Evelyn Reynolds

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    For Tens of Millions of Americans, the Good Times Are Right Now

    Their houses are piggy banks, their retirement accounts are up and their bosses are eager to please. When the boom ends, everything will change.This is an era of great political division and dramatic cultural upheaval. Much more quietly, it has been a time of great financial reward for a large number of Americans.For the 158 million who are employed, prospects haven’t been this bright since men landed on the moon. As many as half of those workers have retirement accounts that were fattened by a prolonged bull market in stocks. There are 83 million owner-occupied homes in the United States. At the rate they have been increasing in value, a lot of them are in effect a giant piggy bank that families live inside.This boom does not get celebrated much. It was a slow-build phenomenon in a country where news is stale within hours. It has happened during a time of fascination with the schemes of the truly wealthy (see: Musk, Elon) and against a backdrop of increased inequality. If you were unable to buy a house because of spiraling prices, the soaring amount of homeowners’ equity is not a comfort.The queasy stock market might be signaling that the boom is ending. A slowing economy, renewed inflation, high gas prices and rising interest rates could all undermine the gains achieved over the years. But for the moment, this flood of wealth is quietly redefining retirement, helping fuel Silicon Valley and stoking a boom in leisure and entertainment. It is boosting corporate profits by unprecedented amounts while also giving just about everyone the notion that a better job might be within reach.More than 4.5 million workers voluntarily quit in March, the highest number since the government started keeping this statistic in 2000, the Bureau of Labor Statistics reported last week. A few years ago, the monthly total was between three million and 3.5 million.“Maybe it’s easier to focus on the negative, but a huge number of people, maybe 40 million households, have been doing pretty well,” said Dean Baker, an economist who was a co-founder of the liberal-leaning Center for Economic and Policy Research. “You’d have to go back to the late 1990s to find a similar era. Before that, the 1960s.”This widespread wealth throws light on why the number of workers who say they expect to be working past their early 60s has fallen below 50 percent for the first time. It accounts for the abundance of $1 billion start-ups known as unicorns — more than 1,000 now, up from about 200 in 2015. It offers a reason for the rise in interest in unionizing companies from Amazon to Apple to Starbucks, as hourly workers seek to claim their share.And it helps explain why Dwight and Denise Makinson just returned from a 12-day cruise through Germany.“Our net worth has reached the millionaire level due to our investments, which was unfathomable when we were married 40 years ago,” said Mr. Makinson, 76, who is retired from the U.S. Forest Service.The couple, who live in Coeur d’Alene, Idaho, have company. There are 22 million U.S. millionaires, Credit Suisse estimates, up from fewer than 15 million in 2014.The State of Jobs in the United StatesThe U.S. economy has regained more than 90 percent of the 22 million jobs lost at the height of pandemic in the spring of 2020.April Jobs Report: U.S. employers added 428,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fourth month of 2022.Trends: New government data showed record numbers of job openings and “quits” — a measurement of the amount of workers voluntarily leaving jobs — in March.Job Market and Stocks: This year’s decline in stock prices follows a historical pattern: Hot labor markets and stocks often don’t mix well.Unionization Efforts: Since the Great Recession, the college-educated have taken more frontline jobs at companies like Starbucks and Amazon. Now, they’re helping to unionize them.“I used coupons to buy things. One of my daughters would say, ‘Mom, that’s so embarrassing,’” said Ms. Makinson, 66, a registered nurse. “But we believed in saving. Now she uses coupons, too.”Denise and Dwight Makinson in their backyard in Coeur d’Alene, Idaho. Their net worth has reached the millionaire level.Margaret Albaugh for The New York TimesEvery economic transaction has several sides. No one thought home prices in 2000 were particularly cheap. But in the last six years, prices have risen by the total value of all housing in 2000, according to the Case-Schiller index. In many areas of the country, it has become practically impossible for renters to buy a house.This is fracturing society. Even as the overall homeownership rate in 2020 rose to 65.5 percent, the rate for Black Americans has severely lagged. At 43.4 percent, it is lower than the 44.2 percent in 2010. The rate for Hispanics is only marginally better.That disparity might account for the muted sense of achievement.“It’s a time of prosperity, a time of abundance, and yet it doesn’t seem that way,” said Andy Walden, vice president of enterprise research at Black Knight, which analyzes financial data.Shawn and Stephanie McCauley said the value of their house 20 miles north of Seattle had shot up 50 percent since they bought it a few years ago, a jump that was typical of the market.