Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts
Tuesday, October 23, 2012
Saturday, October 20, 2012
A Point Of View: What kind of superpower could China be?
A Point Of View: What kind of superpower could China be?
China is on course to becoming a superpower - but not in the way many expect, writes economist Martin Jacques.
Beijing these days is positively throbbing with debate. It
may not have the trappings of a western-style democracy, but it is now
home to the most important and interesting discussions in the world.When I addressed an audience of young Chinese diplomats at their foreign ministry a year ago, it was abundantly clear that a fascinating debate is under way about what kind of foreign policy might be appropriate for the global power China is in the process of becoming.
What will China be like as a superpower? You might think it is already - it is not.
Its military power is puny compared with that of the US. While America has 11 aircraft carriers, China only commissioned its first last month - based on, of all things, a Ukrainian hull.
Continue reading the main story
Find out more
- Martin Jacques is an economist and author of When China Rules the World
- A Point of View is usually broadcast on Fridays on Radio 4 at 20:50 BST and repeated Sundays, 08:50 BST
And its global political influence is still extremely limited.
The only sense in which China is a superpower is economic -
that is, its economy is already over half the size of the US economy and
projected to overtake it around 2018, notwithstanding its reduced
growth rate of 7%. But this is overwhelmingly a function of China's huge
population. In terms of technology and living standards it lags far
behind the US.So when we speak of China as a superpower, we are talking about the future.
A common reaction to the idea of China as a superpower is that it will be like the US - except worse. Worse because it is not a democracy, it has a communist government and because its people are not like us. I guess that gives some the jitters.
In fact we should not expect China to behave in the manner of the US. It will be very different. And nor should we assume that it will necessarily be worse.
Why will it be different? Because its history is so different. Articles about China's growing involvement with Africa - in terms of trade and investment - often talk of the "new colonialism".
Beware historical ignorance. China has never colonised any overseas territories. Overseas empires were a European speciality, with Japan getting in on the act for a short while too.
China could have colonised South East Asia, for example, in the early 15th century. It had the resources, it had enormous ships, many times bigger than anything Europe possessed at the time. But it didn't.
China's first aircraft carrier is a former Soviet vessel, the Varyag
The tributary system comprised what we know today as East Asia, home to one-third of the world's population. It stretched from Japan and Korea to the Malay Peninsula and parts of Indonesia.
It proved remarkably stable, lasting for at least 2,000 years and only coming to an end around 1900.
The West and China share an important characteristic - they both believe they are universal, a model for all others. But the way they have interpreted this in practice has been entirely different. For Europe, and latterly the US, it meant projecting their power around the world, most spectacularly during the heyday of colonialism in the 19th and first half of the 20th Century, when a large part of the world found itself under European rule.
We governed from afar, exported our ways of doing things, imposed our languages, our education, our religion and much else besides.
Zheng He's statue looks across to the city of Nanjing
The seven great voyages of Zheng He between 1405 and 1433 around the East and South China Seas and across the Indian Ocean as far as East Africa left no permanent mark - they were about demonstrating the glory of the Middle Kingdom rather than a desire to conquer. Those who left China to settle in South East Asia were seen as leaving civilisation and deserving of no support or protection by the Emperor.
Compare that with the way in which Britain and France celebrated the heroes of their colonial expansion. Our cities are littered with statues and street names in their memory.
There is another reason why the Chinese have tended to stay at home. The country is huge, diverse - and extremely difficult to govern. The overwhelming preoccupation of its rulers down the ages has been how to maintain order and stability and thereby retain power. It remains just as true today.
Rather than look outwards, China's leaders look inwards. The exception was China's own continental land mass. Its expansion, rather than to the four corners of the world, was confined to its own continent.
The most dramatic example was the westward march of the Qing dynasty from the mid-17th Century which, in a series of bloody and brutal wars, doubled the physical size of China.
So what, you might ask, does all this history tell us about how China might behave as a great global power? A great deal.
And it is not difficult to see how the US - itself the product of European overseas expansion and settlement - inherited these characteristics from us.
China won't be like this. It is not in its DNA. Its rulers will be far less interested in seeking to dominate the rest of the world and far more concerned with keeping themselves in power. That is what ruling a country containing a fifth of the world's population obliges. When Xi Jinping becomes Chinese leader next month, his in-tray, as with Hu Jintao before him, will be overwhelmingly filled with domestic rather than foreign issues.
In time China will certainly come to enjoy huge global power. It will be exercised, however, in a rather different way.
The iconic form of western power has been military. Extraordinarily, the US today accounts for around half of global defence expenditure. Before, European colonial expansion was only possible because its fighting capacity was massively superior to that of the rest of the world.
Continue reading the main story
"Chinese history can be read as a series of peasant
rebellions. One in the 19th Century, led by a man who thought he was
Christ's brother, lasted 15 years and caused at least 10 million
deaths."
Read more about Hong Xiuquan from Carrie Gracie and about great Chinese figures by following the links below
See also in the Magazine
Read more about Hong Xiuquan from Carrie Gracie and about great Chinese figures by following the links below
That kind of overweening military power has never really been a Chinese characteristic.
Instead the quintessential forms of Chinese power will be
economic and cultural. Over time, China's economic strength - given the
size of its population - will be gigantic, far greater than that of the
US at its zenith. Already, even at its present low level of development,
China is the main trading partner of a multitude of countries around
the world. And with economic power will come commensurate political
power and influence. China will, if it wishes, be able to bend many
other countries to its will.Cultural power will also be important to the Chinese. Theirs is a remarkable civilisation - having enjoyed a place in the sun not once but several times. During the Tang dynasty, for instance, from the 7th to the 10th Century, and most remarkably during the Song dynasty from the 10th to the 13th Century, with major advances in a host of fields from biology and hydraulic engineering to architecture, medicine, mathematics and cartography.
The Chinese are enormously proud of their historical achievements. They believe that theirs is the greatest civilisation there has ever been.
They have a strong sense of their own superiority rooted in history. They have long had a hierarchical view of the world, with China at the top. And the rise of China is likely to accentuate these views.
