UK slashes public sector jobs; US growth revised down to 1.8%; Brazil, Turkey and the 'goal' of concessions; Paying the price for dropping out of college

1 UK slashes public sector jobs (Patrick Wintour & Heather Stewart in The Guardian) George Osborne conjured up a populist crackdown on welfare and public sector pay as he sought to minimise the impact of a further £11.5bn of spending cuts, including £2.6bn taken from council budgets and £500m axed from education.

Unveiling the results of his spending review 2015-16, the chancellor claimed that it would be possible to achieve £5bn of the sought-after savings through efficiencies, although this will include the loss of a further 144,000 public sector jobs. Police, student grants and charities will also be hit.

Claiming the economy was moving from rescue to recovery, Osborne set out a fifth and unscheduled year of austerity. "We have to deal with the world as it, not as we wish it to be, so this country has to continue to make savings," he said. "If we abandoned our deficit plan, Britain would be back in intensive care."

In a bid to grab headlines and push Labour into a corner ahead of the 2015 election, Osborne announced an unexpected package of welfare reforms and confirmed he was ending automatic pay rises for employees in the public sector.

2 US growth revised down to 1.8% (BBC) The US economy grew by less than previously estimated in the first quarter of the year, the Commerce Department has said. Gross domestic product - which measures annual economic output - grew at an annualised pace of 1.8%, down from an earlier estimate of a 2.4% rise. Weak business investment, a slowdown in consumer spending and falling exports led to the downward revision.

In the final quarter of 2012, the annualised growth rate had been 0.4%. Global stock markets had dropped sharply at the end of last week after Fed chairman Ben Bernanke said that the US central bank could start reining in its quantitative easing programme later this year and wind it up completely by mid-2014.

A breakdown showed that consumer spending, which accounts for three-quarters of US GDP, grew at a weaker pace of 2.6%, rather than the previously estimated 3.4%. An increase in the Social Security taxes has reduced income for most Americans. A person earning $50,000 to $75,000 a year has about $1,000 less to spend, while a household with two high earners will have roughly $4,500 less.

Earlier this month the International Monetary Fund urged the US government to repeal the huge federal budget cuts introduced this year, denouncing them as "excessively rapid and ill-designed", and warning they would be a significant drag on growth this year.

3 Brazil, Turkey and the ‘goal’ of concessions (Mahir Ali in Khaleej Times) Will the protests in Brazil die down before the World Cup? It is perhaps no more than an intriguing coincidence that at least some of the teargas used against protesters in Turkey bore a “Made in Brazil” stamp. What is arguably less coincidental is the similarity between the Brazilian mass mobilizations of the past two weeks and the recent Turkish variant.

It’s a resemblance that Recep Tayyip Erdogan has recognised, telling reporters last week: “The same plot is being laid in Brazil. The symbols, the banners, Twitter and the international media are the same.” It is true enough that in both cases the initial spark was a relatively minor concern: the redevelopment of Istanbul’s Gezi Park in one instance, a marginal hike in bus fares in the other. There is a remarkable difference, though, between the reactions of the two governments.

Erdogan was quick to demonise the demonstrators. Brazil’s President Dilma Rousseff struck a very different note. “Brazil woke up stronger today,” she declared in the immediate aftermath of mass mobilizations early last week. “The size of yesterday’s demonstrations shows the energy of our democracy, the strength of the voice of the streets and the civility of our population.”

The increase in bus fares was also speedily rescinded. But by then it was already too late. Brazil’s achievements are not to be scoffed at, notably in the sphere of reducing absolute poverty — which helps to explain why Luz Inacio da Silva, better known as Lula, enjoyed a popularity rating of over 80% when his second term ended following the 2010 election, despite accusations of corruption against some of his closest aides.

His successor, Rousseff — the daughter of a Bulgarian communist — has not deviated too sharply from the policies of her predecessor, but has in the past few days been persuaded to propose significant reforms, including constitutional reforms. It would no doubt help, were Erdogan inclined to import Dilma’s attitude rather than her country’s teargas.

4 Paying the price for dropping out of college (Eduardo Porter in The New York Times) College graduation rates in the US are continuing to slip behind, according to a report by the Organization for Economic Cooperation and Development, failing to keep pace with other advanced nations.

In 2000, 38% of Americans age 25 to 34 had a degree from a community college or a four-year institution, putting the nation in fourth place among its peers in the OECD. By 2011, the graduation rate had inched up to 43%, but the nation’s ranking had slipped to 11th place. Graduation rates in the US among 55- to 64-year-olds are higher than in any industrial country except Canada and Israel — reflecting the nation’s head start. 

What’s most troubling, perhaps, is that Americans are actually enrolling in college and then dropping out halfway through — when they’ve probably already incurred a bunch of debt and won’t benefit from the better job prospects that come with a degree. More than 70% of Americans matriculate at a four-year college. But less than two-thirds end up graduating. Including community colleges, the graduation rate drops to 53%. Only Hungary does worse.

And the most perplexing part of this accounting is that regardless of cost, getting a degree is the best financial decision a young American can make. College graduates have higher employment rates and make more money. According to the OECD, a typical graduate from a four-year college earns 84% more than a high school graduate. A graduate from a community college makes 16% more.