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Recent polls suggest that 4 out of 5 Germans say they are not benefitting from the rebound. Germany has experienced growth with the recovery in export markets in Asia, but the benefits are not being seen at home. Experts at the OECD, and at Duisburg-Essen University's employment institute, say that there has been a downside to the unemployment rate having reached 7.6%; much of this gain has been achieved by expanding the low wage sector. Something like this has not happened in other European countries. The OECD employment outlook report 2010, reveals that 21.5% of Germans were employed in the low-wage sector in 2008, compared to 16% in 1998. The Duisburg-Essen University estimate is that 2.3 million workers were added in this sector from 1998 to 2008, with a total of 6.55 million workers in this sector in 2008. What is happening according to experts is that the Hartz IV labor-market reform is subsidizing the low wages paid by the private sector. And the German government has spent $50 billion in subsidies for people in this sector since 2005. The concern relates to consumer spending which is tight in Germany, even as exports have done well in the recovery from 2008. Average net income has actually fallen since 2004 in Germany, reaching 15,815 euros in 2009 from the figure of 16,471 euros in 2004. Germay has no minimum wage across all sectors. To have a minimum wage comparable to other European countries, hourly pay would have to be between 5.93 euros and 9.18 euros. The DGB group of unions have called for a 8.50 euro minimum wage. ...

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Shipping and freight statistics show an increase of shipments from Mexico. Trains and truck shipments from Mexico to the U.S. increased by 8.7% by weight in the first 11 months of 2011 compared to the prior year. By comparison shipping containers entering the ports of Los Angeles and Long Beach went down by 0.2% in 2011. Mexico stands to benefit from the shift in dynamics as manufacturing costs in China increase with labor constraints, higher wages, higher commercial land prices and recent Asian supply chain issues making firms wary of unanticipated problems. This is expected to benefit the U.S. with the return of some manufacturig jobs and a serious rethink of outsourcing. Because of highly automated factories and advanced technologies the manufacturing process requires fewer and more skilled operators, reducing the labor component of costs. Carlisle Companies CEO, David Roberts says he is expanding tire manufacturing plants in Tennessee. He says he can make tires as cheaply or cheaper in the U.S than in China. This has serious implications as the U.S. gets down to rebuilding and renewal of its manufacturing industry....

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Amazon workers in Germany and the U.S. protest low wages. Amazon has about 9000 employees at 9 logistics centers in Germany. The company gets $8.7 billion of global sales of $61 billion from Germany. The retail and mail order sector in Germany has higher wages than the logistics sector. Amazon classifies its employees as being in the logistics sector. Amazon is using 14,000 temporary workers in Germany to cope with the protests and strikes during the Christmas season. It is also using its Europe wide network to cope.

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Dow Chemical CEO, Anthony Liveris, is co-chair of the Advanced Manufacturing Partnership, an effort to bring together federal government, industry, universities and other groups to invest in new technologies that would generate good-quality jobs and increase U.S. competitiveness. He writes this letter in the Wall Street Journal to correct two misperceptions. The first, is that government has no significant role in nurturing an environment that is good for business and manufacturing industry. Because other countries, including China, are now operating like companies, it is important not to let the U.S. be in a disadvantageous position. Government has always been involved in its writing of tax and incentive policies, regulations, trade agreements, and creating a climate of certainty. The second, is that the loss of manufacturing capacity and job losses in the last 10 years are different from the job losses in the 1980's. These are not the low tech and less efficient manufacturing job losses of the 1980's, but job losses as a result of moving advanced manufacturing capacity and research and development centers to outside of the U.S. Of the 8 million jobs lost in the last recession, he says two million manufacturing jobs of higher pay and supporting employment in other sectors were lost. His point: its time to focus on expanding manufacturing in the U.S. because manufacturing is the sector with the highest multiplier effect on other sectors. Public-private partnerships are critical to this effort for increasing technology development and increasing investment. This view is supported by other experts....

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U.S consumer spending declines by 0.9% in Dec. 2014 over the prior month, according to the Commerce Department. Consumer spending was up in Nov. 2014 by 0.4%. Excluding auto sales and falling gas prices the Dec. 2014 decline in consumer spending was 0.3%. This shows that consumers are saving most of the money saved as a result of gasoline at about $2 a gallon, or using it to pay off debt. Analysts had estimated a significant increase in retail spending which turned out not to be happening.

