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    February 2021 Jobs Report Is Expected to Show Only Modest Gains

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutNew Variants TrackerAdvertisementContinue reading the main storyFebruary Jobs Report Is Likely to Show Limited Improvement: Live UpdatesFebruary jobs report is expected to show only modest gains.March 5, 2021, 5:19 a.m. ETMarch 5, 2021, 5:19 a.m. ETVolunteers at St. Mary’s Food Bank in Phoenix preparing boxes for food donations.Credit…Juan Arredondo for The New York TimesThe Labor Department is scheduled to release its monthly gauge of the American labor market on Friday morning. Economists surveyed by Bloomberg expect only small improvements, estimating a gain of 182,000 jobs and no change in the unemployment rate at 6.3 percent.Roughly 10 million fewer jobs exist today than a year ago, and the January report showed a gain of only 49,000. While economists have offered increasingly optimistic forecasts for growth later in the year, millions of workers are still relying on unemployment benefits and other government assistance. First-time jobless claims also rose last week.Federal Reserve and top administration officials have emphasized that the Labor Department’s figures understate the extent of the damage. More than four million people have quit the labor force in the last year, including those sidelined because of child care and other family responsibilities or health concerns. They are not included in the official jobless count.To carry struggling households and businesses through the coming months, Congress is considering a $1.9 trillion package of pandemic relief.In recent weeks, recruiting sites have had an increase in job postings, but demand remains lopsided. The warehouse, transportation, health care, finance and professional services sectors have shown particular strength. But the parts of the economy hit hardest by the pandemic, like restaurants, travel, salons and entertainment, are still floundering.The February report is also expected to show a decline in state and local government payrolls.“The dominant driver of the labor market right now is the Covid situation and the status of reopenings,” said Robert Rosener, a senior U.S. economist at Morgan Stanley.He added that unusually harsh weather, particularly in the first half of February, right before the government conducted its surveys, could also have depressed hiring last month.AdvertisementContinue reading the main story More

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    When Amazon Raises Wages, Local Companies Follow Suit

    #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 storyWhen Amazon Raises Wages, Local Companies Follow SuitNew research suggests that when big companies increase wages, they drive up pay in the places where they operate — without a notable loss in jobs.An Amazon fulfillment center in Kent, Wash. The company lifted starting pay to $15 an hour three years ago.Credit…Ruth Fremson/The New York TimesBen Casselman and March 5, 2021, 5:00 a.m. ETAmazon has embarked on an advertising blitz this winter, urging Congress to follow the company’s lead and raise the federal minimum wage to $15 an hour. American workers “simply can’t wait” for higher pay, the company said in a recent blog post.In the areas where Amazon operates, though, low-wage workers at other businesses have seen significant wage growth since 2018, beyond what they otherwise might have expected, and not because of new minimum-wage laws. The gains are a direct result of Amazon’s corporate decision to increase starting pay to $15 an hour three years ago, which appears to have lifted pay for low-wage workers in other local companies as well, according to new research from economists at the University of California, Berkeley, and Brandeis University.The findings have broad implications for the battle over the federal minimum wage, which has stayed at $7.25 an hour for more than a decade, and which Democrats are trying to raise to $15 by 2025. For one, the research illustrates how difficult it can be for low-wage workers to command higher pay in the modern American economy — until a powerful outside actor, like a large employer or a government, intervenes.Most directly, there is little evidence in the paper that raising the minimum wage would lead to significant job loss, even in low-cost rural areas, a finding consistent with several recent studies. Other research, including a recent report from the Congressional Budget Office, has found a larger negative effect on jobs, although still smaller than many economists believed in the past.The authors of the latest study — Ellora Derenoncourt of Berkeley and Clemens Noelke and David Weil of Brandeis — studied Amazon, Walmart and Target, which operate in areas where wages tend to be low. But even in those places, the researchers found, wage increases by the large corporate employers appear to drive up wages without driving down employment.“When you have major changes in the wage policies of large actors in the labor market, this has ripple effects,” Dr. Derenoncourt said in an interview.At the same time, Dr. Weil added, “the sky doesn’t fall.”The researchers used the federal government’s Current Population Survey, supplemented by evidence from the online job posting site Glassdoor, to estimate what happened in communities where Amazon, Target or Walmart operate after those companies increased entry-level wages in recent years. What they found in many ways confounds traditional economic models: Raising pay did not put the large companies at a disadvantage. Instead, it gave local workers a reason to push their own employers for a raise.At Mooyah Burgers, Fries and Shakes, a chain with 87 locations in 21 states, the Amazon effect is clear. Employees routinely go to their managers and point out that Amazon is hiring at a significant pay increase.“When you have those corporations paying that much, it just puts pressure on the smaller business owners,” said Tony Darden, Mooyah’s president. Franchisees can try to have good relationships with their employees, he said, but there is only so far that can go.