WASHINGTON (CNNMoney) -- Little is known about key details that led Standard & Poor's to downgrade U.S. debt late Friday, despite its outsized repurcussions. While the move knocking U.S. debt down a notch from the lofty AAA rating has exacerbated an already skittish stock market and drawn criticism from the White House, key details are a mystery. Print S&P doesn't say who, exactly, made the decision at the company; what kind of weight they gave U.S.
politics versus ability to pay; or to what extent they felt pressured to downgrade the United States in response to criticism of its downgrades of risky European nations. Standard & Poor's is one of three major credit rating agencies -- along with Moody's and Fitch -- that make money by giving grades on how likely it believes that a nation, municpal government or company will pay off its debt. However, the rating companies are unregulated, even as their ratings garner big-time consequences. And while S&P officials have talked about the "flavor of some of the assumptions," including their doubts about the ability of Congress and the White House to work together to cut deficits, they don't have to reveal details of their discussions. During the financial crisis, these same agencies got hammered for their decision to give top grades to securities based on risky mortgages made to homeowners destined to default on their loans. And while their grades to sovereign debt haven't been as tarnished as their grades to mortgage-backed securities, critics in both cases have questioned the greater significance for the markets. "They're just information providers, although (the big three) have certainly attained substantial prominence as providers of information," said Lawrence White, an economics professor at the Stern School of Business at New York University. "They're not government agencies; they're not under the same kind of transparency requirements that a government agency would be under." What do we know? Two S&P top analysts, David Beers and John Chambers, may have played a key role, since they've been the public face of S&P's public relations' campaign to defend the downgrade of U.S. debt from AAA to AA+. The decision was made by a panel of 5 to 9 people, according to a spokesman who didn't respond to requests about who was on the panel. S&P President Deven Sharma told lawmakers at a House hearing two weeks ago that analysts involved in rating sovereign debt are in "regular ongoing dialogue" with Treasury officials. But Sharma said he had not spoken directly to Treasury Secretary Tim Geithner. Chambers went into some details about what went into the decision, saying the "political settings," including the "debacle of raising of the debt ceiling," played a role. He also said that the U.S. fiscal situation, and S&P's assumption that the debt burden will grow under "any scenario," was the other big downgrade factor. Beers said that other factors that S&P looks at when considering a grade remained unchanged, such as the risk associated with the strength of the dollar, U.S. liquidity of investments and even the economic structure and growth prospects. 0:00 / 4:17 S&P: Tax rich to stabilize U.S. rating One big difference between S&P and other credit rating agencies such as Moody's and Fitch, is the weight S&P gives to politics as a factor in a possible default, said Dan Alpert, managing director of Westwood Capital, an investment bank in New York. Other credit rating agencies base their ratings more on a nation's ability to pay, he added. "This is a spanking to the U.S. Congress and the White House," Alpert said. As a part of the Dodd-Frank financial reform law, Congress tried to deflate the significance of a credit rating agency's scores. Part of the reason the ratings are so watched is that U.S. law, as well as the laws of many other nations, require the rating agencies to grade certain financial products and debt to determine whether such investments are safe. In Dodd-Frank, lawmakers ordered regulators to eliminate such reliance on credit rating agencies. But that effort has been slow going, regulators said at a recent hearing on Capitol Hill. Even with the changes, the big three rating agencies will continue to play a major role in the U.S. financial system, although "it's possible there would be more information purveyors and the relative importance of S&P and Moody's could diminish, " White said.
Tuesday, August 9, 2011
Monday, August 8, 2011
Moody's: Why we're not downgrading U.S. yet
NEW YORK (CNNMoney) -- Moody's Investors Service explained Monday why it was sticking with its triple-A bond rating and negative outlook for the United States, setting itself apart from Standard & Poor's, which downgraded the U.S. last week. Moody's said it expects the economy will improve and additional measures to reduce the budget deficit will be in place by 2013. The rating agency said this is why it reiterated its AAA rating for U.S. debt on Aug.
