The last few articles I have written have been fairly depressing. The economy had been growing slowly and none too surely. Conflicts were increasing and wages were dwindling. I didn’t take any pleasure writing them.
However, things are looking fairly good right now. The sources I follow have been as optimistic as I’ve seen since the crash in 2009.
One of the sources I read is the Financial Times. On January 30, 2012, they published an article regarding US consumer spending. While the article did state that consumer spending had been stagnant in December from the rate in November, the majority of the article was positive.
Incomes went up by a half percent in December. Historically, that may be a fairly small number. However, it is quite good when looking at the recent past. The increase was primarily placed in savings, which increased to four percent (4%) of disposable income. Compared to many industrialized Countries, that is not a real high number. However, it is fairly high compared to the recent past for the USA.
Increasing the rate of savings of total disposable income is generable a positive thing for the Country. However, right now, we could use more spending to help ramp up the economy. Consumer spending accounts for around seventy percent (70%) of the economy in the USA.
What will it take to get people to spend more? In the past, an improving job market has done the trick. The job market includes the feeling of stability with present employees, the prospects for those that don’t have a job, as well as the number of new jobs compared to lost jobs. Those issues also have a large impact on wage increases.
In the Economist, the same topics were discussed and others were analyzed in an article that credited additional debt, in the form of bank loans, for keeping the recovery going. Specifically, improvements in job creation, hitting bottom on housing and the Federal Reserve keeping interest rates very low.
Those, as well as inventory restocking, helped the economy grow in the fourth quarter by a 2.8% annualized rate. The growth rate is predicted to slow down due to the need to reduce debt. The hope is that larger wage increases coupled with low inflation will allow debt to be paid down while spending continues to increase. So long as the private sector is allowed to proceed before the government tries to reduce the national debt and the US is not overly hurt by the European economy, things are looking much better for the next few years.
The Wall Street Journal said the numbers indicated sustained growth. The numbers included almost a quarter of a million net new jobs in January. Those jobs decreased the unemployment rate to 8.3%, the least since 2009. The unemployment rate was 9.1% as recently as August. The jobs were spread over most of the private sector.
Of the net job increase, there was actually a reduction in public sector employee jobs of 14,000 for the month. It is fairly normal for the public sector’s economic conditions to lag a year or so behind the private sector. Hopefully the additional taxes provided by the private sector’s growth will turn things around in the public sector as well.
While I was writing this article, The Christian Science Monitor also sent me an article on the economy. In addition to much of what the others said, there was a reference to the Dow Jones, which jumped more than a hundred points after the announcement of the January numbers.
The job growth was spread throughout the various portions of the market. Professional and manufacturing jobs had the largest increases. Even construction hired over twenty thousand workers. Further, the government analyzed the data and increased the number of jobs added over the prior two months by sixty thousand.
On the other hand, the USA is still over five and a half million jobs below the level prior to the start of the recession. There is also quite a bit of concern over the European recession predicted to start any time now. It could have quite a negative impact on US exports.
By: Jeff Perry
I often report the state-wide statistics for wage increases for police. Those numbers have been depressingly low for the last few years. However, here are some other numbers that have been going up for officers that are even worse. I discovered these in the Detroit newspaper, The Free Press.
Line-of-duty deaths and injuries of Police officers in the U.S.
- 162 - The number of law-enforcement officers killed in the U.S. in the line of duty in 2010. The number went up nearly 40% from 2009. Biggest killer: traffic accidents.
- 59 – The number of federal, state and local officers who died as a result of gun shots in 2010.
- 11 - Officers killed in the line of duty in January of 2011. Six died as a result of gun fire.
- 57,000 – The number of Officers assaulted in the line of duty in 2009. The FBI has not yet released official figures for 2010.
- 39 – The number of states plus the District of Columbia and Puerto Rico that had police fatalities in 2010. Percentage wise that equals 75%.
- 1792 – The first year that the deaths of law enforcement officers was recorded in the U.S.
- Nearly 19,000 – The number of officers killed in the line of duty since the first known death was recorded.
- 41 - Average age of the officers that gave their lives in the line of duty.
Those are some depressing numbers. I wanted to verify the numbers from a source more reliable then a newspaper. Google lead me to the web site of “The Officer Down Memorial Page, Inc. There is a lot of information in quite a bit of detail. If you are interested, the address is http://www.odmp.org
Last Updated (Monday, 21 March 2011 18:49)
The State Employment Relations Board has published the Annual Wage Settlement Report, Wage Settlement Breakdown (2000– 2009). As I’m sure you expected the numbers are greatly reduced from all previous numbers recorded by the State and certainly from the last ten years. Statewide, the percentage increase averaged out to 2.15 %. That is a decrease of over ¾ of a percent from last year. That is down right depressing.
When the increases are broken down based upon various regions within the state, the Akron/Canton area did best. However, they only averaged 2.38 percent. While that number is certainly low compared to years past, it is over a whole percentage point higher than the average wage increase received by those in the Warren/Youngstown region. They only received 1.36 last year. When reviewing the wage increases by jurisdiction, it is plain to see that counties and schools really brought down the averages. We have all heard about the problems getting levies passed for schools as of late. The meager 1.71 percent increase is the result of those failures.
However, counties were not far behind them at 1.74 percent. Both jurisdictions were hit hard by the reduced property values and foreclosures. Townships did the best. Their average wage increased only decreased by .18% from the previous year, to 2.82% from 3%. The wage increases were next broken down based on the type of unit. Once again, police finished second to fire. The difference was only .04%, but they did better for the second year in a row. Over the last ten years, police and fire have each had the top wage increases five years.