“We are very fortunate right now given the situation for many others during the pandemic,” said Mr. McCauley, 36, who works for a data orchestration company. “Somehow we are doing even better financially, and it feels a bit awkward.”Even for those doing well, the economy feels precarious. The University of Michigan’s venerable Index of Consumer Sentiment fell in March to the same levels as 1979, when the inflation rate was a painful 11 percent, before rising in April.Politicians are mostly quiet about the boom.“Republicans are not anxious to give President Biden credit for anything,” said Mr. Baker, the economist. “The Democrats could boast about how many people have gotten jobs, and the strong wage growth at the bottom, but they seem reluctant to do this, knowing that many people are being hit by inflation.”The initial coronavirus outbreak ended the longest U.S. economic expansion in modern history after 128 months. A dramatic downturn began. The federal government stepped in, generously spreading cash around. Spending habits shifted as people stayed home. The recession ended after two months, and the boom resumed.Jerome H. Powell, the Federal Reserve chair, recently warned that there were too many employers chasing too few workers, saying the labor market was “tight to an unhealthy level.” But for workers, it’s gratifying to have the upper hand in looking for a new position or career.“Both my husband and I have been able to make job changes that have doubled our income from five years ago,” said Lindsay Bernhagen, 39, who lives in Stevens Point, Wis., and works for a start-up. “It feels like it has mostly been dumb luck.”A decade ago, the housing market was in chaos. Between 2007 and 2015, more than seven million homes were lost to foreclosure, according to Black Knight. Some of these were speculative purchases or second homes, but many were primary residences. Egged on by lenders, people lived in houses they could not easily afford.Now the reverse is true. People own much more of their homes than they used to, while the banks own less. That acts as a shield against foreclosures, which in 2019 were only 144,000, according to Black Knight. (During the pandemic, foreclosures mostly ceased due to moratoriums.)The equity available to homeowners reached nearly $10 trillion at the end of 2021, double what it was at the height of the 2006 bubble, according to Black Knight. For the average American mortgage holder, that amounts to $185,000 before hitting loan-to-value tripwires. The figure is up $48,000 in a year — about what the average American family earns annually, according to some estimates.Even very new homeowners feel an economic boost.“We never had enough for a down payment, but then in summer of 2020, we got a good tax return, a stimulus check and had a little money in the bank,” said Magaly Pena, 41, an architect for the federal government. She and her husband bought a townhouse in the Miami suburb of Homestead.Ms. Pena, a first-generation immigrant from Nicaragua, likes to check out the estimated value of her house and her neighbors on the real estate website Redfin. “Sometimes I’ll check it every day for three days,” she said. “It’s been crazy — everything has skyrocketed.”In 2006, homeowners cashed in their equity. Sometimes they used the money to double down on another house or two. In 2022, there’s little sense of excess. One reason is that lenders and the culture in general are no longer so encouraging about that sort of refinancing. But owners are also more cautious.Brian Carter, an epidemiologist in Atlanta, said he and his wife, Desiree, had about $250,000 in equity in their home but didn’t plan to draw on it.“I was 27 in 2007 and watched a lot of people lose their houses because they couldn’t leave their equity alone,” he said. “That included my next-door neighbor and the family across the street. I don’t want to worry.”Those who take a boom for granted often get upstaged by reality. In May 2000, the entrepreneur Kurt Andersen said raising money for a media start-up called Inside was as easy “as getting laid in 1969.” That was a few weeks after the stock market peaked. Seventeen months and one merger later, Inside shut down. (Mr. Andersen clarified in an email that he did not actually have sex until the 1970s.)In 2000, the start-up downturn was the first sign of wider economic trouble. This time it may be simply that people are doing too well. “U.S. households in best shape in 30 years … but does it matter?” Deutsche Bank asked in a research note last month.Its logic: Households have more cash than debt for the first time in decades, which is theoretically good. But all that money is encouraging spending, which is propelling inflation, which is forcing the Fed to push up interest rates. The result: a recession late next year.Ashley Humphries, 31, feels prepared for most any scenario. Six years ago, she was a graduate teaching assistant making $12,000 a year. Now she earns a low six figures as a senior product manager for a parking app developer in Atlanta.“I’ve lived out some childhood dreams like dyeing my hair vibrant colors and seeing ‘Phantom of the Opera’ from the front row,” Ms. Humphries said. She got a dog named Kylo, put a bit of her income in the stock market and bought a Tesla. She just left on a Caribbean cruise. Two of them, in fact, one after the other.Ashley Humphries and Kylo. “I’ve lived out some childhood dreams,” she said.Kendrick Brinson for The New York Times More

