Even in a recession, some companies are hiring

by Christopher S. Rugaber - Mar. 9, 2009 04:38 PM

Associated Press

Help wanted: pharmacists, engineers and nurses. Believe it or not, even some banks are hiring, at least for their technology teams.

While the recession has claimed 4.4 million jobs, the economy has created others, many of them for highly trained and specialized professionals. More than 2 million jobs openings now exist across a range of industries, according to government data.

Job seekers beware, though. An average of nearly five people are competing for each opening. That's up sharply from a ratio of less than 2-to-1 in December 2007, when the recession was just starting and nearly 4 million openings existed.

Human resources executives say companies that are hiring are benefiting from a top-notch talent pool as applications pour in from a larger base of job seekers. The number of unemployed Americans has soared, to 12.5 million last month, from 7 million when the recession began.

Broadly, jobs are being added in education, health care and the federal government, the Labor Department said, with the government adding 9,000 new jobs last month alone.

But beyond those areas, jobs can be found in a variety of sectors. Some places that are hiring, such as companies that make nuclear power equipment, haven't been hit that hard by the recession. Others, such as discount retailers, are actually benefiting from the downturn as shoppers turn thriftier.

Even some businesses at the center of the economic meltdown are managing to add a few employees. Banks involved in recent mergers, for example, are hiring information technology specialists to help integrate companies, said Tig Gilliam, chief executive of the Adecco Group North America, a human resources firm.

Some mortgage lending companies, notably those never involved in subprime or other exotic loans, are actually growing and hiring as larger competitors have folded.

"We've been busy," said Terry Schmidt, chief financial officer of Guild Mortgage Co. in California, whose company has doubled in size, from around 450 to close to 900 employees, in the past year and a half.

The new hires originate home loans and process them, among other duties.

"We're finding that the talent pool - the level of talent and experience - is much better than we've ever had," Schmidt said.

Mortgage servicing companies - those that collect payments for the lenders that originated them - are also hiring as lower mortgage rates fuel mortgage refinance applications.

Marina Walsh, associate vice president of industry analysis at the Mortgage Bankers Association, said servicers "are just scrambling for workers."

The nuclear power industry, meanwhile, doesn't seem to have noticed the economic downturn. It is adding thousands of jobs as it gears up to build as many as 26 new nuclear power plants in the next decade.

Corporations such as Pittsburgh-based Westinghouse Electric Company and GE Hitachi Nuclear Energy are hiring engineers and adding other workers as they expand manufacturing facilities, according to the Nuclear Energy Institute, a trade group. (GE Hitachi is a partnership between General Electric Co. and Tokyo-based Hitachi Ltd.)

Engineers of all kinds are in demand and are facing a rock-bottom jobless rate of about 3 percent, according to Gilliam of the Adecco Group North America.

That compares with a nationwide unemployment rate of 8.1 percent last month.

Adecco is trying to fill about 1,200 engineering jobs, Gilliam said. They include product engineers who test the next generation of computer equipment, he said.

Other bright spots in an otherwise dismal labor market:

- Pharmacists: An aging U.S. population is taking more medicine and pharmacists are taking more time helping patients with chronic diseases manage their dosages, said Douglas Scheckelhoff of the American Society of Health System Pharmacists.

There is a 6 percent shortage of hospital pharmacists, Scheckelhoff said, while many drug stores are also looking to hire new pharmacists and pharmacist technicians, he said.

- Nurses: Hospitals also need more nurses to care for the aging population and to replace those nearing retirement, said Cheryl Peterson, director of nursing practice and policy at the American Nurses Association. Hospitals added 7,000 jobs of all kinds last month, even as the economy overall shed 651,000.

- Veterinarians: "There's a tremendous demand" for veterinarians, particularly to serve livestock growers in rural areas, said Dr. Ron DeHaven, chief executive office of the American Veterinary Medical Association. The government is also short of veterinarians needed to inspect slaughterhouses and undertake other food safety measures, he said. The Labor Department projects that the number of veterinary jobs will grow by 35 percent by 2016, DeHaven said.

