Turkey Plans to Tap 40 Bln Lira ($6.6 Billion) from Central Bank Reserves

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

Turkey Plans to Tap 40 Bln Lira from Central Bank Reserves

Monday, 13 May, 2019 – 11:00
A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. (Reuters)
Asharq Al-Awsat
Turkey’s Treasury ministry is working on legislation to transfer the central bank’s 40 billion lira ($6.6 billion) in legal reserves to the government’s budget to shore it up, three economic officials told Reuters.

The budget is deeper in deficit than expected, said the sources, who requested anonymity because they were not authorized to speak publicly.

It was unclear when or whether the draft law would reach parliament, however, though one of the sources said it would happen “soon.”

Turkey’s economy tipped into recession last year after the lira fell sharply. The currency is under pressure again, in part due to worries over the central bank’s depleted foreign exchange reserves, which would help it defend against another crisis.

Separate to foreign exchange reserves, “legal reserves” are what the central bank sets aside from profits by law to be used in extraordinary circumstances. At end-2018, they stood at 27.6 billion lira, according to the bank’s balance sheet data.

A second source with knowledge of the matter said last year’s “legal reserves” combined with this year’s amounted to the 40-billion lira figure, which was cited by all three people who spoke to Reuters.

“The Turkish central bank has around 40 billion lira in legal reserves. The transfer of this amount to the 2019 central administration budget was seen as suitable. This step aims at improving and strengthening the budget,” the second source said.

It remained unclear how much of the reserves would ultimately be transferred and what, if any, new requirements would apply to the central bank.

Central Bank and Treasury ministry officials could not immediately be reached for comment.

The transfer would mark the second recent move by Ankara to tap the central bank’s funds to boost its budget. In January, the bank transferred some 37 billion lira in profits to the Treasury three months earlier than scheduled.

“I do not remember the use of legal reserves before. This method came up to stop further deterioration of the budget,” the first source said.

“There needs to be a legislation to transfer the central bank’s legal reserves. The new legislation is planned to be presented to the parliament soon.” the source said.

Turkey’s budget recorded a 36.2 billion lira deficit in the first quarter of 2019, according to Treasury and Finance Ministry data. The deficit is expected to reach 80.6 billion lira by year end.

VA Mortgage Lenders Hit With Federal Subpoenas

(THIS ARTICLE IS COURTESY OF POLITICO NEWS)

 

VA mortgage lenders hit with federal subpoenas

Federal investigators have issued subpoenas to several mortgage lenders that make loans to military veterans, seeking information on delinquencies and payments.

The investigation is being led by the Department of Veterans Affairs Office of Inspector General in cooperation with the U.S. attorney in the Eastern District of New York, according to four people with knowledge of the subpoenas.

At least eight lenders, and likely more, have been asked to turn over hundreds of files on VA home loans made between 2013 and 2017, according to two people with knowledge of the request.

The requests include questions about quality control and loan audits.

Some VA lenders have drawn scrutiny from regulators after they sold short-term, adjustable-rate mortgages to military homeowners as interest rates climbed. One VA program in particular — the Interest Rate Reduction Refinance Loan, or IRRRL — allows lenders to put existing VA borrowers into new loans without an appraisal or underwriting and was ripe for abuse.

Michael Nacincik, a spokesperson for the Department of Veterans Affairs OIG, and John Marzulli, a spokesperson for the U.S. attorney in Brooklyn, declined to comment. Both said they could neither confirm nor deny the existence of any investigation.

Jeffrey London, executive director of the VA’s Loan Guaranty Service, did not respond to requests for comment.

On Friday, Ginnie Mae said it was weighing whether to exclude some of those VA loans from its pooled securities in an effort to tackle a wave of rapid-fire mortgage refinancings that have left some military service members deeper in debt.

In a 14-page request for input, the government mortgage agency called the practice, known as churning, “unhealthy” for the agency.

The loan documents requested by investigators weren’t limited to IRRRLs, according to one person with knowledge of the subpoenas.

The VA subpoenas are landing as HUD is taking steps to rein in the prosecution of lenders who sell mortgages backed by the Federal Housing Administration.

Many of the nation’s largest banks, including JPMorgan Chase, stopped offering FHA loans after the government, under former President Barack Obama, used the False Claims Act to extract billions of dollars in settlements from dozens of big lenders.

FHA Commissioner Brian Montgomery, an appointee of President Donald Trump, has said those cases went too far and that the Trump administration is working with the DOJ to change how the False Claims Act is used against lenders.

