Economy

Wayne Orr didn’t yet know that his foot was broken as he made his way back from Texas to his home in South Carolina, but he did know that he couldn’t continue pressing the pedals on the tractor-trailer he had been driving.A new driver only a few months past his training period, he had to sit out for six weeks without pay. Then, when his foot finally healed, he discovered that his company, CRST Expedited, had fired him. Frustrated and needing a paycheck, he found a new job driving for Schneider International, but was once again stymied: CRST threatened to sue Schneider for hiring him, he said.“I called CRST and they told me that they would not take me back and that I had to pay them $6,500 or I could never drive for another company, either,” Mr. Orr, 59, said.He had signed a contract to work for CRST for 10 months in exchange for a two-week training course. If he didn’t last 10 months, the contract required him to pay the company $6,500 for that training.Each year, thousands of aspiring truck drivers sign up for training with some of the nation’s biggest freight haulers. But the training programs often fail to deliver the compensation and working conditions they promise. And drivers who quit early can be pursued by debt collectors and blacklisted by other companies in the industry, making it difficult for them to find a new job.At least 18 companies, employing tens of thousands of drivers, run programs aimed at qualifying trainees for a commercial driver’s license, or C.D.L. Typically, to get free training, the new hires must drive for the company for six months to about two years, usually starting at a reduced wage.The companies “sign them into this indentured servitude contract where they basically have to drive and be a profit source for the company,” said Michael Young, a lawyer in Utah representing a former trainee in a lawsuit against C.R. England, a privately held trucking company that employs about 4,800 drivers.With e-commerce leading Americans to expect quick delivery, trucking companies face pressure to haul more and do it faster. The American Trucking Associations, a trade association, has warned of a vast truck driver shortage. But researchers and drivers’ representatives maintain that the high turnover occurs because too many large companies fail to make their jobs attractive enough. The industry has been plagued with class-action lawsuits about working conditions and wages, leading to hundreds of millions of dollars in settlements.Nine in 10 drivers leave their jobs within a year at large carriers like CRST and C.R. England, according to the trucking trade group. The companies need a constant flow of new recruits to keep revenue up, and without locking them into a contract, they risk losing their newly trained drivers to competitors offering a higher wage.“We think paying for C.D.L. school is a great benefit we can offer but not one that we can afford to do if folks do not come work with our team or ultimately pay us back,” said TJ England, chief legal officer of C.R. England. “If people just want to go to a different company, that’s where we try to protect our investment.”On the Road With America’s Truck DriversThe Cost of Quitting: Thousands of aspiring truckers sign up for training each year. But if they quit early, they may be pursued by debt collectors.Trucker Shortages: The real reason there aren’t enough drivers? It is a job full of stress, physical deprivation and loneliness.Supply Chain Issues: A wave of trucker retirements combined with those quitting for less stressful jobs is exacerbating shipping delays.‘We’re Throwaway People’: Trucking is no longer the road to the middle class that it once was. In 2017, we asked drivers why they do it.CRST, an Iowa-based company, would not answer specific questions for this article but said in an emailed statement that its training program “has brought thousands of drivers into the industry who may not otherwise have been able to obtain a commercial driver’s license.” As for Mr. Orr’s account, a spokeswoman would say only that it omitted key facts.The New York Times and The Hechinger Report, a nonprofit news organization, interviewed more than 30 current and former truckers with direct knowledge of company training programs, including 15 who had gone through them. Almost all 15 left before their contracts were up, despite intending to stick it out. One was given only four days at home in the four months he drove for CRST, just a quarter of what he said was promised in his contract, according to a complaint filed with the Iowa attorney general’s office.Others described weeks of unpaid time spent waiting for trainers. Many said they were never told that they would sit for hours, unpaid, while they waited for their trucks to be loaded and unloaded, or even for days to get a new assignment. Many drivers said they were told by the companies that they would make more than they did. Since drivers are paid by the mile, the time spent waiting cut significantly into their paychecks.In job advertisements and in their pitches to recruits, companies promise earnings of up to $70,000 in the first year and even higher salaries in the future. But the median annual wage for all truck drivers, regardless of experience, was $47,000 in May 2020, according to the most recent data from the Bureau of Labor Statistics. Only the top 10 percent of earners were making above $69,500.Wayne Orr attended CRST’s training program in 2019. “That training program is like a money mill to them,” he said. Sean Rayford for The New York TimesStill, many are attracted to trucking despite its sometimes punishing demands, seeing it as a possible on-ramp to the middle class. New drivers can train at independent schools, which can be expensive, or community colleges, which may take more time. Company training programs are a popular option for those eager for a paycheck right away.Many large companies start classes weekly; keeping a constant flow of people is crucial. They deputize their drivers, offering referral bonuses for every new person brought on board, and employ recruiters to pursue anyone who has expressed interest. In a training manual filed as an exhibit to a lawsuit in 2021, CRST instructed recruiters: “Create urgency. Tell the applicant we have a ‘few’ spots open. Our school and orientation will fill up quickly.”At most company schools, trainees typically spend two to four weeks learning in a classroom and in parking lots. Many former trainees said that the instruction was insufficient and that they spent little time in trucks.Amy Jeschke attended C.R. England’s program in Indiana in 2019. She went out on the road only twice during her training, she said, and the rest of the time did maneuvers in a yard or memorized what to do on a pre-trip inspection.