TIME France

French President François Hollande May Not Stand for Re-Election

France President Hollande
French President François Hollande poses on a TV set prior to the start of a French channel TF1 broadcast show, in Aubervilliers, outside Paris, on Nov. 6, 2014 Martin Bureau—AP

He cites his failure to temper the nation's spiraling unemployment during his term in office

France’s President François Hollande said Thursday that he may not stand for re-election in 2017 if he fails to cut unemployment by the end of his term.

“If I cannot manage it by the end of my term in office, do you really think I would go before the French in 2017?” he said in a televised interview with French TV channel TF1.

Hollande admitted that it was a mistake to promise that he could bring down the rise in joblessness, which currently stands at 11%.

But the 60-year-old vowed to “go to the end” to reform France’s weak economy.

A poll released Thursday shows the Socialist Party leader has an approval rating of just 12%.

MONEY The Economy

The Stock Market Loses a Big Crutch as the Fed Ends ‘Quantitative Easing’

The Fed has concluded its asset-purchasing program thanks to an improving labor market. Here's what QE3 has meant to investors and the economy.

After spending trillions of dollars on bond purchases since the end of the Great Recession — to keep interest rates low to boost spending, lending, and investments — the Federal Reserve ended its stimulus program known as quantitative easing.

The central bank’s decision to stop buying billions of dollars of Treasury and mortgage-related bonds each month comes as the U.S. economy has shown signs of recent improvement.

U.S. gross domestic product grew an impressive 4.6% last quarter. And while growth dropped at the start of this year, thanks to an unusually bad winter, the economy expanded at annual pace of 4.5% and 3.5% in the second half of 2013.

Meanwhile, employers have added an average of 227,000 jobs this year and the unemployment rate rests at a post-recession low of 5.9%. It was at 7.8% in September 2012, when this round of quantitative easing, known as QE3, began.

What this means for interest rates
Even with QE over, the Fed is unlikely to start raising short-term interest rates until next year, at the earliest.

In part due to the strengthening dollar and weakening foreign economies, inflation has failed to pick up despite the Fed’s unprecedented easy monetary policy.

And there remains a decent bit of slack in the labor market. For instance, there are still a large number of Americans who’ve been unemployed for 27 weeks or longer (almost 3 million), and the labor-force participation rate has continued its decade long decline. Even the participation rate of those between 25 to 54 is lower than it was pre-recession.

What this means for investors
For investors, this marks the end of a wild ride that saw equity prices rise, bond yields remain muted, and hand wringing over inflation expectations that never materialized.

S&P 500:
Equities enjoyed an impressive run up after then-Fed Chair Ben Bernanke announced the start of a third round of bond buying in September 2012. Of course the last two times the Fed ended quantitative easing, equities faced sell-offs. From the Wall Street Journal:

The S&P 500 rose 35% during QE1 (Dec. 2008 through March 2010), gained 10% during QE2 (Nov. 2010 through June 2011) and has gained about 30% during QE3 (from Sept. 2012 through this month), according to S&P Dow Jones Indices.

Three months after QE1 ended, the S&P 500 fell 12%. And three months after QE2 concluded, the S&P 500 was down 14%.

 

Stocks

10-year Treasury yields:

As has been the case for much of the post-recession recovery, U.S. borrowing costs have remained low thanks to a lack of strong consumer demand — and the Fed’s bond buying. Many investors paid dearly for betting incorrectly on Treasuries, including the Bill Gross who recently left his perch at Pimco for Janus.

Bonds

10-year breakeven inflation rate:

A sign that inflation failed to take hold despite unconventionally accommodative monetary policy is the so-called 10-year breakeven rate, which measures the difference between the yield on 10-year Treasuries and Treasury Inflation Protected Securities, or TIPS. The higher the gap, the higher the market’s expectation for inflation. As you can see, no such expectation really materialized.

