Friday, April 1, 2011

Top 10 dying industries

From Phil Izzo of The Wall Street Journal on March 28:
The U.S. economy is recovering from a severe recession, but some industries are unlikely to ever fully bounce back.

A new analysis by research firm IBIS World looks at 10 industries that appear to be dying. The list isn’t exactly shocking, but it represents a mix of sectors that are being left behind by technology or have been hurt by cheaper overseas competition.

The biggest industry profiled by IBISWorld is wired telecom carriers, largely being supplanted by cellphones and the Internet. The dominance of the Web and digital media also puts Newspaper publishers, record stores and video-rental companies on the list. Meanwhile, photofinishing also takes its place among the top 10 dying industries thanks to the growing influence of digital photography.

Cheap imports are blamed for a decline in mills and apparel manufacturers. Companies that rent formal wear are also counted among dying industries amid both competition from abroad and lower prices making owning your own formal wear a more attractive option than renting.

The only clear recession casualty that makes the list is manufactured home dealers. The housing boom led to a surge in the industry, but now years after the bubble burst the sector has continued to struggle.

Action Alert: webinar on Economic Liberty
and the Constitution

Hillsdale College is hosting April 16 a free online town hall called Economic Liberty and the Constitution.

The erosion of private property rights, a prodigious federal debt, and a nearly incomprehensible tax code are all part of an overweening administrative state that today threatens the liberty of all Americans, the college says.

The live webcast runs from 10 a.m. and 12:30 p.m. and consists of these presentations and speakers:
  • Choosing Liberty: Welcome and Introduction, presented by Rep. Mike Pence, R-Ind.
  • How Our Economic Liberty Has Been Diminished, presented by Dr. Paul Moreno, a professor of constitutional history at Hillsdale College.
  • How Our Economic Liberty Can Be Restored, presented by Dr. Larry P. Arnn, president of Hillsdale College.
Additionally, presenters will answer questions from participants.

To register for the event, click here.

What: Economic Liberty and the Constitution free online town hall forum.
When: April 16, from 10 a.m. to 12:30 p.m.
Where: Online here.
For more information: Click here, or e-mail

Hidden bad signs in a good jobs report

From Phil Izzo of The Wall Street Journal on April 1:
There was lots of good news in Friday’s jobs report, but there are still some caveats to keep in mind.

Overall the economy added 216,000 jobs in March, and the unemployment rate dropped to 8.8%. The gain in jobs was relatively broad-based, though with some sectors still lagging. Meanwhile, the unemployment rate improvement was based on more people working, not just discouraged workers dropping out of the labor force. In fact, the labor force rose more than the general population, indicating the market has improved enough to draw some of the unemployed back into the pool of workers.

But the jobs report is a lagging indicator, and some of the issues that have led economists to scale back growth forecasts for this year aren’t yet reflected in this report. One potential area of difficulty is disruptions in manufacturing supply chains caused by the Japanese earthquake, the ripple effects of which might not be felt for weeks or months. Manufacturing added jobs in March, but there might be some difficulties ahead.

Meanwhile, prices of food and oil have been increasing, sparking worries about consumer spending. If more people have jobs, that mutes those fears a bit. But today’s report notes that wages were unchanged. If prices are going up but workers aren’t getting paid more, it spells good news for companies who can keep labor costs low, but suggests continued struggles for consumers.

Gov. Rick Scott orders immediate cuts
to programs for disabled

From Kate Santich of the Orlando Sentinel on March 31:
Florida Gov. Rick Scott ordered deep cuts Thursday to programs that serve tens of thousands of residents with Down syndrome, cerebral palsy, autism and other developmental disabilities.

Though a range of state services face cuts from this year's Legislature, the governor invoked his emergency powers to order the state Agency for Persons with Disabilities to immediately roll back payments to group homes and social workers by 15 percent — an amount providers say could put them out of business and threaten their clients' safety.

"lt's not like, 'Gee, does this mean I have to skip a vacation this year?'" said Amy Van Bergen, executive director of the Down Syndrome Association of Central Florida. "Potentially, these cuts have life and death implications for these people."

An estimated 30,000 Floridians with severe developmental disabilities receive services that help them live outside of nursing homes — typically with family or in small group homes. Aides help them eat, bathe, take medication and otherwise care for themselves.

But the governor said the Agency for Persons with Disabilities' ongoing budget deficit — currently at $170 million — had reached a critical point and needed to be addressed immediately.

The cuts go into effect Friday and last at least through the fiscal year, which ends June 30. Lawmakers are currently debating what will happen after that.

Providers had not been informed of the cuts.

"No one has gotten any notice," said Linda Cumbie, an Orlando social worker who coordinates services that clients need to live outside of a nursing home — which would be a more expensive arrangement for the state. "We have to find out through the newspapers."

More jobs doesn't necessarily mean more good jobs

From The Wall Street Journal on April 1:
The U.S. economy is producing jobs, that much is clear. But whether those jobs are good jobs is less certain.

Of the 230,000 private-sector jobs created in March, 199,000 of those were in the service sector. A large chunk of those jobs are in fields that are likely to provide a stable livelihood for those lucky enough to snag them –- like some of the 78,000 added in professional and business services. But that’s less certain for, say, the 37,000 new workers in the leisure and hospitality industry.

To be sure, having a job is better than not having one, both for the individual and for economic output. But this recovery seems to be going hand-in-hand with workers taking lower-paying jobs. More than half of those full-time workers who lost jobs between 2007 and 2009 and then found full-time work by early last year said their new jobs came with lower wages. Some 36% saw a pay cut of 20% or more.

That can be good news for companies, who are able to keep their labor costs low and hire talented workers, which can increase productivity. The flipside: it can downshift Americans’ spending and their standard of living.

Academics have pointed out that, as jobs are coming back, they’re returning at the highest and the lowest levels. But the middle-class is being squeezed.
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