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    Middle-Class Pay Lost Pace. Is Washington to Blame?

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    A new paper by liberal economists presents evidence that policymakers helped hold down wages for four decades.One of the most urgent questions in economics is why pay for middle-income workers has increased only slightly since the 1970s, even as pay for those near the top has escalated.For years, the rough consensus among economists was that inexorable forces like technology and globalization explained much of the trend. But in a new paper, Lawrence Mishel and Josh Bivens, economists at the liberal Economic Policy Institute, conclude that government is to blame. “Intentional policy decisions (either of commission or omission) have generated wage suppression,” they write.Included among these decisions are policymakers’ willingness to tolerate high unemployment and to let employers fight unions aggressively; trade deals that force workers to compete with low-paid labor abroad; and the tacit or explicit blessing of new legal arrangements, like employment contracts that make it harder for workers to seek new jobs.Together, Dr. Mishel and Dr. Bivens argue, these developments deprived workers of bargaining power, which kept their wages low.“If you think about a person who’s dissatisfied with their situation, what are their options?” Dr. Mishel said. “Almost every possibility has been foreclosed. You can’t quit and get a good-quality job. If you try to organize a union, it’s not so easy.”The slowdown in workers’ pay increases happened rather abruptly. From the late 1940s to the early 1970s, hourly compensation for the typical worker grew roughly as quickly as productivity. If the value of the goods and services that workers provided rose by 2 percent in a year, then their wages and benefits tended to go up by roughly 2 percent as well.Since then, productivity has continued to grow, while hourly compensation largely flattened. According to the paper, the typical worker earned $23.15 an hour in 2017, far less than the $33.10 that worker would have earned had compensation kept up with productivity growth.In the 1980s and 1990s, economists increasingly argued that technology largely explained this flattening of wages. They said computers were making workers without college degrees less valuable to employers, while college graduates were becoming more valuable. At the same time, the growth in the number of college graduates was slowing. These developments dragged down wages for those in the middle of the income distribution (like factory workers) and increased wages for those near the top (like software engineers).The technology thesis largely relied on a standard economic analysis: As the demand for lower-skilled workers dropped, their wages grew less quickly. But in recent years, many economists have gradually de-emphasized this explanation, focusing more on the balance of power between workers and employers than on long-term shifts in supply and demand.The idea is that setting pay amounts to dividing the wealth that workers and employers create together. Workers can claim more of this wealth when institutions like unions give them leverage. They receive less when they lose such leverage.Dr. Mishel and Dr. Bivens argue that a decades-long loss of leverage largely explains the gap between the pay increases that workers would have received had they benefited fully from rising productivity, and the smaller wage and benefit increases that workers actually received.To arrive at this conclusion, they examine numerical measures of the impact of several developments that hurt workers’ bargaining power — some of which they generated, many of which other economists have generated over the years — then sum up those measures to arrive at an overall effect.For example, when surveying the economic literature on the unemployment rate, Dr. Mishel and Dr. Bivens find that it was frequently below the so-called natural rate — the rate below which economists believe a tight job market could cause inflation to accelerate uncontrollably — in the three decades after World War II, but frequently above the natural rate in the last four decades.This is partly because the Federal Reserve began to put more emphasis on fighting inflation once Paul Volcker became chairman in 1979, and partly because of the failure of state and federal governments to provide more economic stimulus after the Great Recession of 2007-9.Drawing on existing measures of the relationship between unemployment and wages, Dr. Mishel and Dr. Bivens estimate that this excess unemployment lowered wages by about 10 percent since the 1970s, explaining nearly one-quarter of the gap between wages and productivity growth.They perform similar exercises for other factors that undermined