It comes as no surprise to see just how much lower the salary increases were for the teachers this year. They averaged a meager 1.59 percent increase, almost a percent less than fire did. It is also over a tenth of a percent less than the average school district wage increases for only the second time in the last ten years. It is not a good time to be a teacher. The last comparison group of the wage comparison looks at the separate contract years negotiated this last year. It indicates a positive outlook for those that agreed to three year contracts. Wages go up more in each successive year. However, the wage increase in each of the years are well below the three percent that many employees have come to expect as a standard wage increase in the not so distant past. Even further from the standard four percent those of us old enough to remember look upon with glee.
Well it is good to end with a positive outlook for the future. However, I fear this year will be a tough one, maybe worse than last year. The recovery seems to be taking hold in business nationally much more so than locally. There is also usually a year or more of a lag time between the private and public sector and the economy. So I am really looking forward to 2011!
wage breakdown attachment
Last Updated (Saturday, 12 June 2010 12:03)
by Jeff Perry
The best time to try to get the lay-off language in your contract improved is when the economy of the nation and your municipality are both doing well. Chances are, that just isn’t the case right now. However, many Employers may still be willing to allow some improvements to the lay-off procedure.
It is generally a good idea to get the longest notification prior to a lay-off as possible. The time after notification can be used to make any adjustments possible to decrease expenses. The time can also be used to look for other full-time or part-time employment.
Of course, increasing the duration of the notification prior to a lay-off does result in an increased likelihood certain negative outcomes. Many employers don’t pay that close attention to the fiscal position of their municipality. They just get used to telling the employees they are broke and the citizens that everything is wonderful to be bothered with the facts. The longer an employer goes before laying off an employee, the greater the damage to budget. Waiting too long could result in laying off more than should have been laid off to make up for the increased deficit.
Employers could make lay-off notifications prior to being certain of the need. Many do so to avoid waiting too long and having to increase the number of employees needing to be laid off. Some are just overly pessimistic or cautious.
Another issue is bumping rights. Normally employers can determine the appropriate bargaining unit to decrease manpower from. If the employee to be laid off was promoted from another bargaining unit within the same municipality, they would normally have some right to bump back into that unit. The end result would be the maintenance of a job at a lower rank, and the least senior member of that bargaining unit being laid off in their place.
Contracts differ on how much bumping rights a promoted employee has. Many are limited to the seniority they had accrued in the former position. Other contract use seniority with the employer or within the department. Which is best is a value judgment which is better discussed prior to lay-offs being contemplated for obvious reasons.
Another consideration is the call back procedure. Employees want the time to be as long as possible. The norm is two years from my experience. Employers often want to decrease the length to less then a year. Obviously, being out of police work for an extended period of time can result in the need for retraining. Some employers would rather avoid this expense and find qualified candidates that don’t need to be re-trained.
Finally, the reasons for laying off an employee should be limited to a lack of funds. Normally, the language also mentions a lack of work or job abolishment as well. Obviously, we want lay-offs to be as difficult as possible.
If you or somebody you know has been laid off, COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985) should be considered to maintain some health care insurance until alternative coverage can be found. Previously, COBRA benefits cost a laid-off employee 102% for the cost of the insurance previously provided by the employer. However, the American Recovery and Reinvestment Act of 2009 (ARRA) temporarily reduces the premium for COBRA coverage.
To be eligible, they must have been laid-off sometime between September 1, 2008 through December 31, 2009. The employee would only have to pay 35% of the premium to maintain coverage. The substantial reduction in cost could make the insurance affordable enough for at least a while.
If that is a possibility, more information can be found at the Department of Labor’s dedicated COBRA web site at www.dol.gov/COBRA.
Last Updated (Wednesday, 02 September 2009 18:29)
Against the bleak economic news we are hearing every day, the State Employment Relations Board (SERB) has released the wage settlement report for 2008. Keep in mind the economic mess really hit around the last quarter of the year. If we were looking back a year to date, it would probably be even worse.
The State wide average increase is wages for 2008 was 2.92%. In 2007 it was 2.98%. The range over the ten years of the survey was 2.72% in 2005 up to 3.78% in 2001.
The Cincinnati region had the largest decrease in wage rate from the following year of 0.32%. However, that is only 0.03% less than 2006, so the difference isn’t all that much, comparatively speaking. The lowest regional increase award goes to Warren/Youngstown with 2.70%. Ironically, they actually increased the rate of wage increases 0.02% from 2007.
The Columbus Area has the distinction of having the largest increase in wage rates from 2007 to 2008 and the largest percent increase of the regions. Their average of 3.16% was an increase of 0.23%.
County’s were the jurisdiction that had the only increase in rate of wage increase over 2007. They had the second highest percent at 3.16%, compared to 3.18% for City’s. School Districts came in last once again at 2.52%.
While Police did have a slight increase in the percent of wage increases over 2007, Fire did much better. They averaged 3.33% compared to 3.23% for Police. However, the Police had the largest increases in 60% of the surveyed years. The teachers found themselves on the bottom of the pack again.
The first year of most contracts usually had the largest wage increase of the contract last year. Referred to as front loaded, Unions usually prefer to get the most we can as soon as we can, since it maximizes the amount of money earned over the life of a contract.
News from the State doesn’t look all that bad so far. In many cases the wage increases have actually increased over the prior year. I don’t think that will be the case come next year. Since the economic downturn, there has been a fairly steady decline in wage increases that could continue for quite a while.
I was speaking to several Fact-finders at a seminar recently. One of them told me that we shouldn’t expect to see many 3% increases. The other Fact-finders at the table agreed. The consensus was that 3%v increases would only be awarded if the municipality was fiscally healthy and the employees were underpaid. Unfortunately, very few municipalities are fiscally healthy right now.
click here for SERB Report
Last Updated (Tuesday, 21 July 2009 17:26)