Some companies are benefiting from the recession as shoppers shift to lower-priced stores. The economy has lost more than 600,000 retail jobs since the slowdown began, but discount retailer Family Dollar Stores Inc. is hiring.

The company plans to hire new workers for 200 stores it expects to open this year, said spokesman Josh Braverman, and will also add employees at some of its nine distribution centers. Family Dollar saw its sales at stores open at least a year rise by 6.4 percent in the three months ending in February.

Other companies prospering amid the economic gloom include liquidators - firms that sell the assets of troubled businesses.

Bill Angrick, chief executive of Washington, D.C.-based Liquidity Services Inc., which operates the Web site Liquidation.com, said his company expects record profits for the first quarter. Among the items his company liquidates are vehicles and networking and communications equipment.

Julie Davis, a spokeswoman for the firm, said it has openings for at least 10 people in its sales, marketing, operations and finance departments.

"We are absolutely in hiring mode," she said. The company employs about 700 people worldwide.

 

Dow 5000? / 36 Month Recession

US Recession Could Last Up to 36 Months: Roubini

09 Mar 2009 | 03:52 PM ET SOURCE: http://www.cnbc.com

The man who predicted the current financial crisis said the US recession could drag on for years without drastic action.

Among his solutions: fix the housing market by breaking "every mortgage contract."

"We are in the 15th month of a recession," said Nouriel Roubini, a professor at New York University's Stern School of Business, told CNBC in a live interview. "Growth is going to be close to zero and unemployment rate well above 10 percent into next year."

Echoing a speech he made earlier in the day, Roubini said he sees "no hope for the recession ending in 2009 and will more than likely last into 2010."

Roubini, who is also known as "Dr. Doom," told CNBC that the risk of a total meltdown has been reversed for now but that the economy is going through "a death by a thousand cuts." He also said that "most of the U.S. financial institutions are entirely insolvent." 

"We could end up ... with a 36-month recession, that could be "L-shaped stagnation, or near depression," Roubini said. He puts the chance of a severe U-shaped recession at 66.7 percent, and a more severe L-shaped recession at 33.3 percent.

Finally, while he says there will be "a light at the end of the tunnel", it'll probably get worse before it gets better. Those who believe in a second half recovery this year "are delusional" he says.

In fact, based on Roubini's calculations, we could conceivably see the S&P 500 at 500, the Dow at 5000.

Dow 5000? There's a Case for It

Strategists Still See Rally, but Earnings Point to 1995 Levels for Stocks

March 9, 2009 

SOURCE: http://online.wsj.com

Just how low can stocks go?

Despite Friday's small gain, the Dow Jones Industrial Average marked its fourth consecutive week of losses as it tumbled through the 7000-point mark and spiraled to new 12-year lows. The Standard & Poor's 500-stock index is trading below 700 for the first time since 1996.

As earnings estimates are ratcheted down and hopes for a quick economic fix fade, the once-inconceivable notion of returning to Dow 5000 or S&P 500 at 500 looks a little less far-fetched.

Between April 8, 1932, and July 8, 1932, stocks fell 34% -- a little more than what it would take to get the S&P to 500.

A level of 500 would take declines for the S&P to 68% since its October 2007 high, compared with the peak-to-trough depression-era slump of almost 90%.

Plunging Markets, Then and Now

March 5, 2009, 6:50 PM

http://norris.blogs.nytimes.com

Here are the rankings for worst two-year periods, again assuming 2009 ends at today’s prices:

1. 1930-31, down 69%

2. 1931-32, down 64%

3. 2008-09, down 50%

4. 1929-30, down 45%

5. 1973-74, down 40%

6. 1906-07, down 39%

7. 2007-08, down 30%

8. 1940-41, down 26%

9. 1916-17, down 22%

10. 1920-21, down 25%

Here’s another indication that investors feel more or less the way they did during the last disaster:

It has been 513 calendar days since the stock market peaked on Oct. 9, 2007. Since then, the S.&P. 500 is down 56 percent and the Dow is off 53 percent.

