Wednesday, August 17, 2011
For-Profit College Lobbying Group Sues Obama Administration Over Regulations
More than a month after the Obama administration issued weaker-than-expected regulations aimed at reining in abuses at some for-profit colleges, a trade association for the industry filed a lawsuit on Wednesday seeking to strike down the new rules governing excessive student debt.
The lawsuit is a perplexing move for the for-profit college industry, which aggressively fought the Obama administration’s crackdown for more than a year, and ultimately succeeded in getting final regulations last month that were universally regarded as being substantially weakened from those proposed a year earlier.
The market has signaled that investors approved of the measures: Since the Obama administration issued the “gainful employment” regulations in early June, the stocks at many publicly traded for-profit college companies have soared. Executives at for-profit college corporations, including University of Phoenix founder John G. Sperling, have cashed in on the rise by selling millions of dollars worth of stocks since the rules were issued.
Yet despite the apparent victory by the industry’s multi-million dollar lobbying and campaign finance efforts over the past year, the lawsuit from the Association of Private Sector Colleges and Universities calls out the Obama administration’s Department of Education for writing “fatally flawed” regulations that will result in “massive disincentives on private sector schools that currently seek to educate low-income, minority, and other traditionally underserved student populations.”
A spokesman for the association said he was unable to comment on why the lawsuit was filed despite the positive reception of the regulations from the stock market.
Department of Education spokesman Justin Hamilton said in a statement, “Our regulations offer students and taxpayers the protection they deserve. These student safeguards rest on a sound legal foundation.”
Critics of the industry said they were surprised that the trade group would come out swinging after the markets signaled a total victory.
"I’m kind of taken aback by this total rejectionist position," said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, who has followed regulations on for-profit higher education for years. “They’ve decided that total war is the way to go.”
The lawsuit argues the administration does not have the authority to move forward with the “gainful employment” regulations, which test programs at for-profit colleges and other vocational schools based on the percentage of students who are able to repay student loans and the amount of overall student loan debt compared to students’ income.
“This lawsuit is necessary in order to protect 3.8 million students who attend private sector colleges and universities today and those who will attend our schools in the future,” Brian Moran, the group’s interim president and chief executive, said in a statement.
Supporters of stricter accountability for for-profit colleges -- which have taken in a disproportionate amount of federal student aid dollars over the past decade and contribute to nearly half of all federal student loan defaults -- see the issue of protecting students in a different light.
The “gainful employment” measures were conceived by the administration as both an accountability test for the federal student loan program and as a consumer protection measure for students who are often reeled in by aggressive recruiting tactics. Under the administration’s original proposal last summer, programs could immediately lose access to lucrative federal student aid dollars that fuel the bulk of profits if too many students had unsustainable debts.
After a relentless lobbying and public relations campaign by the industry, programs were given an additional three years to come into compliance with the rules. Instead of potentially losing access to federal student loan and Pell grant dollars after failing debt tests for one year, programs must now fail tests three out of four years in order to be deemed ineligible.
The Association of Private Sector Colleges and Universities has filed litigation against most of the major regulations imposed on their industry since the beginning of the Obama administration. A federal judge ruled earlier this month on a lawsuit by the group that disputed additional regulations on the for-profit higher education industry: rules meant to hold schools accountable for recruiters who make misleading statements to prospective students, and rules meant to crack down on bonuses and raises given to recruiters based on the number of students enrolled.
The judge ruled in favor of the Department of Education on those rules, but found fault with an administration rule that required schools to get separate state authorizations for students attending online.
The industry group has appealed the judge’s decision on the misrepresentation and student recruitment rules
http://www.huffingtonpost.com/2011/07/20/for-profit-college-lobbyi_n_905176.html
For-profit colleges respond to increased scrutiny
ST. LOUIS (AP) — They gather in a generic suburban office park, working-class students chasing a fast track to success: a college degree.
But the message at the University of Phoenix orientation is not quite what these secretaries, mental health aides, working moms and single dads expect.
"We want you to decide if this is right for you," says Sam Fitzgerald, director of academic affairs at the school's four St. Louis campuses. "We're here to help you figure it out."
That candor would have been anathema not too long ago in the lucrative world of for-profit colleges, where recruiters received hefty bonuses and often oversold career prospects.
Yet these are new times for the industry that now accommodates one in every eight American college students, either in class or online. Lawmakers in Congress are probing its excesses, from high loan default rates to reports of exploitative sales pitches to wounded veterans.
The Obama administration in June unveiled new rules that could cut off government aid for programs where too few students repay their loans or acquire decent-paying jobs. Disenchantment — and lawsuits — continue among both former students and skittish investors.
"They have a huge bulls-eye on them," said Kevin Kinser, an associate professor at the State University of New York at Albany who studies the industry. "They can't risk business as usual anymore."
The for-profit industry, which prefers the term "career colleges" or "proprietary" schools, grew rapidly over the last decade amid renewed calls to increase the nation's college graduation rate and a need to help laid-off workers find new careers. The private sector's slice of federal aid money grew from $4.6 billion to more than $26 billion between 2000 and 2010.
Now, the industry will see if it can still make healthy profits from its challenging demographic __ low income workers, older students and those with spotty academic backgrounds— while being much more accountable for its results.
The changes are most apparent at the University of Phoenix and its corporate parent, Apollo Group Inc., which, with nearly 400,000 students, ranks atop the industry.
The school has created its own social network, PhoenixConnect, to better link its far-flung students as well as 600,000 alumni who could help those students and graduates find jobs. It boasts of new alumni association chapters, hundreds of student clubs and mentorship programs.