“At some point, it always comes down to money,” he said. “And so if there’s an employee who has the ability to make two or three or four or five bucks an hour more at another location, they go directly to the owner or to their manager.”Many restaurants will grant the pay increase, Mr. Darden said, but at the cost of giving workers fewer hours or hiring fewer employees — a common contention among small-business owners. But while that may be true in individual cases, the Berkeley and Brandeis researchers found little evidence of broad-based job cuts as wages rose. A 10 percent increase in the base wage at a company like Amazon, they found, translated into a 1.7 percent loss in local jobs — and a 0.4 percent loss in jobs for low-wage workers.On raising wages, an Amazon executive said, “We knew that by doing it, we would encourage other employers to do the same.”Credit…Gabriella Demczuk for The New York TimesA mounting body of research in recent years suggests that labor markets don’t work in practice the way they do in some economic models. Employees often have less information about their worth than employers, or face greater risks to changing jobs, or can’t readily move between employers the way a pure market assumes. These “frictions,” in economic jargon, often benefit employers over employees, pushing down wages below where supply and demand suggest they should be.But that leaves room for other forces — in the form of political pressure, organized bargaining or a minimum wage — to push wages up.“In a very simple supply-and-demand, competitive market, firms are just paying the market wage,” said Arindrajit Dube, a University of Massachusetts economist who has studied the minimum wage. In reality, he said, wages “are shaped by market forces but also by norms, pressure as well as policies.”Dr. Dube said that in the 1980s, the spread of Walmart and other national retailers helped push down wages, as they displaced smaller, often unionized local chains. Now big national retailers seem to be helping to push wages up.Many small-business owners do not welcome the pressure.Tad Mollnhauer, who runs two printing and shipping retail stores near Orlando, Fla., said entry-level workers typically earned about $10 to $12 an hour. But these days, anyone paying that rate risks losing workers to Amazon. (The state’s minimum wage is under $9 an hour but will rise to $10 this year under a referendum approved by voters in November. The minimum will rise a dollar a year after that, hitting $15 an hour in 2026.)Mr. Mollnhauer said it was hard for small companies like his to match Amazon’s pay.“Their network and their resources are spread out around the country,” allowing Amazon to pay above-market wages in some places, he said. “For me, as two stores, I can’t do that.”Jay Carney, a senior vice president for Amazon, said the company was conscious of the impact its policy might have on other employers. “We knew that by doing it, we would encourage other employers to do the same, and if that happened then it would put upward pressure on wages in general, which would be good,” he said.But he rejected suggestions that Amazon is using its political power to hurt its rivals. “We have no power to force anybody to do this, only Congress does,” he said.Jared Bernstein, a member of the White House Council of Economic Advisers, said the paper showed both the potential spillover effects for workers from raising the federal minimum wage — which studies suggest would help workers who earn more than the minimum also get raises — and the limits of private company efforts.“There’s just no way to be sure to reach the tens of millions of hardworking but poorly paid workers without significantly raising the national minimum wage,” he said.No Republican senator supports the $15-an-hour bill that Amazon has endorsed, and several Democrats have reservations about it. Given those headwinds and an adverse ruling from the Senate parliamentarian, the provision will almost certainly not make it into the final version of President Biden’s relief package.But the researchers’ findings suggest that there are other ways to raise pay for low-wage workers. Political pressure on big companies can lift pay not just for their direct employees but also for other workers in the same area. Other policies could mimic that effect: If the federal government requires its contractors to pay more, as Mr. Biden has directed by executive order, it could help increase wages throughout the private sector.Many people are skeptical of Amazon’s motives in pushing the federal $15-an-hour effort, noting that the company faces scrutiny from Democrats over its treatment of workers, accusations that it has stifled competition and its moves to fight unionization.Other business groups accused Amazon of using its scale and political influence to squeeze smaller competitors.A Walmart in Charlottesville, Va. Minimum-wage increases in major cities have spread to other areas through companies like Walmart.Credit…Eze Amos for The New York Times“Amazon is clearly doing very well in the current economy,” said Misty Chally, executive director of the Coalition of Franchisee Associations, which represents franchise owners. But gyms, hair salons and many other businesses that compete with Amazon are “all struggling to stay in business right now,” she said.Mr. Dube said he had concerns about the power of companies like Amazon and Walmart. But the upward pressure they put on wages, he said, wasn’t one of them.The “Amazon effect” on wages comes as no surprise to organizers of the Fight for $15 campaign. From its start in 2012, the movement sought to put pressure on private employers, not just elected officials.The two fed each other, said Mary Kay Henry, president of the Service Employees International Union, which has backed the campaign: Minimum-wage increases in big cities encouraged companies like Walmart and Target to raise pay nationwide, which in turn prompted more minimum-wage increases and helped fuel the effort to raise the federal wage floor.Policies like Amazon’s are particularly significant in places where the minimum-wage argument has never gained much of a foothold, like the South.“It shifts the politics of minimum wage in those corners of the country,” Ms. Henry said. “It busts the myth it can’t happen here.”AdvertisementContinue reading the main story More

