Evelyn Reynolds

After a year of prolonged negotiations that have led to delays and declines in cargo, the two sides agreed to a new contract with help from the Biden administration.After a year of contract negotiations that resulted in numerous delays and a decline in the movement of cargo at ports along the West Coast, union dockworkers and port operators have reached a tentative deal set to last for six years.In a joint statement released late Wednesday, the International Longshore and Warehouse Union and the Pacific Maritime Association announced a tentative agreement on a new contract that covers 22,000 workers at 29 ports from San Diego to Seattle, some of the busiest in the world.Details about the agreement, which is expected to be formally ratified by both sides, were not immediately released.President Biden, who stepped in last year to urge a swift resolution, released a statement congratulating both parties for reaching an agreement “after a long and sometimes acrimonious negotiation.”“As I have always said, collective bargaining works,” Mr. Biden said. “Above all I congratulate the port workers, who have served heroically through the pandemic and the countless challenges it brought and will finally get the pay, benefits, and quality of life they deserve.”Mr. Biden also thanked Julie Su, the acting U.S. labor secretary, for assistance in finalizing the deal.The outcome on Wednesday somewhat mirrored past negotiations between the two sides. In 2015, as negotiations went on for nine months, officials in the Obama administration intervened amid work slowdowns and increased congestion at ports.The protracted negotiations between the union and the Pacific Maritime Association, which represents the shipping terminals, have focused on disagreements over wages and the expanding role of automation.In recent weeks the Longshore and Warehouse Union, or the I.L.W.U., has staged a series of work slowdowns at the ports of Los Angeles and Long Beach, which in recent months have lost sizable business to ports along the Gulf and East Coasts. Cargo processing at the Port of Los Angeles, a key entry point for shipments from Asia, was down roughly 40 percent in February, compared with the year before.Recently, the U.S. Chamber of Commerce wrote a letter to Mr. Biden urging the administration to intervene immediately in the negotiations and appoint an independent mediator to help the two parties reach an agreement.Matthew Shay, president of the National Retail Federation, said the ongoing delays and disruptions have had a negative impact on retailers and other stakeholders who rely on the West Coast ports for business operations.“As we enter the all-important peak shipping season for holiday merchandise, retailers need a seamless flow of containers through the ports and to their distribution centers,” Mr. Shay said.On Wednesday, Gene Seroka, head of the Port of Los Angeles, said in a statement that the tentative agreement between the I.L.W.U. and the Pacific Maritime “brings the stability and confidence that customers have been seeking.”Matt Schrap, chief executive of the Harbor Trucking Association, a trade group for transportation companies serving West Coast ports, said his organization is eager for cargo traffic to return to normal soon.“We need the certainty,” he said. “This has been a long, hard process.” More

Tax revenue has surged since cannabis stores opened in Ontario, Ore., fueling a push in neighboring Idaho to legalize sales and get in on the action.For John Leeds, the hour-and-a-half commute to and from his job as assistant manager at Treasure Valley Cannabis Company is exhausting, but logistically unavoidable.Like nearly half of the other employees, Mr. Leeds, 39, lives in Idaho and travels along Interstate 84, past sprawling alfalfa and onion fields, to the marijuana shop just across the Oregon state line, where cannabis is legal.“It’s really two different worlds,” Mr. Leeds said. “A lot of whiplash on this issue just in a car ride up and down the highway.”Every day, hundreds of customers and workers like Mr. Leeds make the pilgrimage from Idaho to Ontario, Ore., a small city nestled along the Snake River that is home to 11 dispensaries — roughly one for every 1,000 residents. They can compare the aromas of various strains of marijuana and gather the staff’s insights on THC levels in edibles.The cannabis boom is helping to drive a thriving local economy — and tax revenues that have paid for new police positions, emergency response vehicles, and park and trail improvements.Missing out on the action has become increasingly frustrating to some politicians and longtime residents in Idaho, where the population and living costs have surged in recent years.Because the sale or possession of marijuana remains illegal at the federal level, many states — and in this case neighboring ones — have landed on drastically different approaches for whether and how to decriminalize, regulate and tax cannabis. Since 2012, 23 states have legalized it for recreational use, and more than three dozen allow medical marijuana.Eleven states, mostly conservative-leaning, have enacted extremely limited medical marijuana laws. Aside from cannabis-derived drugs approved by the U.S. Food and Drug Administration for limited medical use, Idaho has not legalized any cannabis sales — a prohibition that has helped its more progressive neighbors.