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This report in NYT shows the movement of Mexicans who migrated to the US in the 1970's in an earlier migration and the problems they faced seeking a better life in America on the east and west coastal cities. In 1971 Ruperto and Eustacia Enriquez migrate from Puebla, Mexico to New York. They make two migrations within the US after a mugging incident in Brooklyn in 1980. First to Santa Ana, California where they find life difficult with gang crime in neighborhoods, and move to an affluent suburb in the east side of Seattle. Their son Daniel gets a Bachelors degree in philosophy from the University of Washington. In 1996 he returns to New York to study for a Masters degree in Latin American Studies at New York University.  After 25 years in New York and taking up a jobs two financial firms he reflects a strivers mentality, always looking for self-improvement. He helps his younger sister with an application to win a Fullbright scholarship in Germany. Another sister works in Washington as a business analyst. He helped a brother who became a school teacher in New York public schools. Daniel found an apartment in Park Slope, Brooklyn and by 2013 joined another financial firm in its global investment research group coordinating publications.  The story reflects some of the growing pains of Mexican Americans who migrated to America in the 1970's in the earlier migrations. In 2022 Daniel Enriquez 48 years was shot on the subway while going for Sunday Brunch, 25 years after returning to New York City. Crime was once again up in the city after the pandemic. 950 crime offenses happened in the subway system for the year till May the same as in 2019. Subway ridership was 40% lower in May this year.   ...

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Who are the biggest recipients of food stamps and Medicaid in 2023? Not black people in inner cities, says Krugman, they are white people in towns and rural areas that provide much of the support for the Republican party. There the effects of deindustrialization are still felt with the export of manufacturing jobs and the effects of neglect of rural areas under both parties. The rapid recovery from the Covid pandemic and the Biden recovery efforts have helped Black Americans recover from the pandemic and also from the bad effects of the 2009 crisis, that banks operating in a deregulatory environment caused. This is shown in graphs by Krugman on how even the 7-8 percentage points difference between white and black unemployment of the Reagan era is down to 1-2%. The economic effects of the moves to suburbs that left inner cities and black people poorer and the effects of deindustrialization are now fading and this is good for Black America.  

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Workers ended a 3 month strike at Caterpillar's Joliet, Illinois plant, essentially giving in to reduced healthcare and pension benefits and wage freezes for older workers. Under the deal workers hired before May 2005 receive no hourly pay increase, workers hired after that date get a one time 3% pay increase with future pay increases decided by Caterpillar management. Hourly pay at the plant ranges from $13 to $28. About 25% of the older workers are eligible to retire. A $7.8 million fund to supplement incomes of laid off workers will now be used for retirement bonuses. Caterpillar persuaded workers to ratify the contract by increasing the bonus for ratifying to $3100 per worker from $1000. During the strike Caterpillar continued operations by using managers and temporary workers and using 100 workers who crossed picket lines.

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Mitt Romney states the case for supporting free trade both in principles and practice. Acceptance of the staus quo allows China to game the world trading system, says Romney. In the end accepting the status quo may do more damage to the world's trading system than any efforts to correct the misalignment in currencies and failure to rebalance the world economy. He questions the passive approach of some members of Congress and the Obama administration on the grounds that starting a trade war makes them nervous. China with $273 billion more in exports than imports to the U.S. has reason to see this issue objectively, even with all the noise it is making about trade retaliation, suggests Romney. Other experts have pointed to the problems the misalignment creates for China's economy. A New York Times editorial on October 15, 2011, cites figures from the Peterson Institute of Economics showing this costs China $240 billion a year through trade surpluses in dollars that are declining in value. For years China's fears are that this would lead to higher unemployment. This New York Times editorial points out that jobs have increased by about 1% a year since 2004, even with 10%+growth, because many of the manufacturing jobs use advanced manufacturing technologies. A firm response today also makes it possible to avoid the kind of sudden response that could take place later on if public opinion overwhelmingly shifts away from trade with China under status quo conditions. ...