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    Amazon Workers’ Union Drive Reaches Far Beyond Alabama

    AdvertisementContinue reading the main storySupported byContinue reading the main storyAmazon Workers’ Union Drive Reaches Far Beyond AlabamaA vote on whether to form a union at the e-commerce giant’s warehouse in Bessemer, Ala., has become a labor showdown, drawing the attention of N.F.L. players, and the White House.The votes on whether to form a union at the Amazon fulfillment center in Bessemer, Ala., need to be in by the end of the month.Credit…Bob Miller for The New York TimesMichael Corkery and March 2, 2021, 5:00 a.m. ETPlayers from the National Football League were among the first to voice their support. Then came Stacey Abrams, the Democratic star who helped turn Georgia blue in the 2020 election. The actor Danny Glover traveled to Bessemer, Ala., for a news conference last week, where he invoked the Rev. Dr. Martin Luther King Jr.’s pro-union leanings in urging workers at Amazon’s warehouse there to organize. Tina Fey has weighed in, and so has Senator Bernie Sanders.Then on Sunday, President Biden issued a resounding declaration of solidarity with the workers now voting on whether to form a union at Amazon’s Bessemer warehouse, without mentioning the company by name. Posted to his official Twitter account, his video was one of the most forceful statements in support of unionizing by an American president in recent memory.“Every worker should have a free and fair choice to join a union,” Mr. Biden said.A unionizing campaign that had deliberately stayed under the radar for months has in recent days blossomed into a star-studded showdown to influence the workers. On one side is the Retail, Wholesale and Department Store Union and its many pro-labor allies in the worlds of politics, sports and Hollywood. On the other is one of the world’s dominant companies, an e-commerce behemoth that has warded off previous unionizing efforts at its U.S. facilities over its more than 25-year history.The attention is turning this union vote into a referendum not just on working conditions at the Bessemer warehouse, which employs 5,800, but on the plight of low-wage employees and workers of color in particular. Many of the employees in the Alabama warehouse are Black, a fact that the union organizers have highlighted in their campaign seeking to link the vote to the struggle for civil rights in the South.The retail workers union has a long history of organizing Black workers in the poultry and food production industries, helping them gain basic benefits like paid time off and safety protections and a means to economic security. The union is portraying its efforts in Bessemer as part of that legacy.“This is an organizing campaign in the right-to-work South during the pandemic at one of the largest companies in the world,” said Benjamin Sachs, a professor of labor and industry at Harvard Law School. “The significance of a union victory there really couldn’t be overstated.”The warehouse workers began voting by mail on Feb. 8 and the ballots are due at the end of this month. A union can form if a majority of the votes cast favor such a move.Amazon has posted signs in the facility and held meetings with workers, urging them not to unionize.Credit…Wes Frazer for The New York TimesAmazon’s countercampaign, both inside the warehouse and on a national stage, has zeroed in on pure economics: that its starting wage is $15 an hour, plus benefits. That is far more than its competitors in Alabama, where the minimum wage is $7.25 an hour.“It’s important that employees understand the facts of joining a union,” Heather Knox, an Amazon spokeswoman, said in a statement. “We will provide education about that and the election process so they can make an informed decision. If the union vote passes, it will impact everyone at the site and it’s important associates understand what that means for them and their day-to-day life working at Amazon.” The company, which went on a huge hiring spree last year as homebound customers sent its sales to a record $386 billion, recorded more than $22 billion in profit.In Alabama, some workers are growing weary of the process. One employee recently posted on Facebook: “This union stuff getting on my nerves. Let it be March 30th already!!!”The situation is getting testy, with union leaders accusing Amazon of a series of “union-busting” tactics.The company has posted signs across the warehouse, next to hand sanitizing stations and even in bathroom stalls. It sends regular texts and emails, pointing out the problems with unions. It posts photos of workers in Bessemer on the internal company app saying how much they love Amazon.At certain training sessions, company representatives have pointed out the cost of union dues. When some workers have asked pointed questions in the meetings, the Amazon representatives followed up with them at their work stations re-emphasizing the downsides of unions, employees and organizers say. The meetings stopped once the voting started, but the signs are still up, said Jennifer Bates, a pro-union worker in the warehouse.In this charged atmosphere, even routine things have become suspect. The union has raised questions about the changing of the timing of a traffic light near the warehouse where labor organizers try to talk to the workers as they are stopped in their vehicles while leaving the facility.Amazon did ask county officials in mid-December to change the light’s timing, though there is no evidence in the county records that the change was made to thwart the union. “Traffic for Amazon is backing up around shift change,” the public records stated as the reason the county altered the light.Amazon regularly navigates traffic concerns around its facilities, and wasting unpaid time in congested parking lots is a frequent gripe of Amazon workers in Facebook groups.But the retail workers’ union president, Stuart Appelbaum, questioned the timing of the request in Bessemer, coming as it did at the height of the organizing. “When the light was red we could answer questions and have a brief conversation with workers,” he said.Last week, the union questioned an offer the company made to the Alabama warehouse workers to pay them at least $1,000 if they quit by late March. Mr. Appelbaum accused the company of trying to entice employees to leave before the vote ended.