Amazon’s Robotic Future: A Work in Progress

If you were watching Bloomberg TV recently, you may have seen our correspondent, Cory Johnson, standing in the middle of Amazon’s (AMZN) newest distribution center in Arizona. It’s an impressive facility, brand-new and owned by one of the hardest-charging, most-innovative companies to come onto the retail scene since Sam Walton opened a five-and-dime.

So where are the robots?

After all, aren’t robots supposed to be the future of such places as distribution centers and warehouses? Didn’t Amazon buy a robot manufacturer, Kiva, in March? The online retailer announced in October that it was taking on 50,000 additional part-time workers for the holiday season. Shouldn’t some of those spots be taken up by mechanical arms and wheels?

Maybe not. For all the anxiety over robots coming to take jobs, there are still limitations to what they can do—or what they can do well. Bruce Welty is chief executive officer of Quiet Logistics, an order-fulfillment company that manages the online inventory and distribution for retailers like Gilt, Zara, and Bonobos. He uses robots made by Kiva, the company Amazon purchased, but his warehouse in Massachusetts is not bereft of humans. “Robots aren’t very good at picking up things,” he says. “They aren’t very good at looking at a bin of different things and distinguishing one item from another.”

Welty’s robots do one task and one task only: They move racks of merchandise to workers, who then remove the products from the racks and pack them up for shipping. Saving workers the time and effort to retrieve products offers considerable benefit. “In a typical warehouse, that’s about 60 to 70 percent of the labor,” Welty says.

In addition to what the current state of robotic arts does well, there are further reasons for the continued presence of human beings in warehouses. Labor flexibility is one of the larger ones. “Automation won’t help Amazon in periods of peak demand,” says Stephen Graves, a professor of management science at the Massachusetts Institute of Technology. “People are far more flexible.”

The capital expense to add robots means they need to make sense 12 months out of the year, not two. “The only way to handle spikes in demand is by adding temporary workers,” says Jim Tompkins, CEO of supply-chain consultancy Tompkins International. “If you bought a whole bunch of robots to handle the holiday shopping season, you’d have a whole bunch of robots looking at you, come January.”

So if Amazon just spent nearly a billion dollars buying Kiva, but the robots they produce can’t make a huge difference in how the company operates, what are Amazon’s intentions?

For starters, it’s still early. An acquisition like that of Kiva will take a while to digest, during which time new applications for the robots will surely be devised. “They’re really in a test mode,” says Welty. “They’re going to work on getting it right before any major rollout.”

The Kiva acquisition may have had as much to do with software as it does with hardware, adds Tompkins. “Mechanically, there’s nothing that special about Kiva,” he says. “But what they do have is software that makes sure the robots are in the right place at the right time. This was a software play.”

That’s not exactly how most people would view the deal. But it may be just the head-fake that Amazon CEO Jeff Bezos intended. “I bet Jeff Bezos loves that people are running around trying to put more robots in their distribution centers,” Tompkins says.

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Myanmar cracks down on mine protest; dozens hurt

MONYWA, Myanmar (AP) — Security forces used water cannons and other riot gear Thursday to clear protesters from a copper mine in in northwestern Myanmar, wounding villagers and Buddhist monks just hours before opposition leader Aung San Suu Kyi was to visit the area to hear their grievances.

The crackdown at the Letpadaung mine near the town of Monywa risks becoming a public relations and political fiasco for the reformist government of President Thein Sein, which has been touting its transition to democracy after almost five decades of repressive military rule.

The environmental and social damage allegedly produced by the mine has become a popular cause in activist circles, but was not yet a matter of broad public concern. However, hurting monks — as admired for their social activism as they are revered for their spiritual beliefs — is sure to antagonize many ordinary people, especially as Suu Kyi’s visit highlights the events.

“This is unacceptable,” said Ottama Thara, a 25-year-old monk who was at the protest. “This kind of violence should not happen under a government that says it is committed to democratic reforms.”

According to a nurse at a Monywa hospital, 27 monks and one other person were admitted with burns caused by some sort of projectile that released sparks or embers. Two of the monks with serious injuries were sent for treatment in Mandalay, Myanmar’s second biggest city, a 2 ½ hour drive away. Other evicted protesters gathered at a Buddhist temple about 5 kilometers (3 miles) from the mine’s gates.

