Raphael Stevens

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    Jokowi lays out his pitch for why Elon Musk should invest in Indonesia

    Indonesia, Southeast Asia’s largest economy, has abundant natural deposits of tin, copper, nickel, cobalt and bauxite, some of which are key materials for electric vehicle batteries.
    Indonesian President Joko Widodo said the government has been in talks with electric carmaker Tesla as well as Ford and other car companies to set up manufacturing facilities, including a vehicle factory, in Indonesia.
    Widodo, or Jokowi as he is popularly known at home, said he suggested to Elon Musk that Tesla could build base its entire supply chain in the country.

    Elon Musk, here seen at an event in New York in early-May, is being aggressively courted to produce his electric vehicles “end to end” in resource-rich Indonesia.
    Angela Weiss | AFP | Getty Images

    President Joko Widodo denied that Indonesia has turned protectionist during his tenure, saying the gates remain open to all players — including Tesla — that want to use the country’s plentiful natural resources, if they set up plants that can add to the local economy.
    Widodo, or Jokowi as he is popularly known at home, said the government has been in talks with electric carmaker Tesla as well as Ford and other car companies to set up manufacturing facilities, including a vehicle factory, in Indonesia.

    The Indonesian president said he met Elon Musk, Tesla’s chief executive officer and the world’s richest man, in May after U.S. President Joe Biden hosted a summit for Southeast Asian leaders. Jokowi said he suggested that Tesla could base its entire supply chain in the country.
    “We had a lot of discussions, particularly on how Tesla can build their industry from upstream to downstream, end-to end starting from smelter then build the cathode and precursor industry, build EV batteries, build lithium batteries [and] then the vehicle factory. Everything in Indonesia, because that’s very efficient. That’s what I offered,” Widodo told CNBC in an exclusive interview on Friday in Serang city in Banten province.
    He said Musk sent a team to Indonesia six weeks ago “to check the potential of nickel, to check environmental aspects, but the car-related team has not come.”  
    He said a team could visit in the “near future” to evaluate the potential. Jokowi, who has also invited Musk to the G-20 summit, which Indonesia is hosting this year in Bali, said there is “no decision yet” on Tesla’s plans to invest in Indonesia. 

    We want to build an industrial ecosystem for lithium batteries.

    Joko Widodo
    President, Indonesia

    Indonesia, Southeast Asia’s largest economy, has abundant natural deposits of tin, copper, nickel, cobalt and bauxite, some of which are key materials for electric vehicle batteries.

    Under Jokowi, resource-rich Indonesia has banned the export of key commodities, including unprocessed nickel in 2020, coal in 2021 and edible oil in April. The last measure was aimed at stabilizing domestic prices.
    “No, I think it’s not protectionism. But we want that added value to be in Indonesia … If we keep exporting the raw materials, the ones who get the added value are other countries,” he said.
    In a bid to boost its economy and put its natural resources to use in domestic manufacturing, Indonesia wants to move away from exporting raw materials. It also wants to be a global player in EV batteries and a manufacturer of electric cars. 
    “We want to build an industrial ecosystem for lithium batteries,” Jokowi said, arguing this would also create jobs and generate tax revenue.

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    People’s inflation expectations are rising—and will be hard to bring down

