Raphael Stevens

Businesses are increasingly requiring their workers to get a Covid-19 vaccine as a condition of employment.
Employers like ChristianaCare, Northwell Health, Novant Health, UCHealth System and United Airlines have fired (or are poised to fire) hundreds of unvaccinated workers. Kaiser Permanente placed more than 2,200 on unpaid leave.
Such workers likely don’t qualify for unemployment benefits, according to labor experts. But there may be some exceptions.

Police officers stand guard at the entrance of Santa Monica pier as anti-vaccination protesters take part in a rally against Covid-19 vaccine mandates, in Santa Monica, California, on Aug. 29, 2021.
RINGO CHIU | AFP | Getty Images

As businesses and lawmakers increasingly require workers to get a Covid-19 vaccine, thousands of holdouts are losing their jobs — and they likely can’t collect unemployment benefits.
However, there may be exceptions, depending on a worker’s situation, according to employment experts. Some state legislatures are trying to change their rules altogether.

“If you don’t want to be vaccinated, don’t have a religious or disability exemption, and you lose your job, chances are you will be found ineligible for unemployment compensation,” said Christopher Moran, a partner and employment attorney at law firm Troutman Pepper Hamilton Sanders.

Unvaccinated

Northwell Health, the largest health-care provider in New York, recently terminated 1,400 unvaccinated workers. ChristianaCare, Novant Health and UCHealth System — health providers in Delaware, North Carolina and Colorado, respectively — cut more than 100 workers each.
United Airlines is also poised to fire nearly 600 unvaccinated employees. And Kaiser Permanente, which is based in California, said Tuesday it put more than 2,200 employees on unpaid leave nationwide.
(In all these cases, the employees affected represent a small share of the companies’ overall workforce.)

The issue may soon affect many more people — about 46% of organizations plan to institute a vaccine mandate, according to survey published by Gartner, a consulting firm, last month.

The U.S. Department of Labor is also soon expected to issue a rule mandating vaccines (or regular Covid testing) among businesses with at least 100 employees. The White House is also requiring vaccines for all federal workers, contractors who do work for the federal government and health-care workers at facilities receiving Medicare and Medicaid reimbursements.
Earlier this year, 28% of employed Americans said they wouldn’t get a Covid vaccine even if it costs them their job, according to the Society for Human Resource Management. (The group surveyed 1,000 people in January and February.)

Unemployment benefits

Workers qualify for unemployment benefits in cases of “eligible job separation,” according to Anne Paxton, an attorney and policy director at the Unemployment Law Project, which represents individuals in appeals cases when their benefits have been denied.
States somewhat differ in their definitions. In most, workers can collect benefits after they are laid off, quit a job for “good cause” or get fired for a reason other than “misconduct,” Paxton said.
However, a labor agency would likely deem refusal to comply with a vaccine mandate as “misconduct,” she said. Losing one’s job as a result would therefore likely disqualify a worker from benefits (if the refusal hadn’t been for a medical or religious reason).
Similarly, quitting to avoid a mandate would also likely not be viewed as “good cause.”
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“I think the consensus is very strong that employers are within their rights to protect workplace safety, and employees are not within their rights to refuse to comply,” she said.
But there are variables and gray areas, which may vary by state, she added.
For example, a worker who receives an exemption from their vaccine requirement for a religious or medical reason might not be fired, but placed on unpaid leave. Since they received a legitimate exemption, a labor agency might approve a claim for benefits.
“I’d think in that scenario you’d probably be eligible,” Moran said.

State labor agencies

Indeed, language from state labor bureaus appears to leave wiggle room in certain other cases.
“Some individuals may still qualify based on their own unique circumstances,” according to Washington State’s Employment Security Department.
Washington officials will weigh factors such as when the employer adopted the vaccine requirement, the specific terms of the vaccine policy and the reason why the employee didn’t comply with the mandate. (If an employee doesn’t qualify for a religious or medical accommodation, their unemployment claim “would likely be denied,” the agency said.)