Lending further sympathy to the protesters’ cause is whom they are fighting against. The mining operation is a joint venture between a Chinese company and a holding company controlled by Myanmar’s military. Most people remain suspicious of the military, while China is widely seen as having propped up army rule for years, in addition to being an aggressive investor exploiting the country’s many natural resources.

Government officials had publicly stated that the protest risked scaring off foreign investment that is key to building the economy after decades of neglect.

State television had broadcast an announcement Tuesday night that ordered protesters to cease their occupation of the mine by midnight or face legal action. It said operations at the mine had been halted since Nov. 18, after protesters occupied the area.

Some villagers among a claimed 1,000 protesters left the six encampments they had at the mine after the order was issued. But others stayed through Wednesday, including about 100 monks.

Police moved in to disperse them early Thursday.

“Around 2:30 a.m. police announced they would give us five minutes to leave,” said protester Aung Myint Htway, a peanut farmer whose face and body were covered with black patches of burned skin. He said police fired water cannons first and then shot what he and others called flare guns.

“They fired black balls that exploded into fire sparks. They shot about six times. People ran away and they followed us,” he said, still writhing hours later from pain. “It’s very hot.”

Photos of the wounded monks showed they had sustained serious burns on parts of their bodies. It was unclear what sort of weapon caused them.

The protest is the latest major example of increased activism by citizens since the elected government took over last year. Political and economic liberalization under Thein Sein has won praise from Western governments, which have eased sanctions imposed on the previous military government because of its poor record on human and civil rights. However, the military still retains major influence over the government, and some critics fear that democratic gains could easily be rolled back.

In Myanmar’s main city of Yangon, six anti-mine activists who staged a small protest were detained Monday and Tuesday, said one of their colleagues, who asked not to be identified because he did not want to attract attention from the authorities.

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Past hosts teaming for Spike Video Game Awards

LOS ANGELES (AP) — The Spike Video Game Awards are assembling past hosts.

The cable network announced Thursday that the gaming extravaganza’s previous emcees would join “The Avengers” star and four-time VGAs host Samuel L. Jackson at next week’s show.

Previous hosts Zachary Levi, Snoop Lion, Jack Black and Neil Patrick Harris are set to appear at the 10th annual ceremony.

The show will also feature debut footage from upcoming games “BioShock Infinite,” ”Castlevania: Lords of Shadow 2″ and “Tomb Raider,” and from downloadable content “Spartan Ops” for “Halo 4″ and “The Tyranny of King Washington” for “Assassin’s Creed III.”

“Assassin’s Creed III,” ”Dishonored,” ”Journey,” ”Mass Effect 3″ and “The Walking Dead: The Game” are vying for the best game trophy.

The VGAs will air live on Spike on Dec. 7 from Sony Picture Studios in Culver City, Calif.

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Palm Springs Fest gives Robert Zemeckis’ awards campaign a boost

LOS ANGELES (TheWrap.com) – Robert Zemeckis has been named Director of the Year by the Palm Springs International Film Festival, making the “Flight” director the latest awards hopeful to be honored by one of the two big January film festivals that double as campaign stops on the awards circuit.

The announcement by Palm Springs organizers came one day after the Santa Barbara Film Festival declared “Silver Linings Playbook” star Jennifer Lawrence the Outstanding Performer of the Year.

Palm Springs holds its awards gala on the first Saturday of the new year, which this year falls on January 5, two days after Oscar polls close. Santa Barbara spreads out its awards over a two-week period in late January, after Oscar nominations are announced but before final voting begins.

Both festivals jockey to assemble lineups of probable Oscar nominees, and both are lobbied by Oscar campaigners as they make their selections. The two festivals try to stagger their announcements so as not to compete with each other.

Besides Zemeckis’ award, Palm Springs has announced that it will honor Naomi Watts with the Desert Palm Achievement Award for Acting and Helen Hunt with the Spotlight Award.

In addition to Lawrence, Santa Barbara will give its Modern Master Award to Ben Affleck. Robert De Niro will receive the festival’s Kirk Douglas Award for Excellence in Film, an honor that is presented at a separate black-tie event in December rather than during the festival.

