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    Remittances to Mexico near a record but ‘super peso’ crimps spending power

    Mexico is the second-largest recipient of remittances from abroad after India.
    The soaring peso this year has forced many in the United States to increase the amounts they are sending back to Mexico.
    Remittances’ buying power this year in Mexico is on track to fall for the first time in a decade.

    A board displays the exchange rates for Mexican Peso and U.S. Dollar in Mexico City, Mexico March 13, 2023.
    Raquel Cunha | Reuters

    People sending money back to Mexico this year have faced a new challenge: the “super peso.”
    The Mexican currency reached the strongest levels against the U.S. dollar in almost eight years over the summer.

    The skyrocketing peso has eroded the purchasing power of households in Mexico who rely on remittances from abroad. The currency’s rise means every dollar sent home yielded fewer pesos than before.

    Lea este artículo en español aquí.

    Coupled with inflation at home, the buying power of remittances is set to fall this year over last for the first time in a decade, according to Gabriela Siller Pagaza, chief economist at Banco Base.
    “What is truly important for recipients of remittances is not the amount they receive in dollars but the how much they can buy with that in Mexico,” Siller Pagaza said.
    In the 12 months ended in August, people sent more than $62 billion in remittances to Mexico, according to Banco Base. Over the same period, the peso advanced more than 15.6% and annual inflation came in at 4.64%.
    Siller Pagaza estimates that the spending power of remittances in Mexico will decline 9.9% this year, the first drop in a decade and the largest percentage fall in 13 years.

    The peso is down from its highs of less than 17 pesos per U.S. dollar in July, recently at around 18 pesos per dollar this week. At the start of the year, each U.S. dollar was worth 19.46 pesos.

    The currency’s surge has drawn more from the pockets of those sending U.S dollars to Mexico. People looking to send money to the country from the U.S. have found themselves forced to increase the amount to try to keep up.
    For example, at the peso’s peak in July, a person who wanted to get 1,000 pesos to someone in Mexico would have to send about $60. A year earlier, it took around $49.
    Eric Vasquez, a 44-year-old busboy at a New York City diner, is one of those people who has had to increase his contributions for his wife and three children who live in Mexico City.
    “Before I used to send $100,” Vasquez said outside of a money transfer business in the Corona section of Queens, New York. “Now I have to send $130, $140 to cover expenses.”
    Those money transfers include fees for school for his children, food and transportation.
    Vasquez said he has lately been sending closer to $200 a week back home: “The more my children grow, the more money I have to send.”

    Arrows pointing outwards

    Buying power of remittances in Mexico
    Banco de Mexico, Grupo Financiero Base

    Melchor Magdaleno, 33, said for the last three to four months, he’s been sending $120 a month back to his wife and five children in Tlapa de Comonfort, in the southern Guerrero state of Mexico. He used to send $100 every two weeks, he said, but this year increased the amount due to the exchange rate and higher costs in Mexico.
    Mexico’s inflation has eased in recent months but is still up 4.45% on the year, according to the latest read.
    Dilip Ratha, an economist at the World Bank who focuses on remittances, noted that money transfers into Mexico have soared in recent years, driven in large part by the strong U.S. economy.

    Arrows pointing outwards

    Remittances to Mexico

    But the peso’s appreciation, tied in part to near-shoring of manufacturing from Asia to Mexico and economic strength in both the U.S. and Mexico, could hurt Mexican households that use remittances for household budgets.
    Ratha said some families could cut back on certain spending to handle fixed costs like rent or mortgages.
    “People will continue to send money but the fact that economies are slowing, inflation is up, their purchasing power is eroding,” said Ratha. “The welfare effects of the situation will be quite significant.”
    Mexico is the second-largest recipient of remittances worldwide after India. The transfers make up around 4% of the country’s gross domestic product.
    While remittances are likely to reach a record again this year, the rate of growth will likely slow, economists said, as senders and recipients grapple with inflation, squeezing household budgets.
    And the impacts could be felt in both the U.S. and Mexico.
    “Mexicans in the U.S. and their relatives back home are both facing higher inflation, and wage growth has not kept up in both places,” Ratha said. “Consumption has to adjust.” More

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    Retail sales rose 0.7% in September, much stronger than estimate

    Consumers showed surprising strength in September, boosting retail sales well above expectations despite high interest rates and worries over a weakening economy.
    Retail sales rose 0.7% on the month, well above the 0.3% Dow Jones estimate, according to the advance report the Commerce Department released Tuesday. Excluding autos, sales were up 0.6%, also well ahead of the forecast for just 0.2%.