The three-week orientation program is now required of all prospective students with fewer than 24 college credits. The program is free, but those who don't pass can't continue. The company scrapped its financial incentive program for enrollment counselors and there's less reliance on outside sales companies to generate leads, and more emphasis on finding corporate partners willing to help pay for their employees' education.
The results have been dramatic. New student enrollment has declined by nearly half, and the company reported $159 million less in net revenue after the first three quarters of fiscal year 2011 compared to the previous year.
Officials expect further enrollment declines and more short-term financial pain but insist the approach will pay off with fewer dropouts, higher graduation rates and lower federal loan default rates.
"We have made a conscious decision to make sure the students coming through the door are more likely to be successful," said Mark Brenner, senior vice president for external affairs.
Change is also afoot at Kaplan University, which is owned by The Washington Post Co. and serves about 62,000 students. Another 50,000 students study at Kaplan Higher Education career colleges, which focus more on specific trades.
Stung by a series of whistleblower lawsuits by former employees and a Florida attorney general's investigation, Kaplan created a program that allows new students to attend classes for four or five weeks at no cost before deciding whether to continue. Kaplan also stopped paying incentives to recruiters.
The company reported a 48 percent decline in new enrollments as of April and an attrition rate of 25 percent. Of the latter group, 60 percent are dismissed by Kaplan for lack of academic progress.
The for-profit industry's staunchest defenders include Donald Graham, chief executive officer of The Washington Post Co.
"If we are to be guided only by those factors — student graduation rates and how much debt they incur — we would probably close down all, or almost all, of the institutions of higher education — whomever they may be run by — that serve poor students," Graham said at the company's annual meeting in May.
A committee led by Sen. Tom Harkin, D-Iowa, has held multiple hearings on for-profit colleges over the past year — most recently in early July, after the Obama administration issued its new "gainful employment" rules. Those rules require schools to meet at least one of three conditions to continue receiving Pell Grants and other federal paid-tuition: a loan repayment rate by former students of least 35 percent; annual loan payments of no more than 30 percent of an average student's discretionary income; or annual loan payments that don't exceed 12 percent of a typical graduate's salary.
Regulators say those conditions are needed to ensure that for-profit graduates won't face crippling debts, which combined with low-paying jobs could lead to more loan defaults.
The Senate committee found an average dropout rate of 57 percent within two years of enrollment at 16 unnamed for-profit schools. More than 95 percent of students at two-year proprietary schools, and 93 percent at four-year schools, took out student loans in 2007, the committee found. That compares to fewer than 17 percent of community college students and 44.3 percent of students at four-year public schools. Students at for-profit schools also account for nearly half of all student loan defaults, the committee found.
"Some for-profit schools are efficient government subsidy collectors first and educational institutions second," the committee concluded in its report.
In contrast to most nonprofit colleges, proprietary colleges have emphasized expanding their student rolls, regardless of the academic prospects of those enrolled.
"State institutions might like to grow, but they can't afford to. Elite schools define themselves by the fact they don't grow," said industry analyst Trace Urdan, the managing director of Signal Hill Capital Group. "This is a place where growth is the essence of the institution."
Harkin, the industry's most vocal critic, recently compared the high default rates to the subprime mortgage loan meltdown. He remains skeptical that the sector has mended its ways.
"For-profit education must work for students, not shareholders," he said.
Eric Schmitt, 36, earned an associate's degree from Kaplan University's campus in Cedar Falls, Iowa, and then a bachelor's degree from its online school three years ago The aspiring paralegal said he has been unable to find a job in the field. He owes nearly $45,000 in student loans and is working a temporary warehouse job to help support his wife and two children.
Schmitt, who testified before Harkin's committee in June, called the Kaplan Commitment and other industry initiatives "a step in the right direction" but said the gap between education costs and real job prospects could mean "you're going to keep seeing students thrown under the bus."
In a statement issued by Kaplan after Schmitt's testimony, the company said he turned down a paralegal job it helped him line up.
The conversations in Washington and Wall Street mean little to Carl Tabb, a 36-year-old father of 10 who hopes to earn a bachelor's degree in information technology from the University of Phoenix while continuing to work full-time for the Missouri Department of Mental Health and moonlighting repairing home computers.
"I really was not the best student when I was in school," he said. "I always thought I wouldn't make it to college."
Fitzgerald, a former Price Waterhouse consultant, said nontraditional students such as Tabb deserve just a chance to earn a degree and a shot at better future.
"Yeah, we're a for-profit. But that doesn't mean we're in it for the wrong reasons," she said. "We want to set up our students for success."
___
Alan Scher Zagier can be reached on Twitter at http://twitter.com/azagier
But the message at the University of Phoenix orientation is not quite what these secretaries, mental health aides, working moms and single dads expect.
"We want you to decide if this is right for you," says Sam Fitzgerald, director of academic affairs at the school's four St. Louis campuses. "We're here to help you figure it out."
That candor would have been anathema not too long ago in the lucrative world of for-profit colleges, where recruiters received hefty bonuses and often oversold career prospects.
Yet these are new times for the industry that now accommodates one in every eight American college students, either in class or online. Lawmakers in Congress are probing its excesses, from high loan default rates to reports of exploitative sales pitches to wounded veterans.
The Obama administration in June unveiled new rules that could cut off government aid for programs where too few students repay their loans or acquire decent-paying jobs. Disenchantment — and lawsuits — continue among both former students and skittish investors.
"They have a huge bulls-eye on them," said Kevin Kinser, an associate professor at the State University of New York at Albany who studies the industry. "They can't risk business as usual anymore."
