Evelyn Reynolds

New research suggests that big shifts in consumer and company behavior — and maybe federal stimulus dollars — have fueled entrepreneurship.The Covid-19 pandemic hurt the U.S. economy in a lot of ways. It choked global supply chains, sent consumer prices soaring and briefly knocked millions of people out of work. But it might have also broken America out of a decades-long entrepreneurial slump.New research from economists at the University of Maryland and the Federal Reserve, set to be presented on Friday at the Brookings Institution, a think tank in Washington, documents a new and potentially durable surge in Americans starting businesses during and after the pandemic. The new companies range from restaurants and dry cleaners to high-tech start-ups.That surge appears to be a direct response to how the fallout of the virus quickly but permanently changed how many Americans live and work.Those changes opened doors for entrepreneurs, who, economists often contend, are best able to respond to sudden business opportunities. The opportunities came when the federal government was showering Americans with trillions of dollars in pandemic assistance, which may have given many people the capital needed to start a company and hire workers.Federal statistics showed early signs of the business-creation burst. Some economists dismissed it initially as a fluke of the pandemic — one likely to quickly fade.That hesitancy was based in part on studies showing that start-up activity had been declining for several decades. A paper this month by economists at the University of Chicago and the Fed showed that start-up activity and employment, as a share of the economy, had fallen since the 1980s. A handful of large firms increasingly dominate industries.But the new paper by John Haltiwanger of the University of Maryland and Ryan Decker of the Fed, two of the nation’s leading researchers in the study of economic dynamism, suggests that the pandemic may have broken those trends.“We find early hints of a revival of business dynamism,” Mr. Decker and Mr. Haltiwanger wrote.They cautioned that “in many respects it is too early to ascertain whether a durable reversal of prepandemic trends is occurring,” in part because the revival is still so young.Champions of policies to increase dynamism were less restrained. “This is evidence of a genuine resurgence of economic dynamism led by a spike in start-up activity unlike anything we’ve seen in the post-Great Recession era,” said John Lettieri, the president and chief executive of the Economic Innovation Group, a think tank in Washington.Mr. Haltiwanger and Mr. Decker drew evidence from a wide variety of publicly available sources on new and existing businesses. They found evidence of a sustained increase in new-business activity — and job creation from those businesses.The maps of that entrepreneurship track closely with the new realities of an economy in which more Americans work from home, with fewer start-ups in downtowns and a large increase of them in suburban areas.Monthly applications for new businesses that are likely to create jobs are 30 percent higher than they were in 2019, on the eve of the pandemic, the economists report. Those applications spiked shortly after the pandemic hit, when Congress first pumped stimulus into the economy. They fell briefly and then jumped again around the end of 2020 and start of 2021, when lawmakers sent more money to people and companies. In that time, relatively young companies have grown to account for a larger share of employment and total firms in the economy.The paper suggests those trends might be an overlooked reason that businesses spent the past several years complaining of a labor shortage in the United States, even as workers returned to the labor force faster and in greater numbers than after any other recession this century. Put simply, existing companies may have suddenly found themselves competing for workers with many more start-ups than they were used to.One question the study does not address directly is whether President Biden can rightfully claim any credit for those developments, as he has repeatedly tried to do.“A record 10.5 million new business applications were filed in my first two years, the largest number ever on record in a two-year period,” Mr. Biden said this spring.White House officials said on Thursday that they were encouraged by the study and continued to believe that the $1.9 trillion American Rescue Plan, which Mr. Biden signed into law in early 2021, helped support an entrepreneurial surge. It sent money to people, businesses, and state and local governments.“In the spirit of crisis equals opportunity, we’ve long believed that measures in the Rescue Plan helped create a supportive backdrop for entrepreneurs, especially small and minority-owned businesses,” Jared Bernstein, the chairman of Mr. Biden’s Council of Economic Advisers, said in an email. “This work shows extremely welcomed progress in that space, and credibly connects it to the strong job gains we’ve seen over the president’s watch.” More