    The numbers are not adjusted for inflation, so they indicate that consumers more than kept up with price increases. The consumer price index, released last week, showed headline inflation up 0.4% in September.
    On a year-over-basis, sales rose 3.8%, compared to the 3.7% increase for CPI.
    Treasury yields moved higher following the report while stock market futures added to losses.
    Sales gains were broad-based on the month, with the biggest increase coming at miscellaneous store retailers, which saw an increase of 3%. Online sales rose 1.1% while motor vehicle parts and dealers saw a 1% increase and food services and drinking places grew by 0.9%, good for a yearly increase of 9.2%, which led all categories.
    There were only a few categories that showed a decline; electronics and appliances stores as well as clothing retailers both saw decreases of 0.8% on the month.

    The retail report is considered an important factor for the Federal Reserve as officials contemplate the future of monetary policy. While markets largely expect the Fed is done raising rates for this cycle, an unexpectedly strong consumer complicates the equation.
    Fed Chair Jerome Powell speaks Thursday in New York, an event that markets will be watching closely for some indication about where he thinks rates are headed. The rate-setting Federal Open Market Committee next meets Oct. 31-Nov. 1. Market pricing assumes a near-certainty that the FOMC will not hike then, but it could choose to do so at future meetings if economic data remains strong.
    Consumers face growing headwinds going into the end of the year.
    Employment growth is expected to slow though it, too, has defied expectations. Credit card balances are rising, and the resumption of student loan payments also is expected to impact spending.
    Still, third-quarter economic growth is likely to be strong, with the Atlanta Fed’s GDP tracker showing a potential annualized gain of 5.1%.
    This is breaking news. Please check back here for updates. More

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    U.S. Tightens China’s Access to A.I. Chips