“Honestly, we weren’t doing anything for most of the time,” Ms. Jeschke, 46, said. “You’re lucky if you got in the truck once a day.”Joy Skamser, 44, who also attended C.R. England’s training program in 2019 and lives in Southern Illinois, said she felt unprepared to drive, despite earning her commercial driver’s license at the end of the training.“They do not teach you how to drive a truck, they just teach you how to pass the test, and that’s very dangerous,” she said.Mr. England said the company gave high-quality training to its students that includes time in the classroom, on the driving range and on the road, with skill assessments throughout. Students who fail the assessments are given additional practice, he said.Once they have earned the license, drivers haul actual loads for their new employers. For typically four to 12 weeks, they are accompanied by a trainer. They earn a set weekly rate, varying by company but often $500 to $800, according to company websites. Mr. England said his company’s pay was $560 a week in 2019 and about $784 today.Trainers may be barely trained themselves, often needing only six months’ experience, and they are allowed to sleep in the back while the new driver is alone in the cab, according to industry experts and many companies.Ms. Jeschke said she finished her training without being able to back up, a crucial skill for truckers. She said she once spent a week at a truck stop, unpaid, waiting for another driver because she didn’t yet have the expertise to pick up a load on her own.Frustrated with the working conditions and the low pay, she and Ms. Skamser left C.R. England before their contracts were up and went to work for another trucking company, Werner Enterprises, where they say they were more fully trained.“I do not have words for how bad it was,” Ms. Jeschke said. “They do not care about drivers, only the loads.”Ms. Skamser said a debt collection agency was pursuing her for $6,000 that C.R. England says she owes for her training.It’s reasonable for companies to want to recoup the cost of training an individual, said Stewart J. Schwab, a professor at Cornell Law School. Still, he noted, like noncompete clauses, these contracts can significantly restrict worker mobility and hinder competition. In 2021, Mr. Schwab worked on a proposed law about restrictive employment agreements, such as the ones trucking companies use, with the Uniform Law Commission, a nonpartisan organization that drafts laws for states.The proposed legislation calls for the repayment of the training cost to be prorated based on when an employee leaves and says it should not exceed the actual cost of the training.Many major trucking companies don’t prorate their charges, meaning a driver who leaves on Day 1 after training would owe the same amount as one let go the day before fulfilling the contract. And companies are generally not made to account for how much they spend on the actual training. In 2019, a judge found that CRST’s charging $6,500 for its training “when in fact the cost was thousands of dollars lower” was a “deceptive practice.”That finding came as part of a class-action lawsuit that Mr. Orr eventually joined. The suit, which contended that drivers were being overcharged for their training and paid less than minimum wage for their hours worked, was settled for $12.5 million in 2021.Companies can come after drivers for money — or send them to debt collection — regardless of the reasons they leave or are let go. They also can try to prevent drivers from taking other jobs, as CRST did with Mr. Orr, lawyers for the drivers say. Such actions effectively deny those who want to leave a company the opportunity to do so and pay off their debt.Drivers who leave trucking companies before their contracts are up can be pursued by those companies — or by debt collectors — to pay thousands for training.Sean Rayford for The New York TimesA lawsuit filed in 2017 on behalf of drivers contends that eight companies, including CRST and C.R. England, are conspiring to block drivers under contract from changing jobs. Some companies refuse to release drivers’ records to prospective employers or send letters threatening litigation to competitors who don’t abide by a no-poaching agreement, the complaint says.Mr. England described the allegations as meritless but acknowledged in an interview that his company had “sued or threatened to sue some of our competitors for unlawfully interfering with those contractual relationships.”He said his company’s competitors had “unfairly taken advantage” of the training C.R. England provides to its drivers.Worried about being blackballed wherever he went, Mr. Orr took out a loan — the lowest interest rate he could find was 14 percent — and paid CRST. Through the class-action lawsuit, he was reimbursed for about two-thirds of what he had paid.“That training program is like a money mill to them,” he said. “They pretty much sell you a lot of dreams.”This article was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. More