But don't expect the Chinese to be impatient about their rise. In 1972 Henry Kissinger is reputed to have asked Zhou En Lai, the former Chinese premier, what he thought of the French Revolution. Zhou En Lai's response: "It's too early to know".
The Chinese have a completely different conception of time to Westerners. Whereas Americans think very short, the Chinese think very long.
For them a century is nothing.
Source
Thursday, September 27, 2012
Why male Japanese wage-earners have only 'pocket money'
Why male Japanese wage-earners have only 'pocket money'
Mariko Oi reports on the 74% of Japanese household budgets that are controlled by women
The 15th of each month is a big day for 36-year-old Yoshihiro Nozawa: it is the day he gets paid.
But every month, he hands over his entire salary to his wife Masami. She controls the household budget and gives him a monthly pocket money of 30,000 yen ($381; £243). Despite being the breadwinner, that is all the money he can spend on himself over the next 30 days.
"The last five days from the 10th of each month are usually the toughest," says Yoshihiro.
To put the amount of his pocket money into context, the Nozawa family of four could easily spend 30,000 yen at Tokyo Disneyland in a day.
Yoshihiro and Masami have two children, Rino aged 6 and Ren aged 8, and they are the reason his wife decided to put him on a fixed allowance.
Continue reading the main story
“Start Quote
Taisaku Kubo BusinessmanShe draws a pie chart of our household budget to explain why I cannot get more pocket money.”
"I started controlling the household budget when I became a housewife after having children," says Masami.
"Suddenly, there was only one income and their educations and private lessons cost a lot."Under the thumb Yoshihiro nods but he says 30,000 yen doesn't go far in the world's most expensive city, Tokyo.
"She makes me a lunch box every morning so that helps a lot," he says as he eats his lunch alone in a nearby park from his office.
His only luxury is cigarettes, which he spends one third of his monthly allowance on.
"I think I may have to quit if the price goes up again," he says.
Yoshihiro may be eating his lunch alone but he is not unique.
According to a survey conducted by research firm Softbrain Field, 74% of Japanese household budgets are controlled by women and it is not just couples with young children.
Yoshihiro Nozawa: "Even if I get a pay rise, I'm not too hopeful that my pocket money will go up as well"
He has tried to negotiate a pay rise each year but his wife makes a presentation to explain why it cannot be done.
"She draws a pie chart of our household budget to explain why I cannot get more pocket money," says Taisaku.
On the hand drawn chart, his pocket money is stated as 8.8% of the monthly budget.
"The biggest expenditures are home loan and taxes," says his wife Yuriko. "We don't have children so I want to make sure that we'll have enough money after his retirement."
Just like that, Taisaku loses his argument for a pay rise.
"I've given up my car, motorbike and many expensive hobbies," he laughs.
Shrinking budget But his monthly allowance of 50,000 yen is in fact higher than the national average.
According to Shinsei Bank which has been researching the trend since 1979, the average monthly pocket money was 39,600 yen last year.
And to make things harder for the men, that compares with 76,000 yen in 1990 when people thought that Japan's economy was at its peak. That was two years after the nation's benchmark stock index, the Nikkei 225, reached a record high of 38,916.
But share prices fell sharply in the 1990s and have never since come close to that level.
A study shows that 74% of Japanese household budgets are controlled by women
So today, those whose wives don't make lunch boxes try to cap their daily lunch budget to one coin: 500 yen - about $6.50.
As in most cities, prices vary wildly according to location, decor and the standard of food and drink on offer.
But in many places 500 yen would barely be enough for a bowl of noodles or a McDonald's burger.
Their drinking budget has also shrunk to a record low.
On average, they only spend 2,860 yen on a night of drinking which is almost half of what they used to spend just three years ago.
That does not allow for a great many half litre bottles of Asahi - the average price is around 700 yen.
Double income So why don't men start controlling the household budgets themselves?
"I don't think many men hand over their entire salaries happily," says career consultant Takao Maekawa of FeelWorks.
"But they feel it's their obligation to earn money for the family even if it means they have to suffer themselves."
Traditionally, it was a combination of hardworking salarymen, as white-collar businessmen are called in Japan, and stay-at-home mothers or housewives which supported Japan's economic growth after World War II.
"He actually tried to handle the household budget once," says Masami Nozawa whose husband Yoshihiro lives on 30,000 yen a month.
"But he said it was too time consuming so returned the task back to me," she says.
Yoshihiro agrees: "I know how much I make and I now understand how difficult it is to allocate the money".
"Even if I get a pay rise at work, I am not too hopeful that my pocket money will go up."
Today, more families are seeking out a double income simply because they cannot afford not to.
But for now, Yoshihiro and Taisaku look for cheap enough bars where they can still have some drinks without blowing all of their monthly pocket money at once.
Source
Wednesday, September 5, 2012
The Strange Allure of the Gold Standard
The Strange Allure of the Gold Standard
Some Republicans want to take the country forward by taking us back — way back – to the gold standard. The Republican party platform, approved on Tuesday, warns against the evils of “easy money and loose credit” and calls for a commission to ”investigate possible ways to set a fixed value for the dollar.” This proposal is clearly a sop to Ron Paul, who made “sound money” one of his big issues during his failed campaign, and has about as much chance of being enacted as Romney has of winning the African-American vote. But the mere fact of its existence is significant.
Almost everyone who is not Ron Paul, or at the very least a Ron Paul fan, thinks the idea of returning to the gold standard is daft. A recent University of Chicago poll of top academic economists found precisely zero who thought that was a good idea. Liberal commenters are aghast that the issue is even being raised. Economist and New York Times columnist Paul Krugman has described the gold standard as “an almost comically (and cosmically) bad idea.” On The Atlantic, Matthew O’Brien called the gold standard “the world’s worst economic idea.” He conceded that “[t]here might be worse ideas than this, but they generally involve jumping off the Brooklyn Bridge because everybody else is doing it.”