“Our cannabis market caters almost exclusively to Idaho residents,” said Ontario’s mayor, Debbie Folden. “This has been an economic boom unlike any this city has seen.”The patchwork of laws, which vary by state and often by county, have created similar commuter-propelled booms in other parts of the country as well, said Mason Tvert, a partner at VS Strategies, a national cannabis policy and public affairs firm in Denver.Texans travel to Colorado to stock up on their favorite strains or edibles, and Indiana residents make the trek to Michigan, he said. “Demand will be met by either the illegal market or by a legal market in another state,” Mr. Tvert said.That proposition, and the larger economic equation, are not lost on officials in Idaho.Last year, the state approached two million residents, a swell attributed largely to people moving from California and looking for overall cheaper costs of living. Only Florida grew faster.At the same time, property taxes have increased 20 percent since 2018, according to a report from the Idaho Center for Fiscal Policy, a nonpartisan group. And the state’s budget — currently showing a surplus — is expected to come under strain, the group noted, citing legislation that cut income taxes by roughly $500 million over three years even as population growth put new demands on health care, education and transportation.Some longtime residents of the state are tired of seeing the marijuana tax dollars go elsewhere as prices increase from the newer residents arriving.Legalizing and taxing cannabis sales could bring in revenue and help offset any budgetary concerns, said Joe Evans, a lead organizer for Kind Idaho, a group pushing to legalize medical marijuana.“That money should not be leaving the state of Idaho,” said Joe Evans, who supports the legalization of medical marijuana in the state.Ellen Hansen for The New York Times“That money should not be leaving the state of Idaho,” said Mr. Evans, who noted the entrepreneurial spirit of the region, home to Joe Albertson, who started a local grocery store chain, Albertsons, and laid the foundation for a multibillion-dollar national business.But for Mr. Evans, who served with the Army in Iraq and Afghanistan and knows fellow veterans who use cannabis for pain relief, legalization is also about something bigger than money. It is long past time, he said, for his state to legalize a substance that can offer relief for some medical conditions.Patients who use marijuana, especially older or chronically ill Idahoans, shouldn’t have to drive an hour or more to Oregon, he said.“This is about patient advocacy,” said Mr. Evans, who hopes the state will next year consider a measure to legalize cannabis for medicinal use.It would not be the first try.Initiatives to legalize cannabis for medicinal use failed to qualify for the ballot in 2012, 2014 and 2016. In 2020, supporters of a ballot measure suspended efforts to gather signatures because of the onset of the Covid-19 pandemic, and the next year a bipartisan group of state lawmakers introduced a medical marijuana bill that failed to get out of committee.As those efforts foundered, customers in Idaho increasingly made the trek to Oregon, where voters legalized cannabis for medical use in 1998 and for recreational use in 2014.Ontario, Ore., is home to 11 dispensaries — roughly one for every 1,000 residents.Ellen Hansen for The New York TimesFew areas in the state have benefited as much as Malheur County, home to Ontario.The city, which voted to legalize local recreational sales of marijuana in 2018, is the only part of the county with dispensaries. Even so, Malheur County racked up roughly $104 million in total cannabis sales last year, outpacing each of the state’s 35 other counties except Multnomah, which includes Portland.In 2020, the first full year in which Ontario allowed cannabis sales, the city took in $1.8 million in resulting tax revenue. The next year, the revenue increased 65 percent.The area is a conservative pocket in a progressive state — a movement called “Greater Idaho” wants the region to secede from Oregon and become part of Idaho — and Mayor Folden, an Ontario native, calls herself a conservative Republican.That hasn’t blocked the city’s emergence as a cannabis capital. The tax revenues, the mayor said, have been a municipal lifeline. But the city is stockpiling its reserves, Ms. Folden said, because she expects that within five years, Idaho will move ahead with some form of legalization.Treasure Valley Cannabis is one of the businesses that have led to a surge in tax revenue for Malheur County.Ellen Hansen for The New York Times“We know that this will not last forever, so we’re being prudent,” Ms. Folden said. “We know the economic winds, as they say, might shift.”In the fall, a poll for The Idaho Statesman, a Boise newspaper, found that 68 percent of residents backed legalizing marijuana for medicinal purposes. For recreational use, 48 percent supported legalization, while 41 percent were opposed.Gov. Brad Little of Idaho, who is in his second term, staunchly opposes marijuana legalization. In an emailed statement, Mr. Little, a Republican, said that “legalization of marijuana triggers numerous unintended consequences.”But some local politicians in Idaho have begun to consider the economics of the issue.Patrick Bageant, a Boise councilman, said the need for alternative forms of tax revenue was increasingly urgent.