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    States Turn to Tax Cuts as Inflation Stays Hot

    WASHINGTON — In Kansas, the Democratic governor has been pushing to slash the state’s grocery sales tax. Last month, New Mexico lawmakers provided $1,000 tax rebates to households hobbled by high gas prices. Legislatures in Iowa, Indiana and Idaho have all cut state income taxes this year.A combination of flush state budget coffers and rapid inflation has lawmakers across the country looking for ways to ease the pain of rising prices, with nearly three dozen states enacting or considering some form of tax relief, according to the Tax Foundation, a right-leaning think tank.The efforts are blurring typical party lines when it comes to tax policy. In many cases, Democrats are joining Republicans in supporting permanently lower taxes or temporary cuts, including for high earners.But while the policies are aimed at helping Americans weather the fastest pace of inflation in 40 years, economists warn that, paradoxically, cutting taxes could exacerbate the very problem lawmakers are trying to address. By putting more money in people’s pockets, policymakers risk further stimulating already rampant consumer demand, pushing prices higher nationally.Jason Furman, an economist at Harvard University who was an economic adviser under the Obama administration, said that the United States economy was producing at full capacity right now and that any additional spending power would only drive up demand and prices. But when it comes to cutting taxes, he acknowledged, the incentives for states do not always appear to be aligned with what is best for the national economy.“I think all these tax cuts in states are adding to inflation,” Mr. Furman said. “The problem is, from any governor’s perspective, a lot of the inflation it is adding is nationwide and a lot of the benefits of the tax cuts are to the states.”States are awash in cash after a faster-than-expected economic rebound in 2021 and a $350 billion infusion of stimulus funds that Congress allocated to states and cities last year. While the Biden administration has restricted states from using relief money to directly subsidize tax cuts, many governments have been able to find budgetary workarounds to do just that without violating the rules.Last week, Gov. Ron DeSantis of Florida signed a $1.2 billion tax cut that was made possible by budget surpluses. The state’s coffers were bolstered by $8.8 billion in federal pandemic relief money. Mr. DeSantis, a Republican, hailed the tax cuts as the largest in the state’s history.“Florida’s economy has consistently outpaced the nation, but we are still fighting against inflationary policies imposed on us by the Biden administration,” he said.Adding to the urgency is the political calendar: Many governors and state legislators face elections in November, and voters have made clear they are concerned about rising prices for gas, food and rent.“It’s very difficult for policymakers to see the inflationary pressures that taxpayers are burdened by right now while sitting on significant cash reserves without some desire to return that,” said Jared Walczak, vice president of state projects with the Center for State Tax Policy at the Tax Foundation. “The challenge for policymakers is that simply cutting checks to taxpayers can feed the inflationary environment rather than offsetting it.”The tax cuts are coming in a variety of forms and sizes. According to the Tax Foundation, which has been tracking proposals this year, some would be phased in, some would be permanent and others would be temporary “holidays.”Next month, New York will suspend some of its state gas taxes through the end of the year, a move that Gov. Kathy Hochul, a Democrat, said would save families and businesses an estimated $585 million.In Pennsylvania, Gov. Tom Wolf, a Democrat, has called for gradually lowering the state’s corporate tax rate to 5 percent from 10 percent — taking a decidedly different stance from many of his political peers in Congress, who have called for raising corporate taxes. Mr. Wolf said in April that the proposal was intended to make Pennsylvania more business friendly.States are acting on a fresh appetite for tax cuts as inflation is running at a 40-year high.OK McCausland for The New York TimesMr. Furman pointed to the budget surpluses as evidence that the $1.9 trillion pandemic relief package handed too much money to local governments. “The problem was there was just too much money for states and localities.”A new report from the Tax Policy Center, a left-leaning think tank, said total state revenues rose by about 17.6 percent last year. State rainy day funds — money that is set aside to cover unexpected costs — have reached “new record levels,” according to the National Association of State Budget Officers.Yet those rosy budget balances may not last if the economy slows, as expected. The Federal Reserve has begun raising interest rates in an attempt to cool economic growth, and there are growing concerns about the potential for another recession. Stocks fell for another session on Monday, with the S&P 500 down 3.2 percent, as investors fretted about a slowdown in global growth, high inflation and other economic woes.Cutting taxes too deeply now could put states on weaker financial footing.The Tax Policy Center said its state tax revenue forecasts for the rest of this year and next year were “alarmingly weak” as states enacted tax cuts and spending plans. Fitch, the credit rating agency, said recently that immediate and permanent tax cuts could be risky in light of evolving economic conditions.“Substantial tax policy changes can negatively affect revenues and lead to long-term structural budget challenges, especially when enacted all at once in an uncertain economic environment,” Fitch said.The state tax cuts are taking place as the Biden administration struggles to respond to rising prices. So far, the White House has resisted calls for a gas tax holiday, though Jen Psaki, the White House press secretary, said in April that President Biden was open to the idea. The administration has responded by primarily trying to ease supply chain logjams that have created shortages of goods and cracking down on price gouging, but taming inflation falls largely to the Fed.The White House declined to assess the merits of states’ cutting taxes but pointed to the administration’s measures to expand fuel supplies and proposals for strengthening supply chains and lowering health and child care costs as evidence that Mr. Biden was taking inflation seriously.“President Biden is taking aggressive action to lower costs for American families and address inflation,” Emilie Simons, a White House spokeswoman, said.The degree to which state tax relief fuels inflation depends in large part on how quickly the moves go into effect.Gov. Laura Kelly backed a bill last month that would phase out the 6.5 percent grocery sales tax in Kansas, lowering it next January and bringing it to zero by 2025. Republicans in the state pushed for the gradual reduction despite calls from Democrats to cut the tax to zero by July.Understand the 2022 Midterm ElectionsCard 1 of 6Why are these midterms so important? More