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The Venezuelan government provides gasoline to people in the country at a few cents a gallon- almost free. Even Saudi Arabia, the Emirates and Kuwait which have way better financial balances and dollar reserves do not provide gasoline at such prices. The result is chronic shortages of basic parts and other imports because the government does not have enough dollar reserves for imports. Venezuela devalued its currency by 32% recently, making imports more expensive and pushing inflation up even higher to 28%. The problems it creates are excessive and wasteful use of gasoline, and free gasoline that then provides consumers money to pay for surging cost of everyday imported products. Nullifying any real benefits when shortages, inflation, dilapidated infrastructure and lack of development and jobs, are taken into account. The lack of capital to invest in the oil industry has led to declining production making the situation unsustainable. Yet neither party of Maduro or Capriles in the upcoming April 14, 2013 election, following the death of Chavez, supports ending this subsidy. Efforts to end the subsidy by president Carlos Andres Perez in 1986 led to riots and about hundred deaths in police response, and a coup by Chavez, then a military officer, a few years later. Under Chavez the subsidy was extended to the level at which gasoline is about 4 cents a gallon. Compare this with the price in neighboring Colombia at $4.72 a gallon, and Brazil at $5.40 per gallon. Consumption per capita in Venezuela is excessively high, about seven times per capita than neighboring Columbia. The investment in infrastucture is hobbled by lack of capital, the capital Caracas dilapidated, and no major infrastructure projects taken up by the government. It costs Venezuela 8.6% of GDP or $27 billion to pay for the excessively high subsidy, compared to 3.2% of GDP going to healthcare spending and 5.1% for education. In comparison Indonesia, another developing country, uses 2.5% of GDP or 21 billion for its subsidy for a population of over 200 million. It is not that a fuel subsidy is provided, but the entitlement to free gasoline that makes Venezuela the lone exception. There is a reason why prices in Brazil and China, large developing countries, price gasoline to motorists at over $4 a gallon- to discourage excessive and wasteful use, and release scarce capital for infrastructure development, building dollar reserves for imports of machinery and equipment, and other uses in industrializing economies. Compare Venezuela with Bolivia under the socialist government of Evo Morales. In 2010 Bolivia increased its price of gasoline by 80%. The price in 2013 is about $2.00 per gallon. Morales cushioned the increase by increasing salaries in the health and education sectors, armed forces and police by 20%, and increasing prices of locally produced wheat, corn and rice by 10%. Morales said he did this to reduce state subsidies of $380 million for $660 million in gasoline imports, of which $150 million was siphoned off by smuggling gasoline to neigboring countries. Incentives were provided to oil companies to produce gasoline in Bolivia to reduce imports. ...

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There is over $150 billion of additonal spending on education in the Obama stimulus plan being worked on in January 2009. There are several important aspects of this plan. One action will prevent literally hundreds of thousands of layoffs of teachers, according to Education Secretary Arne Duncan, as revenues of local districts drop. In a response to requests from Democratic party governors Congress has allocated $79 billion to help states facing large fiscal budget gaps to maintain government services, and especially to prevent cuts to education services fro kindergarden to college. Another aspect is the effort to reinforce Title 1, a program of specialized classroom efforts to help educate poor children, by increasing 2009 fiscal year spending from $14.5 billion to $20 billion, and raise spending for disabled children from $11 billion to $17 billion. This helps meet the unmet needs of the No Child Left Behind program. Another effort on the stimulus side which would create jobs for construction activity and do this with spending that will bring benefits in future years for along number of years in the future, is the federal government now taking abig role in the building and renovation of schools. The federal government will now spend $14 billion for the renovation and modernization of elementary and secondary schools, and $6 billion for the same for higher education. The stimulus also has tax provisions under which the federal government will pay the interest on construction bonds issued by school districts. The Education Secretary says that the $20 billion for this will create a huge number of construction jobs because so much of the school system building infrastructure needs repairs. In the area of higher education the allocation for Pell Grants used for student aid is increased to $27 billion from $19 billion. These aspects of the stimulus program are ones that will pay off over a number of years into the future. ...