workers’ bargaining power: the decline of unions; a succession of trade deals with low-wage countries; and increasingly common arrangements like “fissuring,” in which companies outsource work to lower-paying firms, and noncompete clauses in employment contracts, which make it hard for workers to leave for a competitor.Together, Dr. Mishel and Dr. Bivens conclude, these factors explain more than three-quarters of the gap between the typical worker’s actual increases in compensation and their expected increases, given the productivity gains.If that figure is in the right ballpark, it is a crucial insight. Underlying most of the explanations for anemic wages that Dr. Mishel and Dr. Bivens cite is the idea that wage growth depends on policy choices, not on the march of technology or other irreversible developments. Government officials could have worried less about inflation and erred on the side of lower unemployment when setting interest rates and passing economic stimulus. They could have cracked down on employers that aggressively fought unions or foisted noncompete agreements onto fast-food workers.And if policymakers are to blame for wage stagnation, they can also do a lot to reverse it — and more quickly than many economists once assumed. Among other things, the conclusion of the paper would suggest that President Biden, who has enacted a large economic stimulus and sought to increase union membership, may be on the right track.“One of the biggest things about the American Rescue Plan,” said Dr. Mishel, referring to the pandemic relief bill Mr. Biden signed, “is first and foremost its commitment to getting to full employment quickly. It’s willing to risk overheating.”The paper’s conclusions suggest that economic programs embraced by President Biden may be useful in raising wages.Stefani Reynolds for The New York TimesSo is the paper’s number plausible? The short answer from other economists was that it pointed in the right direction, but may have overshot its mark.“My sense is that things like fissuring, noncompetes have become very important in the 2000s, along with unions that have gotten to the point where they’re so weak,” said Lawrence Katz, a labor economist at Harvard who is a longtime proponent of the idea that the higher wages earned by college graduates have increased inequality.But Dr. Katz, who has also written about unions and other reasons that workers have lost leverage, said the portion of the wage gap that Dr. Mishel and Dr. Bivens attribute to such factors probably overstated their impact.The reason, he said, is that their effects can’t simply be added up. If excessive unemployment explains 25 percent of the gap and weaker unions explain 20 percent, it is not necessarily the case that they combine to explain 45 percent of the gap, as Dr. Mishel and Dr. Bivens imply. The effects overlap somewhat.Dr. Katz added that education plays a complementary role to bargaining power in determining wages, citing a historical increase in wages for Black workers as an example. In the first several decades of the 20th century, philanthropists and the N.A.A.C.P. worked to improve educational opportunities for Black students in the South. That helped raise wages once a major policy change — the Civil Rights Act of 1964 — increased workers’ power.“Education by itself wasn’t enough given the Jim Crow apartheid system,” Dr. Katz said. “But it’s not clear you could have gotten the same increase in wages if there had not been earlier activism to provide education.”Daron Acemoglu, an M.I.T. economist who has studied the effects of technology on wages and employment, said Dr. Mishel and Dr. Bivens were right to push the field to think more deeply about how institutions like unions affect workers’ bargaining power.But he said they were too dismissive of the role of market forces like the demand for skilled workers, noting that even as the so-called college premium has mostly flattened over the last two decades, the premium for graduate degrees has continued to increase, most likely contributing to inequality.Still, other economists cautioned that it was important not to lose sight of the overall trend that Dr. Mishel and Dr. Bivens highlight. “There is just an increasing body of work trying to quantify both the direct and indirect effects of declining worker bargaining power,” said Anna Stansbury, the co-author of a well-received paper on the subject with former Treasury Secretary Lawrence Summers. After receiving her doctorate, she will join the faculty of the M.I.T. Sloan School of Management this fall.“Whether it explains three-quarters or one-half” of the slowdown in wage growth, she continued, “for me the evidence is very compelling that it’s a nontrivial amount.” More

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    They Were on Equal Footing. Then the Ground Shifted.