I think the consensus is very strong that employers are within their rights to protect workplace safety, and employees are not within their rights to refuse to comply.

Anne Paxton
attorney and policy director at the Unemployment Law Project

The New York State Labor Department website takes a similar position. Workers who refuse an employer’s vaccine directive may be eligible for benefits “in some cases if that person’s work has no public exposure and the worker has a compelling reason for refusing to comply with the directive,” the bureau said.
However, by contrast, New York public employees and workers in health-care facilities, nursing homes or schools would be disqualified (absent a valid exemption) “because these are workplaces where an employer has a compelling interest in such a mandate, especially if they already require other immunizations,” the bureau said.
Republican lawmakers in Tennessee proposed legislation earlier this year to let workers who quit their jobs due to a vaccine requirement collect unemployment benefits. Other state legislatures, such as those in Idaho and Michigan, are trying to outlaw terminations based on vaccine status altogether. (These measures haven’t been successful so far.)
Montana Gov. Greg Gianforte signed a law in May banning vaccine requirements among employers.

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COMPANIES’ enthusiasm for investment faded after the global financial crisis, and took a huge hit when covid-19 struck. But even those that have been stingy in the past decade, such as miners and shipping firms, are expected to loosen the purse strings this year and next. One exception is oil-and-gas companies, many of which, given the global push to decarbonise, may see little point in expanding capacity.Listen to this storyYour browser does not support the element.Enjoy more audio and podcasts on More

Harmit Singh, chief financial officer at Levi Strauss & Co., says the digital preferences of consumers are shaping the investments CFOs need to make.
C-suite executives need to understand that digital transformation is a key part of sustainable profitability and shareholder value creation, even if the costs can be hard to understand upfront.
This thinking includes cloud adoption to keep legacy systems from falling behind; digital upskilling and employee hackathons; data visualization and artificial intelligence; and robotic process automation.

A sign is posted in front of the Levi Strauss & Co. headquarters on April 09, 2021 in San Francisco, California.
Justin Sullivan | Getty Images News | Getty Images

The role of the chief financial officer has expanded well beyond traditional finance. Companies’ critical need to build for a digital future — driven by consumers whose digital preferences continue to accelerate — is adding a new technological remit to CFOs of all industries. Today, CFOs are responsible for allocating resources to set up strong digital foundations; championing the right talent and organizational structure to implement digital objectives; testing before quickly scaling value-creating technologies like data visualization, robotics, artificial intelligence; and relentlessly measuring while communicating the shareholder value created.
Serving as more cross-functional C-suite executives, CFOs are working side-by-side with their C-suite colleagues to restructure and refocus businesses for sustainable profitability while defining and telling the story of how value is created by digital transformation.  

As the CFO of the 168-year-old company Levi Strauss & Co., I’m constantly working with my colleagues to identify ways in which we can do things better, faster and more efficiently through the use of emerging technologies and efficient business processes. Having the CIO and the ERP team report into me enables me to ensure that resources are allocated towards automating and digitizing the processes across the organization. Investing in this proactively as we test and scale digital tools, like robotics and AI capabilities, across the enterprise helps us unlock real growth opportunities and ultimately drive our business forward. 

The CNBC @Work Summit returns

On October 13, Michael Dell, Ray Dalio, Bank of America Chief Operations and Technology Officer Cathy Bessant, WeWork Executive Chairman Marcelo Claure, Levi Strauss & Co. CFO Harmit Singh and Estee Lauder CFO Tracey Travis will talk building a resilient future and more. Register now.

As more companies embark on their own digital journeys, here’s my advice for other CFOs looking to understand their role in leading and pursuing a successful digital transformation.

