Reuters blog archive
from The Great Debate:
If you’re an American man you’re more likely to be unemployed than your female counterparts. Today more than 4.3 million Americans are considered “long-term unemployed” -- out of work for more than 27 weeks. Fifty-six percent of them are men. The Great Recession emasculated generations of men, displacing many of them from the labor force and undermining their financial security. The effects may be felt for decades.
But does that mean the end of men and the rise of women, as author Hanna Rosin has suggested? Not quite. Male unemployment hasn’t come at the expense of women’s success; it reflects deeper structural changes felt by everyone. Technology and globalization has rendered many better-paying jobs, traditionally held by men, obsolete. Both men and women have the potential to thrive, but in order for that to happen we need policy that complements the modern labor market -- rather than hold it back.
Even before the 2008 recession, male labor force participation had been declining while more women went to work. This trend was heightened early in the recession because men experienced the brunt of unemployment, losing jobs in male-dominated industries like construction and manufacturing. These jobs disappear more rapidly during recessions, when weaker firms need to shed workers.
But as the recession wore on, more unemployed men found jobs or left the workforce, and the male/female unemployment rates almost equalized. Today, male unemployment is only slightly higher than it is for women, although the lower unemployment rate masks the fact that many men, especially men older than 55, left the labor force because they couldn’t find work. The unemployment rate also doesn’t tell us how many men took lower paid or part-time jobs because they couldn’t find anything else.
Violence in Ukraine has escalated to a whole new level. The health ministry says 25 people have been killed in fighting between anti-government protesters and police who tried to clear a central square in Kiev. The crackdown, it seems, has been launched.
President Viktor Yanukovich met opposition leaders for talks last night but his opponents, Vitaly Klitschko and Arseny Yatsenyuk, quit the talks without reaching any agreement on how to end the violence and said they would not return while blood is being shed.
from Cancer in Context:
Today’s employment report from the U.S. Labor Department showed the job market remained tough in January. If it’s difficult for healthy individuals to get a job, what is it like for cancer survivors?
Personally, I’m not looking for a job. When I was diagnosed with lung cancer about a year ago, my editors and I came up with the idea that I should write a blog about all aspects of cancer.
Unemployment in the euro zone is stuck at 12 percent, an already high rate that masks eye-popping rates in many of its struggling member economies.
But in a press conference lasting one hour, European Central Bank President Mario Draghi mentioned the problem of high unemployment only a few times – satisfied with the central bank’s usual stance of imploring euro zone governments to implement structural reforms to their labour markets, on a case by case basis.
The European Central Bank held a steady course at its first policy meeting of the year but flagged up the twin threats of rising short-term money market rates and the possibility of a “worsening” outlook for inflation – i.e. deflation.
The former presumably could warrant a further splurge of cheap liquidity for the bank, the latter a rate cut. But only if deflation really takes hold could QE even be considered.
Sabine Lautenschlaeger, the Bundesbank number two poised to take Joerg Asmussen’s seat on the executive board, breaks cover today, testifying to a European Parliament committee. A regulation specialist, little is known about her monetary policy stance though one presumes she tends to the hawkish.
from Lawrence Summers:
Last month in this space I argued that we may be in a period of secular stagnation in which sluggish growth, output and employment at levels well below potential, and problematically low real interest rates might coincide for quite some time to come. Since the beginning of this century U.S. GDP growth has averaged less than 1.8 percent per year. Right now the economy is operating at nearly 10 percent -- or more than $1.6 trillion -- below what was judged to be its potential path as recently as 2007. And all this is in the face of negative real interest rates out for more than 5 years and extraordinarily easy monetary policies.
It is true that even some forecasters who have had the wisdom to remain pessimistic about growth prospects for the last few years are coming around to more optimistic views about growth in 2014, at least in the U.S. This is encouraging, but optimism should be qualified by the recognition that even optimistic forecasts show output and employment remaining well below previous trends for many years. More troubling even with the current high degree of slack in the economy and wage and price inflation slowing, there are increasing signs of eroding credit standards and inflated asset values. If we were to enjoy several years of healthy growth with anything like current credit conditions, there is every reason to expect a return to the kind of problems we saw in 2005-2007 long before output and employment returned to trend or inflation accelerated.
from The Great Debate:
Unemployment, independent of any other factor, threatens to derail the economic promise that Africa deserves. It’s a time bomb with no geographical boundaries: Economists expect Africa to create 54 million new jobs by 2020, but 122 million Africans will enter the labor force during that time frame. Adding to this shortfall are tens of millions currently unemployed or underemployed, making the human and economic consequences nearly too large to imagine.
Thus, even with the strong economic growth we have seen over the past decade, job creation in Africa remains much too slow. Africa needs a comprehensive, coordinated approach akin to America’s “Marshall Plan” in Europe after World War Two. That effort focused on building infrastructure, modernizing the business sector, and improving trade. By the end of the four-year program, Europe surpassed its pre-war economic output.
from The Great Debate:
Recently, Reuters columnist Zachary Karabell proclaimed that “The Youth Unemployment Crisis Might Not Be a Crisis.” Having spent much of the past several years writing about record levels of youth unemployment and speaking with hundreds of struggling young adults across the country, I was intrigued to say the least.
In reality, the article itself does an excellent job demonstrating why youth unemployment is a crisis in America. Unemployment for 15- to 24-year-olds is nearly 16 percent, twice the national average. College graduates are doing slightly better, but young people with just a high school diploma face unemployment rates of nearly 30 percent. High schools dropouts fair even worse. Young people of color face truly shocking labor market conditions: for African American teenagers, the jobless rate is 40 percent. Economists predict this could have serious long-term consequences for the economy. One study claims that nearly 1 million unemployed young Americans will lose $22,000 each in earnings over the next ten years. Youth unemployment is an unmitigated disaster for young people and the economy as a whole.
from The Edgy Optimist:
There’s no doubting that worldwide, kids are out of work. In the United States alone, the unemployment rate for 15 to 24-year-olds is about 16 percent, nearly twice the national average. In parts of Europe, the figures are much worse, with a whopping 56 percent youth unemployment rate in Spain alone -- representing about 900,000 people.
from Global Investing:
Four years into the stock market party fueled by a punch bowl overflowing with trillions of dollars of central bank liquidity, you'd think a hangover might be looming.
But almost all of the fund managers attending the London leg of the Reuters Global Investment Summit this week - with some $4 trillion of assets under management - say the party will continue into 2014.