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyThey Were on Equal Footing. Then the Ground Shifted.A year of pandemic restrictions has meant some friends are flush and others foundering.Robin Arnone, Tim Gallagher, Traci Warner, and Julie Stark are among the millions of Americans whose lives and careers have been upended by the pandemic.CreditFeb. 27, 2021, 5:00 a.m. ETRobin Arnone, a part-time trainer before the coronavirus pandemic, hasn’t set foot in the Colosseum Gym in Columbia, Md., since the virus shut it down almost a year ago. The gym is open again, but she doesn’t need the work. Things are going gangbusters in her other job as a home appraiser, and she hasn’t looked back.For Julie Stark, one of Ms. Arnone’s best friends and a professional dog walker, things are not so rosy. With many clients stuck at home in the pandemic and taking care of their own pets, her services are no longer in demand. Instead of walking seven dogs each day, she now walks three.Ms. Stark has had to economize, eliminating dance and gymnastics classes for her children to save $350 a month. She doesn’t know when her clients will want her back, but it’s not something she discusses with Ms. Arnone. “We don’t talk about money,” Ms. Stark said.“It would be awkward if she were a dog walker and doing unbelievably well,” she added. “I’m happy for her.”And there is a lot in Ms. Arnone’s life to be happy about. She replaced her used Lexus with a new one last year, and in December she indulged herself with a $550 Dyson hair dryer. “It felt a little ridiculous,” she said of the purchase. “But I worked hard, and if there’s any year I’m going to do it, it’s this year.”Robin Arnone and Julie Stark are among the millions of friends who were on a relatively equal financial footing before last March — people who would have thought nothing of splitting the check on a night out — and now find themselves on vastly different trajectories. Lockdowns changed what Americans can do as well as what services they need, and in the process created divergent fates for many workers.The pandemic has wreaked havoc on many who were already struggling. Nearly 10 million fewer people have jobs, and some 26 million reported not always having enough to eat, according to Census Bureau data.For the 50 percent or so of the population that make up the middle class — defined by Pew Research Center as having an income ranging from around $45,000 to $135,000 for a household of three — the toll has been uneven. Like a tornado, the pandemic can devastate one household and leave neighboring ones unscathed.Ms. Arnone’s world, in the Washington-Baltimore area, exemplifies that. The gym where she worked, the Colosseum, is owned by her friend Tim Gallagher. His monthly income at the gym is down 25 to 30 percent, and a quarter of the gym’s members have suspended their accounts. To save money, he has lowered the thermostat at home to 60 degrees from 65, and while his truck has more than 340,000 miles on it, he has no plans to replace it.“You just got to scrape along and gut it out,” he said. “We’re really struggling to get by.”But in Ms. Arnone’s other field, home appraising, her friends and colleagues are reaping rewards from the booming housing market, where January sales were up 23.7 percent from a year earlier, according to the National Association of Realtors. Ultralow mortgage rates have prompted a wave of refinancings, which require fresh appraisals.“I don’t have much to complain about,” said Traci Warner, a friend of Ms. Arnone’s and a home appraiser in Waldorf, Md., south of Washington. After her husband was laid off from his sales job in April, Ms. Warner’s work picked up the slack.It’s not that things are perfect, but unlike Mr. Gallagher, she does not feel that she is barely hanging on.This contrast is mirrored in the larger economy. Weekly unemployment claims by newly laid-off workers remain at historically elevated levels even as stock indexes reach record highs.Vaccines have arrived, but their slow rollout means it will be months before anything resembling normal activity can resume at restaurants, hotels, gyms, airports, malls and other businesses that depend on bringing people together.“It’s very uneven,” said Gregory Daco, chief U.S. economist at Oxford Economics, a forecasting and research group. “The recovery for the most vulnerable parts of the population will take years.” Not only are wages and salaries down for the hardest-hit segments of the work force, he noted, but so are overall employment and participation in the labor force.At the very top, the gains have been staggering. In eight months after the pandemic hit the United States, the wealth of the country’s roughly 650 billionaires grew by $1 trillion, according to a November study by the Institute for Policy Studies and other progressive groups. That included a $70 billion lift for just one of those magnates: the founder of Amazon, Jeff Bezos.White-collar employees, having emerged mostly unscathed from the sharp downturn in 2020, are looking forward to what they hope will be a robust recovery in 2021 once most people are vaccinated. Service workers, devastated by the idling of entire industries amid lockdowns and other restrictions, just want the pain to abate.The split was evident in the latest jobs report