CHICAGO (Reuters) – Four organizations focused on global health and the economy say it will take $15 billion in grants this year, and another $10 billion annually after that to establish and maintain an adequate toolkit to respond to COVID-19 and address future pandemic threats.The estimate is laid out in “A Global Strategy to Manage the Long-term Risks of COVID-19,” a working paper published on Tuesday by the International Monetary Fund, in partnership with the Coalition for Epidemic Preparedness Innovations (CEPI), the Global Fund, and Wellcome Trust.In the paper, the four global groups assert that ending the pandemic everywhere remains an urgent economic, health, and moral priority for the world.”Given the many possible scenarios for the evolution of COVID-19 (from benign to severe) and given the limited resources countries have, we need a new strategy,” Gita Gopinath, the IMF’s First Deputy Managing Director, said in a statement.The IMF estimated the pandemic resulted in $13.8 trillion in cumulative losses as of January 2022.Gopinath said countries need vaccines, tests, treatments and an improved health infrastructure to tackle COVID-19 and other deadly diseases.”These last two years have shown that remarkable progress is possible when the world comes together and supports science boldly at scale, across borders,” said Jeremy Farrar, director at the Wellcome Trust charity. “Now is not the time to ease up – the virus’s next move is anything but certain and the risk of new variants high.” Richard Hatchett, chief executive of CEPI, said vaccines are a key part of the response.”They are one of our most potent tools against pandemic risks and will be critical to any future response,” Hatchett said in a statement. But they must be accompanied by investments in global surveillance, research & development, manufacturing and health systems, he said. More

The paper, prepared with the Coalition for Epidemic Preparedness Innovations (CEPI), the Global Fund, and charitable group Wellcome, said a new, more comprehensive approach was needed immediately to strengthen global health systems and limit the already staggering $13.8 trillion cost of the pandemic.”The cost of inaction – for all of us – is very high. We need to act – now,” IMF First Deputy Managing Director Gita Gopinath said in a statement. More

Despite an economic recovery, borrowing will stay elevated because of high debt rollover requirements and war in Ukraine, the ratings agency said in an annual note.While 137 countries will borrow an equivalent of $10.4 trillion in 2022, an estimated 30% lower than 2020, the overall figure is one-third higher than average borrowing between 2016 and 2019, S&P said.”Tightening monetary conditions will push up government funding costs,” S&P analysts said. “This will pose additional difficulties to sovereigns that have been unable to restart growth, reduce reliance on foreign currency financing, and where interest bills are already critically high on average.”Borrowing in the economies of emerging Europe, Middle East and Africa (EMEA) will rise $253 billion to the equivalent of $3.4 trillion by the end of the year, S&P said in an accompanying report on Thursday.Egypt, which has recently sought IMF assistance, is set to overtake Turkey as the region’s largest issuer of sovereign debt, with $73 billion worth of bond sales, S&P analysts forecast.Among larger countries globally, Kenya, Egypt and Japan have the biggest share of debt that needs to be rolled over this year, the analysts said, pointing to short-term debt of 26% and 30% of total debt stocks in Egypt and Kenya respectively.Commercial debt in EMEA emerging markets is set to increase to 37% of GDP from 31% in 2016, boosted by pandemic-related costs, a rise in commercial borrowing in Oman and Saudi Arabia and “persistently high fiscal deficits” in Egypt and Romania.Across emerging markets, JPMorgan (NYSE:JPM) analysts said in a note on Monday, the corporate default rate could reach 8.5% this year, more than double the 3.9% they expected before Russia invaded Ukraine and the highest since the global financial crisis. More

