Labor and Jobs

More stories

  • 125 Shares109 Views

    in Economy

    Job Openings Dipped in May, a Sign of Continued Cooling

    by

    The NewsJob openings fell in May while the number of workers quitting their jobs increased, the Labor Department reported Thursday.There were 9.8 million job openings in May, down from 10.3 million in April, according to the Job Openings and Labor Turnover Survey, known as JOLTS. The report shows that the labor market is maintaining ample opportunities for workers, but that it is losing momentum.“This is a labor market that is moderating, where things are cooling down, but is still hot,” said Nick Bunker, the director of North American economic research at the job search website Indeed.The quits rate, which is often used to gauge a worker’s confidence in the job market, increased in May, particularly in the health care, social assistance and construction industries. A rise in quitting often signals workers’ confidence that they will be able to find other work, often better paying. But fewer workers are quitting their jobs than were doing so last year at the height of what was called the “great resignation.”Layoffs were relatively steady after decreasing in previous months, a sign that employers are hesitant to let go of workers.College students waiting to speak with representatives of tech companies at a job fair in Atlanta.Alex Slitz/Associated PressWhy It Matters: The Fed’s next move on interest rates is unclear.Policymakers at the Federal Reserve have worried about the strength of the labor market as they continue to tackle stubbornly high inflation.The Fed chose to leave interest rates unchanged in its June meeting after 10 consecutive increases. The JOLTS report is one of several factors that will inform the Fed’s next decision on rates.Some economists worry that the Fed will push interest rates too high and set off a recession.But the JOLTS report as well as previous economic temperature checks have led others to believe that a “soft landing” — an outcome in which inflation eases to the Fed’s goal of 2 percent without a recession — is within reach. The biggest question is whether wage growth can continue to cool as workers switch jobs, said Aaron Terrazas, chief economist at the career site Glassdoor.“A tight labor market does not necessarily have to be inflationary,” he said.Background: A cooling labor market retains underlying strength.The labor market has remained resilient amid the Fed’s efforts to slow down the economy but has shown signs of cooling in recent months. Job openings were down for three consecutive months until April.Initial jobless claims during the week that ended Saturday, also released by the Labor Department on Thursday, nudged higher from the week before, though the four-week trend shows initial claims declining.Although job openings are cooling, the reading of 9.8 million in May is high compared with prepandemic levels. In 2019, for example, the monthly totals hovered around seven million.“To some degree, I worry we’ve become desensitized to numbers that were once upon a time eye-popping,” Mr. Terrazas said.What’s Next: The June jobs report comes Friday.The June employment report — another indicator closely watched by the Fed — will be released by the Labor Department on Friday. Economists surveyed by Bloomberg expect the report to show a gain of 225,000, down from the initial reading of 339,000 for May.The unemployment rate jumped to 3.7 percent in May, from 3.4 percent a month earlier. Although still historically low, the rate was the highest since October and exceeded analysts’ expectations.Fed policymakers will hold their next meeting July 25-26. More

  • 113 Shares139 Views

    in Economy

    The ‘Great Resignation’ Is Over. Can Workers’ Power Endure?

    by

    The furious pace of job-switching in recent years has led to big gains for low-wage workers. But the pendulum could be swinging back toward employers.Tens of millions of Americans have changed jobs over the past two years, a tidal wave of quitting that reflected — and helped create — a rare moment of worker power as employees demanded higher pay, and as employers, short on staff, often gave it to them.But the “great resignation,” as it came to be known, appears to be ending. The rate at which workers voluntarily quit their jobs has fallen sharply in recent months — though it edged up in May — and is only modestly above where it was before the pandemic disrupted the U.S. labor market. In some industries where turnover was highest, like hospitality and retail businesses, quitting has fallen back to prepandemic levels.Quits Are High, But Falling