Authority to investigate ‘financial service fee’ for Benz sales loan

(THIS ARTICLE IS COURTESY OF THE SHANGHAI CHINA NEWSPAPER ‘SHINE’)

 

Authority to investigate ‘financial service fee’ for Benz sales loan

An investigation has been launched after reports that Mercedes-Benz Automobile Finance Co illegally charged a customer a financial service fee, as claims surfaced in Shanghai of dealers also charging fees.

The China Banking and Insurance Regulatory Administration has asked its Beijing authority to initiate an inquiry.

A woman who bought a Mercedes-Benz she claims was defective from a dealer in Xi’an, Shaanxi Province, has now claimed she was cheated over a “financial service fee.”

The woman said she bought the Mercedes-Benz CLS300 from Xi’an Lizhixing Co for 660,000 yuan (US$98,445) but found the engine was leaking oil after she picked it up on March 27. She asked for a refund or a replacement but the dealer only agreed to change the engine.

The incident attracted wide attention after a video of the woman sitting on the bonnet of a Mercedes-Benz while weeping and arguing with salesmen at the 4S dealer store on April 9 was posted online.

The Xi’an market watchdog launched an investigation and asked the dealer to refund the buyer. The regulator also arranged a face-to-face negotiation between the two sides on Saturday, during which the buyer said she had intended to purchase the car outright.

However, the dealer persuaded her to use Mercedes-Benz finance as it is said to feature low interest.

The dealer also “forced” her to pay a “financial service fee” of 15,200 yuan to a personal account without providing a receipt, she claimed. The woman said she thought this was fraud as the dealer hadn’t provided any services.

Mercedes-Benz issued a statement on Sunday, saying it never asks for any financial service fee from dealers or customers.

A Shanghai consumer surnamed Wang who visited several Mercedes-Benz 4S shops to purchase an off-road vehicle said he was asked to take out a loan at the Songzhixing shop on Changshou Road.

The salesperson said the car was popular, and many 4S shops would not sell it if buyers refused to take a loan, Wang said. A salesperson would not get a commission without arranging a loan.

The same requirement was raised by the Minxing Automobile Service Co 4S shop, Wang said.

The Shanghai Consumer Council said yesterday they had received complaints about other automobile companies charging financial service fees.

Lawyers said car sales companies often use various excuses to charge fees to raise their profits, which infringes consumers’ rights to make choices.

A Shanghai consumer surnamed Huang who wanted to purchase a car at a 4S shop last year was told that he must buy a 13,800-yuan package including sticker and tachograph, and a three-year car insurance if he wanted to enjoy a discounted price of the car.

Huang asked several 4S shops the next day, and some had the same requirement.

Meanwhile, a woman Wang Wen who paid 340,000 yuan for a new Mercedes-Benz at the Zhongshengzhixing 4S shop on Jinyun Road in Jiading District found it was faulty.

She asked for a refund, but the 4S shop refused, and offered free exchange, free components and reduction of insurance fees as replacement.

Wang learnt that the car was an “auction car” sold to dealers at a discounted price, and had probably been used for display or trial runs.

A video of a woman sitting on a Mercedes-Benz and arguing with salesmen has gone viral.

12 dead in bank robbery attempts, police shootout in Brazil

(THIS ARTICLE IS COURTESY OF THE BOSTON HERALD)

 

12 dead in bank robbery attempts, police shootout in Brazil

Forensic officers load the body of a victim killed in an attempted bank robbery, at an entrance of a municipal hospital in Milagres, in Brazil’s state of Ceara, Friday, Dec. 7, 2018. Brazilian authorities say that at least 12 people have been killed in two attempted bank robberies in Milagres downtown area. (Antonio Rodrigues/Diario do Nordeste via AP)

PUBLISHED:  | UPDATED: 

By MARCELO SILVA DE SOUSA

RIO DE JANEIRO (AP) — At least 12 people, including two children, were killed Friday when police engaged in a shootout with bank robbers, according to authorities in northeastern Brazil.

The two attempted heists in the state of Ceara began around 2:30 a.m. in the downtown area of the city of Milagres, police said in a statement.

News portal G1 reported that the robbers blocked off a road into the downtown and took hostages as they began entering two banks on the same street. When police responded, a firefight ensued, leading to several deaths.

Lielson Macedo Landim, the mayor of Milagres, told G1 the hostages were executed by the criminal group and not killed by police fire. Macedo Landim said that two children, between 10 and 13 years old, were among the dead hostages.