The for-profit industry, which prefers the term "career colleges" or "proprietary" schools, grew rapidly over the last decade amid renewed calls to increase the nation's college graduation rate and a need to help laid-off workers find new careers. The private sector's slice of federal aid money grew from $4.6 billion to more than $26 billion between 2000 and 2010.
Now, the industry will see if it can still make healthy profits from its challenging demographic __ low income workers, older students and those with spotty academic backgrounds— while being much more accountable for its results.
The changes are most apparent at the University of Phoenix and its corporate parent, Apollo Group Inc., which, with nearly 400,000 students, ranks atop the industry.
The school has created its own social network, PhoenixConnect, to better link its far-flung students as well as 600,000 alumni who could help those students and graduates find jobs. It boasts of new alumni association chapters, hundreds of student clubs and mentorship programs.
The three-week orientation program is now required of all prospective students with fewer than 24 college credits. The program is free, but those who don't pass can't continue. The company scrapped its financial incentive program for enrollment counselors and there's less reliance on outside sales companies to generate leads, and more emphasis on finding corporate partners willing to help pay for their employees' education.
The results have been dramatic. New student enrollment has declined by nearly half, and the company reported $159 million less in net revenue after the first three quarters of fiscal year 2011 compared to the previous year.
Officials expect further enrollment declines and more short-term financial pain but insist the approach will pay off with fewer dropouts, higher graduation rates and lower federal loan default rates.
"We have made a conscious decision to make sure the students coming through the door are more likely to be successful," said Mark Brenner, senior vice president for external affairs.
Change is also afoot at Kaplan University, which is owned by The Washington Post Co. and serves about 62,000 students. Another 50,000 students study at Kaplan Higher Education career colleges, which focus more on specific trades.
Stung by a series of whistleblower lawsuits by former employees and a Florida attorney general's investigation, Kaplan created a program that allows new students to attend classes for four or five weeks at no cost before deciding whether to continue. Kaplan also stopped paying incentives to recruiters.
The company reported a 48 percent decline in new enrollments as of April and an attrition rate of 25 percent. Of the latter group, 60 percent are dismissed by Kaplan for lack of academic progress.
The for-profit industry's staunchest defenders include Donald Graham, chief executive officer of The Washington Post Co.
"If we are to be guided only by those factors — student graduation rates and how much debt they incur — we would probably close down all, or almost all, of the institutions of higher education — whomever they may be run by — that serve poor students," Graham said at the company's annual meeting in May.
A committee led by Sen. Tom Harkin, D-Iowa, has held multiple hearings on for-profit colleges over the past year — most recently in early July, after the Obama administration issued its new "gainful employment" rules. Those rules require schools to meet at least one of three conditions to continue receiving Pell Grants and other federal paid-tuition: a loan repayment rate by former students of least 35 percent; annual loan payments of no more than 30 percent of an average student's discretionary income; or annual loan payments that don't exceed 12 percent of a typical graduate's salary.
Regulators say those conditions are needed to ensure that for-profit graduates won't face crippling debts, which combined with low-paying jobs could lead to more loan defaults.
The Senate committee found an average dropout rate of 57 percent within two years of enrollment at 16 unnamed for-profit schools. More than 95 percent of students at two-year proprietary schools, and 93 percent at four-year schools, took out student loans in 2007, the committee found. That compares to fewer than 17 percent of community college students and 44.3 percent of students at four-year public schools. Students at for-profit schools also account for nearly half of all student loan defaults, the committee found.
"Some for-profit schools are efficient government subsidy collectors first and educational institutions second," the committee concluded in its report.
In contrast to most nonprofit colleges, proprietary colleges have emphasized expanding their student rolls, regardless of the academic prospects of those enrolled.
"State institutions might like to grow, but they can't afford to. Elite schools define themselves by the fact they don't grow," said industry analyst Trace Urdan, the managing director of Signal Hill Capital Group. "This is a place where growth is the essence of the institution."
Harkin, the industry's most vocal critic, recently compared the high default rates to the subprime mortgage loan meltdown. He remains skeptical that the sector has mended its ways.
"For-profit education must work for students, not shareholders," he said.
Eric Schmitt, 36, earned an associate's degree from Kaplan University's campus in Cedar Falls, Iowa, and then a bachelor's degree from its online school three years ago The aspiring paralegal said he has been unable to find a job in the field. He owes nearly $45,000 in student loans and is working a temporary warehouse job to help support his wife and two children.
Schmitt, who testified before Harkin's committee in June, called the Kaplan Commitment and other industry initiatives "a step in the right direction" but said the gap between education costs and real job prospects could mean "you're going to keep seeing students thrown under the bus."
In a statement issued by Kaplan after Schmitt's testimony, the company said he turned down a paralegal job it helped him line up.
The conversations in Washington and Wall Street mean little to Carl Tabb, a 36-year-old father of 10 who hopes to earn a bachelor's degree in information technology from the University of Phoenix while continuing to work full-time for the Missouri Department of Mental Health and moonlighting repairing home computers.
"I really was not the best student when I was in school," he said. "I always thought I wouldn't make it to college."
Fitzgerald, a former Price Waterhouse consultant, said nontraditional students such as Tabb deserve just a chance to earn a degree and a shot at better future.
"Yeah, we're a for-profit. But that doesn't mean we're in it for the wrong reasons," she said. "We want to set up our students for success."