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Voluntary quits per 100 workers
    Note: Data is seasonally adjustedSource: Labor DepartmentBy The New York TimesNow the question is whether the gains that workers made during the great resignation will outlive the moment — or whether employers will regain leverage, particularly if, as many forecasters expect, the economy slips into a recession sometime in the next year.Already, the pendulum may be swinging back toward employers. Wage growth has slowed, especially in the low-paying service jobs where it surged as turnover peaked in late 2021 and early 2022. Employers, though still complaining of labor shortages, report that it has gotten easier to hire and retain workers. And those who do change jobs are no longer receiving the supersize raises that became the norm in recent years, according to data from the payroll processing firm ADP.“You don’t see the signs saying $1,000 signing bonus anymore,” said Nela Richardson, ADP’s chief economist.Ms. Richardson compared the labor market to a game of musical chairs: When the economy began to recover from pandemic shutdowns, workers were able to move between jobs freely. But with recession warnings in the air, they are becoming nervous about getting caught without a job when fewer are available.“Everyone knows the music is about to stop,” Ms. Richardson said. “That is going to lead people to stay put a bit longer.”Aubrey Moya joined the great resignation about a year and a half ago, when she decided she had had enough of the low wages and backbreaking work of waiting tables. Her husband, a welder, was making good money — he, too, had changed jobs in search of better pay — and they decided it was time for her to start the photography business she had long dreamed of. Ms. Moya, 38, became one of the millions of Americans to start a small business during the pandemic.Today, though, Ms. Moya is questioning whether her dream is sustainable. Her husband is making less money, and living costs have risen. Her customers, stung by inflation, aren’t splurging on the boudoir photo sessions she specializes in. She is nervous about making payments on her Fort Worth studio.“There was a moment of empowerment,” she said. “There was a moment of ‘We’re not going back, and we’re not going to take this anymore,’ but the truth is yes, we are, because how else are we going to pay the bills?”But Ms. Moya isn’t going back to waiting tables just yet. And some economists think workers are likely to hold on to some of the gains they have made in recent years.“There are good reasons to think that at least a chunk of the changes that we’ve seen in the low-wage labor market will prove lasting,” said Arindrajit Dube, a University of Massachusetts professor who has studied the pandemic economy.The great resignation was often portrayed as a phenomenon of people quitting work altogether, but the data tells a different story. Most of them quit to take other, typically better-paying jobs — or, like Ms. Moya, to start businesses. And while turnover increased in virtually all industries, it was concentrated in low-wage services, where workers have generally had little leverage.For those workers, the rapid reopening of the in-person economy in 2021 provided a rare opportunity: Restaurants, hotels and stores needed tens of thousands of employees when many people still shunned jobs requiring face-to-face interaction with the public. And even as concerns about the coronavirus faded, demand for workers continued to outstrip supply, partly because many people who had left the service industry weren’t eager to return.The result was a surge in wages for workers at the bottom of the earnings ladder. Average hourly earnings for rank-and-file restaurant and hotel workers rose 28 percent from the end of 2020 to the end of 2022, far outpacing both inflation and overall wage growth.In a recent paper, Mr. Dube and two co-authors found that the earnings gap between workers at the top of the income scale and those at the bottom, after widening for four decades, began to narrow: In just two years, the economy undid about a quarter of the increase in inequality since 1980. Much of that progress, they found, came from workers’ increased ability — and willingness — to change jobs.Pay is no longer rising faster for low-wage workers than for other groups. But importantly in Mr. Dube’s view, low-wage workers have not lost ground over the past two years, making wage gains that more or less keep up with inflation and higher earners. That suggests that turnover could be declining not only because workers are becoming more cautious but also because employers have had to raise pay and improve conditions enough that their workers aren’t desperate to leave.The strong labor market gave Danny Cron, a restaurant server, the confidence to keep changing jobs until he found one that worked for him.Yasara Gunawardena for The New York TimesDanny Cron, a restaurant server in Los Angeles, has changed jobs twice since going back to work after pandemic restrictions lifted. He initially went to work at a dive bar, where his hours were “brutal” and the most lucrative shifts were reserved for servers who sold the most margaritas. He quit to work at a large chain restaurant, which offered better hours but little scheduling flexibility — a problem for Mr. Cron, an aspiring actor.So last year, Mr. Cron, 28, quit again, for a job at Blue Ribbon, an upscale sushi restaurant, where he makes more money and which is more accommodating of his acting schedule. The strong postpandemic labor market, he said, gave him the confidence to keep changing jobs until he found one that worked for him.“I knew there were a plethora of other jobs to be had, so I felt less attached to any one job out of necessity,” Mr. Cron wrote in an email.But now that he has a job he likes, he said, he feels little urge to keep searching — partly because he senses that the job market has softened, but mostly because he is happy where he is.“Looking for a new job is a lot of work, and training for a new job is a lot of work,” he said. “So when you find a good serving job, you’re not going to give that up.”The labor market remains strong, with unemployment below 4 percent and job growth continuing, albeit more slowly than in 2021 or 2022. But even optimists like Mr. Dube concede that workers like Mr. Cron could lose leverage if companies start cutting jobs en masse.“It’s very tenuous,” said Kathryn Anne Edwards, a labor economist and policy consultant who has studied the role of quitting in wage growth. A recession, she said, could wipe away gains made by hourly workers over the past few years.Still, some workers say one thing has changed in a more lasting way: their behavior. After being lauded as “essential workers” early in the pandemic — and given bonuses, paid sick time and other perks — many people in hospitality, retail and similar jobs say they were disappointed to see companies roll back benefits as the emergency abated. The great resignation, they say, was partly a reaction to that experience: They were no longer willing to work for companies that didn’t value them.Amanda Shealer, who manages a store near Hickory, N.C., said her boss had recently told her that she needed to find more ways to accommodate hourly workers because they would otherwise leave for jobs elsewhere. Her response: “So will I.”“If I don’t feel like I’m being supported and I don’t feel like you’re taking my concerns seriously and you guys just continue to dump more and more to me, I can do the same thing,” Ms. Shealer, 40, said. “You don’t have the loyalty to a company anymore, because the companies don’t have the loyalty to you.” More