    Consumer prices across the rich world are rising by more than 9% year on year, the highest rate since the 1980s. Worryingly, there is growing evidence that the public is starting to expect consistently high inflation. Figures suggesting that Americans’ medium-term expectations of inflation had risen helped set off the market turmoil of last week, which culminated in the Federal Reserve raising interest rates by three-quarters of a percentage point. Central banks urgently need to convince people that they are serious about getting inflation down. But a range of evidence suggests that changing the public’s mind could be extraordinarily difficult. The difference in views of expert and lay groups has become gaping. Bernardo Candia, Olivier Coibion and Yuriy Gorodnichenko, three economists, look at the inflation expectations of four groups in America (see chart). Those of professional forecasters and financial markets remain close to the Fed’s target of 2%. But consumers’ beliefs increasingly do not. They expect prices to rise by over 5% over the next year. Firms, exposed to surging commodity, wage and other input costs, expect even higher inflation. Expectations are rising outside of America, too. A dataset put together by the Cleveland Fed, Morning Consult, a consultancy, and Raphael Schoenle of Brandeis University gauges public inflation expectations in various places. In May 2021 a respondent in the median rich country thought inflation over the next year would be 2.3%. Now they expect a rate of 4.2%. Central banks face a problem in getting these expectations down again. This is because few people, aside from investors and financial journalists, pay much notice to what they say. A new paper by Alan Blinder of Princeton University and colleagues puts it more drily. “Households and firms have a low desire to be informed about monetary policy.” A survey in 2014 found that only a quarter of Americans could pick out Janet Yellen as the then-chairwoman of the Fed, from a list of four. Four in ten Americans believe that the Fed’s inflation target exceeds 10%. Small wonder that the impact of its policy announcements on inflation expectations is “muted”, according to a recent study by Fiorella De Fiore of the Bank for International Settlements, and colleagues. Nor are Americans alone. In the late 2000s researchers at the Bank of Italy assessed whether people knew what inflation was. Many had only a fuzzy understanding—with half of respondents confusing price changes with price levels. In recent years Japan has implemented forceful monetary easing in order to boost inflation. But in 2021 more than 40% of Japanese people had “never heard” of the plan, according to an official survey. In the years before the pandemic, public apathy to monetary policy did not much matter. Inflation was low and stable. Now it matters a lot. Spiralling expectations could become embedded in wages and prices, pushing headline inflation higher still. Central bankers’ conventional toolkits may do little to bring them down. Even the effect of raising interest rates is not totally clear: twice as many Americans believe that higher rates raise inflation than reduce it, according to a recent The Economist/YouGov poll. What more can be done? History points to several options. One is to make drastic or unexpected announcements. This could involve raising interest rates outside of scheduled meetings—a decision taken by India’s central bank in May. The European Central Bank (ecb) has used this trick in pursuit of another goal: keeping down government-bond spreads, which would otherwise threaten a debt crisis. In 2012 Mario Draghi, then the head of the bank, made an impromptu promise to do “whatever it takes” to save the euro. According to research by Michael Ehrmann of the ecb and Alena Wabitsch of Oxford University, the words generated high traffic on Twitter among non-experts, suggesting they had cut through. The genius of the statement, other research suggests, was that it focused on the end (“preserve the euro”) rather than the means (“buying bonds”), which is easier for the public to understand. The ecb has tried to repeat the trick more recently, such as by calling an emergency meeting to address widening spreads. Others have played the long game. Paul Volcker, the Fed’s chairman from 1979 to 1987, cultivated a reputation as what economists call an inflation “nutter”: someone willing to tolerate high unemployment to defeat the beast. The public eventually got the message. A recent paper by Jonathon Hazell of the London School of Economics and others argues that post-Volcker “shifts in beliefs about the long-run monetary regime” proved more important than any other factor in conquering inflation before covid-19. Andrew Bailey, the head of the Bank of England, has been trying to embrace his inner Volcker, such as by giving Britons the impression that he cares more about inflation than he does their wages. Public enemy number oneAnother solution is for politicians to get involved. This has potential drawbacks. Politicians often advocate crackpot anti-inflation schemes such as price controls. Still, they might be able to help. After all, 37% of Americans believe that the president has “a lot” of control over inflation, compared with 34% for the Fed. Jimmy Carter’s appointment of Volcker in 1979 showed that he was serious about getting inflation down. In Britain, Margaret Thatcher and her henchmen talked tough on price stability; their willingness to slash government budgets probably backed up those words, by cooling the economy. Today in America, President Joe Biden says that “fighting inflation” is his “top economic priority” (though he shows less inclination to tighten fiscal policy). Public apathy towards central banking may be a backhanded compliment to the policymakers of the 1980s and 1990s. No one needed to care about inflation when it was low. Today’s policymakers are constrained by that very success. To get inflation expectations back down, then, they may need to try everything in their power to get people to sit up and listen. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

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    Pixar's 'Lightyear' snares $51 million in domestic opening

    Pixar’s “Lightyear” rocketed to a $51 million domestic opening, the best performance of an animated feature since the pandemic began.
    Box office analysts had foreseen “Lightyear” bringing in between $70 million and $85 million domestically.
    Internationally, the Disney film tallied $34.6 million in ticket sales, bringing its global haul to $85.6 million.

    Chris Evans voices Buzz Lightyear in Pixar’s “Lightyear.”

    Pixar’s “Lightyear” rocketed to a $51 million domestic opening, the best performance of an animated feature since the pandemic began.
    Internationally, the Disney film tallied $34.6 million in ticket sales, bringing its global haul to $85.6 million.

    The animated film’s performance, while strong for a pandemic release, falls short of expectations. Box office analysts had foreseen “Lightyear” bringing in between $70 million and $85 million domestically.
    Expectations were high because the last two films in the Toy Story franchise both opened to more than $100 million in ticket sales, according to data from Comscore. “Toy Story 4” in 2019 topped $120 million in its domestic debut and “Toy Story 3” generated more than $110 million during its opening 2010.
    “‘Lightyear” had a great deal of potential on paper, but a number of factors resulted in this very rare box office misfire for a Pixar release,” said Shawn Robbins, chief media analyst at BoxOffice.com.
    It’s unclear if tough box office competition with Universal’s “Jurassic World: Dominion,” which generated $58.6 million over the weekend, and Paramount and Skydance’s “Top Gun: Maverick,” which secured another $44 million, was the reason for “Lightyear’s” smaller-than-expected opening or if consumers were confused about the film release.
    After all, there has not been a theatrical release of a Pixar film since 2020’s “Onward.” The last three from the animation studio, “Soul,” “Luca” and “Turning Red,” were all released on streaming service Disney+.