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    Inflation outlook for consumers falls from record high, Fed survey shows

    Inflation expectations over the next year fell to a median 6.3% in April, a 0.3 percentage point decrease from the record high the previous month.
    Still, household spending is projected to rise a record 8% over the next year, according to a New York Fed survey of consumers.
    Consumer expectations for gas price increases fell to 5.2%, a 4.4 percentage point drop that came as oil prices edged lower in April.

    A worker stocks items inside a grocery store in San Francisco, California, May 2, 2022.
    David Paul Morris | Bloomberg | Getty Images

    Consumers grew a little more optimistic about inflation in April, though they still expect to be spending considerably more in the year ahead, a Federal Reserve survey released Monday shows.
    Inflation expectations over the next year fell to a median 6.3%, a 0.3 percentage-point decrease from the record high in March, according to data going back to June 2013. On a three-year basis, expectations rose 0.2 percentage point to 3.9%, which itself is 0.3 percentage point off the record.

    The data comes with 12-month inflation in March running at 8.5%, the highest level since December 1981. April consumer prices are due to be reported on Wednesday.
    Responding to the surge in prices, the Fed last week raised benchmark interest rates by a half percentage point, the biggest hike in 22 years and the second increase of the year.

    “We have our job to do and we have to bring inflation back down,” Minneapolis Fed President Neel Kashkari told CNBC’s “Squawk Box” in a Monday morning interview.
    Americans are still leery about the high cost of living. Household spending is projected to rise 8% over the next year, according to the New York Fed survey. That’s a 0.3 percentage point increase from a month ago and another series high.
    However, there also was some optimism, as consumer expectations for gas price increases fell to 5.2%, a 4.4 percentage point drop that came as oil prices edged lower in April. Respondents also grew more secure in their jobs, with just 10.8% expecting to lose their employment over the next 12 months, tied for an all-time low.
    Expectations for home prices were unchanged, but the 6% anticipated increase is still higher than the long-term average.

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    U.S. to Lift Tariffs on Ukrainian Steel