Lengthy and expanding walkouts by the United Automobile Workers union against Ford, General Motors and Stellantis could strain a fragile supply chain.More than a week into its targeted strike at the three established U.S. car companies, the United Automobile Workers union has poked holes in a supply chain that has still not fully recovered from the pandemic.The companies and the union remain far apart in negotiations, and the U.A.W. could expand its strikes to more locations as soon as Friday. Depending on how long the strikes last, it could exact a heavy toll on autoworkers and the three companies — General Motors, Ford Motor and Stellantis, the parent of Chrysler and Jeep. But the work stoppages could also be painful to drivers, car dealers and auto-parts suppliers.A long and expanding strike will reduce the number of new cars on dealer lots, make it harder for people to repair their vehicles and reduce demand for parts needed to make new vehicles.So far, the economic damage has been limited because the U.A.W. has struck only a small number of plants and warehouses, but the pain could worsen if work stoppages grow to include many more locations and last weeks or months.“The economic spillovers from the U.A.W. strike remain contained as we near the two-week mark,” said Gabriel Ehrlich, an economic forecaster at the University of Michigan. “We are seeing some layoffs among automotive suppliers, ranging from seat makers to steelworkers. We would expect these impacts to accumulate as the strike persists and additional targets are announced.”When the union started walkouts at assembly plants, it appeared to target plants that make popular models, like the Ford Bronco, the Jeep Wrangler and the Chevrolet Colorado. It widened the strike on Sept. 22 to include parts distribution centers at G.M. and Stellantis.As those popular models become more scarce, dealers are likely to push up prices.“They took out the ones that are going to hurt the most,” said Jeff Rightmer, a professor at Wayne State University who specializes in supply chain management. “At this point, they’re not going to be able to get that production back.”New-car sales are expected to rise this month, despite the strike and high interest rates, according to Cox Automotive. And for now, overall inventories for the three companies remain stable, except for the most popular models, according to data from CoPilot, a firm that tracks dealer inventories.As of Sept. 24, G.M. had enough vehicles on dealer lots to meet demand for 40 to 70 days across its four brands. Ford had enough cars and trucks for 74 days. And Stellantis had more than 100 days across three of its four divisions; Jeep had less than 100 days.Jeep Wranglers at the Stellantis Toledo Assembly Complex in Toledo, Ohio, at the beginning of the strike.Evan Cobb for The New York TimesAmong the 10 models affected by the first set of U.A.W. strikes, supply for four models has dwindled to less than one month’s sales.“Once that dries up, they’re not building anything, so it’s important that the strike is as short as possible,” said Wes Lutz, a car dealer in Jackson, Mich., who sells Chrysler, Dodge, Jeep and Ram models.He has been getting cars from other plants, including large pickup trucks imported from Mexico. But he is worried that an expanding strike could reduce the supply of more models.An even bigger concern, Mr. Lutz said, is that the strikes at G.M. and Stellantis parts warehouses could soon make it hard to repair vehicles, leaving some drivers stranded. He said that he was working with other dealers to trade spare parts among themselves to keep their service departments going.Servicing and repairing vehicles is generally the most profitable part of car dealerships. Service departments bring in so much money that they can cover most or all of the costs of running dealerships, said Pat Ryan, chief executive of CoPilot.That’s why a parts shortage could deal a bigger blow to dealers than not having enough vehicles to sell. If parts are hard to come by for weeks or months, some dealers may suspend repairs and lay off mechanics.Another group of businesses exposed to the strikes are the companies that make parts and components like batteries and mufflers for new vehicles. Nearly 700 auto suppliers could be hurt by the strike, according to Resilinc, a supply chain monitoring company.CIE Newcor, an auto components maker, notified workers on Sept. 21 that it expected to lay off 300 employees at four Michigan plants starting Oct. 2. The extent of the layoffs will be “determined by the length of the potential U.A.W. — Detroit 3 strike,” the company said in a regulatory filing.Much of the auto industry practices “just in time” production, meaning materials are delivered and parts are built and sent to car factories as they are needed.If smaller suppliers go more than a few weeks without selling products to customers, some may have to seek bankruptcy protection, said Ann Marie Uetz, a Detroit-based partner at the law firm Foley & Lardner who represents auto suppliers. “There is definite strain in the supply chain, and you’re going to see some of them suffer as a result of the strike if it lingers for a month or more.” More

A lapse in funding would delay data on unemployment and inflation as policymakers try to avoid a recession.A federal government shutdown would cut off access to key data on unemployment, inflation and spending just as policymakers are trying to guide the economy to a “soft landing” and avoid a recession.Federal statistical agencies, including the Bureau of Labor Statistics, the Census Bureau and the Bureau of Economic Analysis, will suspend operations unless Congress reaches a deal before Sunday to fund the government. Even a short shutdown would probably delay high-profile data releases — including the monthly jobs report, scheduled for Oct. 6, and the Consumer Price Index, scheduled for Oct. 12.This isn’t the first time government shutdowns have threatened economic data. The 16-day lapse in funding in 2013 delayed dozens of releases, including the September employment report. A longer but less extensive shutdown in 2018 and 2019 spared the Bureau of Labor Statistics but held up reports from the Commerce Department, including data on gross domestic product.But this shutdown, if it occurs, comes at a particularly sensitive time for the economy. Policymakers at the Federal Reserve have been trying to tame inflation without causing a recession — a balancing act that requires central bankers to fine tune their strategy based on how the economy responds.