  • 125 Shares119 Views

    in Economy

    Ex-Prisoners Face Headwinds as Job Seekers, Even as Openings Abound

    by

    An estimated 60 percent of those leaving prison are unemployed a year later. But after a push for “second-chance hiring,” some programs show promise.The U.S. unemployment rate is hovering near lows unseen since the 1960s. A few months ago, there were roughly two job openings for every unemployed person in the country. Many standard economic models suggest that almost everyone who wants a job has a job.Yet the broad group of Americans with records of imprisonment or arrests — a population disproportionately male and Black — have remarkably high jobless rates. Over 60 percent of those leaving prison are unemployed a year later, seeking work but not finding it.That harsh reality has endured even as the social upheaval after the murder of George Floyd in 2020 gave a boost to a “second-chance hiring” movement in corporate America aimed at hiring candidates with criminal records. And the gap exists even as unemployment for minority groups overall is near record lows.Many states have “ban the box” laws barring initial job applications from asking if candidates have a criminal history. But a prison record can block progress after interviews or background checks — especially for convictions more serious than nonviolent drug offenses, which have undergone a more sympathetic public reappraisal in recent years.For economic policymakers, a persistent demand for labor paired with a persistent lack of work for many former prisoners presents an awkward conundrum: A wide swath of citizens have re-entered society — after a quadrupling of the U.S. incarceration rate over 40 years — but the nation’s economic engine is not sure what to with them.“These are people that are trying to compete in the legal labor market,” said Shawn D. Bushway, an economist and criminologist at the RAND Corporation, who estimates that 64 percent of unemployed men have been arrested and that 46 percent have been convicted. “You can’t say, ‘Well, these people are just lazy’ or ‘These people really don’t really want to work.’”In a research paper, Mr. Bushway and his co-authors found that when former prisoners do land a job, “they earn significantly less than their counterparts without criminal history records, making the middle class ever less reachable for unemployed men” in this cohort.One challenge is a longstanding presumption that people with criminal records are more likely to be difficult, untrustworthy or unreliable employees. DeAnna Hoskins, the president of JustLeadershipUSA, a nonprofit group focused on decreasing incarceration, said she challenged that concern as overblown. Moreover, she said, locking former prisoners out of the job market can foster “survival crime” by people looking to make ends meet.One way shown to stem recidivism — a relapse into criminal behavior — is deepening investments in prison education so former prisoners re-enter society with more demonstrable, valuable skills.According to a RAND analysis, incarcerated people who take part in education programs are 43 percent less likely than others to be incarcerated again, and for every dollar spent on prison education, the government saves $4 to $5 in reimprisonment costs.Last year, a chapter of the White House Council of Economic Advisers’ Economic Report of the President was dedicated, in part, to “substantial evidence of labor force discrimination against formerly incarcerated people.” The Biden administration announced that the Justice and Labor Departments would devote $145 million over two years to job training and re-entry services for federal prisoners.Mr. Bushway pointed to another approach: broader government-sponsored jobs programs for those leaving incarceration. Such programs existed more widely at the federal level before the tough-on-crime movement of the 1980s, providing incentives like wage subsidies for businesses hiring workers with criminal records.But Mr. Bushway and Ms. Hoskins said any consequential changes were likely to need support from and coordination with states and cities. Some small but ambitious efforts are underway.Training and CounselingJabarre Jarrett is a full-time web developer for Persevere, a nonprofit group, and hopes to build enough experience to land a more senior role in the private sector.Whitten Sabbatini for The New York TimesIn May 2016, Jabarre Jarrett of Ripley, Tenn., a small town about 15 miles east of the Mississippi River, got a call from his sister. She told Mr. Jarrett, then 27, that her boyfriend had assaulted her. Frustrated and angry, Mr. Jarrett drove to see her. A verbal altercation with the man, who was armed, turned physical, and Mr. Jarrett, also armed, fatally shot him.Mr. Jarrett pleaded guilty to a manslaughter charge and was given a 12-year sentence. Released in 2021 after his term was reduced for good conduct, he found that he was still paying for his crime, in a literal sense.Housing was hard to get. Mr. Jarrett owed child support. And despite a vibrant labor market, he struggled to piece together a living, finding employers hesitant to offer him full-time work that paid enough to cover his bills.“One night somebody from my past called me, man, and they offered me an opportunity to get back in the game,” he said — with options like “running scams, selling drugs, you name it.”One reason he resisted, Mr. Jarrett said, was his decision a few weeks earlier to sign up for a program called Persevere, out of curiosity.Persevere, a nonprofit group funded by federal grants, private donations and state partnerships, focuses on halting recidivism in part through technical job training, offering software development courses to those recently freed from prison and those within three years of release. It pairs that effort with “wraparound services” — including mentorship, transportation, temporary housing and access to basic necessities — to address financial and mental health needs.For Mr. Jarrett, that network helped solidify a life change. When he got off the phone call with the old friend, he called a mental health counselor at Persevere.“I said, ‘Man, is this real?’” he recalled. “I told him, ‘I got child support, I just lost another job, and somebody offered me an opportunity to make money right now, and I want to turn it down so bad, but I don’t have no hope.’” The counselor talked him through the moment and discussed less risky ways to get through the next months.In September, after his yearlong training period, Mr. Jarrett became a full-time web developer for Persevere itself, making about $55,000 a year — a stroke of luck, he said, until he builds enough experience for a more senior role at a private-sector employer.Persevere is relatively small (active in six states) and rare in its design. Yet its program claims extraordinary success compared with conventional approaches.By many measures, over 60 percent of formerly incarcerated people are arrested or convicted again. Executives at Persevere report recidivism in the single digits among participants who complete its program, with 93 percent placed in jobs and a 85 percent retention rate, defined as still working a year later.“We’re working with regular people who made a very big mistake, so anything that I can do to help them live a fruitful, peaceful, good life is what I want to do,” said Julie Landers, a program manager at Persevere in the Atlanta area.If neither employers nor governments “roll the dice” on the millions sentenced for serious crimes, Ms. Landers argued, “we’re going to get what we’ve always gotten” — cycles of poverty and criminality — “and that’s the definition of insanity.”Pushing for ChangeDant’e Cottingham works full time for EX-incarcerated People Organizing, lobbying local businesses in Wisconsin to warm up to second-chance hiring.Akilah Townsend for The New York TimesDant’e Cottingham got a life sentence at 17 for first-degree intentional homicide in the killing of another man and served 27 years. While in prison, he completed a paralegal program. As a job seeker afterward, he battled the stigma of a criminal record — an obstacle he is trying to help others overcome.While working at a couple of minimum-wage restaurant jobs in Wisconsin after his release last year, he volunteered as an organizer for EXPO — EX-incarcerated People Organizing — a nonprofit group, mainly funded by grants and donations, that aims to “restore formerly incarcerated people to full participation in the life of our communities.”Now he works full time for the group, meeting with local businesses to persuade them to take on people with criminal records. He also works for another group, Project WisHope, as a peer support specialist, using his experience to counsel currently and formerly incarcerated people.It can still feel like a minor victory “just getting somebody an interview,” Mr. Cottingham said, with only two or three companies typically showing preliminary interest in anyone with a serious record.“I run into some doors, but I keep talking, I keep trying, I keep setting up meetings to have the discussion,” he said. “It’s not easy, though.”Ed Hennings, who started a Milwaukee-based trucking company in 2016, sees things from two perspectives: as a formerly imprisoned person and as an employer.Mr. Hennings served 20 years in prison for reckless homicide in a confrontation he and his uncle had with another man. Even though he mostly hires formerly incarcerated men — at least 20 so far — he candidly tells some candidates that he has limited “wiggle room to decipher whether you changed or not.” Still, Mr. Hennings, 51, is quick to add that he has been frustrated by employers that use those circumstances as a blanket excuse.“I understand that it takes a little more work to try to decipher all of that, but I know from hiring people myself that you just have to be on your judgment game,” he said. “There are some people that come home that are just not ready to change — true enough — but there’s a large portion that are ready to change, given the opportunity.”In addition to greater educational opportunities before release, he thinks giving employers incentives like subsidies to do what they otherwise would not may be among the few solutions that stick, even though it is a tough political hurdle.“It’s hard for them not to look at you a certain way and still hard for them to get over that stigma,” Mr. Hennings said. “And that’s part of the conditioning and culture of American society.” More