    The further limits on shipments could cripple Beijing’s A.I. ambitions and dampen revenues for U.S. chip makers, analysts said.The Biden administration on Tuesday announced additional limits on the kinds of advanced semiconductors that American firms can sell to China, shoring up restrictions issued last October to limit China’s progress on artificial intelligence.The rules appear likely to bring to a halt most shipments of advanced semiconductors from the United States to Chinese data centers, which use them to produce models capable of artificial intelligence. More U.S. companies seeking to sell China advanced chips, or the machinery used to make them, will be required to notify the government of their plans, or obtain a special license.To prevent the risk that advanced U.S. chips travel to China through third countries, the United States will also require chip makers to obtain licenses to ship to dozens of other countries that are subject to U.S. arms embargoes.The Biden administration argues that China’s access to such advanced technology is dangerous because it could aid the country’s military in tasks like guiding hypersonic missiles, setting up advanced surveillance systems or cracking top-secret U.S. codes.But artificial intelligence also has commercial applications, and the tougher restrictions may affect Chinese companies that have been trying to develop A.I. chatbots like ByteDance, the parent company of TikTok, or the internet giant Baidu, industry analysts said. In the longer run, the limits could also weaken China’s economy, given that A.I. is transforming industries ranging from retail to health care.The limits also appear likely to cut into the money that U.S. chip makers such as Nvidia, AMD and Intel earn from selling advanced chips to China. Some chip makers earn as much as a third of their revenue from Chinese buyers and spent recent months lobbying against tighter restrictions.U.S. officials said the rules would exempt chips that were purely for use in commercial applications, like smartphones, electric vehicles and gaming systems. Most of the rules will take effect in 30 days, though some will become effective sooner.In a statement, the Semiconductor Industry Association, which represents major chip makers, said it was evaluating the impact of the updated rules.“We recognize the need to protect national security and believe maintaining a healthy U.S. semiconductor industry is an essential component to achieving that goal,” the group said. “Overly broad, unilateral controls risk harming the U.S. semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere.” In a call with reporters on Monday, a senior administration official said that the United States had seen people try to work around the earlier rules, and that recent breakthroughs in generative A.I. had given regulators more insight into how the so-called large language models behind it were being developed and used.Gina M. Raimondo, the secretary of commerce, said the changes had been made “to ensure that these rules are as effective as possible.”Referring to the People’s Republic of China, she said, “The goal is the same goal that it’s always been, which is to limit P.R.C. access to advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers that are critical to P.R.C. military applications.”She added, “Controlling technology is more important than ever as it relates to national security.”The tougher rules could anger Chinese officials when the Biden administration is trying to improve relations and prepare for a potential meeting between President Biden and China’s top leader, Xi Jinping, in California next month.The Biden administration has been trying to counter China’s growing mastery of many cutting-edge technologies by pumping money into new chip factories in the United States. It has simultaneously been trying to set tough but narrow restrictions on exports of technology to China that could have military uses, while allowing other trade to flow freely. U.S. officials describe the strategy as protecting American technology with “a small yard and high fence.”But determining which technologies really pose a threat to national security has been a contentious task. Major semiconductor companies like Intel, Qualcomm and Nvidia have argued that overly restrictive trade bans can sap them of the revenue they need to invest in new plants and research facilities in the United States.Some critics say the limits could also fuel China’s efforts to develop alternative technologies, ultimately weakening U.S. influence globally.The changes announced Tuesday appear to have particularly significant implications for Nvidia, the biggest beneficiary of the artificial intelligence boom.In response to the Biden administration’s first major restrictions on artificial intelligence chips a year ago, Nvidia designed new chips, the A800 and H800, for the Chinese market that worked at slower speeds but could still be used by Chinese firms to train A.I. models. A senior administration official said the new rules would restrict those sales.In addition to those expanded restrictions, the United States will create a “gray list” that requires makers of certain less advanced chips to notify the government if they are selling them to China, Iran or other countries subject to a U.S. arms embargo.In a note to clients last week, Julian Evans-Pritchard, the head of China economics at the research firm Capital Economics, said the effects of the controls would become more apparent as non-Chinese companies rolled out more advanced versions of their current products and the amount of computing power needed to train A.I. models rose as their data sets grew larger.“The upshot is that China’s ability to reach the technological frontier in the development of large-scale A.I. models will be hampered by U.S. export controls,” Mr. Evans-Pritchard wrote. That could have broader implications for the Chinese economy, he added, since “we think A.I. has the potential to be a game changer for productivity growth over the next couple decades.” More

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    A Higher Monthly Payment, but Less Square Footage