On Jan. 29, 1931 — the identical number of days after the 1929 market peak — the S.&P. 500 was down 49 percent and the Dow was down 56 percent. The 1929 crash got off to a much faster start, but we have now more or less caught up.

Ever Closer to 1982

Ever Closer to 1982

By DAVID LEONHARDT

The job market is getting ever closer to the depths that it reached in 1982.

Since the start of 2008, the economy has lost jobs at a steeper rate than at any other point in 50 years. That hadn’t been true until today’s report. But the 651,000 job losses in February — together with 161,000 additional job losses in previous months, a result of Labor Department revisions announced today — means that the decline is worse than it was at any point during the deep recessions of the mid-1970s and of the early 1980s.

The economy has now lost 3.2 percent of its jobs since January 2007. It lost 3.1 percent between the summer of 1981 and the end of 1982.

BB

The job market still is not in as bad shape as it was in 1982, because unemployment entering this downturn was somewhat lower than it was in 1981. But it’s getting close.

The government’s broadest measure of unemployment and underemployment was 14.8 percent in February. That includes some of the people who have stopped looking for work because they don’t believe they can find jobs. It also includes part-time workers who want to be working full time.

The Labor Department did not keep such a statistic in the early 1980s. But it likely would have been in the neighborhood of 17 percent then. (Awhile back, I created a similar — though slightly narrower, for reasons of historical consistency — measure, with help from Labor Department economists. It peaked in 1982 at 16.3 percent in December 1982; it was 14.1 percent last month.)

So it’s still too early to call this the worst recession since the Great Depression. But it’s bad, and it’s still getting worse at a rapid rate.

More on the jobs report, from Economix, is here and here.

SOURCE: http://economix.blogs.nytimes.com/2009/03/06/ever-closer-to-1982/

Broader Unemployment Rate Hits 14.8%

March 6, 2009, 10:52 am

Broader Unemployment Rate Hits 14.8%

If a half-percentage-point increase in unemployment rate isn’t ugly enough for you, there’s more from your government statisticians: almost a full percentage point jump in a broader measure of unemployment.

The Labor Department reported today that its most comprehensive measure of joblessness hit 14.8% in February, from 13.9% in January. That’s just about 1 out of 7 Americans who are either unemployed and looking for a job, want a job but stopped looking, or part-timers who want full-time jobs.

We’ve already blown through the prior high point of the data series, which the Bureau of Labor Statisticsstarted in 1994. An even broader (since discontinued) series hit 15% in late 1982, and we’re likely to fly right through that one next month.

The 8.1% official unemployment rate, up from 7.6% in January, only counts people who are available for work and actively looked for a job in the prior four weeks. The 14.8% figure (known as the “U-6” by the BLS) includes everyone in the 8.1% figure, plus people who say they want a job and looked for work recently, along with people working part-time because they couldn’t get a full-time schedule.

How high can the U-6 go? Just looking at forecasts for the main unemployment rate, the broader measure would hit 17% by the end of next year. Some economists say 18% to 20% — 1 out of 5 peopleunemployed in some way — wouldn’t be terribly surprising. If employers aren’t hiring, job hunters would be more likely to give up hope and stop looking even if they do want jobs. After the 2001 recession, employers took roughly two years to resume meaningful hiring and competition was stiff for the jobs available. Anyone searching for a job during this recession is already aware of that grim reality. –Sudeep Reddy

SOURCE: http://blogs.wsj.com/economics/2009/03/06/broader-unemployment-rate-hits-148/

Demand down for foreign worker visas

By Malika Zouhali-Worrall, CNNMoney.com contributing writer

Last Updated: March 5, 2009: 3:41 PM ET

NEW YORK (CNNMoney.com) -- Kevin Chou has had his fair share of visa woes. For the past two years running, his Silicon Valley social networking start-up, Watercooler, has applied for an H-1B work visa for the same Canadian employee. Both times, the petition lost out in the government's annual visa lottery, which selected only 85,000 from a pool of more than 120,000 hopefuls.