___
Alan Scher Zagier can be reached on Twitter at http://twitter.com/azagier
Tuesday, July 19, 2011
Questions on Legislator on Board of For-Profit University
http://www.insidehighered.com/news/2011/07/18/qt
Connecticut State Representative Selim Noujaim, a Republican, was a key player in amending a bill in June so that some state scholarship funds that would have been restricted to students at public and private nonprofit institutions would also be available to those at for-profit institutions. The Hartford Courant reported that Noujaim is a trustee of Post University, for which the for-profit institution pays him $4,500 a year. Connecticut law bars public officials from taking any action that creates a "direct monetary gain" to a business with which the official is associated. Noujaim said he would have recused himself if the bill helped only Post, but said that there was no need to do so since it helped other for-profit institutions. He also said he was not involved in Post for the money, telling the Courant that "I'm in it for the kids."
Connecticut State Representative Selim Noujaim, a Republican, was a key player in amending a bill in June so that some state scholarship funds that would have been restricted to students at public and private nonprofit institutions would also be available to those at for-profit institutions. The Hartford Courant reported that Noujaim is a trustee of Post University, for which the for-profit institution pays him $4,500 a year. Connecticut law bars public officials from taking any action that creates a "direct monetary gain" to a business with which the official is associated. Noujaim said he would have recused himself if the bill helped only Post, but said that there was no need to do so since it helped other for-profit institutions. He also said he was not involved in Post for the money, telling the Courant that "I'm in it for the kids."
Swedish Schools Are Benefiting From For-Profit Schools
The folks at Cato Institute have re-published a column written by one of their scholars on the benefits his country are seeing from for-profit schools
From a new piece at the Cato Institute’s website, Cato.org:
The central problem facing education systems around the world has not been a lack of excellent schools; it has been our inability to routinely replicate them. If you build a smarter cell phone or design a safer car, your sales increase, your company grows, and you spawn countless imitators. But education is different. If you find a better way to teach children, your innovations seldom reach beyond a single neighborhood.
These words were written by Andrew Coulson, the director of the Cato Institute’s Center for Educational Freedom in Washington D.C. Coulson also authored the book Market Education: The Unknown History. His article on the for-profit school industry in Sweden originally appeared the Swedish newspaper Svenska Dagbladet. Coulson recounts how over the past two decades, Sweden and the United States have tried to address that problem in very different ways. Those very different ways have yielded, not surprisingly, very different results. In the United States, philanthropists have donated hundreds of millions of dollars to replicate what they consider to be the best charter schools. Sweden’s free schools system, by contrast, has allowed both for-profit and non-profit private schools to compete for the privilege of serving students.
To find out how well the U.S. approach is working, I recently studied the academic performance of California’s charter school networks (groups of two or more schools with the same management or teaching methods). I discovered that there is essentially no correlation between the performance of these networks and the amount of philanthropic funding they have received. That means philanthropists are indiscriminately replicating the bad and the mediocre networks as well as the good ones. On average, charter schools perform at about the same level as traditional government schools.
The Swedish private school experience is not uniform. While for-profit schools are growing substantially over time, bringing their higher quality services to more and more families every year, non-profit schools have experienced relatively little growth.
From a new piece at the Cato Institute’s website, Cato.org:
The central problem facing education systems around the world has not been a lack of excellent schools; it has been our inability to routinely replicate them. If you build a smarter cell phone or design a safer car, your sales increase, your company grows, and you spawn countless imitators. But education is different. If you find a better way to teach children, your innovations seldom reach beyond a single neighborhood.
These words were written by Andrew Coulson, the director of the Cato Institute’s Center for Educational Freedom in Washington D.C. Coulson also authored the book Market Education: The Unknown History. His article on the for-profit school industry in Sweden originally appeared the Swedish newspaper Svenska Dagbladet. Coulson recounts how over the past two decades, Sweden and the United States have tried to address that problem in very different ways. Those very different ways have yielded, not surprisingly, very different results. In the United States, philanthropists have donated hundreds of millions of dollars to replicate what they consider to be the best charter schools. Sweden’s free schools system, by contrast, has allowed both for-profit and non-profit private schools to compete for the privilege of serving students.
To find out how well the U.S. approach is working, I recently studied the academic performance of California’s charter school networks (groups of two or more schools with the same management or teaching methods). I discovered that there is essentially no correlation between the performance of these networks and the amount of philanthropic funding they have received. That means philanthropists are indiscriminately replicating the bad and the mediocre networks as well as the good ones. On average, charter schools perform at about the same level as traditional government schools.
The Swedish private school experience is not uniform. While for-profit schools are growing substantially over time, bringing their higher quality services to more and more families every year, non-profit schools have experienced relatively little growth.
New Oriental's fiscal 4Q profit more than doubles
By The Associated Press
updated 7/18/2011 6:37:54 PM ET
http://www.msnbc.msn.com/id/43801651/ns/business-personal_finance
New Oriental Education & Technology Group Inc. said Monday that its fiscal fourth-quarter profit more than doubled as it signed up more students for its language training and test prep courses.
The company, which is based in Beijing and provides private educational services, reported net income climbed to $14.3 million, or 37 cents per American depositary share, in the three months ended May 31.
That compares with net income of $5.8 million, or 15 cents per American depositary share, in the same period last year.
Excluding the impact of a $1.5 million loss related to the disposal of two subsidiaries during the quarter, New Oriental would have earned 49 cents per American depositary share, the company said.
Analysts were anticipating earnings of 26 cents per American depositary share, according to FactSet.
Quarterly revenue surged 59 percent to $137.4 million, up from $86.6 million in the prior-year quarter. Analysts were anticipating revenue of $119.7 million.
The company said enrollment during the fourth quarter grew 11.9 percent from a year earlier to 489,100.
