Here’s Why Spiking Inflation And Labor Shortages Won’t Tank The Economic Recovery, According To Experts

New York City Reopens As Most Pandemic Restrictions Are Lifted

Spiking inflation, disappointing jobs gains and shortages of labor and commodities have investors wringing their hands over the state of the economy and the seemingly growing risk of overheating, but according to Moody’s chief economist, Mark Zandi, there’s no cause for alarm.

In a research note published Tuesday, Zandi emphasizes that all those factors are temporary.  “The recovery . . . may be uneven, given the considerable adjustments needed for the economy to fully reopen, but our outlook for a boom-like economy over the coming year has not changed materially,” he wrote.

The labor shortage and hiring difficulties will improve as students return to school and parents have more childcare options, he suggests, and he describes the evidence that federal supplemental $300 weekly unemployment benefits are keeping workers home as “thin.”

Zandi expects inflationary pressures to ease later this year once the economy returns to normal and businesses—especially those in the travel and leisure industry—get past the point where they are reversing their pandemic-era price cuts.

He suggested investor fears that stubborn inflation will force the Federal Reserve to hastily raise rates, thereby triggering a recession, are unlikely to materialize because of the significant slack still extant in the labor market.

Zandi also cites the ongoing semiconductor shortage as a major factor in the job losses and shortages in the auto manufacturing industry, but adds that he expects those pressures to abate by next year once surging demand and soaring prices for the chips prompt suppliers to boost production, thereby stabilizing the supply chain.

Crucial Quote

“Until the supply side of the economy wakes up and catches up with the fast-reviving demand side coming out of the pandemic, the economic statistics will undoubtedly hold more surprises—output and supply chains scrambled; labor, commodities and products in short supply; and price spikes,” Zandi wrote. “If history is a guide, when businesses can make a healthy profit, they will solve the problems,” he added. “Quickly.”

Key Background

Zandi isn’t the only expert looking beyond the risk factors to a robust recovery. Despite raising their expectations for one measure of inflation by more than a percentage point to a peak of 3.5% this year, analysts from investment giant Goldman Sachs believe the factors that caused them to hike the target for core CPI inflation—soaring used-car prices, production delays in the auto industry and changes in health insurance payouts—are temporary.

Not to mention, their impact isn’t as large across other measures of inflation that weigh prices differently. That sentiment is also beginning to make its way to Wall Street: “The inflation debate is not over, but the majority of Wall Street believes it will be transitory,” OANDA senior market analyst Edward Moya wrote in a Tuesday note.

Just as telling as the wage data, the share of working-age Americans who are in fact working has declined in recent decades. The country now has the equivalent of a large group of bakeries that are not making baguettes but would do so if it were more lucrative — a pool of would-be workers, sitting on the sidelines of the labor market.

Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of G.D.P. than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.

Chief Critic

But not everyone agrees. Larry Summers, an economist who served in the Clinton and Obama Administrations, wrote in a Monday op-ed in the Washington Post that while some of the recent inflation might normalize with time, “not everything we are seeing is likely to be temporary.”

Summers suggests that a handful of factors including demand that grows faster than supply, higher housing prices, inflation expectations and even higher minimum wages and more benefits for employees have the potential to push inflation even higher. Summer recommends that policymakers “explicitly [recognize] that overheating, and not excessive slack, is the predominant near-term risk for the economy.”

What We Don’t Know

When the Federal Reserve will move to tighten policy and raise interest rates. Atlanta Federal Reserve President Raphael Bostic told CNBC last week that given the 8 million jobs that have yet to be recovered, “I think we’ve got to have our policies in a very strongly accommodative situation or stance.” He added: “I don’t think we’re going to have answers on this until at least early fall, and it may take longer than that.”

One of the few ways to have a true labor shortage in a capitalist economy is for workers to be demanding wages so high that businesses cannot stay afloat while paying those wages. But there is a lot of evidence to suggest that the U.S. economy does not suffer from that problem.

If anything, wages today are historically low. They have been growing slowly for decades for every income group other than the affluent. As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions, which together have given employers more workplace power and employees less of it.

I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance.

Source: Here’s Why Spiking Inflation And Labor Shortages Won’t Tank The Economic Recovery, According To Experts

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References

Nelson 1995, p. 158. This Marxist objection is what motivated Nelson’s essay, which claims that labour is not, in fact, a commodity.

Labor Shortage Will Push Wages Higher, According To Bank Of America

A man hands his resume to an employer at the 25th annual...

As the U.S. economy roars back to life, new analysis from Bank of America suggests wages are likely to climb higher in the near term thanks to mismatches between supply and demand for workers.