His account could not be immediately verified, as police did not respond to numerous email and phone requests for more information about the shootout or how the hostages died.

Two suspects were apprehended, and several fled, according to the police statement. Authorities also seized three vehicles, several firearms and explosives.

Andre Costa, secretary of public security in Ceara, said that six of the dead were the attackers. Authorities have yet to release identities of the dead.

To search for the remaining would-be robbers, the city announced on its Facebook page that it was suspending public services and urged residents to remain in their homes.

Latin America’s largest nation routinely is the world leader in total annual homicides. Ceara is one of the country’s most violent states.

India: Country passing through rising intolerance says former President Pranab Mukherjee

(THIS ARTICLE IS COURTESY OF THE INDIAN NEWS AGENCY THE HINDUSTAN TIMES)

 

‘Country passing through rising intolerance,’ says former President Pranab Mukherjee

Pranab Mukherjee expressed concern over rising intolerance and violation of human rights, coupled with a widening gulf between the rich and poor with top one percent rich pocketing the lion’s share of country’s wealth.

INDIA Updated: Nov 24, 2018 13:42 IST

Indo Asian News Service
Indo Asian News Service
Indo Asian News Service
Former President Pranab Mukherjee addressed the National Conference on ‘Towards Peace, Harmony and Happiness: Transition to Transformation’, in New Delhi on Friday, November 23, 2018.(PTI)

Former President Pranab Mukherjee on Friday expressed concern over rising intolerance and violation of human rights, coupled with a widening gulf between the rich and poor with top one per cent rich pocketing the lion’s share of country’s wealth.

He was speaking at the inauguration of the two-day national conference on “Towards Peace, Harmony and Happiness: Transition to Transformation”, organised by Pranab Mukherjee Foundation along with the Centre for Research for Rural and Industrial Development (CRRID).

“The land which gave the world the concept of ‘Vasudhaiva Kutumbakam’ and the civilisational ethos of tolerance, acceptance and forgiveness, is now in news for rising levels of intolerance, manifestations of rage and infringement of human rights,” Mukherjee said.

“Peace and harmony prevails when a nation celebrates pluralism, practices tolerance and promotes goodwill among diverse communities and when we purge the toxin of hatred, envy, jealousy and aggression from our everyday lives,” he said.

He said “happiness is higher in countries that ensure their inhabitants basic amenities and resources, greater security, autonomy and freedom as well as sufficient educational opportunities and access to information. People are manifestly happier in countries where personal freedoms are guaranteed and democracy is secured.”

“Regardless of economic conditions, citizens are happy in a climate of peace,” Mukherjee said.

Referring to the statistics, he said, “If these statistics are anything to go by, we appear to be caught in a ‘rising economy, receding happiness’ syndrome. Our growth paradigm calls for an urgent look.”

Paying tributes to Guru Nanak Dev on his 549th birth anniversary, Mukherjee said given the times we are living in, it is important to recall his message of “peace and oneness”.

He also recalled what Chanakya said that “In the happiness of the people lies the happiness of the king” and the Rig Veda saying that we must live in one assembly, speak in one voice, with our minds in accord.

In a poser he asked whether the state was functioning in conformity with the preamble of the Constitution guaranteeing socio-economic and political justice, liberty of expression and thought and the equality of status and of opportunity, Mukherjee said that on the ranking of the happiness of common man, India ranks at 113, on the index of hunger, India is at 119. Similar is the situation on the rating of malnutrition, suicides, inequality and economic freedom.

Mukherjee said, “We need a State that inspires confidence among people in its ability to surmount challenges before us. We need the media and citizens, who even as they claim their rights, are equally committed to their responsibilities.”

Referring to the Parliament, Executive and the Judiciary, Mukherjee said in recent past these institutions have come under “severe stress” and their credibility is being questioned.

He said “There is a widespread cynicism and disillusionment with the governance and the functioning of these institutions.”

However, former President said that to “save democracy”, it was incumbent upon these institutions to “win back the trust of the people, without any delay.”

Former Union Minister and BJP veteran Murli Manohar Joshi in his valedictory address described as “disturbing” the merging scenarios where the “techno-economic system adopted to produce a democratic egalitarian world order has resulted in an exploitative, extremely unequal and fragmented world”.

“Mankind today is, therefore, unhappy, more turbulent, more violent, more fundamentalist and more alienated than ever before”, Joshi said.

The root cause of this “out of balance world” needs to be investigated, the veteran leader said.