2, when the Senate agreed on a 10-year plan to reduce the deficit by more than $2 trillion. Print But Moody's said that its negative outlook, which it also assigned on Aug. 2, was due to political squabbling in Washington -- the biggest potential threat to the bond rating. "We expect the economic recovery will continue and additional budget deficit reduction initiatives will be put in place by 2013," said Moody's, in its report on Monday. "The political parties now appear to share similar deficit reduction objectives." But Moody's also said, "However, the disagreement between the two parties over the means by which to achieve deficit reduction and the difficulties experienced in reaching a compromise on raising the debt ceiling highlight the risks of political polarization. This uncertainty is among the drivers of our negative outlook." U.S. downgrade: Did S&P get it right? Moody's released this explainer three days after S&P downgraded the credit rating of the United States on Friday. S&P said that it wasn't enough for lawmakers on both sides of the aisle to agree to raise the debt ceiling -- that the U.S. also needed a "credible" plan to tackle long-term debt. 0:00 / 2:50 S&P: Why we downgraded the U.S. S&P also highlighted political bickering as a key factor in undermining its confidence in U.S. debt, with governance "becoming less stable, less effective and less predictable than what we previously believed."
2, when the Senate agreed on a 10-year plan to reduce the deficit by more than $2 trillion. Print But Moody's said that its negative outlook, which it also assigned on Aug. 2, was due to political squabbling in Washington -- the biggest potential threat to the bond rating. "We expect the economic recovery will continue and additional budget deficit reduction initiatives will be put in place by 2013," said Moody's, in its report on Monday. "The political parties now appear to share similar deficit reduction objectives." But Moody's also said, "However, the disagreement between the two parties over the means by which to achieve deficit reduction and the difficulties experienced in reaching a compromise on raising the debt ceiling highlight the risks of political polarization. This uncertainty is among the drivers of our negative outlook." U.S. downgrade: Did S&P get it right? Moody's released this explainer three days after S&P downgraded the credit rating of the United States on Friday. S&P said that it wasn't enough for lawmakers on both sides of the aisle to agree to raise the debt ceiling -- that the U.S. also needed a "credible" plan to tackle long-term debt. 0:00 / 2:50 S&P: Why we downgraded the U.S. S&P also highlighted political bickering as a key factor in undermining its confidence in U.S. debt, with governance "becoming less stable, less effective and less predictable than what we previously believed."
Sunday, August 7, 2011
Government workers catch break
Teacher Rachel Zertuche is one of many who lost their jobs. NEW YORK (CNNMoney) -- The state and local government jobs sector held up surprisingly well in July, but it isn't reason to cheer. Some 39,000 government jobs were lost last month, the Labor Department said Friday. Many of them were state workers in Minnesota temporarily laid off during the 20-day state shutdown, as well as teachers from across the nation. Print The loss was better than some expected, as was the Friday jobs report, which showed a gain of 117,000 jobs overall.
IHS Global Insight had forecast a loss of 50,000 state and local government jobs. But state and local workers aren't out of the woods. The next two months could continue to show big losses as governments continue to wrestle with the weak economy. "With state and cities facing very tight budget restrictions, there is a high probability that many of the summer layoffs in the education sector will not be re-hired when the school year starts," said Greg Daco, U.S. economist for IHS Global Insight. "This could potentially lead to heavy losses on that front." The sector could still turn in its worst quarterly performance in nearly 30 years, Daco said. Some 108,000 jobs were shed in the third quarter of 1982. All told, the state and local government sector has lost 611,000 jobs since its peak in September 2008. Some 237,000 of those have been in education. How long do unemployment benefits last in your state? Teachers and other school employees are bearing the brunt of the public sector layoffs in the wake of the Great Recession. While they are often dismissed temporarily over the summer, more are getting the ax this year because of major state budget cuts to public education. And fewer are expected to get rehired in September, leading to the grim estimates for the quarter. Rachel Zertuche of Austin, Texas, is one of those educators looking for a new job. The 6th grade social studies teacher was let go after more than six years in Austin classrooms. While she hunts for a new position, the new mom is commuting 26 miles to work part-time in an office and taking some proofreading jobs. Her husband, a cook in an upscale restaurant, took a second job at Romano's Macaroni Grill. Competition for teaching jobs