    “Did the film open in a market too crowded with male-driven films?” Robbins asked. “Was marketing ineffective at pitching the idea of this movie to both generations of Toy Story fans? Has Disney’s strategy of siphoning Pixar movies straight to streaming over the past two years backfired and hurt the brand’s value?”
    “These are just some of the valid questions we, and especially Disney, have to consider,” he said.
    Robbins noted that moviegoing has clearly rebounded in 2022, drawing in demographics that have been reticent to return previously. Yet, one of the most reliable franchises from pre-pandemic times missed expectations.
    “This was a good old-fashioned summer holiday movie weekend that saw three films earning more than $40 million as the competition for the attention of moviegoers heats up,” said Paul Dergarabedian, senior media analyst at Comscore. “Newcomer ‘Lightyear’ will now rely on a longer trajectory in theaters in the wake of a debut that has left some underwhelmed.”
    Dergarabedian said word of mouth should help draw families to the theaters in the coming weeks ahead of the release of Universal’s “Minions: The Rise of Gru.”
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Jurassic World: Dominion” and “Minions: The Rise of Gru.”

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    Many younger baby boomers may outlive their 401(k) savings, new research finds. Here's why

    A new study finds that retirees spend down their 401(k) savings balances at an alarming speed.
    Many older Americans could be at risk of emptying their accounts by 85, although half of them will live beyond then.

    Elena Kurkutova | Istock | Getty Images

    Older Americans may have a number of different goals with their retirement savings. But usually their main goal is the same: to make it last.
    Unfortunately, many younger baby boomers and members of subsequent generations who don’t have access to a traditional pension could outlive the funds in their 401(k) accounts, a recent study from the Center for Retirement Research at Boston College found.

    The economists compared the drawdown speeds between those with traditional pensions and those with only 401(k) savings accounts. Although most research on how long retirees’ money lasts is based on the former category, the majority of people now fall into the latter.
    More from Personal Finance:Inflation forces older Americans to make tough financial choicesRecord inflation threatens retirees the most, say advisorsTips for staying on track with retirement, near-term goals
    “What most of people have had the chance to observe were people with traditional pensions,” said Gal Wettstein, a senior research economist at the Center for Retirement Research at Boston College, pointing out that 401(k) workplace retirement plans only became widespread in the 1980s.
    Those analyses based on retirees with pensions found that they often didn’t spend their savings at all. In fact, many saw their nest eggs continue to grow after they stopped working.
    “This sanguine idea from the past might give a false sense of security though,” Wettstein said.

    Retirees with 401(k)s often spend savings quickly

    Access to traditional pensions has been rare for decades now. Workers have increasingly been tasked with saving for their later years on their own in investment accounts, the poster child for which has been the 401(k) plan offered through employers.

    The researchers found that these plans deplete much faster than expected.
    One example in the analysis looked at households who entered retirement with $200,000 in savings. By age 70, retirees who had a 401(k) plan but no pension had $28,000 less than retirees with a pension, according to their analysis — a difference that amounts to one-eighth of that initial balance. By age 75, 401(k) savers had $86,000 less than those who had had a pension.

    “People spend a large share of what they have when they have a 401(k),” Wettstein said.
    The fast drawdown of savings in 401(k) accounts means that many retirees depending on them may be at risk of exhausting their funds entirely by the age of 85, although around half of them will live beyond then, the study said.
    Although they’ll still receive their monthly Social Security checks, Wettstein said, “that’s usually not a sufficient replacement for their career-level earnings.”

    Pensions helped with ‘how much you could afford’

    Because of the relatively new nature of 401(k) plans, more still needs to be known about why retirees spend down the accounts so quickly, Wettstein said.
    Yet some of the reasons can be assumed. Those who had a traditional pension, which guarantee a fixed payment each month until death, likely needed to turn to their savings less because of that reliable income. They may have been able to keep their savings for inheritance purposes or in case of unexpected later-in-life costs.

    We did this as a first look of whether we should be worried.

    Gal Wettstein
    a senior research economist at the Center for Retirement Research at Boston College

    On the other hand, many retirees without a pension are reliant on their own nest egg to cover much of their monthly expenses. Without a pension, people are also responsible for making sure they’ve saved enough to get them through their post-working years, a task that requires decades of adequate earnings and discipline.
    In addition, a challenge with 401(k) savings plans is that they charge retirees with figuring out how much to withdraw each month. This calculation can be hard to hit right, and although those with sizeable savings aim to live off their money’s earnings, the market is unpredictable and has periods — such as right now —where it takes more than it gives.

    “One of the advantages of the pension system was that it reassured you how much you could afford to spend, practically, in that it would never run out, and in the advice-sense, too, because it says, ‘Here, you can spend this much, because next month, you’ll get the same amount again,'” Wettstein said. “A 401(k) doesn’t give you that.”
    Wettstein stressed that it’s still early to get a full picture of how successful 401(k) accounts are at lasting people in their retirement.
    “But we did this as a first look of whether we should be worried,” he said. “And the conclusion we took is, yes, we should.”
    This article was written with the support of a journalism fellowship from The Gerontological Society of America, The Journalists Network on Generations and the Silver Century Foundation.

