Economy

Wealth Gap Widens in Silicon Valley

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The information economy may be firing on all cylinders, but in Silicon Valley more than 60,000 “midwage” jobs — defined as those paying between $30,000 to $80,000 annually — disappeared between 2002 and 2006. During that same period, however, Silicon Valley employers added more than 66,000 jobs paying less than $30,000. The Silicon Valley Index, published annually by a public-private consortium, details the changes, many of which contain “good news,” according to the San Francisco Chronicle. This includes increased worker productivity, more venture capital, and growth in niche markets and new industries, such as “clean tech.” The report blames outsourcing as one of the main culprits in the exodus of higher-paying jobs, but also calls for more aggressive retraining of workers who have been sidelined by the global economy, and remain unaware of opportunities in other fields.

Economy

"Dodgy Collateral" Fuels New Bank Borrowing

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U.S. banks have borrowed almost $50 billion in the last month from the Federal Reserve, using an expanded government program that some critics fear will deepen instability long-term. The Financial Times of London reports that the Reserve’s Term Auction Facility has enabled the government to reduce “financial stress” by “channelling liquidity into the banking system.” It achieves this by allowing banks to “borrow at relatively attractive rates against a wider range of their assets than previously permitted.” One analyst, however, told the Times that the move allowed banks to borrow more freely against “dodgy” or “garbage” collateral, and said the situation was “perilous.” Overall, however, the U.S. government program is popular with banks, and may even be expanded.

Economy

Housing Crash Takes Down Renters, Too

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Among the 11,000 San Francisco Bay Area homes repossessed in 2007 are hidden statistics — the number of renters quickly evicted following their landlords’ fall from grace. No one knows how many renters have been shown the door, but the San Francisco Chronicle reports that the number is “high.” One housing counselor told the newspaper that it has become a “common problem,” while the Oakland city attorney’s office has heard “a ton of anecdotes” about such evictions, according to a neighborhood legal advocate. Efforts to strengthen tenants’ rights have been stymied at the state level. Meanwhile, some lenders are said to speed up the eviction process by telling tenants in foreclosed properties that they no longer have to pay rent — and then serve them eviction notices for nonpayment several months later.

Economy

Shoemakers Walking Away from South China

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More than 1,000 shoe factories in southern China have closed in the past year — half of them just in the past 12 weeks — and many more will be shutting down in the coming months, according to news reports. Hong Kong’s Asia Times reports that about 10,000 factories of different types are expected to close in the region this month, as wages increase and environmental and employment regulations tighten. About half the companies leaving Guangdong are moving to other provinces of China, according to Hong Kong’s Asia Times. At least 25 percent of them are moving to other Asian nations such as Vietnam, where labor is cheaper and regulations looser, according to the newspaper. China’s new Labor Contract Law, which was implemented last month, is seen as a major factor in the mass exodus of industry.

Democracy & Civics

Sea Cow Stymies Navy’s Okinawa Plan

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The endangered dugong, a type of “sea cow” similar to Florida’s manatee, threatens to put the brakes on a huge military construction project in Japan. A federal court in San Francisco ruled that Navy plans to build a new base in Okinawa would violate the National Historic Preservation Act by threatening dugong habitat. The Christian Science Monitor reports that protecting the dugong could cut into related construction and service jobs, exacting a steep economic toll on economically depressed northern Okinawa. U.S. military facilities in Okinawa have a long and controversial history, with resentment lingering over the rape of a schoolgirl by three U.S. servicemen in 1995. Plans for the new base were approved in the late 1990s, following Tokyo’s commitment of more than $900 million in tax breaks and stimulus programs for Okinawa.

Democracy & Civics

The Biodiesel Road Proves Bumpy in Southeast Asia

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It’s heralded as the clean-burning alternative to petroleum, but biodiesel’s baggage has made a smooth roll-out seem unlikely. The challenges come into focus in Southeast Asia, where economic, environmental and industrial concerns find themselves at odds. THAILAND
In Thailand, where new laws mandate the use of biodiesel, fears are emerging over the effects of increased demand for palm oil, which is a cooking staple in private and commercial kitchens across the country. Now, with prices for palm oil spiking, government ministers are pondering an export ban, and also the import of 30,000 tons of palm kernel oil to meet growing demand. A palm oil industry spokesman told the Bangkok Post that the bans would negatively affect local farmers, and called for better management of existing supplies.

Economy

Are Boycotts Cutting into Myanmar's Gem Trade?

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[Updated Jan. 17, 2008]
The Myanmar junta’s repression of democracy protests last summer have calmed the streets, but its harsh tactics may have also robbed the state’s gem trade of its luster. Inter Press Service reports that Myanmar’s gem auctions brought in $300 million in 2006, the state’s third most profitable export after fossil fuels and timber. But according to activists, a November 2007 gem auction earned $150 million, far short of its $230 million “low end sales projection.” Now, Myanmar is staging another auction this week, prompting renewed calls for boycotts.

Democracy & Civics

Afghan Reconstruction Faces U.S. Budget Cuts

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An innovative reconstruction program in Afghanistan has been praised for giving decision-making power to small villages and communities, but may be shuttered due to funding shortfalls. Washington Monthly reports that Afghanistan’s National Solidarity Program is a success across the country, even in unstable areas where the Taliban still holds sway. Originally developed by a “maverick” World Bank officer in Indonesia, advocates say the NSP ensures a sense of ownership by involving all community members in public meetings to determine what local needs are, and allows their direct participation in subsequent construction and development. It also enforces local accountability by requiring full, public disclosure of fund uses and project timelines by village leaders to their constituents. The magazine reports that small public works projects in, such as hydropower and irrigation development, tend to stay intact in “low-security environments.”

Democracy & Civics

Things Looking Up for the Poor Down Under

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When Australia’s conservative government was voted out of office last month, much of the world’s media emphasized the possible ramifications for the wars in Iraq and Afghanistan — or the fact that the former singer of politically charged rockers Midnight Oil is now the nation’s environment minister. But the changes go much deeper than that. The newly installed government of Prime Minister Kevin Rudd is acting quickly to reverse the policies of previous Prime Minister John Howard on a wide range of social justice issues. This week, the government announced that it would discontinue the controversial “Pacific Solution,” whereby Asian refugees seeking asylum in Australia were held in camps in Papua New Guinea. The program, instated by Howard in 2001, had been assailed by human rights groups and the United Nations.

Economy

Oil Industry's Amazon Frontier

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Economic development and ecological conservation are once again at odds in the Amazon, where a remote region thick with rare species — and indigenous peoples in “voluntary isolation” — has been opened to extensive oil and gas development. Environment News Service reports that Brazil’s Petrobras, the U.S. firm Barrett Resources and Spain’s Repsol have all been approved to develop vast territories in the Upper Amazon Basin, in the border regions of Peru and Ecuador. Activists say that 73 percent of the Peruvian Amazon “is now or soon will be” open to oil development, up from 13 percent in 2004. Source:
“Oil Developers Permitted to Penetrate Pristine Upper Amazon”
Environment News Service, December 4, 2007