But aversion for the gold standard is hardly confined to the left. Economist Milton Friedman, the late king of the monetarists, argued that the idea was fundamentally “anti-libertarian because what they mean by a gold standard is a governmentally fixed price for gold.”
(MORE: Is the U.S. Headed for a Double-Dip Recession?)
Yet the gold standard still has its fans. What’s the appeal? True goldbugs have an almost religious faith in the power of the precious metal, and a deep distrust of government. To some, what they call “sound money” is the only moral solution. At a conference organized by the libertarian Cato Institute last fall, speakers denounced our current policy of “fiat money” with the fervor of preachers. As George Melloan observed in the American Spectator,
“the consensus view [as the conference] seemed to be that in these parlous times a return to the gold standard might very well be the only way to restore order in the bawdy house Washington has become.”What worries the goldbug the most is the specter of inflation, which some at the conference referred to as not only harmful but “immoral.” When the government can print money on demand — without having to back up its bucks with real gold — goldbugs warn, the end result can be hyperinflation and economic chaos.
And, as Joe Weisenthal points out on Business Insider, “the ability to create fiat money out of thin air is a stealth form of taxation, because the creation of more dollars diminishes the value of those already in existence.” This makes the gold standard especially enticing to tax-hating conservatives.
(MORE: 10 Questions for Dan Quayle)
The trouble is that the idea of gold as a bulwark against economic chaos is based on illusions. Going on the gold standard would essentially require an instant end to deficits, robbing to government of its ability to fight recessions (and possible depressions) with stimulus money. Moreover, it would link the value of the dollar to the gold supply, leaving our economic future in the hands of gold miners. If miners were to strike, as Noam Scheiber notes in The New Republic,
there [would] be too few dollars relative to the amount of buying and selling going on in the economy. When there are too few dollars, each dollar becomes more valuable, and people start to hoard them. Spending slows and the economy collapses.We all saw what happened when banks started hoarding their dollars during the financial crisis; imagine what might have happened if the rest of us had done the same.
Anyone who thinks the gold standard means stability needs only look at American history to see that theory rebutted, again and again, by the crashes and “panics” of the gilded age and afterwards. As Krugman sardonically notes, “under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933.”
Given all this, it seems likely that any commission tasked with examining the gold standard would return with a conclusion similar to that reached by the Reagan Gold Commission back in 1982, the last time such an exercise was conducted: that a return to the gold standard “does not appear to be a fruitful method for dealing with the continuing problem of inflation.” That’s putting it mildly.
Saturday, August 25, 2012
Marty Nemko's Career Tips: Surviving Today's Job Market
Marty Nemko's Career Tips: Surviving Today's Job Market
Marty Nemko's Career Tips: Surviving Today's Job Market from Commonwealth Club and Commonwealth Club on FORA.tv
Monday, August 20, 2012
How Americans view wealth and inequality
How Americans view wealth and inequality
Americans do not understand how wealth is distributed in their society
There
have been lots of questions and discussions recently about inequality
and economists often argue about what is the right level of inequality
to have in society.
But Mike Norton, professor at Harvard Business School, and I
decided to take a different path and we decided to ask people what
inequality they would want.Now, there are lots of ways to ask this question and we used the philosopher John Rawls.
Rawls said that "a just society is a society that if you knew everything about it, you'd be willing to enter it in a random place". And it's really a beautiful definition.
He called it a veil of ignorance, because if you're very wealthy, you might want the wealthy people to have lots of money and the poor to have very little; and if you are very poor, you might want the poor to have more money and the wealthy to have less.
But in Rawls' definition, you don't know where you'll end up, you have to consider all the different options and therefore you have to think about what is good for society as a whole.
Incomprehension So, we took the American society and we asked people to imagine it divided into five buckets, the wealthiest 20%, the next 20%, the next, the next and the poorest 20%.
First of all, we asked people: how much wealth do you think is concentrated in each of those buckets?
It turns out people get it very wrong.
Continue reading the main story
“Start Quote
Even Americans understand that inequality is not a good idea and principle”
The reality is that the bottom
two buckets together, the bottom 40% of Americans, own 0.3% of the
wealth; 0.3%, almost nothing, whereas the top 20% own about 84% of the
wealth.
And people don't understand it. They don't understand how
much wealth the top have and in particular, they don't understand how
little the bottom has.But then we described to people Rawls' definition, the veil of ignorance, and the idea they could end up anywhere. And we said: What society would you like to create? How much wealth? How would you like to distribute the wealth?
And it turns out people created a society that is much more equal than any society on Earth. It was much more equal than Sweden.
Blind tasting In fact, when we did this experiment another way and we showed people two distributions of wealth, one based on the wealth distribution in the US and the other based on the wealth distribution that is more equal than Sweden, 92% of Americans picked the improved Swedish distribution.
So this suggests to me that when people take a step away from their own position and their own current state, and when people look at society in general terms, in abstract terms, Americans want a much more equal society.
How would you judge a wine if you didn't know where it came from or how much it cost?
And all this makes me wonder, how can it be that in our studies people seem to want such equal society but when you look at the political ideology, people don't seem to want that?
And I think it is a little bit like blind tasting of wine.
When you taste wine and you know the label and you know the price, you are going to be influenced by that. And when you are tasting wine in a blind way, now you don't have anything to base it on and you have to really use your senses.
I think the same thing happens with thoughts about just societies. When we are in the regular world, we are using our current position, our ideology and the labels that politicians give us, and they obscure reality and obscure what we really want.
But Rawls' definition really lets us strip all this away, lets us focus on what is really important and how people actually want something very different from what we have.
The question, of course, is how do we get people to think about this to a higher degree and how do we get them to act on that for a better future?
Dan Ariely is the James B Duke professor of psychology and behavioural economics at Duke University in North Carolina.
Source
Saturday, August 18, 2012
Tuesday, August 14, 2012
Thursday, August 9, 2012
Will Millennials Change How Cars Are Bought and Sold?
Will Millennials Change How Cars Are Bought and Sold?
