Turkey’s tremor strikes at poorest

Ankara, Turkey David Rosenberg / The Med – The 7.2-magnitude earthquake that struck eastern Turkey points up the great economic divide between the country’s thriving west and an east in long-term decline.

The Oct. 23 tremor and a series of aftershocks took an estimated 600 lives as of the latest count and left thousands more homeless, but the area at the epicenter – the city of Van with a population just over 1 million – is so bereft of industry and infrastructure that the cost of reconstruction will have little impact on the country’s economy.

Reconstruction efforts may give a boost to the economy but it might just as well deter development by serving as a reminder of how risky the area is, not only to natural disaster but to renewed conflict between militants and the Turkish army in the largely Kurdish region.

“It happened in a place there almost no industrial manufacturing, no major economic activity, mainly in rural areas so it won’t be significant in such a big economy,” Yarkin Cebeci, economist at JP Morgan Chase in Istanbul, told The Media Line. “It could facilitate some investments into the region. The capacity in the region has been to a large extent limited. Rebuilding will be done with new technology.”

The earthquake brought economic activity to a halt in the eastern province due to the destruction and closure of banks. Many lenders, both state-owned and private, have said they will postpone repayments owed by farmers and small business owners in the province.

A week later in Ercis, the town hit hardest by the quake, the Reuters news agency reported that some shops had finally reopened, electricity was back on line in some parts of town and one bank’s ATM was put into service. But concerned about aftershocks, barely any of the city’s nearly 100,000 residents have returned to their damaged homes.

EQECAT, a California-based catastrophe modeler, estimates that total damage caused by the quake is likely to be in the “low single-digit billions” of dollars, compared with Turkey’s nearly $1 trillion economy. That’s about one-tenth of the damage that was caused by the 7.6-magnitude 1999 Izmit earthquake in Turkey’s west that left nearly 20,000 dead.

In the intervening years, the gap between east and west has only grown as the economic boom Turley has enjoyed since 2002 has mainly benefited the metropolitan areas along the country’s Mediterranean coast. In spite of programs to develop the southeast, the region suffers net migration as people seek industrial jobs in the west, according to a report by Euromonitor International, a London-based market research firm.

Between 2005 and 2010, greater Istanbul’s population expanded by almost 38 percent to 12.1 million and is projected to reach 17.8 million by 2020, or more than a quarter of the country’s total, Euromonitor said. The value of goods and service produced by Istanbul and environs amounted to 28 percent of the country’s total, it said.

By comparison, the southeast is mired in poverty and unemployment. Nearly a third of the country’s poor – defined at 50 percent of median household disposable income – lived in the southeast, Euromonitor said. Its unemployment rate in 2010 was 12.4 percent, 0.5 percentage points higher than the national average. But that understates the extent of the problem because the proportion of economically active people in the southeast was low.

Households in Istanbul spent an average of $43,670 on consumer goods in 2010, versus $19,294 in southeast Anatolia. A nationwide minimum wage level has probably had the effect of lifting incomes, but may also be discouraging investment in the region, which can’t make up for its deficiencies by competing for lower-wage jobs.

“With poor infrastructure, less affluent consumers and yet an equally high minimum wage, the east in unable to compete with the west,” the report said.

Southeast Anatolia’s woes are likely to be compounded by a sharp slowdown in Turkey’s economy that was already on its way even before the earthquake struck. The International Monetary Fund is projecting gross domestic product growth will decelerate to 2.2 percent next year from 6.6 percent in 2011.

Last week, Turkey’s central bank struck another blow to economic growth by effectively ending its low-interest rate policy by reducing the availability of loans at the benchmark weekly rate of 5.75 percent and making banks more reliant on shorter-term rates of up to 12.5 percent.

“The latest moves by the central bank certainly trigger a slowdown in monetary lending and credit extension, which will have a negative impact on the country’s growth prospects,” said Sinan Ulgen, an expert on Turkish politics at the Carnegie Endowment for International Peace in Brussels, told The Media Line.

Lying at the intersection between the Arabian and Eurasian tectonic plates, Turkey is prone to earthquakes. Besides the 1999 shaker in the west, eastern Anatolia was struck in 1976 by a magnitude-7.3 earthquake that destroyed several villages and killed 3,000 to 5,000 people. In 1939, a magnitude-7.8 earthquake near Erzincan killed some 33,000 people. On a smaller scale, a magnitude-6.0 earthquake in March 2010 in the east took 51 lives.

