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    Powell Downplays Inflation Risks as Yellen Foreshadows Future Spending

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    The nation’s two most powerful economic policy officials testified together for the first time, reviewing the state of the economic recovery.The economy is healing, the nation’s top two economic officials told lawmakers on Tuesday, but workers and businesses will need continued government support to rebound from the pandemic — and one of the officials, Jerome H. Powell, the Federal Reserve chair, batted back concerns that vigorous policy help could stoke inflation.Mr. Powell testified Tuesday before the House Financial Services committee alongside Janet L. Yellen, his predecessor at the Fed and now the Treasury secretary, in their first side-by-side appearance in their current roles. In hopes of fueling a rapid rebound in spending and hiring, the government has been spending aggressively and the Fed is keeping borrowing costs at rock bottom.That all-in approach has helped to avert the most dire potential economic outcomes, Mr. Powell told lawmakers, and it has not created grave inflation risks in the process.Asked whether President Biden’s recently passed $1.9 trillion spending package to combat the virus could cause prices to shoot higher — especially as the administration eyes plans to spend as much as $3 trillion more on an infrastructure package — Mr. Powell said the Fed did not fear a jump in inflation.“We do expect that inflation will move up over the course of this year,” he said, adding that some of the rise would be procedural as low readings from March and April of last year dropped out of the data, and part of it might be driven by a recovery in demand.“Our best view is that the effect on inflation will be neither particularly large nor persistent,” he said. And if it does pick up in a more concerning way, “we have the tools to deal with that,” he added.Ms. Yellen faced questions about President Biden’s economic relief legislation, including Treasury’s role in putting it into action, as well as the administration’s plans to propose another big spending package on infrastructure, which could be financed in part by tax increases.She was pressed by Republican lawmakers about how higher taxes would affect consumers and small businesses. “I think a package that consists of investments in people, investments in infrastructure, will help to create good jobs in the American economy,” Ms. Yellen replied, “and changes in the tax structure will help to pay for those programs.”And she argued that tax increases would be necessary to back up the package.“We do need to raise revenues in a fair way to support the spending that this economy needs to be competitive and productive,” she said.Ms. Yellen’s Treasury is in charge of executing Mr. Biden’s $1.9 trillion economic relief legislation, and has been racing to distribute $1,400 checks to millions of Americans. That is posing a test for Ms. Yellen’s team, which is not yet fully in place.Ms. Yellen pushed hard for a robust fiscal relief package. In her opening statement, she described the rescue legislation as precisely what the economy needed.“With the passage of the rescue plan, I am confident that people will reach the other side of this pandemic with the foundations of their lives intact,” Ms. Yellen said. “And I believe they will be met there by a growing economy. In fact, I think we may see a return to full employment next year.”Mr. Powell declined to weigh in on the new infrastructure idea, but he did say that the government’s broad response to the coronavirus pandemic had helped to keep a worst-case economic disaster from playing out..css-yoay6m{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}@media (min-width:740px){.css-yoay6m{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;margin-bottom:15px;}.css-k59gj9{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;width:100%;}.css-1e2usoh{font-family:inherit;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;border-top:1px solid #ccc;padding:10px 0px 10px 0px;background-color:#fff;}.css-1jz6h6z{font-family:inherit;font-weight:bold;font-size:1rem;line-height:1.5rem;text-align:left;}.css-1t412wb{box-sizing:border-box;margin:8px 15px 0px 15px;cursor:pointer;}.css-hhzar2{-webkit-transition:-webkit-transform ease 0.5s;-webkit-transition:transform ease 0.5s;transition:transform ease 0.5s;}.css-t54hv4{-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-1r2j9qz{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-e1ipqs{font-size:1rem;line-height:1.5rem;padding:0px 30px 0px 0px;}.css-e1ipqs a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;}.css-e1ipqs a:hover{-webkit-text-decoration:none;text-decoration:none;}.css-1o76pdf{visibility:show;height:100%;padding-bottom:20px;}.css-1sw9s96{visibility:hidden;height:0px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cz6wm{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;font-family:’nyt-franklin’,arial,helvetica,sans-serif;text-align:left;}@media (min-width:740px){.css-1cz6wm{padding:20px;width:100%;}}.css-1cz6wm:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1cz6wm{border:none;padding:20px 0 0;border-top:1px solid #121212;}Frequently Asked Questions About the New Stimulus PackageThe stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more. Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read moreThis credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.“While the economic fallout has been real and widespread, the worst was avoided by swift and vigorous action,” he said.Mr. Powell and Ms. Yellen faced a volley of questions on how financial regulators should deal with climate change risks. Republicans have expressed concern that the Fed’s growing attention to climate-related issues in its role as a bank overseer could end up making it harder or more expensive for carbon-heavy companies to get loans.“It’s really very early days in trying to understand what all of this means,” Mr. Powell said, noting that many large banks and large industrial companies were already thinking about and beginning to disclose how climate might affect them over time. “We have a job,” he said, “which is to ensure that the institutions we regulate are resilient to the risks that they’re running.”Separately on Tuesday, Lael Brainard, an influential Fed governor, announced that the Fed was establishing a Financial Stability Climate Committee “to identify, assess and address” climate-related risks to financial stability.The new body will approach its task in a way that “considers the potential for complex interactions across the financial system,” Ms. Brainard said, rather than just the risks to individual companies.That’s the kind of oversight some lawmakers fear.“Linking hypothetical climate scenarios to risks to the entire financial system seems to me highly speculative,” Representative Andy Barr, a Republican from Kentucky, told Mr. Powell and Ms. Yellen during the Tuesday hearing. 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    Organizing Gravediggers, Cereal Makers and, Maybe, Amazon Employees

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    A group of gravediggers in Columbus, Ohio, who just negotiated a 3 percent raise. The poultry plant that processes chicken nuggets for McDonald’s. The workers who make Cap’n Crunch in Iowa. The women’s shoe department at Saks Fifth Avenue in Manhattan.The Retail, Wholesale and Department Store Union is not the largest labor union in the United States, but it may be one of the most eclectic. Its membership, totaling about 100,000 workers, seems to reach into every conceivable corner of the American economy, stretching from the cradle (they make Gerber baby food) to the grave (those cemetery workers in Columbus).And now it is potentially on the cusp of breaking into Amazon, one of the world’s most dominant companies, which since its founding has beaten back every attempt to organize any part of its massive work force in the United States.This month, a group of 5,800 workers at an Amazon warehouse in Bessemer, Ala., are voting whether to join the R.W.D.S.U. It is the first large-scale union vote in Amazon’s history, and a decision by the workers to organize would have implications for the labor movement across the country, especially as retail giants like Amazon and Walmart have gained power — and added workers — during the pandemic.The Amazon campaign, said Stuart Appelbaum, the union’s president, “is about the future of work and how working people are going to be treated in the new economy.”For some labor activists, the union and its early success at the Bessemer warehouse represent the vanguard of the modern organizing campaigns. It is outspoken on social issues and savvy on social media — posting a TikTok video of support from the rapper Killer Mike and tweeting an endorsement from the National Football League Players Association during the Super Bowl.“It’s a bit of an odd-duck union,” said Joshua Freeman, a professor emeritus of labor history at Queens College at the City University of New York. “They keep morphing over the years and have been very inventive in their tactics.”The union is also racially, geographically and politically diverse. Founded during a heyday of organized labor in New York City in 1937 — and perhaps best known for representing workers at Macy’s and Bloomingdale’s — most of its members are now employed in right-to-work states, across the South and rural Midwest.Workers lowering a lid onto a vault at Union Cemetery in Columbus. Their organization is known as “a bit of an odd-duck union” for the variety of industries it covers.Brian Kaiser for The New York TimesLou Willis, operating a backhoe at the cemetery.Brian Kaiser for The New York TimesBrian Kaiser for The New York TimesWhile the union’s overall membership has stagnated over the past decade, the number of members in its Mid-South office, which includes Alabama, Tennessee and Louisiana, has nearly doubled, to about 9,000 from 4,700 in 2011, driven by aggressive recruitment efforts in the poultry, warehouse and health care industries. More than half of its members across the country are workers of color.In the Mid-South office, which is leading the organizing at Amazon, local officials begin almost every meeting with a prayer, lean in favor of gun rights and say about half their members supported Donald J. Trump’s re-election bid. (Unlike the national union, which publicly backed President Biden, the southern office did not issue an endorsement of either candidate.)“We are known as the church union,” said Randy Hadley, president of the Mid-South Council. “We put God first, family second and then our jobs.”The retail and wholesale workers union is run nationally by Mr. Appelbaum, a Harvard Law School graduate and former Democratic Party operative from Hartford, Conn., who has written about his identity as a gay, Jewish labor leader.Since becoming union president in 1998, Mr. Appelbaum has created a niche by organizing workers from a wide variety of professions: airline caterers, employees in fast fashion stores and gardeners at a cannabis grow house. “When you buy a joint, look for the union label,” Mr. Appelbaum said jokingly.Stuart Appelbaum, the union president, in 2016. The Amazon effort, he said, “is about the future of work and how working people are going to be treated in the new economy.”Christian Hansen for The New York TimesThe strategy has helped the union to keep flourishing, even as its core work force in brick-and-mortar retail stores continues to shrink as shopping moves online.The union often ties its organizing campaigns to the broader struggle to advance the rights of vulnerable workers, such as the predominately gay, lesbian, trans and nonbinary employees in sex toy shops in New York and undocumented immigrants working in the city’s carwashes.After World War II, the union advocated for Black servicemen who were being shut out of jobs at Macy’s, which paid the highest commissions. “It has a history of being a militant, feisty, left-wing crowd,” Professor Freeman said.Even the Alabama office, which leans further to the right on some issues, has stood up for workers in ways that are locally unpopular.Mr. Hadley said one of his biggest accomplishments was negotiating a paid holiday on Eid al-Fitr, marking the end of Ramadan, at a Tyson poultry plant in Tennessee, where a large number of Somali immigrants work.