Thursday, July 19, 2012
Microsoft makes its first ever loss
Microsoft makes its first ever loss
Microsoft 's advertising business struggled to compete with rival Google
The
computing giant Microsoft has made its first-ever quarterly loss after
it wrote off some of the value of its online advertising business.
The loss came after it wrote down the value of Aquantive by
$6.2bn (£3.94bn, 5bn euros), which failed to bring the profits expected
by Microsoft.That led to a $492m loss in the three months to the end of June, compared with a profit of $5.9bn a year ago.
The company has not made a loss since it joined the stock market in 1986.
It took over aQuantive in 2007 but it struggled to compete with rival Google.
Microsoft paid $6.3bn for Aquantive.
Microsoft is doing well in other areas, despite the decline in popularity of its Windows operating system, which dominated the personal computer market for years.
Revenue for the three months to June rose by 4% to $18.06bn.
Mosaic Excluding the adjustment for the asset write-down, and the holding back of some income related to the launch of its Windows 8 system, Microsoft profits beat those expected by investors.
Shares were up 1.6% after the results were announced.
Microsoft says the update of the Windows systems is the most important redesign in more than 10 years.
Windows 8, which will launch in October, will feature a new look that will present applications in a mosaic of tiles.
Importantly, it will also enable the operating system to work on tablet computers, which along with smartphones are the fastest-growing sector of the computing market.
Microsoft is also planning to release its own tablet, the Surface.
Earlier this week, Microsoft previewed its next version of the Office system, which is expected to be released next year.
Source
Saturday, June 16, 2012
DEAR AMERICA: You Should Be Mad As Hell About This [CHARTS]
Friday, June 8, 2012
The Price of Inequality
The Price of Inequality
Joseph E. Stiglitz
Joseph E. Stiglitz, a Nobel laureate in economics, has pioneered pathbreaking theories in the fields of economic information, taxation, development, trade, and technical change. As a policymaker, he served on and later chaired President Bill Clinton’s Council of Economic Advisers, and was Senior Vice President and Chief Economist of the World Bank. He is currently a professor at Columbia University, and has taught at Stanford, Yale, Princeton, and Oxford.He is the author of The Price of Inequality: How Today’s Divided Society Endangers our Future.
05 June 2012
NEW YORK – America likes to
think of itself as a land of opportunity, and others view it in much the
same light. But, while we can all think of examples of Americans who
rose to the top on their own, what really matters are the statistics: to
what extent do an individual’s life chances depend on the income and
education of his or her parents?
Nowadays,
these numbers show that the American dream is a myth. There is less
equality of opportunity in the United States today than there is in
Europe – or, indeed, in any advanced industrial country for which there
are data.
This is one of
the reasons that America has the highest level of inequality of any of
the advanced countries – and its gap with the rest has been widening. In
the “recovery” of 2009-2010, the top 1% of US income earners captured
93% of the income growth. Other inequality indicators – like wealth,
health, and life expectancy – are as bad or even worse. The clear trend
is one of concentration of income and wealth at the top, the hollowing
out of the middle, and increasing poverty at the bottom.
It
would be one thing if the high incomes of those at the top were the
result of greater contributions to society, but the Great Recession
showed otherwise: even bankers who had led the global economy, as well
as their own firms, to the brink of ruin, received outsize bonuses.
A
closer look at those at the top reveals a disproportionate role for
rent-seeking: some have obtained their wealth by exercising monopoly
power; others are CEOs who have taken advantage of deficiencies in
corporate governance to extract for themselves an excessive share of
corporate earnings; and still others have used political connections to
benefit from government munificence – either excessively high prices for
what the government buys (drugs), or excessively low prices for what
the government sells (mineral rights).
Likewise,
part of the wealth of those in finance comes from exploiting the poor,
through predatory lending and abusive credit-card practices. Those at
the top, in such cases, are enriched at the direct expense of those at
the bottom.
It might not
be so bad if there were even a grain of truth to trickle-down economics –
the quaint notion that everyone benefits from enriching those at the
top. But most Americans today are worse off – with lower real
(inflation-adjusted) incomes – than they were in 1997, a decade and a
half ago. All of the benefits of growth have gone to the top.
Defenders
of America’s inequality argue that the poor and those in the middle
shouldn’t complain. While they may be getting a smaller share of the pie
than they did in the past, the pie is growing so much, thanks to the
contributions of the rich and superrich, that the size of their
slice is actually larger. The evidence, again, flatly contradicts this.
Indeed, America grew far faster in the decades after World War II, when
it was growing together, than it has since 1980, when it began growing
apart.
This shouldn’t come
as a surprise, once one understands the sources of inequality.
Rent-seeking distorts the economy. Market forces, of course, play a
role, too, but markets are shaped by politics; and, in America, with its
quasi-corrupt system of campaign finance and its revolving doors
between government and industry, politics is shaped by money.
For
example, a bankruptcy law that privileges derivatives over all else,
but does not allow the discharge of student debt, no matter how
inadequate the education provided, enriches bankers and impoverishes
many at the bottom. In a country where money trumps democracy, such
legislation has become predictably frequent.
But
growing inequality is not inevitable. There are market economies that
are doing better, both in terms of both GDP growth and rising living
standards for most citizens. Some are even reducing inequalities.
America
is paying a high price for continuing in the opposite direction.
Inequality leads to lower growth and less efficiency. Lack of
opportunity means that its most valuable asset – its people – is not
being fully used. Many at the bottom, or even in the middle, are not
living up to their potential, because the rich, needing few public
services and worried that a strong government might redistribute income,
use their political influence to cut taxes and curtail government
spending. This leads to underinvestment in infrastructure, education,
and technology, impeding the engines of growth.
The
Great Recession has exacerbated inequality, with cutbacks in basic
social expenditures and with high unemployment putting downward pressure
on wages. Moreover, the United Nations Commission of Experts on Reforms of the International Monetary and Financial System,
investigating the causes of the Great Recession, and the International
Monetary Fund have both warned that inequality leads to economic
instability.