BreakEven

Inflation:

Despite concern that the Fed’s policy would lead to run-away inflation, we remain mired in a low-inflation environment.

fredgraph

Unemployment Rate:

The falling unemployment rate has been a real a bright spot for the economy. If you look at a broader measure of employment, one which takes into account those who’ve just given up looking for a job and part-time workers who want to work full-time, unemployment is elevated, but declining.

unemployment rate

Compared to the economic plight of other developed economies, the U.S. looks to be in reasonable shape. That in part is thanks to bold monetary policy at a time of stagnant growth.

Indeed, many economists now argue that the European Central Bank, faced with an economy that’s teetering on another recession, ought to take a page from the Fed’s playbook and try its own brand of quantitative easing.

TIME

4 Ways to Go From Underemployed to Getting the Job You Want

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People standing in line at Job and Training Fair Yellow Dog Productions—Getty Images

Marty Nemko holds a Ph.D. in educational psychology from UC Berkeley and is a career and personal coach.

What to do about America's employers eliminating, automating and offshoring jobs

Most of us have heard of:
  • College graduates doing menial work. A caller to my radio program last week graduated a year ago from the University of California, Berkeley, and the best job he’s been able to land is pizza delivery person. Alas, according to a report in The Atlantic, he’s far from alone; 53.6% of college graduates under 25 are doing work they could have done without college or are unemployed.
  • Middle-age professionals are losing their job: It was offshored, automated or, if s/he was lucky, it was converted to a “consultant” position in which they’re hired only for a project and with minimal benefits after which they’re back pounding the pavement. According to an AARP report, three years after the recession, 45% of the 50- to 64-year-olds surveyed reported a decline in income.
  • Itinerant professors. Colleges tout the importance of treating labor fairly, yet they don’t practice what they preach. Increasingly, they replace tenure-track faculty with people hired, without benefits, to teach just one or two courses at pittance pay. As a result, countless highly and expensively educated Ph.D.s must drive from university to university to cobble together a living smaller than they could have made without any degree, let alone a Ph.D. An Inside Higher Ed/Gallup poll found 65% of college provosts said their institution relies “significantly on non-tenure-track faculty for instruction.”

America’s employers–for-profit, non-profit, and government alike–are eliminating, automating and offshoring as many jobs as possible. And the remaining jobs are, ever more often, converted into part-time or temp work. This is the dejobbing of America

The broader picture

It’s tempting to feel things are better because the unemployment rate is down, but that masks the fact that many people have stopped looking for work. Those people aren’t counted in the unemployment rate. Nor does the unemployment rate consider people who are working but earning less income.

These statistics are more revealing: The U.S. Bureau of Labor Statistics reports that the labor participation rate, the percentage of adults 16 to 64 that are employed or actively looking for work, is 62.7%, the lowest since early 1978.

And those who are working are, on average, making less. An analysis of government data on income and poverty last month found that, “After adjusting for inflation, U.S. median household income is still 8 percent lower than it was before the recession, 9 percent lower than at its peak in 1999.”

The numbers hide the human toll. Work is key to people’s psychological as well as financial well-being. Without work, in addition to not being able to pay for food, shelter, transportation and health care, you can feel useless.

Solutions for the individual

Personally, I love the liberal arts. I enjoy reading novels, looking at paintings, listening to classical music and contemplating life’s Big Questions. Alas, we’re living in times in which those seem less valued than they used to be. A report this month by the National Association of Colleges and Employers reports that the four majors most in demand by employers at the bachelor’s, master’s and doctoral level are business, engineering, computer and information sciences, and sciences, with liberal arts trailing badly—just above agriculture and natural resources. Another survey in that NACE report found that employers are demanding even more problem solving expertise and quantitative analysis skills.

So I bear the bad news that, to avoid long periods of un- and underemployment, you may have to ratchet up your game. And even if you do, you may need to use more aggressive techniques to land a job than not long ago. A pretty, hired-gun-written resume, LinkedIn profile and cover letter may not cut it any more. But these things might help:

  • In answering ads, include a job sample: a proposal for what you might do if hired, a white-paper on a topic of compelling interest to the boss and/or a portfolio of relevant work.
  • Try to get in through the back door. The front door (answering want ads) has a long line of wannabes. So try to connect with people with the power to hire you when they’re not advertising a job. Write an email asking for advice. They may create a job or at least foot-in-the-door project for you. Ask for a job, they’ll feel pressured and just give you advice or ignore your request.
  • Make an offer they can’t refuse. Offer to volunteer for a fixed amount of time. If after that, they like you, they agree to hire you. If not, they got free labor with no strings attached.
  • Not for the faint-of-heart: Walk in. For example, a client wanted the security of a federal job. So at 8:00 AM, when all the federal workers were arriving, she asked a friendly looking one if she might get her through security by saying, “She’s with me.” Two said no but the third said yes. She then schmoozed her way around the building and got useful inside information, which enabled her to write a great application for a position, which she then got.

