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January 26, 2012


Headline News
Jobless Claims Rise, But Trend Shows Improvement
Fed Sees Low Rates to 2014
U.S. Durable Goods Orders Beat Expectations
New U.S. Car Plants Signal Renewal for Manufacturing
Mass Layoff Actions Rose in December
Health Care: Jobs Will Be Hard to Create
Fastest Growing Programming Skills Required in Online Job Ads

Legal Watch
Indiana Right-to-Work Bill Advances
Workers’ Comp Costs Driven by Recession
E-Verify Now a Must for Larger Firms

ASA for You
Differentiate Your Firm—ASAPro Webinar Today
Keep Your Compensation Competitive

Headline News


Jobless Claims Rise, But Trend Shows Improvement
Reuters (01/26/12)

Jobless claims climbed by 21,000 to a seasonally adjusted 377,000 in the week ended Jan. 21, the U.S. Labor Department reports. However, the underlying trend continued to point to improving labor market conditions. Economists polled by Reuters had forecast claims increasing to 370,000. The four-week moving average for initial claims, seen as a better measure of labor market trends, fell 2,500 to 377,500.

Fed Sees Low Rates to 2014
Wall Street Journal (01/26/12) Luca Di Leo; Jon Hilsenrath

U.S. Federal Reserve officials expect to keep short-term interest rates near zero for almost three more years and have signaled they could restart a bond-buying program in another effort to provide a spark for the economy. Fed chairman Ben Bernanke says central bank officials are a little more confident that inflation is settling down after climbing last year, potentially giving the Fed leeway to take more action to support the economy, though he has not committed to it.

The Fed also formally declared it wants inflation of 2% a year in the long run in hopes of assuring the public it will not allow inflation to either rise or fall too much. However, Bernanke suggests he might let inflation run slightly above that for a little while if it would help to lower the unemployment rate.

U.S. Durable Goods Orders Beat Expectations
Bloomberg (01/26/12) Bob Willis

Orders for U.S.-made durable goods rose 3.0% in December after a revised 4.3% gain the prior month that was more than previously estimated, the U.S. Commerce Department reports. Economists projected a 2.0% increase, according to the median forecast in a Bloomberg News survey. Increases in consumer and business spending, combined with lean inventories, may keep driving production in coming months and spur the expansion.

New U.S. Car Plants Signal Renewal for Manufacturing
Wall Street Journal (01/26/12) Neal Boudette

A large supply of affordable labor and favorable foreign exchange rates have helped the U.S. emerge as a favored location for making cars and trucks to be exported to markets around the world—especially for Japan’s big three auto makers. Toyota Motor Corp., Honda Motor Co., and Nissan Motor Co. are increasing capacity in their U.S. plants with the intention of shipping U.S.-made models to other parts of the world.

“The weaker dollar makes it more advantageous to export” from the U.S., says Bill Krueger, vice chairman of Nissan’s operations in North and South America. “We continue to grow our capacity in our U.S. plants. We’re adding shifts and hiring workers.” The company is in the process of hiring 2,500 additional workers at two plants in Smyrna, TN. One hundred and fifty engineers are also being added at a technical center in Farmington Hills, MI. Toyota and Honda are also planning to increase output at their U.S. plants.

Mass Layoff Actions Rose in December
Business First of Louisville (01/25/12)

The U.S. Bureau of Labor Statistics reports that businesses took a seasonally adjusted 1,384 mass layoff actions in December that involved 145,648 workers, as measured by new filings for unemployment benefits during the month. Mass layoff events in December increased by 52 from November, and associated initial claims increased by 14,021. Each mass layoff involved at least 50 workers from a single company. California recorded the highest number of mass layoff initial claims in December, followed by Pennsylvania, Illinois, Michigan, Ohio, and New York. There were 18,521 mass layoff events for all of 2011, the lowest such number since 2007.