from the Labor Department. While professional and business services employment jumped by 97,000 in January, that job growth was almost entirely offset in the private sector by losses in retail, leisure and hospitality industries, among others.So while lines at food banks lengthen, new Teslas dot parking lots, and there are waiting lists for Peloton machines so the most fortunate can keep up with their workouts from home.Peter Atwater, a lecturer in economics at the College of William & Mary, has popularized a term for this phenomenon: the K-shaped recovery. While one arm of the K ascends, the other is driving lower. “There’s an enormous divide in confidence,” he said. “And we buy and spend based on how we feel.”Janet L. Yellen, the newly confirmed Treasury secretary, extended the metaphor during her confirmation hearings. “We are living in a K-shaped economy, one where wealth built upon wealth, while working families fell farther and farther behind,” she said.Life on the UpsideRobin Arnone replaced her used Lexus with a new one last year.Ms. Arnone misses her days at the gym, especially spending time with clients. It is the first time since she was 15 that she hasn’t worked as a trainer, she said. But she is feeling pretty good otherwise.Before the pandemic, she would train people in the morning and shift to her real estate work in the afternoon. Now she rises at 6 a.m. to start writing up appraisals before hitting the road to visit as many as eight homes in a day.“I’ve declined a boatload of appraisal jobs,” she said. “I just didn’t have the time.”After typically handling 500 appraisals a year, she did 635 last year. She is paid by the banks that issue the mortgages, and last year she estimates she earned roughly $250,000 for her services, up from about $185,000 in previous years.The Coronavirus Outbreak More

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    Stimulus Checks Helped Personal Income Surge in January

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyIncome and Spending Gains Are Latest Sign of Economic RecoveryPersonal income and spending both surged in January as a new round of government checks hit Americans’ bank accounts.A Los Angeles mall this week. Money spent on goods rose 5.8 percent in January, but spending on services rose only 0.7 percent.Credit…Philip Cheung for The New York TimesSydney Ember and Feb. 26, 2021Updated 5:00 p.m. ETThe American economic recovery came perilously close to falling off a cliff at the end of last year. But government aid arrived just in time to prevent a disaster — and possibly paved the way for a dynamic rebound.Personal income surged a remarkable 10 percent in January, the Commerce Department reported on Friday. Spending increased last month, too, by a healthy 2.4 percent, largely fueled by a rise in purchases of goods.The report was the latest sign of the economy’s slow but steady march forward after a series of setbacks.Yet the data also underscored the extent to which government aid is buoying the economy. The rise in income last month was almost entirely attributable to the $600 government relief checks approved in December and to unemployment insurance payments. And while spending ticked up, purchases of services remained depressed as the pandemic continued to weigh heavily on the leisure and hospitality industries even as coronavirus cases fell.“Technically, you could say we’re recovering,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “But the patterns in both income and spending point out the fragility of the recovery without aid to bridge these waters that are poisonous.”That the economy remains reliant on government aid is all the more resonant as Democrats in Washington try to push through President Biden’s $1.9 trillion relief measure, which would provide a round of $1,400 checks that could further power consumer spending.Although the data on Friday indicated that the recovery was still fragile, it provided fresh evidence that it was no longer in danger of moving in reverse, a trend also seen in recent reports on retail sales and orders of durable goods.Yields on government bonds, the basis for mortgage rates and corporate borrowing, have risen sharply this month as investors anticipate a quick pickup in growth. Yields on 10-year Treasury notes, below 1 percent for much of 2020, have climbed to roughly 1.5 percent in recent days.The encouraging data led Morgan Stanley on Friday to raise its forecast of first-quarter economic growth to 2 percent (8.1 percent on an annualized basis) from 1.8 percent. Before Congress passed the round of aid that produced the January checks, many economists thought G.D.P. might shrink in the first quarter.There is a possible downside to a robust, stimulus-powered recovery. Some economists have warned in recent weeks that inflation could become a problem, which could prompt the Federal Reserve to cut back on its measures to bolster the economy. A change of posture from the Fed would probably be seen as bad news for stocks, and trading on Wall Street has been turbulent this week as investors react to the sudden moves in bond yields.But the report on Friday gave no indication that inflation was spinning out of control. Consumer prices were up 1.5 percent in January from a year earlier, well below the Fed’s 2 percent target. More