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American Girl Dolls Embrace Differences and Disabilities

Nov 29, 2012 7:00am

I must admit, I find American Girl Dolls slightly unnerving. They are so eerily lifelike, and I know it’s a cliché, but the eyes really do follow you everywhere. My daughter has one, and we put it in the closet every night because mommy is a little crazy.

Despite these misgivings, it’s hard not to cheer for a doll company that goes out of its way to represent girls from all walks of life and every circumstance. The new Special Sparkle section in its  holiday catalog includes a miniature service dog in harness, a hearing aid and an allergy-free lunch kit.

“We have a long history of speaking to diversity and making girls feel good about themselves, and this is just another way we are expanding on the idea,” said American Girl Doll spokeswoman  Julie Parks.

Whereas many dolls from high-end companies resemble a stereotypical beauty unattainable for most little girls, American Girl has always seemed to strive for all-inclusiveness. The dolls come in a vast selection of skin tones, hair color and eye color, which can be mixed and matched so the doll resembles its owner. Now they can also be fitted with glasses, braces for the teeth, crutches or a wheel chair, and the company recently began to offer dolls without hair to represent those who have lost hair to cancer.

American Girl books and movies also do a good job of highlighting problems girls are likely to encounter in life. This year’s “Doll of the Year” McKenna is a talented gymnast who struggles with injuries and a learning disability. In the book and movie about her experiences, Jesse, her brainy friend and tutor, is confined to a wheel chair.

 Dr. Ari Brown, a developmental pediatrician in Austin, Texas, applauds American Girl’s mission of highlighting differences and a message of acceptance.

 ”I think it’s great American Girl tries to have dolls that have the same hodgepodge of traits and features you actually see in kids,” Brown said.

Brown said she also believes playing with a doll that uses a hearing aid,  requires a special diet or depends on a service dog can be an enriching experience for all girls, even if they themselves don’t have special needs.

“It can help kids learn to be more accepting of others who are different from them,” she said.

Perhaps because acceptance  for all is part of American Girl’s  mission, it has been more successful than other toy makers that have  attempted to make dolls with disabilities. Barbie’s wheelchair-bound friend, Share a Smile Becky, is a notable example. Even consumers who overlooked the condescending name couldn’t forgive the fact that Becky’s chair didn’t fit into the Barbie Dream House elevator.

Girl Power aside, all this diversity might have a limited reach. The price tag for a doll is $ 105, and from there the cash register never seems to stop ringing. The wheel chair costs $ 38, the hearing aid $ 9 and the allergy-free lunch bag $ 28.  Let’s not even mention the hair styling, ear piercing and tea parties.

Yet in spite of the steep cost of ownership, Parks said feedback has been overwhelmingly positive for the dolls in general and the new disability accessories in particular.

“Parents realize they are investing in something that builds strong character and helps every girl reach their full potential, no matter who they are or what they look like,” she said. “It’s all about engaging them in positive experiences and helping them fit in.”

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Stock futures gain ahead of data on fiscal hopes

NEW YORK (Reuters) – Stock futures rose on Thursday, building on the previous session’s steep gains, on expectations of progress toward a fiscal agreement in Washington that would avert an economic meltdown.

Market participants will continue to focus on discussions in Congress to avoid big spending cuts and tax hikes – dubbed the “fiscal cliff” – and equities may retreat, as they did Tuesday, if the upbeat negotiation environment in Washington shifts.

“There will be a deal before December 31 to avert the economy facing disaster,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

“We’re back on track for a year-end rally to continue,” he said, highlighting the continued support the Federal Reserve has given to equity markets.

Investors await data, including the second estimate of third-quarter gross domestic product, due at 8:30 a.m. ET (1330 GMT). Economists in a Reuters survey forecast a 2.8 percent annualized pace of growth, compared with a 2.0 percent rate in the first estimate.

The Commerce Department will issue preliminary corporate profits for the third quarter at 8:30 a.m. (1330 GMT). At the same time, the Labor Department will release first-time claims for jobless benefits; 390,000 new filings are forecast, compared with 410,000 in the prior week.

The yield on Italy’s 10-year bonds fell to the lowest in two years at an auction, amid relief that immediate risks over Greece had diminished.

“The fact that the bond sales in Europe went well suggest confidence is beginning to reenter some of the peripheral nations and that is a good sign,” Cardillo said.

The euro flirted with the $ 1.30 level and boosted commodity prices, which could lift the basic materials and energy stock sectors.