“We had Muslims in the facility, they said, ‘We look at that day like Christmas,’ and I thought, ‘Who am I to judge?’” recalled Mr. Hadley, a former meat cutter. “I said, ‘Let’s do it.’”The president of the union’s Mid-South Council, Randy Hadley, back row, center right, with other leaders and staff in Birmingham, Ala. The Mid-South office is leading the organizing at Amazon.Retail, Wholesale and Department Store UnionRatified in 2008, the Muslim holiday took the place of Labor Day as one of the paid holidays that workers were allowed at the facility, and was criticized by some as being un-American.Over the years, the union has faced some powerful enemies. In the 1960s, its Black organizers were threatened — one was even shot at — while trying to sign up food industry workers across the South.Johnny Whitaker, a former dairy worker who started as a union organizer in the 1970s, said he had grown up in a white family in Hanceville, Ala., without much money. Still, he was shocked by the working conditions and racism he witnessed when he started organizing in the poultry plants years ago.Black workers were classified differently from their white counterparts and paid much less. Women were expected to engage in sexual acts with managers in exchange for more hours, he said. Many workers could not read or write.Despite threats that they would lose their jobs if they organized, thousands of poultry workers have joined the R.W.D.S.U. over the past three decades, though the industry still is predominantly nonunion.Roberto Cuellar, a union member and flight coordinator at Flying Food Group, an airline caterer whose workers are represented by the R.W.D.S.U.Meghan Marin for The New York TimesMr. Cuellar checked meals at Kennedy International Airport before a flight.Meghan Marin for The New York TimesMeghan Marin for The New York TimesWhen a small group of Amazon workers contacted the union in late August about their interest in organizing the Bessemer warehouse, Mr. Whitaker acknowledged, “there was a lot of doubt” internally about the idea.The R.W.D.S.U. had tried to lay the groundwork for organizing Amazon’s warehouse in Staten Island in 2019, but the effort failed when the company pulled the plug on its plans to build a second headquarters in New York, known as HQ2, partly because of political pressure to allow organizing at its facilities.“What we learned from HQ2 was that Amazon was going to do anything it possibly could to avoid having a union at any of its workplaces,” Mr. Appelbaum said.At the time, Amazon said it canceled its plans after “a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project.”But the more the workers in Alabama kept talking to the union about their working conditions, the more Mr. Appelbaum and others believed the warehouse was fertile ground for organizing.The employee cafeteria at Flying Food Group.Meghan Marin for The New York TimesThe workers described the control that Amazon exerts over their work lives, including tracking their time in the restroom or other time spent away from their primary task in the warehouse. Some workers have said they can be penalized for taking too much time away from their specific assignments.“We are talking about bathroom breaks,” said Mr. Whitaker, an executive vice president at the union. “It’s the year 2021 and workers are being penalized for taking a pee.”In an email, an Amazon spokeswoman said the company does not penalize workers for taking bathroom breaks. “Those are not our policies,” she said. “People can take bathroom breaks.”The campaign in Bessemer has created some strange political bedfellows. Mr. Biden expressed his support for the Alabama workers to vote freely in the mail-in election, which ends later this month. Republican Senator Marco Rubio of Florida went even further, encouraging the Bessemer workers to unionize in order to protect themselves against the “woke culture” at Amazon.A greenhouse in the PharmaCann facility near Montgomery, N.Y. The company grows cannabis for medical use in several states; the R.W.D.S.U. has organized workers there.David Steinberg for The New York TimesMark Etri Jr. assembling cartridges.David Steinberg for The New York TimesLiz Ferran tending to plants.David Steinberg for The New York TimesIf the union wins the election in Bessemer, the effort to court workers will continue. In a right-to-work state, workers are not required to pay union dues even if they are represented by a union.At a Quaker Oats plant in Iowa, which is also a right-to-work state, the R.W.D.S.U. finds ways to motivate workers to join the union by posting the names of workers who have not yet joined on a bulletin board.“In a right-to-work state, you are always organizing,” Mr. Hadley said.Early in the afternoon of Oct. 20, Mr. Hadley met with about 20 organizers before they headed out to the Bessemer warehouse to begin their campaign to sign up workers. The plan was for the organizers to stand at the warehouse gates talking to workers early in the morning and in the evening when their shift changes. In a pep talk with the group, Mr. Hadley invoked the story of David and Goliath.“We are going to hit Goliath in the nose every day, twice a day,” he told the group, referring to Amazon. “He’s going to see our union every morning when he comes to work, and I want him thinking about us when he closes his eyes at night.” More

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    Why Are Jobless Claims Still High? For Some, It’s the Multiple Layoffs.

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    A California study shows the extent of dependence on benefits over the last year and how many people have shuttled in and out of work.Jobs are coming back. Businesses are reopening. But a year after the pandemic jolted the economy, applications for unemployment benefits remain stubbornly, shockingly high — higher on a weekly basis than at any point in any previous recession, by some measures.And headway has stalled: Initial weekly claims under regular and emergency programs, combined, have been stuck at just above one million since last fall, and last week was no exception, the Labor Department reported Thursday.“It goes up a little bit, it goes down, but really we haven’t seen much progress,” said AnnElizabeth Konkel, an economist for the career site Indeed. “A year into this, I’m starting to wonder, what is it going to take to fix the magnitude problem? How is this going to actually end?”The continued high rate of unemployment applications has been something of a mystery for many economists. With the pandemic still suppressing activity in many sectors, it makes sense that joblessness would remain high. But businesses are reopening in much of the country, and trends on employment and spending are generally improving. So shouldn’t unemployment filings be falling?New evidence from California may offer a partial explanation: According to a report released Thursday by the California Policy Lab, a research organization affiliated with the University of California, nearly 80 percent of the unemployment applications filed in the state last month were from people who had been laid off earlier in the pandemic, gotten back to work, and then been laid off again.Such repeat claims were particularly common in the information sector — which in California includes many film and television employees who have been sidelined by the pandemic — and in the hard-hit hotel and restaurant industries, as well as in construction.The Policy Lab researchers had access to detailed information from the state that allowed them to track individual workers through the system, something not possible with federal data.California’s economy differs from that of the rest of the country in myriad ways, and the pandemic has played out differently there than in many other places. But if the same patterns hold elsewhere, it suggests that the ups and downs of the pandemic — lockdowns and reopenings, restrictions that tighten and ease as virus cases rise and fall — have left many workers stuck in a sort of limbo.A restaurant may recall some workers when indoor dining is allowed, only to lay them off again a few weeks later when restrictions are reimposed. A worker may find a temporary job at a warehouse, or pick up a few hours of work on a delivery app, but be unable to find a more stable job.“This shows the oscillation of employed, unemployed, employed, unemployed — people cycling back into the system,” said Elizabeth Pancotti, policy director at Employ America, a group in Washington that has been an advocate for the unemployed. “We did not see that in previous recessions.”What that instability will mean for workers’ long-term prospects remains unclear. Economic research has found that extended periods of unemployment can leave workers at a permanent disadvantage in the labor market. But there is little precedent for a period of such prolonged instability.Distributing food in Inglewood, Calif., in January. The pandemic’s economic effects hit Black workers in the state especially hard.Jenna Schoenefeld for The New York Times“We don’t know what happens if you’re out of work for two months, you come back to work for two months, you’re out of work for two months, you keep going back and forth,” Ms. Pancotti said.The California data shows how the economic effects of the pandemic have been concentrated among certain industries and demographic groups — and how the consequences continue to mount for the most affected workers, even as the crisis eases for many others.Nearly 90 percent of Black workers in the state have claimed unemployment benefits at some point in the pandemic, according to the Policy Lab analysis, compared with about 40 percent of whites. Younger and less-educated workers have been hit especially hard.Those totals include filings under the federal Pandemic Unemployment Assistance program, which covers people left out of the regular unemployment system, a group that disproportionately includes Black workers. The record-keeping for that program has been plagued by overcounting and fraudulent claims. But even a look at the state’s regular unemployment insurance program, which hasn’t faced the same issues, reveals remarkable numbers: Close to three in 10 California workers have claimed benefits during the crisis, and more than four in 10 Black workers.“That degree of inequality is mind-blowing,” said Till von Wachter of the University of California, Los Angeles, one of the report’s authors.Many of those who lost jobs early in the crisis have since returned to work. But millions have not. The Policy Lab found that nearly four million Californians had received more than 26 weeks of benefits during the pandemic, a rough measure of long-term unemployment.“We have solidly shifted into a world where a large-scale problem of long-term unemployment is now a reality,” Dr. von Wachter said. Black workers, older workers, women and those with less education have been more likely to end up out of work for extended periods.Nationally, nearly six million people were enrolled as of late February in federal extended-benefit programs that cover people who have exhausted their regular benefits, which last for six months in most states. The aid package signed by President Biden last week ensures that those programs will continue until fall, but benefits alone won’t prevent the damage that prolonged joblessness can do to workers’ careers and mental and physical health.“The recovery needs to be on the scale of being a once-in-a-generation economic upswing to really pull those people back into the labor market,” Ms. Konkel said.The latest data provides little sign of that happening. More than 746,000 people filed first-time applications for state unemployment benefits last week, up 24,000 from the previous week, according to the Labor Department. In addition, 282,000 filed for Pandemic Unemployment Assistance.Most forecasters expect the labor market recovery to accelerate in coming months, as warmer weather and rising vaccination rates allow more businesses to reopen, and as the new injection of government aid encourages Americans to go out and spend. Policymakers at the Federal Reserve said on Wednesday that they expected the unemployment rate to fall to 4.5 percent by the end of the year, a significant upgrade over the 5 percent they forecast three months ago.“We’re already starting to see improvement now, and I think that will start to accelerate fairly quickly,” said Daniel Zhao, an economist at the career site Glassdoor.But government aid can do only so much as long as the pandemic continues to limit consumers’ behavior. The pace of the recovery now, Mr. Zhao said, depends on a factor beyond the scope of normal economic analysis.“The dominating factor right now is how quickly we can get vaccines in arms,” he said. More

