TIME Economy

Congrats, World, You’re Getting a Raise Next Year

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Salaries are expected to increase by 5.4% on average globally in 2015, a report says

Here’s some good news for everyone: salaries are expected to increase by 5.4% on average globally in 2015.

That’s the key finding in a study from Hay Group, a global management consultancy firm, which was published this week. The results represent an increase from last year when the global average rose 5.2%.

The U.S. is expected to see a modest increase of 3%, according to the report, up slightly from 2014’s 2.8% increase. And when that increase is adjusted for inflation, you should only expect a 1% bump on average.

The data were taken from Hay Group’s PayNet, which manages data for over 16 million workers in 24,000 organizations in 110 countries. The report also draws on inflation data from the Economist Intelligence Unit to determine just how effective the salary increases will be for each country surveyed.

While the global figure may show an optimistic outlook overall for workers, inflation rates, especially in some emerging economies, will mean lower paychecks for some.

“This average masks a significant slowdown in emerging markets like Brazil, Russia and Ukraine, which have been the key drivers of growth in recent years,” the report said.

Workers in these countries can expect to see salary rises of 6.1%, 6.8% and 6.8%, respectively. However, when adjusted for inflation, which is expected to be high in these countries, workers will actually experience real wage cuts of 0.4%, 0.7% and 3.9%.

“Real pay is now rising in many European markets, but in key emerging economies, which have been the boom area of the last 10 years, real wages are falling,” said Ben Frost, a consultant at Hay Group, in a statement.

Countries such as Greece, Ireland and the U.K. got a shout out in the report for “signs of hope” after struggling economically recently. The countries are expected to see significant salary bumps.

Breaking the findings down by region, those living in Asian countries should be especially pleased, with real incomes in those areas set to get the biggest boost globally, rising 3.1% on average.

This article originally appeared on Fortune.com.

TIME Economy

Number of Job Openings in U.S. Hits 13-Year High

A hopeful sign for both the U.S. economy and the job market

The number of job openings in the United States rose to a near 13-year high in October, according to the Labor Department’s latest Job Openings and Labor Turnover survey.

The jump in job openings is a hopeful sign for both the U.S. economy and the job market.

Employers not in the farming sector had 4.83 million positions waiting to be filled during October, up from 4.69 million in September, according to the Labor Department.

Job openings across the U.S. economy have jumped since April, according to Reuters, and the number of open slots in October was just shy of the 4.85 million jobs available in August, which was the highest reading since 2001.

The report follows the November employment figures, released last Friday, which showed a jump in job creation last month.

—Reuters contributed to this report.

This article originally appeared on Fortune.com

TIME Economy

Here’s an Upbeat Economic Indicator: the Office Holiday Party is Back

Nine out of 10 companies plan to throw holiday parties in 2014, a survey shows, up from previous years

Nine out of ten employers are planning to host a holiday party this year, up from previous years and the latest sign of the economy’s improving fortunes.

According to a survey by global outplacement consultancy Challenger, Gray & Christmas, which polled human resources professionals, 89% of companies are planning to host a holiday or year-end party this year. That figure is an improvement on 82% in 2012, and 68% in 2011. The survey wasn’t conducted last year, and a Challenger spokesman said this year’s holiday party survey was the rosiest since 2007.

The more festive mood shouldn’t come as a huge surprise, especially after several stellar months of job growth and some fresh all-time highs for the stock market. Those factors mean healthier profits for companies and have lifted optimism for both companies and individuals. Fortune last week reported that in the past 11 months, U.S. employers have added nearly 2.7 million jobs — the fastest job growth we’ve had since 1999.

Corporate offices are not only planning to throw more parties, they’re also planning to spend more on this year’s festivities, according to Challenger. And fewer companies are planning to host their shindigs on-site: around 30% said they will host their parties on corporate premises (down from 55% in 2012).

