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Posts Tagged ‘U.S. Economy’

Wisconsin Union Bill Passes State Assembly

MADISON, Wis. — Wisconsin lawmakers voted Thursday to strip nearly all collective bargaining rights from the state’s public workers, ending a heated standoff over labor rights and delivering a key victory to Republicans who have targeted unions in efforts to slash government spending nationwide.

The state’s Assembly passed Gov. Scott Walker’s explosive proposal 53-42 without any Democratic support and four no votes from the GOP. Protesters in the gallery erupted into screams of “Shame! Shame! Shame!” as Republican lawmakers filed out of the chamber and into the speaker’s office.

The state’s Senate used a procedural move to bypass missing Democrats and move the measure forward Wednesday night, meaning the plan that delivers one of the strongest blows to union power in years now requires only Walker’s signature to take effect.

He says he’ll sign the measure as quickly as possible, which could be as early as Thursday.

Walker’s plan has touched off a national debate over labor rights for public employees and its implementation would be a key victory for Republicans, many of whom have targeted unions amid efforts to slash government spending. Similar bargaining restrictions are making their way through Ohio’s Legislature and several other states are debating measures to curb union rights in smaller doses.

In Wisconsin, the proposal has drawn tens of thousands of protesters to the state Capitol for weeks of demonstrations and led 14 Senate Democrats to flee to Illinois to prevent that chamber from having enough members present to pass a plan containing spending provisions.

But a special committee of lawmakers from the Senate and Assembly voted Wednesday to take all spending measures out of the legislation and the full Senate approved it minutes later, setting up Thursday’s vote in the Assembly.

The measure forbids most government workers from collectively bargaining for wage increases beyond the rate of inflation unless approved by referendum. It also requires public workers to pay more toward their pensions and double their health insurance contribution, a combination equivalent to an 8 percent pay cut for the average worker.

Senate Passes Unemployment Extension Bill

Democrats on Tuesday broke Republican-led opposition to a bill that would extend unemployment benefits to 2.5 million jobless Americans, but the vote only hardened the political divide and almost assured that any further domestic aid before November will be all but impossible.

Though the Senate reached the 60 votes needed to end a GOP filibuster and force a final vote on the legislation, prospects for the next spending bill — enabling states to avert teacher layoffs — appeared doomed.

A vote that would send the unemployment benefits legislation to the House could come as soon as Wednesday. The House is expected to pass the bill and send it to President Obama for swift approval.

Credit Card Payment More Important Than House Payment?

In an unprecedented shift, for some consumers having a credit card in good standing appears to have taken priority over having a roof over one’s head, experts said.

While overall consumer debt rose unexpectedly in January, consumers continued to pay off their credit cards that month — a record 16th straight month of lower credit-card debt — with such debt dropping about $1.7 billion to $864.4 billion, according to the Federal Reserve on Friday.

But a small slice of those consumers are paying down credit cards to the detriment of their mortgage loan. The number of consumers delinquent on their mortgages but current on their credit cards rose to 6.6% in the third quarter of 2009 from 4.3% in the first quarter of 2008, according to a TransUnion study of 27 million anonymous consumer records pulled randomly from its database. Meanwhile, the portion of those who fell behind on credit-card payments but paid their mortgage dropped to 3.6% from 4.1%.

The trend is more common among consumers with the lowest credit scores. The percentage of consumers with low scores who paid credit cards rather than home loans shot up to 29% in the third quarter of 2009 from 19.1% in the fourth quarter of 2007, according to TransUnion. And in that low-credit-score group, consumers falling behind on credit cards but keeping pace with mortgage payments declined to 14.5% in 2009 from 18.1% in the first quarter of 2008.

Banks Prepare to Pay Record Bonuses to Employees

The bank bonus season, that annual rite of big money and bigger egos, begins in earnest this week, and it looks as if it will be one of the largest and most controversial blowouts the industry has ever seen.

Bank executives are grappling with a question that exasperates, even infuriates, many recession-weary Americans: Just how big should their paydays be? Despite calls for restraint from Washington and a chafed public, resurgent banks are preparing to pay out bonuses that rival those of the boom years. The haul, in cash and stock, will run into many billions of dollars.

Industry executives acknowledge that the numbers being tossed around — six-, seven- and even eight-figure sums for some chief executives and top producers — will probably stun the many Americans still hurting from the financial collapse and ensuing Great Recession.

Goldman Sachs is expected to pay its employees an average of about $595,000 apiece for 2009, one of the most profitable years in its 141-year history. Workers in the investment bank of JPMorgan Chase stand to collect about $463,000 on average.

Even some industry veterans warn that such paydays could further tarnish the financial industry’s sullied reputation. John S. Reed, a founder of Citigroup, said Wall Street would not fully regain the public’s trust until banks scaled back bonuses for good — something that, to many, seems a distant prospect.

“There is nothing I’ve seen that gives me the slightest feeling that these people have learned anything from the crisis,” Mr. Reed said. “They just don’t get it. They are off in a different world.”

Lost Decade For U.S. Economy and Workers

For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households. But since 2000, the story is starkly different.

The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation’s growth.

It was, according to a wide range of data, a lost decade for American workers. The decade began in a moment of triumphalism — there was a current of thought among economists in 1999 that recessions were a thing of the past. By the end, there were two, bookends to a debt-driven expansion that was neither robust nor sustainable.

There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 — and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.

“This was the first business cycle where a working-age household ended up worse at the end of it than the beginning, and this in spite of substantial growth in productivity, which should have been able to improve everyone’s well-being,” said Lawrence Mishel, president of the Economic Policy Institute.

Feds Shutdown Seven More Banks Yearly Total Now 140

Dec. 19 (Bloomberg) — Seven U.S. banks were seized by regulators, bringing this year’s total of failed lenders to 140 as financial companies are tested by the recession and the Federal Deposit Insurance Corp. anticipates more shutdowns.

Banks with $14.4 billion in total assets were closed yesterday in six U.S. states, the FDIC said in statements on its Web site. The agency is overseeing the dissolution of banks at the fastest pace in 17 years.

U.S. lenders are buckling under the weight of loans tied to commercial real estate, which is plummeting in value. Prices have dropped 43 percent from their peak in October 2007, Moody’s Investors Service said last month.