    Homebuilders are responding to rising interest rates with an innovation: a small house in the traditionally spacious exurbs.The American home is shrinking.With interest rates rising and mortgage costs with them, homebuilders are pulling in yards, tightening living rooms and lopping off bedrooms in an attempt to keep the monthly payment in line with what families can afford. The result is that new home buyers are paying more and getting less, while far-flung developments where people move for size and space are now being reimagined as higher-density communities where single-family houses have apartment-size proportions.In a recent survey of architects, John Burns Research and Consulting found that about half expected their average house size to decline. New communities will have more duplexes or small-lot single-family homes that are just a few feet apart. Even in Texas, where land is abundant, builders are adding more homes per acre, the company found.“The monthly payment matters more than anything else and builders have responded with smaller, more efficient homes,” said John Burns, the company’s chief executive.Consider Hayden Homes, a Pacific Northwest builder that focuses on small towns and exurbs where middle-class families (its typical buyer has a household income of $90,000 a year) have historically traded more house for a longer commute.Two years ago, when interest rates were low, the average Hayden home was a 1,900 square-foot three-bedroom that cost $500,000, or about $2,000 a month, said Steve Klingman, the company’s president, in an interview. This assumed a 5 percent down payment and a 30-year fixed-rate mortgage with a 3 percent interest rate.Now, as borrowing costs consume more of buyers’ mortgage payments, Hayden is lowering prices and square footage to keep customers’ payments stable. The average Hayden home is now 1,550 square feet and costs about $400,000, or $2,100 a month, Mr. Klingman said. To buy it, however, a customer has to produce a 10 percent down payment and, even with incentives, is paying a 6 percent rate on a 30-year fixed-rate mortgage.“We are reconfiguring our floor plans, our features and community design all to get to that payment buyers can afford,” Mr. Klingman said. “People want to own if we can make it attainable.”In dense areas like Southern California, the high cost of land has long led developers to focus on compact homes. Trade-offs like a side yard instead of a backyard, or a garage that opens to the street instead of a driveway, have compressed size and reduced cost. Now those kinds of urban designs are arriving in the exurbs.For instance, in Hayden’s hometown, Redmond, Ore., a city of 35,000 about 30 minutes from Bend, Ore., its Cinder Butte Village development now has homes as small as 400 square feet (a one-bedroom, one-bath with a garage on the back alley). The average is around 1,000 — half the typical home size in the community two years ago.Mr. Klingman expects smaller homes to drive the market in the coming years. Hayden shifted all of its floor plans down as mortgage rates started rising and has prototypes for new communities that are twice as dense as the ones it built during the pandemic.“I think this is for the long haul,” Mr. Klingman said.In Cinder Butte Village, new homes will be much closer together than those built a few years ago.Amanda Lucier for The New York TimesNew homes are a tiny slice of the U.S. housing stock — builders started about 1.5 million houses and apartments last year, while 142 million already existed — but since they are built in every market and bought almost entirely with mortgages, their size and cost are relatively sensitive to changes in the economy. This makes fresh construction a useful picture of how families are affected by higher borrowing costs.American families have for generations had more space than households elsewhere in the developed world, but their homes were shrinking even before interest rates rose. The median new U.S. home peaked around 2,500 square feet in 2015. Over the next five years, new homes shed about 200 square feet as costs rose, urban living boomed and smaller families became more common.The pandemic, with its rock-bottom interest rates, led to what seems poised to be a short-lived increase. As white-collar workers ditched their commutes, and home-based offices went from perk to necessity, builders added rooms and exurban subdivisions thrived.Today’s buyers are dealing with the hangover. The average rate on a 30-year fixed-rate mortgage has roughly doubled over the past two years, to 7.57 percent, according to Freddie Mac. This has all but frozen the market for existing homes by making buyers who locked in low rates reluctant to trade up or move, keeping home prices stable despite a huge increase in borrowing costs.The price that sellers will accept “is unusually high,” said Daryl Fairweather, chief economist at Redfin, the real estate brokerage. “They need somebody to buy them out of their mortgage.”The decline in the inventory of existing homes for sale has made new homes a much bigger slice of the market. New home sales have consumed about a third of the market this year, or double the level in 2019, according to Redfin.Homeowners who can’t get their price can always sit out the market. But homebuilders have to sell to survive. And in a market where borrowing costs are consuming more of their buyers’ payments, and after years of rising material and labor costs, that means selling less house.The cuts will not be equal. In its survey, the John Burns consultancy found that dining and children’s rooms are being sacrificed to preserve bigger kitchens and primary bedrooms. To do this, builders are replacing tubs with showers. They’re expanding kitchen islands so they double as a dinner table. Outdoor spaces are being connected by covered patios and wall-size sliding doors that make a smaller living room seem open.Bigger is still better, even if it only feels like it. More

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    Those Doritos Too Expensive? More Stores Offer Their Own Alternatives.