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    Amazon Labor Fight: Wages May Not Ward Off Union

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    Recent organizing campaigns in the South suggest the company’s wage scale may have left it vulnerable to a union.In making the case against a union at its warehouse in Bessemer, Ala., Amazon has touted its compensation package. The company notes that base pay at the facility, around $15.50 an hour for most rank-and-file workers, is more than twice the local minimum wage, and that it offers comprehensive health insurance and retirement benefits.But to many of Amazon’s Bessemer employees, who are voting this month on whether to unionize, the claims to generosity can ring hollow alongside the demands of the job and local wage rates. The most recent figure for the median wage in greater Birmingham, a metropolitan area of roughly one million people that includes Bessemer, was nearly $3 above Amazon’s pay there, according to the Bureau of Labor Statistics.“If you go into certain rural areas in the South, where wages are suppressed and there’s no industry, that may seem attractive,” said Joshua Brewer of the Retail, Wholesale and Department Store Union, who is the campaign’s lead organizer. “For our folks here in Bessemer and Birmingham, it’s barely enough to keep the lights on. To tote it in front of them like it’s something to be prized is mildly offensive.”It is common for employers facing a union vote to emphasize the generosity of their wages and to suggest that workers could be worse off if they unionize. But the message takes on added resonance in the South, where incomes are lower and jobs with good pay can be harder to find. As a result, organizers say, employers and their surrogates in the region often use such tactics more aggressively.A commercial during a 2017 union campaign at a Boeing plant in South Carolina showed a casino boss urging workers to roll dice at a craps table to make the point that joining a union could put their livelihood at risk. Union campaigns at a Nissan plant in Canton, Miss., and a Volkswagen plant in Chattanooga, Tenn., featured similar appeals.The catch is that wages at these plants tended to be substantially higher than the typical wage in their areas, reinforcing workers’ sense that they had something valuable to lose.Veteran production workers made $23.50 an hour at the Volkswagen plant in 2019, the year of the most recent campaign there. The comparable figure was $23 at Boeing’s South Carolina facility when workers voted on a union and $26 at Nissan’s Mississippi plant during the vote there, also in 2017. The union lost in all three cases.“The global manufacturing companies took more steps to pre-empt unionization by offering better pay,” Richard Bensinger, a former organizing director for the United Automobile Workers and the A.F.L.-C.I.O., said in an email.Mr. Bensinger, who was involved in the Nissan and Volkswagen campaigns and is helping workers organize at other Amazon facilities, held up Mercedes-Benz as a telling example. The U.A.W. tried to organize the company’s plant in Vance, Ala., about 25 miles from Bessemer, for several years during the last decade. But it could never quite get a majority of workers to sign cards, Mr. Bensinger said, partly because wages at the plant were so high — $28 an hour for veteran workers, and even more today.“They paid U.A.W. scale to try to keep the U.A.W. out,” Mr. Bensinger said. (Mercedes, like other automakers, also used temporary workers whom it paid far less.)By contrast, unions have been successful when companies have held down wages. During the first half the 2010s, workers unionized at several auto parts suppliers in Alabama and elsewhere in the South, often citing low pay and benefits as the impetus.In 2015, employees at Commercial Vehicle Group in Piedmont, Ala., which made seats for trucks, voted to join the U.A.W. by a roughly two-to-one ratio. Workers at the plant complained of wages that started as low as $9.70 an hour for temporary workers and topped out at $15.80 for full-time employees. The company laid off many of the workers when it later consolidated its operations.“Workers always say this: It’s about respect, recognition,” said Gary Casteel, the U.A.W.’s former second-ranking official, who helped oversee much of its organizing in the South. “That’s not the case. It is about the money. Everybody wants to get paid more.”Darryl Richardson, an Amazon worker in Alabama, has seen the power of a union to raise wages.Lynsey Weatherspoon for The New York TimesDarryl Richardson, an Amazon employee in Alabama, knows firsthand the catalyzing effect of low wages. In 2012, he was part of a group of workers that voted overwhelmingly to unionize at Faurecia Interior Systems in Cottondale, Ala., which made seats for the nearby Mercedes plant.Mr. Richardson said that he had made around $12.50 an hour when he started at the plant but that, thanks to the union, his hourly pay had nearly doubled by the time he left in 2019, after the plant lost its contract with Mercedes. He said several of his co-workers at Faurecia were now working at Amazon and had seen the power of a union to raise wages.“From Faurecia to Amazon, it’s a big pay difference,” said Mr. Richardson, who now makes $15.55.Heather Knox, an Amazon spokeswoman, said that workers in Bessemer were eligible for raises every six months and that they had received a $2-an-hour bonus during much of last spring. Full-time rank-and-file employees received $300 bonuses during the holiday season and $500 last June. The company also provides significant tuition reimbursement for employees who take classes in certain fields.Some workers at the Bessemer facility, which opened just as Covid-19 was bearing down last March, regard the pay as more than adequate, especially younger employees.“I feel like it is fair,” said Roderick Crocton, 24, who previously made $11.25 as an overnight stocker at a local retailer. “In my old job, I lived in my apartment, never got to go anywhere, paid my bills. Today I’m able to go out and experience being in the city.”But other workers emphasize that pay at Amazon isn’t particularly high for the Birmingham area, even if the pandemic has reduced their job options. An Amazon employee named Clint, a union backer who declined to give his last name for fear of retaliation, said he had stood to make about $40,000 a year installing satellite dishes before the pandemic left him unemployed. He said he made his finances work partly by living with his mother.The retail workers’ union said it represented employees at nearby warehouses where pay is $18 to $21 an hour, including an ice cream facility and a grocery warehouse not far from Amazon.At a plant owned by NFI Group, a Canadian bus manufacturer, about an hour east of Birmingham, hourly pay for rank-and-file workers ranges from $14.79 to $23.31, according to the company.A survey of about 100 workers at the NFI plant by Emily Erickson, a professor at Alabama A&M University, found that white workers earned about $3 an hour more than Black workers on average. One former employee who currently works for a labor group in the area, Charles Crooms, said this made it more difficult to persuade white workers to join a union organizing effort. (The company said all employees with the same job grade and tenure were paid the same.)Workers and organizers said the dissatisfaction over wages at the Amazon warehouse was heightened by the vast wealth of Jeff Bezos, Amazon’s founder.The Amazon warehouse in Bessemer opened just as Covid-19 was bearing down last March.Bob Miller for The New York Times“He’s one of the richest men in the world, yet you treat employees like scavengers,” said Jennifer Bates, an Amazon employee who earned more in her previous job at a pipe factory but joined Amazon hoping it would provide an opportunity to grow.Ms. Bates was mystified that the company was urging Congress to match its pay efforts by raising the federal minimum wage to $15 an hour. “It looks to me like Amazon is admitting it’s only paying a minimum wage, and this is not a minimum-wage job,” she said. Amazon has said its starting wage is higher than $15 an hour in most of the country.Stuart Appelbaum, the president of the retail workers’ union, noted that Mr. Bezos could have given each of Amazon’s more than one million global employees last year a bonus larger than the annual pay of a warehouse worker just from the wealth he accumulated during the pandemic.All of which raises a question: Why didn’t Amazon, which regards unions as a threat, follow the example of Nissan and Mercedes and pay its Alabama employees more as a way to pre-empt a union?The company did not respond to a request to address that question.Mr. Appelbaum, the union president, said the company had underestimated its workers.“I think they took it for granted that we’d be out there for a few days leafleting, then go away,” he said. “They didn’t believe there was any possibility that we’d be able to get enough cards from employees to get to an election.” More

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    How Amazon Crushes Unions

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    Amazon’s warehouse in Chester, Va., where a union effort tried to organize about 30 facilities technicians in 2014 and 2015.Credit…Carlos Bernate for The New York TimesHow Amazon Crushes UnionsIn a secret settlement in Virginia, Amazon swore off threatening and intimidating workers. As the company confronts increased labor unrest, its tactics are under scrutiny.Amazon’s warehouse in Chester, Va., where a union effort tried to organize about 30 facilities technicians in 2014 and 2015.Credit…Carlos Bernate for The New York TimesSupported byContinue reading the main storyMarch 16, 2021, 5:00 a.m. ETRICHMOND, Va. — Five years ago, Amazon was compelled to post a “notice to employees” on the break-room walls of a warehouse in east-central Virginia.The notice was printed simply, in just two colors, and crammed with words. But for any worker who bothered to look closely, it was a remarkable declaration. Amazon listed 22 forms of behavior it said it would disavow, each beginning in capital letters: “WE WILL NOT.”