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Are you better off than you were four years ago? NO!

Upstate New Yorkers answered with a resounding "No" when they were polled earlier this month on whether they think they're financially better off than they were four years ago.

More than half of the upstate residents - 51 percent to be precise - polled by the Siena Research Institute said they were not better off financially than they were in October 2008. Just 34 percent - a little more than a third - said they were better off, while 14 percent said they were in a similar financial condition.

The poll from the Albany researcher, with financial backing from First Niagara Bank, also found that wealthier people generally are feeling better about their financial condition than less affluent New Yorkers.

While almost half (48 percent) of all New Yorkers earning more than $100,000 said they were better off now than they were four years ago, a little more than a third (36 percent) of those earning $50,000 to $100,000 felt they were in a better financial place, and only three of every 10 residents earning less than $50,000 believed they were better off.

More than a third of the Upstate residents surveyed (35 percent) said they'd taken a second job or sought more overtime to help make ends meet. And 47 percent said they were having a harder time managing their monthly expenses with their monthly income.

"New Yorkers continue to climb a steep financial hill," said Don Levy, the Siena Research Institute's director. "Few say that their load has lightened since this time in 2008."

Fewer than half of the upstate residents surveyed (46 percent) said they were confident that they'd be able to maintain their current standard of living after they'd retired. That's in stark contrast to New York City, where almost three of every five people surveyed said they were confident they'd be able to retire comfortably.

- David Robinson

 

 

Canadians welcome here!

Canadian1With the loonie above par, Western New Yorkers can rejoice that we will get a fresh influx of dollars from cross-border Canadian shoppers.

We can, but sometimes we don't.

How many times have you heard someone complain about the "Canadians making a mess of mall parking lots" or grumbled about the driving skills of someone behind the wheel of a car with an Ontario license plate?

You would think anyone who has passed Economics 101 would thank their lucky stars to have Canadian consumers propping up our struggling economy. Our local retailers, hoteliers and small business owners certainly get it. And communities elsewhere would love to have something similar.

Yet you still hear the grumbles. And you still see stories like this one, where shoppers have begun calling Canadian shoppers "milk piranhas" for buying so much milk at U.S. grocery stores. One consumer calls shopping among Canadians a "nightmare." Doing without the $400.99 million in sales tax Canadian shoppers brought in to Erie County last year sounds like more of a nightmare to me. And I'm sure if you talked to our local dairy farmers, they count Canadian "milk piranhas" as a blessing.

Canadian2Shoppers in Bellingham, Washington have created a Facebook page called, "Bellingham Costco needs a special time just for Americans." It has 4,090 likes.

This story spells out why:

Canadians are being admonished on the Facebook page for littering, bad parking, cutting off other drivers, pushing past other customers to grab merchandise and clearing Costco shelves of milk.

“It’s not Costco, it’s everywhere!!! I feel like I’m in Canada anytime I drive anywhere in Bellingham. I wouldn’t have a problem if they were considerate people ... but they are the rudest people I’ve ever encountered,” according to poster Julie Lawson.

According to the same article, a handful of Canadians have started a movement of their own:

It’s that kind of ire that inspired Todd Smith, 25, of Coquitlam B.C., to launch his own Facebook page: “Canadians invade Bellingham Costco,” inviting Canadians to shop the Bellingham Costco on Saturday, Aug. 18.

Smith says he and his partner make the half-hour drive across the border weekly, not only because gas, food and clothes are cheaper in the U.S., but because stores there offer greater variety. About a dozen people have said they’re interested in the shop-the-Bellingham-Costco event.

“It’s a bit tongue-in-cheek, but we do go down there quite regularly and we might go down Saturday,” said Smith. “I find it kind of odd that these people would take such trivial things out of context. Have they not stopped to consider that we’re supporting their economy?”

It's a good question.

---Samantha Maziarz Christmann

 

Highly skilled jobs get outsourced, too

Western New York business leaders met in Buffalo last week to discuss how to address a shortage of highly skilled manufacturing workers, such as engineers and machinists. There has also recently been a lot of talk about importing skilled workers with H1-B visas to make up for other worker shortages. And of course, we've been hearing about the effects of offshoring jobs for years.