“Legalizing marijuana can help bring in different forms of cash,” Mr. Bageant said. “Just look around the country — we as a state should be more forward-looking.”Adam Watkins, a software engineer and a constituent of Mr. Bageant’s, has lived in the city’s West End neighborhood for the past decade. His home value has doubled since 2018, when he paid $3,200 in property taxes; now he pays close to $4,200.“You look around at other states that have legalized marijuana decades ago, when it comes to medical marijuana, and you just cannot help but think, why are we so backward on this issue?” said Mr. Watkins, who supports legalization for philosophical and fiscal reasons.“This is a drug with proven health effects, and we are just leaving this issue to other states to solve,” he added. “We are turning blindly, like this is not an issue, when it clearly is.”Back in Ontario on a recent afternoon, red, white and blue license plates emblazoned with the phrase “Scenic Idaho” lined the parking lot of Treasure Valley Cannabis. (A federal law prohibits transporting marijuana between states.)John Leeds commutes an hour and a half to and from his job at Treasure Valley Cannabis, where he manages a staff of 45.Ellen Hansen for The New York TimesMr. Leeds manages a staff of 45 employees four days a week. He used to work five days, but made a deal with the owner, Jeremy Archie, to work four to cut back on his commute.That day, Mr. Leeds and Mr. Archie walked the floor past vape pens, various strains of cannabis, and sweatshirts acclaiming the company and the state.They greeted customers and shared stories of patients battling health issues like cancer, who use their products to ease pain. On one wall hung a poster board proclaiming a 25 percent discount for customers car-pooling with at least three people.A small gesture of thanks, Mr. Archie said, for their Idaho customers.“The Idaho market has made this a very successful business,” he said. More

Companies are moving headquarters and factories outside the country and cleaving off their Chinese businesses. It’s not clear the strategy will work.As it expanded internationally, Shein, the rapidly growing fast fashion app, progressively cut ties to its home country, China. It moved its headquarters to Singapore and de-registered its original company in Nanjing. It set up operations in Ireland and Indiana, and hired Washington lobbyists to highlight its U.S. expansion plans as it prepares for a potential initial public offering this year.Yet the clothing retailer can’t shake the focus on its ties with China. Along with other brands like the viral social app TikTok and shopping app Temu, Shein has become a target of American lawmakers in both parties. Politicians are accusing the company of making its clothes with fabric made with forced labor and calling it a tool of the Chinese Communist Party — claims that Shein denies.“No one should be fooled by Shein’s efforts to cover its tracks,” Senator Marco Rubio, Republican of Florida, wrote in a letter to other lawmakers this month.As relations between the United States and China turn increasingly rocky, some of China’s most entrepreneurial brands have taken steps to distance themselves from their home country. They have set up new factories and headquarters outside China to serve the United States and other foreign markets, emphasized their foreign ties and scrubbed any mention of “China” from their corporate websites.TikTok has set up headquarters in Los Angeles and Singapore, and invested in new U.S. operations that it says will wall off its American user data from its parent company, ByteDance. Temu has established a headquarters in Boston, and its parent company, PDD Holdings, has moved its headquarters from China to Ireland.Chinese solar companies have set up factories outside China to avoid U.S. tariffs on solar panels from China and limit their exposure to Xinjiang, a region that the United States now bars imports from because of its use of forced labor.JinkoSolar, a behemoth that produces one in 10 solar modules installed globally, has set up a supply chain entirely outside China to make goods for the United States.Other companies, including those that are foreign-owned, are building walls between their Chinese operations and their global businesses, judging that this is the best way to avoid running afoul of new restrictions or risks to their reputation.Sequoia Capital, the venture capital firm, said last week that it would split its global business into three independent partnerships, spinning off unique entities for China and India.Shein said in a statement that it was “a multinational company with diversified operations around the world and customers in 150 markets, and we make all business decisions with that in mind.” The company said it had zero tolerance for forced labor, did not source cotton from Xinjiang and fully complied with all U.S. tax and trade laws.A spokesperson for TikTok said that the Chinese Communist Party had neither direct nor indirect control of ByteDance or TikTok, and that ByteDance was a private, global company with offices around the world.