But, most
importantly, America’s inequality is undermining its values and
identity. With inequality reaching such extremes, it is not surprising
that its effects are manifest in every public decision, from the conduct
of monetary policy to budgetary allocations. America has become a
country not “with justice for all,” but rather with favoritism for the
rich and justice for those who can afford it – so evident in the
foreclosure crisis, in which the big banks believed that they were too
big not only to fail, but also to be held accountable.
America
can no longer regard itself as the land of opportunity that it once
was. But it does not have to be this way: it is not too late for the
American dream to be restored.
Wednesday, May 23, 2012
Who works the longest hours?
Who works the longest hours?
Chill
winds sweeping the world economy have left many people out of a job,
and some of those still working have been asked to worker longer hours
for the same pay. Recently the UK government urged the country to work
harder, after slipping back into recession. So which countries put the
most hours in?
A look at the average annual hours worked per person in
selected countries puts South Korea top with a whopping 2,193 hours,
followed by Chile on 2,068. British workers clock up 1,647 hours and Germans 1,408 - putting them at the bottom of the table, above only the Netherlands.
Greek workers have had a bad press recently but, as we reported in February, they work longer hours than any other Europeans. Their average of 2,017 hours a year puts them third in the international ranking, based on figures compiled by the Organisation for Economic Co-operation and Development (OECD).
Continue reading the main story
Time off around the world
- Workers are generally given paid annual leave and paid public holidays
- In many countries, though not the US, a minimum amount of paid leave is guaranteed by law
- In European Union countries this minimum ranges from 20 to 25 days, but in practice the figure is often higher - in Germany and Denmark the average was 30 days in 2010
- Public holidays in the EU vary from five in the Netherlands, to 14 in Spain (2010 figures) - in England and Wales there are eight in a normal year, in Scotland nine, and in Northern Ireland 10
- Workers in the US are given an average of nine days of paid leave and six paid public holidays (2006 figures)
- Not all employees take the paid leave they are entitled to - Japanese workers were given 18 days on average in 2010, but took less than half of it
It's worth mentioning that the
OECD has only 34 members - most of them developed countries - and some
very important countries, such as India, China and Brazil, are not among
them.
The OECD data includes full and part-time salaried workers
and the self-employed. It includes all the hours they work, including
overtime. While figures are available for some other parts of the world, they are not directly comparable to the OECD data because they are collated very differently or they are out of date, so we are focusing only on the OECD nations.
But by looking at data from the OECD and the International Labour Organization (ILO) we can see some broad and interesting trends.
"Asian countries tend to work the longest [hours], they also have the highest proportion of workers that are working excessively long hours of more than 48 hours a week," says Jon Messenger, an ILO expert on working hours.
"Korea sticks out because it's a developed country that's working long hours," he says. "Normally it's developing countries like Bangladesh, Malaysia, Thailand, Sri Lanka - countries like this that are working long hours."
But working longer doesn't necessarily mean working better.
"Generally speaking, long working hours are associated with lower productivity per hour. Workers are working very long hours to achieve a minimum level of output or to achieve some minimum level of wages because frankly they're not very productive," Messenger says.
Workers in Asian countries put in the hours
"Over the last century, you've seen a reduction from very long working hours - nearly 3,000 a year at the beginning of the 1900s - to the turn of the 21st Century when most developing countries were under 1,800 hours," says Messenger. "And indeed some of the most productive countries were even lower than that."
The drop in working hours is in part a reflection of the greater number of part-time workers in the developed world. A large number of part-time workers brings down a country's average - in the case of Japan, for example, a high proportion of people work excessive hours, but many also work part-time, leaving the country in the middle of the table, with 1,700 hours.
"You have more and more people working part-time hours," says Messenger. "They're quite capable of supporting themselves, quite capable of producing what they need to produce, so it's just not necessary to work longer than that."
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More or Less: Behind the stats
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Tighter labour laws in developed
countries, particularly in Europe, have also reduced working hours. The
differences between the most developed nations are small but leave
entitlement makes a difference.
Messenger says the average Briton works 150 fewer hours than an American. "The difference is really driven by the fact that the US is the only developed country that has no legal or contractual or collective requirement to provide any minimum amount of annual leave," he says.
The UK, in contrast, is subject to the European working time directive, which requires at least four weeks of paid annual leave for every employee.
Some European countries have a higher statutory level of paid leave - 25 days in Austria, Denmark, France, Italy, Luxembourg and Sweden in 2010, according to the European Industrial Relations Observatory (Eiro). And some employers provide more paid leave than the statutory miniumum.
Paid public holidays, which come on top of that, averaged between nine and 10 in the European Union in 2010.
"The combined total of agreed annual leave and public holidays varied in the EU from 40 days in Germany and Denmark to 27 days in Romania - a difference of around 48% or 2.5 working weeks," Eiro said in a report published last year.
When comparing hours worked, however, there's one more thing which must be acknowledged.
Each country collects its own data, and their methods may be not always be perfectly comparable.
Source
Thursday, March 8, 2012
Touch-and-go tablet and computer screens
Touch-and-go tablet and computer screens
(Copyright: Getty Images)
The new iPad launched yesterday amid its usual fanfare. But could dwindling supplies of a crucial component make such events a thing of the past?
Another iPad launch, another event filled with intense anticipation and speculation. This time Apple’s CEO Tim Cook revealed that the latest iteration of iPad will feature a high-definition screen, and no doubt its competitors will rapidly follow suit.
But there is a problem looming on the horizon for fans of the latest tablet computers, not to mention smart phones and flatscreen TVs. Whether it is on the shiny new iPad, computer or phone, the chances are that you are reading this article through a screen laced with one of the rarest metals on Earth: indium. And analysts are warning that global supplies of indium could be exhausted as soon as 2017. So how will we live without the gadgets that we have come to depend on?
Such a prospect might not seem as alarming as running out of essential commodities, such as food or water. But over the past few decades digital displays have become so enmeshed in our lives that they are integral to our social interactions and livelihoods from rural East Africa to the offices of Wall Street. I have met Kenyan fisherwomen trading their wares via SMS to clients based hundreds of kilometres away – an opportunity that depends on indium just as much as my need to read these words I am typing on my computer monitor.
