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    As Biden Pleads for More Covid Aid, States Are Awash in Federal Dollars

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    States pushed back on a plan to take back some of their stimulus money to fund President Biden’s emergency spending request. Now Congress is trying to find other ways to offset the cost.FRANKFORT, Ky. — Gov. Andy Beshear has been toting oversize checks around his state in recent weeks, handing them out to city and county officials for desperately needed water improvements.The tiny city of Mortons Gap got $109,000 to bring running water to six families who do not have it. The people of Martin County, whose water has been too contaminated to drink since a coal slurry spill two decades ago, got $411,000. The checks bear Mr. Beshear’s signature, but the money comes from the federal government, part of a huge infusion of coronavirus relief aid that is helping to fuel record budget surpluses in Kentucky and many other states.Therein lies a Washington controversy. The funds, which Congress approved at a moment when the pandemic was still raging, are allowed to be used for far broader purposes than combating the virus, including water projects like those in Kentucky. Most states will get another round of “fiscal recovery funds” — part of President Biden’s $1.9 trillion American Rescue Plan — next month.But in Washington, Mr. Biden is out of money to pay for the most basic means of protecting people during the pandemic — medications, vaccines, testing and reimbursement for care. Republicans have refused to sign off on new spending, citing the state recovery funds as an example of money that could be repurposed for urgent national priorities.“These states are awash in money — everybody from Kentucky to California,” said Scott Jennings, a former aide to Senator Mitch McConnell of Kentucky, the Republican leader. “People are like: ‘We’ve printed all this money; we’ve sent it out. These states have these massive surpluses, and now you need more?’”Republicans were never fans of Mr. Biden’s rescue plan, which Democrats muscled through Congress without their support. Despite the many ways it is benefiting his state, Mr. McConnell once called it a “multitrillion-dollar, nontargeted Band-Aid” that would dump “another huge mountain of debt on our grandkids.”On Capitol Hill on Thursday, a day after Mr. Biden made a public appeal to Congress for more money, Senate Republicans and Democrats were nearing a deal on a $10 billion emergency aid package — less than half of Mr. Biden’s initial request. But they had not resolved crucial differences over the size and how to pay for it. Republicans want to use unspent money already approved by Congress, but the parties have been unable to agree on which programs should be tapped.Since the outset of the pandemic, the Trump and Biden administrations have injected $5 trillion into the American economy, including the rescue plan. With midterm elections approaching, the gush of federal stimulus spending will draw even greater scrutiny as Republicans accuse Democrats of wasting funds and fueling inflation, and demand a precise accounting of how the money has been spent.David Adkins, the executive director and chief executive of the Council of State Governments, said such questions were inevitable now that policymakers could catch their collective breath.“We have to lean into the notion that states are laboratories of democracy,” Mr. Adkins said. “Some of these things will fail; some of this money will not be spent well. But that is the nature of trying to navigate disruptive times.”The rescue plan set aside $195 billion to help states recover from the economic and health effects of the pandemic. When Mr. Biden made his initial aid request, senior lawmakers in both parties negotiated a plan to pay for it partly by taking back $7 billion from states, as part of a $1.5 trillion spending bill.Governors and rank-and-file Democrats balked, saying that to do so would disproportionately hurt the 31 states that have not yet gotten all their rescue funds, and the deal fell apart. Now it appears the state funds will be spared, though the fracas has cast a sharp spotlight on how the fiscal recovery funds are being spent.“I was never for giving this money to the states, but I was always of the belief that once you gave it to them, politics would not allow you to get it back,” Senator Roy Blunt of Missouri, the top Republican on the subcommittee that controls health spending, said in a recent interview.All told, the White House says 93 percent of the American Rescue Plan dollars that are currently available have been “legally obligated,” meaning they have either already been spent or are committed to being spent.Most states have either started spending their fiscal recovery funds, or have plans to do so. A recent analysis by the Center on Budget and Policy Priorities found that while most states are still developing budgets for the upcoming fiscal year, states have already budgeted 78 percent of their fiscal recovery fund allocation.Kentucky, where Mr. Beshear, a Democrat, is promoting record job growth and economic boom times, ended 2021 with a record $1.1 billion surplus, and another surplus is expected this year. The state has already received $1.1 billion in federal funds and expects another $1 billion in May. It is spending the money on broadband, bolstering tourism and shoring up the unemployment insurance fund as well as coronavirus testing, in addition to water improvements.Martin County recently received $411,000 in federal stimulus funds to help pay for desperately needed water improvements.Maddie McGarvey for The New York Times“These dollars are too important and too transformational to get caught up in a partisan fight,” Mr. Beshear said in an interview, adding: “These are dollars that are helping us as we emerge from Covid. We’ve got a choice to limp out of the pandemic or sprint out of the pandemic, and cutting off this aid only hurts the people that need it.”Congress specified four broad purposes for the money: to respond to the pandemic’s health and economic impacts; to provide bonus pay to essential workers; to prevent cuts in public services; and to invest in sewer, water or broadband infrastructure. But states can also use the funds to replace lost revenues, which gives them great flexibility in spending the money.Arkansas, for instance, has awarded $374,000 to a rape crisis center; $6.3 million to the Arkansas Coalition Against Sexual Assault; and another $6.3 million to the Arkansas Alliance of Boys & Girls Clubs. But the bulk of the money has gone toward improving broadband access and addressing the needs of the health care system.“The Omicron variant came in, cases skyrocketed, hospitals filled up and so we had to utilize a significant amount of our ARPA money for expanding hospital space, home testing and other public health response,” said Gov. Asa Hutchinson, a Republican, using the acronym for the rescue plan. “So that’s obviously the first responsibility, and then we looked at these other needs.”Other states are using the money in ways that are only tangentially related to Covid-19, but that are permissible under guidelines issued by the Treasury Department.Alabama devoted $400 million of its allocation, or roughly one-fifth, to building two new prisons, despite a public outcry from advocates for racial justice and civil liberties. Florida devoted $2 billion, nearly one-quarter of its $8.8 billion allotment, to highway construction — a decision that has drawn criticism from the nonpartisan Florida Policy Institute.“The intended purpose of the American Rescue Plan Act dollars was to ensure that individuals and communities could recover from the pandemic, and I think in many ways there were better uses for this money,” said Esteban Leonardo Santis, the group’s tax and revenue analyst.Twenty states, including Kentucky, spent a total of $15 billion to build up their depleted unemployment insurance trust funds. Independent analysts say that is effectively a tax break for businesses, which otherwise may have had to make up for the lost revenues. But Mr. Beshear defended it, saying that Kentucky businesses stepped up during the pandemic. A local Toyota plant made face shields, and bourbon distillers manufactured hand sanitizer, he said.The governor’s Twitter feed is rife with photos of big checks and smiling city and county officials; he is running for re-election in 2023.“If there’s one thing a governor knows how to do, it’s drive around their state and hand out huge checks and cut big ribbons with oversized scissors,” Mr. Jennings said. “They’re like game show hosts out there.”Chris McDaniel, a Kentucky state senator, spent much of this week immersed in budget talks, including planning how to use Kentucky’s next tranche of fiscal recovery funds.Luke Sharrett for The New York TimesExperts say, and the White House acknowledges, that the fiscal recovery funds have helped create state budget surpluses. Gene B. Sperling, a senior adviser to the president who is overseeing the American Rescue Plan, said the surpluses were proof that Mr. Biden’s stimulus package was working — and this was no time to pare back.“Ensuring that states and localities have a cushion for some pretty serious bumps in the road is smart policy,” Mr. Sperling said, “and a lesson learned from what happened after the Great Recession.”But those surpluses are likely to be temporary, and how states are using them has played into the controversy over Covid relief funds. The Center on Budget and Policy Priorities says 14 states are using temporary budget surpluses “to call for costly and permanent tax cuts targeted more to wealthy people” — a move the center described as a “bad choice.”Here in Frankfort, the state capital, Kentucky lawmakers in a hurry to wrap up their 2022 legislative session were working on pushing through a hefty income tax cut this week. But a proposal to use the state’s budget surplus to give Kentuckians a tax rebate of up to $500 seemed unlikely to pass, said its author, State Senator Chris McDaniel, the appropriations committee chairman.Mr. McDaniel, a Republican, spent much of this week immersed in budget talks, including planning how to use Kentucky’s next tranche of fiscal recovery funds. Another $1 billion is coming, and despite some philosophical misgivings, he said he saw no reason not to spend it.“I believe firmly that it was too much money that came down,” Mr. McDaniel said. “But I also believe that Kentuckians will bear the tax burden eventually, just like everyone else down the line, and I am not going to disadvantage future Kentuckians out of a point of philosophical pride.”Emily Cochrane More

