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Populist angst and anger is running through the United States presidential campaign, but also through the Brexit debates, directed at the political establishment, and also at globalization (with the European Union standing in for the latter in the UK context). This anger has taken policy elites by surprise, throwing wrenches into the works of carefully planned political campaigns by mainstream Republican, Democratic, Conservative, and Labour parties on either side of the Atlantic.

The post Is globalization the problem? appeared first on OUPblog.

The 2008 global economic crisis has been the most severe recession since the Great Depression. Notwithstanding its dramatic effects, cross-country analyses on its heterogeneous impacts and its potential causes are still scarce. By analysing the geography of the 2008 crisis, policy-relevant lessons can be learned on how cities and regions react to economic shocks in order to design adequate responses.

The post Austerity and the slow recovery of European city-regions appeared first on OUPblog.

The European Union is undergoing multiple crises. The UK may vote in favour of leaving the Union in June. European Union member states are in deep disagreement on various crucial issues, not only on how to handle the stream of refugees from the Near East, but also on how to combat terrorism, and how to deal with Russia. And, in each election, Eurosceptic parties garner an increasing share of the vote. Given the urgency of these issues, the Eurozone crisis has been relegated to the background of public debates.

The post Long-term causes of the Eurozone crisis appeared first on OUPblog.

What is happiness and how can we promote it? These questions are central to human existence and human flourishing now plays a central role in the assessment of national and global progress. Paul Anand shows why the traditional national income approach is limited as a measure of human wellbeing and demonstrates how the contributors to happiness, wellbeing, and quality of life can be measured and understood across the human life course. The following extract looks at the connection between income and wellbeing.

The post “The economics of happiness” – an extract from Happiness Explained appeared first on OUPblog.

Forty years ago today (20 November), General Franco, the chief protagonist of nearly half a century of Spanish history, died. ‘Caudillo by the grace of God’, as his coins proclaimed after he won the 1936-39 Civil War, Generalissimo of the armed forces, and head of state and head of government (the latter until 1973), Franco was buried at the colossal mausoleum partly built by political prisoners at the Valle de los Caídos (Valley of the Fallen) in the Guadarrama mountains near Madrid.

The post Spain 40 years after General Franco appeared first on OUPblog.

Anyone who is even remotely familiar with the crisis in Greece must be aware of its record-high unemployment. From an already elevated value of 8% in 2008, the Greek unemployment rate rocketed to 27% in 2013 and has since remained in that ballpark.

The post Greek wages in crisis: Whose loss and whose hope? appeared first on OUPblog.

By Richard S. Grossman

For the past half dozen years or so, the first Friday of the month has brought fear and dread to large portions of the United States. This heightened anxiety has nothing to do with the phases of the moon, the expiration of multiple financial derivatives, or concerns about not having a date for the weekend. No, at 8:30 am (Eastern Time) on the first Friday of each month, the US Bureau of Labor Statistics releases the unemployment data for the previous month.

The release of the unemployment data sets off a media frenzy, as pundits speculate on the winners and losers. What do the numbers foreshadow for the economy? Have we put the Great Recession behind us? How will Wall Street receive the news? And, perhaps most importantly, how does it affect the Administration’s popularity?

There are plenty of reasons why unemployment should be the “marquee” economic statistic. Unlike other important economic indicators, such as GDP, exports, and new housing starts, the human cost of unemployment is inescapable. On an aggregate level, every tenth of a percent increase in the unemployment rate represents about an additional 200,000 people out of work. It is a lot tougher to conjure up a picture of a 1.2 percent decline in GDP.

On the personal level, when unemployment touches our family, friends, and neighbors, it is hard to ignore.

The unemployment rate has been at the center of a monthly drama since the beginning of the Great Recession. As the economy worsened, the unemployment rate surged upward until it hit 10% of the workforce in October 2009, its highest rate in more than 25 years.

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilian Unemployment Rate (UNRATE); US Department of Labor: Bureau of Labor Statistics; accessed 19 May 2014.

With each uptick in unemployment, political analysts wondered out loud if the bad news spelled the failure of the Obama presidency…or the lengthening of the odds against his chances at a second term. For the Administration’s part, the chair of the President’s Council of Economic Advisors typically puts out a statement by 9:30 am on the day of the release, putting the best spin possible on the unemployment data.