“Monetary policy, even in normal times, is a complicated undertaking — we are not in a normal time now,” said David Wilcox, a longtime Fed staff member who is now an economist at the Peterson Institute for International Economics and Bloomberg Economics. “It’s not a good strategy to take a task that is so difficult and make it harder by restricting the information flow to monetary policymakers at this delicate moment.”A short shutdown, similar to the one a decade ago, would delay data releases but probably wouldn’t do much longer-term damage. Data for the September jobs report, for example, has already been collected; it would take government statisticians only a few days to finish the report and release it after the government reopened. In that situation, most major statistics would probably be updated by the time the Fed next meets on Oct. 31 and Nov. 1.But the longer a shutdown goes on, the more lasting the potential damage. Labor force statistics, for example, are based on a survey conducted in the middle of each month — if the government doesn’t reopen in time to conduct the October survey on schedule, the resulting data could be less accurate, as respondents struggle to recall what they were doing weeks earlier. Other data, such as information on consumer prices, could be all but impossible to recover after the fact.“If we miss two months of collecting data, we’re never getting that back,” said Betsey Stevenson, a University of Michigan economist who was a member of President Barack Obama’s Council of Economic Advisers during the 2013 shutdown. “This thing gets more and more and more problematic as the duration goes on.”A longer shutdown would also increase the risk that policymakers misread the economy and make a mistake — perhaps by failing to detect a reacceleration in inflation, or by missing signs that the economy is slipping into a recession.“The thought of the Fed trying to make such an important, critical decision without big pieces of information is just downright terrifying,” said Ben Harris, who was a top official at the Treasury Department until early this year and is now at the Brookings Institution. “It’s like a pilot trying to land a plane without knowing what the runway looks like.”Policymakers wouldn’t be flying completely blind. The Fed, which operates independently and would not be affected by the shutdown, would continue to publish its own data on industrial production, consumer credit and other subjects. And private-sector data providers have expanded significantly in both breadth and quality in recent years, offering alternative sources of information on job openings, employment, wages and consumer spending.“The Fed has always done what it can to gather information from other sources, but now there are more of those sources it can turn to,” said Erica Groshen, a Cornell University economist who served as commissioner of the Bureau of Labor Statistics during the 2013 shutdown. “That will make the very data-dependent parts of the policy world and the business community a little less bereft of timely data.”Still, Ms. Groshen said, private data cannot match the breadth, transparency and reliability of official statistics. She recalled that in 2013, Fed officials contacted her department to see if the central bank could provide funding to get the jobs report out on time — a proposal that administration officials ultimately concluded would be illegal.Policymakers aren’t the only ones who will be affected by the lack of data. Trucking companies base fuel surcharges on diesel prices published by the Energy Information Administration. Inventory and sales data from the Census Bureau can influence businesses’ decisions on when to place orders. And the Social Security Administration can’t settle on the annual cost-of-living increase in benefits without October consumer price data. More

Resource-rich countries like Ghana are often cut out of lucrative parts of the business like manufacturing. The “fairchain movement” wants to change that.The first leg of the 35-mile journey from Ghana’s capital city, Accra, to the Fairafric chocolate factory in Amanase on the N6 highway is a quick ride. But after about 30 minutes, the smoothly paved road devolves into a dirt expanse without lanes. Lumbering trucks, packed commuter minivans, cars and motorcycles crawl along craggy, rutted stretches bordered by concrete dividers, muddy patches and heaps of rock.The stopgap roadway infrastructure is one of the challenges Fairafric has had to navigate to build a factory in this West African country. The area had no fiber-optic connection to Ghana’s telecommunications network. No local banks were interested in lending the company money. And it required the personal intervention of Ghana’s president before construction could even begin in 2020.The global chocolate industry is a multibillion-dollar confection, and Africa grows 70 percent of the world’s raw cocoa beans. But it produces only 1 percent of the chocolate — missing out on a part of the business that generates the biggest returns and is dominated by American and European multinationals.The Fairafric chocolate factory powered by solar energy in Amanase, Ghana. The company aims to create stable, well-paying jobs.Francis Kokoroko for The New York TimesCapturing a bigger share of the profits generated by chocolate sales and keeping them in Ghana — the second-largest cocoa exporter behind Ivory Coast — is the animating vision behind Fairafric. The aim is to manufacture the chocolate and create stable, well-paying jobs in the place where farmers grow the cocoa.Many developing countries are lucky to have large reserves of natural resources. In Ghana, it’s cocoa. In Botswana, it’s diamonds. In Nigeria and Azerbaijan, it’s oil. But the commodity blessing can become a curse when the sector sucks up an outsize share of labor and capital, which in turn hampers the economy from diversifying and stunts long-term growth.