“They are trying to remove the most likely union supporters from their work force by bribing them to leave and give up their vote,” he said in an interview.But “The Offer,” as it’s known among employees, was the same that Amazon made to workers at all of its warehouses around the country. It is an annual program that lets the company reduce its head count after the peak holiday shopping season without layoffs. It has been in place since at least 2014, when Jeff Bezos wrote about it in a shareholder letter.“Once a year, we offer to pay our associates to quit,” Mr. Bezos said at the time. “In the long run, an employee staying somewhere they don’t want to be isn’t healthy for the employee or the company.”Mr. Appelbaum was not swayed. He said he believed that Amazon had chosen to make the offer across all of its warehouses when it did in order to help eliminate possible “yes” votes in Bessemer.President Biden stopped short of urging the Amazon workers to unionize, but his statement instantly raised the stakes of an already momentous campaign.“Let me be really clear,” Mr. Biden said. “It’s not up to me to decide whether anyone should join a union. But let me be even more clear: It’s not up to an employer to decide that, either. The choice to join a union is up to the workers. Full stop.”He added, “Workers in Alabama and all across America are voting on whether to organize a union in their workplace. This is vitally important — a vitally important choice.” And it is one, he said, that should be made without intimidation or threats.Workers around the country, including Seattle, have expressed support for the union vote in Alabama.Credit…Jason Redmond/Agence France-Presse — Getty ImagesDespite the union’s suspicions, it has not filed any formal complaints with the National Labor Relations Board, Mr. Appelbaum said. Typically, unions can raise objections to a company’s tactics before an election and the labor board can step in.If a complaint were to be filed, the labor board could potentially determine that the election is invalid because of Amazon’s actions. But after working for months to build support inside and outside the Amazon warehouse, the last thing the union wants is for the labor board to intervene and rule that the election must be held again. The voting has already been taking place in Bessemer for nearly a month.Mr. Sachs, of Harvard Law School, said that despite Mr. Biden’s admonishments of companies’ interfering in elections, the current labor law does allow Amazon to hold certain mandatory meetings with workers to discuss why they shouldn’t unionize and enables the company to post anti-union messages around the workplace.“It is very helpful that the president is calling out these tactics, but what we need is a new labor law to stop companies from interfering,” he said.It is rare for such a large union election to be held by mail. Over Amazon’s objections, the labor board required a mail-in vote after determining that federal election monitors would be at risk of contracting Covid-19 if they had to travel to Bessemer to oversee in-person voting.By pushing back aggressively against the union, Amazon risks angering Democrats in Washington, many of whom are already calling for more antitrust scrutiny of big tech companies, whose businesses have grown even larger in the pandemic. Amazon has mounted a public campaign supporting legislation to raise the federal minimum wage to $15 an hour, buying prominent ads in The New York Times, The Washington Post and other publications.In his video on Sunday, President Biden specifically mentioned how unions can help “Black and brown workers” and vulnerable workers struggling during the economic crisis brought on by the pandemic.Ms. Bates, 48, one of the leaders of the union drive, started working at the Bessemer warehouse in May.She said she felt insulted by some of Amazon’s anti-union efforts, particularly the company’s statements to the staff that they would be required to pay nearly $500 in union dues every year. Because Alabama is a right-to-work state, there is no such requirement that a union member pay dues.“It angers me a little bit because I feel like they know the truth and they won’t tell the truth and are taking advantage because they know employees come from a community that is looked on as Black and low income,” said Ms. Bates, who is Black. “It felt really horrible that you would stand there and mislead people intentionally. Give them the facts and let them decide.”AdvertisementContinue reading the main story More

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    How Can Biden Bring Back Manufacturing Jobs? Weaken the Dollar

    #masthead-section-label, #masthead-bar-one { display: none }The Jobs CrisisCurrent Unemployment RateWhen the Checks Run OutThe Economy in 9 ChartsThe First 6 MonthsRevere Copper Products in Rome, N.Y., once had two plants and nearly 600 workers. Today the company employs about 300 and operates only one plant.Credit…Joshua Rashaad McFadden for The New York TimesHow Can Biden Bring Back Manufacturing Jobs? Weaken the DollarCritics of a strong currency say it hurts American factory workers by making imports cheap.Revere Copper Products in Rome, N.Y., once had two plants and nearly 600 workers. Today the company employs about 300 and operates only one plant.Credit…Joshua Rashaad McFadden for The New York TimesSupported byContinue reading the main storyMarch 1, 2021, 10:47 a.m. ETPresident Biden has made reviving American manufacturing a top priority. To deliver, he may first have to deal with something even more fundamental to the U.S. economy: the strength of the dollar.Because a strong dollar lowers the price of imports and raises the price of exports, it gives foreign companies an advantage over American competitors and can drag down U.S. employment.