Although the unemployment numbers have been and will remain an important economic indicator, in recent months their importance is being overshadowed by another statistic: inflation. There are a couple of reasons for this.

First, even though the unemployment rate has fallen consistently since November 2010, when it was 9.8%, until April 2014, when it was 6.3%, it is clear that the economy has not fully recovered from the Great Recession. Wage growth is anemic; there are still an alarming number of discouraged workers (who are no longer counted as unemployed because they have given up looking for work); and GDP growth is sluggish.

Second, despite the continuing weakness in the economy, lower unemployment has raised concerns that that the economy is overheating. Declining unemployment combined with several years of monetary stimulus via quantitative easing and other unconventional methods has led to concerns that inflation may emerge at any moment.

So far, there is little evidence that we are experiencing a sharp upturn in inflation. Nonetheless, concern that emerging inflation will force the Fed to undertake contractionary monetary policy which, in turn, may have adverse effects for both the high flying stock market and the still low flying economy, are now gaining ground.

Don’t expect the unemployment rate to sink into obscurity anytime soon. It has always been an important indicator of the health of the economy and will remain so. Just be prepared for a second media frenzy around the middle of each month—when the inflation indices are released.

Richard S. Grossman is Professor of Economics at Wesleyan University and a Visiting Scholar at the Institute for Quantitative Social Science at Harvard University. He is the author of WRONG: Nine Economic Policy Disasters and What We Can Learn from Them and Unsettled Account: The Evolution of Banking in the Industrialized World since 1800. His homepage is RichardSGrossman.com, he blogs at UnsettledAccount.com, and you can follow him on Twitter at @RSGrossman. You can also read his previous OUPblog posts.

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By William Chislett

The Spanish economy roared along like a high-speed train for a decade until it slowed down dramatically in 2008. Only recently has it emerged from a five-year recession. But the jobless rate has tripled to 26% (four times the US level) and will not return to its pre-crisis level for up to a decade. Why is this?

(1)   The economic model was excessively based on the shaky foundations of bricks and mortar.

Between 2000 and 2009, Spain accounted for around 30% of all new homes built in the European Union (EU), although its economy only generated around 10% of the EU’s total GDP. In one year alone (2006), the number of housing starts (762,214) was more than Germany, France, and Italy combined. After Spain joined the euro in 1999, interest rates were low, property was seen as a good investment in a country with very high home ownership (85%), and there was a high foreign demand for holiday and retirement homes due to the 60 million tourists who visited Spain annually.

When the property bubble burst, jobs were destroyed as quickly as they had been created. As construction is a labor intensive sector, its collapse reverberated through other areas of the economy. Between 2002 and 2007, the total number of jobholders, many of them on temporary contracts, rose by a massive 4.1 million, a much steeper rise than in any other EU country and more than three times higher than the number created in the preceding 16 years. Since 2008, more than 3 million jobs have been lost, around half of them in the construction and related sectors.

(2)   Labor market laws were too rigid.

Spain has a dysfunctional labor market: even at the peak of the economic boom in 2007, the unemployment rate was 8%, a high rate by US standards. At the hiring end, Spain’s labor market laws were very flexible, largely as a result of widespread use and abuse of temporary contracts, but at the firing end, severance payments were higher than in comparable countries. This made employers reluctant to put workers on permanent contracts. The reforms approved in 2012 by the conservative government of the Popular Party, which returned to power at the end of 2011, lowered dismissal costs and gave companies the upper hand, depending on their financial health, in collective wage bargaining agreements between management and unions. The reforms have yet to have a discernible impact on job creation. They have, however, lowered the GDP growth threshold for net job creation from around 2% to 1.3%. The Spanish economy is expected to grow by more than 1% this year.

(3)   The property sector caused a banking crisis and corruption to flourish.

The 45 regionally-based and unlisted savings banks, which accounted for around half Spain’s financial system, were closely connected to politicians and businessmen. Many of them made reckless loans to developers and were massively exposed to the property sector when it crashed. The reclassification of land for building purposes and the granting of building permits, in the hands of local authorities, created a breeding ground for corruption. Bad loans soared from 0.7% of total credit in 2007 to more than 13%. The European Stability Mechanism came to the rescue of some banks in 2012 with a €41 billion bail-out package in return for sweeping reforms. The number of savings banks has been reduced to seven, with high job losses. Spain exited the bail out in January.