“Roughly 60 percent of ByteDance is owned by global institutional investors such as BlackRock and General Atlantic, and its C.E.O. resides in Singapore,” said Brooke Oberwetter, a spokesperson.Temu did not respond to requests for comment.Analysts said companies were being driven out of China by a variety of motivations, including better access to foreign customers and an escape from the risk of a crackdown by the Chinese authorities.Some companies have more practical concerns, like reducing their costs for labor and shipping, lowering their tax bills or shedding the shoddy reputation that American buyers continue to associate with goods made in China, said Shay Luo, a principal at the consulting firm Kearney who studies supply chains.But a wave of tougher restrictions in the United States on doing business with China appears to be having an effect, too.Research by Altana, a supply chain technology company, shows that since 2016, new regulations, customs enforcement actions and trade policies that hurt Chinese exports to the United States were followed by “adaptive behavior,” like setting up new subsidiaries outside China, said Evan Smith, the company’s chief executive.For Chinese companies, going global is not a new phenomenon. The Chinese government initiated a “go out” policy at the turn of the century to encourage state-owned enterprises to invest abroad to gain overseas markets, natural resources and technology.Private companies like the electronics firm Lenovo, the appliance maker Haier and the e-commerce giant Alibaba soon followed, seeking investment targets and new customers.As tensions between the United States and China have risen in recent years, investment flows between the countries have slowed. U.S. tariffs on Chinese goods put in place by President Donald J. Trump and maintained by President Biden encouraged companies to move manufacturing from China to countries like Vietnam, Cambodia and Mexico. The pandemic, which halted factories in China and raised costs for moving goods across the ocean, accelerated the trend.International companies are now increasingly adopting a “China plus one” model of securing an additional source of goods in another country in case of supply interruptions in China. Chinese companies, too, are following this practice, Ms. Luo said.In the 12 months that ended in April, the share of imports to the United States from China reached its lowest level since 2006.“It is definitely a rational strategy for these companies to offshore, to move manufacturing or their headquarters to a third country,” said Roselyn Hsueh, an associate professor of political science at Temple University.In addition to tariffs and the ban on products from the Xinjiang region, the United States has imposed new restrictions on trade in technology and tougher security reviews for Chinese investments.The Chinese government, too, is clamping down on the transfer of data and currency outside the country, and it has squashed some Chinese companies’ efforts to list their stocks on American exchanges because of such concerns.Beijing has detained and harassed top tech executives, and foreign consulting firms. And its draconian lockdowns during the pandemic made clear to businesses that they operate in China at the mercy of the government.“Companies like Shein and TikTok move overseas both to reduce their U.S. regulatory and reputational risk, but also to reduce the likelihood that their founders and staff get intimidated or arrested by Chinese officials,” said Isaac Stone Fish, the chief executive of Strategy Risks, a consultant on corporate exposure to China.But companies like Shein and Temu still source nearly all of their products from China, and it’s not clear that the changes the Chinese companies are making to their businesses have done much to lower the heat.The opposition to these companies in Washington is being fueled by an incendiary combination of legitimate concerns over national security and forced labor, and the political appeal of appearing tough on China. It also appears to be driven by the opposition of certain competitors to these services, which are now some of the most downloaded apps in the United States.Shou Chew, the chief executive of TikTok, was questioned at a House hearing in March over whether the social app would make U.S. user data available to the Chinese government.Haiyun Jiang/The New York TimesIn March, a group called Shut Down Shein sprang up to pressure Congress to crack down on the retailer. The group, which has hired five lobbyists with the firm Actum, declined to disclose who is funding its campaign.In a five-hour hearing in March, lawmakers grilled TikTok’s chief executive over whether it would make U.S. user data available to the Chinese government, or censor the information broadcast to young Americans. Legislation is being considered that could permanently ban the app.Some lawmakers are arguing that JinkoSolar’s U.S.