“Dollar overvaluation is the big problem,” said Mike Stumo, chief executive of the Coalition for a Prosperous America, which represents small and midsize manufacturers and farmers. Mr. Stumo describes policies that prop up the dollar as a “war on the working class.”Few recent presidents have devoted much attention to this issue. Donald J. Trump fulminated against the decline of U.S. manufacturing and occasionally mused about weakening the dollar, but focused his policies more on tariffs than on currency.But Mr. Biden has hired a handful of senior economic advisers who are concerned about the dollar’s strength and have explored ways to reduce it.“There are a lot of folks who want to try some new things in there,” said Mr. Stumo, whose group presented ideas for weakening the dollar to three of Mr. Biden’s agency transition teams.The dollar’s strength over much of the past few decades has bloated the U.S. trade deficit, which roughly tripled as a share of gross domestic product in the late 1990s and has remained high.At its simplest level, the trade deficit represents a kind of leakage from the U.S. economy: Americans buy more in goods and services from abroad than the rest of the world buys from the United States, and the country takes on foreign debt to pay for the difference. If Americans bought more domestically made products and fewer imports, the spending would create jobs for U.S.-based workers and require less debt.Traditionally, most economists have nonetheless taken a blasé posture toward trade deficits, arguing that they reflect underlying economic fundamentals — namely, a country’s appetite to consume or invest rather than save.A country with a young population may run a large trade deficit because young workers tend to consume more than older workers, who are focused on saving for retirement. An economy growing unusually quickly can also run a larger-than-usual trade deficit, as spending spikes for goods like cars and phones.The problem for the United States is that its trade deficit appears to be far larger than demographics and other fundamentals would predict. According to an analysis by the International Monetary Fund, a reasonable current account deficit, a somewhat broader measure of the trade deficit, would have been about 0.7 percent of the $21 trillion U.S. economy in 2019. The actual deficit, adjusted for short-term factors like the strength of the economy, was about 2 percent of gross domestic product — larger by hundreds of billions of dollars.This divergence between economic models and the actual trade deficit partly reflects the dollar’s strength relative to other currencies. In some cases, other countries have suppressed their currencies’ value to make their goods cheaper for Americans.China was the world’s leading currency manipulator during roughly the first decade of the 2000s, according to a paper by Joseph E. Gagnon, a former Federal Reserve Board economist now at the Peterson Institute for International Economics, and C. Fred Bergsten, the institute’s founding director. The paper estimated that currency manipulation cost the United States one million to five million jobs in 2011. Manufacturing jobs tend to be hit particularly hard by the strong dollar because manufactured goods are easy to import.Over the past several years, medium-size economies like Switzerland, Taiwan and Thailand have been most active in holding down their currencies, Dr. Gagnon found in a more recent study. Collectively, currency interventions by such countries have been more than half the size of China’s earlier interventions, he notes.But the dollar can appreciate even without currency interventions — for example, if foreign investors increase their appetite for American bonds, which require dollars to buy, as they have in recent years.The former Rome Cable complex in Rome. President Biden has made reviving American manufacturing a top priority.Credit…Joshua Rashaad McFadden for The New York TimesDr. Gagnon estimates that as a result of these forces, the dollar was 10 to 20 percent above its expected value in 2019, probably costing hundreds of thousands of manufacturing jobs.Revere Copper Products in Rome, N.Y., which makes copper strip used in automobiles and air-conditioners, has suffered from these changes. In 2000, Revere had two plants and nearly 600 workers. Today the company, founded in 1801 by that Revere, employs about 300 and operates only one plant.The strong dollar has made it difficult for the company’s customers to compete with imports, said its chairman, Brian O’Shaughnessy. In the 1990s, for example, Revere supplied several American door-lock makers with copper or brass. Today, Mr. O’Shaughnessy said, most of the lock makers have shifted production abroad, undercut by imports made cheaper by the strong dollar.“The industry moved offshore,” he said. “It was currency. It overwhelms everything else.”The U.S. government could reverse these trends using one of two approaches. It could essentially fight fire with fire — buying enough foreign currency to lower the value of the dollar by 10 to 20 percent and restoring the equilibrium that would exist without foreigners’ excessive dollar-buying. Or it could tax foreign purchases of U.S. assets, like stocks and bonds, an approach prescribed in a bill sponsored by Senators Tammy Baldwin, a Wisconsin Democrat, and Josh Hawley, a Missouri Republican.A tax would make these investments less attractive to foreigners and therefore reduce their need for dollars. It would also raise revenue for the government.But a tax would ignite opposition from financial firms, which would see it as driving away customers, and could raise interest rates by reducing the supply of potential lenders to the U.S. government. (John R. Hansen, a former World Bank economist who has designed such a proposal, said the rate increases were not likely to be significant.)To date, a major obstacle to action on currency and the trade deficit has been resistance from senior economic policymakers in the U.S. government. Mr. Stumo said his group’s efforts to persuade the Obama administration of the dangers of an overvalued dollar and a large trade deficit were “the opposite of fruitful.”Dr. Gagnon said that institutionally, the Fed and the Treasury Department tended to oppose adjusting the value of the dollar, both on