“We will not threaten you with the loss of your job” if you are a union supporter, Amazon wrote, according to a photo of the notice reviewed by The New York Times. “We will not interrogate you” about the union or “engage in surveillance of you” while you participate in union activities. “We will not threaten you with unspecified reprisals” because you are a union supporter. We will not threaten to “get” union supporters.Amazon posted the list after the International Association of Machinists and Aerospace Workers accused it of doing those very things during a two-year-long push to unionize 30 facilities technicians at the warehouse in Chester, just south of Richmond. While Amazon did not admit to violations of labor laws, the company promised in a settlement with federal regulators to tell workers that it would rigorously obey the rules in the future.The employee notice and failed union effort, which have not previously been reported, are suddenly relevant as Amazon confronts increasing labor unrest in the United States. Over two decades, as the internet retailer mushroomed from a virtual bookstore into a $1.5 trillion behemoth, it forcefully — and successfully — resisted employee efforts to organize. Some workers in recent years agitated for change in Staten Island, Chicago, Sacramento and Minnesota, but the impact was negligible.Bill Hough Jr., a machinist at the Chester warehouse who led the union drive. Amazon fired him in 2016.Credit…Carlos Bernate for The New York TimesIn an employee notice, Amazon listed behavior it said it would disavow.The arrival of the coronavirus last year changed that. It turned Amazon into an essential resource for millions stuck at home and redefined the company’s relationship with its warehouse workers. Like many service industry employees, they were vulnerable to the virus. As society locked down, they were also less able to simply move on if they had issues with the job.Now Amazon faces a union vote at a warehouse in Bessemer, Ala. — the largest and most viable U.S. labor challenge in its history. Nearly 6,000 workers have until March 29 to decide whether to join the Retail, Wholesale and Department Store Union. A labor victory could energize workers in other U.S. communities, where Amazon has more than 800 warehouses employing more than 500,000 people.“This is happening in the toughest state, with the toughest company, at the toughest moment,” said Janice Fine, a professor of labor studies at Rutgers University. “If the union can prevail given those three facts, it will send a message that Amazon is organizable everywhere.”Even if the union does not prevail, “the history of unions is always about failing forward,” she said. “Workers trying, workers losing, workers trying again.”The effort in Chester, which The Times reconstructed with documents from regulators and the machinists’ union, as well as interviews with former facilities technicians at the warehouse and union officials, offers one of the fullest pictures of what encourages Amazon workers to open the door to a union — and what techniques the company uses to slam the door and nail it shut.The employee notice was a hollow victory for workers. The National Labor Relations Board, the federal agency that negotiated the settlement with Amazon, has no power to impose monetary penalties. Its enforcement remedies are few and weak, which means its ability to restrain anti-union employers from breaking the law is limited. The settlement was not publicized, so there were not even any public relations benefits.Amazon was the real winner. There have been no further attempts at a union in Chester.The tactics that Amazon used in Chester are surfacing elsewhere. The retail workers union said Amazon was trying to surveil employees in Bessemer and even changed a traffic signal to prevent organizers from approaching warehouse workers as they left the site. Last month, the New York attorney general said in a lawsuit that Amazon had retaliated against employees who tried to protest its pandemic safety measures as inadequate.Amazon declined to say whether it had complied with labor laws during the union drive in Chester in 2014 and 2015. In a statement, it said it was “compliant with the National Labor Relations Act in 2016” when it issued the employee notice, and “we continue to be compliant today.” It added in a different statement that it didn’t believe the union push in Alabama “represents the majority of our employees’ views.”The labor board declined to comment.The Chester settlement notice mentions one worker by name: Bill Hough Jr., a machinist who led the union drive. The notice said Amazon had issued a warning to Mr. Hough that he was on the verge of being fired. Amazon said it would rescind the warning.Six months later, in August 2016, Amazon fired him anyway.Mr. Hough (pronounced Huff) was in a hospital having knee surgery when Amazon called and said he had used up his medical leave. Since he couldn’t do his job, he said he was told, this was the end of the line.“There was no mercy, even after what they had done to me,” Mr. Hough, now 56, said. “That’s Amazon. If you can’t give 110 percent, you’re done.”Amazon declined to comment on Mr. Hough.No ConstraintsA truck at the warehouse in Chester. Amazon has been fending off attempts to unionize since at least 1999. Credit…Carlos Bernate for The New York TimesAmazon was founded on notions of speed, efficiency and hard work — lots of hard work. Placing his first help wanted ad in 1994, Jeff Bezos, Amazon’s founder, said he wanted engineers who could do their job “in about one-third the time that most competent people think possible.”Amazon managers openly warned recruits that if they liked things comfortable, this would be a difficult, perhaps impossible, job. For customer service representatives, it was difficult to keep up, according to media accounts and labor organizers. Overtime was mandatory. Supervisors sent emails with subject headings like “YOU CAN SLEEP WHEN YOU’RE DEAD.”In 1999, the reps, who numbered about 400, were targeted by a grass-roots group affiliated with the Communications Workers of America. Amazon mounted an all-out defense.If workers became anything less than docile, managers were told, it was a sign there could be union activity. Tipoffs included “hushed conversations” and “small group huddles breaking up in silence on the approach of the supervisor,” as well as increased complaints, growing aggressiveness and dawdling in the bathroom.Amazon was in sync with the larger culture. Unions were considered relics of the industrial past. Disruption was a virtue.“Twenty years ago, if you asked whether the government or workers should be able to put any constraints on companies, the answer always was ‘No constraints,’” said Marcus Courtney, a labor organizer on the 1999 Amazon campaign. “If companies wanted to push people 365 days a year, 24 hours a day, hats off to them.”When the dot-com bubble burst in 2000, Amazon lost some of its glow. For a time, its very existence was in question.This caused problems for the activists as well. The company reorganized and closed the customer service center, though Amazon said there was no connection with the union drive. The United Food and Commercial Workers Union and the Prewitt Organizing Fund, an independent group, made no inroads organizing Amazon’s 5,000 warehouse workers.A decade later, in 2011, came a low point in Amazon’s labor history. The Morning Call newspaper in Allentown, Pa., revealed that Amazon was hiring paramedics and ambulances during summer heat waves at a local warehouse. Workers who collapsed were removed with stretchers and wheelchairs and taken to hospitals.Amazon installed air conditioning but otherwise was undaunted. After the Great Recession in 2008, there was no lack of demand for its jobs — and no united protest about working conditions. In Europe, where unions are stronger, there were sporadic strikes. In the United States, isolated warehouse walkouts drew no more than a handful of workers.The MachinistMr. Hough said he had felt pressured to cut corners to keep conveyor belts running.Credit…Ruth Fremson for The New York TimesMr. Hough worked as an industrial machinist at a Reynolds aluminum mill in Richmond for 24 years. He once saw a worker lose four fingers when a steel roller fell unexpectedly. Incidents like that made a deep impression on him: Never approach equipment casually.Reynolds closed the plant in the Great Recession, when Mr. Hough was in his mid-40s. Being in the machinists guild cushioned the blow, but he needed another job. After a long spell of unemployment, he joined Amazon in 2013.The Chester warehouse, the size of several aircraft carriers, had opened a year earlier, part of Amazon’s multibillion-dollar push to put fulfillment centers everywhere. Mr. Hough worked on the conveyor belts bringing in the goods.At first, he received generally good marks. “He has a great attitude and does not participate in negative comments or situations,” Amazon said in a March 2014 performance review. “He gets along with all the other technicians.”But Mr. Hough said he had felt pressured to cut corners to keep the belts running. Amazon prided itself on getting purchases to customers quickly, and when conveyor belts were down that mission was in jeopardy. He once protested restarting a belt while he was still working on it.“Quit your bitching,” Mr. Hough said his manager, Bryon Frye, had told him, twice.“That sent me down the wrong road,” Mr. Hough said.Bryon Frye’s tweet about Amazon union campaigns.Credit…TwitterMr. Frye, who declined to comment, no longer works for Amazon. On Twitter last month, he responded to a news story that said Amazon was hiring former F.B.I. agents to deal with worker activism, counterfeiting and antitrust issues.“This doesn’t shock me,” he wrote. “They do some wild things.”The Union DriveMembers of the Retail, Wholesale and Department Store Union distributed literature outside the Alabama warehouse where Amazon workers are voting on whether to join the union.Credit…Bob Miller for The New York TimesIn 2014, Mr. Hough and five other technicians approached the International Association of Machinists and Aerospace Workers. A unionization effort was already taking place with the technicians at an Amazon warehouse in Middletown, Del. If either succeeded, it would be the first for Amazon.The elections for a union would be conducted by the National Labor Relations Board. The first step was to measure interest. At least 18 of the 30 technicians in Chester returned cards indicating their willingness to be represented by the union.“It was not too difficult to sign people up,” said Russell Wade, a union organizer there. “But once the word leaked out to Amazon, they put the afterburners on, as employers do. Then the workers started losing interest. Amazon spent oodles of money to scare the hell out of employees.”The board scheduled an election for March 4, 2015. A simple majority of votes cast would establish union representation.Amazon brought in an Employee Resource Center team — basically, its human resources department — to reverse any momentum. A former technician at the warehouse, who declined to be named for fear of retaliation, said the reps on the team followed workers around, pretending to be friendly but only seeking to know their position on the union drive.If safety was the biggest issue for the technicians, there were also concerns over pay equity — machinists said they were paid different amounts for doing the same job — and about their lack of control over their fate. Part of Mr. Hough’s pitch was that a union would make management less arbitrary.“One guy, all I remember is his name was Bob,” he said. “They paged Bob to the control room, and the next thing I saw was Bob coming down the steps. He had taken off his work vest. I said, ‘Bob, where are you going?’ He said, ‘They terminated me.’ I didn’t ask why. That’s the way it was.”Several technicians said they recalled being told at a meeting, “You vote for a union, every one of you will be looking for a job tomorrow.” At another, the most outspoken union supporters were described as “a cancer and a disease to Amazon and the facility,” according to Mr. Hough and a union memo. (In a filing to the labor board, Amazon said it had investigated the incident and “concluded that it could not be substantiated.”)Mr. Hough, a cancer survivor, said the reference had offended him. He declined to attend another meeting run by that manager. He said he had known in any case what she was going to say: that the union was canceling the election because it thought it would lose. Amazon had triumphed.On March 30, 2015, Mr. Hough received a written warning from Mr. Frye, his manager.