Employers are desperate to staff up quickly to meet surging consumer demand, but some workers have been slow to return for a number of reasons including virus concerns, childcare constraints, early retirement and more generous federal unemployment benefits, BofA senior U.S. economist Joseph Song wrote in a Friday research note.

It’s already clear some workers are holding out for higher pay before they reenter the workforce: The average self-reported reservation wage—the lowest wage a worker says they will accept to start a new job—has grown 21% since the fall for people earning less than $60,000 per year, according to data from the New York Fed.

According to Song’s analysis, wage growth will be stronger in sectors that were hit hardest by the pandemic—including construction, real estate and hotels and food service.

Those are also the industries that tend to employ more workers at the lower end of the income spectrum. The mismatch in the labor market will abate later this year once the reopening boom abates and more Americans return to work, according to Song, which will lessen the upward pressure on wages.

Crucial Quote

“The current labor shortage should sort itself out by the fall as growth normalizes to more sustainable levels and more workers return to the labor force as health concerns subside and generous UI benefits expire by September,” Song wrote. That means wage growth could slow down a little as employers pull back on pay following big wage hikes this year and once they no longer need to compete with a $300 weekly federal unemployment supplement.

What To Watch For

Next year, Song expects wages to rise again when unemployment reaches prepandemic levels, though that growth will be driven by “better labor market fundamentals” rather than transitory factors like the pandemic and enhanced government unemployment benefits.

Big Number

4.2%. That’s the unemployment rate Bank of America is predicting for the end of 2021, down from 6.1%. It expects unemployment will fall even further to 3.5% at the end of 2022.

Key Background

Companies are already beginning to raise their wages to attract more workers as they reopen. Amazon is raising its average starting wage to $17 per hour and McDonald’s plans to raise its average starting pay at company-owned stores to $15 per hour by 2024. Chipotle said earlier this month that it will raise its average wage to $15 per hour by the end of June. Under Armour said Wednesday that it is hiking its minimum wage from $10 to $15 per hour, and Bank of America itself announced this week that it would raise its U.S. minimum wage to $25 per hour by 2025.

Tangent

As big businesses hike pay, the Wall Street Journal reported Thursday that some small businesses are struggling to remain competitive. The chief client officer at a St. Louis office furniture dealership told the Journal that he has had to raise wages in order to fend off competition for workers from larger companies including Amazon.

Further Reading

Biden Administration Doesn’t Think It Can Force States To Pay $300 Unemployment Benefits, According To Report (Forbes)

As Fears Of Worker Shortages Grow, White House Economists Say Covid-19 Is To Blame—Not $300 Unemployment Benefits (Forbes)

Could Covid-19 Worker Shortages Create A $15 Minimum Wage—Even Without A New Law? (Forbes)

At Least 21 States Dropping $300-A-Week Federal Unemployment Benefits (Forbes)

I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance

Source: Labor Shortage Will Push Wages Higher, According To Bank Of America

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The Macroeconomics of Labour Markets

The labour market in macroeconomic theory shows that the supply of labour exceeds demand, which has been proven by salary growth that lags productivity growth. When labour supply exceeds demand, salary faces downward pressure due to an employer’s ability to pick from a labour pool that exceeds the jobs pool. However, if the demand for labour is larger than the supply, salary increases, as employee have more bargaining power while employers have to compete for scarce labour.

The Labour force (LF) is defined as the number of people of working age, who are either employed or actively looking for work (unemployed). The labour force participation rate (LFPR) is the number of people in the labour force divided by the size of the adult civilian non-institutional population (or by the population of working age that is not institutionalized), LFPR = LF/Population.

The non-labour force includes those who are not looking for work, those who are institutionalized (such as in prisons or psychiatric wards), stay-at-home spouses, children not of working age, and those serving in the military. The unemployment level is defined as the labour force minus the number of people currently employed. The unemployment rate is defined as the level of unemployment divided by the labour force. The employment rate is defined as the number of people currently employed divided by the adult population (or by the population of working age). In these statistics, self-employed people are counted as employed.[5]

The skills required in a labour force can vary from individual to individual, as well as from firm to firm. Some firms have specific skills they are interested in, limiting the labour force to certain criteria. A firm requiring specific skills will help determine the size of the market.[6]

Variables like employment level, unemployment level, labour force, and unfilled vacancies are called stock variables because they measure a quantity at a point in time. They can be contrasted with flow variables which measure a quantity over a duration of time. Changes in the labour force are due to flow variables such as natural population growth, net immigration, new entrants, and retirements.

Changes in unemployment depend on inflows (non-employed people starting to look for jobs and employed people who lose their jobs that are looking for new ones) and outflows (people who find new employment and people who stop looking for employment). When looking at the overall macroeconomy, several types of unemployment have been identified, which can be separated into two categories of natural and unnatural unemployment.