“Look at the structure of the economy,” Aurelien Kruse, the lead country economist in the Accra office of the World Bank, said of Ghana. “It’s not an economy that has diversified fully.”The dependency on commodities can lead to boom-and-bust cycles because their prices swing with changes in supply and demand. And without other sectors to rely on during a downturn — like manufacturing or tech services — these economies can crash.“Prices are very volatile,” said Joseph E. Stiglitz, a former chief economist at the World Bank. In developing nations dependent on commodities, economic instability is built into the system.Workers making the chocolate products. By keeping manufacturing in Ghana, Fairafric supports other local businesses.Francis Kokoroko for The New York TimesA batch of chocolate bars being inspected . . .Francis Kokoroko for The New York Times. . . and packaged at the Fairafric chocolate factory.Francis Kokoroko for The New York TimesBut creating industrial capacity is exceedingly difficult in a place like Ghana. Outside large cities, reliable electricity, water and sanitation systems may need to be set up. The suppliers, skilled workers, and necessary technology and equipment may not be readily available. And start-ups may not initially produce enough volume for export to pay for expensive shipping costs.Fairafric might not have succeeded if its founder and chief executive — a German social-minded entrepreneur named Hendrik Reimers — had not upended the status quo.The pattern of exporting cheap raw materials to richer countries that use them to manufacture valuable finished goods is a hangover from colonial days. Growing and harvesting cocoa is the lowest-paid link in the chocolate value chain. The result is that farmers receive a mere 5 or 6 percent of what a chocolate bar sells for in Paris, Chicago or Tokyo.Mr. Reimers’s goal is aligned with the “fairchain movement,” which argues that the entire production process should be in the country that produces the raw materials.The idea is to create a profitable company and distribute the gains more equitably — among farmers, factory workers and small investors in Ghana. By keeping manufacturing at home, Fairafric supports other local businesses, like the paper company that supplies the chocolate wrappers. It also helps to build infrastructure. Now that Fairafric has installed the fiber optic connections in this rural area, other start-up businesses can plug in.Cocoa pods harvested in a cocoa farm in Ghana.Francis Kokoroko/ReutersA worker from Fairafric chocolate factory visiting a cocoa farm in the Budu community.Francis Kokoroko for The New York TimesThe last few years have severely tested the strategy. Ghana’s economy was punched by the coronavirus pandemic. Russia’s invasion of Ukraine fueled a rapid increase in food, energy and fertilizer prices. Rising inflation prompted the Federal Reserve and other central banks to raise interest rates.In Ghana, the global headwinds exacerbated problems that stemmed from years of excessive government spending and borrowing.As inflation climbed, reaching a peak of 54 percent, Ghana’s central bank raised interest rates. They are now at 30 percent. Meanwhile, the value of the currency, the cedi, tumbled against the dollar, more than halving the purchasing power of consumers and businesses.At the end of last year, Ghana defaulted on its foreign loans and turned to the International Monetary Fund for emergency relief.“The economic situation of the country has not made it easy,” said Frederick Affum, Fairafric’s accounting manager. “Every kind of funding that we have had has been outside the country.”Even before the national default, Ghana’s local banks were drawn to the high interest rates the government was offering to attract investors wary of its outsize debt. As a result, the banks were reluctant to invest in local businesses. They “didn’t take the risk of investing in the real economy,” said Mavis Owusu-Gyamfi, the executive vice president of the African Center for Economic Transformation in Accra.“The economic situation of the country has not made it easy,” said Frederick Affum, accounting manager at Fairafric.Francis Kokoroko for The New York TimesFairafric started with a crowdsourced fund-raising campaign in 2015. A family-owned chocolate company in Germany bought a stake in 2019 and turned Fairafric into a subsidiary.In 2020, a low-interest loan of 2 million euros from a German development bank that supports investments in Africa by European companies was crucial to getting the venture off the ground.Then the pandemic hit, and President Nana Akufo-Addo closed Ghana’s borders and suspended international commercial flights. The shutdown meant that a team of German and Swiss engineers who had been overseeing construction of a solar-powered Fairafric factory in Amanase could not enter the country.So Michael Marmon-Halm, Fairafric’s managing director, wrote a letter to the president appealing for help.“He opened the airport,” Mr. Marmon-Halm said. “This company received the most critical assistance at the most critical moment.”Both Ghana and Ivory Coast, which account for 60 percent of the world cocoa market, have moved to raise the minimum price of cocoa and expand processing inside their borders.In Ghana, the government created a free zone that gives factories a tax break if they export most of their product. And this month, Mr. Akufo-Addo announced an increase in the minimum price that buyers must pay farmers next season.Cocoa pods at a cocoa farm in the Budu community . . .Francis Kokoroko for The New York Times. . . which reveal a pulpy white bean when cracked open.Francis Kokoroko for The New York TimesFairafric, which buys beans from roughly 70 small farmers in the eastern region of Ghana, goes further, paying a premium for its organically grown beans — an additional $600 per ton above the global market price.Farmers harvest the ripe yellow pods by hand, and