For the full fiscal year, the company earned $101.8 million, or $2.61 per American depositary share, compared with net income of $77.9 million, or $2.01 per American depositary share, in fiscal 2010.
Revenue grew 44 percent to $557.9 million, up from $386.3 million in the prior fiscal year.
New Oriental said it expects that fiscal first-quarter revenue will range from $255.8 million to $265.4 million, representing year-over-year growth in the range of 33 percent to 38 percent. Analysts expect revenue of $255.4 million.
Advertise | AdChoices
Meanwhile, the company said that, starting Aug. 18, it will adjust the ratio of its American depositary shares representing common shares from one ADS to four common shares, to one ADS for one common share.
New Oriental ADS holders as of the close of business on Aug. 17 will receive three additional ADSs for each ADS then held, the company said.
The effect of this ratio change on the ADS price is expected to take place on Aug. 19.
The ratio change will have the same effect as a four-for-one stock split, the company said.
Shares rose 74 cents to $120.60 in aftermarket trading after ending the regular session down $3.16, or 2.6 percent, to $119.86.
updated 7/18/2011 6:37:54 PM ET
http://www.msnbc.msn.com/id/43801651/ns/business-personal_finance
New Oriental Education & Technology Group Inc. said Monday that its fiscal fourth-quarter profit more than doubled as it signed up more students for its language training and test prep courses.
The company, which is based in Beijing and provides private educational services, reported net income climbed to $14.3 million, or 37 cents per American depositary share, in the three months ended May 31.
That compares with net income of $5.8 million, or 15 cents per American depositary share, in the same period last year.
Excluding the impact of a $1.5 million loss related to the disposal of two subsidiaries during the quarter, New Oriental would have earned 49 cents per American depositary share, the company said.
Analysts were anticipating earnings of 26 cents per American depositary share, according to FactSet.
Quarterly revenue surged 59 percent to $137.4 million, up from $86.6 million in the prior-year quarter. Analysts were anticipating revenue of $119.7 million.
The company said enrollment during the fourth quarter grew 11.9 percent from a year earlier to 489,100.
For the full fiscal year, the company earned $101.8 million, or $2.61 per American depositary share, compared with net income of $77.9 million, or $2.01 per American depositary share, in fiscal 2010.
Revenue grew 44 percent to $557.9 million, up from $386.3 million in the prior fiscal year.
New Oriental said it expects that fiscal first-quarter revenue will range from $255.8 million to $265.4 million, representing year-over-year growth in the range of 33 percent to 38 percent. Analysts expect revenue of $255.4 million.
Advertise | AdChoices
Meanwhile, the company said that, starting Aug. 18, it will adjust the ratio of its American depositary shares representing common shares from one ADS to four common shares, to one ADS for one common share.
New Oriental ADS holders as of the close of business on Aug. 17 will receive three additional ADSs for each ADS then held, the company said.
The effect of this ratio change on the ADS price is expected to take place on Aug. 19.
The ratio change will have the same effect as a four-for-one stock split, the company said.
Shares rose 74 cents to $120.60 in aftermarket trading after ending the regular session down $3.16, or 2.6 percent, to $119.86.
Wednesday, June 15, 2011
Hire Hopes
Hire Hopes
Jun 14th 2011, 16:13 by The Economist
Which countries are most optimistic about hiring?
THE outlook for employment in the third quarter of this year is positive in 35 of the 39 countries and territories covered by Manpower, an employment-services firm. The net balance of employers expecting to increase the size of their workforces in the next three months is highest in India and Brazil, at 47 and 37 percentage points respectively. In Italy and Spain employers have been mostly negative about job prospects since early 2008, and their outlook is getting gloomier. By contrast, German and Canadian companies have seen a quick recovery, and report their most positive hiring intentions since the downturn. Even with the opening of its borders to the European Union’s eastern workers in May, Germany's unemployment has been falling sharply. The central bank recently referred to its “extremely favourable labour market developments”.
shaun39 wrote:
What a depressing outlook - especially for Spain, with unemployment already touching on 21%.
Spain has open access to the whole of the EU market, has excellent assets and a well educated/ skilled workforce.
Why can't businesses employ Spain's labor and capital assets? Why do Spaniards not seek employment in Germany, the Netherlands, Austria or Sweden?
Depressed domestic demand doesn't explain the magnitude of Spanish unemployment.
While a combination factors are clearly in play, something is obviously in direct competition with employment: generous welfare payments, subsidized but badly located housing (whether through government or with parents, etc) and black market activity.
Possible solutions: cut benefits to a level significantly below an average starting salary. End all subsidies tied to specific accommodation. Cut all benefit payments to anybody living with (non-disabled) parents.
Do the above: people will move to parts of the EU with better employment prospects; people will leave their parents' homes to seek employment in parts of Spain with better employment prospects; people will accept lower paying jobs as an alternative to idleness.
Spain could go even further: it could replace all benefits (other than health, pensions and disability) with a right to 40 hours of work a week (at 4 euros/ hour).
Other required measures: deregulate employment contracts; cut corporate taxes and local business taxes; get tough on organized crime (it would help if consumption and supply of drugs were entirely legalized; the income tax system were simplified; and there were better use of modern information systems for tracking personal and business transactions).
The deficit would disappear; unemployment would collapse; exports would soar; standards of living would fall (in the short term); business investment would recover; productivity would resume an upwards trend (after the initial hit from incorporating less skilled workers); standards of living would resume an upwards trajectory.
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Samkaie wrote: Jun 14th 2011 6:32 GMT
@Calm Incence,
Just out of curiosity,what was your major? And where are you from?
