Economist 5/16/16

  1. France recorded three consecutive years of virtually zero growth—for the first time since the second world war. In 2014, even as the euro zone as a whole began to recover, economic stagnation continued in France. The unemployment rate, which stood at 9.8% in 2012, is 10.2% today.The strongest sign was growth in the first quarter. The French economy,grew faster than expected, at a quarterly rate of 0.5%.Thanks also to cheap energy prices and low interest rates, the French economy has now recorded three consecutive quarterly increases, and growth is on track to reach 1.5% this year, in line with the government’s forecast. Manufacturing output was disappointing. But, crucially, private-sector investment is recovering. In the first quarter, investment in equipment was up by a healthy 2.6%.Manufacturing bosses expect to increase investment this year by 7%, which would mark the biggest rise since 2011.But something important is missing: jobs.Youth unemployment, at 24%, has barely budged.The underlying problem is that firms remain wary of taking on permanent workers under France’s rigid labour code: around 85% of new hires are on short-term contracts. This tends to shut out young people in particular from the stable job market.
  2. On May 5th, America’s Food and Drug Administration (FDA) announced new requirements for electronic cigarettes.The vapour industry is small—less than 0.1% of the tobacco market—but expanding fast. Global sales grew 11 times over in the five years to 2014, according to Euromonitor, a data firm. In America sales soared even more rapidly.E-cigarettes might help smokers inhale nicotine without the deadly stuff that comes from burning tobacco.Yet e-cigarettes are not totally harmless.The evidence for e-cigarettes’ broad effects is still slight. Smokers may give up traditional cigarettes for electronic ones, but teenagers may do the opposite. FDA bans the sale of e-cigarettes to children. In 2011, 1.5% of teenagers had smoked an e-cigarette in the past 30 days.e-cigarettes that were not on the market in 2007—that is, almost all of them—must be approved by the FDA as “appropriate for the protection of the public health”.The FDA “recommends” that companies provide certain information when they apply—such as clinical evidence of health risks, research on which flavours appeal to various consumers and details on the training of workers who make them.
  3. Daniel Kish produces between 6,000 and 7,000 bottles of wine a year in Israel’s Negev desert; he reckons each costs 45 shekels ($12) to make. They sell for just over twice that at his vineyard on Kish Farm. Keeping the process kosher is costly.A region’s climate determines its terroir—the environmental elements that affect the quality of grapes, such as rainfall, temperature and soil conditions.Most grapes grow between temperatures of 12°C and 22°C. So research in recent years suggests that, in a warmer world, grapes will cope better at higher latitudes and elevations.Grapes exposed to too much sun become sweeter and less acidic; eventually, they become raisins. Some spots, such as California’s Napa Valley, may get too hot for vines altogether.Israel’s deserts can serve as laboratories for growing vines in warmer conditions.
  4. ON AVERAGE women earn 18% less than men, according to analysis by Korn Ferry Hay Group, a consulting firm which looked at more than 8m employees in 33 countries. The pay gap is largely explained by a lack of women in highly paid roles. Women make up 40% of the global workforce for clerical jobs but only 17% of executive roles.  However, the pay gap shrinks when comparing males and females working at an identical level and function within the same company (but still favours men by 1.6%).The United Arab Emirates has a reverse pay gap. Women at the same level, company and function actually earn 2% more than their male counterparts. This is partly because fewer women participate in the labour force, and those that do tend to have higher levels of education.
  5. Slack is one of the fastest-rising startups around, with $540m in funding and a valuation of around $3.8 billion.It is rare for business software to arouse emotion besides annoyance. But some positively gush about how Slack has simplified office communication.Slack’s rise points to three important changes in the workplace. First, people are completing work across different devices from wherever they are, so they need software that can work seamlessly on mobile devices. Messaging naturally lends itself to this format. Second, communication is becoming more open. Just as offices went from closed, hived-off rooms to open-plan.Third, software firms are trying to automate functions that used to be done by people in order to make employees more productive. Slack has made a big push into “bots”, algorithms that can automate menial tasks which used to be done by humans.Mr Butterfield says that Slack could achieve $10 billion in revenue if it signs up 100m knowledge workers, of which there are around 850m worldwide. That is far easier said than done. For one thing, Slack still needs to woo larger companies outside the technology world.

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