OTTAWA (Reuters) -Canada’s Liberals find themselves in a bind ahead of this week’s budget: the economy has recovered from the pandemic, yet Prime Minister Justin Trudeau has pledged billions in new stimulus, a political poker chip that could further torch runaway inflation.Trudeau’s Liberals will present their 2022 budget on Thursday, just seven months after promising C$78 billion ($62.7 billion) in new spending in a re-election campaign. Much of that, to be spread over five years, has not yet been budgeted.But fresh fiscal spending could be risky at a time when inflation is already running at a 30-year high. If too broad, measures could fuel further price increases and end up hurting lower-income Canadians.”When you look at the impact of this elevated inflation on lower-income households, clearly they are hurting,” said Rebekah Young, director of fiscal & provincial economics at Scotiabank.”But at the same time, from an economic perspective, there’s a risk that if you put even more money at the problem, it can create more pressures.”Young said major new spending initiatives should be set aside for the near term, even though total government revenues are expected to be higher than previously forecast due to higher inflation-linked tax revenue.But that may be easier said than done. The government has already committed to spend more on defense following Russia’s invasion of Ukraine. Trudeau’s Liberals currently spend less than 1.4% of GDP on defence, under the NATO threshold of 2%.The budget will also include about C$2 billion on a strategy to accelerate Canada’s production and processing of critical minerals needed for the electric vehicle supply chain, Reuters reported exclusively on Monday.Green technologies and initiatives on housing will be focal points of the budget, said one senior source.And the Liberals will have to start to deliver a national dental-care program for low-income Canadians – a costly initiative that is a cornerstone of a support deal with the New Democrats meant to keep Trudeau in power until 2025.Structural spending will end up adding to the deficit once the stronger than expected revenues are no longer rolling in.This could derail efforts to reduce Canada’s debt-to-GDP ratio, which skyrocketed during the pandemic amid extraordinary emergency spending and was last forecast to peak at 48.0% this year.”Any near-term drop in the federal deficit from today’s improved economic outlook could be fleeting. As such, we feel the risks to our baseline debt-to-GDP forecast are very much skewed to the upside,” said Randall Bartlett, senior director of Canadian economics at Desjardins. Rising interest rates – the Bank of Canada is widely expected to hike its policy rate by 50 basis points to 1% at a decision on April 13 – will add to debt pressures. Canada’s federal debt was last forecast to top C$1.19 trillion this year. Trudeau, facing backlash over surging home prices and rents, has also promised to make housing more affordable, including measures to make it easier for first-time buyers to get into the market. “That does get us into a problem where typically the prices just adjust to reflect the improvement in affordability,” said Stephen Brown, senior Canada economist at Capital Economics.($1 = 1.2449 Canadian dollars) More

MADRID (Reuters) – Spain’s central bank on Tuesday lowered its economic growth forecast for this year and next due to the impact of inflation stoked by Russia’s invasion of Ukraine, and said the pace of recovery had already slowed down in the first quarter.Inflation is projected to rise to 7.5% in 2022.The Bank of Spain now expects gross domestic product to expand 4.5% in 2022, down from its December estimate of 5.4%. Growth is then expected to slow to 2.9% in 2023, also less than the previously predicted 3.9%.”The conflict in Ukraine and the economic sanctions imposed on Russia are expected to have a severe impact on growth prospects for the coming quarters,” it said in a report.It said it did not expect Spain to reach pre-pandemic output levels before the third quarter of 2023.Last year, the Spanish economy rebounded 5.1% after a record 10.8% slump in 2020 induced by the coronavirus pandemic.The government has yet to revise its bullish 7% growth projection for 2022 made last year. Economy Minister Nadia Calvino said the Ukraine conflict would weigh on growth, but recovery should continue.The central bank put first-quarter GDP growth at 0.9% from the previous three-month period, when the expansion was 2.2%, and expects European Union-harmonised consumer inflation to have clocked 7.9% in the first quarter.”The impact of the conflict will be concentrated in the second quarter under our central scenario which does not encompass an escalation,” said Bank of Spain Chief Economist Angel Gavilan. He expected the economy to still eke out small growth in the second quarter but did not rule out a contraction.Gavilan saw inflation, which hit 9.8% in March year-on-year, hovering around 10% until the summer, when it should start abating. For all of 2022, Gavilan said, inflation should reach 7.5%, double the bank’s previous forecast of 3.7%, before gradually dropping to 1.6% by 2024.Soaring energy prices have already caused transport strikes and stoppages in some sectors in Spain, aggravating supply chain disruptions and inflation.Public debt is expected to fall to 112.6% of GDP in 2022 from 118.4% last year. More