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    High Inflation Could Persist as Wages Continue to Rise

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    Economists have been waiting for Americans to shift from buying goods, like furniture and appliances, and toward spending on vacations, restaurant meals and other services as the pandemic fades, betting the transition would take pressure off supply chains and help inflation to moderate.Rapid wage growth could make that story more complicated. Demand for services is rising just as many employers are struggling to find workers, which could force them to continue raising wages. While positive for workers, that could keep overall inflation brisk as companies try to cover their labor costs, speeding up price increases for services even as they begin to moderate for goods.Heavy spending on goods during the pandemic has been a driver of the recent inflation burst. Consumers began snapping up items a few months after pandemic lockdowns began and have kept on buying. Spending on services also has recovered, but much more slowly. That shift in what people are purchasing has roiled supply chains, which were not built to produce, ship and deliver so many cars, treadmills and washing machines.Policymakers spent months betting that as the virus waned and consumers resumed more normal shopping patterns, prices of goods would slow their ascent or even fall. That would pull down inflation, which has been running at its fastest pace in 40 years.But that transition — assuming it happens — may do less to cool inflation than many had hoped. A big chunk of what the government defines as “services” inflation comes from rental housing costs, which often move up alongside wage growth, as households can afford more and bid up the cost of a limited supply of housing units. And when it comes to discretionary services, like salons and gyms, labor is a major cost of production. Rising pay likely means higher prices.Jason Furman, a Harvard economist who served as a top adviser to President Barack Obama, said the shortage of workers in many service industries means that if demand for services goes up, prices will too. That means a shift in spending back to services won’t necessarily result in an overall slowdown in the pace of price increases.“An awful lot of services are incredibly constrained,” he said. “As we shift back to services, we’ll get more services inflation and less goods inflation, and I don’t think it’s at all obvious that the result of that is less inflation.”While America has gotten used to thinking about shortages in products — couches are out of stock, shoes are back-ordered — labor shortfalls could mean that services will also end up oversubscribed, allowing providers to charge more.MaidPro, a home-cleaning firm, has seen a surge in demand from professionals who are spending more time at home. But it is having trouble finding workers to keep up, said Tom Manchester, the company’s president.“Our demand right now outstrips our supply of being able to service that demand,” he said. “Demand has just continued to be strong — like double-digit strong. And if we could find qualified pros to meet the demand, we’d be even more ahead than we are today.”An Amazon employee delivering packages in Manhattan. Americans have continued to buy goods even as services have rebounded.Gabby Jones for The New York TimesMr. Manchester said hourly wages were up $1 to $3, adding to costs at a time when cleaning products have gotten pricier and higher gas prices have made travel reimbursements more expensive. MaidPro franchisees have been able to pass those costs on to their customers, both via fuel surcharges and outright price increases that have more or less kept up with inflation.So far, they have lost few customers — in part because few competitors have capacity to take on new customers.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: Times readers sent us their questions about rising prices. Top experts and economists weighed in.Interest Rates: As it seeks to curb inflation, the Federal Reserve announced that it was raising interest rates for the first time since 2018.How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.“If someone has someone that they really like coming in to clean their home, they don’t want to lose them,” he said. “They don’t want to risk saying, ‘I want to move away from MaidPro and try to find someone else,’ because in nine out of 10 instances, that someone else isn’t available.”Some economists argue that if goods inflation slows, that could still help price gains overall to moderate, even amid rising wages. Prices for products that last a long time rose 11.6 percent in the year through January, and prices for shorter-lived products like cosmetics and clothing were up 7.2 percent, still much stronger than services inflation.“We have in mind a big decline in goods prices,” said Roberto Perli, the head of global policy research at the investment bank Piper Sandler. “It would take a lot of increase in service prices to actually offset that.”Outright declines in goods prices are not guaranteed. Take cars: Rapid price growth in new and used autos was a big driver of inflation last year, and many economists expect those prices to dip in 2022. But Jonathan Smoke, the chief economist at Cox Automotive, said continued shortages mean prices for new cars are likely to continue rising, and issues with new car supply could spill over to blunt the expected decline in used car costs.And services inflation is now also coming in fast. It ran at 4.6 percent in the year through January, the quickest pace since 1989, and it has been posting large monthly gains since autumn. That is enough to keep inflation above the Federal Reserve’s 2 percent goal even if product prices stop accelerating.While goods have taken up a bigger chunk of household budgets in recent months than they did before the pandemic, Americans still spend nearly twice as much on services as on goods overall.“You don’t need a lot of extra services inflation to make up for your lost goods inflation,” Mr. Furman said.Restaurants, hotels and other discretionary services aren’t the only places where persistent demand could run up against limited supply, Mr. Furman argued. Many nonurgent health care services saw a decline in demand during the pandemic and are now experiencing a rebound amid a shortage of nurses and other skilled workers.Inflation F.A.Q.Card 1 of 6What is inflation? More