I hope you wouldn't find this personal.
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Ed (Brazil) wrote: Jun 14th 2011 7:49 GMT
All countries in this chart can survave going bellow zero for some time, except one: China.
They don't let us, nor their people, to see it on TV, but protests are there... China is a gun powder barrel whose owner has to keep on moving away from the fire that get closer everyday.
Italy and Spain, don't you think the only way you will go back in black is to stop the easy short term solutions and leave the Euro ?
"The Economist", where is Brazil ? I bet Brazil is between Canada gemany and China. If its above, its a buble...
Britain, you are Japan tomorrow. Actuallly, old, earthquake tsunami hit Japan generated much more jobs than you !
India, you are the only hope the World has for the decade that is beggining. Chinese don't play fair with their currency, so the world will face them sometime in the near future. But in order to do that, the world needs to find a replacement. You are the one. Hope you accept the invitation. Otherwise, we might get ready for a period of constant financial turmoil...
"The age of leverage". It will end with unimaginable defaults (not now), some ex-rich countries (Argentina is the worst of examples - in 1900 they had the world's 5th GDP per person). US is no longer the Rome of economics, and the question is, will it be able to sustain its position as the Rome of military ?
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Escha wrote: Jun 14th 2011 8:07 GMT
Apart from Brazil's data another important information is missing: The evolution of the workforce is quite different: shrinking populations in Japan and Germany make it increasingly difficult to hire enough skilled workers, i.e. engineers. However, immigration - as suggested by shaun39 - is not an easy solution, not least because of language difficulties. Have you ever tried to learn German (not to mention Japanese) to a level required by employers? In contrast growing populations in India, China and the US require much greater job growth.
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vmoriz wrote: Jun 14th 2011 10:00 GMT
@shaun39 I liked your macro review, and liked the proposals you made. I'm open to move to countries like Germany, Sweden or Austria. The question is, apart from all the good forecasts those countries report about labour market, are there companies really interested in hiring spaniards? At least from my experience it is not so easy, with the skills and seniority I'm looking for.
Feel free to connect via linkedIn:
http://linkd.in/connect2vfernandez
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russelbertrand wrote: Jun 14th 2011 10:00 GMT
Escha wrote "In contrast growing populations in India, China and the US require much greater job growth."
US is shrinking not growing i.e. baby boomers and greatest generation. Also, China has to many old people and to few young workers problem caused by mandatory 1 child laws. Which it seems most US families now practice.
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An Drew wrote: Jun 14th 2011 10:12 GMT
Britain's Confidence Fairy seems to be doing pretty well.
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Murilo Assis wrote: Jun 14th 2011 10:19 GMT
In Brazil there is a sharp shortage of engineers, technicians, researchers in the following areas: bulding, petrochemical, IT.
I strongly suggest those people that are unenployed in Europe/USA to have closer look in Brazil.
I am brazilian and according to some news I have lately read in newspapers and TV, some projects have been delayed due to lack of people with skills on the a.m. fields.
Due to Olimpic Games, World Cup, Pre-salt layer, the booming areas are as follow: Petrol (pre-salt layer), Buldings (house, dam, airports, ports, ethanol mills, agricultural research, transport and so on...)
For further information Google companies like: PETROBRÁS, EMBRAER, Norberto Odebrecht, EMBRAPA, CAMARGO CORREA, COSAN, COPERSUCAR (all World Class companies).
Needless to say it is necessary you guys know to communicate in portuguese or at least spanish as second language.
Good Luck you!
Murilo Assis
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Steve Thompson wrote: Jun 14th 2011 10:23 GMT
It's interesting to see that the prospects in for employment in the United States are on a very modest uptrend. That said, it is also interesting to note that the wages paid for many jobs in America have not grown in real terms for decades. Here's an article that shows how little incomes have risen in real terms in America over the past 30 years:
http://viableopposition.blogspot.com/2011/02/working-in-america-once-aga...
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Cloudwarrior wrote: Jun 14th 2011 10:25 GMT
I sure wish people would learn the difference between an ageing population and a shrinking population.
@(Ed) Brazil
"Britain, you are Japan tomorrow. Actually, old"
Two totally different countries other than the fact they are island kingdoms. Yes, Japan's population is going to start shrinking - it hasn't yet though but almost any day now. It's population is estimated to shrink by over 30 million in the next 40 years - not just through a low birthrate but pretty much zero immigration. It is ageing at a rapid rate.
Britain on the other hand, whilst ageing is expected to have an extra 10 million people in the same time.
Ageing yes, shrinking no! A very shallow comparison.
@russelbertrand
"US is shrinking not growing i.e. baby boomers and greatest generation. Also, China has to many old people and to few young workers problem caused by mandatory 1 child laws. Which it seems most US families now practice."
Again, the US population is NOT shrinking. Whilst it is getting older, it is not ageing at anywhere near the pace of other countries, especially places like Japan, South Korea and China.
It's population is expected to grow by about a third in the next 40 years to over 440 million. Hardly shrinking now. Please find me a rich, developed country that is expected to grow by nearly 30%.
As for China, that is a very shallow analysis of the country's population. At this stage, China does not have too many old people, though it is lacking in younger people.
But for at least the next five years, China will enjoy the economic dividend of having it's largest working age cohort ever. However, from about 2015 even this cohort will start to rapidly shrink and THEN China will have the burden of having too many old people. (for those that disagree on my claim, please don't attack the sentiment but attack the facts - they are there provided by the Chinese government for all to see).
Jun 14th 2011, 16:13 by The Economist
Which countries are most optimistic about hiring?