-made panels should not be eligible for government tax credits, and, for reasons that have not yet been disclosed, the company’s Florida factory was raided by customs officials last month.State governments, which have often been more welcoming to Chinese investment, are also growing more hostile. In January, Glenn Youngkin, the Republican governor of Virginia, blocked a deal for Ford Motor to set up a factory using technology from a Chinese battery maker, Contemporary Amperex Technology, calling it a “Trojan-horse relationship.”A House committee set up to examine economic and security competition with China is investigating the ties that Temu and Shein have with forced labor in China, and lawmakers are calling for Shein to be audited before its I.P.O.“The message of our investigation of Shein, Temu, Adidas and Nike is clear: Either ensure your supply chains are clean — no matter how difficult it is — or get out of countries like China implicated in forced labor,” Representative Mike Gallagher, the Republican chair of the committee, said in a statement.An investigation by Bloomberg in November found that some of Shein’s clothes were made with cotton grown in Xinjiang. In a statement, Shein said it had “built a four-step approach to ensure compliance” with the law, including a “code of conduct, independent audits, robust tracing technology and third-party testing.Jordyn Holman More

Central bankers are expected to leave interest rates unchanged on Wednesday, but the decision is an unusual nail-biter. Also: Keep an eye on the economic forecasts.Federal Reserve officials will announce their June policy decision on Wednesday, and they are widely expected to hold steady after 10 straight interest rate increases — taking a breather to see how the economy is shaping up 15 months into their fight against rapid inflation.Prices have been increasing faster than the Fed would like for more than two years, but a report on Tuesday confirmed that the pace of overall inflation continues to cool. That doesn’t mean the Fed can declare victory: Once volatile food and fuel prices were stripped out, the data showed inflation remained stubbornly rapid.Investors are betting that Fed officials will respond to the mixed picture by skipping an increase this month, even as they signal that they might lift rates in July.Still, the outlook is very uncertain, and investors will be watching Wednesday’s Fed meeting closely for any hint at what could come next. Central bankers will release their rate decision and fresh economic forecasts at 2 p.m., followed by a news conference with Jerome H. Powell, the Fed chair, at 2:30 p.m. Here’s what to know about the decision.Interest rates are at their highest since 2007.Fed officials have raised interest rates sharply since March 2022, pushing them to just above 5 percent in the fastest series of rate increases since the 1980s.The speed of adjustment is relevant because it takes months or even years for the effects of interest rate changes to fully trickle through the economy.Given that, the economy is — most likely — feeling only part of the brunt of the Fed’s past moves. That increases the risk that the central bank could overdo it and slow growth by more than is strictly necessary to contain inflation if officials push forward without taking time to assess conditions.Overshooting would have serious ramifications: Restraining the economy too aggressively would very likely cost jobs, diminishing financial security for many Americans.But an incomplete policy response would also carry consequences. If rapid inflation drags on for years, consumers could come to see fast price increases as the norm, making them harder to stamp out without serious economic pain that causes higher unemployment down the road.Skipping does not mean stopping.If setting monetary policy is like a marathon, a pause now is like stopping for a water break — to stretch and take stock — rather than giving up on running altogether. Fed officials have been clear that while they may hit pause temporarily, they could lift rates again if needed.“A decision to hold our policy rate constant at a coming meeting should not be interpreted to mean that we have reached the peak rate for this cycle,” Philip Jefferson, a Fed governor who is President Biden’s pick to be the central bank’s next vice chair, said in a speech last month. Instead, Mr. Jefferson said, skipping would “allow the committee to see more data.”Tuesday’s inflation data probably kept officials on track to hold policy steady in June while teeing up a July increase, said Sarah Watt House, senior economist at Wells Fargo.