Free Markets, Free People

Daily Archives: July 11, 2011


Temporary worker hiring outlook dismal

One of the things economists watch to try to gauge the job market is how the temporary worker market is doing.   Many times a rise in temp workers signals businesses are gearing up for more permanent hiring as the economy gains steam.  The opposite is many times also true.   And, unfortunately, it appears that this particular indicator isn’t giving us the warm fuzzy feeling  we hoped it would:

Last month’s fall in the number of temporary workers could herald continued weakness in the job market.

The total number of temporary employees placed by staffing agencies dipped by 12,000 last month and is down 19,000 the past three months, the Bureau of Labor Statistics reported Friday.

Now perhaps 3 months can’t be considered a “trend”, but it is pretty darn close.  And it parallels the news we’ve been getting about unemployment and the economy in general.

Temporary workers, however, could be the most telling signal. The number of contingent workers started growing in fall 2009, about six months before the broader job market began to emerge from the recession. From September 2009 to March, employers added nearly 500,000 temporary workers.

Roy Krause, CEO of SFN Group, a top staffing agency, says temporary placements for white-collar jobs in accounting, computers and legal remain strong. But those for lower-skilled light industrial, clerical and certain call-center jobs — which accounted for most of last year’s growth — have slowed. "They tend to be more sensitive to economic conditions," he says.

An example:

Chemical maker Arkema of Philadelphia employed about 150 temporary workers earlier this year. But it trimmed that total by about 50 in April and May as the weak economy prompted it to cut its 2011 forecast, Vice President Chris Giangrasso says. Arkema, he says, will likely not add this year to its permanent staff of about 2,500 in North America.

Key point – “weak economy”.  He had enough growth last year to warrant hiring temp workers but not full time staff.   Now he doesn’t even have enough business to warrant 2/3rds of the temps he hired and had to let them go.

That weakness in the economy continues to linger because, as we’ve noted any number of times, of the unsettled business climate.  And that’s something government could do to help the situation – back off regulation, taxes and interference (*cough* NLRB/Boeing*cough*) and stay out of the way.   It seems, though, that doing so is just not in this administration’s genes.

And so the negative indicators continue to pile up while the President of the United States and a complicit media attempt to make bad guys out of the GOP as they hold the line against economy crippling tax increases.

Go figure.

~McQ

Twitter: @McQandO


Hold up the tank sale until after Egyptian elections

This is just not very smart politics or foreign policy:

While everyone in Washington was concentrating on the debt crisis this week, the Obama administration attempted to slip through a questionable arms deal that requires serious scrutiny. Though it got little attention, the Defense Department officially notified Congress on Friday that it was authorizing the sale of 125 M1A1 tanks to Egypt as well as other weapons, equipment, parts, training and logistical support. While most of the military sales to Egypt have sailed through without objection in the more than 30 years since it signed a peace deal with Israel, this is the first such sale since the fall of the Mubarak regime earlier this year. Which is exactly why the sale ought to be held up until the unsettled situation in the most populous country in the Arab world is better understood.

Why?

In the wake of Mubarak’s fall from power, the Egyptian military seems to have retained a firm grip on power. But the army seems intent on sharing power with a resurgent Muslim Brotherhood movement that threatens the foundation of the relationship between the United States and Egypt. Since the 1979 Camp David Accords, the Egyptian military has gotten all the high-tech and expensive equipment it wanted so long as it was clear their new toys would not be used to threaten or attack Israel. But as Egypt lurches toward the election of a new government that will probably be made up of Islamist elements, that peace is in jeopardy.

Emphasis mine.  We have no assurance or reason to believe that won’t happen given the direction of the country and the fact that the Muslim Brotherhood, an avowed enemy of Israel whose representatives have repeatedly said the treaty Egypt has with that country must be voided.

So here we are going along as though nothing has happened and preparing to sell 125 of the world’s most advanced battle tank to a country which could conceivably turn around and use them against Israel.  Since, as I noted in another post, we seem to have little if any leverage there and it appears the Muslim Brotherhood has little desire to talk with us, I would think we’d be leery of such a deal and perhaps use it as a method of gaining some leverage.   No?

Yes, I know we might see another country try to fill the gap by offering their tanks and equipment, but such a switch (Egypt is presently equipped with US military equipment) isn’t as easy as it sounds and it would be quite expensive.  It may be worth it to a Russia or a China (given the Suez Canal, etc.) to do that.

But at the moment this sale makes no sense – at least until the political situation is much more settled than it is at the moment.  125 tanks may not be enough to get the Brotherhood to change it’s mind, but it does represent more leverage than we currently have with their military – the institution that may be able to moderate the Brotherhood’s stance on Israel.  Why give away that sort of leverage for nothing?

~McQ

Twitter: @McQandO