is stiff, she said. "There are so many of us who were laid off," said Zertuche, who has been teaching a total of 14 years. "We're all scurrying for the same positions." Around the country, districts are sending thousands of workers to the unemployment office. In years' past, school administrators were able to meet their budgets through attrition or retirement. And many were able to recall a good number of those who were let go. But not this year, they say. The disappearance of federal stimulus funds and the continued weakness in the economy mean fewer dollars for public education. And that means fewer employees. Over the past two school years, New York has lost 10,000 school jobs, but 9,000 of them were through attrition or retirement, according to the New York State United Teachers union. Now, the ax is falling on actual workers. School districts, which suffered a $1.3 billion cut in state aid for the 2011-12 year, have left 5,660 teachers, librarians, counselors and nurses out of work. Another 1,940 school professionals, including bus drivers, cafeteria workers, custodians and teachers aides, are in the same boat. "This year, there is no room for contraction, which is why you'll see real people on unemployment lines," said Dick Ianuzzi, president of the 600,000-member union. That means class sizes are soaring and students have fewer support services. In California, there are now 30 to 35 kids in some classes, up from 20, said Dean Vogel, president of the California Teachers Association. Art, music and some electives are disappearing. School libraries are closed because there are no librarians to staff them. "What it means for the learning environment is that it changes it drastically," Vogel said. 0:00 / 1:47 2 million government jobs at stake Some 4,200 teachers around the Golden State are anxiously awaiting word that there's a job for them in September. Julia Cervantes-Espinoza, who teaches 2nd and 4th grade in the Los Angeles Unified School District, has been laid off each of the last three years. But this is the first time she ended school without being rehired. More than 2,000 teachers remain unemployed in her district. While she's starting to apply for positions teaching English as a Second Language in community colleges, she remains hopeful that a job will open up for her. She's relatively high on the seniority list. "I'm Number 153 so I think I'll get called back, but we'll see," Cervantes-Espinoza said.
IHS Global Insight had forecast a loss of 50,000 state and local government jobs. But state and local workers aren't out of the woods. The next two months could continue to show big losses as governments continue to wrestle with the weak economy. "With state and cities facing very tight budget restrictions, there is a high probability that many of the summer layoffs in the education sector will not be re-hired when the school year starts," said Greg Daco, U.S. economist for IHS Global Insight. "This could potentially lead to heavy losses on that front." The sector could still turn in its worst quarterly performance in nearly 30 years, Daco said. Some 108,000 jobs were shed in the third quarter of 1982. All told, the state and local government sector has lost 611,000 jobs since its peak in September 2008. Some 237,000 of those have been in education. How long do unemployment benefits last in your state? Teachers and other school employees are bearing the brunt of the public sector layoffs in the wake of the Great Recession. While they are often dismissed temporarily over the summer, more are getting the ax this year because of major state budget cuts to public education. And fewer are expected to get rehired in September, leading to the grim estimates for the quarter. Rachel Zertuche of Austin, Texas, is one of those educators looking for a new job. The 6th grade social studies teacher was let go after more than six years in Austin classrooms. While she hunts for a new position, the new mom is commuting 26 miles to work part-time in an office and taking some proofreading jobs. Her husband, a cook in an upscale restaurant, took a second job at Romano's Macaroni Grill. Competition for teaching jobs is stiff, she said. "There are so many of us who were laid off," said Zertuche, who has been teaching a total of 14 years. "We're all scurrying for the same positions." Around the country, districts are sending thousands of workers to the unemployment office. In years' past, school administrators were able to meet their budgets through attrition or retirement. And many were able to recall a good number of those who were let go. But not this year, they say. The disappearance of federal stimulus funds and the continued weakness in the economy mean fewer dollars for public education. And that means fewer employees. Over the past two school years, New York has lost 10,000 school jobs, but 9,000 of them were through attrition or retirement, according to the New York State United Teachers union. Now, the ax is falling on actual workers. School districts, which suffered a $1.3 billion cut in state aid for the 2011-12 year, have left 5,660 teachers, librarians, counselors and nurses out of work. Another 