“They are going to have to walk a very fine line,” she said. “The U.S. economy continues to carry some pretty formidable momentum.”Investors are on dot watch.Every three months, the Fed releases a set of projections — the “dot plot” — that shows where each official expects interest rates to land by the end of the next few years. (The predictions are anonymous and are demarcated by little blue spots, hence the name.)The dots come out alongside a set of projections for unemployment, inflation and growth. They will be released on Wednesday for the first time since March.Some economists are expecting the Fed to pencil in slightly higher growth for the economy, slightly higher core inflation, and a slightly lower unemployment rate by the end of 2023. One complication is that officials will have had barely any time to update their projections in the wake of Tuesday’s Consumer Price Index report. Officials had until Tuesday evening to change their forecasts, but that meant they had just hours to factor in the new figures.Investors are probably going to be most focused on how much higher interest rates are expected to rise this year. Many expect Fed officials to pencil in one more rate move — lifting the anticipated policy rate to a range of 5.25 percent to 5.5 percent at the end of 2023. But given the varied opinions on the central bank’s policy-setting committee, the predictions might be for even higher rates.All eyes are on Jerome Powell.Jerome H. Powell, the Fed chair, will give a news conference after the meeting. He may explain how central bankers are thinking about their path ahead for interest rates — and how officials will judge whether they have done enough to feel confident that inflation, now running at 4.4 percent by their preferred measure, is back on a path toward their 2 percent goal.“The main message will be: A pause does not necessarily mean the end of the rate hiking cycle,” said Michael Feroli, chief U.S. economist at J.P. Morgan. More

The report from McKinsey comes as a debate rages over the potential economic effects of A.I.-powered chatbots on labor and the economy.“Generative artificial intelligence” is set to add up to $4.4 trillion of value to the global economy annually, according to a report from McKinsey Global Institute, in what is one of the rosier predictions about the economic effects of the rapidly evolving technology.Generative A.I., which includes chatbots such as ChatGPT that can generate text in response to prompts, can potentially boost productivity by saving 60 to 70 percent of workers’ time through automation of their work, according to the 68-page report, which was published early Wednesday. Half of all work will be automated between 2030 and 2060, the report said.McKinsey had previously predicted that A.I. would automate half of all work between 2035 and 2075, but the power of generative A.I. tools — which exploded onto the tech scene late last year — accelerated the company’s forecast.“Generative A.I. has the potential to change the anatomy of work, augmenting the capabilities of individual workers by automating some of their individual activities,” the report said.McKinsey’s report is one of the few so far to quantify the long-term impact of generative A.I. on the economy. The report arrives as Silicon Valley has been gripped by a fervor over generative A.I. tools like ChatGPT and Google’s Bard, with tech companies and venture capitalists investing billions of dollars in the technology.The tools — some of which can also generate images and video, and carry on a conversation — have started a debate over how they will affect jobs and the world economy. Some experts have predicted that the A.I. will displace people from their work, while others have said the tools can augment individual productivity.Last week, Goldman Sachs released a report warning that A.I. could lead to worker disruption and that some companies would benefit more from the technology than others. In April, a Stanford researcher and researchers at the Massachusetts Institute of Technology released a study showing that generative A.I. could boost the productivity of inexperienced call center operators by 35 percent.Any conclusions about the technology’s effects may be premature. David Autor, a professor of economics at M.I.T. cautioned that generative A.I. was “not going to be as miraculous as people claim.”“We are really, really in the early stage,” he added.For the most part, economic studies of generative A.I. do not take into account other risks from the technology, such as whether it might spread misinformation and eventually escape the realm of human control.The vast majority of generative A.I.’s economic value will most likely come from helping workers automate tasks in customer operations, sales, software engineering, and research and development, according to McKinsey’s report. Generative A.I. can create “superpowers” for high-skilled workers, said Lareina Yee, a McKinsey partner and an author of the report, because the technology can summarize and edit content.