“Your behavior has been called out by peers/leaders as having a negative impact,” it said. Included under “insubordination” was a refusal to attend the Amazon victory announcement. Another incident, Amazon said, could result in termination.The machinists union filed a complaint with the labor board in July 2015 alleging unfair labor practices by Amazon, including surveilling, threatening and “informing employees that it would be futile to vote for union representation.” Mr. Hough spent eight hours that summer giving his testimony. While labor activists and unions generally consider the board to be heavily tilted in favor of employers, union officials said a formal protest would at least show Chester technicians that someone was fighting for them.In early 2016, Amazon settled with the board. The main thrust of the two-page settlement was that Amazon would post an employee notice promising good behavior while admitting nothing.Wilma Liebman, a member of the labor board from 1997 to 2011, examined the employee notice at the request of The Times. “What is unusual to my eye is how extensive Amazon’s pledges were, and how specific,” she said. “While the company did not have to admit guilt, this list offers a picture of what likely was going on.”Amazon was required to post the notice “in all places where notices to employees are customarily posted” in Chester for 60 days, the labor board said.From the machinists union’s point of view, it wasn’t much of a punishment.“This posting was basically a slap on the wrist for the violations that Amazon committed, which included lies, coercion, threats and intimidation,” said Vinny Addeo, the union’s director of organizing.Another reason for filing an unfair labor practices claim was that the union hoped to restart its efforts with a potentially chastened company. But most of the employees who supported the Chester drive quit.“They were intimidated,” Mr. Wade, the union organizer, said.Mr. Hough was beset by ill health during his years at Amazon. Radiation treatment for his cancer prompted several strokes. His wife, Susan, had health problems, too. Mr. Hough said he wondered how much the unionization struggle contributed to their problems. He added that he didn’t know whom to trust.After leaving Amazon, Mr. Hough began driving trucks, at first long haul and later a dump truck. It paid less, but he said he was at peace.Maximum Green TimesNearly 6,000 workers in Bessemer have until March 29 to decide whether to join the union.Credit…Wes Frazer for The New York TimesWhen Amazon vanquished the 2014 union drive in Delaware, the retailer said it was a victory for “open lines of direct communication between managers and associates.”One place Amazon developed that direct communication was in its warehouse bathrooms under what it called its “inSTALLments” program. The inSTALLments were informational sheets that offered, for instance, factoids about Mr. Bezos, the timing of meetings and random warnings, such as this one about unpaid time off: “If you go negative, your employment status will be reviewed for termination.”Amazon’s “inSTALLments” program used postings in warehouse bathrooms to communicate with workers.Credit…The New York TimesAs the union drive heated up in Bessemer, the direct communication naturally was about that. “Where will your dues go?” Amazon asked in one stall posting, which circulated on social media. Another proclaimed: “Unions can’t. We can.”Amazon also set up a website to tell workers that they would have to skip dinner and school supplies to pay their union dues.In December, a pro-union group discovered, Amazon asked county officials to increase “maximum green times” on the warehouse stoplight to clear the parking lot faster. This made it difficult for union canvassers to approach potential voters as they left work. Amazon declined to comment.Last month, President Biden weighed in.“There should be no intimidation, no coercion, no threats, no anti-union propaganda,” he said in a video that never mentioned Amazon but referred to “workers in Alabama” deciding whether to organize a union. “You know, every worker should have a free and fair choice to join a union. The law guarantees that choice.”Owning 25 HatsMr. Hough, in an interview before the pandemic, said part of him wanted to forget what had happened at Amazon. Why dwell on defeat? He threw away all the papers from the union drive. He never saw the employee notice because he was recovering from a stroke.But he has not forgiven the retailer.“You’re only going to step on me one time,” he said, sitting in his home in the outskirts of Richmond.Amazon’s customers just don’t know how miserable a job there can be, he suggested.“I guarantee you, if their child had to work there, they’d think twice before purchasing things,” he said.Ms. Hough, sitting next to him, had a bleaker view.“The customers don’t care about unions. They don’t care about the workers. They just want their packages,” she said.As if on cue, their son, Brody, came in. He was 20, an appliance technician. His mother told him there was a package for him on his bed. It was from Amazon, a fishing hat. It cost $25, Brody said, half the price on the manufacturer’s website.“I order from Amazon anything I can find that is cheaper,” Brody said. That adds up to a lot of hats, about 25. “I’ve never worked for Amazon. I can’t hate them,” he said.Ms. Hough looked at her husband. “If your own son doesn’t care,” she asked, not unkindly, “how are you going to get the American public to care?”The pandemic helped change that, bringing safety issues at Amazon to the forefront. In a Feb. 16 suit against Amazon, the New York attorney general, Letitia James, said the company continued last year to track and discipline employees based on their productivity rates. That meant workers had limited time to protect themselves from the virus. The suit said Amazon retaliated against those who complained, sending a “chilling message” to all its workers. Amazon has denied the allegations.Last week, regional Canadian authorities also ordered thousands of workers at an Amazon warehouse near Toronto to quarantine themselves, effectively closing the facility. Some 240 workers recently tested positive for the virus there, a government spokeswoman said, even as the rate of infection in the area fell. Amazon said it was appealing the decision.Alabama is now the big test. Mr. Hough worries the union supporters will be crushed.“They will fall to threats or think, ‘I won’t have a job, Amazon will replace me,’” he said by phone this month. “When a company can do things to you in secret, it’s real hard to withstand.”Still, he added, “I’m hoping for the best. More power to them.”AdvertisementContinue reading the main story More

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    How the U.S. Got It (Mostly) Right in the Economy’s Rescue

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    #masthead-section-label, #masthead-bar-one { display: none }Biden’s Stimulus PlanBiden’s AddressWhat to Know About the BillAnalysis: Economic RescueBenefits for Middle ClassShoppers at a mall in Los Angeles. Consumer spending is nearly back to its prepandemic level.Credit…Mark Abramson for The New York TimesAnalysisHow the U.S. Got It (Mostly) Right in the Economy’s RescueThough the recession has been painful, policymakers cushioned the pandemic’s blow and opened the way to recovery.Shoppers at a mall in Los Angeles. Consumer spending is nearly back to its prepandemic level.Credit…Mark Abramson for The New York TimesSupported byContinue reading the main storyMarch 15, 2021Updated 2:31 p.m. ETWhen the coronavirus pandemic ripped a hole in the economy a year ago, many feared that the United States would repeat the experience of the last recession, when a timid and short-lived government response, in the view of many experts, led to years of high unemployment and anemic wage growth.Instead, the federal government responded with remarkable force and speed. Within weeks after the virus hit American shores, Congress had launched a multitrillion-dollar barrage of programs to expand unemployment benefits, rescue small businesses and send checks to most American households. And this time, unlike a decade ago, Washington is keeping the aid flowing even as the crisis begins to ease: On Thursday, President Biden signed a $1.9 trillion aid bill that will pump still more cash into households, businesses, and state and local governments.The Federal Reserve, too, acted swiftly, deploying emergency tools developed in the financial crisis a decade earlier. Those efforts helped safeguard the financial system — and the central bank has pledged to remain vigilant.The result is an economy far stronger than most forecasters expected last spring, even as the pandemic proved much worse than feared. The unemployment rate has fallen to 6.2 percent, from nearly 15 percent in April. Consumer spending is nearly back to its prepandemic level. Households are sitting on trillions of dollars in savings that could fuel an epic rebound as the health crisis eases.Yet not everyone made it into the lifeboats unscathed, if at all. Millions of laid-off workers waited weeks or months to begin receiving help, often with lasting financial consequences. Aid to hundreds of thousands of small businesses dried up long before they could welcome back customers; many will never reopen. Long lines at food banks and desperate pleas for help on social media reflected the number of people who slipped through the cracks.“The damage that has been done has occurred in a disparate fashion,” said Michelle Holder, a John Jay College economist who has studied the pandemic’s impact. “It’s occurred among low-income families. It’s occurred among Black and brown families. It’s certainly occurred among families that did not have a lot of resources to fall back on.”For many white-collar workers, Dr. Holder said, the pandemic recession may one day look like a mere “bump in the road.” But not for those hit hardest.“It wasn’t just a bump in the road if you were a low-wage worker, if you were a low-income family,” she said. “Their ability to recover is just not the same as ours.”Jesus Quinonez lost his job as a manager at a warehouse in the San Diego area early in the pandemic. He quickly found another job — with a company that shut down before he could begin work. He hasn’t worked since.It took Mr. Quinonez, 62, three months to fight his way through California’s overwhelmed unemployment insurance system and begin receiving benefits. Less than two months later, a $600-a-week unemployment supplement from the federal government expired, leaving Mr. Quinonez, his wife and his four children trying to subsist on a few hundred dollars a week in regular unemployment benefits.By January, Mr. Quinonez was four months behind on rent on the one-bedroom trailer he shares with his family. He had raided his 401(k) account, leaving no savings a few years before his intended retirement. Government nutrition assistance kept his family fed, but it didn’t help with the car payment, or pay for toilet paper.“I started falling behind on my bills, plain and simple,” he said.A closed storefront in Newark. Not everyone made it into the lifeboats unscathed.Credit…Bryan Anselm for The New York TimesFor hundreds of thousands of small businesses, government aid dried up long before they could welcome back customers. Many will never reopen.Credit…Bryan Anselm for The New York TimesBut in December, Congress passed a $900 billion aid package, which included a second round of direct checks to households and revived the expanded unemployment programs. By January, Mr. Quinonez was able to pay off at least part of his debt, enough to hold on to the trailer and his car. The next round of aid should carry Mr. Quinonez until he can work again.“As soon as they lift the restrictions and more people get vaccinated, I see things coming back good,” he said. “I expect to get a job, and I expect to continue working until I retire.”Whether Mr. Quinonez’s story — and millions more like it — should count as a success or failure for public policy is partly a matter of perspective. Mr. Quinonez himself is unimpressed: He worked and paid taxes for decades, then found himself subject to a decrepit state computer system and a divided Congress.