philosophical grounds — economists there believe that markets should set exchange rates — and on practical ones. Doing so could require complicated judgments about when a foreign country’s efforts to influence the dollar should trigger an intervention, while the Treasury is likely to resist anything that makes U.S. government debt harder to sell, like a tax on purchases of debt by foreigners.Menzie Chinn, an economist at the University of Wisconsin, said foreign investors could find ways around paying the tax, as they have to some extent in similar instances abroad.Brian O’Shaughnessy, the chairman of Revere Copper Products, said the strong dollar had made it difficult for his customers to compete with imports.Credit…Joshua Rashaad McFadden for The New York TimesEven experts, like Dr. Bergsten, who acknowledge that the dollar is overvalued and results in job losses for manufacturing workers are reluctant to call for aggressive action. Some argue that the trade deficit is helping sustain economies abroad during a delicate moment for the global economy.“It would essentially be an act of economic war to aggressively intervene to push the dollar down against the euro, the yen, the Canadian dollar,” Dr. Bergsten said. “Those countries are doing worse than we are.”But the political landscape has shifted in recent years, as reflected in Mr. Trump’s rise, and momentum for reining in the dollar and the trade deficit may be building. Though Mr. Trump’s tariffs on products like steel and aluminum were ineffective on this front — tariffs tend to increase the dollar’s value, leading to more imports of other goods — the Trump administration gave the Commerce Department new authority to penalize countries that had weakened their currencies.It used that authority for the first time in November to impose tariffs on Vietnamese tires, after the A.F.L.-C.I.O. submitted a petition saying Vietnam had used its currency as an unfair subsidy to producers.Mr. Biden’s team may be picking up the baton. One of his top economic advisers, Jared Bernstein, has long expressed concern about the overvaluation of the dollar. A second, Bharat Ramamurti, oversaw economic policy for Senator Elizabeth Warren’s presidential campaign, which proposed “more actively managing our currency value to promote exports and domestic manufacturing.” And the Biden administration hired Brad W. Setser, a skeptic of the strong dollar, as a counselor to its trade representative.These aides may face resistance from Biden advisers with more orthodox views. Treasury Secretary Janet L. Yellen said at her confirmation hearing in January that the dollar’s value “should be determined by markets” and that “the United States does not seek a weaker currency to gain competitive advantage.”But some former Treasury officials interpreted this as a more nuanced position than that of other recent secretaries, who have explicitly supported a strong dollar.“Secretary Yellen speaks for the administration on the dollar, and her approach fully reflects the president’s focus on fostering strong and equitable economic growth,” a White House spokeswoman said.Those who have discussed the dollar and the trade deficit with Mr. Biden’s advisers have gotten the impression that many see it as a problem and are willing to press for action internally.“I think they are probably having that conversation,” Mr. Stumo said. “Who comes out on top — we’ll see.”Ana Swanson More

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    They Were on Equal Footing. Then the Ground Shifted.

    #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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    Unemployment Claims Dropped Last Week as Coronavirus Cases Eased

    #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 storyJobless Claims Decline as Coronavirus Cases EaseThe latest reading on the labor market shows evidence of continued healing, though economists caution that the recovery is still fragile.Coronavirus caseloads have been dropping amid vaccination efforts, but until employers and consumers feel that the pandemic is under control, economists say, the labor market won’t fully recover.Credit…James Estrin/The New York TimesFeb. 25, 2021Updated 5:42 p.m. ETNew claims for unemployment fell last week, the government reported on Thursday, the latest sign that the labor market’s recovery, however slow and unsteady, is continuing.“The numbers look encouraging on the face of it,” said Gregory Daco, chief U.S. economist at Oxford Economics.He and other analysts, however, cautioned against reading too much into a single week’s changes. The combined average of new state and federal unemployment insurance claims over the first eight weeks of this year is actually slightly higher than it was over the last eight weeks of 2020.When you take step back and look at the broader picture, Mr. Daco said, “It does reflect an environment in which the labor market remains quite fragile.”A total of 710,000 workers filed first-time claims for state benefits during the week that ended Feb. 20, a decrease of 132,000, the Labor Department said. In addition, 451,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, a decline of 61,000.Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 730,000, a decline of 111,000.On an unadjusted basis, last week’s total was the lowest number of new state claims since the start of the pandemic; seasonally adjusted, it was the lowest since November. The figures are subject to revision as the Labor Department receives more data.Although initial jobless claims are nowhere near the eye-popping levels seen last spring, they are still extraordinarily high by historical standards. There are roughly 10 million fewer jobs than there were last year at this time.Coronavirus caseloads have been dropping amid efforts to get vaccines to people who are most vulnerable. But until employers and consumers feel that the pandemic is under control, economists say, the labor market won’t fully recover.“I can’t imagine we’re going to see big changes in jobless claims for a while,” said Allison Schrager, an economist at the Manhattan Institute.The Coronavirus Outbreak More