then crack them open with a cutlass, or thick stick. The pulpy white beans are stacked under plantain leaves to ferment for a week before they are dried in the sun.On the edge of a cocoa farm in Budu, a few minutes from the factory, a bare-bones, open-sided concrete shed with wooden benches and rectangular blackboards houses the school. Attendance is down, the principal said, because the school has not been included in the government’s free school feeding program.The factory employs 95 people. They have health insurance and are paid above the minimum wage. Salaries are pegged to the dollar to protect against currency fluctuations. Because of spotty transportation networks, the company set up a free commuter van for workers. Fairafric also installed a free canteen so all the factory shifts can eat breakfast, lunch or dinner on site.Mr. Marmon-Halm said the company was looking to raise an additional $1 million to expand. He noted that the chocolate industry generated an enormous amount of wealth.But “if you want to get the full benefit,” he said, “you have to go beyond just selling beans.”Students by a stream in the Budu community, a cocoa farming village.Francis Kokoroko for The New York Times More

If the area around Jackson, Wyo., boasts two things, they’re natural resources and very rich locals. Nathan Wendt is trying to use the Biden administration’s clean energy incentives to bring the two together.Mr. Wendt, the president of the Jackson Hole Center for Global Affairs, has spent years working on issues related to climate change and local economic development. And as President Biden pushed one climate-related policy after another through Congress — first the infrastructure law, and then the Inflation Reduction Act — and a dizzying array of tax credits, loans and grants became available, he sensed an opportunity.“For Jackson Hole investors looking for the next big thing, there’s no need to look beyond state lines,” Mr. Wendt wrote this spring in an opinion essay in The Jackson Hole News & Guide, where he extolled the “flush tax credits” the law provided. “This decade’s great money-making opportunity,” he wrote, “will be in investing in net zero projects in energy communities, including in Wyoming.”Wyoming is both the nation’s largest coal producer and a Republican stronghold where the clean energy transition has at times faced stark opposition. Its entire congressional delegation voted against the Inflation Reduction Act. But the state is unusually well suited to benefit from some of the green incentives the government is offering.Wyoming’s geology and legal landscape make it a top candidate for fledgling carbon capture technologies, which the law promotes through sweetened and extended tax credits. Its existing pipeline infrastructure and energy industry work force could help with hydrogen development. And, perhaps most important, the state has plenty of people whom the Inflation Reduction Act is courting — well-heeled investors who are looking for a way to turn a profit off the green energy transition.Nathan Wendt is hoping that Wyoming’s combination of wealthy residents, a work force primed for energy industries and local resources could make the state a magnet for clean energy investment.Ryan Dorgan for The New York TimesThe Biden administration’s climate law works by attracting private capital to clean energy. While the plan includes targeted grants, many of its potentially most significant provisions aim to transition the nation’s energy supply — and its energy work force — by luring people with capital to invest. Tax breaks and other incentives mean it’s more attractive to make financial bets on risky, but possibly transformational, green technologies.That has Mr. Wendt and other climate researchers across the state looking at Jackson, a town full of potential investors who could pour money into new projects. The elite enclave nestled next to Grand Teton National Park boasts the highest-income county in the United States by some measures. And, Mr. Wendt reasons, many of its millionaires and billionaires work in financial markets but decamped from big coastal cities because they loved the natural beauty that Wyoming has to offer.They might, he figures, have both the money and the motivation to make local climate investment a reality.“Teton County has been historically disconnected from the wider Wyoming economic story,” Mr. Wendt said on a late August morning in Jackson’s town square, a few yards away from an arch made of elk antlers and a few hundred yards away from a number of wealth management offices. “We’re trying to bridge that gap.”Mr. Wendt said, “Teton County has been historically disconnected from the wider Wyoming economic story.”Ryan Dorgan for The New York TimesThe town of roughly 10,000 is the only municipality in Teton County, which boasts the highest per capita income of any county in the United States.Ryan Dorgan for The New York TimesLocal climate activists see Jackson as a place that could help bankroll local clean energy development.Ryan Dorgan for The New York TimesIt’s not just Mr. Wendt who has sensed a profit opportunity. Investors and companies across the country have taken notice. Just since August, about 150 corporations have talked about the Inflation Reduction Act during investor presentations, based on Bloomberg transcripts.In fact, interest has exceeded expectations. The Congressional Budget Office had at one point forecast that energy and climate outlays tied to the law would total about $391 billion from 2022 to 2031, with more than 60 percent of that coming from claims for various tax credits.But Goldman Sachs analysts have estimated that the total could be three times that amount, as people and businesses make much heavier use of the incentives than the government expected. That could mean that some $3 billion pours into green energy investment over the