While it appears positive for companies to want to celebrate a good year, it’s important to remember that holiday parties don’t cost a lot.

“The memories of the most recent and very painful recession still may be too fresh for most companies to return to the type of decadent parties that were more common prior to the economy’s meltdown,” Challenger said. “But there clearly is a sense that it is okay to loosen the budget reins a bit to hold a respectable holiday party.”

This article originally appeared on Fortune.com

TIME Know Right Now

Know Right Now: Why Gas Prices Are at the Lowest Point in 4 Years

Gas prices have dropped significantly for Americans, and several factors are driving the change in prices

American drivers may have noticed a smaller bill at the pump recently– that’s because the average price of U.S. regular gas has recently reached $2.72 a gallon, the lowest it’s been in four years.

In the last two weeks alone, the average price has dropped 12 cents. But what is the reason for these dropping prices? Watch this video to find out what’s causing the cheaper fuel, and where you can find the most affordable gas in the country.

TIME Opinion

Determined to Cut Taxes Once Again, Republicans Use New Math to Reshape Reality

CBO Director Elmendorf Releases Budget And Economic Outlook For 2014-2024
CBO Director Elmendorf on Aug. 27, 2014, in Washington, DC. Alex Won—Getty Images

"Republicans and Democrats inhabit different factual universes"

In 2004, an unnamed senior White House staffer, widely thought to be political adviser Karl Rove, gave a famous interview to Ron Suskind, “The aide,” Suskind wrote, “said that guys like me were ‘in what we call the reality-based community,’ which he defined as people who ‘believe that solutions emerge from your judicious study of discernible reality.’”

But, the anonymous man told Suskind, that wasn’t the way the world worked. “We’re an empire now,” he’s quoted as saying, “and when we act, we create our own reality. And while you’re studying that reality — judiciously, as you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.’”

The staffer may not have known it, but he was identifying one feature of the kind of crisis era into which the United States had just entered. Great political crises like those of the American Revolution, the Civil War, the Depression and the Second World War, and the one that began in 2001 and continues today are also struggles over the meaning of words—words like democracy and dictatorship, freedom, free enterprise and socialism, and so on. They also become struggles over the most basic facts. Writing during the great worldwide crisis of the Second World War, George Orwell identified a number of competing world views whose adherents could not accept various obviously true statements about the world around them. Within ten years more—that is, by the mid-1950s—that was no longer the case. Victory in war and postwar economic growth had created a new consensus in the western world.

But today, divisions over reality are as deep as they have been for a very long time, and Republicans and Democrats inhabit different factual universes. One obvious area of disagreement is climate change. While President Obama seeks agreements with foreign nations to reduce greenhouse gas emissions, Republicans almost unanimously reject the consensus of scientific opinion and argue that those emissions have not been proven to heat up the planet. Another very important area of disagreement concerns fiscal and economic policy — and this week it became clear that some Republicans are struggling to make their version of economic reality prevail in Washington, too.

The New York Times reported on a campaign by prominent Republican conservatives and some Tea Party Congressmen to replace the director of the Congressional Budget Office, Douglas W. Elmendorf, with someone who would calculate the effects of tax cuts in a different way. Led by the anti-tax activist Grover Norquist and the Heritage Foundation, these Republicans specifically want a new director who would use what they call “dynamic scoring” to predict the impact of tax cuts. “Dynamic scoring” is based upon the theory of supply-side economics. That theory, first popularized under Ronald Reagan, held that tax cuts, particularly on the highest income brackets, would unleash extraordinary economic growth, and therefore bring in more, rather than less, revenue within a few years. Dynamic scoring is a theoretically more sophisticated application of this idea. Rather than simply deduct the projected cost of tax cuts from federal revenues to estimate their future impact, dynamic scoring actually predicts how much new tax cuts will increase GDP by unleashing economic growth, and how much they will tax revenues and mitigate the effect of the cuts upon the deficit. Since the new Republican majorities in Congress are determined to cut taxes yet again while claiming to move closer to a balanced budget, this is an idea they need to validate in order to justify their plans.