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    Workers Are Still in High Demand, Department of Labor Reports

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    Job openings last month remained near record levels, and the number of workers voluntarily leaving their positions increased, the Labor Department said on Tuesday.The data, released as part of the agency’s monthly report on job openings, layoffs and quitting, serve as indicators of how much demand there is for workers in the U.S. economy and the extent to which employers are still struggling with labor shortages months after the economy began recovering from the pandemic’s worst damage.There were about 11.3 million job openings in February, essentially the same as the month before and down a little from a record in December, though the number of hires overall edged up by 263,000 last month, to about 6.7 million.After falling during the peak of Covid-19 lockdowns in 2020, the rates at which so-called prime-age workers — those aged 25 to 54 — are working or seeking work has rallied back to prepandemic levels. Yet with the economy growing faster than in decades, demand for labor has outpaced the availability of workers — at least at the wages and benefits employers are offering.There are still roughly three million or so people who have not returned to the work force, according to the government data.“Looking at how poorly our labor force has grown so far this year, if companies want to win the war for talent they need to engage the people who may not be actively seeking work right now, or be the first option people see when they do return,” Ron Hetrick, a senior economist at Emsi Burning Glass, a data and research company, wrote in a note.That echoes the sentiment of many unions and labor activists, who have been saying that even though wage growth has picked up, people aren’t feeling valued enough by employers. It’s led to fresh questions about how bosses might get to know the “love language” of their hires and find sometimes unconventional ways to show them that they care. There are also more straightforward requests: Several progressive economists have noted that employers could, for instance, take some jobs generally expected to be low-wage — such as fast food service and cashiers — and entice workers by offering higher pay and better benefits.Large public companies and small businesses alike often say that they have already substantially raised pay from before the pandemic and that with inflation raging at highs unseen since the early 1980s, raw material and other costs have made business more difficult. An expensive surge in commodity markets suggests that price increases for food and energy could worsen, especially if firms raise prices further.Still, despite widespread frustration with inflation and shortages of some products and materials, some surveys suggest businesses are becoming more optimistic about the future. The MetLife and U.S. Chamber of Commerce Small Business Index recently reached a pandemic-era high, with about three in five of the small business owners surveyed saying their business is in good health. More

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    Is America’s Economy Entering a New Normal?