coming decade — $1.2 trillion from the government in the form of tax credits and other incentives, matched by even more in capital from private companies. While their estimates are on the high side, other research groups and the government itself have revised their forecasts upward.Wyoming, for its part, could be well placed to take advantage of some of the law’s more cutting-edge provisions. Some estimates have suggested that the state could see the largest per capita investment related to the legislation of any state in the nation.The opportunities are linked to both local policies and local resources, said Scott Quillinan, the senior director of research for the School of Energy Resources at the University of Wyoming.For instance, the law incentivizes hydrogen development with a new tax credit, making it a much cheaper potential fuel. Wyoming already has pipeline and rail networks that could help transport hydrogen mixtures, Mr. Quillinan said.The law also expanded a tax credit for what is known as direct carbon sequestration, the process of removing carbon from the air and storing it underground or turning it into new products. Wyoming is home to spongelike rocks filled with pockets of saltwater, which are ideal for storing captured carbon. It is also easier to get the necessary permits to set up such projects in Wyoming than in many other states.And while it used to be difficult to make cost-intensive direct capture projects pencil out, the law changed that, increasing the credit for directly captured carbon stored in saline rock formations to $180 per ton from $50.“The incentives finally make these investments profitable,” said Michele Della Vigna, a researcher at Goldman.Environmentalists sometimes question both hydrogen and direct carbon capture technologies, in part because they’re relatively untested. But since the law’s passage last year, announcements of carbon capture projects — including a large one in Wyoming — have spiked.Project Bison, a carbon capture facility under development by the firm CarbonCapture, is set to be the biggest project of its kind, and big names like BCG and Microsoft have signed on for its carbon removal credits.Jonas Lee, CarbonCapture’s chief commercial officer, said that, without the law, the project would most likely have been smaller and slower moving. Even with the law’s help, its planned opening this year has been delayed. Mr. Lee did not provide a reason or a new opening date, but said the firm still expected to operate at scale. Rusty Bell, the director of the Office of Economic Transformation at the Gillette College Foundation in Wyoming, thinks the administration’s climate push is destined for such hiccups. New technologies take time to roll out. The maze of incentives and grants on offer can be difficult to navigate.But Mr. Bell, who wrote the opinion essay with Mr. Wendt, also says Campbell County, where he is based, recognizes that its future as a coal-producing area will hinge partly on seizing new technologies. Residents can look at flailing coal communities elsewhere and realize “we don’t want to be like that in 10, 15, 20 years,” he said.The law also expanded a tax credit for direct carbon sequestration, the process of removing carbon from the air and storing it underground or turning it into new products.Ryan Dorgan for The New York Times More

The United Automobile Workers union said the strikes against General Motors, Ford and Stellantis could grow on Friday if negotiators don’t make enough progress.The United Automobile Workers union said on Wednesday that it planned to expand its strike against the big three Michigan automakers on Friday if negotiators failed to make substantial progress on new contracts.The union ordered workers to walk off the job nearly two weeks ago at three vehicle assembly plants — each owned by one of the companies, General Motors, Ford Motor and Stellantis, the parent of Chrysler and Jeep. Last Friday the union broadened the strike to include spare parts-distribution centers owned by G.M. and Stellantis, saying it had made progress in its talks with Ford.The U.A.W. president, Shawn Fain, is scheduled to update members in a video streamed live on Facebook on Friday morning.The union is seeking a substantial wage increase to make up for much smaller raises over the last decade. Each of the companies has offered to lift wages by roughly 20 percent over four years, about half of what the U.A.W. is seeking. The union has demanded other measures including cost-of-living adjustments, the right to strike to protest plant closures, pensions for more workers and company-paid health care for retirees.The three plants that have been shut down by the strike include a G.M. factory in Wentzville, Mo., a Ford plant in Wayne, Mich., and a Stellantis complex in Toledo, Ohio. They make some of the manufacturers’ most profitable models, including the GMC Canyon pickup truck, the Ford Bronco sport-utility vehicle, and the Jeep Wrangler.The second wave of the strike idled 20 Stellantis parts-distribution centers and 18 owned by G.M. More than 18,000 U.A.W. workers are now on strike. The union represents about 150,000 workers employed by G.M., Ford and Stellantis.The union and the companies started negotiating new collective bargaining agreements in July, but made little progress until this month. Their contracts expired on Sept. 14 and Mr. Fain called on the first round of work stoppages the following day. More