    WASHINGTON — The Biden administration announced on Monday that it would lift tariffs on Ukrainian steel for one year, halting a measure that President Donald J. Trump placed on that country and many others in 2018.The move comes as the Biden administration looks for ways to assist Ukraine during the Russian invasion. Ukraine is a fairly minor supplier of U.S. steel, shipping about 218,000 metric tons in 2019, to rank 12th among America’s foreign suppliers. However, the sector is a significant source of economic growth and employment for Ukraine, and steel mills have continued to provide paychecks, food and shelter for their workers through the war.When Prime Minister Denys Shmyhal of Ukraine visited Washington last month, he told administration officials that some Ukrainian steel mills were starting to produce again after initially shutting down because of the invasion. He asked the Biden administration to suspend the tariffs, a senior Commerce Department official, who was not authorized to speak publicly before the official announcement, said on Monday.The United States imposed a 25 percent tariff on foreign steel and a 10 percent tariff on foreign aluminum three years ago on national security grounds, arguing that a flood of cheap metal had decimated American manufacturing and posed a threat to its military and industrial capacity.Ukraine is a significant steel producer, ranking 13th globally. Most of the country’s factories and other economic activity have been frozen as workers are called off to fight and shipments of parts and raw materials are disrupted during the war. Many major Ukrainian steel mills halted their operations in late February because of major disruptions to logistics routes required to ship metal out of the country, analysts at S&P Global said.The senior Commerce Department official said that Ukrainian steel plants had been cut off from some of their more traditional markets in the Middle East and Africa, as the war closed shipping lanes through the Black Sea. In order to continue to support its plants, the Ukrainian government is now aiming to move steel by rail to Romania, and then on to markets in Europe, Britain and the United States, the official said.The Commerce Department has noted that the steel industry is uniquely important to Ukraine’s economic strength, employing one in 13 people there.A steel mill in Mariupol under siege by Russian forces sheltered thousands of Ukrainian soldiers and civilians for weeks. Russian and Ukrainian officials said on Saturday that all the women, children and elderly people who had been trapped for weeks in the plant were evacuated.“For steel mills to continue as an economic lifeline for the people of Ukraine, they must be able to export their steel,” Gina M. Raimondo, the commerce secretary, said in the announcement. “Today’s announcement is a signal to the Ukrainian people that we are committed to helping them thrive in the face of Putin’s aggression, and that their work will create a stronger Ukraine, both today and in the future.”The move is one of a variety of economic measures aimed at penalizing Russia and assisting Ukraine. Those include a broad swath of sanctions on Russian entities, export controls that have limited Russian imports and $3.8 billion in arms and equipment for the Ukrainian government, in addition to other direct financial assistance.Senators called on the administration last month to lift the steel tariffs, saying it would help the industry bounce back immediately after the war.“Lifting the U.S. tariff on steel from Ukraine is a small but meaningful way for the U.S. to signal support for Ukraine and to provide stability,” Senators Patrick J. Toomey, Republican of Pennsylvania, and Dianne Feinstein, Democrat of California, wrote in a letter.Many other major steel-producing countries have had their tariffs lifted or eased. During his presidency, Mr. Trump negotiated deals with South Korea, Mexico, Canada and other countries to replace the tariffs with quotas or so-called tariff rate quotas, which restrain the volume of a product coming into the United States but allow at least some of it to be imported at lower tariff rates.Russia-Ukraine War: Key DevelopmentsCard 1 of 3Putin’s Victory Day speech. More

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    Fed's Neel Kashkari confident inflation can come down, but not without some pain

    Minneapolis Fed President Neel Kashkari said Monday he’s confident inflation will come back to the central bank’s 2% target.
    He said he underestimated how persistent price increases would be, adding rate increases to tame inflation will hurt low-income people.

    Minneapolis Federal Reserve President Neel Kashkari said Monday he’s confident inflation will come back to normal, though he added it will take longer than he expected.
    Acknowledging that he was on “team transitory” in believing that surging prices wouldn’t last, he said persistent supply-demand imbalances have generated the highest inflation levels in more than 40 years.

    While the Fed’s monetary policy tools can help tamp down demand, they can’t do much to get supply to keep up.
    “I’m confident we are going to get inflation back down to our 2% target,” he told CNBC’s “Squawk Box” in a live interview. “But I am not yet confident on how much of that burden we’re going to have to carry versus getting help from the supply side.”

    Neel Kashkari
    Anjali Sundaram | CNBC

    His comments come less than a week after the Federal Open Market Committee raised benchmark rates by a half percentage point. The 50 basis point hike was the largest increase in 22 years and sets the stage for a series of similar-sized moves in the months ahead.
    Though Kashkari historically has favored lower rates and looser monetary policy, he has voted in favor of the two increases this year as necessary to control spiraling prices. He noted, though, that the burden from tighter policy will fall on those at the lower end of the wage spectrum.
    “It’s the lowest-income Americans who are most punished by these climbing prices, and yet your policy tools to tamp down inflation most directly affect those lowest-income Americans as well, either by raising the cost to get a mortgage … or if we have to do so much that the economy were to go into recession,” he said. “It’s their jobs that are most likely put at risk.