Surging inflation has Americans reconsidering how they spend their money.
The Consumer Price Index, which measures a wide-ranging basket of goods and services, jumped 7.9% in February from 12 months prior. Prices are going up on everything from the food you put on the table to the gas that powers your car.

That’s weighing heavily on people’s minds, with 48% thinking about rising prices all the time, according to a CNBC + Acorns Invest in You survey, conducted by Momentive. The online poll was conducted March 23-24 among a national sample of 3,953 adults.
Three-quarters are worried that higher prices will force them to rethink their financial choices in the coming months, the survey found.

Arrows pointing outwards

Inflation is costing the average U.S. household an additional $296 per month, according to a Moody’s Analytics analysis. Experts expect it to get worse before it gets better.
Still, there hasn’t been a significant impact on consumer spending, although retail sales grew at a slower pace than expected in February.
The biggest area people have cut back on is dining out, with 53% saying they’ve done so, according to the survey. They are also driving less and canceling monthly subscriptions, among other things.

Arrows pointing outwards

If higher prices persist, dining out, driving and trips or vacations are the top three areas Americans plan to cut back on even more.
To be sure, the past year has been difficult for many. Fully 52% said they are under more financial stress than a year ago. They are most concerned about gas prices, housing costs and food costs. In the last year, gas spiked 38%, shelter rose 4.7% and food prices increased 7.9%.
Meanwhile, a bulk of Americans are unhappy with the response from the White House, with 61% disapproving of the way President Joe Biden is handling inflation.

Recession fears

The current environment has a majority of Americans concerned about an economic recession, with 81% of respondents believing one is likely to happen this year.
“People are definitely on edge,” said Moody’s Analytics’ chief economist Mark Zandi. “Recession risks are high.”
He puts the odds at 1 in 3 and rising.

When will inflation slow?

Inflation was brought on by the pandemic, which scrambled supply chains and labor markets, and worsened by the Russian invasion of Ukraine, which impacted gas and food prices, Zandi explained.
“If that diagnosis is correct, as the pandemic fades and as we get the other side of the fallout of the Russian invasion, inflation should moderate,” he said.

Arrows pointing outwards

However, consumers will be in for some more pain in the near term, as inflation continues, Zandi said.
“We’ve got a couple of bad months dead ahead,” he said.
He predicts inflation will peak around May and by this time next year, it will be a lot lower, depending on how global events play out, as well as the response by the Federal Reserve. The central bank increased interest rates last month to combat inflation and plans another six hikes this year.
If the Fed doesn’t calibrate things just right, the economy can go into a recession, Zandi warned.

Navigating higher prices

Grace Cary | Moment | Getty Images

The first thing you should do is get a handle on your financial situation.
Asking yourself some key questions can help you figure out where you may be able to trim expenses, said certified financial planner Ashton Lawrence, a partner at Goldfinch Wealth Management in Greenville, South Carolina.
“What’s the cash flow look like? What type of debt, how much debt are we looking at?” he said.
“It’s about making the small changes and controlling where you can control.”
More from Invest in You:Most Americans are worried about a recession hitting this yearHere’s what consumers plan to cut back on if prices continue to surgeHere’s how retirees can navigate higher prices
Once you see where you are spending money, break it down into needs and wants, and begin to cut back on things that are optional, said CFP Carolyn McClanahan, founder and director of financial planning at Life Planning Partners in Jacksonville, Florida.
In fact, eating out all the time not only costs more money than cooking at home, it’s also not as healthy, said McClanahan, who is also a medical doctor. When at the grocery store, use coupons and comparison shopping to help you save money.