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Manufacturing in the US is adding jobs for the first time since 1997, according to government data. Job growth in 2010 was 1.2%, or 136,000 jobs. IHS Global Insight expects total manufacturing jobs in the US to increase in 2011 to 12 million. Manufacturing will be a modest contributor to job growth according to economists. Economists projections show a gain of 2.5% or 330,000 manufacturing jobs in 2011. Moody's Analytics estimates job growth of 2% a year through 2015. Government incentives, need to replace aging equipment and rehiring in the automobile industry will help manufacturing. At the same time manufacturers are cautious about hiring and increases in automation reduce the need for workers compared to earlier periods. Overall the loss of about 6 million manufacturing jobs since 1997 will not be made up. Yet the improvement is a positive sign as the US faces high unemployment and companies make investment in new factories overseas to meet growth in emerging markets.

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Debate in Germany over whether there should be exception to the minimum wage agreement of 8.50 euros per hour. The head of the federal employment agency, Heinrich Alt, says a universal minimum wage would reduce incentives for young people to join vocational training. The new labor minister, Social Democrat Andrea Nahles, says "there will be no exceptions, notwithstanding all the escape fantasies." The Social Democrats insisted on the minimum wage to win support from rank and file working class members after losing support in its own base with the increase in the low wage sector in Germany. Unemployment in Germany is less than 5%, but this comes with an increase in lower wage workers as part of the reforms under the Social Democrat Schroeder administration when unemployment was close to 10%. Economists say the increase in wages would increase weak consumer spending in Germany and increase imports from other eurozone countries. In 2011 the share of the German population making less than the new minimum wage of 8.50 euros an hour, according to the German Institute for Economic Research, is- for former East Germany 27%, for former West Germany 15%, for ages under 24 years 44%, for ages 25 to 60 years 15%. This does not affect the manufacturing sector in East Germany as wages in the sector are above 8.50 euros. The other problem is that wages appear to be declining in Germany, with wages decreasing by 0.3% in October 2013, according to the Federal Statistical Office. ...

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The National Assessment of Education Progress, NAEP, which is a report card of educational levels in the U.S. secondary school system shows 36% of fourth graders in the U.S. are proficient in reading for 2017. For eighth graders this drops to 34% in 2017. This shows that a little over a third of fourth and eight graders are achieving proficiency in reading, a glaring sign of failure leaving about two thirds of young people behind. With declining level of reading proficiency and proliferation of social media, the bottom 25% are faring much worse than even this dismal result.

Between 2015 and 2017 there was no improvement in NAEP scores.

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The German Statistical Office reported that GDP growth in Germany was 0.1% in the second quarter of 2011. This compares with GDP growth of 1.3% in the first quarter. This is slower than Italy which came in at 0.3% for the second quarter. France had no growth in the second quarter. The German Statistical Office said the causes were: lower household consumption and construction investment, imports rising faster than exports and a buildup of inventories. Analysts at Commerzbank say the warm spring resulted in construction activity starting earlier and taking out some of the growth in the second quarter, in its absence the growth would be 0.4% for the second quarter. The statistics office said an additional 553,000 persons were added to employment compared to the prior year, with a total of 41 million employed.

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The U.S. jobs added for Dec. 2011, are 325,000, according to ADP figures, but the reliability of these figures has been questioned because of the different methods used in calculating the number. For Nov. 2011, the ADP number for private sector jobs added was 206,000. The same number from the Labor Department was 140,000. For June 2011 there was wide divergence- the ADP showed private sector jobs added as 157,000, the same number from the Labor Department was 57,000 jobs. For December 2010, ADP reported private sector jobs increased by 297,000, and official numbers showed 113,000. For December there are seasonal issues as well that affect the figures. Other factors affecting the jobs picture is the loss of jobs inthe government sector, and the gains in jobs predominantly coming from poorly paid retail and restaurant industries and fewer job gains in the better paid construction and manufacturing industries.