Macro solutions

  • Assistance Army. Companies, nonprofits, and government should collaborate in creating an “Assistance Army.” Each sector would create societally beneficial jobs that even many low-skilled workers could do: for example, student mentor, community garden raised-bed builder, health-care system docent and mural creator to brighten gritty neighborhoods. Additionally, the three sectors would develop a campaign to encourage individuals to hire personal aides: tutors for their children, housekeeper, personal assistant and technology explainer for themselves, elder companion for their older relative, etc.
  • A world-class K-16 entrepreneurship curriculum. Permanent jobs get created mainly by starting and expanding private-sector businesses. Government jobs require tax dollars, which thus reduce private-sector jobs. To increase business creation, we must go beyond the born entrepreneurs, hence the proposed entrepreneurship curriculum. That should consist heavily of students creating and running businesses, plus online simulations, in which students get instant feedback on their business decisions.
  • Expanded apprenticeship programs. Despite the rampant un- and underemployment among college graduates and the relative shortage of skilled (and offshore-proof) blue-collar jobs, we’re sending young people a message that everyone should go to college, even students that struggled in high school. In fact, according to Clifford Adelman, senior statistician at the U.S. Department of Education, if you graduated in the bottom 40% of your high school class, your chance of graduating college is less than one in four, even if given 8 ½ years. And if you graduate, it’s likely to be from a third-tier college with a major that is likely to make employers yawn, thus setting you up to be one of the aforementioned 53.6% of college graduates doing work they could have done without college or who are unemployed.

Instead, we need to expand our system of apprenticeships so it’s a major initiative, like that in Germany and in England: a partnership between the schools and employers that creates a high-quality experience for high-schoolers whose track record indicates they’re more likely to succeed in a practical curriculum than by calculating calculus integrals, deciphering the intricacies of Shakespeare and interpreting stochastic processes.

A perhaps hyperbolic call to action.

Good jobs are at the heart of a satisfied citizenry and viable society. Our rapidly dejobbing America is prioritizing short-term profit over long-term survival. Many people consider climate change our most urgent threat. I believe dejobbing is an even greater one.

Marty Nemko is an award-winning career coach, writer, speaker and public radio host specializing in career/workplace issues and education reform. His writings and radio programs are archived on www.martynemko.com.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY Jobs

Unemployment Rate Falls to 5.9% on Strong Job Growth

The unemployment rate is the lowest since 2008.

The economy added 248,000 jobs in September, the Bureau of Labor Statistics reports, beating analyst expectations and improving significantly over August’s disappointing numbers. The bureau’s last monthly release showed the U.S. only adding 142,000 jobs, the fewest in eight months. Friday’s data could help quell any fears of a worsening employment climate.

Today’s nonfarm payroll report also showed the unemployment rate falling to 5.9%, down from 6.1% in August and the lowest since July of 2008. The labor force participation rate — the percentage of the workforce that is either employed or actively looking for work — remained mostly static at 62.7% as older Americans continue to drop out of the work force. The unemployment rate has dropped by 0.7% in 2014, but still remains about 1.5 percentage points higher than its pre-crisis lows.

 

Despite an increase in hiring, average hourly earnings did not budge. Wages growth was static in September, and hourly wages have increased just 2% over the year.

Economists and investors have been closely watching monthly jobs numbers, partly to glean insight into when the Federal Reserve will begin to raise interest rates. Fed chair Janet Yellen has made employment growth a key factor in determining monetary policy, and repeatedly cited labor market slack as a reason for keeping rates at historic lows. However, as MONEY’s Taylor Tepper notes, Yellen is unlikely to raise interest rates in the near future due to inconsistent employment numbers and concerns over a shaky global economy, particularly in Europe.