Chris Rowan, a geologist specializing in tectonics at the University of Chicago, said in a comment for Scientific American that while all of Turkey faces a high risk of earthquakes, the Van region where last week’s tremor was felt has a more complicated geology than in the west. The “mish-mash of lots of smaller faults” makes it hard for scientists to say where the next will occur.

“The stress changes in the region due to this earthquake may interact in complicated and hard-to-predict ways with other faults in the area, and may lead to a heightened chance of further large earthquakes in the months and years ahead,” he said.

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Zimbabweans finding some more indigenous than others

Harare, Zimbabwe (IRIN) – Stallholders at the Mupedzanhamo market on the outskirts of Zimbabwe’s capital, Harare, thought they were immune to the 2008 Indigenisation and Economic Empowerment Act, which requires large businesses such as banks and mining companies to relinquish at least 51 percent of their shares or interests to indigenous Zimbabweans.

They were wrong. Bustling Mupedzanhamo, where shoppers can buy anything from hairpins to refrigerators, has for many years provided traders with a small income and an escape from the country’s economic woes, but recently groups of youths have descended on the market, brandishing letters they claim authorize them to eject any trader that they believe is opposed to the black empowerment program.

Miriam Raradza, 38, a stallholder and widow living in the populous nearby suburb of Mbare, was forced out of the market last month after they accused her of belonging to the opposition Movement for Democratic Change (MDC) led by Morgan Tsvangirai, the prime minister in a coalition government formed in early 2009.

”They accused me and other stall owners of belonging to the MDC, which they said is opposed to indigenisation, and said we should stop doing business at Mupedzanhamo. Hundreds of people who are known MDC supporters have been booted out since the beginning of this year,” Raradza told IRIN.

She said members of the Chipanganos – a gang with a reputation for violence, based in Mbare and thought to have links with President Robert Mugabe’s ZANU-PF party – had hijacked the stalls and, in some cases, also the goods that their victims were selling, she said.

”I have been robbed of the only source of income that I had for about eight years. The money that I realized from the sale of used clothes was enough to send my three children to boarding school and buy all basic items,” Raradza said.

Stanley Ziwakaya, 42, a teacher from the low-income Harare suburb of Highfields, whose wife runs a small informal convenience store, or tuckshop, described the gangs preying on the traders as ”vultures feeding on the flesh of the poor who are at the edge of death”.

Empowerment brigades

”The militia in this area call themselves the Empowerment Brigade and are notorious for visiting vending sites, where they demand bribes from the poor vendors. They claim to be representing the youths who need economic empowerment,” Ziwakaya told IRIN.

A member of the ”brigade”, who identified himself only as Peter, defended their actions. ”Empowerment does not mean just taking over the mines, banks and big factories. We cannot do that because we don’t have the money, so we will start with the sell-outs who are opposed to indigenisation.”

The MDC opposed the indigenisation act, passed on the eve of the violent 2008 elections, when ZANU-PF lost its parliamentary majority for the for the first time since independence from Britain in 1980, and Mugabe lost the first round of the presidential elections to Tsvangirai, who subsequently withdrew from the second round in protest over the political violence.

After pressure from the Southern African Development Community, a regional body, and the international community, a unity government was set up in 2009.

Tsvangirai has called the indigenisation program a ZANU-PF political campaign strategy meant to win votes, and during a recent visit to the US described it as a ”warped indigenisation policy [that] has eroded investor confidence”.

According to John Robertson, a Harare-based economic consultant, ”This policy is the direct opposite of empowerment. The number of Zimbabweans who are poor, and those who will become poorer, will increase. The net effect is far much more poverty and far less self-sufficiency.”

He said ZANU-PF militias were using the flag of indigenisation to take over the businesses of “already struggling people, and what is worrying is that the police seem to be blessing their actions because they are not being arrested”.

More job losses

Robertson told IRIN it was likely that the indigenisation policy would force many foreign-owned companies to close down, leading to further job losses, while people struggling to find jobs would fail to do so because investors would keep away.

He compared the indigenisation policy to the fast-track land reform program launched in 2000, which led to the forced eviction of more than 4,000 white commercial farmers, often leaving the farm workers homeless and without a livelihood.

”The land reform program seriously injured the economy, thrived on clear violations of human and property rights and led to widespread misery. This is what will happen with the indigenisation program,” he said.