1,940 school professionals, including bus drivers, cafeteria workers, custodians and teachers aides, are in the same boat. "This year, there is no room for contraction, which is why you'll see real people on unemployment lines," said Dick Ianuzzi, president of the 600,000-member union. That means class sizes are soaring and students have fewer support services. In California, there are now 30 to 35 kids in some classes, up from 20, said Dean Vogel, president of the California Teachers Association. Art, music and some electives are disappearing. School libraries are closed because there are no librarians to staff them. "What it means for the learning environment is that it changes it drastically," Vogel said. 0:00 / 1:47 2 million government jobs at stake Some 4,200 teachers around the Golden State are anxiously awaiting word that there's a job for them in September. Julia Cervantes-Espinoza, who teaches 2nd and 4th grade in the Los Angeles Unified School District, has been laid off each of the last three years. But this is the first time she ended school without being rehired. More than 2,000 teachers remain unemployed in her district. While she's starting to apply for positions teaching English as a Second Language in community colleges, she remains hopeful that a job will open up for her. She's relatively high on the seniority list. "I'm Number 153 so I think I'll get called back, but we'll see," Cervantes-Espinoza said.
Saturday, August 6, 2011
Downgrade turns up heat on Congress
NEW YORK (CNNMoney) -- The downgrade of the United States' AAA credit rating will apply even greater pressure on Congress to follow through on plans to tame the nation's debt. Over the next few months, Washington is set to engage in a series of battles over the fiscal course of the federal government. Print And that debate will largely be carried out through a new bipartisan "super committee." The 12-member panel -- six Democrats and six Republicans -- will have until Nov. 23 to propose how to cut between $1.2 trillion and $1.5 trillion in deficits. Congress will then take an up-or-down vote on the proposals by Dec.
23. In its downgrade announcement on Friday, credit rating agency S&P said it could "stabilize" the country's rating if the committee's work helps lead to debt-reduction measures "beyond the minimum mandated." The committee was established by the debt ceiling deal signed by President Obama this week. The law put caps in place on domestic and defense spending, resulting in cuts of $917 billion over 10 years. According to the Budget Control Act of 2011, Congress must appoint members to the committee in the next couple weeks. What's wrong with the debt ceiling deal Members will be tasked with finding ways to cut the deficit while navigating tough issues that have festered in Washington for decades: taxes, along with cuts to entitlements, defense and discretionary spending. The members of the committee will face intense pressure from lobbyists and special interest groups, as well as their fellow lawmakers -- who have to run reelection campaigns and want their views represented. A dispute has, of course, already erupted over whether the committee will tackle taxes, and which baseline should be used to measure cuts. While the committee -- once appointed -- faces a series of tough choices, they also have a powerful incentive to finish their work on time, and on budget. 0:00 / 1:48 Who is getting squeezed by the debt deal? The committee's goal is to cut at least $1.5 trillion in debt. If it fails to do that or deadlocks, the sword of Damocles will fall on most forms of spending in the federal budget. Specifically, as much as $1.2 trillion in across-the-board cuts would kick in -- evenly divided between defense and non-defense spending. The battle over 2012: The super committee won't be the only budget game in town. Lawmakers will also have to decide on agency spending levels for fiscal year 2012, which starts Oct. 1. As part of the debt ceiling deal, Congress decided to cut spending for the year, but not which programs and agencies will receive less money. The deadline for making those tough choices is just around the corner. The debt ceiling law sets discretionary spending levels for 2012 at $1.043 trillion and at $1.047 trillion for 2013 -- or an accrued total of $10 billion below current levels. Congress has made little progress on the normal appropriations process, and faces the risk of starting the year with a short-term stopgap spending plan, called a continuing resolution. That sounds an awful lot like what happened with the fiscal 2011 budget, when the process degenerated into a protracted battle that brought the government to the edge of a shutdown. Congress passed seven continuing resolutions over the course of six months. Of course, short-term spending bills are nothing new. Congress has enacted at least one every year for all but three of the past 30. But seven in one year was unprecedented, and indicative of partisan gridlock. It now appears lawmakers will face the same kind of battle over 2012 funding, at the same time the super committee will be doing its work and presenting its findings.