Spain was ranked 40th out of 177 countries in the latest corruption perceptions ranking by the Berlin-based Transparency International, down seven places from the year before. Its score of 59 was six points lower than its previous score in 2012, in a numerical index where the cleanest countries are those closest to a score of 100. Spain lost more points than almost every other country, topped only by war-torn Syria.

(4)   The education system is in crisis.

The education system is holding back the need to create a more sustainable economic model. One in every four people in Spain between the ages of 18 and 24 are early school leavers, double the EU average but down from a peak of one-third during the economic boom, when students dropped out of school at 16 and flocked in droves to work in the construction and related sectors. Almost one-quarter of 15-29 year-olds are not in education, training, or employment. Results in the OECD’s Pisa international tests in reading, mathematics, and scientific knowledge for 15-year-old students and for fourth-grade children in the TIMS and PIRLS tests are also poor. No Spanish university is among the world’s top 200 in the main academic rankings. Research, development and innovation spending, at 1.3% of GDP, is way below that of other developed economies. In these conditions, the creation of a more knowledge-based economy is something of a pipe dream, and the brightest young scientists and engineers are emigrating.

(5)   Spain received more immigrants in a decade than any other European country.

Immigrants were lured to Spain when the economy began to expand rapidly. Their number soared from more than 900,000 in 1995 to 5.7 million in 2012, the largest increase in a European country in the shortest time. They were particularly needed in the construction and agricultural sectors, as there were not enough Spaniards prepared to work in them. At the peak of the boom in 2007, more than half of the 3.3 million non-EU immigrants in Spain worked in the construction sector. When the economy went into recession, immigrants bore a large part of the surge in the unemployment, as many of them were on temporary contracts and were the first to lose their jobs. The jobless rate among immigrants (37%) is much higher than that for Spaniards (24%). Immigrants only began to return to their countries in significant numbers in 2012 and Spain’s population declined by 500,000 in 2013, an unprecedented fall in the country’s modern history.

William Chislett is the author of Spain: What Everyone Needs to Know. He is a journalist who has lived in Madrid since 1986. He covered Spain’s transition to democracy (1975-78) for The Times of London and was later the Mexico correspondent for the Financial Times (1978-84). He writes about Spain for the Elcano Royal Institute, which has published three books of his on the country, and he has a weekly column in the online newspaper, El Imparcial.

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Image credit: “Palacio Real” by Bepo2. CC BY 2.0 via Flickr.

The post Five reasons why Spain has a stubbornly high unemployment rate of 26% appeared first on OUPblog.

        

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By William Chislett

The good news is that Spain has finally come out of a five-year recession that was triggered by the bursting of its property bubble. The bad news is that the unemployment rate remains stubbornly high at a whopping 26%, double the European Union average.

The scale of the property madness was such that in 2006 the number of housing starts (762,214) was more than that of Germany, France, and Italy combined. This sector, to borrow the title of a novel by Gabriel García Márquez, was a Chronicle of a Death Foretold. There are still an estimated more than one million new and second hand unsold homes.

The excessive concentration on the property sector, as the motor of an economy that boomed for a decade, created a lopsided economic model and fertile ground for corruption. When the sector crashed as of 2008 and house prices plummeted, 1.7 million people lost their jobs in construction out of a total of 3.7 million job losses in the last six years, households were left with mortgages they could not pay and property development companies unable to service their bank loans. This, in turn, severely weakened parts of the banking system which had to be rescued by the European Stability Mechanism with a €42 billion bailout programme. Spain exited the bail-out in January, but bad loans still account for more than 13% of total credit, up from a mere 0.7% in 2006.

Spain has emerged from recession thanks largely to an impressive export performance, achieved through an “internal devaluation” (lower unit labour costs stemming from wage cuts or a wage freeze and higher productivity). As a euro country, Spain cannot devalue. Merchandise exports rose from €160 billion in 2009 to €234 billion in 2013, an increase equivalent to more than 7% of GDP. This growth has been faster than the pace of powerhouse Germany, albeit from a smaller base. Exports of goods and services rose from 27% of GDP in 2007 to around 35% last year. The surge in exports combined with the drop in imports and a record year for tourism, with 60 million visitors, turned around the current account, which was in surplus for the first time in 27 years. In 2007, the current account recorded a deficit of 10%, the highest in relative terms among developed countries.