The history of dynamic scoring is closely tied to the history of Republican economic policy since Ronald Reagan. When Reagan took office in 1981, the federal deficit was $79 billion. His Administration immediately adopted policies based on supply-side economics. It didn’t work. When he left office eight years later after several rounds of tax cuts on the higher brackets, the annual deficit was $152 billion, down from a peak of $221 billion in 1986. Despite George H. W. Bush’s tax increases, which split the Republican Party, a severe recession had raised the deficit back up to $255 billion when he left office in 1993.

Bill Clinton began his Administration with an income tax increase on nearly all Americans. It helped cost the Democrats the House of Representatives in 1994. It was at that point that Newt Gingrich, then the new Speaker of the House, and his fellow Republicans began to advocate dynamic scoring as a means of calculating the impact of further tax cuts. Once again, they claimed they could accurately estimate the beneficial impact of leaving more money in the hands of the wealthy and ease fear of deficits. But Clinton refused to go along, and eventually, the Clinton Administration ran a budget surplus in fiscal 2000.

George W. Bush inherited a deficit of only $32 billion in 2001, and came into office determined to cut taxes again. By 2003, the Bush Administration was basing calls for a second round of cuts on dynamic scoring estimates that once again claimed that the cuts would generate increased revenue. The cuts passed, but their impact, combined with the Iraq war and the Great Recession, was to balloon the deficit up to $641 billion in fiscal 2008, and $1.55 trillion in fiscal 2009. Together, President Obama and the Republican Congress have now reduced the deficit to $483 billion in the fiscal year that was just completed. This pattern actually dates from the 1950s. Beginning with Dwight D. Eisenhower, every Republican President has substantially increased the federal deficit, while every Democratic President except Jimmy Carter has reduced it during his term of office.

Few theories of public policy have been tested so repeatedly and failed tests so spectacularly, as the idea that tax cuts in the high brackets will ultimately increase revenue and lower deficits. But led by Representative Paul Ryan, the Republican majority, by pushing for personnel changes that will lead the non-partisan Congressional budget office to adopt dynamic scoring, is eager to try it again. It is hard for me to believe that any Republican activists seriously believe that a new round of top-bracket and corporate tax cuts will increase revenues. Their real agenda, I suspect, is the one that Grover Norquist—a prime mover in the campaign to replace Elmendorf—has repeatedly spoken of: to force further reductions in government spending by reducing government revenues still further. Meanwhile, wealthy Republican donors will get even wealthier, and, presumably, even more generous in their contributions. Once again the Republicans are trying to create their own reality: a world in which making the rich richer will bring down deficits, while only a few poor benighted members of the “reality-based community” take the trouble to notice that this is not so.

David Kaiser, a historian, has taught at Harvard, Carnegie Mellon, Williams College, and the Naval War College. He is the author of seven books, including, most recently, No End Save Victory: How FDR Led the Nation into War. He lives in Watertown, Mass.

This post has been updated to include additional economic data.

TIME

U.S. Adds 321,000 Jobs, the Most in Nearly 3 Years

A now hiring sign is posted in window of an O' Reilly auto parts store on Nov. 7, 2014 in San Rafael, Calif.
A now hiring sign is posted in window of an O' Reilly auto parts store on Nov. 7, 2014 in San Rafael, Calif. Justin Sullivan—Getty Images

Job gains have averaged 241,000 a month this year

(WASHINGTON) — U.S. employers added 321,000 jobs in November, the biggest burst of hiring in nearly three years and the latest sign that the United States is outperforming other economies throughout the developed world.

The Labor Department also said Friday that 44,000 more jobs were added in September and October combined than the government had previously estimated. Job gains have averaged 241,000 a month this year, putting 2014 on track to be the strongest year for hiring since 1999.