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    How a Minimum-Wage Increase Is Being Felt in a Low-Wage City

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    #masthead-section-label, #masthead-bar-one { display: none }The Jobs CrisisCurrent Unemployment RateWhen the Checks Run OutThe Economy in 9 ChartsThe First 6 MonthsAdvertisementContinue reading the main storySupported byContinue reading the main storyHow a Minimum-Wage Increase Is Being Felt in a Low-Wage CityIs $15 an hour too much, or not enough? Fresno, Calif., may be a laboratory for a debate over the minimum wage that is heating up on the national level.Elsa Rodriguez Killion, a Fresno restaurant owner, worries that California’s rising minimum wage will force her to cut jobs.Credit…Sarahbeth Maney for The New York TimesFeb. 14, 2021, 5:05 p.m. ETEven before the pandemic, Elsa Rodriguez Killion realized that Casa Corona, her restaurant in Fresno, Calif., was going to have to change with the times.She spent money on digital marketing. She invested in technology that enabled online orders, for dishes like the restaurant’s signature chile verde. And there was something else she had to keep up with: California’s rising minimum wage.The minimum rose to $14 an hour on Jan. 1, the fifth annual increase under a 2016 law. It is set to reach $15 for most employers by next year. With price increases, Ms. Rodriguez Killion was able to absorb some of the added payroll expense. But she also cut more than 20 percent of the 160 jobs at her restaurant’s two locations in the last five years, not including those lost because of the pandemic.“Every year we have had to make hard decisions to let labor go,” said Ms. Rodriguez Killion, 47, who opened Casa Corona with her brother and sister more than 20 years ago. She worries that paring more of her work force is inevitable.On the flip side of her anxiety is the measurable difference felt by some Fresno workers, even if the higher pay is still often not enough to live comfortably.“It helps tremendously,” said Elisabeth Parra, 25, a Walmart cashier who lives with her mother. Since her pay rose to the $14 minimum last month, she said, “I’m able to help my mom more with bills.”Fresno may be a laboratory for a debate that is heating up on the national level. President Biden wants to gradually raise the federal minimum wage to $15 an hour, from the current $7.25, achieving a longstanding priority of the labor movement and the Democratic Party’s progressive wing.For now, at least, such a provision is part of Mr. Biden’s $1.9 trillion pandemic relief package. House Democrats, who voted in 2019 for a $15 minimum wage, intend to do so again when they send the pandemic legislation to the Senate. But chances there are clouded by parliamentary questions — and the objections of two key Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, along with Republicans.Backers have long said that increasing the minimum wage would raise the living standard of workers and help combat poverty. With more money, workers would be inclined to spend more, strengthening the economy.Opponents contend that minimum-wage increases cost jobs, particularly in struggling cities like Fresno. What’s more, they say, any broad standard, whether statewide or nationwide, does not account for local variations in the cost of living or business conditions.According to a study by the Congressional Budget Office, raising the minimum wage to $15 by 2025 would decrease employment by 1.4 million — but it would still raise 900,000 people out of poverty. The report’s conclusions were wielded by both proponents and foes of the $15 proposal.The pandemic-induced downturn has raised the stakes. Those favoring a minimum-wage increase say it is more essential than ever, especially since sectors hit hardest by the pandemic, including leisure and hospitality, have a higher proportion of low-wage workers. Critics counter that lifting the wage floor would severely harm small businesses trying to bounce back.“This is the debate that usually takes place in some academic circles,” said Antonio Avalos, the chairman of the economics department at California State University, Fresno. But the experience of Fresno, an inland city of 500,000 isolated geographically and economically from coastal metropolises like San Francisco and Los Angeles, underscores the core tension between the competing economic arguments.Fresno is the hub of an agriculture-rich area, with produce that includes almonds, pistachios, oranges and grapes. Its economy is tied directly to the agriculture industry, though its location has also made it a draw for warehouses. In recent years, Amazon and the beauty emporium Ulta Beauty both opened sprawling fulfillment centers there.Fresno’s economy is tied to agriculture, but its location has also drawn warehouses, including an Amazon distribution center.Credit…Sarahbeth Maney for The New York TimesFresno County, where more than half of the population identifies as Hispanic, has one of the state’s highest poverty rates, and one of its lowest median wages. The typical local worker in 2019, the last year for which data is available, made under $17 an hour. A quarter of workers made $12.50. Before California enacted gradual increases under its 2016 