    “So this is a difficult challenge I think for all of us, but we also know that letting inflation stay at these very high levels, it’s not good for anybody and it’s not good for the economy’s long-run potential for anybody across the income distribution,” he added.
    On Wednesday, the government will release its latest data on consumer prices, followed by April producer prices on Thursday.
    Economists expect the pace of inflation to have eased a bit in April, with the headline consumer price index likely to show an 8.1% increase over the past year, and 6% excluding food and energy, according to Dow Jones estimates. That compares to March’s respective climbs of 8.5% and 6.5%.
    Those kinds of numbers provide some comfort to Kashkari, though he said conditions remain challenging as long as the supply and demand imbalances remain.
    “We just need to keep paying attention to the data,” he said. “Some of the more recent inflation data by some measures is a little softer than we had thought might come in. So maybe there’s some evidence that things are starting to soften by a hair. But we just need to keep paying attention to the data and see where it comes out before we can draw any conclusions.”

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    Taxpayers May Foot Bill for Penn Station Revitalization, Report Says

    New York State wants to rebuild the transit hub in Midtown Manhattan and pay for the improvements through a larger real estate development.To restore the ailing Pennsylvania Station, both Gov. Kathy Hochul and her predecessor endorsed an extraordinary reimagining of Midtown Manhattan with 10 super-tall skyscrapers — among the largest real estate projects in American history.The ambitious undertaking would be complex but necessary, they said, as the development of new towers would help pay for much-needed improvements at Penn Station, which was, before the pandemic, the busiest train station in the Western Hemisphere and, perhaps, the most universally disliked.But just as New York State is set to approve the project as soon as next month, a new analysis by New York City’s Independent Budget Office has raised serious questions about the financial viability of the development, the state’s role in it and the possibility that taxpayers would have to foot the bill if the revenue its boosters are expecting fails to materialize.Most strikingly, the report concludes, New York State has provided so few financial details about the 18.3-million-square foot project, that it is all but impossible to analyze the plan on the merits. The state’s cost projections have run the gamut from an original estimate of between $30 billion to $40 billion, to an estimate closer to $20 billion, now that the state is no longer bundling the Hudson Tunnel into the same project estimate, it said.The reconstruction of Penn Station would be complete in 2032, before construction would start on half of the towers, largely consisting of office space, demand for which has declined markedly because of the pandemic-induced shift to working from home. The last building would be finished in 2044.During that 12-year gap, the city agency said, revenue from the new buildings’ office leases, hotel rooms, retail and residences may not be enough to pay for the completed transit improvements, which would force taxpayers to cover the bill.“Without this information, it doesn’t seem reasonable to actually be moving on to approving this program,” George Sweeting, the acting director of the Independent Budget Office, the nonpartisan agency that monitors the city budget, said in an interview.A spokesman at the Empire State Development Corporation, the state agency leading the redevelopment, said that the project would not be brought to its board for approval until the financial questions have been resolved. Agency officials said that the city would be protected from financial risk because any shortfalls would be covered by the state.“In addition to cooperating with the I.B.O. on its report, E.S.D. will continue to work with the community, the city, stakeholders and elected officials to ensure their priorities, including a fair financial structure, are in place prior to securing public approval,” the spokesman, Matthew Gorton, said.“We will finally transform the area’s neglected business district, create much-needed affordable housing and social services, vastly enhance the commuter experience and provide a foundation for sustainable growth for the city and the broader region,” he added.Ms. Hochul revised the proposed development plan, which was first introduced by her predecessor, in response to concerns over the size of the project.Cindy Schultz for The New York TimesDespite the report’s findings, a spokesman for Mayor Eric Adams said that his administration was still committed to the state’s redevelopment plan.“We are working constructively with our state partners to advance a project that transforms Penn Station and the surrounding area into the world-class transit hub New Yorkers deserve, in a fiscally responsible way,” the spokesman, Charles Lutvak, said.The report amplifies many of the criticisms that were first raised by elected officials and community leaders when former Gov. Andrew M. Cuomo revealed the full scope of the project a year ago, just months before he resigned amid sexual-assault allegations.It also echoes similar questions about the project’s finances posed by the New York City Planning Commission in a letter in January to Empire State Development.