The unemployment rate remained at a six-year low of 5.8 percent last month.

The robust job gains come after the economy expanded from April through September at its fastest pace in 11 years. The additional jobs should help boost growth in coming months.

Still, the healthy hiring levels have yet to boost most Americans’ paychecks significantly.

The improving U.S. job market contrasts with weakness elsewhere around the globe. Growth among the 18 European nations in the euro alliance is barely positive, and the eurozone’s unemployment rate is 11.5 percent. Japan is in recession.

China’s growth has slowed as it seeks to rein in excessive lending tied to real estate development. Other large developing countries, including Russia and Brazil, are also straining to grow.

Most economists say the United States will likely continue to strengthen despite the sluggishness overseas. The U.S. economy is much less dependent on exports than are Germany, China and Japan. U.S. growth is fueled more by its large domestic market and free-spending consumers, who account for about 70 percent of the economy.

That trend helps support the steady U.S. job growth. Most of the industries that have enjoyed the strongest job gains depend on the U.S. market rather than on overseas demand. Retailers, restaurants and hotels, and education and health care, for example, have been among the most consistent sources of healthy hiring since the recession officially ended in 2009.

Manufacturing, which is more exposed to overseas ups and downs, has added jobs for most of the recovery but in smaller numbers. That is a likely reason why pay growth has been tepid since the recession ended. Companies and industries that are more exposed to international competition typically pay higher salaries.

Temporary hiring for the winter holidays may be providing a boost, though it isn’t clear how much occurred last month and how much in December. Shipping companies have announced ambitious plans: UPS has said it expects to add up to 95,000 seasonal workers, up from 85,000 last year. FedEx plans to hire 50,000, up from 40,000.

The National Retail Federation estimates that seasonal retail hiring could grow about 4 percent to as high as 800,000.

Most recent figures on the economy have been encouraging. Americans are buying more cars, which will likely keep factories busy in coming months. Auto sales last month rose to their second-fastest pace this year. Car sales are on track to rise 6 percent this year from 2013.

And a survey by the Institute for Supply Management, a trade group of purchasing managers, showed that services firms expanded at nearly the fastest pace in eight years last month. Retailers, hotels, construction firms and other service companies added jobs, the survey found, though more slowly than in October.

The ISM’s separate survey of manufacturing firms showed that factories are expanding at a brisk pace. New orders and order backlogs rose, pointing to steady growth in coming months.

There have been some signs of moderating growth. Consumer spending rose only modestly in October. And businesses ordered fewer big-ticket manufactured goods that month, excluding the volatile aircraft category. That indicates that companies are holding back on investment.

As a result, most economists have forecast that the economy will slow in the final three months of the year to an annual pace of 2.5 percent. That would be down from a 4.3 percent pace from April to September, the fastest six-month pace since 2003.

TIME Demographics

4 Ways Millennials Have It Worse Than Their Parents

millenial money
Adrian Samson—Getty Images

The latest Census numbers show Americans aged 18 to 34 struggling worse than their parents did in the '80s

Millennials make less money, are more likely to live in poverty and have lower rates of employment than their parents did at their ages 20 and 30 years ago.

That’s the bleak assessment from the U.S. Census Bureau’s latest American Community Survey numbers Thursday, which paint a financially disheartening portrait of Americans aged 18 to 34 who are still trying to rebound from the Great Recession.

The survey largely shows that millennials are worse off than the same age group in 1980, 1990 and 2000 when looking at almost every major economic indicator:

1. Median income
Millennials earned roughly $33,883 a year on average between 2009 and 2013 compared with $35,845 in 1980 and $37,355 in 2000 (all in 2013 inflation-adjusted dollars).

(MORE: American Women are Waiting to Have Kids)

2. Leaving home
More than 30% of millennials live with at least one parent compared to about 23% in 1980, largely because they can’t get a job.