Create unity

For a true digital transformation to take hold and prove beneficial long-term, companies have to start with a solid plan and build the right digital foundation. CFOs, in partnership with their C-suite colleagues, need to think holistically across the organization and implement technology systems at the core of their operations to enable simplified, standardized, and integrated processes throughout every team of the enterprise.
While relatively dated, enterprise resource planning (ERPs) systems are still the lifeline for businesses. These systems have modernized throughout the decades to keep up with orbiting technologies, but it’s on the CFO to ensure these systems integrate with pricing systems, operations, supply-chain-management systems, and every other aspect of the organization. They are one of the foundations of a successful digital transformation. My role,  working with the ERP team, is to ensure that our employees and customers experience this digital transformation not as a pure technological change but a change that simplifies their work and allows them to make data-driven decisions with real-time business insights — ultimately accelerating market share growth and profitability.

The investment in technology is often intimidating. Returns are not overnight, making it hard to justify the cost.

Our own digital transformation started with a dedicated team made up of both business and technical talent upgrading to a cloud-based ERP platform, enhancing visibility into key wholesale, direct-to-consumer and manufacturing data across all sales channels and regions globally. Defining the processes and configuring the platform to deliver these processes across order management, inventory management and omnichannel allocation — as well as one single global financial system of record — supercharges our operational efficiency and fundamentally changes the way we do business. That’s game-changing value.

Champion tech talent

Building the right global diverse team and a culture of innovation to create, implement and manage these platforms and new technologies is equally important. We’re living in an era where talent, especially tech talent, is hard to secure, and we’re competing with companies that span industries. But while there is great global talent to recruit, there is also great talent to build.
At Levi Strauss, we’re focused on fostering an enterprise-wide culture of innovation and are investing in our people — some of the best talent in retail. Our people are the key drivers of our digital transformation and the best ones to build the future of our company. We’ve embarked on a company-wide digital upskilling initiative to help our people learn and practice the skillsets we need to achieve our digital transformation from the inside. Digital savvy employees must live across all departments, including finance. We have also established global capability centers that allow us to not only recruit talent closer to our consumers but also build a diverse talent team.
Similarly, creating the programs, initiatives and space for innovation is also vital, and it’s the C-suite’s responsibility to champion these opportunities. For me, I’m proud to play my part and have been a sponsor of our ongoing hackathon series. By bringing our people together to collaboratively solve problems in a short period of time, we’re creating a powerful engine for idea generation to better serve our consumers. Our 2021 hackathon event included 35 teams from across 11 countries that came together to share ideas and add to our digital future. The top three teams presented their business case for funding to the executive team where we could decide which ideas to take to the next level. From chat bots to self-checkout, the resulting software solutions presented at our hackathons have a business impact.

Befriend automation

Everything that can be automated, should be automated. As CFOs, we need to constantly remember that, and push our teams to do the same. Our teams should not be spending hours entering data from one system into another, updating spreadsheets, or copying over datasets. Instead, we need to free employees from such tedious tasks and allow them to spend their time analyzing and solving the more complicated problems.
Robotic Process Automation (RPA) is gaining in popularity across all industries as more and more businesses see how its techniques can save businesses 30–40% of the hours typically spent on tedious tasks. I’ve been on a personal mission to address this within Levi Strauss, and I’m excited to see our organization embrace RPA with open arms. We created our own RPA Center of Excellence team where it’s focused on finding automation opportunities and scaling automation across functions in our organization, in turn freeing up valuable resources to carry out our long-term digital-first vision.
The investment in technology is often intimidating. Returns are not overnight, making it hard to justify the cost. But as CFOs, we need to help prioritize projects that create value while balancing foundational investments that will accelerate digital transformation These technologies can unlock enormous potential across the business from saving on operational costs to uncovering new business opportunities to predicting areas of concern.
There has never been a more important time for CFOs to realize building for a digital future is paramount, especially as we continue to face challenges from the pandemic and plan for the future. In uncertain economic environments, it’s key to have the most up-to-date, real-time data on hand to make quick decisions about the strategic direction of your business.
As the CFO of a brand steeped in heritage, I’m excited about the future and what’s possible when we collectively lean into digital transformation.
—By Harmit Singh, Executive Vice President and Chief Financial Officer at Levi Strauss & Co. Singh is a member of the CNBC Global CFO Council. More