First Published: Nov 24, 2018 09:49 IST

China to help Pakistan avert fiscal crisis: One Demon Bailing Out Another: For A Price

(THIS ARTICLE IS COURTESY OF AL-JAZEERA NEWS AGENCY)

 

China to help Pakistan avert fiscal crisis, ‘more talks needed’

Pakistan’s foreign reserves have dwindled, causing PM Khan to decry the financial situation he inherited.

The last time Pakistan received an IMF bailout was in 2013, when it received $6.6bn [Jason Lee/Reuters]
The last time Pakistan received an IMF bailout was in 2013, when it received $6.6bn [Jason Lee/Reuters]

China is willing to provide Pakistan with economic aid to help it deal with its deteriorating finances but more discussions are needed on the details, according to a top Chinese diplomat.

The comments on Saturday by Vice Foreign Minister Kong Xuanyou came after a meeting in Beijing between Chinese Premier Li Keqiang and new Pakistani Prime Minister Imran Khan.

Pakistan’s foreign reserves have plunged 42 percent since the start of the year and now stand at about eight billion dollars, or less than two months of import cover.

Late last month, Saudi Arabia pledged to give Pakistan a six billion dollars rescue package, but officials say it is not enough and the country still plans to seek a bailout from the IMF to avert a balance of payments crisis.

It would be Pakistan’s 13th rescue package from the multilateral lender since the late 1980s.

Speaking to reporters in Beijing’s Great Hall of the People following Khan’s talks with Li, Kong said his country would help.

“During the visit, the two sides have made it clear in principle that the Chinese government will provide necessary support and assistance to Pakistan in tiding over the current economic difficulties,” Kong said.

“As for specific measures to be taken, the relevant authorities of the two sides will have detailed discussions,” he added, without giving details.

Pakistan’s fiscal crisis partly comes from limited restraints on spending and a failure to institute genuine tax reform [Akhtar Soomro/Reuters]

Khan, whose party swept Pakistan’s July elections, told Chinese President Xi Jinping the previous day that he had inherited “a very difficult economic situation” at home.

Though China is Pakistan’s closest ally, Khan’s newly elected government has sought to re-think the two countries’ signature project, the $60bn China-Pakistan Economic Corridor (CPEC), which Beijing touts as the flagship infrastructure programme in its vast Belt and Road Initiative.

Pakistan has looked to amend CPEC to put greater emphasis on projects that focus on social development, rather than purely on infrastructure.

In his meeting with Li, Khan invited the Chinese premier to visit Pakistan and see for himself the difference the megaproject has made in the country.

“CPEC in 2013 was just an idea. Now, it is on the ground. And it has caught the imagination of the people of Pakistan,” he said.

“We feel that this a great opportunity for our country to progress, to attract investment. It gives us an opportunity to raise our standard of living, growth rate.”

For his part, Li praised the relationship, saying “China and Pakistan are all-weather partners.”

Commenting on CPEC, Kong said there were no plans to scale back the economic corridor, but he added that it would be altered somewhat to “tilt in favour of areas relating to people’s lives”.

Meanwhile, Khan’s office said in a statement that the two governments had signed a number of agreements and memoranda of understanding in the fields of agriculture, poverty reduction, forestry, law enforcement and socioeconomic development.

A history of the IMF

EMPIRE

A history of the IMF

SOURCE: AL JAZEERA AND NEWS AGENCIES

The Chinese century is well under way

(THIS ARTICLE IS COURTESY OF THE ECONOMIST)

 

 

The Chinese century is well under way

Many trends that appear global are in fact mostly Chinese

When scholars of international relations predict that the 2000s will be a “Chinese century”, they are not being premature. Although America remains the lone superpower, China has already replaced it as the driver of global change.

There is one economic metric on which China already ranks first. Measured at market exchange rates, China’s gdp is still 40% smaller than America’s. However, on a purchasing-power-parity (ppp) basis, which adjusts currencies so that a basket of goods and services is worth the same amount in different countries, the Chinese economy became the world’s largest in 2013. Although China is often grouped with other “emerging markets”, its performance is unique: its gdp per person at ppphas risen tenfold since 1990. In general, poorer economies grow faster than rich ones, because it is easier to “catch up” when starting from a low base. Yet in other countries that were as poor as China was in 1990, purchasing power has merely doubled.

China’s record has exerted a “gravitational pull” on the world’s economic output. The Economist has calculated a geographic centre of the global economy by taking an average of each country’s latitude and longitude, weighted by their gdp. At the height of America’s dominance, this point sat in the north Atlantic. But China has tugged it so far east that the global centre of economic gravity is now in Siberia.