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    Children as young as 6 months eligible for Covid shots in U.S., vaccinations to begin Tuesday

    The Centers for Disease Control and Prevention has signed off on Covid vaccines for children 6 months through 5-years-old.
    Doctor’s offices, pharmacies and other providers can now start administering the shots.
    However, vaccinations likely won’t begin in earnest until Tuesday after the Juneteenth federal holiday.

    A child is administered a dose of the Pfizer-BioNTech coronavirus disease (COVID-19) pediatric vaccine.
    Mayela Lopez | Reuters

    The Centers for Disease Control and Prevention on Saturday backed Pfizer’s and Moderna’s Covid-19 shots for children as young as 6 months, with vaccinations expected to begin in earnest after the holiday weekend.
    The CDC’s committee of independent vaccine experts voted unanimously to recommend the shots for infants through preschoolers after two days of public meetings. CDC Director Dr. Rochelle Walensky accepted the committee’s recommendation and gave the final go-ahead on Saturday.

    The White House has said vaccinations for children under age 5 would begin in earnest on Tuesday, after the Juneteenth federal holiday. Appointment availability might be limited initially but every parent who wants to get their child vaccinated should be able to do so in the next few weeks, according to Dr. Ashish Jha, who oversees the Biden administration’s Covid response.
    The federal government has initially made 10 million vaccine doses available to its local partners. There are nearly 20 million children 6 months through 5-years-old in the U.S.
    The CDC is encouraging parents to reach out to their family doctor, local pharmacy, health department or visit vaccines.gov to find out where the shots are available for their kids.
    Nearly everyone in the U.S. is now eligible for Covid vaccination less than two years after the first shots were authorized for the elderly in December 2020.
    “I am fully confident that vaccines should be recommended,” said Dr. Grace Lee, chairperson of the CDC’s vaccine committee. “We can clearly prevent hospitalizations and deaths. And I believe we have the potential to prevent long-term complications of infections that we don’t yet understand.”

    The American Academy of Pediatrics, in a statement Saturday, strongly recommended that parents get their kids vaccinated and bring any questions or concerns they may have to their family doctor.

    Covid risk for kids

    Although Covid is normally less severe in children than adults, the virus can be life threatening for some kids. Covid is the fifth leading cause of death for children ages 1 to 4, according to CDC data. More than 200 children ages 6 months to 4-years-old have died from Covid since January 2020.
    More than 2 million children in this age group have been infected with Covid during the pandemic, and more than 20,000 have been hospitalized, according to CDC data.
    Hospitalizations of children under age 5 with Covid spiked during the winter omicron wave, hitting the highest level of the pandemic for this age group. The overwhelming majority of them, 86%, were admitted primarily due to the impact of Covid on their health, according to CDC data. In other words, they were not picked up in the data because they tested positive for the virus after admission for another health reason.
    More than 50% of kids under age 5 who were hospitalized had no underlying medical conditions, according to CDC data. Nearly a quarter of kids hospitalized in this age group ended up in the intensive care unit.
    Nearly 2,000 kids under age 5 developed multisystem inflammatory syndrome, or MIS-C, after Covid infection. MIS-C is a condition in which multiple organ systems – the heart, lungs, kidneys, brain, skin, eyes or digestive organs – become inflamed. Nine kids under age 5 have died from MIS-C.
    “These very clear data just decimate the myth that this infection is not life threatening in this age group,” said Dr. Sarah Long, a committee member and pediatrician at St. Christopher’s Hospital for Children in Philadelphia.

    Pfizer, Moderna vaccine differences

    Pfizer’s vaccine is administered in three doses for children 6 months to 4 years old. The shots are dosed at 3 micrograms, one-tenth the level of what adults receive. Three shots were about 75% effective at preventing mild illness from omicron in 6-month- to 2-year-olds and 82% effective in 2- to 4-year-olds.
    However, the data on the vaccine’s effectiveness is preliminary and imprecise because it is based on a small population of 10 kids, with estimates ranging from 14% to 96% protection against omicron. Dr. Bill Gruber, head of Pfizer’s vaccine research, said the antibody response observed in children post dose three, which was higher than people ages 16 to 25 who received two shots, should provide reassurance that the vaccine is effective.
    “In the interest of sort of full transparency to parents, it’s to me appropriate to acknowledge the uncertainty around that,” committee member Dr. Matthew Daley said of the vaccine efficacy estimate.
    It is crucial that parents who opt for Pfizer make sure their kids get the third shot to have protection against the virus. Two doses were only about 14% effective at preventing infection for kids under age 2, and 33% effective for those ages 2 to 4.
    “I don’t want parents to get the impression that two doses is sort of good enough,” said Daley, a pediatrician who investigates vaccine safety.
    Moderna’s vaccine is administered in two doses for children 6 months to 5 years old. The shots are dosed at 25 micrograms, one-fourth the level that adults receive.
    Moderna’s vaccine was about 51% effective at preventing mild illness from omicron for kids 6 months to 2 years old, and about 37% effective for kids ages 2 to 5 years old. However, the company expects the vaccine to provide strong protection against severe illness because the kids had higher antibody levels than adults who received two doses.
    Moderna is studying a booster dose that targets omicron for children in this age group with data expected on the shot’s safety and immune response expected in the fall, according to Dr. Rituparna Das, who leads Moderna’s Covid vaccine development.
    The most common side effects from the vaccines were pain at the injection site, irritability and crying, loss of appetite and sleepiness, according to the FDA. Few children who received either shot developed a fever higher than 102 degrees Fahrenheit, and there were no cases of myocarditis, a type of heart inflammation, in Pfizer’s or Moderna’s trials.