"We've flushed $10,000 down the drain on H-1Bs," says a disenchanted Chou, who last year was unable to offer a job to a highly-skilled software engineer from India because he was worried that engineer would face the same problem. The candidate ended up taking a position at Google (GOOG, Fortune 500).

Watercooler's story is not atypical for small businesses, which usually have fewer resources to throw at the application process and no foreign offices in which to temporarily place talented candidates awaiting visa approval. As a result, many are disproportionately affected by the cap on H-1Bs. But this year, analysts say, could be different.

Immigration experts expect H-1B applications for 2009 to be at their lowest levels in years. Some even suggest that after April 1, the first day on which applications may be filed, it could take a week or more to fill the quota of 85,000 visas. (65,000 visa spots are open to all applicants, while an additional 20,000 are earmarked for those with graduate degrees from U.S. universities.) In past years, it's taken as little as 48 hours for the queue to fill up.

A combination of factors are behind this year's reduced demand, including the slowing economy, new restrictions on H-1B hiring at some firms, and the accounting scandal that has weakened massive Indian outsourcing firm Satyam Computer Services. The end result: Smaller firms have the best chance they've had in years to score an H-1B.

"If you're lucky enough to be in hiring mode, this is the year to apply," says Greg Siskind, an immigration attorney and blogger, who notes that the number of work visa applications always dips during a recession. Other attorneys say they're filing half as many applications as they did last year, as their clients cut costs or downsize.

That's good news for small business owners such as Aleksandar Ivanovic, CEO of Milwaukee software firm Webcom. He's not in the habit of applying for H-1Bs, but last year he decided that a talented intern of Nigerian citizenship was worth the investment of $5,000 for filing and attorney fees. The petition failed.

"It's frustrating because it's not easy to find bright kids," says Ivanovic. His company has unusually high standards when it comes to recruiting, even for internships; he requires at least a 3.9 GPA. This particular candidate was the only one who made it through a tough application process in 2007. Ivanovic hired him - the intern's student visa allows him to accept limited employment for training purposes. A more recent internship recruitment effort at Webcom drew close to a hundred applicants, but none of them made it through.

That's why Ivanovic is petitioning for an H-1B again this year for the same Nigerian intern, whom Ivanovic says has exceptional math and Boolean logic skills that Webcom hasn't found in any other candidates. Ivanovic would like to keep the staffer after his student visa runs out. He's happy that his chances of scoring the H-1B have dramatically improved.

It's not just the slowing economy that's depressing H-1B visa demand. A protectionist provision in the recently passed federal stimulus program has made it harder for financial institutions receiving federal funds to apply for H-1B visas for the next two years.

While individual U.S banks haven't been big H-1B petitioners in the past, their combined impact is significant. According to the National Foundation for American Policy, a nonpartisan immigration research think tank in Arlington, Va., twelve of the banks that have received funding from the government's Troubled Asset Relief Program (TARP) submitted a combined total of more than 900 H-1B petitions in 2007. That's a minuscule percentage of the more than 1.2 million workers the banks employed, but it's a noticeable chunk of the H-1B application pool.

Then there's Satyam, the Indian software firm currently under investigation for massive accounting fraud. In 2008, Satyam was the third-largest petitioner for H-1B visas, submitting a total of nearly 2,000 petitions, according to the U.S. Citizenship and Immigration Services.

Following the recent scandal, analysts such as Sam Udani of Immigration Daily, an immigration news Web site, expect the company to file far fewer applications this year. Satyam recently told the New York Times that it is withdrawing many Indian employees from the U.S. and sending them back to India.

"If you apply for an H-1B this year, there's close to a 100% chance that you'll get it," Udani says.

Watercooler's Chou says he has no choice but to try again this year. His foreign employee has remained with the company for the past two years on a special TN1 work visa for Canadians, but it costs $2,000 for the company to renew each year, with no guarantee that the next year's renewal will be granted.