Unemployment is the most pressing problem. The depth of the jobs’ crisis is such that Spain, which represents 11% of the euro zone’s economy and has a population of 47 million, has almost 6 million unemployed (around one-third of the zone’s total jobless), whereas Germany (population 82 million and 30% of the GDP) has only 2.8 million jobless (15% of the zone’s total). Germany’s jobless rate is at its lowest since the country’s reunification, while Spain’s is at its highest level ever.

Mariano Rajoy

Young Spanish adults, particularly the better qualified, are increasingly moving abroad in search of a job, though not in the scale suggested by the Spanish media which gives the impression there is a massive exodus and brain drain. One thing is the large flow of those who go abroad, especially to Germany, and return after a couple of months; another the permanent stock of Spaniards abroad (those who stay beyond a certain amount of time), which is surprisingly small. According to research conducted by the Elcano Royal Institute, Spain’s main think tank, between January 2009 and January 2013, the worst years of Spain’s recession, the stock of Spaniards who resided abroad increased in net terms by a mere 40,000, which is less than 0.1% of Spain’s population, to 1.9 million. These figures are based on official Spanish statistics cross-checked with data in the countries where Spaniards reside. The number of Spaniards living abroad is less than one-third the size of Spain’s foreign-born population of 6.4 million (13.2% of the total population). Immigrants in Spain are returning to their country of origin, particularly Latin Americans.

Spain’s crisis has also resulted in a long overdue crackdown on corruption. There are around 800 cases under investigation, most of them involving politicians and their business associates. Spain was ranked 40th out of 177 countries in the 2013 corruption perceptions ranking by the Berlin-based Transparency International, down from 30th place in 2012. Its score of 59 was six points lower. The nearer to 100, the cleaner the country. Spain was the second-biggest loser of points, and only topped by war-torn Syria. The country is in for a long haul.

William Chislett, the author of Spain: What Everyone Needs to Know, is a journalist who has lived in Madrid since 1986. He will be talking on his book at the Oxford Literary Festival on 29 March. He covered Spain’s transition to democracy (1975-78) for The Times of London and was later the Mexico correspondent for the Financial Times (1978-84). He writes about Spain for the Elcano Royal Institute, which has published three books of his on the country, and he has a weekly column in the online newspaper El Imparcial. He has previously written on Spanish unemployment and Gibraltar for the OUPblog.

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Image credits: (1) Spanish Falg By Iker Parriza. CC-BY-SA-3.0 via Wikimedia Commons (2) Mariano Rajoy By Gilad Rom. CC-BY-SA-3.0 via Wikimedia Commons

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Developing story…
Some unfortunate news this morning. An anonymous source at TheLayoff.com wrote about an all-hands meeting at DreamWorks yesterday to announce large-scale layoffs at the studio:

Bill Damaschke called in everyone today February 5th 2013, to announce that DreamWorks will lay off 20-25% of all Company Employees. This includes people from Glendale, India and PDI. Several meetings where arranged to announce the unfortunate news. The term ‘layoffs’ was substituted by ‘transitioning outside the company.’ Most people being let go will be from the show [Me and My Shadow] and Peabody, while people comming out from Turbo will not find many spots available in other productions such as Smekday. Additionally, everyone in production will be called in next week to be announced of his status and re-casting (another term for taking your job away) positions.

20-25% of the company’s employees could potentially mean layoffs in the hunreds. DreamWorks is currently the largest animation employer in Los Angeles, and as of January 2013, the studio employed over 825 artists represented by the Animation Guild.

The reason that so many people are being let go from Me and My Shadow is because the film was removed from the release schedule and pushed back into development, according to this report on Deadline.com. Further, Mr. Peabody and Sherman, which was scheduled for 2013 release, has been pushed back to 2014. The only films that DreamWorks will release this year are The Croods and Turbo.

If you’d like to submit news about the layoffs confidentially, you can contact me HERE.

And a note to would-be commenters: This is NOT the place to discuss the content of DreamWorks film. Keep the discussion focused on labor, or risk having your comment deleted.