    CNBC Health & Science

    Read CNBC’s latest global coverage of the Covid pandemic:

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    Microsoft finds Gen Z is redefining the idea of work hustle in and outside the office

    Almost two-thirds of Gen Z Americans have started, or intend to start, their own business.
    Nearly half of Gen Z, about 48%, have numerous side hustles, compared to 34% of small business owners. 
    New business formation boomed since the pandemic, but it was as much a story of necessity as opportunity.

    Inga Kjer | Photothek | Getty Images

    For decades Microsoft has been associated with a traditional definition of office work, long hours in front of a computer, but now the corporate enterprise giant finds Gen Z entrepreneurs disrupting ideas about workplace hustle and the traditional 9-5 day. Many recent Gen Z college graduates are flipping the career paradigm and pursuing entrepreneurship rather than entering the corporate world. 
    “We’ve seen a lot of reimagination during the pandemic and a lot of digital transformation, which I think really has propelled what we see as a bit of a boom in entrepreneurship,” says Travis Walter, vice president of retail at Microsoft Store. Almost two-thirds (62%) of Gen Z has indicated they have started, or intend to start, their own business, according to data from WP Engine and the Center for Generational Kinetics. Meanwhile, in 2021 alone, 5.4 million Americans submitted applications to start their own business, according to government data.  

    The traditional idea of “hustle culture” has evolved over the years, and while the grind Gen Z puts in looks slightly different than millennials, it doesn’t mean they’re doing any less work. Instead, these entrepreneurs wear multiple hats with flexible work schedules, working vacations and more consideration for personal time. Nearly half of Gen Z, about 48%, have numerous side hustles, compared to 34% of small business owners, according to Microsoft’s survey, conducted by Wakefield Research across 1,000 small business owners with less than 25 employees. Many of these businesses overlap with the rise in social media marketing. Entrepreneurs who use TikTok for their business (48%) are almost twice as likely to have multiple side hustles as those who do not (27%), according to the Microsoft data.
    “I think it’s important to let people work the way they need to work because then they can actually do their best work, as we’re seeing with entrepreneurs and Gen Z,” Walter said.
    Microsoft’s data shows 91% of Gen Z entrepreneurs work unconventional hours; 81% say they work on vacation, compared to 62% of business owners overall. 
    “What do I truly want to do?” is a question being asked more frequently, according to Philip Gaskin, vice president of entrepreneurship at the Ewing Marion Kauffman Foundation. “That’s some of that Gen Z energy,” he said.
    Gen Z graduates are coming into the workforce during the pandemic period of “rediscovery,” Gaskin said, a reevaluation of personal and professional goals by many Americans across generations. Some people who may have been bored of their corporate jobs, or felt stale at a point in life, were given the time to pause and reevaluate. Many people who saw an opportunity went for it during the pandemic, often with new technology ideas. The boom in new business formation isn’t uniformly a rosy scenario. In some cases, it is a function of necessity, according to Kauffman’s analysis, with people who lost their jobs needing new forms of income.

    This shift is correlated with a rate of new entrepreneurs that has been growing for several years, with 2020 showing the highest spike of all, according to Kauffman Foundation data. And it has big implications for the labor market. “Most jobs created over the last five years were provided by firms less than five years old,” Gaskin said.
    Gen-Z is also leaning more towards the entrepreneurship path rather than getting involved in corporate America right out of college because many see it as a way to fast-track their retirement. About 61% of Gen Z small business owners believe they will be able to retire faster than if they had gotten a corporate job, compared to 40% of all small business owners who hold this view, according to the Microsoft survey. Among the broader small business community, amassing retirement savings through investment vehicles has historically been a challenge and much of their income directly reinvested in the business, which has provided reason for concern about financial security among entrepreneurs.

    Mission-driven, problem-solving Gen Z entrepreneur

    Ritwik Pavan, a Gen Z entrepreneur, has already started several businesses.
    “I’ve been on the entrepreneurial journey since high school, and I always wanted to build something because I always had the problem-solving type of mindset,” Pavan said.
    The big idea he landed on after working in various tech niches, including app development, since college, is in urban mobility.
    With co-founders Matthew Schaefer and Christian Burke, he launched Vade in 2018, which helps reduce traffic congestion and carbon emissions by providing real-time parking data for citizens.