A WAVE OF green sovereign debt is flooding markets. Britain issued its first such bond in September, alongside other new issuers, such as Colombia and Spain. They join at least 20 countries that already issue green debt, notably Germany, which is well on its way to building a “green curve” of bonds across several maturities. Governments have together raised more than $100bn through the green route so far this year. And later this month the European Union is due to join the club. Its €250bn ($290bn) green-borrowing programme stands to make it the world’s largest sovereign issuer of the instruments.The main difference between a green bond and the regular sort is that the capital raised by it must be spent on certain environment-friendly projects. So why not raise debt the old-fashioned way instead, and simply direct the proceeds towards greenery? One advantage could be the opportunity to borrow at a lower cost. Investors may be willing to accept a lower yield for green bonds (that is, to pay a higher price for them), because they can either count their holdings towards their environmental, social and governance targets, or because it makes them look good in the public eye, says Dion Bongaerts of Erasmus University in Rotterdam.Indeed, investors do demand a higher yield on conventional debts than they do on green ones with near-identical characteristics. The yield difference (called the “greenium”) may seem modest: for a ten-year bond in Germany it is about 0.05 percentage points. But that starts to look more significant when you consider that the yield on a conventional German ten-year bond is -0.18%. The yield gap has risen from 0.02 points a year ago, suggesting that the demand for green debts exceeds their supply. Britain’s bond, issued last month, had a yield gap of 0.025 percentage points, more than had been expected for an opening green issuance. The sale was oversubscribed by ten times—larger than any issuance by the Debt Management Office.Still, the cost savings are unlikely to be meaningful for governments, says Antoine Bouvet of ING, a Dutch bank. For €1bn of debt, an interest rate that is 0.05 percentage points lower would mean savings of about €500,000 a year, a drop in the bucket for a government.That suggests that green bonds carry another benefit: they serve as a commitment device for politicians. The proceeds of Britain’s issuance, for instance, will be spent on a range of green policies, including a plan to develop low-carbon hydrogen technologies by 2030. The risk with such commitments is that they end up being either watered down or reversed when a new government comes into power. But when a finance ministry creates a green-bond programme and builds out a “green curve”, backing out of specific policies may become harder, says Mr Bouvet. Doing so would hurt liquidity and anger investors.Issuing newfangled bonds could carry other liquidity problems, though. One is that investors may be unwilling to plough cash into a still-nascent market. But as green bonds become more popular, the risk for governments is that they split the overall sovereign-bond market in two, says Mr Bongaerts. Normally, all bonds issued at the same time and of a given maturity are identical, which makes them easier to trade. But a more verdant green segment could have the effect of lowering the liquidity premium that investors place on conventional bonds, and increasing the cost of raising funds.Germany has tried to guard against this. Last year it began issuing green bonds that are matched to a conventional “twin” with the same maturity date and coupon. The Bundesbank maintains liquidity in the market through “switch trades”, allowing investors to swap green bonds for conventional ones. As more governments go green, other workarounds may follow. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.This article appeared in the Finance & economics section of the print edition under the headline “Green party” More