THE outlook for employment in the third quarter of this year is positive in 35 of the 39 countries and territories covered by Manpower, an employment-services firm. The net balance of employers expecting to increase the size of their workforces in the next three months is highest in India and Brazil, at 47 and 37 percentage points respectively. In Italy and Spain employers have been mostly negative about job prospects since early 2008, and their outlook is getting gloomier. By contrast, German and Canadian companies have seen a quick recovery, and report their most positive hiring intentions since the downturn. Even with the opening of its borders to the European Union’s eastern workers in May, Germany's unemployment has been falling sharply. The central bank recently referred to its “extremely favourable labour market developments”.
shaun39 wrote:
What a depressing outlook - especially for Spain, with unemployment already touching on 21%.
Spain has open access to the whole of the EU market, has excellent assets and a well educated/ skilled workforce.
Why can't businesses employ Spain's labor and capital assets? Why do Spaniards not seek employment in Germany, the Netherlands, Austria or Sweden?
Depressed domestic demand doesn't explain the magnitude of Spanish unemployment.
While a combination factors are clearly in play, something is obviously in direct competition with employment: generous welfare payments, subsidized but badly located housing (whether through government or with parents, etc) and black market activity.
Possible solutions: cut benefits to a level significantly below an average starting salary. End all subsidies tied to specific accommodation. Cut all benefit payments to anybody living with (non-disabled) parents.
Do the above: people will move to parts of the EU with better employment prospects; people will leave their parents' homes to seek employment in parts of Spain with better employment prospects; people will accept lower paying jobs as an alternative to idleness.
Spain could go even further: it could replace all benefits (other than health, pensions and disability) with a right to 40 hours of work a week (at 4 euros/ hour).
Other required measures: deregulate employment contracts; cut corporate taxes and local business taxes; get tough on organized crime (it would help if consumption and supply of drugs were entirely legalized; the income tax system were simplified; and there were better use of modern information systems for tracking personal and business transactions).
The deficit would disappear; unemployment would collapse; exports would soar; standards of living would fall (in the short term); business investment would recover; productivity would resume an upwards trend (after the initial hit from incorporating less skilled workers); standards of living would resume an upwards trajectory.
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Samkaie wrote: Jun 14th 2011 6:32 GMT
@Calm Incence,
Just out of curiosity,what was your major? And where are you from?
I hope you wouldn't find this personal.
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Ed (Brazil) wrote: Jun 14th 2011 7:49 GMT
All countries in this chart can survave going bellow zero for some time, except one: China.
They don't let us, nor their people, to see it on TV, but protests are there... China is a gun powder barrel whose owner has to keep on moving away from the fire that get closer everyday.
Italy and Spain, don't you think the only way you will go back in black is to stop the easy short term solutions and leave the Euro ?
"The Economist", where is Brazil ? I bet Brazil is between Canada gemany and China. If its above, its a buble...
Britain, you are Japan tomorrow. Actuallly, old, earthquake tsunami hit Japan generated much more jobs than you !
India, you are the only hope the World has for the decade that is beggining. Chinese don't play fair with their currency, so the world will face them sometime in the near future. But in order to do that, the world needs to find a replacement. You are the one. Hope you accept the invitation. Otherwise, we might get ready for a period of constant financial turmoil...
"The age of leverage". It will end with unimaginable defaults (not now), some ex-rich countries (Argentina is the worst of examples - in 1900 they had the world's 5th GDP per person). US is no longer the Rome of economics, and the question is, will it be able to sustain its position as the Rome of military ?
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Escha wrote: Jun 14th 2011 8:07 GMT
Apart from Brazil's data another important information is missing: The evolution of the workforce is quite different: shrinking populations in Japan and Germany make it increasingly difficult to hire enough skilled workers, i.e. engineers. However, immigration - as suggested by shaun39 - is not an easy solution, not least because of language difficulties. Have you ever tried to learn German (not to mention Japanese) to a level required by employers? In contrast growing populations in India, China and the US require much greater job growth.
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vmoriz wrote: Jun 14th 2011 10:00 GMT
@shaun39 I liked your macro review, and liked the proposals you made. I'm open to move to countries like Germany, Sweden or Austria. The question is, apart from all the good forecasts those countries report about labour market, are there companies really interested in hiring spaniards? At least from my experience it is not so easy, with the skills and seniority I'm looking for.
Feel free to connect via linkedIn:
http://linkd.in/connect2vfernandez
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russelbertrand wrote: Jun 14th 2011 10:00 GMT
Escha wrote "In contrast growing populations in India, China and the US require much greater job growth."
US is shrinking not growing i.e. baby boomers and greatest generation. Also, China has to many old people and to few young workers problem caused by mandatory 1 child laws. Which it seems most US families now practice.
Recommend (15)PermalinkReport abuse
An Drew wrote: Jun 14th 2011 10:12 GMT
Britain's Confidence Fairy seems to be doing pretty well.
Recommend (16)PermalinkReport abuse
Murilo Assis wrote: Jun 14th 2011 10:19 GMT
In Brazil there is a sharp shortage of engineers, technicians, researchers in the following areas: bulding, petrochemical, IT.
I strongly suggest those people that are unenployed in Europe/USA to have closer look in Brazil.
I am brazilian and according to some news I have lately read in newspapers and TV, some projects have been delayed due to lack of people with skills on the a.m. fields.
Due to Olimpic Games, World Cup, Pre-salt layer, the booming areas are as follow: Petrol (pre-salt layer), Buldings (house, dam, airports, ports, ethanol mills, agricultural research, transport and so on...)