White House and Wall Street estimates suggested the economy could withstand a brief shutdown, with risks mounting the longer it lasts.Federal government shutdowns have become so common in recent years that forecasters have a good read on how another one would affect the American economy. The answer is fairly simple: The longer a shutdown lasts, the more damage it is likely to inflict.A brief shutdown would be unlikely to slow the economy significantly or push it into recession, economists on Wall Street and inside the Biden administration have concluded. That assessment is based in part on the evidence from prior episodes where Congress stopped funding many government operations.But a prolonged shutdown could hurt growth and potentially President Biden’s re-election prospects. It would join a series of other factors that are expected to weigh on the economy in the final months of this year, including high interest rates, the restart of federal student loan payments next month and a potentially lengthy United Automobile Workers strike.A halt to federal government business would not just dent growth. It would further dampen the mood of consumers, whose confidence slumped in September for the second straight month amid rising gas prices. In the month that previous shutdowns began, the Conference Board’s measure of consumer confidence slid by an average of seven points, Goldman Sachs economists noted recently, although much of that decline reversed in the month after a reopening.Gregory Daco, the chief economist at EY-Parthenon, said a government shutdown would not be a “game changer in terms of the trajectory of the economy.” But, he added, “the fear is that, if it combines with other headwinds, it could become a significant drag on economic activity.”Jared Bernstein, the chairman of the White House Council of Economic Advisers, said in a statement on Wednesday that the council’s internal estimates suggest potential losses of 0.1 to 0.2 percentage points of quarterly economic growth for every week a shutdown persists.“Programmatic impacts from a shutdown would also cause unnecessary economic stress and losses that don’t always show up in G.D.P. — from delaying Small Business Administration loans to eliminating Head Start slots for thousands of children with working parents to jeopardizing nutrition assistance for nearly 7 million mothers and children,” Mr. Bernstein added. “It is irresponsible and reckless for a group of House Republicans to threaten a shutdown.”Goldman Sachs economists have estimated that a shutdown would reduce growth by about 0.2 percentage points for each week it lasts. That’s largely because most federal workers go unpaid during shutdowns, immediately pulling spending power out of the economy. But the Goldman researchers expect growth to increase by the same amount in the quarter after the shutdown as federal work rebounded and furloughed employees received back pay.That estimate tracks with previous work from economists at the Fed, on Wall Street and prior presidential administrations. Trump administration economists calculated that a monthlong shutdown in 2019 reduced growth by 0.13 percentage points per week.After that shutdown ended, the Congressional Budget Office estimated that real gross domestic product was reduced by 0.1 percent in the fourth quarter of 2018 and 0.2 percent in the first quarter of 2019. Although the office said most of the lost growth would be recovered, it estimated that annual G.D.P. in 2019 would be 0.02 percent lower than it would have been otherwise, amounting to a loss of roughly $3 billion. Because growth and confidence tend to snap back, previous shutdowns have left few permanent scars on the economy. Some economists worry that might not be the case today.Mr. Daco said federal workers might not spend as much as they would have absent a shutdown, and government contractors might not recoup all of their lost business.A long shutdown would also delay the release of important government data on the economy, like monthly reports on jobs and inflation, by forcing the closure of federal statistical agencies. That could prove to be a bigger risk for growth than in the past, by effectively blinding policymakers at the Federal Reserve to information they need to determine whether to raise interest rates again in their fight against inflation.The economy appears healthy enough to absorb a modest temporary hit. The consensus forecast from top economists is for growth to approach 3 percent, on an annualized basis, this quarter. But economists expect growth to slow in the final months of the year, raising the risks of recession if a shutdown lasts several weeks.Diane Swonk, the chief economist at KPMG, said she expected G.D.P. to rise about 4 percent in the third quarter, and then slow to roughly 1 percent in the fourth quarter. She said a two-week shutdown would have a limited impact, but one that lasted for a full quarter would be more problematic, potentially resulting in G.D.P. entering negative territory.“When you start nicking away even a tenth here or there, that’s pretty weak,” Ms. Swonk said.A shutdown could also further convey political dysfunction in Washington, which could rattle investors and push up yields on Treasury bonds, leading to higher borrowing costs, Ms. Swonk said.Biden administration officials had hoped to avoid such dysfunction when they reached a deal with Republicans in June to raise the nation’s borrowing limit. That agreement included caps on federal spending that were meant to be a blueprint for congressional appropriations. A faction of Republicans in the House has pushed for even deeper cuts, driving Congress toward a shutdown.Michael Linden, a former economic aide to Mr. Biden who is now a senior policy fellow at a think tank, the Washington Center for Equitable Growth, said immediate economic effects from the shutdown could force Republican leaders in the House to quickly pass a funding bill to reopen the government.“There’s a reason shutdowns tend to be pretty short,” Mr. Linden said. “They end up causing disruptions that people don’t like.” More

The U.S. Latino economy continues to grow, reaching $3.2 trillion in 2021, up from $2.8 trillion the year prior, according to a new report by the Latino Donor Collaborative in partnership with Wells Fargo.