MONEY’s Pat Regnier points out that while consumer spending has largely recovered since the housing crash, construction and government spending has not. Until public spending begins to return to pre-recession levels, job growth may continue to be especially sluggish. September showed little increase in government spending.

TIME Workplace & Careers

1 in 5 U.S. Workers Say They Were Laid Off in Last 5 Years: Poll

New York Job Fair Offers Services For Chronically Unemployed
People stand in a line that stretched around the block to enter a job fair held at the Jewish Community Center (JCC), on March 21, 2012 in New York City. John Moore—Getty Images

Total of 30 million say they received pink slips since 2009

One in five American workers say they have lost their jobs at some point within the last five years, according to a new survey that reveals that the recession, which technically ended in 2009, has continued to rattle the labor market.

The survey findings, released by Rutgers University’s John J. Heldrch Center for Workforce Development, exposes the lingering costs of lay-offs, both for those who cannot find work and those who have. Nearly 4 out of 10 laid-off workers say they spent more than seven months searching for a new job and nearly half of those who managed to find work said their new job was a step lower on the payscale.

Regardless of employment status, two-thirds of all adults in the survey say the recession negatively impacted their own standard of living, but the workers that took the hardest hits to income and savings were those who had been unemployed for a period longer than 6 months, whose struggles the authors called “among the most persistent, negative effects of the Great Recession.”

 

MONEY Millennials

10 Places Millennials Are Moving For Bigger Paychecks

140918_CAR_MillennialsMove_NewOrleans
With 5.1% unemployment and low-priced homes, New Orleans is a top town for millennials. John Coletti—Getty Images

Over the past five years, Gen Yers have decamped for some surprisingly pricey cities in search of a higher-paying job.

Millennials are on the hunt for high-paying jobs, and they’re moving to some unexpected places to find them, according to a new report out today.

Bruised by the rough post-recession job market, Gen-Yers are moving from lower-cost cities to places with a higher cost of living but more plentiful and lucrative jobs, a RealtyTrac analysis of Census data from 2007 through 2013 found.

“Millennials are attracted to markets with good job prospects and low unemployment, but that tend to have higher rental rates and high home-price appreciation,” says Daren Blomquist, vice president of RealtyTrac. “It’s a tradeoff.”

In the 10 U.S. counties with the biggest increase in millennials, the average unemployment rate is 5.2%, well below the national average of 6.1%. The average household income is $62,496, vs. $51,058 nationally. The median home price is $406,800 (nearly double the U.S. median of $222,900), while a three-bedroom apartment rents for $1,619 a month on average, just over the national average of $1,550.

Riding the robust job market in the D.C. area, two counties in Northern Virginia with unemployment rates below 3.7% top the list. But not all places that the 69-million-strong millennial generation are flocking to are expensive. New Orleans, where the median home price is $140,000, edged out San Francisco, where tech jobs may be plentiful but the median home price is nearly $1 million.

New Orleans, where the unemployment rate is 5.1%, is a transportation center with one of the busiest and largest ports in the world, as well as tons of jobs related to the local oil refineries. Denver, Nashville, and Portland, Ore., all top 10 areas, offer median home prices below $300,000 and a diversity of jobs in technology, health care, and education.

Perhaps the most surprising millennial magnet: Clarksville, Tenn, the fifth largest city in the state behind Nashville, Memphis, Knoxville, and Chattanooga. Forty five miles north of Nashville, it benefits from spillover from that city’s strong job market, but Clarksville also has its own industrial base, plus nearby Ft. Campbell and Austin Peay State University. The unemployment rate: 4.7%.