Welshman Ncube, president of the smaller MDC faction and minister of industry and commerce in the coalition government, said there were problems with the implementation of the empowerment program and also a lack of transparency.

”There would always be cases of greed, abuse and personal gain in the implementation of a program like the indigenisation drive, but what is important is that everything that is done by the government is made transparent to avoid the problems. That way, we can also be able to bring the culprits to book,” Ncube told IRIN.

There have been signs of economic recovery since the formation of the unity government in 2009, but economic activities are often subject to political decisions.

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– Provided by Integrated Regional Information Networks.

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Initial jobless claims stuck above 400,000 mark

Washington, DC, United States (AHN) – New jobless claims remained above the 400,000 mark for the week ending Oct. 8, according to the U.S. Department of Labor.

However, the 404,000 initial unemployment compensation claims filed for the week was slightly down, representing a drop of 1,000 claims from the previous week’s total of 405,000.

The less volatile 4-week moving average was 408,000, down by 7,000 from the previous week’s revised average of 415,000.

First-time jobless claims figures have remained stubbornly above the 400,000 mark since April, signaling that the nation’s jobs sector is not yet in a recovery, despite the fact that the recession officially ended in 2009 when a recovery began in the financial services sector of the economy.

Nevertheless, economists say that with the Main Street and jobs sectors of the economy not yet in recovery, some analysts recently began forecasting a double-dip recession.

The nation’s official unemployment rate remains at 9.1 percent.

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VP Biden promotes American Jobs Act with Alexandria police chief

Washington, D.C., United States (AHN) – There was laughter and goodwill as Vice President Joe Biden on Thursday addressed a select audience of law enforcement officials in Alexandria in Virginia saying, “We need better roads, we need better bridges, we need safer streets.”

Sending a message to Congress to pass the $450-billion American Jobs Act Biden said, “We’ve got to kick start this economy that’s stalled.”

Speaking at the spacious new headquarters of the Alexandria Police Department in Alexandria, Va., Vice President Biden announced that the hosting organization had won funds for the hiring of four new officers with the almost $859,000 it received from the more than $243 million in grant funds.

Keeping the focus on American Jobs Act, Biden said, “We need to be in a position where our kids are in classrooms where there’s enough qualified teachers, where they are in fact in classes where they are safe.”

“Look, we should be doing all of this stuff even if we were growing by 8%, even if there was a 3% unemployment rate in America,” Biden. The recent unemployment rate continue to hover above 9% although it was around 7% when President Barack Obama took office in 2008.

In November 2010 the unemployment rate hit 9.8 percent for the third time since Obama signed the first stimulus bill into law. In August 2011 the unemployment rate was 9.1 percent.

Education and jobs for teachers was another major thrust of Biden speech as he talked about getting hundreds of thousands of teachers back to work.

“If anyone is gonna define what the middle class is — which is what we say this is all about — it’s a school teacher, a firefighter, a law enforcement officer. That is the definition of middle class,” Biden stressed.

Alexandria Police Chief Earl Cook thanked the Vice President for the federal grant of $900,000 but noted that he was still about 30 officers short of where he’d like to be as the department continued under pressure for nearly three years with budget cuts.

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LA Times joining new mass layoffs list with 66 additional employees cut

Los Angeles, CA, United States (AHN) – The Los Angeles Times has announced plans to cut at least 66 employees by the end of the third quarter of the year.

It is particularly bad news for the affected employees because the nation’s unemployment rate stands at 9.1 percent, and the economy did not create any jobs in August.

Company officials announced the first 30 of the 66 cuts just before Labor Day. At that point, the cuts only affected operations.

Now, the announced cuts affect circulation, marketing, advertising and editorial as well.

Company officials say most of the employees losing their jobs are eligible for severance pay.

Here is a breakdown of the job losses at the LA Times: 16 editorial staffers, 16 employees in packaging and distribution, 10 in the pressroom, 14 people in circulation, five workers in paper handling, two employees in marketing and two in advertising and one employee at the paper’s magazine.

The layoffs at the Los Angeles paper are only the most recent in the newspaper industry.

On Monday, the Salt Lake Tribune announced it had cut five employees from the newsroom because of a drop in advertising revenue. Last week, the St. Petersburg Times announced a 5 percent pay cut for employees, and it announced changes to the paper’s severance package in anticipation of new layoffs.

However, the woes extend well beyond the print media sector.

Yesterday, Bank of America announced plans to lay off 30,000 employees and industry insiders said they expected more U.S. banks to follow suit soon.