Despite having grown up with the Internet at their fingertips (college students aren’t very good at using Google to find information they need. Ethnographic research shows they have trouble refining their results and they aren’t making the best... Read the rest of this post

By Julie MacLeavy In recent years, governments of both the right and left have been involved in debates over the best way to deliver public services. Whereas during the post-war period it was widely accepted that state provisioning of infrastructure, health, education and social services was the best way to ensure the well being of citizens, in the latter decades of the twentieth century the market was claimed to be a better way of delivering public goods and services because it was associated with competition, economic efficiency and consumer choice. Commitment to the market entailed a qualitative shift in welfare provision, whereby welfare was based less on a model in which the state counters the market and more on a model where the state serves the market.

By Sydney Beveridge, Social Explorer With the new school year approaching, Social Explorer is taking a closer look at education data today and over the years. The most recent available data (from the 2009 American Community Survey) reveal education levels and distinctions among groups, as well as the correlations between educational attainment, income and employment.

If you’ve been reading the headlines on just one news service in the past few days, you’ve probably come away shaking your head and wondering what the future holds for you and yours.

Here are some examples of things in the news.

• A legislator in California has proposed that the 13 counties south of Los Angeles be separated from the main body of the state and granted statehood, to become the country’s 51^st. The apparent reason behind the proposal was that the state is simply too big to govern efficiently and needed to be pruned, so to speak. The proposed new state would be called “South California.”
• The huge iceberg that calved from a Greenland ice shelf last August is now in Canadian waters—Labrador, to be exact. Curious how it went west rather than east as common thought would expect, isn’t it? It’s being monitored by satellite from a beacon planted on its surface. Its original size was one-quarter of its parent ice shelf. That’s many billions of gallons of fresh water floating around desalinating the North Atlantic as the berg melts.
• All of those extended unemployment benefits and past government tax cuts will expire in January, leaving millions without any available income.
• Immediate results of Minnesota’s government shutdown due to lack of finances are beginning to come to the front. The Minnesota Zoo will suffer greatly if not funded soon, for instance. 

These are just a few of the headlines from yesterday and today. Granted, the Minnesota Zoo’s problems don’t seriously affect any of those living outside that state. Its fate does point to those smaller and less visible victims of gross financial distress plaguing each of the states this year.

 Costs of everything have risen, populations have increased and revenues have fallen due to the housing crunch and employment downturns.

 With unemployment benefits being suspended in January, Minnesota may not be the only state taking a leave of absence in the coming months. Those states hardest hit may follow suite in alarming numbers. And your state may just be one in the flock.

Canada is the one having to deal with the iceberg and its potential for danger—for now, at least. As the berg dissipates in the Atlantic’s northern waters the cumulative effect of all that fresh water in the Northern Atlantic will affect everyone. It’s become a favored climatological theory that desalinization of those waters helps bring about the slowing of the oceanic conveyor belt and hastens the cooling of the Earth to the point of a little ICE AGE.

And the one headline that really should clue the populace as to how shaky things are, both socially and economically, centers on the California issue. For a state—any state—to propose a split of both territory and legislation to the point of putting the motion before the state government is a rare event. It puts the spotlight even more brightly on the condition of some states to conduct business and remain solvent.

For any state to suggest such a territorial split encourages others to consider their own situations and conditions. The social ramifications are staggering for the coming year. At the moment it’s not important if the motion passes. The idea has already fallen ou

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Fans finally understand (what Radiohead means by calling their latest release a “newspaper album.” It’s an album that has a companion newspaper! (Duh, we should have known.) The band is distributing “The Universal... Read the rest of this post

The Manwife Chronicles: As Pantless As I Want To Be by David Kaa

Review by: Chris Singer

About the author:

David brings over 746 days of experience in unemployment. There he has been responsible for sorting sock drawers, and making sure his kids don’t go to school with their shirts tucked into their underwear.

Prior to that, he did a bunch of stuff in marketing but, apparently, wasn’t very good at it. Because it always ended with him standing in the driveway, holding a cardboard box with that dead plant he’d been trying to resurrect the past six months.

David then went on to launch an initiative to perfect the afternoon nap, and write about his findings on TheManwifeChronicles.com.

David resides with his wife and two kids in Albuquerque, which looks something like a cross between the face of Mars and a cat’s litter box.