S&P 500 futures rose 9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 78 points, and Nasdaq 100 futures added 17.5 points.

Also due for release Thursday are pending home sales for October at 10:00 a.m. (1500 GMT) and the Federal Reserve Bank of Kansas City November manufacturing survey at 11:00 a.m.

Tiffany shares fell 9 percent to $ 58.02 in premarket trading after the upscale jeweler reported quarterly results and lowered its full-year sales and profit forecasts.

U.S.-listed shares of BlackBerry maker Research In Motion soared 11.7 percent to $ 12.40 in premarket trading after Goldman Sachs upgraded the stock to “buy” from “neutral.”

Kroger , the biggest U.S. supermarket operator, is due to report third-quarter earnings.

On Wednesday, the Dow Jones industrial average <.DJI> rose 106.98 points, or 0.83 percent, to 12,985.11. The S&P 500 <.SPX> gained 10.99 points, or 0.79 percent, to 1,409.93. The Nasdaq Composite <.IXIC> added 23.99 points, or 0.81 percent, to close at 2,991.78.

(Editing by Bernadette Baum)

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US rabbi says jailed American in good health

HAVANA (AP) — A prominent New York rabbi and physician visited an American subcontractor serving a long jail term in Cuba and said the man is in good health, despite his family’s concerns about a growth on his right shoulder.

Rabbi Elie Abadie, who is also a gastroenterologist, told The Associated Press in an exclusive interview following Tuesday’s 2 1/2-hour visit at a military hospital in Havana that he personally examined Alan Gross and received a lengthy briefing from a team of Cuban physicians who have attended him.

He said the 1 1/2-inch growth on Gross’s shoulder appeared to be a non-cancerous hematoma that should clear up by itself.

“Alan Gross does not have any cancerous growth at this time, at least based on the studies I was shown and based on the examination, and I think he understands that also,” Abadie said.

Abadie said the hematoma, basically internal bleeding linked to the rupture of muscle fiber, was likely caused by exercise Gross does in jail. He said the growth ought to eventually disappear on its own.

Gross’s plight has put already chilly relations between Cuba and the United States in a deep freeze. The Maryland native was arrested in December 2009 while on a USAID-funded democracy building program and later sentenced to 15 years in jail for crimes against the state.

He claims he was only trying to help the island’s small Jewish community gain Internet access.

Gross’s health has been an ongoing issue during his incarceration. The 63-year-old, who was obese when arrested, has lost more than 100 pounds while in jail.

Abadie, a rabbi at New York’s Edmund J. Safra Synagogue, said Gross’s weight is appropriate for a man his age and height.

Photos that Abadie and a colleague provided to AP of Tuesday’s meeting with Gross showed him looking thin, but generally appearing to be in good spirits.

In one photo, Gross holds up a handwritten note that says “Hi Mom.”

“He definitely feels strong. He is in good spirits. He feels fit, to quote him, physically. But of course, like any other person who is incarcerated or in prison, he wants to be free. He wants to be able to go back home,” Abadie said.

Gross’s family has repeatedly appealed for his release on humanitarian grounds, noting his health problems and the fact that his adult daughter and elderly mother have both been battling cancer.

Jared Genser, counsel to Alan Gross, said late Tuesday that Rabbi Abadie is not Gross’s physician and he would like an oncologist of his choosing to evaluate him.

“While we are grateful Rabbi Abadie was able to see Alan, we have asked an oncologist to review the test results to determine if they are sufficient to rule out cancer. More importantly, if Alan is so healthy, we cannot understand why the Cuban government has repeatedly denied him an independent medical examination by a doctor of his choosing as is required by international law,” said Genser.

Gross and his wife recently filed a $ 60 million lawsuit against his former Maryland employer and the U.S. government, saying they didn’t adequately train him or disclose risks he was undertaking by doing development work on the Communist-run island.

They filed another lawsuit against an insurance company they say has reneged on commitments to pay compensation in case of his wrongful detention.

Separately, a lawyer for Gross has written the United Nations’ anti-torture expert, saying Cuban officials’ treatment of his client “will surely amount to torture” if he continues to be denied medical care.

Rumors have been swirling in U.S. media that Cuba might soon release Gross as a gesture of good will or in the hopes of winning concessions from the administration of President Barack Obama, but Abadie said that those reports appeared to be false.