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Gretchen Morgenson cites two views on the newly approved Volcker Rule in December 2013. Prof. Richard Sylla of New York University sees the rule as going part way in the direction of the Glass-Steagall Act, which gave the financial markets five or six decades of financial stability. Just the fact that the rule is on the books should give the bank officers pause before engaging in questionable financial activities, is his view. Prof. David Skeel of the University of Pennsylvania Law School, believes only aggressive enforcement can make the law work because of the way it is written. He says regulators have fallen short in enforcement in the past and have not been held accountable. Only by making regulators accountable, including penalties for regulators failing to do their job, would this work says Skeel. By not imposing penalties for regulatory failures in the last crisis there is more likelihood for this sort of behaviour to continue. Instead the same regulators are now given greater powers after an earlier failure. Considering the Skeel view, the importance of the attestation- that is now required from bank senior executives that the Volcker Rule's provisions are being followed- take on an important role in ensuring enforcement. This also coincides with Mr. Volcker's view that the bank officers should have to take on the responsibility for making sure that they are doing it the right way....

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The huge investments that president Biden has made in America, including rebuilding aging infrastructure are part of the reason that the economy has been resilient with unemployment at about 3% and inflation coming down from 9% to 3%. In March 2022 leaders in finance such as Ray Dalio of Bridgewater Associates and Jamie Dimon of JP Morgan Chase were convinced that inflation would not come down and the economy would be in recession. Instead Fed's Jay Powell with repeated rate increases and Joe Biden by investing trillions of dollars in rebuilding infrastructure and creating new jobs and new factories have done what the leaders of American corporations were skeptical about, doubtful about whether this could be done.

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The Trans Pacific Partnership (TPP) free trade pact led by Japan and the U.S. moves to the next stage with legislation introduced by Orrin Hatch and Ron Wyden in the U.S. Congress for granting trade promotion authority to the U.S. president. This would facilitate the negotiation of an agreement leading to concessions by different countries. Talks between Japan and the U.S. intensified with the U.S. president Obama saying in his 2015 State of the Union message that China wanted to write the rules for trade in Asia, and asking why the U.S. should not work to write its own rules. Defense Secretary, Aston Carter, called it more important than another aircraft carrier. Support from Europe, India and other countries for the China sponsored Asian Infrastructure Investment Bank, as a rival to the U.S. dominated World Bank and IMF, also give urgency to the TPP. The TPP countries, Vietnam, Malaysia, Singapore, Australia, New Zealand, Japan, Peru and Chile, make up over $400 billion of about $4 trillion in U.S. trade, according to the Peterson Institute for International Economics. The TPP is now seen not just a free trade pact, but also as away to counter China's influence in Asia. Experts see the Obama administration as having bungled its handling of the Asian Infrastructure Investment Bank which the U.S. did not join, and its allies in Europe, other Asian countries including India, decided to join as founding members. Democrats in Congress led by Senator Schumer, Warren, oppose the legislation granting fast track for free trade pacts citing the loss of jobs and lowering of wages for workers in manufacturing in the U.S., with only about a dozen Democrats favoring the legislation, leading to a split in the party. Projections by Peter Petri, Michael Plummer, Fan Zhai, of the Peterson Institute for International Economics, show a net negative impact on depressed wage sectors such as U.S. manufacturing with additional $45 billion in U.S. imports and $35 billion in exports for heavy manufacturing from the TPP free trade pact, and additional $33 billion of U.S. imports and $10 billion exports in light manufacturing by 2025. Higher wage sectors such as U.S. Services including IT get a boost with additional $42 billion in exports and $ 8 billion imports. Agriculture shows insignificant gains with additional exports of $2 billion and imports of 0.5 billion. The auto and transport sector disproportionately favors Japan with $33 billion in additional U.S. imports and $8 billion in exports. ...

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Foxconn announces salaries for workers would increase by 16-25% to about $400 a month before overtime. Foxconn plans to reduce overtime. Foxconn is a major supplier in China for Apple Computer.

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The U.S. Senate voted 79-19 to go forward with a bill on sanctions against China for undervaluation of the yuan. The IMF says China's currency is "substantially undervalued."

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Earnings of the typical American man working full-time year round declined in 2010, and is now in inflation adjusted terms below the level in 1978, according to the U.S. Census Department. The income of a typical Ameircan family has declined for three consecutive years and is now at $49,445 for 2010. This is the level reached in inflation adjusted terms in 1996. 15.1% of the American people lived below the poverty line in 2010, and 22% of children lived below the poverty line. The poverty line is set at $22,314 for a family of four in 2010. Statisics from the U.S. Census Department.