  • 100 Shares99 Views

    in Economy

    The Russia-Ukraine War Changed This Finland Company Forever

    by

    Even with sheets of rain falling, the sprawling construction site was buzzing. Yellow and orange excavators slowly danced around a maze of muddy pits, swinging giant fistfuls of dirt as a chorus line of trucks traipsed across the landscape.This 50-acre plot in Oradea, Romania, close to the border with Hungary, beat out scores of other sites in Europe to become the home of Nokian Tyres’ new 650 million-euro, or $706 million, factory. Like an industrial-minded Goldilocks, the Finnish tire company had searched for the just-right combination of real estate, transport links, labor supply and pro-business environment.Yet the make-or-break feature that every host country had to have would not have even appeared on the radar a few years ago: membership in both the European Union and the North Atlantic Treaty Organization.Geopolitical risk “was the starting point,” said Jukka Moisio, the chief executive and president of Nokian. That was not the case before Russia invaded Ukraine on Feb. 24, 2022.Nokian Tyres’ altered business strategy highlights the transformed global economic playing field that governments and companies are confronting. As the war in Ukraine drags on and tensions rise between the United States and China, critical decisions about offices, supply chains, investments and sales are no longer primarily ruled by concerns about costs.As the world re-globalizes, assessments of political threats loom much larger than before.Oradea, Romania, became Nokian Tyres’ top choice for a new factory.Andreea Campeanu for The New York TimesThe new factory is going on a 50-acre site.Andreea Campeanu for The New York Times“This is a world that has fundamentally changed,” said Henry Farrell, a political scientist at Johns Hopkins. “We cannot just think in terms of innovation and efficiency. We have to think about security, too.”For Nokian Tyres, which first sold shares on the Helsinki stock exchange in 1995, the new reality struck like a hammer blow. Roughly 80 percent of Nokian’s passenger car tires were manufactured in Russia. And the country accounted for 20 percent of its sales.The perils of over-concentration hit home, Mr. Moisio said, “when your company loses billions.”Within six weeks of the war’s start, it became clear that the company had no choice but to exit Russia and ramp up production elsewhere. Rubber had been added to the European Union’s rapidly expanding package of sanctions. Public sentiment in Finland soured. The share price plunged. In January 2022, the share price was over €34; today it’s €8.25.“We were very exposed,” Mr. Moisio said, sipping coffee in a sunny conference room at the company’s low-key Helsinki office. The Russian operation had high returns, but it also had high risks, a fact that, over time, had faded from view.Diversifying may not be as efficient or cheap, he said, but “it’s far more secure.”With roughly 80 percent of its production located in Russia, “we were very exposed” when Russia attacked Ukraine, said Jukka Moisio, Nokian’s chief executive.Juho Kuva for The New York TimesC-suite executives are relearning that the market often fails to accurately measure risk. A January survey of 1,200 global chief executives by the consulting firm EY found that 97 percent had altered their strategic investment plans because of new geopolitical tensions. More than a third said they were relocating operations.China, which has become an increasingly fraught home for foreign businesses and investment, is among the places that firms are leaving. Roughly one in four companies planned to move operations out of the country, a survey conducted last year by the European Union Chamber of Commerce in China found.Businesses are suddenly finding themselves “stranded in the no-man’s land of warring empires,” Mr. Farrell and his co-author, Abraham Newman, argue in a new book.Mr. Moisio’s tenure at Nokian has coincided with the triple crown of crises. He started in May 2020, a few months after the Covid-19 pandemic essentially shut down global commerce. Like other companies, Nokian hunkered down, cutting production and capital spending. Its lack of outstanding debt helped it ride out the storm.And when the economy bounced back, Nokian scrambled to restart production and restock raw materials amid a huge breakdown of the supply chain and transportation. The war posed an existential threat to Nokian’s operations.Adding production lines to existing facilities is often the fastest and cheapest way to increase output. Still, Nokian decided not to expand its operation in Russia.Production there was already concentrated, Mr. Moisio said, but more important, the persistent supply chain bottlenecks underscored the added risks and costs of transporting materials over long distances.The Nokian Tyres main office in Nokia, Finland.Juho Kuva for The New York TimesNewly completed tires on the production line. Nokian is moving manufacturing closer to specific markets.Juho Kuva for The New York TimesGoing forward, instead of locating 80 percent of production in one spot, often far from the market, 80 percent of production would be local or regional.“It turned upside down,” Mr. Moisio said.Tires for the Nordic market would be produced in Finland. Tires for American customers would be manufactured in the United States. And in the future, Europe would be serviced by a European factory.Diversification had, to some extent, already been incorporated into the company’s strategic plan. It opened a plant in Dayton, Tenn., in 2019, in addition to the original factory that operated in Nokia, the Finnish town that gave the tire maker its name.At the end of 2021, the company opened new production lines at both of those plants.When it came time to build the next factory, executives figured it would be in Eastern Europe, close to its largest European markets in Germany, Austria, Switzerland and France, as well as Poland and the Czech Republic.That moment came much sooner than anyone expected.In June 2022, less than four months after the invasion of Ukraine, Nokian executives asked the board to approve an exit from Russia and the construction of a new plant.Negotiations to leave Russia commenced, as did a high-speed search for a new location. Aided by the consulting firm Deloitte, the site assessment process, which included dozens of candidates across Europe, was completed in four months, said Adrian Kaczmarczyk, senior vice president of supply operations. By comparison, in 2015 Deloitte took nine months to recommend a site in a single country, the United States.Nokian expedited its search for a site, selecting Oradea in just four months, said Adrian Kaczmarczyk, senior vice president of supply operations.Andreea Campeanu for The New York TimesMr. Kaczmarczyk and engineers examining designs for the project.Andreea Campeanu for The New York TimesThe aim was to start commercial production by early 2025.Serbia had a flourishing automotive sector, but was eliminated from the get-go because it was in neither the European Union nor NATO. Turkey was a member of NATO but not the European Union. And Hungary was labeled high risk because of its illiberal prime minister, Viktor Orban, and close relationship with Russia.At each successive round, a long list of other considerations kicked in. Where were the closest highway, harbor and rail lines? Was there a sufficient pool of qualified employees? Was land available? Could permitting and construction time be fast-tracked? How pro-business were the authorities?Nokian would have looked to reduce a new factory’s carbon footprint in any event, Mr. Moisio, the chief executive, said. But the decision to commit to a 100 percent emissions-free plant probably would not have happened in the absence of war. After all, cheap gas from Russia was what helped lure Nokian there in the first place. Now, the disappearance of that supply accelerated the company’s thinking about ending dependence on fossil fuels.“Disruption allowed us to think differently,” Mr. Moisio said.As the winnowing progressed, a complex matrix of small and large considerations came into play. Was there good health care and an international school where foreign managers could send their children? What was the likelihood of natural disasters?Countries and cities fell out for various reasons. Slovenia and the Czech Republic were considered low-to-medium-risk countries, but Mr. Kaczmarczyk said they couldn’t find appropriate plots of land.A machine operator monitoring equipment on the production line inside the factory in Nokia.Juho Kuva for The New York TimesTires being made on the production line.Juho Kuva for The New York TimesSlovakia fell into the same bucket and already had a large automotive industry. Bratislava, though, made clear it had no interest in attracting more heavy industry, only information technology, Mr. Kaczmarczyk said.At the end, six candidates made Deloitte’s final cut: two sites in Romania, two in Poland, and one each in Portugal and Spain.The messy mix of new and old considerations that businesses have to contemplate were evident in the list of finalists. Geopolitics, as the Nokian Tyres chief executive said, had been a starting point, but it was not necessarily the end point.Spain has virtually no geopolitical risk. And the site in El Rebollar had a large talent pool, but Deloitte ruled it out because of high wage costs and heavy labor regulations. Portugal, another country with no security risk, was rejected because of worries about the power supply and the speed of the permitting process.Poland, along with Hungary and Serbia, had been labeled high risk despite its staunch anti-Russia stance. It has an antidemocratic government and has repeatedly clashed with the European Commission over the primacy of European legislation and the independence of Poland’s courts.Yet low labor costs, the presence of other multinational employers and a quick permitting process outweighed the worries enough to elevate the sites in Gorzow and Konin to second and third place.Oradea, the top recommendation, ultimately offered a better balance among the company’s competing priorities. The cost of labor in Romania, like Poland, was among the lowest in Europe. And its risk rating, though labeled relatively high, was lower than Poland’s.The factory in Nokia. The low cost of labor in Romania attracted the company.Juho Kuva for The New York TimesStretching the lining for tires. The main raw materials for tires are natural rubber, synthetic rubber, soot and oil.Juho Kuva for The New York TimesThere were other pluses as well in Oradea. Construction could start immediately; utilities were already in place; a new solar power plant was in the works. The amount of development grants from the European Union for companies investing in Romania was larger than in Poland. And local officials were enthusiastic.Mihai Jurca, Oradea’s city manager, detailed the area’s appeal during a tour of the turreted confection of Art Nouveau buildings in the renovated city center.“It was a flourishing cultural and commercial city, a junction point between East and West,” in the early 20th century, under the Austro-Hungarian Empire, Mr. Jurca said.Today the city, an affluent economic hub of 220,000 with a university, has solicited businesses and European Union funds, while constructing industrial parks that house domestic and international companies like Plexus, a British electronics manufacturer, and Eberspaecher, a German automotive supplier.Nokian is not looking to replicate the kind of megafactory in Romania that it ran in Russia — or anywhere else, for that matter. The idea of concentrating production is “old-fashioned,” Mr. Moisio said.For him, the company emerged from crisis mode on March 16, the day $258 million from sale of its Russian operation landed in Nokian’s bank account. Although only a fraction of the total value, the amount helped finance the construction and closed out the company’s involvement with Russia.Now uncertainty is the norm, Mr. Moisio said, and business leaders need to constantly be asking: “What can we do? What’s our Plan B?”Oradea “was a flourishing cultural and commercial city, a junction point between East and West,” in the early 20th century, said Mihai Jurca, the city manager.Andreea Campeanu for The New York TimesOradea is an affluent hub of 220,000 people with a university, and has solicited businesses and European Union funds.Andreea Campeanu for The New York Times More