About the book:

Over six years ago I relocated from Boston to Albuquerque, which resembles something between the face of the moon and a cat’s litter box. I went from the intellectual center of the universe to a cleaner version of Mexico. It’s an understatement to say that things are a bit “different” from the Northeast. Actually, A LOT different. Darn close to ass backwards.

After a year of interviewing with every mom and pop laundry map, taco stand and fly by night company, I finally landed a job as Marketing Manager. However, things didn’t work out so well and after three and a half years it all came to an end. Now my worst nightmare has come true – unemployed in the desert without even a tree tall enough to hang myself from. That’s when I discovered the Internets to keep my sanity.

One day, in the course of a Twitter conversation, I posed a stupid question. Not surprisingly, I get a stupid answer, and it was funny. So every day I’d post a random question. Every day I would think up some stupid question, and repost some of the best answers. Questions ranged from “Uses for a throw blanket,” to “Things not to say in an interview,” and anything my unemployed mind could think up in between.

This is a collection of those posts… that I have made funnier. As well as given you the correct answers.

My take on the book:

I stayed up later than I should have last night thinking I would start this book and read a bit before going to sleep. Instead, I finished it all in one sitting while having a few too many laughing fits in the process — resulting in me getting banished to the couch to finish reading.

The author deserves a lot of credit. When you’ve been unemployed for 435 days and counting, it’s got to be hard to keep not just your sense of humor, but also find a way to keep your creative juices flowing as well.

The book is a success

Elvin Lim is Assistant Professor of Government at Wesleyan University and author of The Anti-intellectual Presidency, which draws on interviews with more than 40 presidential speechwriters to investigate this relentless qualitative decline, over the course of 200 years, in our presidents’ ability to communicate with the public. He also blogs at www.elvinlim.com. See Lim’s previous OUPblogs here.

We have 99 Days to go before Election Day. How different things look today compared to Obama’s first 100 days. In the last year and a half, the national mood has turned from hope to uncertainty.  The sluggish job market is the economic representation of this psychological state. Business are not expanding or hiring because they do not know what the future holds for them.

The White House, in acknowledging that it expects unemployment to remain at or around 9 percent, has conceded that voters will have to deal with this state of uncertainty even as they will be invited this Fall to make up their minds about whether their members of Congress deserve another term or if it is time for another reset. A certain act given an uncertain future. That’s the crux of the political game this year.

Come November, voters will be asking: do we stay the course and give the incumbents a little more time to bring back the test results, or do we throw the bums out and issue a new test? Republicans are chanting behind one ear saying, “no results means bad results”  and Democrats are chanting in the other, saying, “wait for it, the good times are coming.” With no good news or an objective litmus test in sight, the election outcomes will turn largely on the perception of despair versus hope.

The emerging Republican narrative for Election 2010 is that all this uncertainty in the market was generated by big brother. A massive health-care bill which has made it difficult for business to predict their labor costs for the years to come; a financial deregulation bill has given new powers to government but no indication as to how such powers will be deployed; and now, talk of legislation that would allow the Bush tax cuts to expire in 2010 is only going to spook business out even more. The Republican headline is: despair; and it is time to move on.

Unless they can point to some specific pork they have brought back to their constituents, Democrats will have to deal with this national mood of uncertainty that can easily be turned into despair. The question of whether or not Democrats will lose one or both (because zero is nearly out of the question) houses of Congress will turn on how successfully, once again, they would be able to massage the reality of uncertainty away from the fairly contiguous sentiment of despair into the more unrelated sentiment of hope.

Now that was a lot easier done in 2008. When patience had run dry with Iraq and George Bush, even Independents found it easy to be optimistic about an alternative path. Anything but the status quo was cause for hope in 2008. Not so in 2010, where there is neither clear light at the end of the economic tunnel nor a wreck in sight. It would take a much bigger leap of faith this year for the same people who voted Obama into office to continue to hope that his friends in Congress will deliver on his promises. Indeed, at this point, Republicans and most Independents are probably done with hoping. They’ve heard the boy cry “wolf” too many times.

The only people who will see hope when there is only uncertainty are the Democratic party faithful. If Democrats want to avert an electoral catastrophe, their best bet is to turn out the party faithful who will