Wonder metal
Though it was discovered 150 years ago, indium’s remarkable qualities have been harnessed only recently to create wafer-thin electrodes. It is a very soft silvery metal that can be painted onto glass because unlike other soft metals, such as mercury, it wets the glass rather than forming beads. (Another curious property of indium is that when you bend a rod of the metal, it issues a high-pitched crackling sound, known as its “cry”.)
Indium is most useful, however, when it is manufactured into indium tin oxide, or ITO. The reason you cannot see it is because when indium reacts with oxygen, it becomes transparent. This, plus its tremendous ability to conduct electricity, allows our mobile phones to be smarter, our TV flatscreens to be larger and our tablet computers to be more sleek.
As a result, the price of indium has rocketed in recent years – it went from $60 per kilogramme in 2003 to $1,000 in just three years – giving rise to a whole new indium smuggling industry, primarily out of China. And there is no let up on our demand for hi-tech displays – there were more than 1.5 billion mobile phone handsets alone sold in 2011, one of which was to me.
But the supply of indium cannot meet our voracious demands. Indium is harvested as a byproduct of zinc mining because this so-called "hitchhiker" metal exists almost entirely in trace amounts inside deposits of other ores such as zinc and lead – sometimes as little as 1 part per million. And because indium is not mined in its own right, greater demand for it won't necessarily lead to more being mined, according to Robert Ayres, a physicist and economist at INSEAD business school in France. "Most of the indium is just single atoms stuck inside rock that can never be utilised," he says.
If the most gloomy predictions for indium are true, Ayres says the only solution is to increase recycling efforts. Because of its value, the indium recycling market is already bigger than primary production.
But a single monitor screen typically contains less than 0.5 g of ITO, so recovering such a tiny amount from electronic products is expensive and energy-intensive. "I call indium a “spice metal”, because it's sprinkled into products in a way that makes it almost impossible to recover," says Armin Reller, a materials physicist at the University of Augsburg in Germany.
So what other options do we have to indium? Finding a material that is transparent, light and conducts electricity as efficiently as ITO is a big challenge, but there are some candidates. So-called non-stochiometric tin oxides, which use the far more abundant aluminium, are one option that could be incorporated fairly easily into current manufacturing set-ups. The problem is that they do not perform as well as ITO and that tin is itself running out, with reserves estimated to last another 20-40 years.
Researchers in Germany and Japan are working on a flexible polymer-based material called PEDOT, which when doped with various chemicals becomes more transparent and a better conductor. Again, the polymer relies on non-renewable oil or coal supplies.
What’s desperately needed is a sustainable alternative, and the best solution could come in the shape of a remarkable material called graphene, the subject of a recent Nobel Prize. Like pencil-lead and diamonds, graphene is yet another form of carbon, one of the most abundant elements on Earth. Graphene's carbon atoms are arranged in a flat sheet of hexagons, like chicken wire, and this structure makes it the strongest known material and can conduct electricity as well as copper. And because graphene is just one atom thick, it is almost transparent.
Graphene may be one of the most versatile materials ever discovered – with an endless list of possibilities ranging from miniaturised computer chips to high-capacity batteries (and believe it or not for making extra-strong vodka). But one of its most-desired applications is to roll it up into carbon nanotubes and use it in touchscreens, as it offers several advantages over ITO. Graphene is more stable, so it will survive better in applications where the product will be subjected to constant physical force, such as regular finger-pounding. And graphene's superior flexibility means that it can be shaped in various configurations – you could create a spherical touchscreen, for example.
So why have we not already moved from ITO to carbon? Mark Hersam, a carbon nanotubes pioneer at Northwestern University in Illinois, believes we're waiting for an industry tipping point. "There's tremendous inertia in the electronics sector because the entire industry is modelled around ITO. Big companies like Apple are wedded to the ITO manufacturing processes and will need to invest substantially to start using carbon," he says. However, as the price of indium goes up and it becomes harder to get hold of, there is likely to be a switch."
With solar cells and electronics all competing for the same rare metal, industry is already under increasing pressure to start using a different material, whether that's another metal oxide or novel carbon chicken-wire. Looking through the breathless coverage of the iPad 3 launch on my phone, one thing is for sure: our unwavering enthusiasm for touchscreen/display-screen technologies means we desperately need to find alternatives soon.
Which jobs have more women than men?
Which jobs have more women than men?
Most journalists are women. Most authors are women. Most teachers, lab technicians, therapists, editors, librarians, public relations officers and insurance underwriters are women.
In fact, it is arguable that women now hold a greater proportion of Britain's professional jobs than their representation in the workforce would lead one to expect.
The statistics team in the House of Commons library has just published data on women in public life, the professions and the board room. On International Women's Day it is worth celebrating the progress there has been over the past decade in trying to achieve equality for women in the workplace.
In some parts of public and corporate life there is still some way to go. Just 22% of MPs and peers are women, with a similar proportion in the Cabinet and serving as judges in the courts. As of last month, just 15% of FTSE 100 company directors were women.
But what does equality look like? As I scrutinised the tables of occupations and the ratio of male to female employees, I began to wonder if only 50:50 really represented job done.
A look at official employment stats reveals that the number of men working full-time is 13.58m compared to 7.68m women. The figures for part-time working show 2.01m men and 5.86m women. If we assume that two part-time jobs equals one full-time job, it means that 58% of the workforce are men and 42% are women.
So, it could be argued that equal gender representation within the current employment market would see roughly four out of 10 jobs in any sector held by women.
With this in mind, one sees that among the professions, some 44% of jobs are filled by women - slightly higher than their representation within the workforce might lead one to expect.
Women now make up 45% of the country's GPs, with the same figure in a category comprising solicitors, lawyers, judges and coroners. It is a similar story with scientists - 46% are women.
The employment consequences of the government's austerity package are expected to have a greater impact on women than men, particularly those working part-time in the public sector. There are still glass ceilings for women in some parts of the country's professional and public life.