“As far as I know there is no truth to it,” he said.

Abadie said he met with senior Cuban officials who expressed their desire to resolve the case “as quickly as possible,” but would not say specifically who he spoke with or what they offered.

“They claim that they are more than willing to sit at the table,” he said.

Cuban officials have strongly implied they hope to trade Gross for five Cuban agents sentenced to long jail terms in the United States, one of whom is already free on bail.

Abadie said Gross made clear that he does not want his case linked to that of the agents, known in Cuba as “The Five Heroes,” because he does not believe he is guilty of espionage.

But Abadie said Gross is hoping for a “constructive and productive” dialogue between U.S. and Cuban officials to resolve his case.

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Follow Paul Haven on Twitter: http://www.twitter.com/paulhaven.

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U.S. for-profit colleges spend big on marketing while slashing other costs

(Reuters) – Google‘s biggest advertiser is neither a bank nor a retailer.

It’s the for-profit University of Phoenix, which has recently been spending nearly $ 400,000 a day on ads, more than any financial firm or retailer, the traditional big spenders on online advertising, according to search analytics firm SpyFu.

That kind of spending may seem surprising coming from a college, but marketing has become vital for the university and its for-profit rivals as enrollments plummet and they fight back against a host of criticisms, including low job-placement rates.

Colleges such as University of Phoenix, the industry leader owned by Apollo Group Inc, will not only have to boost enrollments to reverse their fortunes, analysts say. They will also need to consider cutting tuition fees as well as continue to slash costs and take market share from rivals.

“I have witnessed several versions of this cycle but none as extreme as this,” said Trace Urdan, an analyst with Wells Fargo Securities, who has been covering the U.S. for-profit education industry for about 15 years.

“We are going to see more pointed efforts at marketing and more price competition in an effort to try to capture more market share both from each other as well as from traditional schools,” Urdan said.

Operators of other for-profit colleges, whose ranks include the Washington Post Co’s Kaplan business, DeVry Inc and ITT Educational Services Inc, are also boosting their spending on marketing and are among the 25 biggest advertisers on Google.

But no one is spending like the University of Phoenix, which doubled its spending on Google ads to about $ 380,000 per day on average between October 12 and November 12, compared with $ 170,000 a day in the previous month, according to SpyFu.

Increased marketing alone will not be enough to fatten fast-shrinking profit margins and increase enrollments, however. Lower tuition fees and increased specialization of the type of programs offered, along with further streamlining of operations, will also be necessary, analysts say.

Industry bellwether University of Phoenix, which offers courses at about 230 campuses as well as online, announced plans last month to shut about half its locations and cut 800 jobs in order to save about $ 300 million a year by 2014.

New enrollments in the Apollo system are down nearly 50 percent in the past two years. As of August 31, enrollment totaled about 328,000.

Career Education Corp, which owns American InterContinental University and the Le Cordon Bleu colleges, and Lincoln Educational Services Corp have also announced closures.

LOW-COST MODEL

The $ 25 billion industry, which typically serves adults looking for a career change or a program to enhance job skills, is reeling after government investigations revealed fraud related to financial aid, worryingly high student debt loads and low rates of graduation and job placement.

“Many for-profit colleges make decisions that prioritize their bottom line, even when those decisions limit their students’ opportunities for academic success,” a U.S. Senate report said earlier this year.

Tuition fees, and therefore profits, is one area under pressure as potential students need to be convinced to take out loans in an uncertain job market.

Apollo, whose stock has lost about 65 percent of its value this year, implemented a tuition freeze earlier this year and promised students it will not increase prices through the course of their programs.

Apollo is also looking at different cost models, with a view to serving segments of the population that it cannot serve with current University of Phoenix tuition prices.

“We have certainly seen a lot more competition at the lower end of the price scale, and that’s something we are focusing on,” Apollo spokesman Mark Brennar said, while declining to offer specifics.

Wells Fargo’s Urdan said it is likely that Apollo wants to compete in the low-cost end of the market by building a second brand, which it would likely do by acquiring another college rather than starting from scratch.

As colleges lower their revenue base by cutting tuition fees even as they spend more on marketing, lower margins could become the norm, analysts say. That has spooked investors already worried about sliding enrollments.