Turns out, companies can save a lot of money by importing skilled workers and outsourcing skilled jobs. So how does that affect us as workers and college graduates?

Here is an excerpt from an interesting New York Times article from guest economist Nancy Folbre:

Since the 1990s, the global supply of skilled labor has greatly expanded and the technology for using this labor wherever it is has greatly improved. Why hire a more expensive employee when a cheaper one is available? Why pay taxes to educate and train highly skilled workers when other countries (and their families and taxpayers) will do that for you?

The disruptive impacts of globalization initially hammered workers without much education. Many workers holding college degrees remained optimistic about the benefits of international trade, celebrating improvements in their own purchasing power.

Now, my students can decide for themselves if lower prices will compensate them for reduced opportunities and lower wages. More than half of recent college graduates in the United States are either unemployed or are working in a job that doesn’t require a bachelor’s degree. Entry-level wages for employed college graduates were lower in 2011 than in 2000.

The current global recession isn’t the only cause. The economist Richard Freeman provides an extraordinarily clear account of what he calls “The Great Doubling” of labor supply resulting from structural changes that brought China and India more directly into the global marketplace.

Rather than relying merely on low-wage competition, China and India, like many developing countries, invested heavily in higher education and scientific training. While college graduates represent a small occupational elite within their large labor force, their absolute numbers are high compared with those homegrown in the United States.

College students in the United States who major in science, technology, engineering and mathematics – often referred to as STEM fields – definitely face better prospects in the labor market than others do. But even they need to be aware of intensified competition down the road.

Many software engineers and others in the information technology field feel particularly aggrieved about the effects of the H1-B visa program. The computer scientist Norman Matloff, who maintains a Web site on the topic, asserts that it enables employers to hire younger and less expensive workers, leaving many highly skilled, older programmers in the lurch.

Some Libor laughs

The Libor Scandal is no laughing matter. London bankers' practice of reporting false interest rates misrepresented the health of the British banking industry and has caused ripple effects in everything from mortgages and student loans to derivatives and a myriad of financial products.

But if it bums you out to know how casually this sort of thing goes on, take a look at it from the lighter side.

                                                             

 

Unemployment looks to be a sticky problem

JobFairGet used to seeing depressing photos from desperate job-seekers at career fairs.

A story in today's Business section says unemployment in the United States is expected to stay high for at least four more years--regardless of who wins November's presidential election.

The Economy Survey conducted by the Associated Press shows a majority of economists predicting the unemployment rate will remain above 6 percent until at least 2016.

That sounds pretty scary. But it seems more innocuous when you consider that the country has spent less time below the five percent unemployment rate (which is considered healthy) over the past 40 years than it has spent above it.

In this interesting Washington Post piece, associate history professor David B. Sicilia takes a look back at unemployment through the decades and breaks down what contributed to the numbers' rise and fall.

Cartoonists' take on Greece woes

Greece's economic problems have been weighing heavily on a lot of minds. Let's take a look at the lighter side, courtesy of some political cartoonists.

First, Grecio Komar takes a crack at it:

Komar

Next up is Buffalo News alum Tom Toles:

TolesGreece

Here is one from our own Adam Zyglis:

Zyglis

And a personal favorite:

Greecebennett

Euro scare spreading

Bank patrons across Europe have been withdrawing their money in huge numbers, as fears rise about the stability of the Euro and the European Union.

ZyglisThough not classified as a typical bank run, money is fleeing and fleeing fast.

John Maxfield of DailyFinance.com explains:

Private bankers in London have reported that European clients are moving into dollar-based assets. Central banks around the world are eschewing the euro in favor of the dollar or even their own currency, according to Bank of America. And hedge funds are doing what hedge funds do -- piling on.

The reason is simple. Nobody wants to be caught with money in a European bank -- more specifically, a bank in Greece, Ireland, Italy, Spain, or Portugal -- if the monetary union disintegrates. Imagine waking up one day only to learn that the 50,000 euros in your bank account had been involuntarily converted into drachmas . . . .

The massive withdrawls prompted New York magazine to take a lighthearted look back at bank runs throughout history.