There will be nights when time is tight and you are tempted to order takeout for dinner. McClanahan cooks in bulk on Sundays and puts meals in the freezer for those nights.
Carpooling or planning car trips to minimize driving can help with gas, as can working from home a few days a week, if feasible.
While it is natural to be concerned about rising prices, you can’t control them — and worrying about it isn’t good for your health, McClanahan said.
“Only think about the things that you can control,” she said.
“Making certain you are spending your money in a thoughtful fashion is the one thing you can do to help mitigate the outside world around you.”
TUNE IN: Watch Sharon Epperson all day on CNBC discussing recession fears, consumer spending and financial literacy in schools.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns. More

BENGALURU (Reuters) – The U.S. Treasury yield curve, already hammered into a flat line after one of its worst quarters in decades, is set to remain off its normal upwardly-sloping shape over the coming year, according to a Reuters poll of bond strategists.The gap between two-year and 10-year U.S. Treasury yields has been inverted in the last several trading sessions. Such an inversion, when sustained, has been a reliable early warning of most U.S. recessions since the Second World War.Forecasts for a flat to slightly inverted curve come despite expectations that the Federal Reserve will soon start reducing its bond holdings, letting securities accumulated during the pandemic roll off its near-$9 trillion balance sheet.The March 29-April 5 poll of nearly 60 fixed-income strategists showed no sharp rise was imminently expected in 10-year notes, leaving the yield curve either flat or consistently at risk of further inversion over the coming year.”If you asked me what’s going to be the dominant trend over the next phase, six to 12 months, it’s going to be the Fed pushing up the short rate expectations and a split between the behaviors of the yield curve that will drive further flattening,” said Robert Tipp, chief investment strategist and head of global bonds at PGIM Fixed Income.He said two-year notes would keep following the fed funds rate up but alongside that, “the five-year and longer part of the curve keeping faith that at some point the secular fundamentals are going to become soft again.”Just in the past few months, as inflation has soared to multi-decade highs, market expectations have surged from a series of steady 25 basis point Fed rate rises at each meeting this year to a succession of half-point moves.That has led to concerns the Fed may end up overdoing its tightening campaign and put at risk the economic recovery from the pandemic, which has already shifted down a gear.Median forecasts showed the U.S. 2-year Treasury note yield, currently at 2.47%, trading at 2.30%, 2.49% and 2.60% in the next three, six and 12 months respectively, suggesting those Fed rate rises have already been priced in. The benchmark 10-year bond yield was expected to trade around the current rate of 2.45% for the next three to six months before rising to 2.60% in a year, with the highest forecast at 3.25%.If the median view is realized, that would be the flattest prediction and the first consensus forecast on a six-month horizon for a slight inversion in any Reuters poll for two decades.Apart from a handful of respondents, most expected the spread to be less than 25 basis points, smaller than a single normal rate move by the Fed in a year when they are expected to deliver several increases twice that size.”They (2s-10s) will remain inverted until the Fed stops. As long as they keep talking about going, it will remain inverted,” said Michael Every, global market strategist at Rabobank, who said the yield curve was flashing a warning signal.However, many analysts argue the Fed, which now owns a significant percentage of the U.S. Treasury market through years of quantitative easing, has robbed it of its predictive powers.”The yield curve is also distorted by QE since the Fed has bought a significant share of Treasuries, depressing term premiums and flattening the curve,” noted Priya Misra, head of global rates strategy at TD Securities.”The market is likely pricing in balance sheet run-off later this year, but implementation details are still forthcoming. This makes it difficult to have much conviction about the extent to which QT is priced in.”There was no clear consensus among analysts asked to describe the gap between current U.S. Treasury market pricing and impending quantitative tightening from the Fed. Very few regular respondents to the poll ventured a guess. (Reporting and analysis by Hari Kishan and Vivek Mishra; Polling by Shrutee Sarkar and Sarupya Ganguly; Editing by Ross Finley and Chizu Nomiyama) More