Here are RealtyTrac’s top 10 destinations for millennials on the move:

Rank County State Metro Area % Increase in Millennial Population, 2007-2013 Milennials % of Total Population, 2013 Median Home Price, April 2014 Average Monthly Apartment Rent (3 beds), 2014
1 Arlington County Va. Washington, DC 82% 39% $505,000 $1,996
2 Alexandria City Va. Washington, DC 81% 34% $465,000 $1,966
3 Orleans Parish La. New Orleans 71% 30% $140,000 $1,190
4 San Francisco County Calif. San Francisco 68% 32% $950,000 $2,657
5 Denver County Colo. Denver 57% 33% $270,000 $1,409
6 Montgomery County Tenn. Clarksville 46% 31% $128,000 $1,016
7 Hudson County N.J. New York 44% 31% $330,000 $1,643
8 New York County N.Y. New York 43% 32% $850,000 $1,852
9 Multnomah County Ore. Portland 41% 28% $270,000 $1,359
10 Davidson County Tenn. Nashville 37% 29% $160,000 $1,131
MONEY Economy

The Real Reason Jobs Are So Slow to Come Back

Garden snail
Daly and Newton—Getty Images

It's not tax rates, or too much regulation, or college kids majoring in art history instead of computer science. This is a global slowdown.

Jobs growth has been frustratingly slow in this recovery. The headline unemployment rate is down to 6.1%, but there’s still a lot of slack in the labor market. Wages are stagnant, long-term unemployment is strikingly high, and an unusually large number of Americans are so discouraged about their prospects that they’ve stopped looking for work.

So what’s holding us back from a full recovery? Maybe taxes are too high. Or perhaps regulation is holding us back. Or too many people are going on disability. Or maybe—this theory is especially popular now—there’s something wrong with the workforce we have. Too many liberal arts majors, not enough welders and truckers and computer scientists.

The problem with those theories is that they are way too local. The jobs shortfall isn’t just an American thing—it’s global. Earlier this week, the World Bank released a report on jobs in the “G20″ group of major world economies. Missing jobs and stagnant wages is a story all around the world. Here’s a snapshot from the report, showing how far below the pre-crisis trend jobs growth has been:

Screen Shot 2014-09-11 at 4.58.17 PM
SOURCE: World Bank

So what is it that’s holding almost everyone back? The World Bank chalks it up to a weak “aggregate demand”—but that only gets us halfway to an answer. What’s harder and more controversial is figuring out why demand for goods and services, which is what ultimately convinces employers to hire, has been so sluggish. One possibility is that consumers are too nervous to kick-start a virtuous cycle, where they buy more and thus spur more production and more hiring. The report notes that consumers around the world found themselves mired in debt after the crash, and that the growth in their income has been disappointing. In advanced economies, the share of GDP that goes to employee pay and benefits has declined substantially.

Screen Shot 2014-09-11 at 4.53.46 PM
SOURCE: World Bank

But to bring the story back home to U.S., at least, the anxious consumer alone isn’t a good enough answer anymore. As economist Brad DeLong points out here, consumption in the U.S. isn’t actually down by that much. What is down, he says, is construction and government spending. And on government spending, what’s true in the U.S. has been true with a vengeance in Europe, where policymakers have pursued government austerity policies.

Rethinking education, or how we train the workforce, or tax policy, or regulations might very well help economic growth in the long run. Finding some way to boost the mood of consumers couldn’t hurt, either. But the big-picture view suggests a deeper problem. The economic crisis blew a massive hole in the global economy. And more than five years later, the evidence is mounting that governments around the world just did too little, too late to help mend the gap.

TIME Economy

A Global Jobs Crisis Is Coming, Says World Bank

And a new report says there’s no immediate solution in sight for the problem

We are heading for a global jobs crisis, says the World Bank, warning that 600 million new jobs would have to be created by the year 2030 just to keep up with current levels of population growth.

A study released by the organization Tuesday at the G-20 Labor and Employment Ministerial Meeting in Australia indicates there are currently over 100 million people unemployed and around 447 million that live on less than $2 per day across G-20 member nations, reports Agence France-Presse.

“As this report makes clear, there is a shortage of jobs — and quality jobs,” said Nigel Twose, the World Bank’s senior director for jobs. He warns that although progress had been made in emerging economies like Brazil, China and South Africa, wage and income inequality continues to widen in several G-20 countries.