But on International Women's Day, perhaps it is also worth reflecting on how much has been achieved already.
Thursday, January 19, 2012
Can a company live forever?
Can a company live forever?
In 1288, Stora Enso issued the first share ever granted in a company, giving a bishop an eighth of a copper mountain
The past few years have seen previously unthinkable corporate behemoths - from financial firms such as Lehman Brothers to iconic car manufacturers such as Saab - felled by economic turmoil or by unforgiving customers and tough rivals.
And do not put away the black garb yet - the pace of corporate funerals is set to pick up.
The average lifespan of a company listed in the S&P 500 index of leading US companies has decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today, according to Professor Richard Foster from Yale University.
Today's rate of change "is at a faster pace than ever", he says.
Professor Foster estimates that by 2020, more than three-quarters of the S&P 500 will be companies that we have not heard of yet.
So in a world where former titan General Motors was brought to its knees a couple of years ago, requiring a government cash injection to escape bankruptcy, it seems apt to ask: How long can a company survive?
Looking eastward
The implications can be enormous when large companies go under It is perhaps unsurprising that the country where people live the longest is also home to some of the oldest companies in the world.
In Japan, there are more than 20,000 companies that are more than 100 years old, with a handful that are more than 1,000 years old, according to credit rating agency Tokyo Shoko Research.
The list includes Nissiyama Onsen Keiunkan, a hotel founded in 705, which is thought to be the oldest company in the world.*
There is even a specific word for long-lived companies in Japanese: shinise.
So what is the key to their longevity?
"Japanese companies can survive for so long," according to Professor Makoto Kanda at Meiji Gakuin University, "because they are small, mostly family-run, and because they focus on a central belief or credo that is not tied solely to making a profit."
Local factors could be another key to their success, he says.
Shinise focus primarily on the Japanese market, from Kikkoman's products to small sake manufacturers, and they benefit from a corporate culture that has long avoided the mergers and acquisitions that are common among their Western counterparts.
"Those conditions must be sustained," says Professor Kanda. "Otherwise it will be a little bit difficult for them to continue live long."
Predicting the futureBut, of course, conditions do change - and what then?
Changing with the times is essential for companies that want to survive for a long time Although there are exceptions to every rule, the most important factor for survival is an emphasis on innovation and reinvention.
Nokia was a pulp manufacturer before it got into electricity and then mobile phones; at some point its brand name was even used on galoshes. Or take Berkshire Hathaway, which began as a textile mill in Rhode Island.
However, innovation for the sake of it is not the goal, says Vicki TenHaken, a professor of management at Hope College.
It is a focus on "little bets" that helps companies grow and keep up with the competition, she says.
In fact, the world's oldest limited liability corporation, the Finnish paper and pulp manufacturer Stora Enso, first started out as a copper mining company in 1288.
Now the company is looking into expanding into bio-energy and green construction materials, areas that it has spent several years developing.
"The next 40 years look very different from the 700 years behind us," says Stora Enso spokesman Jonas Nordlund, emphasising the company's desire to expand outside Europe in Brazil, China and Uruguay, as well as its investment in cross-laminated timber, a building material that sequesters carbon dioxide.
Balancing act
Research and development may be expensive, but it might help secure long-term survival Innovation in general is not always easy, however, especially for publicly listed companies that must balance the concerns of capital markets and shareholders, who demand quarterly profits and who are not necessarily interested in decades-long research projects.
"Research and development is always a delicate balance between maintaining a long-term view and remaining sensitive to short-term financial objectives," observes Mark Vergnano, executive vice president of innovation at DuPont.
Mr Vergnano cites DuPont's trove of more than 37,000 patents and its early history as a gunpowder manufacturer as proof of its commitment to innovation - but acknowledges that inventions are not enough to keep the company operating from day to day.
DuPont implemented a new rule in 2010 that mandated that 30% of revenue must come from innovations the company has created in the last four years - a move that could help reassure investors who might balk at the company's $2bn research and development budget.
The problems of living foreverYet even if a company can innovate and conditions do remain favourable, immortality does have its downsides.
For instance, there is no real proof that age makes a company any more profitable than younger companies. On the contrary, evidence from the stock market actually suggests that age could be a hindrance.
When GM filed for bankruptcy, the US government had to come to the rescue to prevent its downfall Of the 74 or so companies that have stayed in the S&P 500 for more than 40 years, only a dozen or so have managed to beat the average, according to a study by consultancy McKinsey.
In fact, if the S&P 500 were made up of only the companies that were part of the index in 1957, overall performance would have been some 20% worse.
"When a company has run its course it gets bought," says Professor Foster.
"This is a good thing, because if the economy stops changing then productivity would go away.
"All companies would like to think that they're going to be the Methuselah, but they're not."
When to die?Ms TenHaken agrees, although she also emphasises the toll that unplanned for or sudden deaths can have on surrounding communities - particularly her home of Michigan, which has seen its fair share of corporate funerals.
"I don't know that it's necessary to say that companies should live forever," she says.
"I think the tragedy is that companies die premature deaths. If a company dies too soon we have to ask what went wrong."
As more and more companies look set to take their final bow, the real question for those who are left may not be how to survive, but when to die.
*There is some debate over the oldest company designation. There is an older organisation, Ikenobo Kadokaia, which was founded in Kyoto in 587 AD. However, its stated purpose is the promotion of traditional floral arranging, which is not necessarily commercial in nature.
The Big Winner of the Great Recession Is … Large Corporations
The Big Winner of the Great Recession Is …
The recent recession has been the most brutal since the Great Depression and has caused enormous hardship for many American families, as well as immense financial problems for governments around the world. As a result, it’s hard to see the downturn that began at the end of 2007 as anything but a catastrophe. With household incomes generally lower and poverty rates significantly higher than they were 10 years ago, it’s easy to feel that everything is falling apart. But amid the wreckage, there are some success stories that are vitally important for the recovery and the future prosperity of America.
