was in contrast to 2008, when the United States increased the value of its weapons sales despite a drop in business for competitors in the global arms bazaar.
For 2009, the United States signed arms deals worth $22.6 billion — a dominating 39 percent of the worldwide market. Even so, that sales figure was down from $38.1 billion in 2008, which had been a surprising increase over the $25.7 billion in 2007 that defied sluggish economic trends.
The decrease in American weapons sales in 2009 was caused by a pause in major orders from clients in the Middle East and Asia, which had pumped up the value of contracts the year before. At the same time, there were fewer support and services contracts signed with American defense firms last year, the study said.
Russia was a distant second in worldwide weapons sales in 2009, concluding $10.4 billion in arms deals, followed by France, with $7.4 billion in contracts. Other leading arms traders included Germany, Italy, China and Britain.
The annual report was produced by the nonpartisan Congressional Research Service, a division of the Library of Congress. The analysis, regarded as the most detailed collection of unclassified global arms sales data available to the public, was delivered to members of the House and Senate over the weekend in advance of their return to work on Monday after the summer recess.
The decline in new weapons sales worldwide in 2009 was caused by government decisions “to defer the purchase of major systems” in a period of “severe international recession,” wrote Richard F. Grimmett, a specialist in international security at the Congressional Research Service and the author of the study.
Ah, but Saudi Arabia comes winging to the rescue
No sooner do we get wind of the travails of the merchants of death than we discover a ray of sunshine for the munitioneers.
The Wall Street Journal reports:
The Obama administration is set to notify Congress of plans to offer advanced aircraft to Saudi Arabia worth up to $60 billion, the largest U.S. arms deal ever, and is in talks with the kingdom about potential naval and missile-defense upgrades that could be worth tens of billions of dollars more.
The administration plans to tout the $60 billion package as a major job creator — supporting at least 75,000 jobs, according to company estimates—and sees the sale of advanced fighter jets and military helicopters to key Middle Eastern ally Riyadh as part of a broader policy aimed at shoring up Arab allies against Iran.
Cuba to lay off 500,000 government workers
Cuba announced on Monday it would lay off “at least” half a million state workers over the next six months and simultaneously allow more jobs to be created in the private sector as the socialist economy struggles to get back on its feet.
The plan announced in state media confirms that President Raul Castro is following through on his pledge to shed some one million state jobs, a full fifth of the official workforce — but in a shorter timeframe than initially anticipated.
“Our state cannot and should not continue maintaining companies, productive entities and services with inflated payrolls and losses that damage our economy and result counterproductive, create bad habits and distort workers’ conduct,” the CTC, Cuba’s official labor union, said in newspapers.
Castro had announced layoffs in August, but said they would occur over the next five years.
At the time, he said the government “agreed to broaden the exercise of self employment and its use as another alternative for the employment of those excess workers.”
More bad news for newspapers
And this time from France, where newspaper readership is already low. Agence France Presse reports:
France’s newspapers are kept in a state of “permanent artificial respiration” by the annual billion euros in state aid they get and badly need to shake themselves up to survive, a report said Thursday.
The government-commissioned report lamented that the massive subsidies had failed to create the “emergence or the presence of political and general press titles that were strong and not dependent on public aid.”
The aid even had the effect of discouraging newspapers from trying to find sustainable financial strategies, said the report, which has been handed to France’s budget and culture ministers and published online by the government.
The official aim of the report was to “end the perverse effects of some public aid which maintains the press in a system of permanent artificial respiration.”
State aid makes up 12 percent of the written press sector’s annual turnover of 10.6 billion euros, over half of which comes from sales and the rest from advertising.
Around 400 million euros in aid comes in the form of reduced sales and business tax and 626 million euros in direct subsidies to help with operations such as printing plant modernisation and distribution.
The author of the report published Thursday, Aldo Cardoso, proposed 15 measures to rein in state aid to newspapers and make it conditional on innovation in the sector.
He did not call for an end to public help for the press but said it could be reduced to 835 million euros by 2016 if his recommendations were followed.
British union challenge government budget cuts
Another story from Agence France Presse:
The government’s programme of drastic spending cuts is putting the British economy in “great danger”, the Trades Union Congress has warned ahead of its annual conference opening in Manchester on Monday.
The cuts will affect economic activity, undermine confidence and could lead to higher unemployment which is “stuck” at around two and a half million, with young people particularly badly hit, the TUC’s general council said in a statement.
In next month’s comprehensive spending review the Government will start to withdraw 32 billion pounds from the economy in tax rises and spending cuts from April 2011, on top of the 8.9 billion already taken out during the current financial year, the TUC leaders said.
“There is therefore scant prospect that the private sector will now create the new jobs needed,” they added.
“Falling confidence suggests a stagnant labour market and at best a jobless recovery. But the prospect of further deep public spending cuts makes even this look like an optimistic scenario, as both public sector staff and employees in the many companies that depend on the public sector for orders lose their jobs.
Making hundreds of thousands of public servants redundant at a time of such cuts and with reduced redundancy pay when there is little or no chance of finding private sector employment is “callous”, the union organisation said.
The TUC warned that deep cuts to public services, benefits and tax credits are bound to have more impact on those with low incomes, adding: “Women, disabled people and those from black and minority ethnic communities are likely to be among the biggest victims of the cuts and the greater inequality they will bring.”