“Now that we need them, there’s no freaking help,” he said.Research from Eliza Forsythe, an economist at the University of Illinois, found that from June until Feb. 17, only 41 percent of unemployed workers had access to benefits. Some of the rest were unaware of their eligibility or couldn’t navigate the thicket of rules in their states. Others simply weren’t eligible. Asian workers, Black workers and those with less education were disproportionately represented among the nonrecipients.The gaps and delays in the system had consequences.“The impact of that is folks’ having to move out of their apartments because they have this money that’s supposed to be coming but they just haven’t received it,” said Rebecca Dixon, executive director of the National Employment Law Project, a worker advocacy group. Others kept their homes because of eviction bans, but had their utilities shut off, Ms. Dixon added, or turned to food banks to avoid going hungry — measures of food insecurity surged in the pandemic.Still, the federal government did far more for unemployed workers than in any previous recession. Congress expanded the safety net to cover millions of workers — freelancers, part-time workers, the self-employed — who are left out in normal times. At the peak last summer, the state and federal unemployment systems were paying $5 billion a day in benefits — money that helped workers avoid evictions and hunger and that flowed through the economy, preventing an even worse outcome.The record of other federal responses is similarly mixed. The Paycheck Protection Program helped hundreds of thousands of small businesses but was plagued by administrative hiccups and, at least according to some estimates, saved relatively few jobs. Direct checks to households similarly helped keep families afloat, but sent billions of dollars to households that were already financially stable, while failing to reach some of those who needed the help the most — in some cases because they had not filed tax returns or did not have bank accounts.Beyond the successes and failures of specific programs, any evaluation of the broader economy needs to start with a question: Compared with what?Relative to a world without Covid-19, the economy remains deeply troubled. The United States had 9.5 million fewer jobs in February than a year earlier, a hole deeper than in the worst of the last recession. Gross domestic product fell 3.5 percent in 2020, making it among the worst years on record.Relative to the rosy predictions early in the pandemic — when economists hoped a brief shutdown would let the country beat the virus, then get quickly back to work — the downturn has been long and damaging. But those hopes were dashed not by a failure of economic policy but by the virus itself, and the failure to contain it.“If you want to think back on what we got wrong, really the fundamental errors were about the spread of the virus,” said Karen Dynan, a Harvard economist and Treasury Department official during the Obama administration. But relative to the outcome that forecasters feared in the worst moments last spring, the rebound has been remarkably strong. In May, economists at Goldman Sachs predicted that the unemployment rate would be 12 percent at the end of 2020 and wouldn’t fall below 6 percent until 2024. The same team now expects the rate to fall to 4 percent by the end of this year. Other forecasters have similarly upgraded their projections..css-yoay6m{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}@media (min-width:740px){.css-yoay6m{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;margin-bottom:15px;}.css-k59gj9{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;width:100%;}.css-1e2usoh{font-family:inherit;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;border-top:1px solid #ccc;padding:10px 0px 10px 0px;background-color:#fff;}.css-1jz6h6z{font-family:inherit;font-weight:bold;font-size:1rem;line-height:1.5rem;text-align:left;}.css-1t412wb{box-sizing:border-box;margin:8px 15px 0px 15px;cursor:pointer;}.css-hhzar2{-webkit-transition:-webkit-transform ease 0.5s;-webkit-transition:transform ease 0.5s;transition:transform ease 0.5s;}.css-t54hv4{-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-1r2j9qz{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-e1ipqs{font-size:1rem;line-height:1.5rem;padding:0px 30px 0px 0px;}.css-e1ipqs a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;}.css-e1ipqs a:hover{-webkit-text-decoration:none;text-decoration:none;}.css-1o76pdf{visibility:show;height:100%;padding-bottom:20px;}.css-1sw9s96{visibility:hidden;height:0px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cz6wm{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;font-family:’nyt-franklin’,arial,helvetica,sans-serif;text-align:left;}@media (min-width:740px){.css-1cz6wm{padding:20px;width:100%;}}.css-1cz6wm:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1cz6wm{border:none;padding:20px 0 0;border-top:1px solid #121212;}Frequently Asked Questions About the New Stimulus PackageThe stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more. Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read moreThis credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.The recovery proved so strong in part because businesses were able to adapt better — and Americans, for better or worse, were willing to take more risks — than many people expected, allowing a faster rebound in activity over the summer. But the biggest factor was that Congress responded more quickly and forcefully than in any past crisis — a particularly remarkable outcome given that both the White House and Senate were controlled by Republicans, a party traditionally skeptical of programs like unemployment insurance.Millions of laid-off workers waited weeks or months to begin receiving help, a lag that often left financial consequences.Credit…Bryan Woolston/ReutersLong lines at food banks provided a hint of the number of people who slipped through the cracks.Credit…Tamir Kalifa for The New York Times“The dominant narrative about Washington and about legislating and public policy is one of dysfunction, one of not being able to rise to meet challenges, one of not being able to get it together to address glaring problems, and I think it’s a well-earned narrative,” said Michael R. Strain, an economist at the American Enterprise Institute. “But when I look back over the last year, that is just not what I see.”Congress didn’t prevent a recession. But its intervention, along with aggressive action from the Federal Reserve, may have prevented something much worse.“We could have experienced another Great Depression-like event that took years and years to recover from, and we didn’t,” Dr. Strain said.Washington’s moment of unity didn’t last. Democrats pushed for another multitrillion-dollar dose of aid. Republicans, convinced that the economy would rebound largely on its own once the pandemic eased, wanted a much smaller package. The stalemate lasted months, allowing aid to households and businesses to lapse. Economists are still debating the long-term impact of that delay, but there is little doubt it resulted in thousands of business failures.“We had this grand success that policymakers acted so quickly in passing two significant pieces of legislation early in the pandemic, and then they flailed through the whole fall in just the most frustrating of ways,” said Wendy Edelberg, director of the Hamilton Project, an economic-policy arm of the Brookings Institution. “That was just such an unforced error and created confusion and needless panic.”But unlike in 2009, when Republican opposition prevented any significant economic aid after President Barack Obama’s first few months in office, Congress did eventually provide more help. The $900 billion in aid passed in late December prevented millions of people from losing unemployment benefits, and helped sustain the recovery at a moment when it looked like it was faltering.The $1.9 trillion plan that Democrats pushed through Congress this month could help the United States achieve something it failed to do after the last recession: ensure a robust recovery.If that happens, it could fundamentally shift the narrative around the pandemic recession. The damage was deeply unequal, and the economic response, though it helped many families weather the storm, didn’t come close to overcoming that inequity. But a recovery that restores jobs quickly could help workers like Mr. Quinonez get back on track.“It’s just a bad year, and you just close the page and move on and try to make the best of the new days and new years,” he said. “Things are going to get better.”AdvertisementContinue reading the main story More

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    Uncounted in the Unemployment Rate, but They Want to Work

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutGuidelines After VaccinationAdvertisementContinue reading the main storySupported byContinue reading the main storyUncounted in the Unemployment Rate, but They Want to WorkMillions have left the labor force in the last year, many home with children or health concerns. The statistics may not reflect their aspirations.Robert Hesse says he plans to look for a job in earnest once he is vaccinated and hopes to go back to work this year.Credit…Jenna Schoenefeld for The New York TimesMarch 15, 2021Updated 6:17 a.m. ETRobert Hesse was expecting an imminent promotion to manager of Sub Zero Ice Cream, a nitrogen ice cream shop in Ventura, Calif., when it shut down in March because of the pandemic.“I like to work,” said Mr. Hesse, a college graduate who turns 26 on Tuesday. “Otherwise I feel like I’m useless.” But he has been reluctant to seek a new job because he lives with his parents, who are not yet vaccinated, and is afraid of bringing the virus home to them.“It’s just health concerns — I don’t really want to be around the general public yet,” he said.Mr. Hesse represents what economists say is one of the most striking features of the pandemic-driven economic downturn: the tide of workers who, as the government counts things, have left the labor force.In the year since the pandemic upended the economy, more than four million people have quit the labor force, leaving a gaping hole in the job market that cuts across age and circumstances. An exceptionally high number have been sidelined because of child care and other family responsibilities or health concerns. Others gave up looking for work because they were discouraged by the lack of opportunities. And some older workers have called it quits earlier than they had planned.These labor-force dropouts are not counted in the most commonly cited unemployment rate, which stood at 6.2 percent in February, making the group something of a hidden casualty of the pandemic.Now, as the labor market begins to emerge from the pandemic’s vise, whether those who have left the labor force return to work — and if so, how quickly — is one of the big questions about the shape of the recovery.“There are a lot of dimensions related to the pandemic that I think are driving this phenomenon,” said Eliza Forsythe, a labor economist at the University of Illinois. “We don’t really know what the long-term consequences are going to be because it is different from the past.”There is some reason for optimism. Economists expect that many who have left the labor force in the last year will return to work once health concerns and child care issues are alleviated. And they are optimistic that as the labor market heats up, it will draw in workers who grew disenchanted with the job search.Mr. Hesse, for instance, said he planned to look for a new job in earnest once he is vaccinated and hoped to go back to work this year.Moreover, after the last recession, many economists said those who left the labor force were unlikely to come back, whether because of disabilities, the opioid crisis, a loss of skills or other reasons. Yet labor force participation, adjusted for demographic shifts, eventually returned to its previous level.But the speed with which the pandemic has driven workers from the labor force has had devastating effects that could leave lasting damage.The labor force participation rate among those 16 or older has dropped to about 61 percent from 63 percent in February 2020. Among prime age workers — those 25 to 54 — it has declined to 81 percent from 83 percent.Women in their prime working years have quit the labor force at nearly twice the rate of men, according to research by Wells Fargo, partly because more women work in industries like leisure and hospitality that are less suited to social distancing and partly because women are more likely to bear the burden of child care. The share of Black women who have left the labor force is more than twice the share of white men.Then there are the many people who may be seeking a job but who are unavailable to take one because of health concerns, illness or caretaking obligations, putting them in what economists say is something of a gray area — between being unemployed and not in the labor force — that has become more common during the pandemic.A single mother, Frankie Wiley, 29, worked as a housekeeper at a resort in Bloomington, Minn., until she was laid off last March. She would like a paid job, but she has to stay home with her 11-year-old daughter, who is attending school remotely.The Coronavirus Outbreak More