“The project needs to be retired,” said Layla Law-Gisiko, a community board member in Midtown Manhattan who is running to represent the area in the State Assembly. “The rationale for this project to go forward is to generate the revenue. And this particular project is going to be costing money and not producing revenue.”In many ways, the project mirrored Mr. Cuomo’s other efforts to put his imprint on the city, including the renovation of the Moynihan Train Hall across the street from Penn Station and his reconstruction of the city’s major airports in Queens.In this case, the funds from the development would pay for cosmetic improvements at Penn Station, as well as a potential expansion of the station a block south of its current location. New tracks and platforms would add rail capacity along the economically vital corridor connecting commuters in New Jersey to jobs in New York, after a second tunnel is built under the Hudson River.The state would wield its authority to overrule local zoning and planning laws so that developers could build bigger buildings at the site than otherwise allowed. When Ms. Hochul succeeded Mr. Cuomo, she continued the state’s support for the project while making modest changes to appease critics, such as expanding pedestrian pathways and slightly reducing the project’s proposed scale.The report also highlights a key concern from critics: It would largely benefit a single company, Vornado Realty Trust, one of the city’s largest office developers. Vornado owns four sites in the development zone and part of a fifth, and its chief executive, Steven Roth, last year donated the maximum, $69,700, to Ms. Hochul’s campaign.Mr. Roth, along with his family members, also gave Mr. Cuomo about $400,000 in campaign donations before he resigned. State officials and a Vornado spokesman have said the donations did not influence Vornado’s role in the venture. Mr. Roth has called the redevelopment of the Penn Station area Vornado’s “Promised Land.”In an earnings call this week, Mr. Roth reiterated the company’s commitment to the state’s project. “Obviously, we support it,” he said.A Vornado spokesman declined to comment on the record on the report.Despite the state’s multiyear work on the project and its imminent approval, the Independent Budget Office found that the plan lacked a robust analysis of the numerous risks, including the consequences of the shift to remote work and whether the new Penn Station towers could negatively impact Hudson Yards, the enormous development on the far West Side of Manhattan. Hudson Yards opened in 2019 and has a similarly structured tax deal as the proposed Penn Station site.“It’s a flashing yellow light that the Penn Station redevelopment plan at this stage has more questions than answers,” said Brad Hoylman, the State Senator whose district encompasses most of the proposed development. “There are significant risks that the state has not yet addressed.”Officials have not reviewed whether a simple rezoning of the area to spur redevelopment could produce greater economic benefits and property-tax collections than the state’s project, the agency said. Yet, without the state’s proposal, the area is unlikely to entice developers, the agency said, noting the lack of construction in the Penn Station area. And while the mayor is pro-development, such a rezoning would be unlikely to proceed through the current City Council.The state’s proposed financial scheme would suspend additional property taxes on the new towers but require Vornado and other developers to contribute an undetermined share of their revenues to pay down the construction costs at Penn Station.But without financial specifics, the report said, it is not possible to determine whether the developers would pay less to the city and state in this deal than if the new buildings were subject to standard property taxes. And, while the state would still be collecting payments from developers, the city would lose out on extra property-tax revenue that it would have earned under a standard rezoning.While the Penn Station area has not had seen large redevelopment in decades, Vornado executives have explored such projects in the area for years, which the city agency noted “may signal that little additional incentive is needed, if at all, for those sites.”John Kaehny, the executive director of Reinvent Albany, a government watchdog group, said that the Independent Budget Office’s report makes clear that “the project does not stand up under scrutiny.”“It’s an issue of putting a lot of taxpayers at risk for no reason other than helping Vornado,” Mr. Kaehny said. “It just doesn’t make sense from a public-financing and public-policy perspective.” More

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    What’s Your Rate of Inflation?

    Inflation is at the highest level in four decades. But how you experience it can vary greatly depending on what you eat, how much you travel and your other spending habits. Answer seven questions to estimate your personal inflation rate.

    The numbers above are derived from the Consumer Price Index, the best-known measure of inflation. The C.P.I. is based on a “basket of goods”: The prices of hundreds of commonly purchased goods and services, from cookies to cars to college tuition, are blended together, with each product counted in proportion to its share of overall spending.

    Clothing, for example, accounts for about 2.5 percent of the average American’s monthly spending, so clothes prices make up that share of the index. But those are averages — if you spend more than 2.5 percent of your budget on clothes, your personal rate of inflation will look different.

    Prices are rising pretty much across the board now, but the increases are particularly rapid in some categories, like meat, cars and travel. People who spend a lot on those categories are experiencing much faster inflation as a result.