“The most profound change we are going to see is the change to people, and that’s going to require far more innovation and leadership than the technology,” she said.The report also outlined challenges that industry leaders and regulators would need to address with A.I., including concerns that the content generated by the tools can be misleading and inaccurate.Ms. Yee acknowledged that the report was making prognostications about A.I.’s effects, but that “if you could capture even a third” of what the technology’s potential is, “it is pretty remarkable over the next five to 10 years.” More

The National Labor Relations Board, with a Democratic majority, restored a standard that counts more workers as employees rather than contractors.Labor regulators issued a ruling on Tuesday that makes it more likely for workers to be considered employees rather than contractors under federal law.Overturning a ruling issued when the board was under Republican control, the decision effectively increases the number of workers — like drivers, construction workers or janitors — who have a federally protected right to unionize or take other collective action, such as protesting unsafe working conditions.The ruling ensures that “workers who seek to organize or exercise their rights under the National Labor Relations Act are not improperly excluded from its protections,” said a statement by Lauren McFerran, the Democratic chairman of the labor board, which voted 3 to 1 along party lines to broaden the standard.Determining whether a worker is an employee or a contractor has long depended on several variables, including the potential employer’s control over the work and provision of tools and equipment.In 2019, when the board was controlled by appointees of President Donald J. Trump, it elevated one consideration — workers’ chances to make more money based on their business savvy, often described as “entrepreneurial opportunity” — above the others. It concluded that such opportunities should be a key tiebreaker when some factors pointed to contractor status and others indicated employment.In its decision in 2019, the board said that a ruling during the Obama administration had improperly subordinated the question of moneymaking opportunities.That 2019 ruling appeared to be a victory for gig companies like Uber and Lyft, whose supporters have argued that ride-share drivers should be considered contractors in part because of the opportunities they have for potential profit — say, by determining which neighborhoods to work in.The latest decision returned the board to the standard laid out in the Obama era, explicitly rejecting the elevation of entrepreneurial opportunity above other factors.The turnabout was criticized on Tuesday by businesses that rely heavily on contractors. In a statement, Evan Armstrong, chair of the Coalition for Workforce Innovation, which represents companies like Uber and Lyft as well as industry trade groups, said that the ruling “decreases clarity and threatens the flexible independent model that benefits workers, consumers, entrepreneurs, businesses and the overall economy.”Some labor experts, however, say it is not clear that gig companies like Uber and Lyft, which set the prices that passengers pay, provide drivers with enough bona fide entrepreneurial opportunity to qualify them as contractors even under the old standard.In his dissent, Marvin E. Kaplan, the board’s lone Republican member, made a version of this argument, concluding that the workers in the case before the board — wig, hair and makeup stylists who work with the Atlanta Opera — “have little opportunity for economic gain or, conversely, risk of loss.”As a result, he agreed with the board’s majority that the stylists should be considered employees who have the right to unionize.But Mr. Kaplan wrote that the lack of entrepreneurial opportunities meant that the stylists should have been considered employees even under the Trump-era standard, and that there was no need to alter it. More

The Treasury secretary, speaking to a House committee, said trade and investment were crucial in U.S.-Chinese relations.Treasury Secretary Janet L. Yellen said on Tuesday that it would be a mistake for the United States to try to “decouple” from China and called for deepening economic ties between the world’s two largest economies.The comments came as the Biden administration has been seeking to improve relations with China, which faced a setback this year when a Chinese surveillance balloon was found flying across the United States. Secretary of State Antony J. Blinken is planning to travel to Beijing next week, and Ms. Yellen hopes to make a trip there soon.Speaking at a House Financial Services Committee hearing on Tuesday, Ms. Yellen made clear that she believes the economic relationship with China is critical.