Other industries have recently announced mass layoffs as well.

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UK unemployment rate rises by 80,000

London, United Kingdom (AHN) – Unemployment rose in the United Kingdom by 80,000 to 2.51 million during the three months ending in July, according to the Office for National Statistics (ONS).

That represents the largest jobless increase in almost two years and brought the official unemployment rate to 7.9 percent, the ONS said.

Unemployment for youth also rose and now stands at 973,000.

Government officials said they are determined to take steps to get the economy moving and help create jobs in the private sector. A growth in jobs there would offset cuts to public-sector jobs as the government enacts budget cuts.

In the meantime, the number of people collecting unemployment compensation insurance in August also rose. The number of jobless workers claiming the Jobseeker’s Allowance increased by 20,300 to 1.58 million people.

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Labor pains in Saudi Arabia as hiring deadline nears

Jeddah, Saudi Arabia Rob L. Wagner – Jaad Ameen Jaad is used to deadline pressure. He builds hotels and operates his family-owned Crom Hotels & Resorts International in the highly competitive tourism industry. However, next month Jaad faces a different kind of deadline under the Nitaqat nationalization program that may force him to employ Saudis without qualifications.

In May, the Ministry of Labor launched Nitaqat — literally meaning “layers” or “ranges” in classical Arabic — to do what Saudization could not: increase the number of Saudis in the workforce.

The Saudization program required an across-the-board hiring system to increase employment of locals to 30 percent, but never exceeded a third of its goal. Nitaqat features a more nuanced system. There are 164 different quotas based on the performance of individual businesses that must employ a certain percentage of Saudis according to the size of their workforce and the type of services. On Sept. 10, Saudi companies must demonstrate they have met the quotas.

Jaad says the deadline for compliance is unrealistic.

“The time given to us by the Ministry of Labor is too short for us to organize our needs,” he told The Media Line. “It takes a long time to transfer iqamas [work permits] or even bring in new employees from abroad, especially during Ramadan. What’s worse is that the ministry is considering Ramadan as part of the time allocated for us to finish this business. They work only 24 days in the month and their working hours are very short.”

Nitaqat uses the carrot-and-stick approach. It rewards companies that meet the deadline to employ Saudis and punishes those that do not.

Each business is assigned to a category of red, yellow, green or premium code based on the number of Saudis on the payroll. Red and yellow companies are those that don’t have enough Saudi employees. These companies risk losing Labor Ministry services, such as visas transfers or extensions. Yellow companies can apply for new expatriate visas and visa transfers starting Sept. 10, with the caveat that visa renewals can continue only for workers who have been on the job less than six years as of 2011.

Red companies are hit the hardest. They stand to lose all their visa and work permit privileges if they don’t demonstrate recruitment of Saudis. But Nitaqat permits red companies a grace period until Nov. 27 to renew work permits for expats.

Crom Hotels is better off than many private companies. Crom is in the green category because it meets the Nitaqat requirement that between 18 percent and 39 percent of its workforce is Saudi. As a green company, Crom can hire expatriates, obtain new visas or transfer them, and even raid red and yellow businesses to recruit new workers.

While that is all well and good, Jaad says he is under pressure to hire Saudis who are either not qualified or fail to finish their contract.

“We find ourselves sometimes forced to hire Saudis who aren’t qualified,” Jaad says, noting that some Saudis simply walk off the job without finishing their contract. “The Ministry of Labor should implement laws to force Saudis to finish their contracts with us without carelessness.”

Saudi Arabia is notorious for its reliance on foreign workers, which number about 8 million in a country with a total population of 26 million people. The sudden influx of massive oil revenues beginning in the 1970s resulted in a generation of men who preferred office work and disdained manual labor. Millions of foreign workers picked up the slack, but they also sent billions of Saudi riyals to their home countries instead of spending money in the kingdom.

Beginning in the 1990s, the Saudi government embarked on its ambitious Saudization program to wean the kingdom from its reliance on foreign labor. Saudis generally regard Saudization as a failure, as companies have long grown comfortable with expatriate labor and view Saudis as lacking a work ethic.

The work ethic issue rankles Labor Minister Adel Fakeih, who lamented recently that “negative stereotypes” hinder Saudi employment. Fakeih even urged employers to hire Saudis without qualifications and give them on-the-job training to bring them up to speed.

Usamah Al-Kurdi, a member of the Shoura Council, Saudi Arabia’s quasi-legislative body, told The Media Line that the work ethic issue is not grounded in fact.