law, the minimum wage was $10, a level typical for fast-food jobs and other low-wage occupations.Some Fresno business owners saw little impact from the raises.Arthur Moye, who owns Full Circle Brewing Company, a craft brewery, has not had to reduce his staff because the wage increases had been “a slow roll,” he said. Instead, he has adjusted both the pay and the work. “We might increase expectations on the people that are here earning that higher wage,” devoting more scrutiny to job candidates and doing more to develop those they hire, he said.But others, especially restaurant owners like Ms. Rodriguez Killion, say costs are becoming untenable, especially as they contend with the pandemic’s impact.A 2019 study by the University of California, Riverside, funded by the California Restaurant Association, a trade group, found evidence that the rising minimum wage was slowing growth in the state’s restaurant industry.Kris Stuebner, an executive at Jem Restaurant Management Corporation, which operates KFC and Wendy’s franchises in Fresno, said the wage mandate had been particularly tough for restaurant operators like him, who have to allocate a percentage of their profits to things like franchise royalties and advertising fees.He has not reduced his work force, he said. But to offset the rising labor costs, he said, he has had to raise prices and look for places to save money. He formed an internal maintenance department because he could no longer afford to pay an outside company to fix issues like plumbing.“It’s this balancing act — you’ve got all these balls in the air to juggle,” he said.Several employers questioned the logic of applying a statewide minimum wage in a place like Fresno, where the cost of living is much lower than in coastal cities. In voices tinged with resentment, some describe the rising minimum wage as akin to a “payroll tax grab” by the government because payroll taxes for employers are tied to employees’ wages and rise when wages do.Some business owners also noted that they had had to raise wages for employees already making more than the minimum to keep the pay scale fair. And some mentioned indirect results: When the minimum wage increases, the price of other things, from gas to cleaning linens to produce, increases as well.Yet hiring has continued. According to the Bureau of Labor Statistics, restaurant employment in Fresno rose by about 7 percent from the end of 2016 to the end of 2019, before the pandemic — a slightly higher rate than in California as a whole.The minimum-wage law allows the governor to delay a planned increase for a year if the economy weakens. With the pandemic gutting their industry, restaurant owners in Fresno and elsewhere urged Gov. Gavin Newsom to do so.When he didn’t, some owners were outraged.“It’s frustrating as can be,” said Chuck Van Fleet, the owner of Vino Grille & Spirits and the president of the Fresno chapter of the California Restaurant Association. “You’ve got somebody who’s out there saying, ‘Hey, I’m trying to do what’s right for everybody.’ And the only thing he wants to do is increase wages.”At the same time, the wage increases in California have offered hope to some workers in Fresno, whose incomes have grown.Ms. Parra, the Walmart cashier, has lived almost her whole life in Fresno. She recently graduated from California State University, Fresno, with a degree in mass communications and journalism, focusing on advertising, and dreams of becoming an art director.She was making $15 an hour in a part-time job at a public relations firm before she was let go in the spring during the first coronavirus surge. She started working at Walmart in October for $13 an hour, the minimum wage last year.Jessica Ramirez makes $15.65 an hour at the Amazon warehouse in Fresno, but even with food stamps, she finds her pay barely enough to support her five children.Credit…Sarahbeth Maney for The New York TimesWhen the wage went up, Ms. Parra said, she could more easily help with rent and pay the phone and cable bills at the apartment that she shares with her mother, who makes $18.50 an hour at a heating and air-conditioning company.She noted, however, that her wages were not enough for her to live on her own. “I wouldn’t say that we’re poor, but I also wouldn’t say that we’re well off,” she said. “But because there is both of us who have incomes, we’re able to do O.K.”Mayor Jerry Dyer said there were “mixed feelings, obviously,” about the rising minimum wage. “As a mayor of a city, it’s important that we have people in our community who are making a livable wage,” he said.But Mr. Dyer, a Republican, said he also understood the pain that businesses might be feeling. “I’ve heard from businesses that if the minimum wage goes up too much, they’re not able to be competitive,” he said.“That’s the challenge that we face,” he said.One prevailing question is whether $15 is enough.In Fresno, it often isn’t. M.I.T.’s Living Wage Calculator estimates that a living wage in Fresno for a family of four, with both adults working, is $22.52 an hour. In the past year, Fresno’s median rent increased by 11 percent, to $1,260, according to Apartment List’s National Rent Report, among the greatest increases in the country.For 40 hours a week, Jessica Ramirez, 26, makes $15.65 an hour at the Amazon warehouse in Fresno. She is the primary breadwinner for herself, her partner and her five children, but even with food stamps and occasional gig work, she said, her wage is barely enough for them to get by.Ms. Ramirezsaid she was renting a three-bedroom house for $1,350 a month — roughly half of what she makes.She wants to go to college, but even more, she wants a better life for her children. “I’m their provider,” she said. “I have to give them a home. That’s what they need — a home.”AdvertisementContinue reading the main story More

