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New Era Newspaper Monday January 8, 2018

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10 Inside BUSINESS

10 Inside BUSINESS Monday, January 8 2018 | NEW ERA Minimum wage hikes not enough to boost broader US salaries WASHINGTON Hikes in the minimum wage take effect this week in about 40 US states and municipalities but they will not be enough to boost US salaries more broadly, economists say. Congress has not approved a federal minimum wage hike since tion, so state and local governments stepped in to help workers on the lowest end of the pay scale make up some lost ground. Washington state’s minimum wage will rise to .50 an hour, the highest in any state, while some are phasing in increases to get to a “living wage” of , compared with the federal minimum of .25. In all, 18 states and nearly two dozen municipalities are raising their base salaries, but economists say the move affects a relatively small segment of the American labor force. They say policies that could have a broader impact on wages include direct employment programs, like infrastructure projects, especially in regions of the country that have not yet recovered from the recession. An expanded earned-income tax credit which would boost earnings for higher-wage workers could also help, they say. Other policies unrelated to wages include standardizing state licensing criteria for professions like hair dressers. This would allow professionals to move to areas with more vibrant economies without ing requirements. Another more technical change would be to clamp down on the use increasingly include in employment contracts. Such clauses keep workers from moving to competitors or starting their own businesses. Even with the US economy in its eighth year of recovery, and with solid hiring pushing the unemployment rate to a 17-year low of 4.1 percent, wage gains have been far more sluggish than economists and policymakers expected. The gains have not been widely shared, either. for 2017 released Friday showed average hourly earnings increased 2.5 percent to .63, just ahead of consumer price increases. Nominal wage growth since late 2009 has been just above two percent which is a little faster increases of more than three percent in previous recoveries. “That’s the big open question... why haven’t we seen more wage growth?” said Roberto Pinheiro, senior research economist at the Cleveland Federal Reserve Bank. And recent gains have been marked by “rising inequality” with much of the growth “concentrated at the top,” according to a study led by Jay Shambaugh at the Brookings Institution. From 1979 to 2016, wages in the to a gain of just 12 percent in the next quintile, and a one percent drop for the bottom group, the study shows. Pinheiro attributed the low wage growth mostly to slow improvement in labour productivity in the wake of the Great Recession that getting more in output per hour from workers,” so “the pie is not growing,” he told AFP. He and other economists agree there are many factors behind this, and as a result there is no easy solution. Some of the slow wage gains are due to demographics in an ageing American workforce: older, higherpaid workers are retiring – the socalled baby boomers – replaced by younger, lower-paid “millennials,” which drags down average wages. Some areas, mostly near major cities, are booming, and companies say they had to boost wages and offer more attractive working But Jared Bernstein of the Center on Budget and Policy Priorities, who served as chief economic adviser to former Vice President Joe Biden, noted the US economy still has “pockets of geographic weakness”. Those areas could benefit most from infrastructure projects to create jobs directly and help them catch up to more prosperous regions. Bernstein also said companies “have seriously gotten out of the habit” of raising wages, and executives have used holding down amid slow revenue growth. Shambaugh agreed, telling themselves to offer above-market wages to steal people because there isn’t a deep bench”. The economists called for policies to address declining innovation, in part caused by increasing concentration of industries; and the erosion of workers’ ability to negotiate higher pay, due to sharp declines in union membership, and the rise of non-compete clauses. While the divisive current US political environment makes it hard to push such measures, Shambaugh said one issue could have bipartisan support: keeping until wage gains spread throughout the economy. Most economists expect to see the unemployment rate fall much lower this year, and to see wages accelerate. - Nampa/AFP INVITATION FOR BIDS Integration Management Consultants hereby invites Namibian registered companies to an Open National Bidding for the following Tender. 1 Sector Agriculture Sub-Sector Horticulture 2 Item Description Supply of Irrigation equipment for Rundu and Zambezi VTC. 3 Procurement Reference Number AGR_21 4 Closing Date 28 January 2018 The Suitable Candidate companies should submit at least the following mandatory documents along with their bids to be considered eligible: shareholders company facilities represented. the following address: Komborerai Shoko ProVET, NTA Village, 10 Rand Street, Khomasdal, Windhoek, email: on or before the closing date mentioned above. Electronic and late bidding January 2018. Bids will be opened in the presence of the bidders at the All 3 major US stock indexes end at records again NEW YORK Wall Street stocks powered higher Friday with the Dow surging further above 25,000 points as bullish investors shrugged off a disappointing US jobs report. The Dow Jones Industrial at 25,295.87, its third straight record and the second close above the 25,000 landmark. The broad-based S&P 500 gained 0.7 percent to end at 2,743.15 and the tech-rich Nasdaq Composite Index advanced 0.8 percent to 7,136.56, both setting new closing records for the fourth straight day. The US added just 148,000 jobs in December, the Labor Department reported, far below expectations, although unemployment held steady at its 17-year low of 4.1 percent. The figures also lagged those in Thursday’s report by private-sector job growth at the year. But investors, who opened 2018 in a fever pitch to buy equities, were unfazed by the lackluster data, much as they have also overlooked any concerns about US-North Korea tensions or domestic political controversies. “Whatever the news, the reaction thus far continues to be more of what we have been seeing,” said Adam Sarhan founder of 50 Park Investments. “Investors are buying, dismissing all negative news, whether economic or geopolitical and they are just buying stocks.” Aerospace giant Boeing led the Dow with a 4.1 percent gain, with Caterpillar, DowDu- Pont and Visa also scoring big increases. Tech giants also were strong, with Google-parent Alphabet, Apple, Facebook and Amazon all winning more than one percent. Other big winners included payment company Square, up 8.0 percent, and videogame developer Electronic Arts, up 4.9 percent. CVS Health jumped 4.4 percent following an upgrade from Morgan Stanley. - Nampa/AFP