If Latinos were an independent country, their GDP would rank fifth in the world, ahead of the United Kingdom, India and France, the study found.
Industry strength for Latinos remains steady in accommodation and food services, construction, administrative support, waste management and transportation.

The U.S. Latino economy continues to grow, reaching $3.2 trillion in 2021, up from $2.8 trillion the year prior, according to a new report by the Latino Donor Collaborative in partnership with Wells Fargo.
Over the last decade, the U.S. Latino economy has grown two and a half times faster than the non-Latino equivalent, surpassing the gross domestic product of the United Kingdom, India, France and Italy, according to the report released Wednesday by LDC, a nonprofit, nonpartisan group focused on reshaping perceptions of U.S. Latinos through data and economic research.

If Latinos were an independent country, their GDP would rank fifth in the world, the study found.
“We have a massive economy that’s under-invested right now, under-engaged,” said Sol Trujillo, Latino Donor Collaborative chairman, in an interview with CNBC’s “Squawk Box.”
Industry strength for Latinos remains steady in accommodation and food services, construction, administrative support, waste management and transportation.
While growth for the Latino community remains widespread in the U.S. geographically, the community drove particular growth in the states of California, Texas and Florida, amounting to $682 billion, $465 billion and $240 billion of economic impact, respectively.
That is largely due to the Latino community’s strong population share, labor force participation and overall productivity in those states.

“I would say if you look at the charts now that we have in our study, 48 out of the 50 states’ growth is tied to this [Latino] cohort,” Trujillo said.

Spectators cheer during Puerto Rican Day Parade in New York. Thousands of people lined both sides of Fifth Avenue for the annual parade, which recognizes the achievements and influence of Puerto Ricans and Latinos in the city.
Eric Thayer | Reuters

The California Latino economy alone would rank as the 21st largest economy in the world, between Poland and Switzerland, according to LDC’s analysis.
In Latino emerging markets, South Dakota, North Dakota and New Hampshire have seen a surprising surge, with the highest GDP growth rates since 2011. In South Dakota, the economic impact of Latinos grew at an annual rate of 11.8% in 2021, according to LDC, slightly outpacing its neighbor.
“Businesses operating in these areas must stay ahead of these substantial changes to ensure they remain relevant,” LDC noted in the report. “And be able to meet the needs of their evolving customer base.”
The report also found that Latinos’ wages and salary incomes — totaling $1.67 trillion in 2021 — grew more than those of non-Latinos over the previous decade at an annualized rate of 4.7% compared to 1.9% for non-Latinos.
But despite the rapid growth, a substantial wage gap persists in the country, with the average Latino worker earning 80 cents for every $1 earned by white non-Hispanic employees.
Latinos’ purchasing power in the U.S. was strong and reached $3.4 trillion in 2021. Collective purchasing power of U.S. Latinos grew between 2.1 and 2.4 times faster than non-Latino counterparts, according to the report.
“In the rest of this century, this cohort is only going to get bigger and bigger,” said Trujillo. “So those who want to get in early, think about it. Think about capital and fund structures that could flow.”
The findings were released alongside the L’Attitude conference examining the state of Latino leadership, participation and representation in corporate America, as well as in the public, media and entertainment sectors.
The report is based on data from 2021, the most recent year for which information is publicly available. It includes data from the U.S. Census Bureau, the Bureau of Economic Analysis and the Bureau of Labor Statistics, among others. More