  • 88 Shares99 Views

    in Economy

    Los Angeles Hotel Workers Go on Strike

    by

    The NewsThousands of hotel workers in Southern California walked off the job on Sunday demanding higher pay and better benefits, just as hordes of tourists descended on the region for the Fourth of July holiday.“Workers have been pent up and frustrated and angry about what’s happened during the pandemic combined with the inability to pay their rent and stay in Los Angeles,” said Kurt Petersen, co-president of Unite Here Local 11, the union representing the workers. “So people feel liberated, it’s Fourth of July, freedom is reigning in Los Angeles and hotel workers are leading that fight.”Representatives for the hotels have said that the union had not been bargaining in good faith, and that leaders were determined to disrupt operations.“The hotels want to continue to provide strong wages, affordable quality family health care and a pension,” Keith Grossman, a spokesman for the coordinated bargaining group consisting of more than 40 Los Angeles and Orange County hotels, said in a statement.The strike is part of a wave of recent labor actions in the nation’s second-largest metropolis, where high costs of living have made it difficult for many workers — from housekeepers to Hollywood writers — to stay afloat.Thousands of hotel workers in Southern California walked off the job, demanding higher pay and better benefits.Philip Cheung for The New York TimesWhy It MattersWorkers across Southern California in a range of industries have threatened to strike or walked off the job in recent months, displaying unusual levels of solidarity with other unions as they push for higher pay and better working conditions.Dockworkers disrupted operations for weeks at the colossal ports of Los Angeles and Long Beach until they reached a tentative deal in June. And screenwriters have been picketing outside the gates of Hollywood studios for about two months.Hugo Soto-Martinez, a Los Angeles City Council member who worked as an organizer for Unite Here Local 11, said that the breadth of industries locked in labor fights demonstrated frustration especially among younger workers, who have seen inequality widen and opportunities evaporate.“It’s homelessness, it’s the cost of housing,” he said. “I think people are understanding those issues in a much more palpable way.”The hotel workers’ strike comes just as the summer tourism season ramps up, and labor leaders say they are hoping to capitalize on that momentum.Last year, tourism in the city reached its highest levels since the coronavirus pandemic, according to the Los Angeles Tourism and Convention Board. Roughly 46 million people visited, and there was $34.5 billion in total business sales in 2022, reaching 91 percent of the record set in 2019.But for many workers like Diana Rios-Sanchez, who works as a housekeeping supervisor at the InterContinental Los Angeles Downtown, the pay has not helped to keep up with inflation.She often wonders how long she and her three children, who live in a one-bedroom apartment in El Sereno, a neighborhood on the Eastside of Los Angeles, can afford to stay in the city.“All we do in hotels is work and work and get by with very little,” Ms. Rios-Sanchez said. “We take care of the tourists, but no one takes care of us.”Business groups say that simply demanding that employers pay workers more does not address the much-deeper problems that have led to sky-high costs of living in California.BackgroundThe union has been negotiating since April for a new contract. In June, members approved a strike.The group has asked that hourly wages, now $20 and $25 for housekeepers, immediately increase by $5, followed by $3 bumps in each subsequent year of a three-year contract.By contrast, Mr. Grossman said in the statement that the hotels had offered to increase pay for housekeepers currently making $25 an hour in Beverly Hills and downtown Los Angeles to more than $31 per hour by January 2027.On Thursday, the Westin Bonaventure Hotel & Suites, a large hotel in downtown Los Angeles, announced that it had staved off a walkout of its workers with a contract deal.Agreements made this year will set pay levels ahead of the 2026 World Cup and 2028 Olympics, which are expected to be enormous tourist draws to the region.What’s NextMr. Petersen said on Sunday that the strike would go on for “multiple days.” The Hotel Association of Los Angeles had said in a statement that the hotels would be able to continue serving visitors.Anna Betts More