FORTY YEARS ago Antoine van Agtmael of the International Finance Corporation pitched the idea of a “Third World Equity Fund” to sceptical fund managers, and the concept of emerging markets entered global investing. The aim had been to offer diversified exposure to fast-growing countries outside the rich world. Since then emerging and developing countries have, in aggregate, gained economic and corporate clout. But the vast disparities between them makes lumping them all into a single category increasingly odd. What might a new framework for investing outside of the rich world look like?In the early 1980s emerging and developing countries made up about 25% of global GDP, according to the IMF. Today they account for about 40%, and more than 20% of total global market capitalisation. The market cap of the MSCI emerging-markets index, as a share of the global gauge, has risen by 13 times.Yet countries’ economic situations vary widely. Consider, for instance, the MSCI emerging-markets index. In 1988, when the gauge was launched, the income per person of countries that were included ranged from $1,123 in Thailand to $7,598 in Greece. In 2019 the range was over four times that, stretching from India’s $2,100 to South Korea’s $31,846. The fortunes of some economies, such as Brazil and Russia, are tied to the vagaries of commodities markets; those of East and South-East Asia, by contrast, are powered by manufacturing.Existing definitions of emerging markets do not capture such complexity. Most people, including many investors, think of the category as linked to income levels. But index providers also consider whether trading in markets is as frictionless as in the rich world. This is why, although South Korea and Taiwan are wealthy, their markets are not considered “developed”. The result is a grouping that is highly concentrated: the two East Asian countries together make up 27% of the MSCI emerging-markets index.How then to think about gaining exposure to more than three-quarters of the world’s population, and two-fifths of the global economy? A framework that is organised by geography seems only slightly less arbitrary than the emerging-markets classification: the Turkish and Saudi Arabian markets, say, have little in common. Another approach would be to segment countries by income. But this too can have odd results. The low-income category, for instance, would combine places that have failed to develop for decades with those that could soon take off. The Republic of Congo and Vietnam have similar levels of income per person, but share few other economic qualities. Kuwait and Taiwan are broadly as rich as each other, but their stockmarkets are vastly different. Income levels alone do not say much about a country’s prospects.Perhaps a more promising approach is to think of countries in terms of their growth models instead. This framework would apply to the familiar big emerging economies, as well as to the edgier, “frontier” markets. Investors who want more exposure to export-oriented powerhouses could turn not just to China, South Korea and Taiwan, but also to later adopters of the model, such as Bangladesh and Vietnam. These are still minnows compared with the incumbents’ market capitalisation of about $16trn. But adding them makes sense, since they are already beneficiaries of rising Chinese wages, and could expand into technologically advanced manufacturing.A second category could include countries that rely instead on services-led growth, with all the promise of healthy middle-class consumption. Here, India and Indonesia are possible candidates; Kenya might be a frontier market worth investigating. And a third group could include commodity exporters, such as Brazil, Russia and South Africa. These have provided dismal returns over the past decade and shrunk as a proportion of emerging-market indices. But climate change and the green transition could create new winners and losers, as some resources, such as battery metals, become sought-after, and others fall out of favour.Such a taxonomy is far from perfect. Growth models can change over time, for a start. Just think of China, which is seeking to become more consumption-led. Many smaller countries have long had hopes of boosting exports, only to be tripped up by poor policymaking. Still, the strategy of lumping much of the world’s population and output into one category is no longer useful. Time to experiment.For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.This article appeared in the Finance & economics section of the print edition under the headline “Brave new world” More