23. In its downgrade announcement on Friday, credit rating agency S&P said it could "stabilize" the country's rating if the committee's work helps lead to debt-reduction measures "beyond the minimum mandated." The committee was established by the debt ceiling deal signed by President Obama this week. The law put caps in place on domestic and defense spending, resulting in cuts of $917 billion over 10 years. According to the Budget Control Act of 2011, Congress must appoint members to the committee in the next couple weeks. What's wrong with the debt ceiling deal Members will be tasked with finding ways to cut the deficit while navigating tough issues that have festered in Washington for decades: taxes, along with cuts to entitlements, defense and discretionary spending. The members of the committee will face intense pressure from lobbyists and special interest groups, as well as their fellow lawmakers -- who have to run reelection campaigns and want their views represented. A dispute has, of course, already erupted over whether the committee will tackle taxes, and which baseline should be used to measure cuts. While the committee -- once appointed -- faces a series of tough choices, they also have a powerful incentive to finish their work on time, and on budget. 0:00 / 1:48 Who is getting squeezed by the debt deal? The committee's goal is to cut at least $1.5 trillion in debt. If it fails to do that or deadlocks, the sword of Damocles will fall on most forms of spending in the federal budget. Specifically, as much as $1.2 trillion in across-the-board cuts would kick in -- evenly divided between defense and non-defense spending. The battle over 2012: The super committee won't be the only budget game in town. Lawmakers will also have to decide on agency spending levels for fiscal year 2012, which starts Oct. 1. As part of the debt ceiling deal, Congress decided to cut spending for the year, but not which programs and agencies will receive less money. The deadline for making those tough choices is just around the corner. The debt ceiling law sets discretionary spending levels for 2012 at $1.043 trillion and at $1.047 trillion for 2013 -- or an accrued total of $10 billion below current levels. Congress has made little progress on the normal appropriations process, and faces the risk of starting the year with a short-term stopgap spending plan, called a continuing resolution. That sounds an awful lot like what happened with the fiscal 2011 budget, when the process degenerated into a protracted battle that brought the government to the edge of a shutdown. Congress passed seven continuing resolutions over the course of six months. Of course, short-term spending bills are nothing new. Congress has enacted at least one every year for all but three of the past 30. But seven in one year was unprecedented, and indicative of partisan gridlock. It now appears lawmakers will face the same kind of battle over 2012 funding, at the same time the super committee will be doing its work and presenting its findings.
Friday, August 5, 2011
European fear: The wolves are at the gate
Sarkozy, Obama, Merkel and Cameron stand together. NEW YORK (CNNMoney) -- A sharp drop in manufacturing, a towering debt-to-GDP ratio and a jaw-dropping decline in equity markets. No -- not the United States. Europe! Print Many of the underlying tremors that led to this week's steep sell-off in the U.S.
