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South Korean truckers say strike is a fight for livelihood

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© Reuters. FILE PHOTO: Members of the Cargo Truckers Solidarity union stop a truck during a strike in Yeosu, South Korea, June 9, 2022. Yonhap via REUTERS

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By Ju-min Park

INCHEON, South Korea (Reuters) – Kang Myung-gil parked his truck last week and stopped hauling products from a unit of Samsung Electronics (OTC:SSNLF) and other major South Korean companies to the port of Incheon, joining a strike that has hit industrial hubs and ports.

At stake is his family’s livelihood, Kang said, as soaring fuel prices and other costs make it impossible for him to go on while big business can pass on the burden charging higher prices to customers like himself.

Kang, 50, said in an interview he had no choice but to join the strike even though he was not a member of the union.

“When the other side of the world is getting better, why is our side of the world going backward and getting worse?” he asked.

The truckers are striking for the seventh day on Monday, protesting against rising fuel prices and demanding minimum pay guarantees.

The action has paralysed ports and cargo terminals in South Korea – a major supplier of autos, batteries, semiconductors, smartphones and electronics goods – further stretching global supply chains already disrupted by China’s COVID-19 curbs and Russia’s invasion of Ukraine.

Working as many as 15 hours a day, father-of-three Kang says he earns about $2,300 a month. Since April, his monthly fuel bill has leapt about $1,000.

He has borrowed from his in-laws to pay interest on his loans and says a $800 monthly income from his wife’s part-time job at a nursery is not enough to raise three children.

The truckers’ demands centre on the extension of a 2020 measure dubbed the “Safe Trucking Freight Rate, which ensures minimum pay and is set to expire this year.

The union says the measure is crucial to ensure truckers work in sustainable conditions. Being independent contractors, they say it guards against fuel price fluctuations and exploitation by powerful businesses.

The new government of President Yoon Suk-yeol does not control parliament and says it is up to the truckers to negotiate a deal with bosses and the opposition to extend the minimum wage guarantees.

“The most frustrating thing is I’ve been following all the rules, like installing low-emission equipment, even by paying more money if I need to. But why is the situation torturing me now and why would I let things be taken away?” Kang said.

In 2019, he was paid 280,000 won for a 240 km (149 mile) round trip between Incheon and a Samsung (KS:005930) display panel plant in Asan, although other truckers hired by higher-tier subcontractors were paid 320,000 won for the same trip.

Under the minimum rate scheme introduced in 2020, the freight rate increased to about 350,000 won for all truckers including non-union drivers.

The price of diesel at gas pumps was 1,960 won per litre in May 2022, compared to 1,340 won a year before, a 46% jump. Urea solution, mandatory for diesel vehicles, has doubled in price since a supply crisis in November, drivers say.

While the strike has been largely peaceful, tension is rising as the truckers run out of funds to maintain their industrial action.

Truck driver Park Kyung-soo said drivers were fighting for fairness.

“We are not beggars. We want our message to be heard for that fair share,” Park, 55, said as he took turns cooking inside a truck for fellow drivers in Incheon.

Stock Markets

Stats had a positive effect on the European stock market. European growth stocks

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european growth stocks

West European stock indexes closed Wednesday’s trading with a confident growth. Traders evaluated the fresh batch of statistics and bought European growth stocks.

What influenced European stocks to high growth?

GDP volume in France rose 0.2% in the third quarter compared to the previous three months, final data from the national statistics institute Insee showed. The final data coincided with a preliminary estimate. Analysts, on average, had not expected a revision, according to a Trading Economics survey. GDP growth slowed from a 0.5% rebound in the second quarter.

Consumer prices in France, harmonized with European Union standards, rose 7.1% year-over-year in November. Insee also reported. The November rate of increase in consumer prices coincided with that of October, and analysts polled by Trading Economics expected inflation to remain at the same level.

Consumer spending in the country collapsed by 2.8% in October compared with the previous month. Analysts polled by Bloomberg expected a more moderate decline of 1 percent. The consensus forecast of experts polled by Trading Economics envisioned a 0.6% decline. The decrease in consumer spending was the maximum since April 2021.