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    Policymakers are wrestling with the reality that the pandemic may mark a turning point in the nation’s economic plot.The pandemic, and now the war in Ukraine, have altered how America’s economy functions. While economists have spent months waiting for conditions to return to normal, they are beginning to wonder what “normal” will mean.Some of the changes are noticeable in everyday life: Work from home is more popular, burrito bowls and road trips cost more, and buying a car or a couch made overseas is harder.But those are all symptoms of broader changes sweeping the economy — ones that could be a big deal for consumers, businesses and policymakers alike if they linger. Consumer demand has been hot for months now, workers are desperately wanted, wages are climbing at a rapid clip, and prices are rising at the fastest pace in four decades as vigorous buying clashes with roiled supply chains. Interest rates are expected to rise higher than they ever did in the 2010s as the Federal Reserve tries to rein in inflation.History is full of big moments that have changed America’s economic trajectory: The Great Depression of the 1930s, the Great Inflation of the 1970s and the Great Recession of 2008 are examples. It’s too early to know for sure, but the changes happening today could prove to be the next one.Economists have spent the past two years expecting many of the pandemic-era trends to prove temporary, but that has not yet been the case.Forecasters predicted that rapid inflation would fade in 2021, only to have those expectations foiled as it accelerated instead. They thought workers would jump back into the labor market as schools reopened from pandemic shutdowns, but many remain on its sidelines. And they thought consumer spending would taper off as government pandemic relief checks faded into the rearview mirror. Shoppers have kept at it.Now, Russia’s invasion of Ukraine threatens the global geopolitical order, yet another shock disrupting trade and the economic system.For Washington policymakers, Wall Street investors and academic economists, the surprises have added up to an economic mystery with potentially far-reaching consequences. The economy had spent decades churning out slow and steady growth clouded by weak demand, interest rates that were chronically flirting with rock bottom and tepid inflation. Some are wondering if, after repeated shocks, that paradigm could change.“For the last quarter century, we’ve had a perfect storm of disinflationary forces,” Jerome H. Powell, the Fed chair, said in response to a question during a public appearance this week, noting that the old regime had been disrupted by a pandemic, a large spending and monetary policy response and a war that was generating “untold” economic uncertainty. “As we come out the other side of that, the question is: What will be the nature of that economy?” he said.The Fed began to raise interest rates this month in a bid to cool the economy down and temper high inflation, and Mr. Powell made clear this week that the central bank planned to keep lifting them — perhaps aggressively. After a year of unpleasant price surprises, he said, the Fed will set policy based on what is happening, not on an expected return to the old reality.“No one is sitting around the Fed, or anywhere else that I know of, just waiting for the old regime to come back,” Mr. Powell said.The prepandemic normal was one of chronically weak demand. The economy today faces the opposite issue: Demand has been supercharged, and the question is whether and when it will moderate.Before, globalization had weighed down both pay and price increases, because production could be moved overseas if it grew expensive. Gaping inequality and an aging population both contributed to a buildup of savings stockpiles, and as money was held in safe assets rather than being put to more active use, it seemed to depress growth, inflation and interest rates across many advanced economies.Japan had been stuck in the weak-inflation, slow-growth regime for decades, and the trend seemed to be spreading to Europe and the United States by the 2010s. Economists expected those trends to continue as populations aged and inequality persisted.Then came the coronavirus. Governments around the world spent huge amounts of money to get workers and businesses through lockdowns — the United States spent about $5 trillion.The era of deficient demand abruptly ended, at least temporarily. The money, which is still chugging out into the U.S. economy from consumer savings accounts and state and local coffers, helped to fuel strong buying, as families snapped up goods like lawn mowers and refrigerators. Global supply chains could not keep up.The combination pushed costs higher. As businesses discovered that they were able to raise prices without losing customers, they did so. And as workers saw their grocery and Seamless bills swelling, airfares climbing and kitchen renovations costing more, they began to ask their employers for more money.Companies were rehiring as the economy reopened from the pandemic and to meet the burst in consumption, so labor was in high demand. Workers began to win the raises they wanted, or to leave for new jobs and higher pay. Some businesses began to pass rising labor costs along to customers in the form of higher prices.The world of slow growth, moderate wage gains and low prices evaporated — at least temporarily. The question now is whether things will settle back down to their prepandemic pattern.The argument for a return to prepandemic norms is straightforward: Supply chains will eventually catch up. Shoppers have a lot of money in savings accounts, but those stockpiles will eventually run out, and higher Fed interest rates will further slow spending.As demand moderates, the logic goes, forces like population aging and rampant inequality will plunge advanced economies back into what many economists call “secular stagnation,” a term coined to describe the economic malaise of the 1930s and revived by the Harvard economist Lawrence H. Summers in the 2010s.The Russia-Ukraine War and the Global EconomyCard 1 of 6Rising concerns. More

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    How 6 Workers Built New Careers In the Pandemic