“There is no magic bullet to solve this jobs crisis, in emerging markets or advanced economies,” Twose said, adding that the creation of enough jobs to sustain the growing population calls for “a whole of government approach cutting across different ministries, and of course the direct and sustained involvement of the private sector.”

[AFP]

MONEY temps

Why Your Colleague Has the Same Boss, but a Different Employer

Temp nameplate
Jeffrey Coolidge—Corbis

As the economy recovers, companies are hiring more "temporary" workers who aren't all that temporary.

When Americans get back into the office after Labor Day weekend, they’ll probably see fewer empty cubicles than they have in recent years. New jobless claims have been falling, and as of May there are more people working than there were in early 2008, before the downturn.

But some of those people sitting next to you, or chatting with you by the coffee machine, might be working for a different company.

According to the Bureau of Labor Statistics, an estimated 2.9 million Americans work in the “temporary help services industry.” That means that while they show up at the office of one employer, they really work for the staffing agency that signed their contract.

Of course, “temps” are nothing new. Companies—especially in white-collar industries—have been hiring temporary workers since the 1950s, often for specialized tasks for a short period of time. But today, some “temporary” employees do the exact same tasks as permanent employees, and they stick around for a lot longer.

“‘Temp’ is kind of a misnomer,” says Catherine Ruckelshaus, general counsel and program director at the National Employment Law Project, a liberal advocacy group. “Staffing companies are acting like human resource departments. They’re placing permanent slots, if not permanent workers.”

The number of temp jobs really began to balloon in the early 1990s. And since temps are easy to hire and easy to fire, they’ve borne the brunt of the booms and busts of the last 25 years. Temps were hit particularly hard during the recession of the early 2000s. “More than 25 percent of all jobs lost during that period were in temporary help services, despite their accounting for less than 2 percent of total employment,” according to the BLS.

“Whenever there’s a recession, temp and staffing trails off early and picks up in the beginning as the jobs start to come back,” Ruckelshaus says. “Oftentimes employers start to fill up their payroll with temp and staffing jobs as opposed to permanent positions.”

temporary help

That’s exactly what has happened since late 2009. “It’s a little bit early to tell if that’s a long-term trend or if that’s a normal bubble,” Ruckelshaus adds.

Increasingly, blue collar industries like janitorial services, warehouse and logistics, and home care have started to make use of contract workers. So have white collar industries like legal services, accounting, records processing, and media. (Some journalists at Time Inc., which publishes this site, are employed by an outside staffing company.)

What’s in it for companies? They like the flexibility—which is another way of saying easy-to-hire, easy-to-fire. Research suggests that temps are generally paid less, get fewer benefits and face more health and safety violations than direct hires.

In a new case before the National Labor Relations Board, a union argues that a subcontractor relationship has weakened its collective bargaining power. Browning-Ferris Industries gets some of its workers at a recycling facility though Leadpoint, a temporary staffing company. The union wants both companies to be considered those workers’ employers. The case could change the way NLRB evaluates “joint-employer” relationships, the Wall Street Journal reports.

Even so, it’s unlikely to mean that employers will stop using outside staffing—at least not until the job market is strong enough for potential employees to demand a less “flexible” arrangement.

Related:
If Jobs Are Back, Where’s My Raise?
If You’re Looking for Work, the Outlook Is Brightening
5 Ways to Speed Up Your Job Search This Fall

TIME White House

Biden Celebrates Labor Day With Call For ‘Fair Wage’

A job's about a lot more than a paycheck. It's about your dignity, it's about your place in the community, it's about who you are."

Vice President Joe Biden celebrated Labor Day with a call for a “fair wage” at a union rally for workers in Detroit on Monday.

“Folks, the middle class is in real trouble now,” Biden said to an enthusiastic crowd. “A job’s about a lot more than a paycheck. It’s about your dignity, it’s about your place in the community, it’s about who you are.”

Biden’s 20-minute speech employed a populist and personal tone as he took on everything from the estate tax to American corporations that have moved operations overseas.

Biden, who is known for his blue collar roots, referenced his family roots and his ties to labor.

“‘Joey, you’re labor from belt buckle to shoe sole,'” Biden said his uncle told him.

 

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