References

Paul, Oyer; Scott, Schaefer (2011). Personnel Economics: Hiring and Incentives. Handbook of Labor Economics. 4. pp. 1769–1823. doi:10.1016/S0169-7218(11)02418-X. ISBN 9780444534521.

IRS Delivers Covid-19 Surprise To Workers:  A Chance To Redo Their 2021 Health Plan And FSA Choices

If your employer lets you make changes to your workplace healthcare elections for 2021 under new Treasury guidance, it could cut your tax bill.

 

Wish you could change your health plan for 2021? In newly released guidance on new flexible rules for healthcare and dependent care FSAs, the Internal Revenue Service has included a new Covid-19-relief surprise: Employers can allow employees to make changes prospectively to health care coverage for 2021.

“The guidance is very employer and employee friendly; it really gives a lot of flexibility,” says Jake Mattinson, an employee benefits lawyer with McDermott Will & Emery in Chicago.

Notice 2021-15 allows for mid-year changes to employer-sponsored health care coverage, healthcare flexible spending accounts and dependent care accounts. It will help employees whose medical and caregiving situations have changed because of the coronavirus pandemic. That is, if your employer is on board.

Usually healthcare elections are set in stone on a calendar year basis. Last May, the Treasury Department came up with a partial mid-year fix for 2020, allowing prospective changes and extending grace periods and carryovers through year-end (IRS Notice 2020-29). But employees still cried foul: they had socked away more money than they could spend in these workplace tax-favored accounts, and would be subject to forfeiture rules.

In December, in the tax provisions tied onto the year-end spending package, Congress passed new special rules allowing rollovers and more for leftover 2020 and 2021 FSA money for employees and ex-employees. Notice 2021-15 answers a lot of the open questions about how to implement the new rules.

For 2021, you can revoke an existing healthcare plan election and make a new election, or revoke an existing election and attest that you’re getting coverage elsewhere. Say you picked an HMO plan, but really want to be in a PPO plan. Or say you decide you’d be better off under a spouse’s plan. This gives you the chance to make a mid-year change. That allowance is not in the December law, so it was a surprise, Mattinson says.

For healthcare and dependent care FSAs, the guidance says employers can allow employees to carryover unused amounts they’ve stashed in these accounts from the 2020 and 2021 plan years. It wasn’t clear before, but the IRS says that any plan can implement a 100% carryover or extended grace period, no matter what feature the plan had before, Mattinson says. That means employees might be able to carry over their whole balance (instead of just $550 under current law) from one year to the next.

The extended grace period could go out 12 months, instead of just 2.5 months. as of January 1, 2022, everything would shift back to the regular rules. Under the regular rules, you can stash up to $5,000 pretax per year in a dependent care FSA, but if you don’t use the money for the specified year, you lose it. You can put up to $2,750 in a healthcare FSA, and if you don’t use it, you may be able to either use it up during a grace period or carry over $550.

Don’t get your hopes up just yet: Employers have to adopt these changes, and while some have already been working on amendments to their plans based on the December law even before today’s guidance, others have decided to do nothing. “The reaction among employers is mixed; everyone has their own ideas of what to implement. It’s all optional,” says Mattinson. One client said they would implement it all, while another client said they wouldn’t make any of the changes, for example.

Some of the nitty-gritty guidance surrounds COBRA and health savings accounts. For COBRA, the guidance makes clear that if an employer lets terminated workers seek reimbursement from an FSA, that won’t hurt their qualification for COBRA. For health savings accounts, the guidance clarifies that for employees who want to make a midyear change into a high deductible health plan with an HSA, they could convert a general purpose FSA to a limited purpose FSA so as not to be disqualified from contributing to the HSA.

Notice 2021-15 is 34 pages long and includes detailed examples, suggesting this is an area of the tax code that could be simplified! Here’s a bullet point summary of the law changes addressed in the IRS guidance; employers can:

 

  • allow employees to carry over unused money up to the full annual amount from the plan year 2020 to 2021, and also from the plan year 2021 to 2022 for healthcare and dependent care FSAs
  • allow up to a 12-month grace period for employees to incur new expenses and submit claims against unused accumulated funds for plan years ending in 2020 or 2021 for healthcare and dependent care FSAs
  • allow midyear election changes on a prospective basis without a change in status event for plan years ending in 2021 for healthcare and dependent care FSAs
  • allow dependent care reimbursement up to age 14 in cases where an employee’s dependent turned 13 in 2020 and the employee had leftover funds from 2020 (this special carry forward rule helps employees whose dependents “aged out” during the pandemic) for dependent care FSAs
  • allow health FSA participants who stop participating in the plan (ex-employees) during calendar year 2020 or 2021 to continue to receive reimbursements through the end of the year, including grace periods (this post-termination benefit applies to healthcare FSAs, not dependent care FSAs)

 

Further reading: Healthcare And Childcare FSA Fix For 2021, Finally: Special Carry Over Rules And More

Follow me on Twitter or LinkedIn.