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    When the pandemic struck in 2020, entire industries were decimated overnight, leaving workers to survive on unemployment benefits. But for some, the Covid-19 crisis presented an opportunity to change course; indeed, the post-lockdown job market faces a shortage of workers even as it recovers.These are the stories of six people who transformed their careers during the past two years. For some, it was a financial imperative. For others, lockdowns became a chance to rethink their path. For each, it was a big risk on a new future..“My favorite part of the job is when I get a compliment from a customer.”Tre’Vonte CurrieTre’Vonte Currie frying fresh wontons during his dinner shift at Fahrenheit, where he’s learning the skills he’ll need to someday open his own food business.Amber Ford for The New York TimesFood has long been Mr. Currie’s passion.Amber Ford for The New York TimesMr. Currie prepping kale for salads.Amber Ford for The New York TimesWhen he was growing up, nothing brought Tre’Vonte Currie as much joy as food: his mom’s macaroni and cheese, the brownies and ice cream that fed his sweet tooth. Like a “mad scientist,” he created recipes for fried baloney, spaghetti and chicken Alfredo in his family’s kitchen.As a teenager, Mr. Currie dreamed of opening his own restaurant. It would be spacious and filled with warmth. Maybe there would be chandeliers. The food would include a range of cultural cuisines, from pizza to curry.At the start of the pandemic, Mr. Currie, 22, felt stuck. He had dropped out of high school in 2019 because he had had trouble focusing, even though he hadn’t found the curriculum difficult. He made money by doing odd jobs, like roofing and landscaping, around his Cleveland neighborhood, mostly from friends who wanted to help him out. But much of that work disappeared when Covid-19 swept the city.Then in August 2021, Mr. Currie’s mother learned about a free program near their home called Towards Employment, which offered career coaching and job search services. Mr. Currie was skeptical at first, but after speaking with the program’s coordinators, he signed up for two weeks of training in professional behaviors like how to dress for job interviews. Immediately afterward, he got a job at a restaurant in downtown Cleveland.In January, Mr. Currie took a new job at a high-end contemporary American restaurant, Fahrenheit, where he works 40 hours a week cooking and cleaning. He feels energized, knowing he is building the skills he needs to someday open his own business, maybe starting with a food truck.“My favorite part of the job is when I get a compliment from a customer about how good the meal was,” he said. “That lights up my day.”“I had generations before me teaching me to be a better mom.”Dwanét PerryDwanét Perry with her son. Nearly two years after being laid off, she has launched her own candlemaking business.Courtney Yates for The New York TimesMs. Perry has saved enough to move into her own apartment.Courtney Yates for The New York TimesMs. Perry sells her candles online.Courtney Yates for The New York TimesMs. Perry delivering for DoorDash, one of several jobs she juggles to support her family.Courtney Yates for The New York TimesDwanét Perry, 25, was six months pregnant when she was laid off from her job at a money transfer company in Queens in March 2020. The notice brought a jolt of pain and tough questions: How would she support herself and her baby? What could she do to move her life forward?Her son was born in June, and she moved the two of them into her mother’s home in Oradell, N.J. It was a painful period, but the bright spot was her family. She spent the summer surrounded by her mom, her grandmother and her younger sisters.“Everything there was cozy and comforting,” Ms. Perry said. “I had generations before me teaching me to be a better mom and telling me things I didn’t know.”Ms. Perry started thinking about how she might use the moment of upheaval to move toward her dream of doing something creative.She started watching YouTube and Instagram videos on candle making. Figuring that “everyone loves candles,” she decided to try making and selling her own. She melted soy wax in a double boiler and added oils to create different scents: pink sugar, cucumber melon, fallen leaves, sweater weather. She called her business Flame N Mama, in honor of her newborn son.Now Ms. Perry balances several jobs. She delivers for DoorDash three to four hours a day and was recently hired as a registration specialist at a car dealership. In the evenings, she makes and sells her candles to people who find her on social media.She was able to save up and move back to Queens with her son: “He has a very great sense of humor,” Ms. Perry said, laughing. “He loves to stick with his mommy.”“You have no choice but to be really good at it.”Liz MartinezLiz Martinez finds commonalities between her new career as a dental assistant and her old job as a beauty adviser.Christie Hemm Klok for The New York TimesMs. Martinez dropping her two daughters off at day care in San Francisco.Christie Hemm Klok for The New York TimesWhen Liz Martinez, 32, started training to be a dental assistant last year, she assumed it would be drastically different from her previous work as a beauty adviser at Sephora in San Francisco. But she found surprising commonalities: She practices the technical skills until they feel seamless, and she connects with clients and tries to ease their day.As a dental assistant, “you have no choice but to be really good at it,” she said. “It’s nice not being nervous.”Ms. Martinez hadn’t been closely following the news when Covid-19 started to spread in March 2020, so she was confused about why Sephora told her to put away makeup samples. Then she got an email that the store was temporarily closing. Soon after, she gave birth to her second daughter and wasn’t able to work because she had to look after her children during the day. She had no income to support her family.“I realized at that moment you can be surrounded by people and still be super alone,” she said.She learned that she could train to be a dental assistant through a local chapter of the Jewish Vocational Service, a nonprofit. She signed up for the three-month course: one month of Zoom classes, two months of hands-on training. By the fall of 2021, a clinic had hired her.The dentist she works with, Dr. Earl Capuli, continues to applaud Ms. Martinez’s improvement on the job, especially in mixing dental compounds. “The day I finally got it perfectly, he was bragging about it all day,” she said. “It’s really nice to hear positive feedback.”“That accident was the best thing that ever could have happened to me.”David LevyDavid Levy inside his second food truck, Tacos Cinco De Mayo.Lexey Swall for The New York TimesMr. Levy and his wife, Gloria, working in Arlington, Va.Lexey Swall for The New York TimesMr. Levy opened his first food truck with the insurance payout from a serious car accident.Lexey Swall for The New York TimesWhen the pandemic hit, David Levy, 61, was still reeling from a different life-altering disaster. In 2017, Hurricane Irma seriously damaged his family’s home in Florida, and Mr. Levy lost his job in construction shortly after, forcing him to pack up his belongings with his wife and three children and move in with his mother in Virginia.Mr. Levy struggled to find work in Virginia, so he started driving for Uber to make ends meet. When the pandemic struck, Uber trips fell off, and his income slowed to a trickle.Then he got a letter from the Senior Community Service Employment Program, which provides job training to older workers. In August 2020, he enrolled in a food entrepreneur workshop and had the idea to refashion a large storage trailer into a food truck. But he did not have enough capital to start his own business.And then something terrible and miraculous happened: A car accident left him with injuries serious enough to land him in a hospital. He won $65,000 in an insurance payout in August 2021 and used it to start a food truck business, Pizza Pita, which offers dishes that combine the flavors of Mediterranean and Colombian food.“It is crazy to think about it now, but that accident was the best thing that ever could have happened to me,” he said. “It made it possible for my dream of opening my own business to come true.”Mr. Levy, who was born in Colombia and has a Lebanese father, wanted to channel his heritage through cross-cultural flavor combinations. He recently converted to Judaism and was inspired by the Middle Eastern food he tasted during trips to Israel.Six months ago, he was financially stable enough to move his family out of his mother’s home and into one of their own in McLean, Va. Mr. Levy said his first food truck had been so successful that he opened another, Tacos Cinco De Mayo, last month.“Most days I work from 4:30 a.m. to midnight,” he said. “But no matter how hard it is, when you do something you love, it is worth it.”“I really needed to get out of that job.”Jane Watiri TaylorJane Watiri Taylor loading up her car with vegetables to sell to a grocery delivery service.Miranda Barnes for The New York TimesMs. Watiri Taylor’s tools for harvesting vegetables.Miranda Barnes for The New York TimesMs. Watiri Taylor bundling greens.Miranda Barnes for The New York TimesJane Watiri Taylor was working as a nurse at the Travis County Jail in Austin, Texas, when the pandemic hit. She called it the most frightening time she could remember in 10 years of nursing. Not only was she worried about catching the virus during her shifts, but some inmates took out their anger and frustration on her.“One time this person literally tried to spit on me,” she remembered. “They said, ‘I have Covid, and I’m going to give it to you.’ They spit on my scrubs; luckily it never got on my face.”For Ms. Watiri Taylor, 54, like so many other health care workers, “the burnout was real.”“I like taking care of people. But at that point, I was like, ‘I think I’m going to change jobs and start taking care of plants,’” she said. “You know, plants are never going to call me names, or insult or abuse me. I really needed to get out of that job.”In July 2021, she left to pursue a dream she’d had since her childhood in Kenya: to become a farmer.She had been growing fruits and vegetables in her backyard since 2015. To learn how to run her own farming business, she signed up for a class through Farmshare Austin, a nonprofit. She subleased a small piece of land in Lexington, Texas, to grow fruits and vegetables on a larger scale. She now sells her produce at local farmers’ markets.“I want to nurture people; that’s why I got into nursing,” she said. “With farming, you are still nurturing people, but in a different way. It is really satisfying when you grow stuff and are able to know that eventually it is going to help make sure someone has got food on the table and it is going to nourish their bodies. And to me, that’s enough.”Farming is much less predictable than nursing, and the financial instability worries her. Still, she says she is much happier than when she was working as a nurse.“Money is important,” she said. “But I want to be able to wake up every morning excited about what I’m doing. And that’s how I feel about farming.”“It was time for me to take a step back.”Adam SimonAdam Simon preparing sourdough loaves. He has no plans to return to his old career in finance.Tonje Thilesen for The New York TimesMr. Simon baking at the Entrepreneur Space in Queens.Photographs by Tonje Thilesen for The New York TimesLike many people, Adam Simon baked his own sourdough in the early months of the pandemic. He loved his pandemic hobby so much that he decided to turn it into a new career.In 2017, after working in finance for about 20 years, the 47-year-old left his job as a partner and director of research at the investment firm Echo Street Capital Management to spend more time with his family.“Every day of the week I was out the door before my kids woke up, and by the time I got home, they were asleep,” he said. “It was time for me to take a step back.”In June 2020, Mr. Simon, his wife and two daughters started baking sourdough bread and pastries and sharing the goods with their neighbors in Long Island.Though he had originally planned to return to finance, he decided instead to train himself to be a better baker. He read and watched everything he could about baking and worked in two local bakeries to hone his skills.In February 2022 he launched his own baking business, Sourdough Gambit, a homage to his love of chess.He makes his bread at the Entrepreneur Space, a food and business incubator in the Long Island City neighborhood of Queens, where he produces and sells about 300 baked goods each week. He hopes to open his own bakery and doesn’t plan to work in finance again.“It was a lot to walk away from,” he said. “But in hindsight, it was very much the right thing.” More