The S&P 1500 Education Services index has lost three-quarters of its value since April 2010, including a 50 percent decline in 2012.

Some for-profit colleges already differentiate themselves in the crowded higher-education market by offering programs in a particular field or by targeting students of a particular background, and that trend could accelerate.

American Public Education, for example, is known for enrolling those who work in the military and public services, while Universal Technical Institute offers programs related to the automotive industry.

For-profit colleges play up their links to employers to attract students who may otherwise opt for traditional or community colleges, said Rob Lytle, head of the education practice at advisory firm Parthenon Group.

“They are about getting people workforce employability skills, and I think they are going to be focusing tighter on that,” said Lytle.

(Reporting by A. Ananthalakshmi in Bangalore; Editing by Ted Kerr)

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Van Gogh, John Lennon letters coming to NY auction

NEW YORK (AP) — An upcoming auction of over 300 historical documents includes rare letters written by Vincent van Gogh, George Washington, John Lennon and other iconic figures.

The property of an anonymous American collector is being offered by Profiles in History in an online and phone auction on Dec. 18.

Among the highlights is a two-page letter from Washington to an Anglican clergyman.

Another top item is a signed van Gogh letter, written in 1890, to Joseph and Marie Ginoux, who were proprietors of the Cafe de la Gare in Arles, France, where the Dutch post-impressionist artist lived for a time.

Each of those letters is estimated to bring $ 200,000 to $ 300,000.

A handwritten letter from John Lennon to Eric Clapton has a pre-sale estimate of $ 20,000 to $ 30,000.

The collection will be exhibited Dec. 3-9 at Douglas Elliman’s Madison Avenue art gallery.

Washington‘s letter was written on Aug. 15, 1798, to the Rev. Jonathan Boucher, amid an undeclared naval war with France. Washington thanks Boucher for sending him his “View of the Causes and Consequences of the American Revolution,” a book of 13 discourses Boucher preached.

“Peace, with all the world is my sincere wish, I am sure it is our true policy — and am persuaded it is the ardent desire of the Government,” the former president and Founding Father wrote.

In a Jan. 20, 1890, four-page letter, handwritten in French to his friends Monsieur and Madame Ginoux, van Gogh wishes the ailing proprietress a speedy recovery.

“Illnesses are there to make us remember again that we are not made of wood,” the artist wrote. “That’s what seems the good side of all this to me. Then afterwards one goes back to one’s everyday work less fearful of the annoyances, with a new store of serenity.” Van Gogh died less than seven months later.

He suffered from acute anxiety and bouts of depression throughout his life. Madame Ginoux and the cafe were frequent subjects of his work.

The eight-page letter from Lennon is a draft he wrote to Clapton on Sept. 29, 1971, and signed “John and Yoko.” The whereabouts of the final version is unknown.

Lennon writes candidly about his admiration for the great British guitarist and suggests forming a “‘nucleus’ group (Plastic Ono Band) . — and of course had YOU!!! In mind as soon as we decided.” He writes that drummer Jim Kelnter, artist Klaus Voormann, pianist Nicky Hopkins and producer Phil Spector “all agreed so far” to join.

“Anyway, the point is, after missing the Bangla-Desh concert, we began to feel more and more like going on the road, but not the way I used with the Beatles — night after night of torture. We mean to enjoy ourselves, take it easy, and maybe even see some of the places we go to! We have many ‘revolutionary’ ideas for presenting shows that completely involve the audience .”

Other luminaries whose papers will be sold include Lou Gehrig, Louis Pasteur, Sigmund Freud, Charles Darwin, Marie Curie, Giuseppe Verdi, Peter Tchaikovsky, Cole Porter, King Henry II and Napoleon I.

The December auction is the first of several sales that will be held over two years. The entire collection contains 3,000 items.

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Online:

Information on how to bid is available on www.profilesinhistory.com.

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One in 10 workers underemployed

28 November 2012 Last updated at 08:21 ET

Penny Cook has asked her part-time employer for more hours but has been refused

One in 10 of all workers in the UK is now officially underemployed, according to a study from the Office For National Statistics (ONS).

It says 3.05 million workers want to work more hours each week, out of a total workforce of 29.41 million.

The number of workers in this position has shot up by 980,000 in the four years since the start of the economic recession in 2008.