“I think we gain and China gains from trade and investment that is as open as possible, and it would be disastrous for us to attempt to decouple from China,” Ms. Yellen said.The United States maintains tariffs that the Trump administration imposed on billions of dollars’ worth of Chinese imports, and the Biden administration is developing new restrictions on how U.S. companies can invest in China. But Ms. Yellen said that the United States intended only to “de-risk” the relationship and that it had no intention of inflicting economic harm on China.“I certainly do not think it is in our interest to stifle the economic progress of the Chinese people,” Ms. Yellen said. “China has succeeded in lifting hundreds of millions of people out of poverty, and I think that’s something that we should applaud.”Although she struck an accommodating tone, Ms. Yellen also laid out concerns likely to arise in meetings with her Chinese counterparts.Because of national security concerns, she said, the administration is considering restrictions on American private equity firms’ investments in Chinese firms that have connections with China’s military. She also said the Treasury Department was examining additional sanctions on China in response to human rights abuses against Uyghurs in Xinjiang.In recent months, the United States has been ratcheting up pressure on China to provide debt relief to Zambia and other developing countries. Ms. Yellen lamented that despite some signs of a willingness to cooperate and help poor countries avoid defaults, China had not done enough. She emphasized a growing need for international financial institutions like the World Bank and the International Monetary Fund to help the most vulnerable economies.“These institutions reflect American values,” Ms. Yellen said. “It serves as an important counterweight to nontransparent, unsustainable lending from others like China.”Asked about Ms. Yellen’s comments on Tuesday, Wang Wenbin, a spokesman for China’s Foreign Ministry, rejected the idea that the I.M.F. or the World Bank is meant to further American interests.“The I.M.F. is not the I.M.F. of the United States, nor is the World Bank for that matter,” he said. More

The inflation rate cooled in May to its lowest annual rate in about two years, the Labor Department reported Tuesday.
The consumer price index, which measures changes in a multitude of goods and services, increased just 0.1% for the month, bringing the annual level down to 4%. That 12-month increase was the smallest since March 2021, when inflation was just beginning to rise to what would become the highest in 41 years.

Excluding volatile food and energy prices, the picture wasn’t as optimistic.
So-called core inflation rose 0.4% on the month and was still up 5.3% from a year ago, indicating that while price pressures have eased somewhat, consumers are still under fire.

All of those numbers were exactly in line with the Dow Jones consensus estimates.
A 3.6% slide in energy prices helped keep the CPI gain in check for the month. Food prices rose just 0.2%.
However, a 0.6% increase in shelter prices was the biggest contributor to the increase for the all-items, or headline, CPI reading. Housing-related costs make up about one-third of the index’s weighting.

Elsewhere, used vehicle prices increased 4.4%, the same as in April, while transportation services were up 0.8%.
Markets showed little reaction to the release, despite its expected prominence in the decision the Federal Reserve will make at this week’s meeting regarding interest rates. Stock market futures were slightly positive, though Treasury yields fell sharply.
Pricing did shift notably in the fed funds market, with traders now pricing in a nearly 100% chance that the Fed will not raise benchmark rates when its meeting concludes Wednesday.
“The encouraging trend in consumer prices will provide the Fed some leeway to keep rates unchanged this month and if the trend continues, the Fed will not likely hike for the rest of the year,” said Jeffrey Roach, chief economist at LPL Financial.
The tame CPI reading was good news for workers. Average hourly earnings adjusted for inflation rose 0.3% on the month, the Bureau of Labor Statistics said in a separate release. On an annual basis, real earnings are up 0.2% after running negative for much of the inflation surge that began about two years ago.
The consumer price report featured a growing discrepancy between the core and headline numbers. The all-items index usually runs ahead of the ex-food and energy measure, but that hasn’t been the case lately.
The year-over-year discrepancy between the two measures stems from gas prices that were surging at this time in 2022. Ultimately, prices at the pump would exceed $5 a gallon, which had never happened before in the U.S. Gasoline prices have fallen 19.7% over the past year, Tuesday’s BLS report showed.
Food prices, however, were still up 6.7% from a year ago. Shelter prices have risen 8% and transportation services are up 10.2%, though airline fares have declined 13.4% after surging in the early days of the economic recovery. More