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    Ukraine War and Pandemic Force Nations to Retreat From Globalization

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    WASHINGTON — When the Cold War ended, governments and companies believed that stronger global economic ties would lead to greater stability. But the Ukraine war and the pandemic are pushing the world in the opposite direction and upending those ideas.Important parts of the integrated economy are unwinding. American and European officials are now using sanctions to sever major parts of the Russian economy — the 11th largest in the world — from global commerce, and hundreds of Western companies have halted operations in Russia on their own. Amid the pandemic, companies are reorganizing how they obtain their goods because of soaring costs and unpredictable delays in global supply chains.Western officials and executives are also rethinking how they do business with China, the world’s second-largest economy, as geopolitical tensions and the Chinese Communist Party’s human rights abuses and use of advanced technology to reinforce autocratic control make corporate dealings more fraught.The moves reverse core tenets of post-Cold War economic and foreign policies forged by the United States and its allies that were even adopted by rivals like Russia and China.“What we’re headed toward is a more divided world economically that will mirror what is clearly a more divided world politically,” said Edward Alden, a senior fellow at the Council on Foreign Relations. “I don’t think economic integration survives a period of political disintegration.”“Does globalization and economic interdependence reduce conflict?” he added. “I think the answer is yes, until it doesn’t.”Opposition to globalization gained momentum with the Trump administration’s trade policies and “America First” drive, and as the progressive left became more powerful. But the pandemic and President Vladimir V. Putin’s invasion of Ukraine have brought into sharp relief the uncertainty of the existing economic order.President Biden warned President Xi Jinping of China on Friday that there would be “consequences” if Beijing gave material aid to Russia for the war in Ukraine, an implicit threat of sanctions. China has criticized sanctions on Russia, and Le Yucheng, the vice foreign minister, said in a speech on Saturday that “globalization should not be weaponized.” Yet China increasingly has imposed economic punishments — Lithuania, Norway, Australia, Japan and South Korea have been among the targets.The result of all the disruptions may well be a fracturing of the world into economic blocs, as countries and companies gravitate to ideological corners with distinct markets and pools of labor, as they did in much of the 20th century.Mr. Biden already frames his foreign policy in ideological terms, as a mission of unifying democracies against autocracies. Mr. Biden also says he is enacting a foreign policy for middle-class Americans, and central to that is getting companies to move critical supply chains and manufacturing out of China.The goal is given urgency by the hobbling of those global links over two years of the pandemic, which has brought about a realization among the world’s most powerful companies that they need to focus on not just efficiency and cost, but also resiliency. This month, lockdowns China imposed to contain Covid-19 outbreaks have once again threatened to stall global supply chains.The Chinese city of Shenzhen was shut down due to Covid concerns last week, threatening the global supply chain.Kin Cheung/Associated PressThe economic impact of such a change is highly uncertain. The emergence of new economic blocs could accelerate a massive reorganization in financial flows and supply chains, potentially slowing growth, leading to some shortages and raising prices for consumers in the short term. But the longer-term effects on global growth, worker wages and supplies of goods are harder to assess.The war has set in motion “deglobalization forces that could have profound and unpredictable effects,” said Laurence Boone, the chief economist of the Organization for Economic Cooperation and Development.For decades, executives have pushed for globalization to expand their markets and to exploit cheap labor and lax environmental standards. China especially has benefited from this, while Russia profits from its exports of minerals and energy. They tap into enormous economies: The Group of 7 industrialized nations make up more than 50 percent of the global economy, while China and Russia together account for about 20 percent.Trade and business ties between the United States and China are still robust, despite steadily worsening relations. But with the new Western sanctions on Russia, many nations that are not staunch partners of America are now more aware of the perils of being economically tied to the United States and its allies.If Mr. Xi and Mr. Putin organize their own economic coalition, they could bring in other nations seeking to shield themselves from Western sanctions — a tool that all recent U.S. presidents have used.“Your interdependence can be weaponized against you,” said Dani Rodrik, a professor of international political economy at Harvard Kennedy School. “That’s a lesson that I imagine many countries are beginning to internalize.”The Ukraine war, he added, has “probably put a nail in the coffin of hyperglobalization.”China and, increasingly, Russia have taken steps to wall off their societies, including erecting strict censorship mechanisms on their internet networks, which have cut off their citizens from foreign perspectives and some commerce. China is on a drive to make critical industries self-sufficient, including for technologies like semiconductors.And China has been in talks with Saudi Arabia to pay for some oil purchases in China’s currency, the renminbi, The Wall Street Journal reported; Russia was in similar discussions with India. The efforts show a desire by those governments to move away from dollar-based transactions, a foundation of American global economic power.For decades, prominent U.S. officials and strategists asserted that a globalized economy was a pillar of what they call the rules-based international order, and that trade and financial ties would prevent major powers from going to war. The United States helped usher China into the World Trade Organization in 2001 in a bid to bring its economic behavior — and, some officials hoped, its political system — more in line with the West. Russia joined the organization in 2012.But Mr. Putin’s war and China’s recent aggressive actions in Asia have challenged those notions.“The whole idea of the liberal international order was that economic interdependence would prevent conflict of this kind,” said Alina Polyakova, president of the Center for European Policy Analysis, a research group in Washington. “If you tie yourselves to each other, which was the European model after the Second World War, the disincentives would be so painful if you went to war that no one in their right mind would do it. Well, we’ve seen now that has proven to be false.”“Putin’s actions have shown us that might have been the world we’ve been living in, but that’s not the world he or China have been living in,” she said.The United States and its partners have blocked Russia from much of the international financial system by banning transactions with the Russian central bank. They have also cut Russia off from the global bank messaging system called SWIFT, frozen the assets of Russian leaders and oligarchs, and banned the export from the United States and other nations of advanced technology to Russia. Russia has answered with its own export bans on food, cars and timber.The penalties can lead to odd decouplings: British and European sanctions on Roman Abramovich, the Russian oligarch who owns the Chelsea soccer team in Britain, prevent the club from selling tickets or merchandise.Ticket sales for Chelsea Football Club games were stopped after Britain and the European Union imposed sanctions on the club’s owner, Roman Abramovich, a Putin ally. Andy Rain/EPA, via ShutterstockAbout 400 companies have chosen to suspend or withdraw operations from Russia, including iconic brands of global consumerism such as Apple, Ikea and Rolex.Russia-Ukraine War: Key DevelopmentsCard 1 of 4Russia’s shrinking force. More