3. Employment
Only about 65% of millennials are currently working compared with more than 70% in 1990

4. Poverty
Almost 20% live in poverty compared with about 14% in 1980.

But it’s not all bad news. The new Census numbers show that young Americans are much more diverse and educated than previous generations. About 22% have a bachelor’s degree or higher (up from 16% in 1980), and a quarter have grown up speaking a language other than English at home (up from 10% in 1980).

And possibly the most interesting statistic in the new numbers? A little over 2% of those aged 18 to 34 are veterans, compared with almost 10% in 1980.

Read next: Millennials Are Mooches…and Other Money Myths

TIME Japan

Japanese Prime Minister Defends Abenomics Ahead of Elections

Shinzo Abe
Japan's Prime Minister Shinzo Abe speaks during a press conference at his official residence in Tokyo on Nov. 18, 2014 Shizuo Kambayashi—AP

The vote will test public confidence in the prime minister's set of economic reforms

Japanese Prime Minister Shinzo Abe on Monday took on the leaders of six opposition parties in a debate marking the start of the official campaign season for this month’s elections. The polls are widely seen as a referendum on the incumbent’s economic policies.

Abe had in November called snap elections for the next month to let voters weigh in on so-called Abenomics — a package of reforms to boost the Japanese economy — after Japan dipped into recession and stoked fears that the reforms were unsuccessful, the Associated Press reports.

The incumbent prime minister is expected to easily come out of the elections with a four-year mandate to helm Japan and press onward with Abenomics, despite Moody’s cutting Japan’s credit rating this week.

Critics of Abenomics have castigated the policies as supporting just big businesses and the well-heeled. Abe has said it will take time to see the full benefits of the reforms, which seek to end deflation.

TIME Economy

The (Recent) History of Black Friday Shopping

Christmas Shopping Season Kicks Off In New York City
Shoppers at Macy's on Nov. 28, 2003, in New York City. Stephen Chernin—Getty Images

The holiday season has long been considered shopping primetime — but the Black Friday rush is a more recent phenomenon

In 1938, a TIME reporter marveled at the artificial snow falling in the display window of Lord & Taylor’s on New York City’s Fifth Avenue. Major retailers were just beginning to invest in their displays to entice potential customers ahead of the Christmas shopping spree, and the reporter was impressed.

“All this not only added melody to Christmas shopping but made the Avenue’s 80,000 daily pedestrians acutely aware of an artistic rivalry which has begun to show signs of lustiness,” the reporter wrote in the December 1938 issue.

As that TIME story attests, the competition for consumer dollars over the holidays is nothing new. As far back as the 19th century, the window between Thanksgiving and Christmas has been considered primetime for shopping. In fact, the retail industry was so intent on squeezing the most sales out of that period that they convinced President Franklin D. Roosevelt to push the Thanksgiving Holiday forward to the third Thursday in November; the new date failed to catch on or spur shoppers, so President Roosevelt reversed the change in 1941. (Read more about that decision here.)

But that doesn’t mean that Black Friday, the shopping bonanza the day after Thanksgiving, has an equally deep past.

Until recently, the largest shopping day of the year was not Black Friday but the Saturday before Christmas, says Jesse Tron, the director of communications for the International Council of Shopping Centers. According to one TIME article from 1968, the seasonal shopping rush didn’t even really begin until the Saturday after Thanksgiving. In fact, TIME didn’t use the term to refer to the Friday after Thanksgiving until 1998. (Black Friday had traditionally referred to the financial crisis of 1869.)

So how did the pseudo-holiday take root? The term itself is traced back to Philadelphia in the 1960s, where police used it to label the crowds of shoppers and ensuing traffic jams. It would later be explained apocryphally as the day that retailers begin to make a profit–or go into the black–after months in the red.