  • 113 Shares179 Views

    in Economy

    Affirmative Action Ruling May Upend Diversity Hiring Policies, Too

    by

    The Supreme Court decision on college admissions could lead companies to alter recruitment and promotion practices to pre-empt legal challenges.As a legal matter, the Supreme Court’s rejection of race-conscious admissions in higher education does not in itself impede employers from pursuing diversity in the workplace.That, at least, is the conclusion of lawyers, diversity experts and political activists across the spectrum — from conservatives who say robust affirmative action programs are already illegal to liberals who argue that they are on firm legal ground.But many experts argue that as a practical matter, the ruling will discourage corporations from putting in place ambitious diversity policies in hiring and promotion — or prompt them to rein in existing policies — by encouraging lawsuits under the existing legal standard.After the decision on Thursday affecting college admissions, law firms encouraged companies to review their diversity policies.“I do worry about corporate counsels who see their main job as keeping organizations from getting sued — I do worry about hyper-compliance,” said Alvin B. Tillery Jr., director of the Center for the Study of Diversity and Democracy at Northwestern University, who advises employers on diversity policies.Programs to foster the hiring and promotion of African Americans and other minority workers have been prominent in corporate America in recent years, especially in the reckoning over race after the 2020 murder of George Floyd by a Minneapolis police officer.Even before the ruling in the college cases, corporations were feeling legal pressure over their diversity efforts. Over the past two years, a lawyer representing a free-market group has sent letters to American Airlines, McDonald’s and many other corporations demanding that they undo hiring policies that the group says are illegal.The free-market group, the National Center for Public Policy Research, acknowledged that the outcome on Thursday did not bear directly on its fight against affirmative-action in corporate America. “Today’s decision is not relevant; it dealt with a special carve-out for education,” said Scott Shepard, a fellow at the center.Mr. Shepard claimed victory nonetheless, arguing that the ruling would help deter employers who might be tempted overstep the law. “It couldn’t be clearer after the decision that fudging it at the edges” is not allowed, he said.(American Airlines and McDonald’s did not respond to requests for comment about their hiring and promotion policies.)Charlotte A. Burrows, who was designated chair of the Equal Employment Opportunity Commission by President Biden, was also quick to declare that nothing had changed. She said the decision “does not address employer efforts to foster diverse and inclusive work forces or to engage the talents of all qualified workers, regardless of their background.”Some companies in the cross hairs of conservative groups underscored the point. “Novartis’s D.E.I. programs are narrowly tailored, fair, equitable and comply with existing law,” the drugmaker said in a statement, referring to diversity, equity and inclusion. Novartis, too, has received a letter from a lawyer representing Mr. Shepard’s group, demanding that it change its policy on hiring law firms.The Supreme Court’s ruling on affirmative action was largely silent on employment-related questions.Kenny Holston/The New York TimesBeyond government contractors, affirmative action policies in the private sector are largely voluntary and governed by state and federal civil rights law. These laws prohibit employers from basing hiring or promotion decisions on a characteristic like race or gender, whether in favor of a candidate or against.The exception, said Jason Schwartz, a partner at the law firm Gibson Dunn, is that companies can take race into account if members of a racial minority were previously excluded from a job category — say, an investment bank recruiting Black bankers after it excluded Black people from such jobs for decades. In some cases, employers can also take into account the historical exclusion of a minority group from an industry — like Black and Latino people in the software industry.In principle, the logic of the Supreme Court’s ruling on college admissions could threaten some of these programs, like those intended to address industrywide discrimination. But even here, the legal case may be a stretch because the way employers typically make decisions about hiring and promotion differs from the way colleges make admissions decisions.“What seems to bother the court is that the admissions programs at issue treated race as a plus without regard to the individual student,” Pauline Kim, a professor at Washington University in St. Louis who specializes in employment law, said in an email. But “employment decisions are more often individualized decisions,” focusing on the fit between a candidate and a job, she said.The more meaningful effect of the court’s decision is likely to be greater pressure on policies that were already on questionable legal ground. Those could include leadership acceleration programs or internship programs that are open only to members of underrepresented minority groups.Many companies may also find themselves vulnerable over policies that comply with civil rights law on paper but violate it in practice, said Mike Delikat, a partner at Orrick who specializes in employment law. For example, a company’s policy may encourage recruiters to seek a more diverse pool of candidates, from which hiring decisions are made without regard to race. But if recruiters carry out the policy in a way that effectively creates a racial quota, he said, that is illegal.“The devil is in the details,” Mr. Delikat said. “Were they interpreting that to mean, ‘Come back with 25 percent of the internship class that has to be from an underrepresented group, and if not you get dinged as a bad recruiter’?”The college admissions cases before the Supreme Court were largely silent on these employment-related questions. Nonetheless, Mr. Delikat said, his firm has been counseling clients ever since the court agreed to hear the cases that they should ensure that their policies are airtight because an increase in litigation is likely.That is partly because of the growing attack from the political right on corporate policies aimed at diversity in hiring and other social and environmental goals.Gov. Ron DeSantis of Florida has signed legislation to limit diversity training in the workplace.Haiyun Jiang for The New York TimesGov. Ron DeSantis of Florida, who is seeking the 2024 Republican presidential nomination, has deplored “the woke mind virus” and proclaimed Florida “the state where woke goes to die.” The state has enacted legislation to limit diversity training in the workplace and has restricted state pension funds from basing investments on “woke environmental, social and corporate governance” considerations.Conservative legal groups have also mobilized on this front. A group run by Stephen Miller, a White House adviser in the Trump administration, contended in letters to the Equal Employment Opportunity Commission that the diversity and inclusion policies of several large companies were illegal and asked the commission to investigate. (Mr. Miller’s group did not respond to a request for comment about those cases.)The National Center for Public Policy Research, which is challenging corporate diversity policies, has sued Starbucks directors and officers after they refused to undo the company’s diversity and inclusion policies in response to a letter demanding that they do so. (Starbucks did not respond to a request for comment for this article, but its directors told the group that it was “not in the best interest of Starbucks to accept the demand and retract the policies.”)Mr. Shepard, the fellow at the center, said more lawsuits were “reasonably likely” if other companies did not accede to demands to rein in their diversity and inclusion policies.One modest way to do so, said David Lopez, a former general counsel for the Equal Employment Opportunity Commission, is to design policies that are race neutral but nonetheless likely to promote diversity — such as giving weight to whether a candidate has overcome significant obstacles.Mr. Lopez noted that, in the Supreme Court’s majority opinion, Chief Justice John G. Roberts Jr. argued that a university could take into account the effect on a candidate of having overcome racial discrimination, as long as the school didn’t consider the candidate’s race per se.But Dr. Tillery of Northwestern said making such changes to business diversity programs could be an overreaction to the ruling. While the federal Civil Rights Act of 1964 generally precludes basing individual hiring and promotion decisions explicitly on race, it allows employers to remove obstacles that prevent companies from having a more diverse work force. Examples include training managers and recruiters to ensure that they aren’t unconsciously discriminating against racial minorities, or advertising jobs on certain campuses to increase the universe of potential applicants.In the end, companies appear to face a greater threat of litigation over discrimination against members of minority groups than from litigation over discrimination against white people. According to the Equal Employment Opportunity Commission, there were about 2,350 charges of that latter form of discrimination in employment in 2021, among about 21,000 race-based charges overall.“There’s an inherent interest in picking your poison,” Dr. Tillery said. “Is it a lawsuit from Stephen Miller’s right-wing group that doesn’t live in the real world? Or is it a lawsuit from someone who says you’re discriminating against your work force and can tweet about how sexist or racist you are?”He added, “I’ll take the Stephen Miller poison any day.”J. Edward Moreno More