    Retailers are expanding their own private-label food and beverage offerings, attracting customers looking for less expensive options.The snack chips had become pretty pricey.For years, customers stopping at Casey’s General Stores, a convenience store chain in the Midwest, hadn’t thought twice about snagging a soda and a bag of Lay’s or Doritos chips. But over the past year, as the price of a bag of chips soared and some customers felt squeezed by the high cost of gas and other expenses, they began picking up Casey’s less-expensive store brand.So Casey’s began stocking more of its own chips, in a variety of new flavors. This summer, Casey’s brand made up a quarter of all bags of chips sold, eating into the sales of big brands like Frito-Lay, which is owned by PepsiCo.“As inflation continues to ratchet up, more people are open to trying alternatives,” said Darren Rebelez, the chief executive of Casey’s, which has 350 private-label products and plans to add 45 this year. “If you put the alternative right on the shelf, right next to the expensive option, people may say, ‘What the heck,’ and give it a try.”Large food companies gobbled up market share during the pandemic. With supply chain issues affecting what was on the shelves, people were buying basically whatever they could find. And they kept buying even as prices soared when the food and beverage brands raised prices to maintain their profit levels while still covering rising ingredient and labor costs.But with retailers now expanding their store-owned food and beverage offerings, consumers are slowly shifting their spending. Overall, private-label foods and beverages have crept up to a 20.6 percent share of grocery dollars from 18.7 percent before the pandemic, according to the market research firm Circana.In some categories like canned vegetables and cheese, private-label goods have garnered a significant portion of the market.Andres Kudacki for The New York TimesBut a deeper look at some categories reveals private-label goods are gaining significant ground on national brands. Private labels snagged 38 percent of canned vegetable sales in the three months that ended June 30, according to Numerator, another market research firm. Numerator’s data also shows private-label cheese held 45 percent of the market and coffee nearly 15 percent.The shift in spending reflects a customer base that is nearing or at its tipping point. Inflation, which climbed to 3.7 percent in September, is running at a less-rapid pace than a year ago, but millions of shoppers still face increasingly high prices in grocery stores.The trend is having a greater effect among those with lower incomes, who spend a greater share of their paycheck on food, even as a pandemic-era policy that increased the amount of money that food-stamp recipients received over the last three years has ended. This month, payments on federal student loans, which had been on pause for the pandemic, also resumed. Adding to the financial burden, rates on credit cards and mortgages are rising.Two-thirds of consumers said in July that they bought less-expensive groceries at retailers, an increase of four percentage points from a year earlier, according to the consulting firm McKinsey. The shift, the firm said, was particularly pronounced among those with incomes less than $100,000 in categories such as meat, dairy and staples.“Consumers are trading down,” said Rupesh D. Parikh, an equity analyst at Oppenheimer & Company who covers food, grocery and consumer products. He recently bought a box of Kellogg’s Mini Wheats cereal at Walmart along with the Walmart version. “The Kellogg’s cereal was 75 percent more expensive, and I couldn’t tell the difference between them,” he said.Big brands, in response, are already starting to offer small sale prices on certain foods, like salty snacks. “The question is how deep they are willing to go in promotions,” Mr. Parikh said.The expansion in private-label goods is also a response to a changing grocery landscape. Competition is revving up because of consolidation, led by Kroger’s proposed $24.6 billion merger with Albertsons, and the push into the United States by entrants like the German discount chain Aldi, which stocks 90 percent of its shelves with private-label goods. In August, Aldi agreed to acquire 400 Winn Dixie and Harveys Supermarket stores, giving it a significant presence in the Southeast.Retailers say they need the private-label goods to give consumers a broader array of choices. The store brands are also typically more profitable for the retailers than products from big food companies.But perhaps the biggest factor is a seismic shift in consumer attitudes. Older generations that grew up with “generic” ketchup or soup recall them as bland, tasteless versions of the name brands. Retailers, which have dumped the term “generic,” insist that the quality of the private-label foods and beverages has improved substantially. Social media platforms like TikTok and Reddit are filled with young people hyping their favorite store brand foods at Aldi and Trader Joe’s.“If the food is not good quality, our reputation is at risk,” said Scott Patton, the vice president of national buying for Aldi, who said the chain was seeing increased traffic in all income levels. “If you’re going to sell a store-branded apple cinnamon ice cream, it had better be the best apple cinnamon ice cream you’ve ever had.”Retailers are offering customers “belly fillers,” basic foods at low prices that are virtual clones of national brands, but they are also hunting for ways to differentiate themselves, said Jordan Bouey, the owner of Silver State Baking, a Las Vegas-based manufacturer that makes cookies, bars and breads for grocery chains and retailers.“If there’s a category that doesn’t have a big national brand, retailers are looking to be unique and give the shoppers what they’re looking for, like a protein cookie,” Mr. Bouey said.The private-label pasta carried by Wegmans includes more high-end varieties aimed at “the food enthusiast,” an executive said.Andres Kudacki for The New York TimesAt a Wegmans in Hanover, N.J., the dried pasta aisle was stocked with fettuccine, shells and spaghetti from well-known brands like Barilla and De Cecco. But the vast majority of the pasta on the shelves was Wegmans’ own brand, one line priced at 99 cents a box and another, Amore, that is imported from Italy and $4.99 a box, about $2 more than some of the national brands.“We want our brand to serve the value customer who is on a budget,” said Nicole Wegman, who was named president of Wegmans Brand in 2021. Wegmans has expanded its private-label business in recent years to more than 17,000 products, including deli and prepared meals, frozen vegetables and healthy snacks.“But we also want products, like our cheese and our breads, that are fun for the food enthusiast,” Ms. Wegman said. “They’re specialty items and more expensive to make, so we have to charge more for them.”Indeed, executives at Casey’s, which started dabbling in private-label goods three years ago, said they were trying not to compete with the national brands but rather expand what’s available for customers. In some cases, that means offering flavors the national brands do not.Sales of limited-edition Casey’s chips in flavors like sweet corn, barbecue brisket and jalapeño Cheddar sold well this summer. “Those are the kind of products that a Frito-Lay is not going to make because it is not a national flavor profile that is going to work for their business,” Mr. Rebelez said.But he also acknowledged that some Casey’s customers were simply looking for deals.Take candy bars. For years, retailers would not compete against behemoths like Hershey and Mars because customers remained loyal to the brands they had grown up eating. But as the price of candy bars rose in recent years, some customers stopped buying.So Casey’s created four of its own lower-priced candy bars, including a chocolate with mint and a chocolate caramel.“I was skeptical going in, but those candy bars have performed really well,” Mr. Rebelez said, adding that Casey’s was working on more iterations. “There is a breaking point for consumers, and in certain products and categories we’ll provide an alternative.” More