“Frankly, I have had my own experiences with Saudization as far back as 20 years ago,” Al-Kurdi says. “And it took a lot of effort, but it’s not an impossible job and the professionalism was quite satisfactory.”

Al-Kurdi says negative stereotypes persist because private foreign-owned companies rely on a deep expatriate labor pool. “Most companies don’t have their own experiences [with Saudis] and worry about Saudis’ work ethic.”

Employing unqualified Saudis remained an issue up until about 2010 when the labor market began to change. King Abdullah’s government scholarship program implemented in 2007 has brought university-educated men and women to the labor market. This flood of graduates promises to reduce the overall 9 percent Saudi unemployment rate and the 28 percent unemployment rate among women.

But the lack of a recruitment infrastructure is the bigger obstacle to employment, Al-Kurdi says.

“There is a recruitment problem because there aren’t sufficient offices and statistics that will satisfy the private sector,” Al-Kurdi says. “The unemployment scene has changed dramatically. There have been two important changes. One is the number of university and diploma graduates coming into the market, and two, are the [government] arrangements to recruit women.”

He adds that, “the combination of these two changes will help make private companies satisfy the quota.” Yet recruiting these new graduates will be cumbersome without a comprehensive recruitment program, he says.

Ali Dakkak, assistant professor of business management at Prince Sultan College and a business consultant, says the lack of a minimum wage law also hinders Saudi recruitment. Simply, foreign-owned businesses don’t want to pay the same salaries to Saudis as they do expatriates. Starting salaries for Saudis are as low as SR4,000 ($1,066) per month, compared with some expats who receive SR8,000 ($2,133) a month.

“The salaries for Saudis are low and there are long working hours,” Dakkak told The Media Line. “Saudis can’t compete with expats for higher salaries. So far these companies aren’t willing to pay Saudis the same wage as expats.”

One area doing well is the banking sector, with most financial institutions in the green category, although the vast majority of Saudis employed in banking fill lower management positions.

But Al-Kurdi notes, “The percentage of Saudis in lower management is high. As you get more educated and more experienced, it is easier to fill senior positions. It’s only natural that Saudis fill the lower and mid-management positions and climb the ladder.”

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SSI Program For ADHD, Other Disabled Kids Under Scrutiny

Washington, DC, United States (KaiserHealth) – To those who believe the federal Supplemental Security Income program for severely disabled children is a lifesaver and not a boondoggle, Hulston Poe is a great example.

After four-year-old Hulston Poe was diagnosed with severe ADHD last October, case workers said there wasn’t much they could do for him. But when doctors recommended his mother enroll him in the SSI program this year, everything changed.

The four-year-old was diagnosed with severe ADHD last October, after more than a year of violent temper tantrums, and kicked out of preschool. Case workers said there wasn’t much they could do for him. “We were at a standstill,” said his mother, Suzanne Poe, who was scraping by as a single parent of two in Des Moines, Iowa.

But when doctors recommended she enroll her son in the SSI program this year, everything changed. A monthly check of $674 helps pay for Hulston’s day care, a private tutor and medicines. Perhaps most importantly, the program made Hulston newly eligible for Medicaid, the joint state-federal health insurance program for the poor. He gained access to the doctors he needed.

“I can see a light in his eyes again,” Poe says with relief. “He just looks so much happier.”

The SSI program for children is rapidly expanding, with the biggest increase among kids with mental, behavioral and learning disorders, including ADHD, speech delays, autism, and bipolar disorder. But as it pulls in children like Hulston, the program is sparking criticism in Congress. The Boston Globe fueled a lot of the backlash with a series last December that termed the children’s SSI program “The Other Welfare” and followed several families whose children’s eligibility for the program was questionable. Several of the families, the articles reported, believed that they had to medicate their children with psychotropic drugs in order to qualify for the benefit.

The Globe series spurred Rep. Geoff Davis, R-Ky., Rep. Richard E. Neal, D-Mass., and Sen. Scott Brown, R-Mass., to request an investigation by the Government Accountability Office, which is expected to be released by the end of the year.

In a January letter to the GAO, the three lawmakers expressed concern about “recent reports in the media and elsewhere” that “have identified potentially alarming practices … [that raise] numerous concerns, including the potential for fraud and abuse in the program.”