FOR ECONOMICS writing—a genre that stylistically is often closer to computer manuals than to literature—a discussion paper recently posted on the Federal Reserve’s website is a blessed relief. Jeremy Rudd, a Fed researcher, includes quotations from William Butler Yeats and Dashiell Hammett. He uses such phrases as “ill-tempered pettifogging” and “arrant nonsense”. And, as if channelling David Foster Wallace, he has fun in his footnotes, notably one in which he casually observes that mainstream economics may serve as “an apologetics for a criminally oppressive, unsustainable and unjust social order”. Little wonder his paper has become, by central-bank standards, a social-media sensation.But it is the substance, not the style, of Mr Rudd’s paper that is most provocative. He directs his arguments at an axiomatic idea in economics: that expectations determine inflation. The conventional story is straightforward. When workers expect prices to rise, they demand higher wages. When firms expect costs to rise, they set higher prices. In both cases, inflation becomes a self-fulfilling prophecy. Central bankers’ task is to pin down expectations at a low, stable level. If they succeed, they can control inflation.This idea also appears to have been remarkably successful. For the past three decades inflation in the rich world has been quiescent. Whenever it has shot above target, it has, soon enough, fallen back. Expectations are, in the parlance, well-anchored. Indeed, this is why many economists are sanguine about the current bout of inflation: supply disruptions will eventually pass, and price pressures will ease. It is a comforting thought.Enter Mr Rudd, the author of more than a dozen papers on inflation over the past two decades. The idea of inflation expectations “rests on extremely shaky foundations”, he writes. First, he says, the theory is flawed. Models of inflation mostly include expectations as a short-term variable (that is, what prices will be in the next month or two). Insofar as expectations matter, though, central bankers and analysts think of them as a longer-term force, an underlying trend impervious to cyclical ups and downs. Empirically, however, this is hard to document. And whose expectations matter? There are ordinary people, businesses, forecasters and investors. None, he argues, is much good at predicting prices.Nevertheless, it is true that the past three decades have seen both subdued inflation and low expectations, however measured. But Mr Rudd’s contention is that the causality has been misdrawn. It is not that low expectations led to low inflation, but rather that low observed inflation led to low expectations. As he notes, it was only after a recession in the early 1990s, when inflation fell sharply and then stayed low, that expectations were ratcheted down. Mr Rudd concludes that obsessing over inflation expectations is useless and dangerous. Useless, because it is observed prices that count. Dangerous, because central bankers might grow unjustifiably confident in their powers of mind control.The reaction to Mr Rudd’s provocation has been fierce. Tyler Cowen, a prolific economist at George Mason University, points to the extreme example of hyperinflation as proof that expectations matter. When people think their currency will be worth much less tomorrow, they switch out of it. Ricardo Reis of the London School of Economics, who has studied inflation as deeply as Mr Rudd, notes that no variable—neither expectations nor money supply, unemployment or interest rates—is perfect in predicting inflation. Yet each contributes to the picture. Moreover, he adds, there is plenty of evidence about expectations. Studies show, for example, that firms that think costs will rise tend to set higher prices.For all the heat in the debate, there may be some common ground. Adam Posen of the Peterson Institute for International Economics, a think-tank, makes a sensible distinction. Over the long term, inflation expectations and, specifically, whether people believe the central bank will quell soaring prices, are important. Mr Rudd implicitly concedes this, writing that it is best for inflation to “be off of people’s radar screens”. Put differently, it is good to expect that inflation is and will be a non-issue.Yet “that is different from saying that fine differences in inflation expectations are either well-measured or policy-relevant over shorter time horizons,” says Mr Posen. There is little evidence that communication alone by central banks can control inflation, without policy measures. And their credibility stems more from responses to crises than from attempts to manage expectations.Janet Yellen drew a similar distinction when she was chair of the Fed. Stable long-term inflation expectations appear to be linked to stable long-term inflation, she said in a speech in 2015, in line with conventional wisdom. But she then pronounced herself “somewhat sceptical” that central banks can influence expectations simply by announcing an inflation target. Instead, she said, expectations may only take hold after a central bank keeps inflation near its target, a process that could take years.Inspect the unexpectedSome commentators have concluded from Mr Rudd’s paper that economics is a mess and no one understands inflation. Yet sifting through the arguments, there are shared ideas of profound importance. First, central-bank credibility is precious. Second, expectations of inflation are formed by experiences of inflation. And third, in the long run, such expectations probably matter.What does that mean for the rising inflationary pressures now facing much of the world? The hawkish view is that central banks must rein in prices before it is too late and expectations lose their anchor. Yet there is also a doveish take. Central banks in the rich world remain credible. By letting inflation run a little higher now, they may help reset expectations. After all, before covid-19, the big worry in rich countries was too-low inflation. Or, at least, that was what some economists and investors had expected of the future—whatever their expectations are worth. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.This article appeared in the Finance & economics section of the print edition under the headline “Grated expectations” More