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    Bill Ford Says U.A.W. Strike Is Helping Tesla and Toyota

    Mr. Ford, the executive chairman of Ford Motor, said nonunion automakers would make gains against Michigan automakers because of strikes by the United Automobile Workers union.The monthlong strike by the United Automobile Workers and the union’s demands for substantial pay and benefits increases risk damaging the U.S. auto industry, hurting its ability to compete against nonunion foreign rivals, the executive chairman of Ford Motor said on Monday.The fight should not be seen as the U.A.W. against Ford, or its crosstown rivals, General Motors and Stellantis, said William C. Ford Jr., the great-grandson of the company’s founder Henry Ford, noting that at times U.A.W. officials have referred to the automakers as the union’s “enemy.”“It should be Ford and the U.A.W. against Toyota, Honda, Tesla and all the Chinese companies that want to enter our home market,” Mr. Ford said at the company’s Rouge plant in Dearborn, Mich.“Toyota, Honda, Tesla and the others are loving the strike, because they know the longer it goes on, the better it is for them,” the executive chairman said. “They will win, and all of us will lose.”Mr. Ford’s remarks alluded to a period several decades ago when the U.A.W. won increasingly rich contracts that were later seen by many industry experts as having hobbled the three Michigan automakers in the face of competition from Japanese and European carmakers. Ford came to the brink of collapse, and G.M. and Chrysler — now part of Stellantis — had to seek bankruptcy protection after the 2008 financial crisis.“Ford’s ability to invest in the future isn’t just a talking point,” Mr. Ford said. “It is the absolute lifeblood of our company. And if we lose it, we will lose to the competition. Many jobs will be lost.”In a statement, the U.A.W. president, Shawn Fain, said Mr. Ford should “stop playing games” and meet the union’s demands, or “we’ll close the Rouge for him.” Mr. Fain added that the U.A.W. was not fighting the company but “corporate greed.”“If Ford wants to be the all-American auto company, they can pay all-American wages and benefits,” Mr. Fain said. “Workers at Tesla, Toyota, Honda and others are not the enemy — they’re the U.A.W. members of the future.”Ford, G.M. and Stellantis have been negotiating new labor contracts with the U.A.W. since July. Over the past month, the union has called on workers at a few plants to go on strike. The action has idled three Ford plants, two G.M. factories and one Stellantis plant. Workers at 38 G.M. and Stellantis spare-parts warehouses are also on strike.The strategy is intended to increase pressure on the companies to meet the union’s demands for significantly higher wages, shorter working hours and expanded pensions, and to end a system that pays new hires just over half of the top U.A.W. wage of $32 an hour.The companies have offered wage increases of more than 20 percent over the next four years and certain other measures in line with the union’s demands, but the U.A.W. is pressing for greater concessions.Last week, the union called for a strike by 8,700 workers at Ford’s Kentucky truck plant in Louisville, the company’s largest.Ford executives said last week that the company had made a record offer to the union and that sweetening the deal would hurt the automaker’s ability to invest in electric vehicles and other new models and technologies.Mr. Ford, who has had a role in every round of negotiations with the U.A.W. since 1982, said the talks had reached “a crossroads” and warned that labor contracts that burdened the automakers with heavy costs could affect the U.S. economy.“The price of failure should be clear to everyone,” he said. “Let’s come together and reach an agreement, so we can take the fight to the real competition.” More