Most of the underemployment is concentrated among part-time workers.

Continue reading the main story

“Start Quote

This problem of underemployment seems to particularly affect the poorer parts of society”

End Quote

The main reason for the growth of underemployment has been the economic downturn of the past few years.

“During this period many workers moved from full-time to part-time roles and many of those returning to work after a period of unemployment could only find part-time jobs,” the statistical office said.

“Of the extra one million underemployed workers in 2012 compared with 2008, three-quarters were in part-time posts.”

The ONS said 1.9 million of the underemployed were in part-time jobs and this meant, in turn, that 24% of all part-timers wanted more work.

By contrast, only 5.5% of full-time staff said they wanted to work more hours.

Each quarter, as part of its Labour Force Survey (LFS), the ONS asks respondents a series of questions about their willingness and ability to work more hours.

Someone is counted as underemployed if they are working fewer hours than they would like.

Continue reading the main story

The growth of underemployment has gone alongside a big fall in the real value of earnings, the ONS said, which have been outstripped by inflation in recent years.

Jane Tomlinson, a part-time worker from Oxford, told the BBC what it had been like to be underemployed for the past year.

“I work only 15 hours a week paid work for a charity as communications manager,” she said.

“I don’t actually want a full-time job, but I need more than 15 hours a week, so I pick up a bit of copywriting work here and there as I can find it.

“But month to month it’s really tough as I make only just enough to pay the bills. Thank goodness my husband has a job,” she added.

‘Half-time salaries’

Caroline Parre, an academic from Birmingham, said for the past three years the recession had prevented her hours being extended.

Continue reading the main story

“Start Quote

With part-timers we can contract and expand our workforce relative to increases and decreases in orders received,”

End Quote Colin Johnson An employer from Lincoln

“Recruited to set up a research centre, the expectation had always been the part-time job would convert into full-time employment. The recession has changed that hope,” she said.

“There is danger in the situation: to enable the success of the venture I have, voluntarily, worked full-time hours on a part-time salary, in the hope and belief that efforts would be rewarded.

“Efforts, of course, are not rewarded, and employers find themselves in the happy position of paying full time workers half-time salaries,” she pointed out.

But a spokeswoman for the Department for Work and Pensions (DWP) said the figures showed that three quarters of all part-time staff appeared to be content.

“Part-time working suits millions of people and gives others the skills and experience to find a different job or take advantage of longer hours when they are available,” she said.

“For many people it is an important step to full-time work and coming off benefits.”

This was backed up by Colin Johnson, who runs a mail order company in Lincoln and who told the BBC his staff were happy to work part-time.

“All of my employees are technically part-time. Some are working mums who work around schooling,” he said.

“With part-timers we can contract and expand our workforce relative to increases and decreases in orders received, and we can dovetail staff to deal with peaks on the phone.

“Prior to this way of working we would have out-sourced, so these are new jobs,” he added.

Self-employed

The ONS explained that most of the rise in underemployment took place between 2008 and 2009, when the recession first gripped the UK economy.

ONS statistician Jamie Jenkins: “Underemployment has gone up by one million people since the economic crisis”

Since then it has still been rising, though more slowly then before.

According to the ONS analysis, the problem is worst among the lowest paid, young workers and those in low-skilled jobs, such as labourers, cleaners and catering staff.

The shortage of work has also led to a big rise in the level of underemployment reported by the self-employed.

They are now even more likely to report being underemployed than those who work for others.

However the precise reasons for individuals being underemployed can vary.

The ONS said these reasons could include:

• employers only being able to offer a few hours of work each week


• workers, such as bar staff, being in jobs where they are only required for a few hours a day


• personal circumstances changing so that someone now wants to work more hours then before


• people settling for a part-time job as second-best when they would much rather have a full-time one

Labour market economist John Philpott said: “Approaching one in five economically active people are struggling in today’s ‘no or not enough work’ economy.

“Add in the effect of falling real take-home pay for the vast majority of people in work and it becomes clear how much distress is being suffered.”

The TUC’s general secretary, Brendan Barber, said: “Being underemployed carries a huge pay penalty that puts a real strain on people’s finances.

“Long periods of underemployment can cause longer term career damage, which is particularly worrying for the one in five young people currently trapped in it.”

BBC News – Business

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