    The calculator above adjusts your rate of inflation based on how much more or less you spend on different products than the average American. It doesn’t account for other factors, like whether you live in a more expensive part of the country or are more likely to shop around for bargains. Even so, it reveals a wide range of different experiences: Based on how you answered the questions above, you might have a “personal inflation rate” as low as 5 percent or as high as 15 percent.

    Even a 5 percent inflation rate is high by the standards of recent history – before the pandemic, prices in the United States were rising about 2 percent a year. But when it comes to inflation, small differences have a big impact. At 5 percent, prices double in about 15 years. At 7 percent, prices double in just over 10 years. And at 15 percent, prices double in only five years.

    Oil price boom

    Perhaps the clearest case study in how people experience inflation differently is gasoline.

    Gas prices have shot up in recent months, partly because Russia’s invasion of Ukraine roiled global energy markets. Prices were up 48 percent in March from a year earlier, accounting for a fifth of the increase in the overall Consumer Price Index. More

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    NLRB Finds Merit in Union Accusations Against Amazon and Starbucks

    In a sign that federal labor officials are closely scrutinizing management behavior during union campaigns, the National Labor Relations Board said Friday that it had found merit in accusations that Amazon and Starbucks had violated labor law.At Amazon, the labor board found merit to charges that the company had required workers to attend anti-union meetings at a vast Staten Island warehouse where the Amazon Labor Union won a stunning election victory last month. The determination was communicated to the union Friday by an attorney for the labor board’s regional office in Brooklyn, according to Seth Goldstein, a lawyer representing the union.Such meetings, often known as “captive audience” meetings, are legal under current labor board precedent. But last month, the board’s general counsel, Jennifer Abruzzo, issued a memo saying that the precedent was at odds with the underlying federal statute, and she indicated that she would seek to challenge it.In the same filing of charges, the Amazon Labor Union accused the company of threatening to withhold benefits from employees if they voted to unionize, and of inaccurately indicating to employees that they could be fired if the warehouse were to unionize and they failed to pay union dues. The labor board also found merit to these accusations, according to an email from the attorney at the regional office, Matt Jackson.Mr. Jackson said the agency would soon issue a complaint reflecting those accusations unless Amazon settled the case. The complaint would be litigated before an administrative law judge, whose decision could be appealed to the labor board in Washington.Understand the Unionization Efforts at AmazonBeating Amazon: A homegrown, low-budget push to unionize at a Staten Island warehouse led to a historic labor victory. (Workers at another nearby Amazon facility rejected joining a similar effort shortly after.)Retaliation: Weeks after the landmark win, Amazon fired several managers in Staten Island. Some see it as retaliation for their involvement in the unionization efforts.A New Playbook: The success of the Amazon union’s independent drive has organized labor asking whether it should take more of a back seat.Amazon’s Approach: The company has countered unionization efforts with mandatory “training” sessions that carry clear anti-union messages.Mr. Goldstein applauded Ms. Abruzzo and the regional office for taking “decisive steps ending required captive audience meetings” and said the right to unionize “will be protected by ending Amazon’s inherently coercive work practices.”Kelly Nantel, an Amazon spokeswoman, said in a statement that “these allegations are false and we look forward to showing that through the process.”At Starbucks, where the union has won initial votes at more than 50 stores since December, the labor board issued a complaint Friday over a series of charges the union filed, most of them in February, accusing the company of illegal behavior. Those accusations include firing employees in retaliation for supporting the union; threatening employees’ ability to receive new benefits if they choose to unionize; requiring workers to be available for a minimum number of hours to remain employed at a unionized store without bargaining over the change, as a way to force out at least one union supporter; and effectively promising benefits to workers if they decide not to unionize.In addition to those allegations, the labor board found merit to accusations that the company intimidated workers by closing Buffalo-area stores and engaging in surveillance of workers while they were on the job. All of those actions would be illegal.In a statement, Starbucks Workers United, the branch of the union representing workers there, said that the finding “confirms the extent and depravity of Starbucks’s conduct in Western New York for the better part of a year.” It added: “Starbucks will be held accountable for the union-busting minefield they forced workers to walk through in fighting for their right to organize.”Starbucks said in a statement that the complaint doesn’t constitute a judgment by the labor board, adding, “We believe the allegations contained in the complaint are false, and we look forward to presenting our evidence when the allegations are adjudicated.” More