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    U.S. can ‘certainly’ afford military support to both Israel and Ukraine, Janet Yellen says

    President Joe Biden in a post on X (formerly Twitter) on Sunday reiterated Washington’s “unwavering support” for Israel in its war against Palestinian militant group Hamas.
    Secretary of State Antony Blinken made an unscheduled return to Israel on Monday, the 10th day of an Israeli aerial bombardment campaign of the Gaza Strip.
    Israel’s siege, which has been widely criticized by human rights organizations, came as a response to a brutal and large-scale terrorist attack carried about by Hamas on Oct. 7.

    Janet Yellen, United States Secretary of Treasury, participates in global infrastructure and investment forum in New York, Thursday, Sept. 21, 2023. 
    Pool | Via Reuters

    U.S. Treasury Secretary Janet Yellen said the country can “absolutely” afford to financially support both Israel and Ukraine in their respective war efforts.
    President Joe Biden in a post on X (formerly Twitter) on Sunday reiterated Washington’s “unwavering support” for Israel in its war against Palestinian militant group Hamas, and said he had provided Israeli Prime Minister Benjamin Netanyahu with an update on both U.S. military support and efforts to protect civilians as the conflict escalates.

    Though the White House has so far fully endorsed what it terms “Israel’s right to defend itself,” Biden noted in an interview with CBS’ “60 Minutes” that an Israeli re-occupation of Gaza would be a “big mistake” and that although Hamas should be eliminated entirely, there “must be a path to a Palestinian state.”
    Secretary of State Antony Blinken made an unscheduled return to Israel on Monday, the 10th day of an Israeli aerial bombardment campaign of the Gaza Strip as part of an all-out siege that has seen water, food and electricity cut off to around 2 million people.
    Asked in an interview with Britain’s Sky News on Monday whether the U.S. could afford to be providing military support to Israel and to Ukraine in its ongoing war with Russia, Yellen said “the answer is absolutely.”
    “America can certainly afford to stand with Israel and to support Israel’s military needs and we also can and must support Ukraine in its struggle against Russia,” Yellen said, adding that the U.S. economy is doing “extremely well.”
    “Inflation has been high and it’s been a concern to households, it’s come down considerably. At the same time, we have about the strongest labor market we’ve seen in 50 years with 3.8% unemployment. And at the same time, America, the Biden administration, has passed legislation that is strengthening our economy in years to come for the medium-term.”

    Yellen said the need to release funds for both allies was a “priority” and called for Republicans in the House of Representatives to seat a speaker so that legislation can be passed, following the ousting of former speaker Kevin McCarthy.
    “We stand with Israel. America has also made clear to Israel, we’re working very closely with the Israelis, that they have a right to defend themselves,” Yellen told Sky News’ Wilfred Frost.
    “But it’s important to try to spare innocent civilian lives to the maximum extent possible.”
    Israel’s siege, which has been widely criticized by human rights organizations, came as a response to a brutal and large-scale terrorist attack carried about by Hamas on Oct. 7.
    The death toll from the conflict has risen to at least 1,400 people in Israel and almost 2,700 in Gaza, and Israel’s military has urged residents of northern Gaza to evacuate south as it promised to ramp up its bombardment, with the evacuation orders widely criticized by humanitarian agencies on the ground.
    Yellen said it was too early to gauge the potential economic impact of the conflict in the Middle East, as oil prices remain volatile amid concerns that neighboring powers in the region, such as Iran, could be pulled into the Israel-Hamas war. More