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    Powell Says Better Child Care Policies Might Lift Women in Work Force

    #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 storyPowell Says Better Child Care Policies Might Lift Women in Work ForceThe Fed chair said better caregiving options was an “area worth looking at” for Congress, while reiterating the central bank’s full-employment pledge.Jerome H. Powell, the Federal Reserve chair. He said that affordable child care could help women regain a foothold in the labor market.Credit…Al Drago for The New York TimesFeb. 24, 2021, 5:48 p.m. ETJerome H. Powell, the Federal Reserve chair, suggested on Wednesday that improved child care support policies from the government might help pull more women into the labor market.The Fed chief studiously avoided commenting on specific government policy proposals during three hours of wide-ranging testimony before the House Financial Services Committee. But he did acknowledge, in response to a question, that enabling better options for affordable child-care is an “area worth looking at” for Congress.“Our peers, our competitors, advanced economy democracies, have a more built-up function for child care, and they wind up having substantially higher labor force participation for women,” Mr. Powell said, answering a question from Representative Cindy Axne, an Iowa Democrat. “We used to lead the world in female labor force participation, a quarter-century ago, and we no longer do. It may just be that those policies have put us behind.”The Fed chair, who had also testified before the Senate Banking Committee on Tuesday, repeatedly refused to weigh in on the $1.9 trillion spending package the Biden administration has proposed or any of its individual provisions. The central bank is independent of politics, and it tries to avoid getting involved in partisan debates.But Mr. Powell did voice qualified support for a few broader ideas — like exploring better child-care options — and he stressed that in the near-term, it is critical to help workers who have been displaced from their jobs during the pandemic. He made it clear that the labor market remained far from healed, that the pandemic’s economic fallout has disproportionately hurt women and minorities, and that both Congress and the central bank have a role to play in supporting vulnerable families until the economy has recovered more fully.“Some parts of the economy have a long way to go,” he said Wednesday.Women’s labor force participation had climbed for decades in the United States before stalling out — and then actually dropping slightly — starting in the 1990s. As Mr. Powell alluded to, adult women in the United States hold jobs or look for them at lower rates than women in some other major advanced economies, such as Canada or Germany.Research has suggested that the divergence may be linked to child care policies. In a 2018 paper that asked why the share of Canadians who work or look for jobs had climbed even as United States labor force attachment had fallen, researchers at the Federal Reserve Bank of San Francisco pointed out that most of the gap owed to different outcomes for women. And they pointed to caregiving policy differences as a likely culprit.“Parental leave policies in Canada provide strong incentives to remain attached to the labor force following the arrival of a new child,” the paper, written by the San Francisco Fed president, Mary C. Daly, and co-authors, pointed out. “The contrast between the incentives Canada and the United States offer prime-age workers to remain attached to the labor force is clear.”The fact that child care responsibilities fall heavily on women in the United States has come under a brighter spotlight during the pandemic, which has shuttered schools and disproportionately left women bearing added child care responsibilities during the traditional workday.While women lost jobs less dramatically than men during the 2009 recession, their employment rate is down by about as much as men’s during the pandemic crisis. And when it comes to labor force participation, which measures the share of people who are either working or looking, women have lost more ground.Female participation dropped 2.1 percentage points to 55.7 percent in January, compared with February 2020, whereas men’s participation has dropped 1.7 points to 67.5 percent.Mr. Powell noted the disproportionate impact on Wednesday, saying that “women have taken on more of the child-care duties than men have at a time when kids are going to be at home, they’re not going to be at school in many places.”Throughout his tenure as Fed chair, Mr. Powell has been keenly focused on the job market. During the pandemic downturn, he has repeatedly said that both monetary and fiscal policymakers should support displaced workers so that they can make their way back into jobs when the economy reopens.While the Fed can help the economy and the job market to improve broadly, helping individual groups in a targeted way is generally left to elected officials, who can create more precise programs. That includes paving a clearer path to the labor market for mothers, which would mainly fall to Congress and the White House.The pandemic has shuttered schools and disproportionately left women to bear the added responsibility for looking after children during the traditional workday.Credit…Bridget Bennett for The New York TimesStill, the Fed can help to foster conditions for strong economic growth overall, which pulls people in the labor market and helps to set the stage for higher wages.Officials are trying to do that by keeping interest rates low and buying large quantities of government-backed bonds in order to keep many types of credit cheap, policies that can fuel both lending and spending. The Fed’s explicit aim is to achieve both maximum employment and slow but steady inflation that averages 2 percent over time.Mr. Powell signaled on Wednesday that interest rates, which have been at rock-bottom since March 2020, are likely to remain there for years to come. He also suggested that the Fed would be patient in slowing down its bond buying, waiting to see “substantial” further progress before changing that policy.Mr. Powell has been pledging for the past 11 months that the Fed would use its policies to help the economy get through the pandemic, but his comments have become noteworthy at a time when some lawmakers — in particular Republicans — have become worried that big government spending could fuel economic overheating that leads to rapid inflation.The Fed is tasked with keeping price gains under control. But its officials have been clear that weak price gains, not runaway ones, are the problem of the modern era. Central bankers try to keep price gains from slipping ever lower, because disinflation can be economically damaging.Mr. Powell reiterated that message Wednesday.