Indeed, the term was eventually reappropriated by the retail industry, which had begun in the 1950s and 1960s to offer sales that Friday in order to woo shoppers, who often had the day after Thanksgiving off from work (to shop, so the retailers hoped). The day-long shopping spree gained traction in the Internet age, when sales and coupons could be more widely publicized. By 2002, Black Friday had indeed become the biggest shopping day of the year.

Read TIME’s 1961 cover story about how Christmas became a gift-giving holiday: But Once a Year

TIME Economy

FDR Moved Thanksgiving to Give People More Time to Shop

Franklin D. Roosevelt Thanksgiving
President Franklin D. Roosevelt and his family, during Thanksgiving dinner in 1937 Thomas D. McAvoy—The LIFE Picture Collection/Getty Images

In 1939, the President got a pretty wacky idea about post-turkey shopping

Thanksgiving had been an official national holiday for decades when, in 1939, Franklin Roosevelt decided to mix things up.

The November calendar that year was an odd one: the month had started on a Wednesday, so there were five Thursdays rather than four Thursdays. Though Thanksgiving had been celebrated on the last Thursday of the month since the time of Lincoln, that August Roosevelt “broke his umptieth [sic] precedent,” in the words of TIME, and declared that he was moving the national Thanksgiving day up a week, the the second-to-last Thursday in the month.

Many people were not happy about the change, as TIME reported the week after it was announced:

Only since 1863 has Thanksgiving had a consistent year-to-year day, but football coaches were furious: 30% of them had games scheduled Nov. 30 which would now play to ordinary weekday crowds. Calendar-makers took the blow quietly except for Elliott-Greer Stationery Co. of Amarillo, Tex., which happily discovered it had designated Nov. 23 as Thanksgiving Day by mistake. Alf Landon sounded off in Colorado as follows: “. . . Another illustration of the confusion which his impulsiveness has caused so frequently during his administration. If the change has any merit at all, more time should have been taken in working it out . . . instead of springing it upon an unprepared country with the omnipotence of a Hitler.”

Yes, Roosevelt’s Republican rival did just compare FDR to Hitler because of this.

But FDR had a Black Friday-friendly explanation: merchants wanted a holiday that was farther from Christmas, allowing more time to shop. By that fall, 22 states had decided to play along with the change in their official calendars, 23 were sticking with tradition and Mississippi hadn’t decided. (Two states, Texas and Colorado, decided to observe both holidays.) The President stuck with the change the following year, declaring Nov. 21 to be the official Thanksgiving Day for 1940.

The following year, however, TIME’s headline on the topic was “President Admits Mistake”:

Midway in his press conference, with no change of voice or expression, the President picked up a memorandum and said there was one thing more. The reporters, expecting an announcement of the occupation of Martinique, or the declaration of a national emergency, sucked in their breath. They let it out again when they heard the President say that in 1942 Thanksgiving would be changed back to the traditional date, the last Thursday in November.

Nobody rushed for the telephone. But seasoned old Pundit Mark Sullivan grasped the full historic significance of the change: though some New Deal experiments had been killed by Congress, and a few had been invalidated by the courts, this was the first one to be formally renounced. The President made it clear that he had not been responsible for the mistake in the first place. Retail merchants had wanted the date of Thanksgiving set a week ahead to lengthen the shopping season before Christmas; the expected boon to trade had not materialized; the changed date had been an experiment and the experiment had not worked.

It was, by then, too late to change 1941’s calendars, on which the old-new Thanksgiving date (the third Thursday) had already been printed. And in Maine, things were even more extreme: “Now that President Roosevelt has gone back to the old Thanksgiving,” TIME reported, “Republican Governor Sumner Sewall has proclaimed the new Thanksgiving for the first time.”

By the end of 1941, Roosevelt had signed a bill officially sticking Thanksgiving on the fourth Thursday of November, whether or not it was the last Thursday of the month. His attempt to give Americans a longer holiday season had proved futile — but, as anyone at a mall this Friday could attest, his instinct about the nation’s desire to get shopping wasn’t entirely misguided.

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