The big winners of the recent Great Recession have been the largest U.S. corporations. This isn’t simply because they are greedy and rapacious, or because they can steamroller everything in their path. Rather, it reflects the fact that they are in a position to use the recession as a positive opportunity to restructure and become more efficient, while government, small businesses and most American households are forced by circumstances to play defense.
In every economic system, there have to be occasional corrective phases, where inefficient and uncompetitive businesses and services are eliminated, costs are lowered, and ground is cleared for new growth. But not every part of the economy is equally well positioned to do this. Government usually has to worry first about unemployment. It therefore tries to preserve current jobs and existing businesses, rather than focusing on restructuring government services to make them more effective or reforming social programs to lower their long-term costs. Most households and many small businesses give top priority to immediate concerns in a recession, because they have to respond to the short-term pain rather than the potential for long-term gain.
(More: What S&P’s Downgrades Mean for the Euro’s Future)
The organizations that have the resources to think about the future and position themselves accordingly are typically the largest corporations. Sure, some big companies have failed – most notably banks – but most have been able to take advantage of reduced labor costs and low interest rates to boost their productivity at the same time that they are strengthening their balance sheets. Consider the following:
Labor costs are down while productivity is up. The most recent data from the Bureau of Labor Statistics show that quarterly productivity in manufacturing rose 5%, while unit labor costs declined 5.1%. Basically, as companies shut down their least successful business operations, they are left with the most efficient and productive ones. Moreover, wages are not keeping pace with inflation right now. In fact, adjusted for inflation, they are down 2.3% from a year ago, the biggest such decline since 1948. The overall result is that companies are getting more from their workers without having to pay them more.
Top companies are able to refinance their debt at low interest rates. The Federal Reserve’s policy of quantitative easing has made plenty of money available at low interest rates. Giant corporations with excellent credit ratings can therefore restructure their balance sheets any way they want – boosting cash on hand or locking in long-term borrowing exceptionally cheaply. As a result, the value of corporate balance sheets has risen by 28% since late 2009. Much of the needed refinancing has now been completed, although some companies, such as GM and Ford, still have big bond offerings coming up.
(VIDEO: The 99ers: The Real Lives of the Long-Term Unemployed)
Money is rolling in. Higher productivity, moderate labor costs and restructured balance sheets combine to make companies more profitable. In fact, corporate profits are now at a peak in dollar terms and close to an all-time high as a percentage of GDP. Overall, profits have more than doubled since 2000, while stock prices are actually lower than they were 12 years ago. What that means is that lots of great stocks are now cheap by historical standards.
Corporate cash holdings are immense. Nonfinancial companies are taking in hundreds of billions of dollars more than they need to fund current operations. Total cash reserves at U.S. corporations total more than $2 trillion, close to a 50-year high in relative terms. Perhaps not surprisingly, some of the companies with lots more cash on hand than they need are paying ample dividends. Oil giant Chevron, with $20 billion in cash, now offers a 3.1% yield. Chipmaker Intel, with $15 billion, now pays 3.3%. And health-care conglomerate Johnson & Johnson, with $30 billion, yields 3.5%. (I give a longer list of companies that are likely to grow dividends here.)
In part, these huge cash reserves reflect the uncertainty corporate executives feel about whether to expand right now. Demand is still soft, government policy on taxes and regulations is confused, and risks of a currency collapse in Europe are impossible to gauge. As a result, many U.S. companies are simply hunkering down and hanging onto their money until the picture gets clearer.
There’s no guarantee, of course, that the U.S. economy will continue to get better. Recent small improvements could suddenly be reversed – for example, by upheaval in Europe that leads to a worldwide double-dip recession. But at least most U.S. businesses are in better shape than they were a couple of years ago. And once a sustainable recovery does get under way, the companies that have been able to make the most of the recession’s opportunities are likely to prosper in the years to come.
The Weird Ways Gender Ratios Affect Dating, Spending, Saving—and the Size of Your Engagement Ring
The Weird Ways Gender Ratios Affect Dating, Spending, Saving—and the Size of Your Engagement Ring
Men are known to go to great lengths—and great expense—to impress women. This is most obviously the case when the male population outnumbers that of females, and laws of supply and demand kick in.
A new report from the University of Minnesota’s Carlson School of Management finds that men are prone to spend more, save less, and even be willing to go into debt when they believe women are scarce in their neck of the woods:
“What we see in other animals is that when females are scarce, males become more competitive. They compete more for access to mates,” says Vladas Griskevicius, an assistant professor of marketing at the Carlson School and lead author of the study. “How do humans compete for access to mates? What you find across cultures is that men often do it through money, through status and through products.”
(MORE: How 401(k)s Make Many Americans Poorer)
In the study, entitled “The Financial Consequences of Too Many Men: Sex Ratio Effects on Savings, Borrowing, and Spending” and set to be published next month in the Journal of Personality and Social Psychology, volunteers read stories indicating that the local population had either more men or more women. Then, they were asked how much money they’d save each month from their paycheck, and how much they’d be likely to spend using credit cards when they don’t have enough cash for immediate expenditures.
Men, it seems, turn into spendthrifts when women are in short supply. When women are scarce, savings rates for guys drop 42%, and dudes say they’re willing to borrow 84% more each month via credit cards.
For a real-life example of this phenomenon, USA Today points to a pair of communities in Georgia:
In Columbus, Ga., where there are 1.18 single men for every single woman, the average consumer debt was $3,479 higher than it was 100 miles away in Macon, Ga., where there were 0.78 single men for every woman.
The study indicates that the ratio of the sexes isn’t likely to affect how women spend money. But it does have an impact on women’s expectations regarding how much cash a guy will spend to woo the ladies. When women hear that guys outnumber girls, they expect men to drop more money on dates, Valentine’s gifts, and engagement rings. Griskevicius, the report’s lead author, explains that women know that being outnumbered puts them in the driver’s seat:
“When there’s a scarcity of women, women felt men should go out of their way to court them.”
(MORE: Is It a Bad Idea to Friend a Co-worker on Facebook?)
I’d love to see how varying sex ratios change the likelihood of how often men and women go to the gym.
Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.
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