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    in Economy

    Doctors at Allina Health Form Union

    The physicians, at Allina Health in Minnesota and Wisconsin, appear to be the largest group of unionized doctors in the private sector.In the latest sign of growing frustration among professionals, doctors employed by a large nonprofit health care system in Minnesota and Wisconsin have voted to unionize.The doctors, roughly 400 primary and urgent-care providers across more than 50 clinics operated by the Allina Health System, appear to be the largest group of unionized private-sector physicians in the United States. More than 150 nurse practitioners and physician assistants at the clinics were also eligible to vote and will be members of the union, which will be represented by a local of the Service Employees International Union.The result was 325 to 200, with 24 other ballots challenged, according to a tally sheet from the National Labor Relations Board, which conducted the vote. In a statement, Allina said, “While we are disappointed in the decision by some of our providers to be represented by a union, we remain committed to our ongoing work to create a culture where all employees feel supported and valued.”The doctors complained that chronic understaffing was leading to burnout and compromising patient safety.“In between patients, your doctor is dealing with prescription refills, phone calls and messages from patients, lab results,” said Dr. Cora Walsh, a family physician involved in the organizing campaign.“At an adequately staffed clinic, you have enough support to help take some of that workload,” Dr. Walsh added. “When staff levels fall, that work doesn’t go away.”Dr. Walsh estimated that she and her colleagues often spend an hour or two each night handling “inbox load” and worried that the shortages were increasing backlogs and the risk of mistakes.The union vote follows recent walkouts by pharmacists in the Kansas City area and elsewhere over similar concerns.A variety of professionals, including architects and tech workers, have sought to form unions in recent years, while others, like nurses and teachers, have waged strikes and aggressive contract bargaining campaigns.Some argue that employers have exploited their sense of mission to pay them less than their skills warrant, or to work them around the clock. Others contend that new business models or budget pressures are compromising their independence and interfering with their professional judgment.Increasingly, doctors appear to be expressing both concerns.“We feel like we’re not able to advocate for our patients,” said Dr. Matt Hoffman, another doctor involved in the organizing at Allina. Dr. Hoffman, referring to managers, added that “we’re not able to tell them what we need day to day.”Consolidation in the health care industry over the past two decades appears to underlie much of the frustration among doctors, many of whom now work for large health care systems.“When a physician ran his or her own practice, they made the decisions about the people and technology they surrounded themselves with,” Dr. Robert Wachter, chair of the department of medicine at the University of California, San Francisco, said in an email. “Now, these decisions are made by administrators.”Doctors at Allina say that staffing was a concern before the pandemic, that Covid-19 pushed them to the brink and that staffing has never fully recovered to its prepandemic levels.Relatively low pay for clinical assistants and lab personnel appears to have contributed to the staffing issues, as these workers left for other fields in a tight job market. In some cases, doctors and other clinicians within the Allina system have quit or scaled back their hours, citing so-called moral injury — a sense that they couldn’t perform their jobs in accordance with their values.“We were promised that when we get through the acute phase of the pandemic, staffing would get better,” Dr. Walsh said. “But staffing never improved.”Allina, which takes in billions in revenue but has faced financial pressures and recently eliminated hundreds of positions, did not respond to questions about the doctors’ concerns.Joe Crane, the national organizing director for the Doctors Council of the S.E.I.U., which represents attending physicians, said that before the pandemic, he would receive about 50 inquiries a year from doctors interested in learning more about forming a union. He said he received more than 150 inquiries during the first month of the pandemic. (Mr. Crane was with another physicians’ union at the time.)Mr. Crane, citing the siloed nature of the medical profession, said that unionization among attending physicians had nonetheless proceeded slowly, but that the victory at Allina could create momentum.In March, more than 100 doctors voted to unionize at another Allina facility, a hospital with two locations. Dr. Alia Sharif, a physician involved in that union campaign, said doctors were under pressure there not to exceed length-of-stay guidelines for patients, even though many suffer from complex conditions that require more sustained care.Allina is appealing the outcome of that vote to the National Labor Relations Board in Washington; a board official rejected an earlier appeal.Even as rates of unionization have languished among attending physicians, they have increased substantially among medical residents. A sister union within the S.E.I.U., the Committee of Interns and Residents, has added thousands of members over the past few years.Dr. Wachter said this could herald an increase in unionization among doctors outside training programs. “When these physicians finish training and enter practice, they are more comfortable with a world in which unionization doesn’t automatically conflict with their notions of being a professional,” he wrote. More