have been festering in plain sight in Europe for a year or more. Consider a few figures: European indexes have been hammered over the past month, with the main exchanges of England ( UKX ) off 12.9%, France ( CAC40 ) 17.6% and Germany ( DAX ) 16.7%. The economies of Italy and France -- two of the continent's largest -- expanded by only 0.3% and 0.2% in the second quarter. The problem? Developed countries piled on massive amounts of debt during the recession. Advanced economies worldwide increased their debt burden from $18.1 trillion in 2007 to $29.5 trillion in 2011, according to researchers at the Brookings Institution. And that's not the half of it. The number is projected to grow to $41.3 trillion by 2016. Throw 3 coins in the fountain. Italy needs them The bill collector has already come for some. Billions have been spent propping up Ireland and Greece, and investors have not been shy about sending yields through the roof when they smell blood in the water. Investors lending money to Spain are now demanding interest rates of 6%, while Greek bonds carry a 15% rate and yields on Italian notes spiked this week to 5.5%. Coupled with weak growth, the sharp increase in interest rates only adds to the countries' debt and makes it even more difficult for them to lower their debt-GDP-ratio. There is some evidence that politicians are waking up to the scale of the crisis. What's going on with Italy? German Chancellor Angela Merkel and French President Nicolas Sarkozy planned to interrupt their summer vacations -- a hiking holiday in Italy and a three-week excursion to the French Riviera -- to confer by phone about the growing economic unease. That's welcome news, because while the crisis started at the continent's periphery, it has now arrived at the gates of Italy and Spain. And that, according to Domenico Lombardi, a senior fellow at Brookings and former International Monetary Fund executive board member, should worry policymakers in the United States. "Italy has been hit," Lombardi said. "It's the third largest economy in the euro area, and there is no organization that can bail Italy out. It's just too big to swallow." 0:00 / 5:15 Market correction looks bearish If the situation in Italy were to worsen, the impact could lead to weakening demand for U.S. exports, uncertainty in global currency markets, and consequences for U.S. banks that are exposed to the European banking system. The timing couldn't be worse for the United States, which is about to engage in some fiscal belt-tightening as a result of the debt ceiling deal negotiated in Washington. With the government pumping less money into the economy, policymakers need to find a way to increase demand for U.S. exports, Lombardi said. "But this is certainly not going to come from Europe," he said. The tremendous instability in Europe is yet another drag on an already weak U.S. economy and could increase uncertainly, spark a rush to safe-haven assets or delay major investments by American businesses. "The economic recovery in the U.S. is inherently fragile," Lombardi said. "And this could have a dramatic effect on the job market outlook." On Friday, EU Economic and Monetary Affairs Commissioner Olli Rehn tried to calm the swirl of rumors as markets bucked up and down. "The market unrest witnessed in the last few days is simply not justified on the grounds of economic fundamentals," he said, having broken off his holidays to return to Brussels. "It is not justified for Italy. It is not justified for Spain." But try telling that to bond markets.
have been festering in plain sight in Europe for a year or more. Consider a few figures: European indexes have been hammered over the past month, with the main exchanges of England ( UKX ) off 12.9%, France ( CAC40 ) 17.6% and Germany ( DAX ) 16.7%. The economies of Italy and France -- two of the continent's largest -- expanded by only 0.3% and 0.2% in the second quarter. The problem? Developed countries piled on massive amounts of debt during the recession. Advanced economies worldwide increased their debt burden from $18.1 trillion in 2007 to $29.5 trillion in 2011, according to researchers at the Brookings Institution. And that's not the half of it. The number is projected to grow to $41.3 trillion by 2016. Throw 3 coins in the fountain. Italy needs them The bill collector has already come for some. Billions have been spent propping up Ireland and Greece, and investors have not been shy about sending yields through the roof when they smell blood in the water. Investors lending money to Spain are now demanding interest rates of 6%, while Greek bonds carry a 15% rate and yields on Italian notes spiked this week to 5.5%. Coupled with weak growth, the sharp increase in interest rates only adds to the countries' debt and makes it even more difficult for them to lower their debt-GDP-ratio. There is some evidence that politicians are waking up to the scale of the crisis. What's going on with Italy? German Chancellor Angela Merkel and French President Nicolas Sarkozy planned to interrupt their summer vacations -- a hiking holiday in Italy and a three-week excursion to the French Riviera -- to confer by phone about the growing economic unease. That's welcome news, because while the crisis started at the continent's periphery, it has now arrived at the gates of Italy and Spain. And that, according to Domenico Lombardi, a senior fellow at Brookings and former International Monetary Fund executive board member, should worry policymakers in the United States. "Italy has been hit," Lombardi said. "It's the third largest economy in the euro area, and there is no organization that can bail Italy out. It's just too big to swallow." 0:00 / 5:15 Market correction looks bearish If the situation in Italy were to worsen, the impact could lead to weakening demand for U.S. exports, uncertainty in global currency markets, and consequences for U.S. banks that are exposed to the European banking system. The timing couldn't be worse for the United States, which is about to engage in some fiscal belt-tightening as a result of the debt ceiling deal negotiated in Washington. With the government pumping less money into the economy, policymakers need to find a way to increase demand for U.S. exports, Lombardi said. "But this is certainly not going to come from Europe," he said. The tremendous instability in Europe is yet another drag on an already weak U.S. economy and could increase uncertainly, spark a rush to safe-haven assets or delay major investments by American businesses. "The economic recovery in the U.S. is inherently fragile," Lombardi said. "And this could have a dramatic effect on the job market outlook." On Friday, EU Economic and Monetary Affairs Commissioner Olli Rehn tried to calm the swirl of rumors as markets bucked up and down. "The market unrest witnessed in the last few days is simply not justified on the grounds of economic fundamentals," he said, having broken off his holidays to return to Brussels. "It is not justified for Italy. It is not justified for Spain." But try telling that to bond markets.