It starts in Sicily in the fourth century B.C. and ends in present-day Greece.

How much more will the eurozone crisis affect us?

Unemployment in the eurozone rose by 169,000 in March, bringing the unemployment rate to its highest ever since the euro was created n 1999.

Stocks

Bad jobs reports coming out of Europe and the United States caused stock prices to drop Wednesday. The Dow Jones industrial average fell by 87 points before closing down 10.75, while the Standard & Poor's 500 fell 3.51 points to 1,402.31.

You can follow the history of the crisis in this archive  of related articles compiled by Bloomberg.

Catherine Rampell, writing for the New York Times, sums up the three dangers the eurozone's problems pose to the U.S.: trade, the stock market and credit. Europe's struggle leaves a smaller customer base for our exports, makes our dollar (and thus our goods) more expensive and sends stocks down. Worse, because European countries own so much of each other's debt, one country's troubles will have a domino effect on those tied up with it. That would make it harder for Americans to borrow money.

Reuters wades through several different scenarios, ranging from a mild eurozone recession to a financial meltdown. 

Clash

In the case of the latter, Stella Dawson writes that the risk of one or more countries leaving the eurozone "would cause political, economic and market upheaval."

This audio report from Marketplace in 2010 shows how European troubles don't affect all regions of the U.S. in the same way. Cities tied to the automobile and pharmaceutical industries could be hit harder, for example.

As usual, the Economic Collapse blog does not disappoint with its, "27 Statistics About the European Economic Crisis That Are Almost Too Crazy to Believe." It includes Spain's sky-high unemployment rate (now at 24.1 percent) and asks "Just how far can you stretch the rubberband before it snaps? Perhaps we are about to find out."

Breadline

It continues:

"The European financial system is leveraged like crazy right now.  Even banking systems in countries that you think of as 'stable' are leveraged to extremes. For example, major German banks are leveraged 32 to 1, and those banks are holding a massive amount of European sovereign debt. When Lehman Brothers finally collapsed, it was only leveraged 30 to 1."

 

Signs of recovery. Right?

Manufacturing

The economy is doing better than earlier indicators suggested, according to a survey from a trade group of purchasing managers. New data from the Institute for Supply Management says U.S. manufacturing grew during April at its fastest rate in 10 months and that sunny news helped the Dow Jones industrial average end at its highest level in four years.

But trying telling that to, well, anyone.

"If this is supposed to be an 'economic recovery' it sure is pathetic," writes the Economic Collapse blog. "Sadly, what we are experiencing right now is a brief period of stability in the middle of a downward spiral toward economic oblivion."

Holy doomspeak, Batman!

OccupyBuffalo

This article from Time Magazine is from June, but it outlines what it calls "five destructive myths" of economic recovery, including the myth that "this is a temporary blip and then it's full steam ahead" and that "the private sector will make it all better."

“There is a fundamental disconnect between the fortunes of American companies, which are doing quite well, and American workers, most of whom are earning a lower hourly wage now than they did during the recession. The thing is, companies make plenty of money; they just don't spend it on workers here,” writes Rana Foroohar.

Foroohar goes on. Tell me if this inspires confidence:

Half of Americans say they couldn't come up with $2,000 in 30 days without selling some of their possessions. Meanwhile, companies are flush: American firms generated $1.68 trillion in profit in the last quarter of 2010 alone. But many firms would think twice before putting their next factory or R&D center in the U.S. when they could put it in Brazil, China or India. These emerging-market nations are churning out 70 million new middle-class workers and consumers every year. That's one reason unemployment is high and wages are constrained here at home.

 

JobSeekers

Those don't seem like things that will be changing any time soon.

Still, analysts say the report really is good news, with data that can be trusted, even if it doesn't mean everything is coming up roses once again.

"This survey will ease concerns that the softer tone of the incoming news in recent months marked the start of a renewed slowdown in growth," Paul Dales, an economist at Capital Economics wrote in a note to clients. "We think the latest recovery is made of sterner stuff, although we doubt it will set the world alight."

What do you think? Will the U.S. economy ever be the powerhouse it once was? What will it take to get us there?