Monday, January 8 2018 | NEW ERA Inside BUSINESS 11 Libya’s oil revenues surge as output recovers than tripled in 2017 despite violence and political instabil- Friday by the central bank. The backbone of the North African country’s economy, the wake of the 2011 NATObacked uprising that toppled long-time dictator Moamer Oil output fell from 1.6 million barrels per day to less than 500,000 bpd between 2014 and 2016 due to violence around production facilities and export terminals as rival militias fought for control. Despite revenues surging to billion (12 billion euros) in 2017, up from .8 billion the fall far short of the billion Up… Libya’s oil revenues have more than tripled in 2017 despite violence and political instability. In 2017, production surged again to over one million barrels per day, slashing a record .7 billion in 2017, the central bank said. Crude sales make up 90 per- including most of what the country spends on public salaries and subsidies. An internationally-backed unity government in Tripoli controls the country’s oil income, but a rival administration based in the east has also established its own central bank. tests have regularly shut down oil facilities, a key focus of power struggles in a country with the largest oil reserves in Africa. Analysts see restarting oil production and exports as key to economy and returning security to the country. Despite rising revenues, the country continues to face persistent cash shortages and is struggling to tackle an unprecedented drop in the value of its currency. – Nampa/AFP US tax law pushes Deutsche into loss for 2017 FRANKFURT AM MAIN Germany’s biggest lender Deutsche Bank said Friday it would report “a small full-year after-tax loss” for 2017, largely owing to changes in the US tax system passed late last year. “As a result of the recent enactment of the Tax Cuts and Jobs Act, Deutsche Bank... expects to recognise an approximate 1.5-billion-euro (.8 billion) non-cash tax charge... for the fourth quarter,” the group said in a statement. Deutsche therefore “expects to record a small full-year after-tax loss,” it added. Although the US tax reform slashes the rate from 35 percent to 21 percent, Goldman Sachs have reported that it A lower tax rate means that tax breaks Washington offered for com- correspondingly smaller. But looking to the future, Deutsche noted that the changes would reduce its average effective tax rate worldwide to around 30 percent from January 1. The bank, which has struggled to a massive restructuring and a backlog of thousands of legal cases, offered no forecast for its full-year performance when presenting its results for July to September. It was contrite early last year when it reported a 1.4-billion euro loss for 2016, with chief executive John Cryan asking investors for patience as his painful medicine works through the system. As well as the impact of the US tax changes, Deutsche highlighted that “trading conditions in the fourth quarter 2017 were characterised by low levels of client activity”. Its bond and equity trading and 22-percent drop in revenues between October and December compared to The fourth quarter also brought around 500 million euros in “restructuring and severance costs and litigation charges”, including a loss it unit. Shares in Deutsche Bank MARKET OVERVIEW plunged following the announcement, losing more than 5.0 percent to trade around 15.51 euros in Frankfurt around 1615 GMT – making them the worst performer on the DAX index of blue-chip German stocks. –Nampa/AFP Change Latest 3 months 0.00% 7.16% 6 months 0.00% 7.56% CGP CAPRICORN INVESTMENT GROUP L 1800 0.00% 9 months 0.00% 7.69% NBS NAMIBIA BREWERIES LTD 3902 0.00% 12 months 0.00% 7.90% BVN BIDVEST NAMIBIA LTD 784 0.00% Change Latest FNB FNB NAMIBIA HOLDINGS LTD 4663 0.00% GC18 (R204 : 7.06%) -0.01% 7.97% ORY ORYX PROPERTIES LTD 2059 0.00% GC21 (R208 : 7.48%) -0.08% 8.30% NAM NAMIBIAN ASSET MANAGEMENT LT 72 0.00% GC24 (R186 : 8.54%) -0.07% 9.76% NHL NICTUS NAMIBIA 189 0.00% GC27 (R186 : 8.54%) -0.07% 10.15% BMN BANNERMAN RESOURCES LTD 54 0.00% GC30 (R2030 : 9.12%) -0.07% 10.79% DYL DEEP YELLOW LTD 319 2.24% GC32 (R213 : 9.17%) -0.07% 10.88% SILP STIMULUS INVESTMENT LTD-PREF 12129 0.00% GC35 (R209 : 9.45%) -0.05% 10.88% FSY FORSYS METALS CORP 162 -4.14% GC37 (R2033 : 9.28%) -0.06% 11.28% TUC TRUSTCO GROUP HOLDINGS LTD 889 0.00% %Change Latest B2G B2GOLD CORP 3739 -2.22% Gold -0.08% $ 1,312.19 Platinum -0.45% $ 952.93 Copper 0.00% $ 7,147.00 Brent Crude -0.06% $ 68.22 %Change Latest NSX (Delayed) -0.23% 1267.93 JSE All Share -1.01% 59,027.01 SP500 0.64% 2,713.06 FTSE 100 0.07% 7,676.81 Hangseng 0.57% 30,736.48 DAX 1.01% 13,108.80 %Change Latest Financials -0.78% 17,114.88 Resources -0.63% 36,758.96 Industrials -1.33% 79,069.21 %Change Latest N$/US dollar -0.58% 12.2950 N$/Pound -0.27% 16.6652 N$/Euro -0.15% 14.8340 US dollar/ Euro 0.42% 1.2065 Latest Previous Namibia Inflation (Nov 17) 5.2 5.2 Bank Prime 10.50 10.50 BoN Repo Rate 6.75 6.75

New Era

New Era Newspaper Vol 22 No 167