Because China is so populous and is developing so quickly, it is responsible for a remarkable share of global change. Since the start of the financial crisis in 2008, for example, China has accounted for 45% of the gain in world gdp. In 1990 some 750m Chinese people lived in extreme poverty; today fewer than 10m do. That represents two-thirds of the world’s decline in poverty during that time. China is also responsible for half of the total increase in patent applications over the same period.

For all its talk of a “peaceful rise”, China has steadily beefed up its military investment—even as the rest of the world cut back after the end of the cold war. As a result, the People’s Liberation Army accounts for over 60% of the total increase in global defence spending since 1990. And all of this growth has come at a considerable cost to the environment: China is also the source of 55% of the increase in the world’s carbon emissions since 1990.

Sources: Economist Intelligence Unit; Global Carbon Project; Maddison Project Database; SIPRI; World Bank; World Intellectual Property Organisation; The Economist
Get the data

This article appeared in the Graphic detail section of the print edition under the headline “Well under way”

Theology Poem: Their Is Only One Thing We Own

Their Is Only One Thing We Own

 

We bought us a Hector of land about 3 yrs ago

It even had a three bedroom planted upon its face

We’re even blessed with two old sleds, but they ride

Could we all be more alive if we just owned more toys

Own the Business, but, do we really ever own the fame

 

There are many generations of those whom have owned this land

How many striped backs have worked this very place that I stand

Grass to timber, back to grass, then back to trees, again and again

Did a Red Man before me own it, if so, which people were they of

Did a Cave Man or maybe a Monkey or even a Chimp lay claim to it

 

Do the Trees think they own the Stars as well as the Ground below

The Skies hold the Rain but are the Skies beholding to the night breeze

How is it that I think to my self, yes I do own this, and I also own that

The Air owns the Man, the Man has never been in control of his Air

The Only Thing that We Own is Our Own Name, waiting in Line Up There

Lebanon Stresses Compliance With US Measures Against Hezbollah

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

Lebanon Stresses Compliance With US Measures Against Hezbollah

Friday, 28 September, 2018 – 09:45
Central Bank Governor Riad Salameh delivers a speech during the plenary session of the Annual Meetings of the International Monetary Fund and the World Bank Group in Tokyo. REUTERS/Yuriko Nakao
Beirut – Nazeer Rida
The new US draft-law on Hezbollah is moving to an advanced stage involving media funders, economic and social institutions linked to the group, in what seems to be “an attempt to isolate the supporters of the party, which is facing increased financial pressure,” according to experts.

The new draft-law imposes sanctions on the supporters of “Bayt al-Mal” and “Jihad Al-Bina”, which is involved in construction works, as well as the party’s media institutions, and includes advertisers who broadcast ads through Hezbollah’s channels.

While the bill seeks to “increase pressure on banks dealing with the group,” Central Bank Governor Riad Salameh said on Thursday in response to a question about his willingness to enforce the sanctions: “We, as the central bank, issued circulars a while ago, and there aren’t new notices.” He explained and these circulars make Lebanon comply with the laws of countries that have currency or banks dealings with it.

He pointed out in a radio interview that those circulars were sufficient enough whatever the new sanctions, adding that there was nothing new on this subject.

The US House of Representatives unanimously voted to pass a bill calling for new and harsh sanctions against Hezbollah. The new sanctions aim to limit the party’s ability to raise funds and recruit members, as well as increase pressure on the banks that deal with the group and the countries that support it, especially Iran. The sanctions also prohibit anyone who supports the party materially and in other means from entering the United States.

According to Dr. Sami Nader, Director of Levant Institute for Strategic Affairs (LISA), the new bill shows that the circle of sanctions is widening, since it started with Hezbollah’s officials, then reached the entities associated with the party, and today includes the supporters of the group’s institutions.

 

 

Workers with low levels of education still haven’t recovered from the Great Recession

(THIS ARTICLE IS COURTESY OF THE BROOKINGS BRIEF)

 

Workers with low levels of education still haven’t recovered from the Great Recession

Lauren Bauer and Jay Shambaugh

Over a decade after the start of the Great Recession, most Americans looking for a job can find one—the unemployment rate has fallen to around 3.9 percent. Also, following a decline in labor force participation that pre-dated but continued through the Great Recession, the share of Americans aged 25-54 in the labor market has increased in the last few years.

Despite these positive developments, the labor market is not perfect. Wage growth is still sluggish, with modest gains offset by inflation. Despite recent increases, the share of prime-age Americans in the labor force is still slightly below the pre-Recession level. Levels of unemployment vary widely across places and the population by key demographic characteristics.