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    Here Are 17 Reasons to Let The Economic Optimism Begin

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    #masthead-section-label, #masthead-bar-one { display: none }Biden’s Stimulus PlanBiden’s AddressWhat to Know About the BillBenefits for Middle ClassChild Tax CreditAdvertisementContinue reading the main storyUpshotSupported byContinue reading the main story17 Reasons to Let the Economic Optimism BeginA reporter who has tracked decades of gloomy trends sees things lining up for roaring growth.March 13, 2021, 5:00 a.m. ETCredit…Jordy van den NieuwendijkThe 21st-century economy has been a two-decade series of punches in the gut.The century began in economic triumphalism in the United States, with a sense that business cycles had been vanquished and prosperity secured for a blindingly bright future. Instead, a mild recession was followed by a weak recovery followed by a financial crisis followed by another weak recovery followed by a pandemic-induced collapse. A couple of good years right before the pandemic aside, it has been two decades of overwhelming inequality and underwhelming growth — an economy in which a persistently weak job market has left vast human potential untapped, helping fuel social and political dysfunction.Those two decades coincide almost precisely with my career as an economics writer. It is the reason, among my colleagues, I have a reputation for writing stories that run the gamut from ominous to gloomy to terrifying.But strange as it may seem in this time of pandemic, I’m starting to get optimistic. It’s an odd feeling, because so many people are suffering — and because for so much of my career, a gloomy outlook has been the correct one.Predictions are a hard business, of course, and much could go wrong that makes the decades ahead as bad as, or worse than, the recent past. But this optimism is not just about the details of the new pandemic relief legislation or the politics of the moment. Rather, it stems from a diagnosis of three problematic mega-trends, all related.There has been a dearth of economy-altering innovation, the kind that fuels rapid growth in the economy’s productive potential. There has been a global glut of labor because of a period of rapid globalization and technological change that reduced workers’ bargaining power in rich countries. And there has been persistently inadequate demand for goods and services that government policy has unable to fix.There is not one reason, however, to think that these negative trends have run their course. There are 17.Credit…Jordy van den Nieuwendijk1. The ketchup might be ready to flowIn 1987, the economist Robert Solow said, “You can see the computer age everywhere but in the productivity statistics.” Companies were making great use of rapid improvements in computing power, but the overall economy wasn’t really becoming more productive.This analysis was right until it was wrong. Starting around the mid-1990s, technological innovations in supply chain management and factory production enabled companies to squeeze more economic output out of every hour of work and dollar of capital spending. This was an important reason for the economic boom of the late 1990s.The Solow paradox, as the idea underlying his quote would later be called, reflected an insight: An innovation, no matter how revolutionary, will often have little effect on the larger economy immediately after it is invented. It often takes many years before businesses figure out exactly what they have and how it can be used, and years more to work out kinks and bring costs down.In the beginning, it may even lower productivity! In the 1980s, companies that tried out new computing technology often needed to employ new armies of programmers as well as others to maintain old, redundant systems.But once such hurdles are cleared, the innovation can spread with dizzying speed.It’s like the old ditty: “Shake and shake the ketchup bottle. First none will come and then a lot’ll.”Or, in a more formal sense, the economists Erik Brynjolfsson, Daniel Rock and Chad Syverson call this the “productivity J-curve,” in which an important new general-purpose technology — they use artificial intelligence as a contemporary example — initially depresses apparent productivity, but over time unleashes much stronger growth in economic potential. It looks as if companies have been putting in a lot of work for no return, but once those returns start to flow, they come faster than once seemed imaginable.There are several areas where innovation seems to be at just such a point, and not just artificial intelligence.2. 2020s battery technology looks kind of like 1990s microprocessorsRemember Moore’s Law? It was the idea that the number of transistors that could be put on an integrated circuit would double every two years as manufacturing technology improved. That is the reason you may well be wearing a watch with more computer processing power than the devices that sent people into outer space in the 1960s.Battery technology isn’t improving at quite that pace, but it’s not far behind it. The price of lithium-ion battery packs has fallen 89 percent in inflation-adjusted terms since 2010, according to BloombergNEF, and is poised for further declines. There have been similar advances in solar cells, raising the prospect of more widespread inexpensive clean energy.Another similarity: Microprocessors and batteries are not ends unto themselves, but rather technologies that enable lots of other innovation. Fast, cheap computer chips led to software that revolutionized the modern economy; cheap batteries and solar cells could lead to a wave of innovation around how energy is generated and used. We’re only at the early stages of that process.3. Emerging innovations can combine in unexpected waysIn the early part of the 20th century, indoor plumbing was sweeping the nation. So was home electricity. But the people installing those pipes and those power lines presumably had no idea that by the 1920s, the widespread availability of electricity and free-flowing water in homes would enable the adoption of the home washing machine, a device that saved Americans vast amounts of time and backbreaking labor.It required not just electricity and running water, but also revolutions in manufacturing techniques, production and distribution. All those innovations combined to make domestic life much easier.Could a combination of technologies now maturing create more improvement in living standards than any of them could in isolation?Consider driverless cars and trucks. They will rely on long-building research in artificial intelligence software, sensors and batteries. After years of hype, billions of dollars in investment, and millions of miles of test drives, the possibilities are starting to come into view.Waymo, a sister company of Google, has opened a driverless taxi service to the public in the Phoenix suburbs. Major companies including General Motors, Tesla and Apple are in the hunt as well, along with many smaller competitors.Apply the same logic to health care, to warehousing and heavy industry, and countless other fields. Inventions maturing now could be combined in new ways we can’t yet imagine.4. The pandemic has taught us how to work remotelyBeing cooped up at home may pay some surprising economic dividends. As companies and workers have learned how to operate remotely, it could allow more people in places that are less expensive and that have fewer high-paying jobs to be more productive. It could enable companies to operate with less office space per employee, which in economic terms means less capital needed to generate the same output. And it could mean a reduction in commuting time.Even after the pandemic recedes, if only 10 percent of office workers took advantage of more remote work, that would have big implications for the United States’ economic future — bad news if you are a landlord in an expensive downtown, but good news for overall growth prospects.5. Even Robert Gordon is (a little) more optimistic!Mr. Gordon wrote the book on America’s shortfall in innovation and productivity in recent decades — a 784-page book in 2016, to be precise. Now Mr. Gordon, a Northwestern University economist, is kind of, sort of, moderately optimistic. “I would fully expect growth in the decade of the 2020s to be higher than it was in the 2010s, but not as fast as it was between 1995 and 2005,” he said recently.Credit…Jordy van den Nieuwendijk6. Crises spur innovationThe mobilization to fight World War II was a remarkable feat. Business and government worked together to drastically increase the productive capacity of the economy, put millions to work, and advance countless innovations like synthetic rubber and the mass production of aircraft.Similarly, the Cold War generated a wave of public investment and innovation, such as satellites (a byproduct of the space race) and the internet (originally intended to provide decentralized communication in the event of a nuclear attack).Could our current crises spur similar ambition? Already the Covid-19 pandemic has accelerated the usage of mRNA technology for creating new vaccines, which could have far-reaching consequences for preventing disease.And as the 2020s progress, the deepening sense of urgency to reduce carbon emissions and cope with the fallout of climate change is the sort of all-encompassing challenge that could prove as galvanizing as those experiences — with similar implications for investment and innovation.7. Tight labor markets spur innovation, tooWhy did the Industrial Revolution begin in Britain instead of somewhere else? One theory is that relatively high wages there (a result of international trade) created an urgency for firms to substitute machinery for human labor. Over time, finding ways to do more with fewer workers generated higher incomes and living standards.But why might the labor market of the 2020s be a tight one? It boils down to two big ideas: shifts in the global economy and demographics that make workers scarcer in the coming decade than in recent ones; and a newfound and bipartisan determination on the part of policymakers in Washington to achieve full employment.8. There’s only one ChinaImagine an isolated farm town with 100 people.Five of the 100 own the farms. An additional 10 act as managers on behalf of the owners. And there are five intellectuals who sit around thinking big thoughts. The other 80 people are laborers.What would happen if suddenly another 80 laborers showed up, people who were used to lower living standards?The intellectuals might tell a complex story about how the influx of labor would eventually make everyone better off, as more land was cultivated and workers could specialize more. The owners and