Republicans in Congress are not waiting for the results of the GAO study; they have twice proposed limiting SSI benefits. The House budget resolution passed earlier this year by Republicans, for example, proposed that the government could save $1.4 billion over 10 years by reducing incentives in the SSI program “for parents to place their children on medication solely to receive SSI benefits.” The resolution didn’t mention ADHD, but it was specifically cited in a separate budget proposal by Rep. Eric Cantor, R-Va., during the debt ceiling debate.

Advocates for children and people with mental illness have rallied against the potential cuts. Sixteen of the largest advocacy groups, including the Bazelon Center for Mental Health Law, the American Psychiatric Association, the American Academy of Pediatrics and Children and Adults with Attention Deficit/Hyperactivity Disorder, have formed a coalition to protect the SSI program for kids and launched a major campaign to lobby Congress.

SSI currently provides cash assistance and Medicaid to the families of 1.2 million low-income kids who struggle from severe disabilities, at a cost of $10 billion a year. Since 2002, the program has grown by nearly 40 percent.

“Cutting the SSI program could have disastrous consequences for families, many of which already are struggling well below the poverty line,” says Rebecca Vallas, a lawyer at Community Legal Services, a Philadelphia nonprofit that also is part of the coalition. She says the increase in the SSI program can be explained by a national increase in child poverty and increased access to health care for kids, who get diagnosed earlier and more frequently with disabilities that might otherwise be missed.

She also says some children who were once characterized as mentally retarded may now be diagnosed as having autism or another mental disability. Overall, the percentage of kids on the program with any form of mental disability, including retardation, has remained largely stable since the early’90s, according to Vallas. “I think a lot of the skepticism about the children’s SSI program really is just thinly veiled skepticism about the legitimacy of mental health disorders,” she says.

But Richard Burkhauser, a professor at Cornell University who recently wrote a book about disability benefits, says the increase in kids on SSI, especially those with disorders that can be difficult to diagnose, is troubling.

He points to a long history of expanding the benefits. “The issue is: Has there been a stupendous increase in the number of kids out there with other mental conditions, or is the SSI kids program increasingly being used as a more general welfare program to help poor kids?”

When the program began in’74, the majority of recipients had disabilities such as Down syndrome, cerebral palsy, blindness and mental retardation. In’90, a class action lawsuit that reached the Supreme Court led to a fundamental change in the way SSA made eligibility determinations for children and expanded the number of kids who were eligible for the program.

In addition, Burkhauser argues, a major overall of the federal welfare program in’96 led some low-income families to apply for SSI instead. SSI is an attractive option because, relative to welfare, it provides a higher benefit level and has no work requirements or time limits.

States also acquired a financial incentive to shift both low-income kids and adults off welfare benefits and onto SSI, which is fully funded by the federal government. States now have staff members whose job is to evaluate whether welfare recipients can be switched over to SSI instead.

Among all poor children, the percent on SSI has quadrupled over the past 30 years. Much of the growth has come from kids like Hulston with ADHD, or what’s called “other mental disorders,” who now make up more than half of recipients.

Burkhauser says that while he’s not against providing more assistance for needy families, SSI is the wrong way to do it because it creates perverse incentives for families. If the child’s disability improves or the family finds other ways to climb out of poverty, they lose their SSI benefits. Two-thirds of kids on SSI stay on the program as adults, and “never enter the workforce,” he says.

While the program is easy to target for cuts, “it’s easier said than done,” says Mark Duggan, a professor of business and public policy at the Wharton School at the University of Pennsylvania. He compares it to lawmakers seeking to cut down on waste, fraud and abuse in health care.

David Wittenburg, a senior researcher at Mathematica Policy Research, says cuts could prove expensive in the long term. “Given that SSI is the program of last resort and many of these youth live in families that were on other programs that have been cut back, a key question is where would they go now?” he asks. What’s really needed, he continues, is a “fundamental rethinking of how cash supports are provided to youth with disabilities,” so that there are incentives to promote their long-term employment as adults.

President Obama’s 2012 budget proposed another approach: increase funding for the SSA to do more regular medical reviews that evaluate whether SSI recipients are still eligible for the benefits. If the reviews find people receiving benefits who are no longer disabled, they can result in significant savings.

Suzanne Poe feels so strongly about SSI that she recently went to Capitol Hill to testify and lobby her representatives to preserve the program. She says that the SSI program is holding her family together. After Hulston was kicked out of preschool, she had to drop two classes from college to care for him. “I can’t even express to you how much it was disrupting my household.”