    Left to right: Ritwik Pavan (COO), Christian Burke (CTO) and Matty Schaefer (CEO) of Vade discuss venture plans.
    Source: Vade

    “I’m helping all these people solve problems and build their ideas, but I’d love to go find something I’m passionate about solving and for me, that problem was parking,” Pavan said. “The best part about being an entrepreneur is that we’re very mission-driven and believe that what we’re going to do is going to change lives for the better and help cities become better places to live,” he said.
    According to the Microsoft survey, around 88% of all small business owners who prioritize social good say it helped their business grow, including 82% of Gen Z respondents. 
    Pavan is an example of how work hustle has changed. His favorite part about being a small business owner is the flexibility that comes with the job, but that doesn’t mean working fewer hours than a corporate boss like Jamie Dimon or Elon Musk demands.
    “The truth is, as a founder, for the first three years me and my co-workers were working 18-hour days, even 20 hour days, even now sometimes,” Pavan said.
    But being able to make decisions for your own company, he says, makes the long hours worthwhile, even if that also means being responsible for the bad ones. According to the Microsoft data, many Gen Z entrepreneurs start this decision-making, like Pavan, before college, and many don’t see a degree as being critical to their success: 78% of Gen Z entrepreneurs say a college education is “not very necessary” for them to run a business. More

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    How the massive EV transition is starting in the car rental industry

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    Hertz’s $4.2 billion deal to purchase 100,000 Tesla fully electric vehicles (EVs) by the end of 2022 set off a race among rental car agencies.
    Enterprise Holdings and Avis Budget Group have announced their own plans to transition away from the internal combustion engine.
    But for the $56-billion U.S. rental industry, which buys about one-tenth of auto manufacturers’ new cars every year, hundreds of thousands of traditional autos will be rented for years to come.

    Tesla Model 3 electric vehicles at a Hertz airport location.
    Photo by E.R. Davidson

    Not long after Hertz Global Holdings emerged from bankruptcy last summer, reorganized after the Covid-19 pandemic stalled the entire car rental industry, the Estero, Florida-based company boldly announced a $4.2 billion deal to purchase 100,000 Tesla fully electric vehicles (EVs) by the end of 2022. Just like that, the race was on within the industry to transition to EVs from internal combustion engine (ICE) models.
    While Hertz was first off the starting blocks, its two biggest rivals, Enterprise Holdings and Avis Budget Group, have since joined in. But just like the full-scale adoption of EVs among American drivers is going to take years, the rental car shift also will be a marathon, not a sprint. “Companies that operate fleets at our size cannot just turn on a dime and next year go all EV,” said Sharky Laguana, president of the American Car Rental Association. “Our industry wants to move as fast as it can, but there are some serious and challenging constraints.”

    The initial one, Laguana said, “is just getting your hands on the damn things.”
    The $56-billion U.S. rental industry typically buys about one-tenth of auto manufacturers’ new cars every year, but with persistent supply-chain disruptions, especially the shortage of essential computer chips, the numbers are way down. The industry bought 2.1 million vehicles from OEMs in 2019, Laguana said, compared with only about 750,000 in 2021. U.S. sales of EVs doubled in 2021, but still only comprise about 4% of the nation’s total market for cars and trucks.
    Another major speed bump for rental car companies is the paucity of EV charging stations, at airports and other rental locations, hotels, resorts and office buildings, as well as along local roads and interstate highways. And then there’s the challenge of educating and training companies’ agents and mechanics on EVs, not to mention familiarizing drivers on the differences from operating ICE vehicles.
    Hertz does not state the overall number of vehicles in its fleet, said Jeff Nieman, senior vice president, operations initiatives, so it’s unknown how many Teslas are available in the more than 30 markets currently offering EVs, which now also include the first of the 65,000 Polestar 2s — an EV brand jointly owned by Volvo and its Chinese parent Gheely which has planned to go public through a SPAC deal — Hertz began purchasing in a five-year deal announced in April. Nieman did say, however, he is confident that EVs will represent “more than 30% of our fleet by the end of 2024.”

    In the meantime, Hertz has several hundred thousand ICE models in the U.S. that will be rented for years to come, said Chris Woronka, an analyst at Deutsche Bank. Even so, “they’ve decided they’re going to carry the EV torch for the industry and be very outspoken about their plans and goals,” he said.

    Look no further than the spate of Hertz TV spots, starring NFL superstar Tom Brady touting Tesla rentals, that aired during this year’s Super Bowl. Hertz also has created a dedicated area on its website to help educate drivers about EVs.