“We live in a time when there are significant disinflationary pressures around the world,” he said, and so officials are trying to bolster prices. “We believe we can do it, we believe we will do it. It may take more than three years.”The Fed tweaked its approach to monetary policy in 2020, saying that it would aim for periods of slightly higher inflation and that it would no longer seek to cool off the economy just because the unemployment rate was falling — an approach monetary policymakers had for decades embraced as prudent. Mr. Powell’s colleague, the Fed governor Lael Brainard, explained the thinking in remarks delivered to a Harvard economics course Wednesday morning.“Removing accommodation preemptively as headline unemployment reaches low levels in anticipation of inflationary pressures that may not materialize may result in an unwarranted loss of opportunity for many Americans,” Ms. Brainard said. “It may curtail progress for racial and ethnic groups that have faced systemic challenges in the labor force.”The Fed was relatively patient in lifting interest rates after the 2007 to 2009 recession — leaving them near zero until 2015 and then raising them slowly. As they proceeded cautiously and unemployment dropped to 50-year lows, workers who had been counted out began to re-enter the labor market and employers started to go to greater lengths to recruit and train talent.“At very low levels of unemployment” the United States “saw benefits going to those at the lower end of the spectrum — which means disproportionately African Americans, other minorities, and women,” Mr. Powell said. “With our tools, what we can do, is try to get us back to that place.”AdvertisementContinue reading the main story More

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    Gov. Phil Murphy Unveils N.J. Budget Plan With No New Taxes

    #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 storyHow New Jersey Averted a Pandemic Financial CalamityA $44.8 billion spending plan unveiled Tuesday by Gov. Phil Murphy calls for no new taxes and fully funds the state pension program for the first time since 1996.Gov. Philip D. Murphy of New Jersey released a $44.8 billion budget on Tuesday that shows better-than-expected revenue projections.Credit…Pool photo by Anne-Marie CarusoFeb. 23, 2021Updated 3:07 p.m. ETIt has been five months since New Jersey officials issued warnings about a coronavirus-related financial calamity. The dire outlook contributed to lawmakers’ decisions to increase taxes on income over $1 million and to become one of the first states to borrow billions to cover operating costs.But the doomsday forecast has since brightened considerably, officials said, enabling the Democratic governor, Philip D. Murphy, to unveil a $44.8 billion spending plan on Tuesday that calls for no new taxes, few cuts and tackles head-on a chronic problem — the state’s underfunded pension program — for the first time in 25 years.The governor also said there would be no increase in New Jersey Transit fares.“The news is less bad,” the state’s treasurer, Elizabeth Maher Muoio, said. “I wouldn’t say it’s good, but it’s less bad.”The governor’s election-year financial blueprint relies on better-than-expected revenue from retail sales and high-earners, who have lost fewer jobs during the pandemic than low-income workers and are reaping the benefits of a prolonged Wall Street rally.The $38 billion that New Jersey and its residents have received in federal stimulus funding, a short-term extension of a corporate tax and a $504 million windfall from the so-called millionaire’s tax also helped, Ms. Muoio said.The release of New Jersey’s proposed 2022 fiscal year budget comes as Congress continues to debate President Biden’s $1.9 trillion virus relief package. The proposed package includes considerable funds for states and municipalities as well as grant and loan programs for small businesses.Other states have seen similarly strong signs of an economic rebound even as cases of the virus have spiked nationwide over the last several months and the nation’s death toll surpassed 500,000 on Monday.Earlier this month, the nonpartisan Congressional Budget Office concluded that large sectors of the economy were adapting to the pandemic better than originally expected and that December’s economic aid package had helped.Mr. Murphy, who is running for re-election in November, said the spending plan was designed to not only enable the state to scrape through the pandemic, but to help it emerge stronger.“This is the time for us to lean into the policies that can fix our decades-old — or in some cases centuries-old — inequities,” the governor said Tuesday in a budget address, which he delivered virtually.A key pillar of the budget is a proposal to fully fund the state’s public sector pension obligations for the first time since 1996.The state has not set aside the full amount of its pension obligation for 25 years, leading $4 billion in extra debt to accrue over time, Ms. Muoio said. Under a deal brokered with the Legislature, Mr. Murphy had been on track to fully fund the state’s share by the 2023 fiscal year. But the spending plan released on Tuesday sets aside $6.4 billion for the pension system, accelerating full funding by a year.“New Jersey is done kicking problems down the road,” the governor said. “We are solving them.”Under the plan, the state’s surplus, which proved to be a vital resource during the first wave of the pandemic, would not grow, officials said, but would remain at about the same level it was at the end of 2020.The Coronavirus Outbreak More