  • 100 Shares149 Views

    in Economy

    Inflation Has Eased, but Economists Are Still Worried

    by

    Inflation has come down from its 2022 heights, but economists are worried about its stubbornness.Inflation is beginning to abate meaningfully for American consumers. Gas is cheaper, eggs cost roughly half as much as they did in January and prices are no longer climbing as rapidly across a wide array of products.But at least one person has yet to express relief: Jerome H. Powell, the chair of the Federal Reserve.The Fed has spent the past 15 months locked in an aggressive war against inflation, raising interest rates above 5 percent in an attempt to get price increases back down to a more normal pace. Last week its officials announced that they were skipping a rate increase in June, giving themselves more time to see how the already enacted changes are playing out across the economy.But Mr. Powell emphasized that it was too early to declare victory in the battle against rapid price increases.The reason: While less expensive gas and slower grocery price adjustments have helped overall inflation to fall from its four-decade peak last summer, food and fuel costs tend to jump around a lot. That obscures underlying trends. And a measure of “core” inflation that strips out food and fuel is showing surprising staying power, as a range of purchases from dental care and hairstyling to education and car insurance continue to climb quickly in price.Last week, Fed officials sharply marked up their forecast of how high core inflation would be at the end of 2023. They now see it at 3.9 percent, higher than the 3.6 percent they predicted in March and nearly twice their 2 percent inflation target.The economic picture, in short, is playing out on something of a split screen. While the steepest price increases appear to be over for consumers — a relief for many, and a development that President Biden and his advisers have celebrated — Fed policymakers and many outside economists see continued reasons for concern. Between the subtle signs that inflation could stick around and the surprising resilience of the American economy, they believe that central bankers might need to do more to cool growth and rein in demand to prevent unusually elevated price increases from becoming permanent.“Big picture: We are making progress, but the progress is slower than expected,” said Kristin J. Forbes, a Massachusetts Institute of Technology economist and a former Bank of England policymaker. “Inflation is somewhat more stubborn than we had hoped.”A fresh Consumer Price Index inflation report last week showed that inflation continued to moderate sharply on an overall basis in May. That measure helps to feed into the Fed’s preferred measure, the Personal Consumption Expenditures index, which it uses to define its 2 percent target. The fresh P.C.E. figures will be released on June 30.White House officials, who have spent months on the defensive about the role that pandemic spending under Mr. Biden played in stoking demand and price increases, have greeted the recent cooling in inflation enthusiastically.“We have seen a very large reduction in inflation, by more than 50 percent,” Lael Brainard, the director of the White House National Economic Council, said in an interview. She added that the current trajectory on inflation offered reasons for optimism that it could return back to normal fairly quickly as the economy slowed, and expressed hope that crushing it would not necessarily require a big jump in unemployment — something that has historically accompanied the Fed’s campaigns to wrangle inflation.“The employment picture is very sustainable,” she said.But many economists are less sanguine. That’s partly because most of the factors that have helped inflation to fall so far have been widely anticipated, sort of the low-hanging fruit of disinflation.Supply chains were roiled by the pandemic and have since healed, allowing goods price increases to slow. A pop in oil prices tied to the war in Ukraine has faded.And there may be more to come: Rents jumped starting in 2021 as people moved out on their own or relocated amid the pandemic. They have since cooled as landlords found that renter demand was not strong enough to bear ever-higher prices, and the moderation is slowly feeding into official inflation data.

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Year-over-year percentage change in the Personal Consumption Expenditures index
    Source: Bureau of Economic AnalysisBy The New York TimesWhat linger are relatively rapid price increases in services outside of housing. That’s a broad category, and it includes purchases that tend to be labor-intensive, like hospital care, school tuition and sports tickets. Those prices tend to rise when wages climb, both because employers try to cover their higher costs and because consumers who are earning more have the ability to pay more without pulling back.“The big action is behind us,” said Olivier Blanchard, a former International Monetary Fund chief economist who is now at the Peterson Institute. “What remains is the pressure on wages.”