For further information Google companies like: PETROBRÁS, EMBRAER, Norberto Odebrecht, EMBRAPA, CAMARGO CORREA, COSAN, COPERSUCAR (all World Class companies).
Needless to say it is necessary you guys know to communicate in portuguese or at least spanish as second language.
Good Luck you!
Murilo Assis
Recommend (14)PermalinkReport abuse
Steve Thompson wrote: Jun 14th 2011 10:23 GMT
It's interesting to see that the prospects in for employment in the United States are on a very modest uptrend. That said, it is also interesting to note that the wages paid for many jobs in America have not grown in real terms for decades. Here's an article that shows how little incomes have risen in real terms in America over the past 30 years:
http://viableopposition.blogspot.com/2011/02/working-in-america-once-aga...
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Cloudwarrior wrote: Jun 14th 2011 10:25 GMT
I sure wish people would learn the difference between an ageing population and a shrinking population.
@(Ed) Brazil
"Britain, you are Japan tomorrow. Actually, old"
Two totally different countries other than the fact they are island kingdoms. Yes, Japan's population is going to start shrinking - it hasn't yet though but almost any day now. It's population is estimated to shrink by over 30 million in the next 40 years - not just through a low birthrate but pretty much zero immigration. It is ageing at a rapid rate.
Britain on the other hand, whilst ageing is expected to have an extra 10 million people in the same time.
Ageing yes, shrinking no! A very shallow comparison.
@russelbertrand
"US is shrinking not growing i.e. baby boomers and greatest generation. Also, China has to many old people and to few young workers problem caused by mandatory 1 child laws. Which it seems most US families now practice."
Again, the US population is NOT shrinking. Whilst it is getting older, it is not ageing at anywhere near the pace of other countries, especially places like Japan, South Korea and China.
It's population is expected to grow by about a third in the next 40 years to over 440 million. Hardly shrinking now. Please find me a rich, developed country that is expected to grow by nearly 30%.
As for China, that is a very shallow analysis of the country's population. At this stage, China does not have too many old people, though it is lacking in younger people.
But for at least the next five years, China will enjoy the economic dividend of having it's largest working age cohort ever. However, from about 2015 even this cohort will start to rapidly shrink and THEN China will have the burden of having too many old people. (for those that disagree on my claim, please don't attack the sentiment but attack the facts - they are there provided by the Chinese government for all to see).
Friday, June 3, 2011
APSCU on Gainful Employment: Trust but Verify
For more information:
Mary Gotschall Bob Cohen
202-336-6744 202-336-6836
mary.gotschall@apscu.org bob.cohen@apscu.org
APSCU on Gainful Employment: Trust but Verify
Question about Fundamental Legal Authority Remains
WASHINGTON, DC – June 1, 2011 – The Association of Private Sector Colleges and Universities issued the following statement in response to the Department of Education’s release of the gainful employment rule:
We remain very concerned that the gainful employment regulation, while reflecting the fact that the Department has listened to the sector and made changes to its initial proposal, is still using the same ill-advised metric approach to this matter and is clearly outside of its statutory authority. Notwithstanding the changes, the real question is how the regulation will impact students, particularly non-traditional students served by our institutions. We will not know the answer to that until we have had the opportunity to run an independent analysis of the Department’s metric. Our concern is that the regulation will still penalize programs with great outcomes while allowing under-performing programs to continue. We need to trust but verify the impact of the new regulation. The APSCU Board will review the regulation’s impact on students carefully before deciding its next steps.
About APSCU
The Association of Private Sector Colleges and Universities is a voluntary membership organization of accredited, private postsecondary schools, institutes, colleges and universities that provide career-specific educational programs. APSCU has more than 1,900 members that educate and support approximately two million students each year for employment in over 200 occupational fields. APSCU member institutions provide the full range of higher education programs: Master's and doctoral degree programs, two- and four-year associate and baccalaureate degree programs, and short-term certificate and diploma programs. Visit APSCU at www.apscu.org. On September 22, 2010, APSCU changed its name from the Career College Association.
Mary Gotschall Bob Cohen
202-336-6744 202-336-6836
mary.gotschall@apscu.org bob.cohen@apscu.org
APSCU on Gainful Employment: Trust but Verify
Question about Fundamental Legal Authority Remains
WASHINGTON, DC – June 1, 2011 – The Association of Private Sector Colleges and Universities issued the following statement in response to the Department of Education’s release of the gainful employment rule:
We remain very concerned that the gainful employment regulation, while reflecting the fact that the Department has listened to the sector and made changes to its initial proposal, is still using the same ill-advised metric approach to this matter and is clearly outside of its statutory authority. Notwithstanding the changes, the real question is how the regulation will impact students, particularly non-traditional students served by our institutions. We will not know the answer to that until we have had the opportunity to run an independent analysis of the Department’s metric. Our concern is that the regulation will still penalize programs with great outcomes while allowing under-performing programs to continue. We need to trust but verify the impact of the new regulation. The APSCU Board will review the regulation’s impact on students carefully before deciding its next steps.
About APSCU
The Association of Private Sector Colleges and Universities is a voluntary membership organization of accredited, private postsecondary schools, institutes, colleges and universities that provide career-specific educational programs. APSCU has more than 1,900 members that educate and support approximately two million students each year for employment in over 200 occupational fields. APSCU member institutions provide the full range of higher education programs: Master's and doctoral degree programs, two- and four-year associate and baccalaureate degree programs, and short-term certificate and diploma programs. Visit APSCU at www.apscu.org. On September 22, 2010, APSCU changed its name from the Career College Association.
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