She says she’d be thrilled if Hulston’s ADHD improved enough to get off of the SSI program.

“The reason I applied for disability was not because that’s what I want to live on for the rest of my life or my kid’s life. I want to achieve things in life. I want my family to be self-sufficient,” she explains. “Right now that isn’t happening.”

– Provided by Kaiser Health News.

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U.K. admits weak retail sales in July

London, United Kingdom (AHN) – Retail sales, excluding gasoline, grew weakly in the United Kingdom during July rising only 0.2 percent compared to the 0.8 percent growth rate in June, according to Office for National Statistics (ONS).

A drop in the sales of clothing and household goods offset the increase in food sales.

Sales of clothing, shoes and household goods dropped by 0.3 percent each, which offsets the 0.7 percent growth in food store sales.

Economists blame the decline in retail sales on inflation in prices coupled with job losses and stagnant wages for those with jobs.

Sales were also down by 0.2 percent in July compared to the same month a year earlier.

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Australian unemployment rate rises to 5.1% for July

Adelaide, Australia (AHN) – The unemployment rate in Australia unexpectedly increased in July to 5.1 percent, according to a report by the Australian Bureau of Statistics (ABS).

Australia’s jobless rate rose by 0.1 percentage point from June’s 4.9 percent.

That puts the jobless rate at its highest level since last November. Analysts say it shows that the nation’s economy — powered largely by the mining sector — is slowing.

The increased unemployment rate comes on the heels of stalled retail sales and weak consumer confidence. Since the employment rate is a lagging indicator, economists expect unemployment to rise further.

News of the unemployment figures caused the Australian dollar to slump briefly in currency pairs trading against the U.S. dollars before recovering.

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Texas accounts for half of U.S. payroll gains in past 24 months

Dallas, TX, United States (AHN) – In the past 24 months from June 2009 to June 2011, Texas accounted for half of the 524,000 payroll gains of the U.S., data from the Federal Reserve Bank of Dallas and the Bureau of Labor Statistics said.

Payrolls in the state went up 2.9 percent since the recession ended two years ago, which is third behind North Dakota and Alaska, but far larger than the national average growth rate of 0.4 percent. Texas has an 8.2 percent unemployment rate, which is better than the national average of 9.2 percent.

Economists explained the faster pace of jobs generation in the Lone Star state to high energy prices which resulted in more oil drilling activities, growing exports and the state’s conservative banking sector which protected Texas from a major housing crash.

According to the BLS, regional and state unemployment rates hardly changed last month, with 28 states and the District of Columbia registering hikes in unemployment rate. For June, Texas logged a 32,000 increase in its payroll, which is the largest among the states.

It was followed by California (28,000), Michigan (18,000) and Minnesota (13,200).

The biggest losers were Tennessee (18,900), Missouri (15,700), Virginia (14,600) and North Carolina (9,500).

Texas’ job creation performance works in favor of Gov. Rick Perry, who has indicated he may run for the Republication nomination for the presidency. Observers said that if he aims for higher office, Perry would likely cite his record in creating jobs in the state when other states are suffering from high unemployment rates as one of his achievements.

State officials pointed out that Texas’ higher-than-expected payroll gains is because of a pro-business climate that Perry created which drew companies from other states where the cost of doing business is much higher.

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Bombardier may cut over 1,500 jobs over loss of train contract

London, England, United Kingdom (AHN) – Bombardier said on Tuesday that it may shed 1,500 jobs at its Derby train factory in Britain after the firm lost a $4.5-billion Thameslink government contract to Siemens of Germany.

Britain’s Department for Transport awarded the contract to manufacture 1,000 train carriages for London’s Thameslink rail route to the German firm. The decision led Bomardier to place its U.K. operations under review.

In May, Bombardier warned the British government that 1,200 of its 3,000 workforce at its Derby train factory are at risk. The loss of contract would put in peril the jobs of up to 350 more Bombardier employees in engineering jobs.

John Pearson, head of Bombardier’s works committee, said he hopes the threat of job losses would force the department to review its decision to award the contract to Siemens.

A long-time employee of Bombardier pointed out that the company’s Derby plant is the last train maker in Britain. If the firm closes shop, the skills would die with the remaining workers and Britain would have to train future train builders abroad to acquire the skills.

However, a reversal of the decision by the department may no longer be possible because European Union procurement rules specify that EU states must not consider a company’s location or nationality to influence the award of contracts.