    Renting EVs to corporates focused on ESG, carbon neutrality

    A primary target for Hertz, according to Woronka, is the corporate market. “The leisure customer might think it’s cool to drive an electric car, but the longer game is on the corporate side,” he said.
    Beyond comparing costs of employees driving EVs versus ICE cars — currently skewed by the national average of around $5 for a gallon of regular gas — companies view EVs as a quantifiable way to reduce their greenhouse gas (GHG) emissions, meet net-zero goals and burnish their environmental, social and governance (ESG) bona fides among sustainability investors and advocacy groups.
    “The initial research has shown that corporate accounts are going to be willing to pay a premium for EVs,” Woronka said, “because it helps them achieve some of their ESG objectives.”
    Not surprisingly, rental companies themselves are embracing this concept, said Sara Forni, director of clean vehicles for the nonprofit Corporate Electric Vehicle Alliance (CEVA). While they certainly “want to get more butts in EV seats,” she said, “they also want to meet their sustainability goals and greenhouse gas emissions reduction targets.”
    Siemens US, an affiliate of the German-based conglomerate, is a flagship member of CEVA and was part of the Hertz EV program launch last fall. “We fully support our global decarbonization and ESG goals,” said Randall Achterberg, North America travel commodity manager, “and our fleet makes the largest Scope 1 emissions footprint and we’re already making progress with an aggressive EV transition strategy,” referring to GHGs produced by Siemens’ U.S. fleet of nearly 10,000 vehicles. “On the corporate travel side, we want to expand our employees’ usage of EVs.”
    To date, Siemens has booked more than 100 EV rentals with Hertz. “We’re not pushing as heavily as we’d like to, because they’re not ready,” Achterberg said, acknowledging the inherent obstacles in its EV rollout. Siemens is alleviating one stumbling block: it builds EV charging stations and has committed to manufacture a million of them in the U.S. over the next three years.

    Enterprise’s early Orlando EV rental car experiment

    Enterprise may not be as out-front as Hertz with its EV rental program, but the privately held company, headquartered in St. Louis, has been in the exploratory stage since 2014. That’s the year it began participating in the Drive Electric Orlando Rental Pilot, a multi-year study sponsored by the Electrification Coalition, a Washington, D.C.-based nonprofit advocating for EV adoption, particularly among fleet owners.
    The pilot, partly funded by the U.S. Department of Energy, was centered at Orlando International Airport and as well comprised resorts and theme parks in the area. “We also had close partnerships with local regulators and policymakers, which was critical in making sure we did this the right way,” said Chris Haffenreffer, assistant vice president of innovation at Enterprise. The company rented all-electric cars, including Chevy Volts and Nissan Leafs to travelers, who were incentivized with perks such as free charging, parking and valet service.
    “Even though EVs were [then] an afterthought in our business, the lessons learned are consistent with what we see today,” Haffenreffer said. Namely, getting employees behind the wheel of EVs is crucial, “so they can communicate actively with customers,” as is partnering with other entities to invest in the charging infrastructure.
    Although the rental companies have said they are building their own charging stations, another critical partner is the U.S. government, which in last year’s bipartisan infrastructure bill earmarked $7.5 billion to states to create a network of EV charging stations. Earlier this month, the Biden administration proposed regulations that would require stations built on interstates with federal dollars to be no more than 50 miles apart.
    Enterprise, like Hertz, is focusing on its commercial-rental fleets and fleet-management division, where business customers will value the lower maintenance and operating costs. “It’s about being a trusted advisor to those customers, helping them understand how to operate an EV and the benefits,” Haffenreffer said. But as with leisure travel renters, figuring out how to get from point A to Point B and how to charge the car is increasingly challenging, Haffenreffer said.
    Parsippany, New Jersey-based Avis saw its stock rocket in early November after it said it was getting into the EV rental business a week after the Hertz-Tesla deal broke, and though its come back down along with the entire market, CEO Joe Ferraro told analysts during a conference call at the time, “You’ll see us going forward be much more active in electric scenarios as the situation develops.”
    Avis has been tight-lipped since then and declined to be comment for this article. But Woronka said, “I take them at their word.” He cited the rental car company’s sizable corporate fleet exposure as a reason. “They’re just not ready to pull back the curtain yet on what they’re doing,” he said.
    U.S. automakers are spending billions to ramp up their EV production. General Motors aims to deliver 400,000 EVs in North America by the end of 2023, and Ford has committed to 600,000 by that same time. Considering that renting an EV is essentially an extended test drive, the rental market is seen as an important driver in President Joe Biden’s plan for half of all new cars and trucks sold in 2030 to be zero-emissions vehicles.
    “From our point of view, the rental car market makes a ton of sense, especially as OEMs get into longer-range electric vehicles,” said Electrification Coalition executive director Ben Prochazka. “What a great way to get consumers exposure to new technology in a low-risk setting.” More

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    Pandemic-era checks rewired how these Americans see money: 'Stimulus changed how I think about what's possible'

    Pandemic-era stimulus checks helped many Americans pay bills, reduce debt and build savings. For some, the payments altered how they think about money.
    “The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money,” said Denise Diaz, a recipient who lives outside Orlando, Florida.

    Ciydemimages | E+ | Getty Images

    For Denise Diaz, the benefits of pandemic-era stimulus checks went beyond everyday dollars and cents. They rewired how she thinks about money.
    Diaz, a mother of three who lives outside Orlando, Florida, received more than $10,000 from three rounds of “economic impact payments.”