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    Jobless, Selling Nudes Online and Still Struggling

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesA Future With CoronavirusVaccine InformationF.A.Q.TimelineSavannah Benavidez created an OnlyFans account after losing her job as a medical biller. Credit…Adria Malcolm for The New York TimesSkip to contentSkip to site indexJobless, Selling Nudes Online and Still StrugglingOnlyFans, a social media platform that allows people to sell explicit photos of themselves, has boomed during the pandemic. But competition on the site means many won’t earn much.Savannah Benavidez created an OnlyFans account after losing her job as a medical biller. Credit…Adria Malcolm for The New York TimesSupported byContinue reading the main storyJan. 13, 2021, 5:00 a.m. ETSavannah Benavidez stopped working at her job as a medical biller in June to take care of her 2-year-old son after his day care shut down. Needing a way to pay her bills, she created an account on OnlyFans — a social media platform where users sell original content to monthly subscribers — and started posting photos of herself nude or in lingerie.Ms. Benavidez, 23, has made $64,000 since July, enough not just to take care of her own bills, but to help family and friends with rent and car payments.“It’s more money than I have ever made in any job,” she said. “I have more money than I know what to do with.”Lexi Eixenberger was hoping for a similar windfall when she started an OnlyFans account in November. A restaurant worker in Billings, Mont., Ms. Eixenberger, 22, has been laid off three times during the pandemic and was so in need of cash by October that she had to drop out of dental hygiene school. After donating plasma and doing odd jobs, she still didn’t have enough to pay her bills, so at the suggestion of some friends, she turned to OnlyFans. She has made only about $500 so far.Lexi Eixenberger lost her restaurant job three times and had to quit dental hygiene school. She became an OnlyFans creator, but hasn’t earned much so far.Credit…Janie Osborne for The New York TimesOnlyFans, founded in 2016 and based in Britain, has boomed in popularity during the pandemic. As of December, it had more than 90 million users and more than one million content creators, up from 120,000 in 2019. The company declined to comment for this article.With millions of Americans unemployed, some like Ms. Benavidez and Ms. Eixenberger are turning to OnlyFans in an attempt to provide for themselves and their families. The pandemic has taken a particularly devastating toll on women and mothers, wiping out parts of the economy where women dominate: retail businesses, restaurants and health care.“A lot of people are migrating to OnlyFans out of desperation,” said Angela Jones, an associate professor of sociology at the State University of New York at Farmingdale. “These are people who are worried about eating, they’re worried about keeping the lights on, they’re worried about not being evicted.”But for every person like Ms. Benavidez, who is able to use OnlyFans as her primary source of income, there are dozens more, like Ms. Eixenberger, who hope for a windfall and end up with little more than a few hundred dollars and worries that the photos will hinder their ability to get a job in the future.“It is already an incredibly saturated market,” Ms. Jones said of explicit content online. “The idea that people are just going to open up an OnlyFans account and start raking in the dough is really misguided.”The most successful content creators are often models, porn stars and celebrities who already have large social media followings. They can use their other online platforms to drive followers to their OnlyFans accounts, where they offer exclusive content to those willing to pay a monthly fee — even personalized content in exchange for tips. OnlyFans takes a 20 percent cut of any pay. Some creators receive tips through mobile payment apps, which aren’t subject to that cut; Ms. Benavidez earns most of her money this way.But many of the creators who have joined the platform out of dire financial need do not have large social media followings or any way to drum up consistent business.Elle Morocco posted this image to promote herself on her OnlyFans page.Credit…Elle MoroccoMs. Morocco said maintaining the account could feel like a full-time job.Credit…Elizabeth CraigElle Morocco of West Palm Beach, Fla., was laid off from her job as an office manager in July. Her unemployment checks don’t cover her $1,600 monthly rent, utility bills and food costs, so she joined OnlyFans in November.The Coronavirus Outbreak More

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    New Signs of Economic Distress Emerge as Trump Imperils Aid Deal