Health Care: Jobs Will Be Hard to Create
National Journal (01/25/12) Meghan McCarthy

President Barack Obama has repeatedly made it clear that he sees the health care sector as a place ripe for jobs growth. The American Association of Medical Colleges projects a shortage of 90,000 doctors over the next 10 years, while the American Nursing Association sees a potential shortage of 260,000 nurses by 2025. These shortfalls will only increase as an additional 30 million people get health insurance under the 2010 health care reform law.

However, a national work force commission established under the health care law has been chronically underfunded by Congress, and the training programs that will be needed to fix these shortages have a slim chance of obtaining any funds. Meanwhile, the medical device industry says the cost of the health care reform law is already causing layoffs. The American Hospital Association, meanwhile, warns that a coming 2% cut to Medicare and other cuts will cost them 278,000 jobs as revenue drops from Medicare and Medicaid.

Fastest Growing Programming Skills Required in Online Job Ads
Wanted Analytics (01/25/12) Abby Lombardi

Among the fastest growing computer programming skills in demand are Ruby, REST, and JSON. In December, recruiters posted more than 3,200 job ads for computer programmers that included Ruby as one of their skill requirements, representing a 40% increase in demand compared to December 2010. The volume of job ads that included REST requirements increased 60% between December 2010 and December 2011. Hiring demand for JSON has grown the most since 2007. In December 2011, about 2,200 jobs were advertised online that included requirements for this skill set, a total 930% higher than the one in December 2007.


Legal Watch


Indiana Right-to-Work Bill Advances
Wall Street Journal (01/26/12) Jack Nicas; Kris Maher

The Indiana House approved legislation on Jan. 25 that would ban contracts requiring employees to pay union dues, ending Democratic efforts to block the bill and making final passage almost certain for the country’s first right-to-work law in more than 10 years. The measure now heads to the Indiana Senate, which is expected to move the legislation to Republican Gov. Mitch Daniels by Feb. 1. “This is going to embolden Republican presidential candidates to talk about a national right-to-work law,” says Gary Chaison, a professor of industrial relations at Clark University. At least nine states have right-to-work legislation pending.

Workers’ Comp Costs Driven by Recession
Sacramento Business Journal (01/25/12) Kelly Johnson

A new study from the Workers’ Compensation Research Institute concludes that the recession contributed to indemnity costs per claim in California growing faster from 2007 to 2009 than in prior years. Between 2002 and 2005, California’s indemnity costs per claim dropped almost 30% as a result of reforms. But the organization reports that costs per claim rose at an annual rate of 7% between 2007 and 2009, despite little change in the average weekly wage of injured California workers during that time. The average duration of temporary disability claims increased by one week per year during the recession, which drove much of the recent increase in indemnity costs.

WCRI says the data is possible evidence that the recession had an impact on workers’ compensation costs. “During a recession period, one would typically expect to see slower wage growth, slower return to work (because there are fewer jobs available due to higher unemployment rate), and more incentive to settle cases for both parties because of greater uncertainty regarding the future,” the report states.

E-Verify Now a Must for Larger Firms
Shelbyville Times-Gazette (Tennessee) (01/25/12) John Carney

Businesses that employ 500 or more people are now required to either use E-Verify, the federal government’s electronic employment eligibility verification program, to check the citizenship status of newly hired employees, or else ask for and keep a file copy of verifying documents. Many Tennessee businesses have already been using the E-Verify program for years. “We’ve been utilizing the program for some while now,” says Wendy Bruer of HG Staffing. “It’s very easy. It only takes a few minutes per employee.”

Bruer notes that before E-Verify, some businesses paid to have Social Security checks done. She adds that the nature of the staffing company business means that she processes more inquiries a week than most normal businesses would. “If I can do it,” she says, “then any employer should be able to.” Bruer says she has had only a couple of nonconfirmations—cases where the E-Verify system has flagged an employee’s citizenship status. The employee must then go to a Social Security office to sort out the matter, and the potential employer will be notified once the matter has been resolved.


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