On Tuesday, People reported the news we'd all been fearing: Jennifer Garner and Ben Affleck are indeed getting a divorce. The couple made the official announcement just one day after their 10-year-anniversary, and with a little bit of lead time before Affleck starts promoting Batman – pretty much exactly as [...]
WHAT’S the easiest way to boost America's sluggish wage growth? President Barack Obama thinks that expanding overtime pay may be the answer. On June 30th details emerged of a new scheme in which 5m more Americans will be entitled to “overtime pay”—1.5 times their normal pay when they work more than 40 hours. Mr Obama hopes that the plan will boost the paypackets of some workers. The economic evidence behind it says this may not be the only benefit.
American workers have seen better days. Since the recession, inflation-adjusted private-sector hourly earnings have stumbled. People wistfully remember decades long gone, where they were used to annual rises of 2.5% or more in real terms every year. Small wonder, then, that economists are trying policy ideas from the glory days. The Fair Labor Standards Act (FLSA), implemented in 1938, is one place to look. The FLSA stipulated that any worker who worked more than 44 hours and was paid less than $30 a week was entitled to overtime pay. The FLSA is still in force (and the working-hours threshold is now 40 hours) but the earnings threshold was last updated in 1975 and currently stands at...Continue reading
ON OCTOBER 4th 1582 the Julian calendar was replaced by the Gregorian in many European countries. The following day was October 15th 1582. The change provoked chaos, as landlords demanded a full month’s rent and greedy bankers attached a full month’s interest to loans, while workers went unpaid for the eleven missing days. Unsurprisingly, riots ensued.
To listen to some pundits, June 30th 2015 will see similar chaos. At midnight tonight there will be a “leap second”. The day will be lengthened by one second, in order to realign Coordinated universal Time (UCT), the main standard regulating the world’s clocks, with solar time. This chronological quirk, many worry, will befuddle computer systems.
The last leap-second was added during a weekend in 2012. That time, the computer system of Qantas, an Australian airline, crashed and 400 flights were delayed. But tonight will be the first time since 1997 that a leap-second was added on a working day, with financial markets in full swing. And over the last two decades trading has become much more dependent on...Continue reading
Queen Bey has her kingdom, and Jay Z has his empire; together, they ranked first on our highest-earning celebrity couples list in 2013. But they’ve been dethroned by a younger pair on this year’s Celebrity 100.
Over in my native UK The Guardian is running a series on the terrible manner in which all too many people don't get paid enough money. That's a fair enough thing to worry about if we're honest. But they manage to get two major points howlingly wrong. So badly wrong [...]
ANDY MURRAY, a tennis ace, made headlines this month—off the court as well as on it. He is teaming up with Seedrs, an up-and-coming British crowdfunding platform through which small companies sell stakes in themselves. The Scot will advise Seedrs on the health, sports and wearable-technology sectors as well as make the odd investment himself. Through such websites, individuals and funds provided over €1.5 billion ($2 billion) in equity and debt to European small and medium-sized enterprises (SMEs) in 2014, according to researchers at Cambridge University and EY, an accounting firm.
That is a pittance compared with the €926 billion of total new external funding made available to European SMEs the year before, mostly by banks. But the amount is more than doubling each year. That is heartening, since European banks, nursing big losses from the financial crisis and trying to rebuild their capital ratios, have trimmed lending to businesses by 12% over the past six years.
Crowdfunding is just one of a number of ways in which European SMEs, typically far more reliant on bank financing than their American counterparts (see...Continue reading
CHINA’S blistering economic performance in recent years has brought advocates of democracy out in hives. GDP growth in the one-party state, at an average of 10% over the past decade, has easily outpaced that of its democratic emerging-market rivals. India saw annual growth of 6% over the same period; Brazil, just 2%. Some say that democracy is to blame for India’s and Brazil’s slower progress. Politicians in such places cannot lay the foundations for long-term growth, the argument goes, since voters want instant gratification. Are freedom and prosperity really at odds?
The idea is not new. In 1994 Torsten Persson of Stockholm University and Guido Tabellini, then of the University of Brescia, published a paper that argued that in democracies, vote-hungry politicians divert resources away from people who could use them more efficiently by lavishing spending on their constituents in the form of unemployment benefits and pensions. This and political gridlock, another unfortunate aspect of democracy, both tend to slow growth. Another Continue reading
WALL STREET has been in buoyant mood in recent years. The S&P 500 equity index has reached repeated record highs. One might think that would be great news for America’s public-sector pension plans, which hold more than half their assets in equities.
Only up to a point. The latest report* from the Centre for Retirement Research (CRR) at Boston College estimates that the funding ratio of pension plans—the proportion of liabilities covered by assets—has risen from 72% in 2013 to (drum roll) 74% last year. A fifth of all schemes have a funding ratio of less than 60%—a group that includes not just the usual suspects in Illinois and New Jersey but some in Alaska, Arizona, Connecticut and Kentucky.
To make matters worse, this calculation makes a very generous assumption. Most liabilities of a pension plan fall well into the future—a stream of payments to current and future beneficiaries who may live into their 90s. These payments must be discounted to work out the sum in contemporary dollars needed to cover them, but at what rate? Private-sector pension plans are required to use long-dated AA-rated corporate-bond...Continue reading
ON A brutally hot day in May, Gani Patel is sitting in Vipin Seeds, a farm-supplies store in Jalna, a small town in a drought-prone region of India. The talk in the shop is of prospects for the monsoon, the three-month rainy season beginning in June. Business is slow. Last year’s rains were below normal, so farmers are short of cash. Mr Patel grows cotton and maize on his 12-acre farm in Bhakarwadi, around 45km from Jalna. In case the rains disappoint again, he plans to install a drip-irrigation rig to make the best use of the water he draws from his two wells.
Much in India’s economy depends on the monsoon. Farming is India’s largest employer. Three-fifths of the land under cultivation is watered only by rainfall. Food accounts for almost half of the consumer-price index, so prices ebb and flow with the rains. A forecast at the start of June by the India Meteorological Department that the rainy season would again fall short was worrying. Then the heavens opened. Rainfall across India in the first three weeks of June was 21% above its 50-year average. Mumbai had its wettest 24 hours in ten years on...Continue reading
Under McNerney, Boeing’s stock price did very well. But he leaves behind a toxic legacy that future leadership will need to deal with, largely as a result of a confrontational approach to labor that has cut costs in that department while paradoxically undercutting future profitability.
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AS THE deadline for repayment looms, Greece finally offers a concrete set reforms, Russian assets are seized abroad and a look at China's booming and busting stock markets
Dampening down inflation