Finding an American employee to replace his Canadian staffer wouldn't be easy, Chou says. Part of a seven-person software engineering team, she started at Watercooler within months of the company's launch and has deep institutional knowledge to draw on - plus fluency in LAMP (Linux, Apache, MySQL, PHP) and the application development platforms that underpin social networking sites Facebook and MySpace.

"Finding that type of skill set is not easy. It's very specialized," says Chou. He estimates that finding and training a replacement would take at least six months and amount to more than $50,000 in expenses.

This year's better H-1B odds give Chou hope, but after losing out the past two years, he's not holding his breath. "It's still a $5,000 bet," he says. 

First Published: March 5, 2009: 6:38 AM ET

Obama’s Scary Hoover-Style Tax Hikes

March 2nd, 2009 5:17 PM Eastern

Obama’s Scary Hoover-Style Tax Hikes

By Phil Kerpen
Director of Policy, Americans for Prosperity

The composition of the tax hikes in the 2010 budget is frighteningly similar to the Revenue Act of 1932, the much-maligned Hoover tax hikes that put the “Great” in Great Depression by putting an enormous tax burden on millions of Americans, largely through excise taxes. These taxes, raised even further by FDR, were justified by the promise that the funds would be returned in the form of relief programs, which is to say that some portion of the tax revenue, after administrative costs in Washington, would go back to the states with strings attached, often to further political rather than economic objectives.

As the table below shows, the Obama budget blueprint, like the 1932 act, is split mainly between broad excise taxes and income tax hikes on high income earners. Unfortunately, there were no 10-years projections back then, so I had to use one year numbers, but it’s still an interesting comparison.

Courtesy Phil Kerpen

The 2010 budget assumes, probably correctly, that the only way to generate a big revenue increase in the face of severe economic weakness is to use a tax mechanism–the excise tax–that is collected in relatively small increments across millions of transactions made by Americans of all income levels. That is a direct lesson of 1932, when the income tax on the rich–then the only people who paid income taxes–was raised to capture as much revenue as possible before high-income earners fled the country or stopped working. Then, as now, that amount was about 0.3 percent of GDP.

Excise taxes did most of the revenue work in the 1932 act, including excises on everything from trucks, tires, jewelry, chewing gum, and soft drinks to gasoline and electricity. Those last two are especially interesting in light of the carbon cap-and-trade proposal in the 2010 budget, which is a de facto excise tax on those items as well as every other energy technology that relies on the most affordable energy sources: natural gas, oil, and coal.

Despite President Obama’s promise that “If your family earns less than $250,000 a year, you will not see your taxes increase a single dime. I repeat: not one single dime,” his new budget raises 45 percent of its revenue from energy taxes that will be paid by everyone who fills a gas tank, pays an electric bill, or buys anything that was grown, shipped, or manufactured.

While the overall tax hike is smaller than 1932 (0.9 percent of GDP versus 1.6 percent of GDP) and the excise/energy component is only half the size (0.4 percent of GDP versus 0.8 percent of GDP) there is every reason to believe that the bite of the cap-and-trade tax will increase considerably beyond the initial projections, making this plan even more resemble 1932.

The cap-and-trade provisions are designed to get much, much more expensive over time, making the total impact hard to quantify but likely to be as or more expensive than the 1932 Revenue Act. In fact, Obama’s version of cap-and-trade is much more expensive than last year’s already outrageous Lieberman-Warner bill, mandating emissions cuts of 83 percent versus 63 percent in last year’s version.

I didn’t include the death tax in the chart, because there was no revenue estimate for it in 1932, but that’s another eerie parallel. In 1932 the rate was hiked from 20 percent to 45 percent, and in 2010, under Obama’s proposal (which is hidden in a footnote in the budget) it will go from zero under current law to that same 45 percent rate.

If we continue down a path of repeating the policies of the 1930s we risk a repeat of the same results. Let’s hope Congress has the good sense to say no to these Hoover-style tax hikes.

Phil Kerpen is director of policy for Americans for Prosperity.