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    As Inflation Surges, Biden Targets Ocean Shipping

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    The president is targeting shipping companies that have jacked up prices during the pandemic, but critics say bigger economic forces are at work.With inflation surging at its fastest pace in 40 years, President Biden has identified a new culprit that he says is helping fuel America’s skyrocketing prices: The ocean vessels that ferry containers stuffed with foreign products to America’s shores each year.Shipping prices have soared since the pandemic, as rising demand for food, couches, electronics and other goods collided with shutdowns at factories and ports, leading to a shortage of space on ocean vessels as countries competed to get products from foreign shores to their own.The price to transport a container from China to the West Coast of the United States costs 12 times as much as it did two years ago, while the time it takes a container to make that journey has nearly doubled. That has pushed up costs for companies that source products or parts from overseas, seeping into what consumers pay.Mr. Biden has pledged to try to lower costs by increasing competition in the shipping industry, which is dominated by a handful of foreign-owned ocean carriers. He has cited the industry’s record profits and directed his administration to provide more support for investigations into antitrust violations and other unfair practices.Congress is also considering legislation that would hand more power to the Federal Maritime Commission, an independent agency that polices international ocean transportation on behalf American companies and consumers.The bill, which has bipartisan support, would authorize the commission to take action against anticompetitive behavior, require shipping companies to comply with certain service standards and regulate how they impose certain fees on their customers. Mr. Biden is pushing lawmakers to add a provision that would allow the commission and Justice Department to review applications for new alliances between companies for antitrust issues, and reject those that are not in the public interest.The House passed its version of the bill in December; it must be reconciled with a Senate version.But it’s unclear to what extent more government oversight and enforcement will actually bring down shipping costs, which are being driven in large part by soaring consumer demand and persistent bottlenecks. Global supply chains are still plagued by delays and disruptions, including those stemming from the Russian invasion of Ukraine and China’s broad lockdowns in Shenzhen, Shanghai and elsewhere.“As a standard matter of economics, if you have inelastic supply and experience a surge in demand, you will see a rise in prices,” said Phil Levy, the chief economist at Flexport, a logistics company.The effect is expected to worsen in the coming months. Shipping rates typically take 12 to 18 months to fully pass through to consumer prices, said Nicholas Sly, an economist at the Federal Reserve Bank of Kansas City.“The goods that are being affected by shipping costs today are really the goods that consumers and American households are going to be buying many months from now, and that’s why those costs tend to show up later,” he said.Some of the price increases from late last summer have yet to work their way through into consumers, he said, and the conflict in Ukraine is causing further disruptions.Shipping prices have already skyrocketed so high that, for some products, they have erased companies’ profit margins.The cost to ship a container of goods from Asia to the U.S. West Coast surged to $16,353 as of March 11, nearly triple what it was last year, according to data from Freightos, a freight booking platform. While supply chain congestion showed some signs of easing in January and February, the Russian invasion of Ukraine has quickly worsened the situation along with lockdowns in China that have closed factories and warehouses.Analysts at Capital Economics, in a research note on Wednesday, said that it was still possible for China to suppress coronavirus infections without causing widespread disruption to global supply chains. “But the risk that global supply chains links within China get severed is the highest that it has been in two years,” they said.American businesses that use ocean carriers have been pushing for additional oversight of what they say is an opaque, lightly regulated industry.One of the main complaints among importers and exporters is that ocean carriers are charging customers huge and unexpected fees for delays in picking up or returning shipping containers, which are often mired in congestion in the ports or in warehouses. American farmers, who have struggled to get their goods overseas, say that ocean liners have refused to wait in port to load outgoing cargo or skipped some congested ports entirely. As a result, some have periodically been unable to get their products out of the United States.Eric Byer, the chief executive of the National Association of Chemical Distributors, said American companies were having trouble getting chlorine to clean swimming pools, citric acid to make soft drinks and phosphoric acid to add to fertilizer through American ports.“It’s taking weeks upon months, and they’re getting nickelled and dimed on costs. There are a lot of fees that are being imposed on products waiting in the San Pedro Bay,” he said, referring to the body of water outside the busy California ports of Los Angeles and Long Beach.“It’s been a lot of turmoil and challenges, a lot of unreliability,” said Patti Smith, the chief executive of DairyAmerica, which exports milk powder to foreign factories to be made into baby formula. Her company has sometimes been unable to get its products out of West Coast ports, she said, and has racked up extra warehousing costs and unexpected fines because of the delays.While Ms. Smith said she supported the administration’s efforts to enhance oversight of the shipping industries, she wasn’t sure that would do much to bring down overall prices.“I wouldn’t say it would necessarily lower prices. I think it might put prices more on a level playing field,” she said.The White House insists that its efforts can drive down costs, portraying the measures Mr. Biden announced as a way to calm skyrocketing inflation, which has become a huge economic concern among voters. Consumer prices surged 7.9 percent in the year to February, a 40-year high.American demand for foreign products, and for space on container ships, shows little sign of easing.Erin Schaff/The New York TimesThe White House has pointed to rapid consolidation in the industry over the past decade as a driver of higher prices, saying that three global shipping alliances now control 80 percent of global container ship capacity, and increased shipping costs would continue to fuel inflation. “Because of their market power, these alliances are able to cancel or change bookings and impose additional fees without notice,” the administration said in a fact sheet.The Russia-Ukraine War and the Global EconomyCard 1 of 6Rising concerns. More