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus DealThe Latest Vaccine InformationF.A.Q.AdvertisementContinue reading the main storySupported byContinue reading the main storyNew Signs of Economic Distress Emerge as Trump Imperils Aid DealA decline in consumer income and spending poses a further challenge to the recovery as jobless claims remain high and benefits approach a cutoff.Food donations were distributed on Saturday in Bloomington, Calif. Economic data released on Wednesday pointed to challenges ahead as the pandemic grinds on.Credit…Alex Welsh for The New York TimesDec. 23, 2020, 5:30 p.m. ETWith the fate of a federal aid package suddenly thrown into doubt by President Trump, economic data on Wednesday showed why the help is so desperately needed.Personal income fell in November for the second straight month, the Commerce Department said Wednesday, and consumer spending declined for the first time since April, as waning government aid and a worsening pandemic continued to take a toll on the U.S. economy.Separate data from the Labor Department showed that applications for unemployment benefits remained high last week and have risen since early November.Taken together, the reports are the latest evidence that the once-promising economic recovery is sputtering.“We know that things are going to get worse,” said Daniel Zhao, senior economist with the career site Glassdoor. “The question is how much worse.”The answer depends heavily on two factors: the path of the pandemic, and the willingness of the federal government to provide help.Congress, after months of delays, acted on Monday, passing a $900 billion economic relief package that would provide aid to the unemployed, small businesses and most households. Most urgently, it would prevent millions from losing jobless benefits at the end of this week.But on Tuesday evening, Mr. Trump demanded sweeping changes in the bill, throwing into doubt whether he would sign it.Mr. Trump’s criticism of the relief effort, which he called a “disgrace,” was that it was not generous enough: He called on Congress to provide $2,000 a person in direct payments to households, rather than the $600 included in the bill.Many economists view direct payments as among the least effective measures in the package, because much of the money would go to households that don’t need it. But beyond the merits of any specific measure, the real risk is that Mr. Trump’s comments could delay the aid, or derail it entirely.The data released Wednesday underscored the economy’s fragility. Personal income fell 1.1 percent in November and is down 3.6 percent since July, as the loss of federal assistance more than offset rising income from wages and salaries.Consumer spending, which proved resilient in the summer and fall, declined 0.4 percent, an ominous sign for small businesses trying to survive the winter. Some of the biggest drops came in categories most exposed to the pandemic’s impact: Spending on restaurants and hotels fell 3.8 percent in November, and spending on transportation, clothing and gasoline also declined.The pullback in spending is spilling over into the labor market. About 869,000 people filed new claims for state jobless benefits last week. That was down from a week earlier but is significantly above the level in early November, before a surge in coronavirus cases prompted a new round of layoffs in much of the country.A further 398,000 people filed for Pandemic Unemployment Assistance, one of two federal programs to expand jobless benefits that were set to expire this month without congressional action. Some forecasters expect the December employment report to show a net loss of jobs.“The data just underscores the importance of fiscal support,” said Aneta Markowska, chief financial economist for Jefferies, an investment bank. Without it, she said, “there would be permanent damage, and it would probably be pretty significant.”The relief bill was smaller than many economists said was needed to carry the economy through the pandemic and ensure a robust recovery. It won’t revive the hardest hit industries or undo the damage left by months of lost income for many households.A deserted hotel lobby in Beverly Hills, Calif. Consumer spending fell last month for the first time since April, with Americans cutting back in particular on restaurant meals and hotel stays.Credit…Philip Cheung for The New York TimesBut the package may be enough to forestall the wave of evictions and small-business failures that many economists warn is inevitable without it. And it should be enough to avoid a fall back into recession, which an increasing number of forecasters have said is likely without a quick injection of federal money.The Coronavirus Outbreak More

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    Up to 30 Million in U.S. Have the Skills to Earn 70% More, Researchers Say

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyUp to 30 Million in U.S. Have the Skills to Earn 70% More, Researchers SayThe findings point to the potential of upward mobility for people without a college degree.Microsoft is one of the major companies that have pledged to adopt skills-based hiring for many jobs, often dropping a college degree requirement.Credit…Stuart Isett for The New York TimesBy More