The loss of the contract contrasts with the healthier business climate for Bombardier’s jet manufacturing. Last month, Bombardier got an order at the Paris Air Show for 10 CSeries aircraft from an unnamed European company. The contract was worth $628 million.

It is Bombardier’s eighth overall order. The firm got in the same air show 10 aircraft orders from Korean Air Lines , on top of 10 options and 10 purchase rights from the Asian air carrier.

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Small business confidence slips again

Washington, DC, United States (AHN) – Small business pessimism increased in June, according to the National Federation of Independent Business’s small-business optimism index.

The NFIB index slipped 0.1 point to 90.8 last month, which left it firmly in recession territory, the organization said.

Moreover, it was the fourth consecutive month that confidence among small businesses has fallen.

Although the earnings trend sub index remained unchanged at -24 percent in June, the sub index of expected business conditions in the next six months dropped by 6 percentage points to -11 percent. In addition, the expected higher real sales index fell 3 points to 0 percent.

The brighter spot was the hiring sub index, which rose by 4 points to 3 percent and the sub index covering hard-to-fill job openings rose by 3 points to 15 percent. That means the unemployment rate should drop back below 9 percent within the next few months, the NFIB said.

If that index is correct, that would be good news for the unemployed after the bad news that the jobless rate had increased from 9.1 percent to 9.2 percent in June.

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Federal Reserve forecasts weaker growth for the U.S. in 2011, 2012

Washington, D.C., United States (AHN) – The Federal Reserve reduced its forecast for the U.S. economy for 2011 and 2012 on Wednesday. For this year, the Fed estimates that the country’s economy would expand from 2.7 to 2.9 percent only.

It is lower than the U.S. central bank’s April forecast of a 3.1 to 3.3 percent rise in gross domestic product.

Fed Chairman Ben Bernanke attributed the lower outlook for the American economy to the impact of higher prices on consumer spending, weakness in the financial sector and the ongoing decline of the housing market.

But Bernanke added there is no precise explanation for the persistence of slower pace of growth, and admitted some of the head winds that hit the economy apparently are stronger or more persistent than officials thought.

Bernanke also warned that unemployment rate would continue to remain high until the end of 2011.

The Fed, in effect, took back its view that the economic slowdown was only temporary. However, despite the lower economic forecasts, the Fed said it will end by June 30, as scheduled, a program of purchasing large amounts of Treasury bonds and did not indicate if it will pursue new action.

Because of the weaker outlook, the central bank’s Federal Open Market Committee, at its 22nd meeting, voted unanimously to keep key lending rates between 0 to 0.25 percent. The rate has been at that level since December 2008 in a bid to boost the country’s GDP.

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Existing home sales fall 3.8% in May to lowest rate in six months

Washington, D.C., United States (AHN) – Sales of existing homes in May fell by 3.8 percent from a month earlier to a seasonally adjusted annual rate of 4.81 million, according to a report by the National Association of Realtors.

That put existing home sales at its slowest rate in the last six months, since November.

Moreover, sales were down by more than 15 percent when compared to May 2010.

With a 9.3-month supply of housing units on the market, prices continue to drop and the continued high unemployment rate is being blamed for the shortage of buyers.

However, NAR’s chief economist, Lawrence Yun, also blamed temporary factors.

“Spiking gasoline prices along with widespread severe weather hurt house shopping in April, leading to soft figures for actual closings in May,” he said. “Current housing market activity indicates a very slow pace of broader economic activity, but recent reversals in oil prices are likely to mitigate the impact going forward. The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.”

He also blamed financing problems for the slow-down in existing housing sales.

“Even with recent economic softness, this is a disappointing performance with home sales being held back by overly restrictive loan underwriting standards,” Yun said. “There’s been a pendulum swing from very loose standards which led to the housing boom to unnecessarily restrictive practices as an overreaction to the housing correction – this overreaction is clearly holding back the recovery.”

Although housing prices continue to drop in some areas, especially those with high numbers of foreclosures in the pipeline, in areas with good employment conditions housing prices are stable or increasing. Areas with those conditions included Alaska, North Dakota, Washington, D.C. and some areas in Texas.

Overall, the national median price for all existing housing types was $166,500 in May, down 4.6 percent from May 2010, while distressed homes were typically selling at discounts of around 20 percent. Existing housing sales for distressed properties represented about 31 percent of sales in May, a decrease of 37 percent in April, NAR said.

The data for existing home sales counts single-family, townhomes, condominiums and co-ops.

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