Thursday, August 4, 2011
FCC promises 100,000 jobs
WASHINGTON (CNN) -- When you call customer service in the time ahead, chances should improve that you will reach someone in the United States, with a forecast of 100,000 new jobs at call centers to be created the next two years, according to the Federal Communications Commission. In an announcement expected Thursday at a call center in Jeffersonville, Indiana, FCC Chairman Julius Genachowski will detail how small towns are replacing jobs lost from declining industry with new jobs made possible by broadband technology. Print Call centers need broadband capability to handle Internet-based chat sessions with consumers along with traditional phone calls and email correspondence. But many call centers have moved outside the United States where labor is cheaper. Where the Jobs Are Thursday's announcement, partnered with a business group Jobs4America, promises to return some of those jobs to America.
Genachowski, according to his staff, will be at a call center that services the Charbroil outdoor cooking chain and the discount retailer BJ's Warehouse ( BJ , Fortune 500). The center's activities have been based in India, the FCC said. The move is creating 175 jobs in the United States. 0:00 / 4:40 Job cuts by the thousands Jobs4America, in a statement, said the jobs will include "marketing and sales communication with consumers, as well as chat, social media monitoring, and web and phone-based self-service options," such as obtaining information about product recalls and the status of discount rebates for which consumers have applied. The contact center industry, as the group describes the field, can create thousands of U.S.-based jobs to help cut unemployment. A tally of jobs from members of Jobs4America includes: Aegis Global -- 4000 jobs Alpine Access -- 4000 jobs Accent -- 2000 jobs Novo1 -- 1000 jobs Back Office Support Systems -- 1000 jobs Sprint -- 600 jobs Etech -- 250 jobs CallAssistant -- 250 jobs AnswerNet -- 200 jobs QCSS, Inc. -- 200 jobs
Genachowski, according to his staff, will be at a call center that services the Charbroil outdoor cooking chain and the discount retailer BJ's Warehouse ( BJ , Fortune 500). The center's activities have been based in India, the FCC said. The move is creating 175 jobs in the United States. 0:00 / 4:40 Job cuts by the thousands Jobs4America, in a statement, said the jobs will include "marketing and sales communication with consumers, as well as chat, social media monitoring, and web and phone-based self-service options," such as obtaining information about product recalls and the status of discount rebates for which consumers have applied. The contact center industry, as the group describes the field, can create thousands of U.S.-based jobs to help cut unemployment. A tally of jobs from members of Jobs4America includes: Aegis Global -- 4000 jobs Alpine Access -- 4000 jobs Accent -- 2000 jobs Novo1 -- 1000 jobs Back Office Support Systems -- 1000 jobs Sprint -- 600 jobs Etech -- 250 jobs CallAssistant -- 250 jobs AnswerNet -- 200 jobs QCSS, Inc. -- 200 jobs
Wednesday, August 3, 2011
Aviation workers deal with politics-induced furloughs
FAA engineer Michael MacDonald, in the red shirt on the left, has been furloughed for a week. WASHINGTON (CNNMoney) -- Some 4,000 furloughed aviation workers are the latest casualty of political infighting in Washington. Families used to making $75,000 a year are filing for unemployment benefits and worrying how to make mortgage, car and student loan payments, furloughed workers say. Print "It really is scary," said Michael MacDonald, a 54-year-old Federal Aviation Administration engineer who lives outside of Boston. "For one week, you think OK, we can handle one week.