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    Treasury Shifts Cash Among States as Pandemic Housing Aid Dries Up

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    The Biden administration pulled back the aid from states and counties with unspent funds and diverted it to four states pressing for more: California, New York, New Jersey and Illinois.WASHINGTON — The Biden administration has clawed back $377 million in federal emergency housing aid from states and counties, most of them controlled by Republicans, and redirected the cash to states that have been clamoring for more help, including New York, California and New Jersey.The $46 billion Emergency Rental Assistance Program, first enacted by Congress in 2020, succeeded in preventing a wave of evictions stemming from the downturn caused by the pandemic. But Treasury Department officials, increasingly concerned that evictions might rise after the program winds down, have tried to ensure that none of the remaining funding goes unspent while pushing states to find other funding sources to assist poor tenants.In recent months, White House officials have pressured governors in states with unspent funds to turn over the money to local governments within their states. Now they are going one step further, pulling back cash from states with relatively few tenants — like Montana, Nebraska, South Dakota and Wyoming — or localities that failed to efficiently distribute the aid, including Alabama, Arkansas and several counties in Texas.The money, in turn, is being diverted to four states that burned through their allotted amounts — with $136 million in additional aid headed to California, $119 million to New York, $47 million to New Jersey and $15 million to Illinois, according to a spreadsheet provided by a senior administration official. North Carolina, Washington and other localities will be receiving smaller amounts.New York officials were happy with their windfall but said it fell far short of the $1.6 billion in additional aid requested by the state.“This is better,” said Representative Ritchie Torres, a Democrat whose district includes the South Bronx, which has some of the highest eviction and poverty rates in the country. “But it’s a pitiful drop in the bucket compared to what we need.”The four states, home to roughly a third of the nation’s low-income renters, have already spent billions in emergency aid paying back rent for tenants at risk of eviction, and they have requested more funding, citing affordable housing shortages and rising rents. In January, their governors — Gavin Newsom of California, Kathy Hochul of New York, Philip D. Murphy of New Jersey and J.B. Pritzker of Illinois, all Democrats — called on Treasury Secretary Janet L. Yellen to shift cash from low-spending states into their accounts, saying that tenants were “facing an immediate need now.”Treasury officials responded with the reallocation — but made it clear the well was running dry, and states would soon have to make hard choices by using their own revenues, or other federal pandemic relief funding, to bankroll anti-eviction initiatives that might have been buoyed by President Biden’s stalled social spending bill.“The emergency rental program has helped keep millions of families in their homes, reducing the economic costs of the pandemic, and built a nationwide system for eviction prevention that didn’t exist before,” the deputy Treasury secretary, Wally Adeyemo, who has overseen the implementation of the program, said in an interview.“As these funds run out, Treasury is encouraging state and local governments to invest in long-term strategies to prevent evictions and build affordable housing, using other resources,” he added.The program, initiated under the Trump administration and ramped up by Mr. Biden’s team, got off to a sluggish start, as state governments struggled to create new systems to process applications, determine eligibility and distribute the cash.But by late 2021, most local systems were up and running, thanks in part to White House guidelines relaxing verification requirements.The enormous infusion of cash, coupled with federal and local eviction bans, helped prevent or delay about 1.35 million evictions in 2021, according to an analysis published last week by Princeton’s Eviction Lab. Evictions have risen in recent months in some cities but remain below the levels predicted when the pandemic first struck.Most of the aid that the Treasury Department is clawing back comes from states in the West, Midwest and New England with relatively high per capita incomes and low percentages of renters per capita. But part of the money is being pulled out of some of the country’s poorest states, where local officials were unable, for various political and logistical reasons, to disburse the funds.Alabama, for instance, is losing $42 million from a total allocation of about $263 million. A spokesman for the state’s housing agency provided a memo from state housing officials claiming that the Treasury Department “did not consider that Alabama has a lower proportion of renters to homeowners” in making its aid decisions, and that an overall lack of need put “downward pressure” on applications.But applicants and housing groups have complained that the state has made accessing the money difficult, and that a company hired to run the program rejected a large percentage of low-income tenants.West Virginia, which has been slow to distribute a range of federal food, housing and anti-poverty aid during the pandemic, was forced to return $39 million despite recent efforts by state officials to encourage more renters to apply. A spokesman for Gov. Jim Justice of West Virginia, a Republican, said the state was “simply not a renter state,” adding that the program “was clearly designed with Manhattan in mind — not rural America.”And Arkansas, which took months to organize its effort, is giving back $9 million, according to the tally provided by the senior administration official.The Biden administration had hoped to avoid shifting funding across state lines, opting instead to negotiate with governors to send unspent aid to counties and cities in their own states. Late last year, the White House persuaded Arizona, Georgia, Louisiana, Wisconsin and other states to voluntarily shift about $875 million to the cities and counties in their states that needed the money most.Yet administration officials are less concerned about offending state officials that have lost funding than tamping down the expectations of Democratic governors who want them to claw back even more.Gene Sperling, who oversees the Biden administration’s pandemic relief programs, said that the program was on track to help around five million renters, and that the largest complaint now was that “the funds are moving out so swiftly that there is very little left to be reallocated.” More