KeNo's Housing and Economic Portal: Tuesday July 5 Housing and Economic stories

Monday, July 4, 2011

Tuesday July 5 Housing and Economic stories

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Florida Teachers Sue State To Avoid Paying For Pensions - (www.businessinsider.com) They say it's 'unconstitutional.' Florida teachers are suing the state to block a new law that requires public employees to start contributing to their pension plans. The lawsuit, filed Monday by Florida's 140,000-member teachers union, argues the state violated its contractual obligations when it passed a law requiring state workers to contribute 3% of their salaries to the state retirement system. The teachers also object to a provision that would end cost-of-living increases for retirees. The suit, which represents several state employee unions, claims that the new mandates amount to an "unconstitutional" pay cut. State workers have not paid into their pension plans since 1974.

Updated: President Obama In A Tough Spot On Boeing-NLRB Case - (www.businessinsider.com) In the latest development in Boeing's ongoing dispute with its main union, last week the aerospace giant filed a motion to dismiss the pending court case threatening to prevent it from opening a new assembly plant in South Carolina. This afternoon, the National Labor Relations Board will file a counter-motion to keep the case in court. At issue is whether Boeing's decision to open the South Carolina plant constitutes retaliation against the The International Association of Machinists and Aerospace Workers (IAMAW), whose 2008 strike crippled the company and set back production of the company's new Dreamliner jet. Boeing contends the move is simply a response to incentives and lower wages in South Carolina, though in a video interview with the Seattle Times, Boeing executive vice president Jim Albaugh said preventing another strike was a key motivator for the move. “The overriding factor was not the business climate, and it was not the wages we’re paying people today," he said. "It was that we can’t afford to have a work stoppage every three years.” South Carolina Gov. Nikki Haley (R) was in Washington last month to try to force Obama to take a position on the suit — something Obama seems unwilling to do. Unions played a major role in helping Obama win the White House in 2008, and he needs them to play a similar role organizing for his reelection. Complicating his political calculus, both Obama's Chief of Staff William Daley, and his nominee to head the Department of Commerce, John Bryson have served on Boeing's board.

Bernanke May Prolong Record Stimulus to Spur Economy - (www.bloomberg.com) Federal Reserve Chairman Ben S. Bernanke will probably delay the central bank’s exit from record stimulus, economists said in a survey, giving the flagging economy a boost without resorting to additional asset purchases. Seventy-nine percent of 58 economists expect Bernanke to sustain the Fed balance sheet at current levels until October or later, compared with 52 percent who held that view before the Fed’s last policy meeting in April, according to a Bloomberg News survey conducted last week. Ninety percent of those surveyed predict the Fed will wait until the fourth quarter before dropping its pledge to hold interest rates low for an “extended period.”

Banks May Speed Job Cuts: Challenger - (www.bloomberg.com) U.S. banks may accelerate job cuts after reducing 11,400 positions in the first five months of the year, a 21 percent increase over 2010, because of falling profits and government regulation, according to Challenger, Gray & Christmas Inc. “Firms are under tremendous pressure,” said John Challenger, chief executive officer of the Chicago-based company that advises companies on workplace reductions. “Shareholders are bailing out of them, and their stock prices are reflecting that these businesses may not be the profit-generating entities that they once were.” Job cuts at financial firms are climbing after falling to a 14-year low of about 24,000 announced last year, according to data compiled by Challenger. This year’s reduction “might very well” be more than double 2010’s number, CEO Challenger said today in a phone interview.

IMF Warns of ‘Considerable’ Risks in Spain as Debt Crisis Threatens Growth - (www.bloomberg.com) The International Monetary Fund said Spain must step up efforts to reform its economy as Europe’s sovereign debt crisis threatens to damp growth. “The repair of the economy is incomplete and risks are considerable,” the Washington-based IMF said in its annual appraisal of Spain yesterday. There must be “no let up in the reform momentum” to bolster the recovery and reduce a 21 percent unemployment rate that is “unacceptably high,” the fund said. Spain’s Socialist government is carrying out the deepest budget cuts in at least three decades while raising the retirement age and reducing firing costs. Prime Minister Jose Luis Rodriguez Zapatero overhauled wage-bargaining rules on June 10 in the latest step aimed at reining in borrowing costs that surged to the highest in a decade last week on mounting expectations of a Greek default.