    They were among the 472 million payments issued by the federal government, totaling about $803 billion. The effort amounted to an unprecedented experiment to prop up households as Covid-19 cratered the U.S. economy.
    The checks (and other federal funds) are at the epicenter of a debate as to whether and to what extent the financial assistance helped fuel inflation, which is running at its hottest in about 40 years.

    But they undoubtedly offered a lifeline to millions of people during the worst unemployment spell since the Great Depression. Recipients reached by CNBC used the money in various ways — to cover household staples, make debt payments and create rainy-day funds, for example.
    Diaz, who co-directs a local nonprofit, Central Florida Jobs With Justice, used the funds to pay off a credit card and a car loan. Her credit score improved. She built an emergency fund — previously nonexistent — which the household was able to lean on when Diaz’s partner lost his job earlier this year.
    Consequently, Diaz, 41, feels more financially stable than during any other period of her adulthood.

    The financial buffer and associated peace of mind also changed her psychology. She automated bill payments (for utilities, a second family car and credit cards, for example) for the first time.

    “We weren’t doing that [before],” Diaz said. “Because you never knew what could happen [financially], so I never trusted it.”
    These days, Diaz thinks more about budgeting. Homeownership seems within reach after years of renting.  
    “The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money,” she said.

    ‘Tough to make a dent’

    The stimulus checks were the result of legislation — the CARES Act, Consolidated Appropriations Act and American Rescue Plan Act — Congress passed in 2020 and 2021 to manage the fallout from Covid-19.
    Households received payments of up to $1,200, $600 and $1,400 a person, respectively. Qualifications such as income limits and payment amounts for dependents changed over those three funding tranches.
    Census Bureau survey data shows most households used the funds for food and household products, and to make utility, rent, vehicle, mortgage and other debt payments. To a lesser extent, households used them for clothing, savings and investments and recreational goods.

    Salaam Bhatti and Hina Latif, a married couple living in Richmond, Virginia, used a chunk of their funds to reduce credit card debt, which has proven difficult in recent years, especially after having kids. (They have a 3-year-old and a 3-month-old.)
    Bhatti and Latif paid off several thousand dollars of the debt during the pandemic and have about $30,000 left, they said.
    “It’s been tough to make a dent,” Bhatti, 36, said. “Sometimes it just feels like you’re not making any progress.”
    More from Personal Finance:Credit card balances rise after stimulus checks helped cut debtBeware of scams involving jobs, stimulus checks, tax refundsHow effective were those stimulus checks?
    The couple had a gross income of about $75,000 during the pandemic. Bhatti was the public benefits attorney at the Virginia Poverty Law Center (he’s now the deputy director), and Latif teaches online at the College of DuPage in Illinois.
    Prior to getting the stimulus payments, the duo used a “debt shuffle” approach to stay afloat, Bhatti said. That included taking advantage of multiple balance-transfer offers that carried periods of zero interest, he said.
    They also used stimulus funds to help cover higher household costs for groceries and other items like diapers.

    The stimulus changed how I think about what’s possible, personal spending habits and the way in which I manage my money.

    Denise Diaz
    stimulus check recipient in Florida

    Bhatti and Latif, like Diaz, also received monthly payments of the enhanced child tax credit — up to $250 or $300 per child, depending on age — that lasted for six months starting in July 2021.
    “Costs increased with our new baby so it often feels like we’re scooping water out of a boat with a hole in it,” Bhatti said. “We are not living extravagantly by any means, but because the bulk of our income [is] going to the debt, we are pretty much living paycheck to paycheck.”

    ‘Every dollar really matters’

    Nestor Moto Jr., 27, largely used his stimulus payments to chip away at student loans. The Long Beach, California, resident received about $4,000 from federal and state-issued payments.
    He used about half for loans and 10% for savings. The remainder helped Moto, an office manager for an accounting firm, pay bills (phone and car insurance, for example) when his employer reduced his full-time schedule to about 10 hours a week earlier in the pandemic.

    “They really helped me catch up on my student loans,” said Moto, who graduated from California State University Long Beach with a bachelor’s degree in political science. He still owes about $10,000 of an $18,000 initial balance.
    Moto wanted to reduce his debt even though the federal government paused payments and interest for the last two-plus years. He’s not expecting the Biden administration to wipe out his outstanding debt.

    Sometimes it just feels like you’re not making any progress.

    Salaam Bhatti
    stimulus check recipient in Virginia

    “I saved money,” Moto added. “[The stimulus] really helped put into perspective how much money I make a month and week and how much I spend.
    “It showed me how much every dollar really matters.”
    While grateful for the financial assistance, Bhatti feels a slight letdown after getting a brush with financial freedom. The U.S. economy has rebounded significantly since early 2021, when lawmakers passed the last broad pandemic aid package for individuals; another doesn’t appear likely despite ongoing financial pressures for some households.
    “It feels like such a tease,” Bhatti said of the stimulus payments. “It felt like dangling a carrot in front of you, the government saying, ‘We know we can help you.’ And then eventually choosing not to.”

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