In August of last year, The Hamilton Project calculated that the “jobs gap”—the difference between demographically adjusted national employment and its level before the recession—had closed for the country overall. That is, after adjusting for demographic shifts, the economy had added enough jobs to fill the hole left by the Great Recession.

But not every group of Americans has fully recovered from the Great Recession. In this piece, we provide an annual update of the employment rate gap, which is different from the jobs gap, by race/ethnicity and level of education.

CALCULATING EMPLOYMENT RATE GAPS 

Using the Current Population Survey from January 2007 to May 2018, we identify the “employment rate gap:” the difference between the demographically adjusted 2007 employment-to-population ratio and the actual employment-to-population ratio at a given point in time. It should be noted that this methodology differs from that used for The Hamilton Project’s previous monthly jobs gap series.1 Because we are exploring differential trends by demographic characteristics, we cannot use payroll employment from the Current Employment Statistics, as the “jobs gap” did.

RECOVERING FROM THE GREAT RECESSION

Figure 1 shows that, in the depths of the Great Recession, blacks and Hispanics faced much steeper job losses than their white counterparts. What this figure also shows, though, is that blacks and Hispanics recovered from the recession much more quickly, and ultimately closed their employment rate gap before non-Hispanic whites did. Once we account for demographic change, the employment-to-population ratio for blacks is almost two percentage points above pre-recession levels.

Demographically Adjusted Employment Rate Gap, by Race/Ethnicity

That said, we note that even with this higher rate of growth for blacks, they still experience lower levels of employment in absolute terms. In June 2018, 58.2 percent of African-Americans aged 16 and older were employed, compared to 60.6 percent of whites and 63.4 percent of Hispanics, and the unemployment rate for African-Americans was still nearly twice the rate it is for white Americans.

All three major ethnic groups have a demographically adjusted employment rate above the pre-crisis level, consistent with the demographically adjusted jobs gap having closed.

There are three reasons this may not signal an end to slack in the economy. First, as Americans live longer and the Social Security retirement age has increased, older Americans are working longer. The employment rate for 55-64 Americans is well above pre-recession levels while the prime age employment rate is still slightly below its November 2007 level. Second, as noted in Schanzenbach, Nunn, Bauer, and Breitwieser, the employment recovery from the 2001 recession was weak—arguably leaving labor market slack in 2007—such that recovering to the 2007 level may not mark the elimination of labor market weakness. Finally, given that more-educated Americans tend to have higher employment levels, one might have expected the increase in educational attainment from 2007 to 2018 to have raised the employment-to-population ratio. We therefore explore educational outcomes next.

Demographically Adjusted Employment Rate Gap, by Level of Education

Those with less education were disproportionately harmed by the Great Recession (figure 2).2 We see that graduate degree holders—and to a lesser extent bachelor’s degree holders—experienced smaller reductions in employment during the recession. For those with no postsecondary degree, the employment rate gap in 2011 was 5 percent or more, while it was just 2 percent for those with a bachelor’s degree.

Recovery from the bottom of the trough occurred earlier for those with more education. The first upturn among graduate degree holders was between 2009 and 2010, between 2010 and 2011 for those with a bachelor’s degree. By 2018, only those with bachelor’s or graduate degrees had returned to their demographically adjusted pre-recession employment rate.

The recession was particularly hard on those without a high school diploma. In 2010 and 2011, this group had an employment-to-population ratio that was fully six percentage points lower than in 2007. Those with a high school diploma and/or some college followed a similar trend through this period, with a slightly shallower trough during the worst of the recession than those who didn’t graduate from high school. In recent years, workers without a postsecondary degree have seen improving employment outcomes, though a gap remains.3

Not only have less-educated groups not recovered as fully from the recession, they started at lower levels of employment rates prior to the crisis such that at this point, amongst those aged 25 and higher, 72.5 percent of those with a bachelor’s degree work compared to just 55 percent of those with only a high school degree.

CONCLUSION

The Great Recession inflicted economic pain on many American families, but its burden was not equally distributed. Ultimately, the brunt of the Great Recession was borne by those without the protection of post secondary education. College raises average lifetime earnings, and it also helps insulate workers from economic downturns, providing economic security in the times they need it most. Finally, racial disparities have been less severe in recovery than in the worst years of the Great Recession, though differences in employment rates persist. For the American labor market to be truly healthy, it needs to work for all people—not just some.

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