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Year-over-year percent change in the Personal Consumption Expenditures index by category
    Source: Bureau of Economic AnalysisBy The New York TimesDuring a news conference last week, Mr. Powell said that in the measure of inflation that excluded food and energy “you just aren’t seeing a lot of progress,” emphasizing that “getting wage inflation back to a level that is sustainable” could be an important part of lowering the remaining price increases.There are early signs that a labor market slowdown is underway. The Employment Cost Index measure of wages, which the Fed watches closely, is climbing much more rapidly than before the pandemic but has slowed from its mid-2022 peak. A measure of average hourly earnings has come down even more notably. And jobless claims have climbed in recent weeks.But hiring has remained robust, and the unemployment rate low — which is why economists are trying to figure out if the economy is cooling enough to guarantee that inflation will return fully to normal.Cylus Scarbrough, 42, has witnessed both features of today’s economy: fast wage growth and rapid inflation. Mr. Scarbrough works as an analyst for a homebuilder in Sacramento, and he said his skills were in such high demand that he could rapidly get a new job if he wanted. He got a 33 percent raise when he joined the company two years ago, and his pay has climbed more since.Cylus Scarbrough of Sacramento said he felt inflation was not eating into his budget the way it had before. “I don’t think about it every day,” he said.Rozette Halvorson for The New York TimesEven so, he’s racking up credit card debt because of higher inflation and because he and his family spend more than they used to before the pandemic. They have gone to Disneyland twice in the past six months and eat out more regularly.“It’s something about: You only live once,” he explained.He said he felt OK about spending beyond his budget, because he bought a house just at the start of the pandemic and now has about $100,000 in equity. In fact, he is not even worrying about inflation as much these days — it was much more salient to him when gas prices were rising quickly.“That was the time when I really felt like inflation was eating into our budget,” Mr. Scarbrough said. “I feel more comfortable with it now. I don’t think about it every day.”Fed officials are not yet comfortable, and they may do more to tame price increases. Officials predicted last week that they would raise interest rates to 5.6 percent this year, making two more quarter-point rate moves that would push rates to their highest level since 2000.Investors doubt that will happen. Given the recent cooling in inflation and signs that the job market is beginning to crack, they expect one more rate increase in July — and then outright rate cuts by early next year. But if that bet is wrong, the next phase of the fight against inflation could be the more painful one.As higher borrowing costs prod consumers and firms to pull back, they are expected to translate into less hiring and fewer job opportunities for people like Mr. Scarbrough. The slowdown might leave some people out of work altogether.Fed policymakers estimated that joblessness will jump to 4.5 percent by the end of next year — up somewhat from 3.7 percent now, but historically pretty low. But Mr. Blanchard thinks that the jobless rate might need to rise by one percentage point “and probably more.”Jason Furman, a Harvard economist, said he thought the unemployment rate could go even higher. While it is not his forecast, he said that in a bad scenario it was “possible” that it would take something like 10 percent unemployment for inflation to return totally to normal. That’s how high joblessness jumped at the worst point in the 2009 recession, and inflation came down by about two percentage points, he noted.In any case, Mr. Furman cautioned against jumping to early conclusions about the path ahead for inflation based on progress so far.“People have been so crazily premature to keep declaring victory on inflation,” he said. More

  • 100 Shares129 Views

    in Economy

    UPS Workers Authorize Teamsters Union to Call Strike

    by

    A walkout is possible after the contract for more than 325,000 workers expires this summer. Negotiations began in April but have yet to resolve pay.United Parcel Service workers have authorized their union, the International Brotherhood of Teamsters, to call a strike as soon as Aug. 1, after the current contract expires, the Teamsters announced Friday.The Teamsters represent more than 325,000 UPS employees in the United States, where the company has nearly 450,000 employees overall. The union said 97 percent had voted in favor of strike authorization.Many unions hold such votes to create leverage at the bargaining table, but a much smaller percentage end up following through. “The results do not mean a strike is imminent and do not impact our current business operations in any way,” UPS said in a statement, adding that it was “confident that we will reach an agreement.”A UPS strike could have significant economic fallout. The company handles about one-quarter of the tens of millions of parcels shipped each day in the United States, according to the Pitney Bowes Parcel Shipping Index. And while UPS’s competition has grown in recent years, rivals would be hard-pressed to replace that lost capacity quickly, leaving some customers in the lurch and others facing higher costs.“What happens when you try to stuff 25 percent more food into a stomach that’s 90 percent full?” said Alan Amling, a fellow at the University of Tennessee’s Global Supply Chain Institute and a former UPS executive.The two sides have reached tentative agreements on a number of issues since they began negotiating a national contract in April, most recently on heat safety, including a requirement for air conditioning in new trucks beginning in January and additional fans and venting for existing trucks.But the negotiators have yet to tackle pay increases, which the Teamsters say are overdue amid the company’s strong pandemic-era performance. The company’s adjusted net income increased by more than 70 percent from 2019 to last year.The union has also focused on revisiting pay disparities for a category of driver who typically works on weekends.The UPS chief executive, Carol Tomé, who started in that position in 2020, said on a recent earnings call that UPS was aligned with the union on “several key issues.” She added that outsiders should not put too much stock in the “great deal of noise” that was likely to arise during the negotiation.Looming over the talks is the political standing of the Teamsters’ leader, Sean O’Brien, who during his campaign for the union’s presidency in 2021 repeatedly accused his predecessor, James P. Hoffa, of being overly conciliatory toward employers.Mr. O’Brien complained that Mr. Hoffa had essentially forced a concessionary contract onto UPS workers in 2018 after union members voted down the deal. He criticized his opponent for the presidency, a Hoffa-aligned candidate, for being unlikely to strike.“You already conceded that in your 25-year career, you only struck six times, so UPS knows you’re not going to strike,” Mr. O’Brien said at a candidates’ debate.Mr. O’Brien has largely maintained his aggressive stance on UPS since taking over as president last year. Speaking in October to activists with Teamsters for a Democratic Union, a reformist group that backed his candidacy, Mr. O’Brien vowed that “this UPS agreement is going to be the defining moment in organized labor.”Compensation for UPS drivers is generally higher than pay at the company’s competitors. UPS said that the average full-time delivery driver with four years’ experience makes $42 an hour, and that part-time workers who sort packages make $20 an hour on average after 30 days.The groups receive the same benefits package, which includes health care and pension contributions and is worth about $50,000 a year for full-time drivers, the company says.Beyond overall pay levels, the union has said it wants to eliminate a category of driver created under the 2018 contract.The company said the category was intended for hybrid workers who performed jobs like sorting packages on some days while driving on other days, especially Saturdays, to address the growing demand for weekend delivery.But the Teamsters said these workers never followed the hybrid arrangement and simply drove full time from Tuesday to Saturday, for less pay than other full-time drivers. The company says that the weekend drivers make about 87 percent of the base pay of regular full-time drivers, and that some employees have worked under a hybrid arrangement.In the event of a strike, deliveries to consumers, such as e-commerce orders, would probably be among the first to be disrupted. But experts said the supply chain could suffer, too. Some suppliers would struggle to quickly ship goods like automotive parts to manufacturers, potentially causing production slowdowns.Even a short strike could take a toll on UPS. Many customers long relied exclusively on the company, but that started to change after the Teamsters last went on strike in 1997, Mr. Amling said. After that strike, which lasted just over two weeks, more customers began to work with multiple carriers. The consequences were masked by gains from the rise of e-commerce and fewer competitors to choose from, but the company may not be so fortunate today.Niraj Chokshi More