their managers would be happy because they would be instantly richer (they could pay people less to plow the fields).But the existing 80 laborers — competing for their jobs with an influx of lower-paid people — would see only immediate pain. The long-term argument that everybody gets richer in the end wouldn’t carry much weight.That’s essentially what has happened in the last few decades as China has gone from being isolated to being deeply integrated in the world economy. When the country joined the World Trade Organization in 2001, its population of 1.28 billion was bigger than that of the combined 34 advanced countries that make up the Organization for Economic Cooperation and Development (1.16 billion).But that was a one-time adjustment, and wages are rising rapidly in China as it moves beyond low-end manufacturing and toward more sophisticated goods. India, the only other country with comparable population, is already well integrated into the world economy. To the degree globalization continues, it should be a more gradual process.9. There’s only one MexicoFor years, American workers were also coming into competition with lower-earning Mexicans after enactment of the North American Free Trade Agreement in 1994. As with China, the new dynamic improved the long-term economic prospects for the United States, but in the short run it was bad for many American factory workers.But it too was a one-time adjustment. Even before President Trump, trade agreements under negotiation were for the most part no longer focused on making it easier to import from low- labor-cost countries. The main aim was to improve trade rules for American companies doing business in other rich countries.10. The offshoring revolution is mostly played outOnce upon a time, if you were an American company that needed to operate a customer service call center or carry out some labor-intensive information technology work, you had no real choice but to hire a bunch of Americans to do it. The emergence of inexpensive, instant global telecommunication changed that, allowing you to put work wherever costs were the lowest.In the first decade of the 2000s, American companies did just that on mass scale, locating work in countries like India and the Philippines. It’s a slightly different version of the earlier analogy involving the farm; a customer service operator in Kansas was suddenly in competition with millions of lower-earning Indians for a job.But it’s not as if the internet can be invented a second time.Sensing a theme here? In the early years of the 21st century, a combination of globalization and technological advancements put American workers in competition with billions of workers around the world.It created a dynamic in which workers had less bargaining power, and companies could achieve cost savings not by creating more innovative ways of doing things but exploiting a form of labor cost arbitrage. That may not be the case in the 2020s.Credit…Jordy van den Nieuwendijk11. Baby boomers can’t work foreverThe surge of births that took place in the two decades after World War II created a huge generation with long-reaching consequences for the economy. Now, their ages ranging from 57 to 76, the baby boomers are retiring, and that means opportunity for the generations that came behind them..css-yoay6m{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}@media (min-width:740px){.css-yoay6m{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;margin-bottom:15px;}.css-k59gj9{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;width:100%;}.css-1e2usoh{font-family:inherit;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;border-top:1px solid #ccc;padding:10px 0px 10px 0px;background-color:#fff;}.css-1jz6h6z{font-family:inherit;font-weight:bold;font-size:1rem;line-height:1.5rem;text-align:left;}.css-1t412wb{box-sizing:border-box;margin:8px 15px 0px 15px;cursor:pointer;}.css-hhzar2{-webkit-transition:-webkit-transform ease 0.5s;-webkit-transition:transform ease 0.5s;transition:transform ease 0.5s;}.css-t54hv4{-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-1r2j9qz{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-e1ipqs{font-size:1rem;line-height:1.5rem;padding:0px 30px 0px 0px;}.css-e1ipqs a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;}.css-e1ipqs a:hover{-webkit-text-decoration:none;text-decoration:none;}.css-1o76pdf{visibility:show;height:100%;padding-bottom:20px;}.css-1sw9s96{visibility:hidden;height:0px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cz6wm{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;font-family:’nyt-franklin’,arial,helvetica,sans-serif;text-align:left;}@media (min-width:740px){.css-1cz6wm{padding:20px;width:100%;}}.css-1cz6wm:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1cz6wm{border:none;padding:20px 0 0;border-top:1px solid #121212;}Frequently Asked Questions About the New Stimulus PackageThe stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more. Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read moreThis credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.As the boomers seek to continue consuming — spending their amassed savings, pensions and Social Security benefits — there will be relatively stable demand for goods and services and a relatively smaller pool of workers to produce them.According to the Social Security Administration’s projections of the so-called “dependency ratio,” in 2030 for every 100 people in their prime working years of 20 to 64, there will be 81 people outside that age range. In 2020 that number was 73.That is bad news for public finances and for the headline rate of G.D.P. growth, but good news for those in the work force. It should give workers more leverage to demand raises and give employers incentives to invest in productivity-enhancing software or machinery.12. The millennials are entering their primeSpending has a life cycle. Young adults don’t make much money. As they age, they start to earn more. Many start families and begin spending a lot more, buying houses and cars and everything else it takes to raise children. Then they tend to cut back on spending as the kids move out of the house.That, anyway, is what the data says takes place on average. The rate of consumption spending soars for Americans in their 20s and 30s, and peaks sometime in their late 40s. It’s probably not a coincidence that some of the best years for the American economy in recent generations were from 1983 to 2000, when the ultra-large baby boom generation was in that crucial high-spending period.Guess what generation is in that life phase in the 2020s? The millennials, an even larger generation than the boomers.They’ve had a rough young adulthood, starting their careers in the shadow of the Great Recession. But all that adult-ing they’re starting to do could have big, positive economic consequences for the decade ahead.13. Everybody likes it hotTwelve years ago, a Democratic president took office at a time of economic crisis. He succeeded at ending the crisis, but the expansion that followed was a disappointment, with years of slow growth at a time millions were either unemployed or out of the work force entirely.The overwhelming tone of the economic policy discussion during those years, however, was different. President Obama spoke of his plans to reduce the budget deficit. Republicans in Congress demanded even more fiscal restraint. Top Federal Reserve officials fretted about inflation risks, even when unemployment was high and inflation persistently low.The Trump presidency changed that discussion. Even as tax cuts widened the budget deficit, interest rates stayed low. Even as the jobless rate fell to levels not seen in nearly five decades, inflation stayed low. It was evident, based on how the economy performed in 2018 and 2019, and up until the pandemic began, that the U.S. economy could run hotter than the Obama-era consensus seemed to allow. That insight has powerful implications for the 2020s.14. Joe Biden wants to let it ripPresident Biden and congressional Democrats were determined to learn the lessons of the Obama era. Mr. Biden was deeply involved in that stimulus plan, which proved inadequate to the task of creating and sustaining a robust recovery.The lesson that Mr. Biden and the Democratic Party took from 2009 was straightforward: Do whatever it takes to get the economy humming, and the politics will work in your favor.That thinking helped lead to the $1.9 trillion relief bill signed on Thursday.15. Jay Powell wants to let it rip“To call something hot, you need to see heat,” Federal Reserve Chair Jerome Powell said in 2019. That’s as good a summary of the Fed’s approach to the economy as any.In more formal terms, the Fed has a new framework for policy called “Flexible Average Inflation Targeting.” It is in effect a repudiation of past Fed strategies of pre-emptively slowing the economy to prevent an outbreak of inflation predicted by economic models.Now, the Fed says it will raise interest rates in response to actual inflation in the economy, not just forecasts, and will not act simply because the unemployment rate is lower than models say it can sustainably get.Nearly every time he speaks, Mr. Powell sounds like a true believer in the church of full employment.16. Republicans are getting away from austerity politicsConsider an event that took place less than three months ago (that may feel like three years ago): Overwhelming bipartisan majorities in Congress passed a $900 billion pandemic relief bill. Then a Republican president threatened to veto it, not because it was too generous, but because it was too stingy.President Trump didn’t get his way on increasing $600 payments to most Americans to $2,000 payments, and he signed the legislation anyway, grudgingly. But the episode reflects a shift away from the focus on fiscal austerity that prevailed in the Obama era.With the current stimulus bill, opposition in conservative talk radio was relatively muted. Republicans voted against it, but there hasn’t been quite the fire-and-brimstone sense of opposition evident toward the Obama stimulus a dozen years ago.As the party becomes more focused on the kinds of culture-war battles that Mr. Trump made his signature, and its base shifts away from business elites, it wouldn’t be surprising if we saw the end of an era in which cutting government spending was its animating idea. This would imply a U.S. government that aims to keep flooding the economy with cash no matter who wins the next few elections.17. The post-pandemic era could start with a bangThe last year has been terrible on nearly every level. But it’s easy to see the potential for the economy to burst out of the starting gate like an Olympic sprinter.That could have consequences beyond 2021. A rapid start to the post-pandemic economy could create a virtuous cycle in which consumers spend; companies hire and invest to fulfill that demand; and workers wind up having more money in their pockets to consume even more.Americans have saved an extra $1.8 trillion during the pandemic, reflecting government help and lower spending. That is money that people can spend in the months ahead, or it could give them a comfort level that they have adequate savings and can spend more of their earnings.Things are also primed for a boom time in the executive suite. C.E.O. confidence is at a 17-year high, and near-record stock market valuations imply that companies have access to very cheap capital. There is no reason corporate America can’t hire, invest and expand to take advantage of the post-pandemic surge in activity.And on a psychological level, doesn’t everybody desperately want to return to feeling a sense of joy, of exuberance? That is an emotion that could prove the most powerful economic force of them all.Economics may be a dismal science, and those of us who write about it are consigned to see what is broken in the world. But sometimes, things align in surprising ways, and the result is a period in which things really do get better. This is starting to look like one of those times.AdvertisementContinue reading the main story More