The number of unemployed in Germany increased by 17 thousand in November, according to the Federal Employment Agency of Germany. The rise in the index was marked at the end of the sixth month in a row. Experts interviewed by Bloomberg agency, on average, predicted an increase of 13.5 thousand. Respondents to Trading Economics expected an increase of 13 thousand.

Additional positives for investors in European markets on Wednesday were messages about easing of coronavirus restrictions in a lot of cities in China. Note that Amazon’s stock price is also rising if you are interested in the U.S. stock market.

Earlier, we reported that U.S. stock indices were up 2.2-4.4%.

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U.S. stock indices today rose 2.2-4.4%

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U.S. stock indices today

The U.S. stock indices today closed the trading on Wednesday with the confident growth due to the statements of the Federal Reserve Chairman, Jerome Powell, who confirmed that the U.S. Central Bank could slow down the basic rate rise as early as in December.

Judging by the quotations of futures on the level of the prime rate, U.S. stock market indices expect the Federal Reserve to raise it by 50 basis points (bps) in December – to 4.25-4.5%. The U.S. Central Bank has increased the rate by 75 bps at each of the previous four meetings. Against this background, the current stock price of Facebook also rose.

The report by the industry organization ADP, published on Wednesday, showed a slowdown in job growth in the U.S. private sector. Their number increased by 127,000 in November, the lowest rate since January, said the ADP. Analysts polled by The Wall Street Journal on average had forecast job growth of 190,000 after a jump of 239,000 in October.

Data from the U.S. Commerce Department, also released Nov. 30, showed higher-than-reported growth in the U.S. economy in the third quarter. U.S. GDP grew at an annualized rate of 2.9% in the July-September quarter, rather than the previously reported 2.6%. Experts polled by Trading Economics had expected an average revision of 2.7%.

Also, the Federal Reserve released its regional Beige Book survey Wednesday, showing that economic activity in the United States was little changed in the fall.

Federal Reserve banks in five counties reported a weak increase in activity in October and November, while the other seven reported a stable or slightly declining economy.

  • The Dow Jones Industrial Average index was up 737.24 points (2.18%) at 34589.77 as of Wednesday’s market close.

  • Standard & Poor’s 500 rose 122.48 points (3.09%) to 4,080.11 points.

  • The Nasdaq Composite added 484.22 points (4.41%) to 1,468.

All three U.S. stock market indices closed November, with the Dow Jones gaining 5.3%; the S&P 500 gaining 4.6%, and the Nasdaq Composite gaining 3.3%.

Earlier we reported that Main European stock indices were rising during trading.

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Stock Markets

Main European stock indices rise in trading

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best european stock indices

Main European stock indices are rising during trading on Thursday. The Stoxx Europe 600 composite index of the largest companies in the region rose 0.58% to 442.60 points. German DAX is up 0.34%, British FTSE 100 is up 0.15%, French CAC 40 is up 0.01%, Italian FTSE MIB is up 0.47% and Spanish IBEX 35 is up 0.45%.

What affected the best European stock indices?

During a speech at the Brookings Institution on Wednesday, Powell reiterated that the Fed could slow the rise in the prime rate as early as December. “The time to moderate the pace of rate hikes may come as early as the next meeting,” Powell said. 

The Fed chair, meanwhile, tried to balance those words with “hawkish” signals. Market Watch notes. He said that the U.S. Central Bank will have to raise the rate higher than could be expected a few months ago. Moreover, Powell made it clear that the issue of rate cuts is irrelevant at the moment. By the way, his words influenced the growth of the current stock price of the NASDAQ-100

Another Fed official, Board of Governors member Lisa Cook said she believes the regulator needs to keep raising rates as inflation is still too high. “We’ve started to get more favorable inflation data. But I would be cautious about drawing big conclusions on just one month’s worth of data,” Cook said during a speech at the Detroit Economic Club.

Earlier, we reported on how European stock indexes were falling following Asian stock markets.

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