But now the reality is starting to set in --- this is going to take six weeks or more." The FAA has been partially shut down for more than a week, with only air traffic controllers, mechanics and those integral to keeping planes flying safely on the job. The plight of 4,000 FAA workers has been overshadowed by greater commotion over raising the debt limit and spending cuts. But lawmakers have also been at odds over approving a routine stop-gap funding measure for the agency. With the House adjourned, the funding impasse will likely grind on for FAA employees who are feeling the pinch of a lack of paycheck, not to mention perks such as like 401(k) retirement benefit contributions. MacDonald works on updating communications systems for the FAA. He's worried about paying his mortgage, car loans and college tuition for his two kids. He filed for unemployment benefits last week and has been urging his colleagues to do the same. "I've never been in this situation before," said MacDonald, a 20-year veteran of the FAA. While many employees, especially single parents, are terrified of spiraling into debt, other FAA workers say they're just furious that they've become the victims of partisan wrangling in Washington. "For this to be about something so petty, it's ridiculous. And terribly arrogant and totally uncaring," said Steve Alexander, 59, who lives near Sanford, N.C. Alexander's last day on the job was July 22, when he finished upgrading the landing system at Memphis International Airport. Best Travel Deals While Alexander saved up over a year to withstand this furlough, as a union representative, he has been talking to panicked colleagues who can't afford to be out of work for weeks on end. The partial shutdown impacts more than just federal workers. The FAA had to stop hundreds of airport construction projects nationwide, which means some 24,000 construction workers are also out of work. Another 35,000 support workers, such as food service vendors, are also impacted, said Steve Sandherr CEO of the Associated General Contractors of America. 0:00 / 2:11 Bring air traffic into 21st century "This can't go on a day longer, much less six weeks longer," Randy Babbitt, administrator of the Federal Aviation Administration, told CNN on Tuesday -- CNN's Mike M. Ahlers contributed to this report.
But now the reality is starting to set in --- this is going to take six weeks or more." The FAA has been partially shut down for more than a week, with only air traffic controllers, mechanics and those integral to keeping planes flying safely on the job. The plight of 4,000 FAA workers has been overshadowed by greater commotion over raising the debt limit and spending cuts. But lawmakers have also been at odds over approving a routine stop-gap funding measure for the agency. With the House adjourned, the funding impasse will likely grind on for FAA employees who are feeling the pinch of a lack of paycheck, not to mention perks such as like 401(k) retirement benefit contributions. MacDonald works on updating communications systems for the FAA. He's worried about paying his mortgage, car loans and college tuition for his two kids. He filed for unemployment benefits last week and has been urging his colleagues to do the same. "I've never been in this situation before," said MacDonald, a 20-year veteran of the FAA. While many employees, especially single parents, are terrified of spiraling into debt, other FAA workers say they're just furious that they've become the victims of partisan wrangling in Washington. "For this to be about something so petty, it's ridiculous. And terribly arrogant and totally uncaring," said Steve Alexander, 59, who lives near Sanford, N.C. Alexander's last day on the job was July 22, when he finished upgrading the landing system at Memphis International Airport. Best Travel Deals While Alexander saved up over a year to withstand this furlough, as a union representative, he has been talking to panicked colleagues who can't afford to be out of work for weeks on end. The partial shutdown impacts more than just federal workers. The FAA had to stop hundreds of airport construction projects nationwide, which means some 24,000 construction workers are also out of work. Another 35,000 support workers, such as food service vendors, are also impacted, said Steve Sandherr CEO of the Associated General Contractors of America. 0:00 / 2:11 Bring air traffic into 21st century "This can't go on a day longer, much less six weeks longer," Randy Babbitt, administrator of the Federal Aviation Administration, told CNN on Tuesday -- CNN's Mike M. Ahlers contributed to this report.
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