I cover personal finance, with a focus on retirement planning, trusts and estates strategies, and taxwise charitable giving. I’ve written for Forbes since 1997. Follow me on Twitter: @ashleaebeling and contact me by email: ashleaebeling — at — gmail — dot — com

Source: IRS Delivers Covid-19 Surprise To Workers:  A Chance To Redo Their 2021 Health Plan And FSA Choices

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An Expert on Getting Fired Shares How to Suck It up and Push Forward

1

Sometimes I get asked about hard decisions I’ve had to make in my career and how I’ve dealt with it. The hardest decisions in my career were the ones that were made for me. Namely, being terminated from a job.

As the effects of COVID-19 continue to unfurl, many promising careers are coming to an abrupt end. Headlines from all over the world are about companies large and small being forced to let employees go. It’s been a jolt to the senses.

I’ve had the “luxury” of getting let go (fired) from the last four companies that employed me. That’s right. I’ve been sacked four times in the last four and a half years. Before you pass judgement, I should note that I’ve over delivered and shattered every goal and benchmark I set from the start. Four years ago I moved from Washington, D.C., and entered the startup scene here in Copenhagen, Denmark. I brought my American work ethic and culture with me.

Regardless of the reasons I was fired—I don’t believe it was ever due to my processes, skills, or results—purpose of this article is to share with you how I’ve managed to spring back faster and stronger from being cut out of my job, time after time. … And how you can, too.

Get a reason.

In most cases, this type of abrupt change has given me a chance to reflect and re-frame my energy toward constructive growth. Self-reflection after being let go from a job is incredibly important. Even if you weren’t a fan of your previous boss or supervisor, there’s almost always a nugget of truth in their reasoning. It’s beneficial for you to consider it from his or her point of view.

I’ve always asked for a meeting a day or two after I sign the termination paperwork so I can gather my thoughts. I try to schedule an hour with my supervisor. And unless you’ve really messed something up, they’re likely to give you time. Why meet again after the initial firing?

Get some certainty: In many cases, you will replay the moments of that final conversation over and over in your head. Take notes on “the why” that led to the decision.

Get the story straight: Make sure that if you’re going to use your recent ex-employer as a reference, they have the right story and agree to give the positive side to your abilities.

Expectations of the future: Maybe you can ask about getting access to documents or files. Maybe there were some email connections you made. It never hurts to ask. The worst they can say is no.

Here are some additional considerations during your post-firing meeting:

Objectivity: Taking the objective route of working your way through thinking about the firing from their perspective can be cathartic.

Humanize it: Think of the person who fired you as a flawed human just like the rest of us and assume he or she made a decision out of something that was based in reason or fairness.

Beyond control: If the firing was only due to economic reasons, then rest assured that this happened through no fault of your own.

Angles: Consider the circumstances from all angles before moving forward. Would colleagues agree with the decision? Would a perfect stranger? Would it matter?

Post firing exercise.

In order to move on fast while growing as an individual and professional, I advise giving the following topics some thought. Write a few bullet points out:

  • Top 3 reasons given for being let go: X, Y, Z
  • Top 3 things I could have done to avoid this: A, B, C
  • Top 3 things I can learn to overcome A, B, C and avoid X, Y, Z are 1, 2, 3

If you couldn’t have changed anything, you’re nearly ready to move on. If you could improve something; save that. This should be the cornerstone of your road map moving forward.

changelly5Also important is to give yourself a reasonable period of time with a specific end date/time in mind where you are no longer going to allow yourself to feel bad about being fired. The last time I was terminated, I gave myself a total of an hour to feel sorry for myself. The first time I got fired I gave myself three days to throw myself a pity party. It’s OK to embrace all of the non-productive “woe is me” thoughts during this time. But once the time limit I set in advance was up, I set my mind into a state of focus on the next steps. Fight the urge to bring up or dwell on negative thoughts. They won’t serve you and won’t change anything.

Create your to-do list.

Step one to moving forward is starting something … anything. Often, the less time you put between your last day and getting back on your journey makes bouncing back much easier.

Focus on completing your to-do list. Put yourself into something that is cathartic but also measurable. Blend it with the three things you need to learn from the earlier bullet point exercise (Remember: X, Y, Z, / A, B, C, and 1, 2, 3). Even if you don’t believe in the reasons for your untimely exit, these points are still somewhat valid. Set a schedule that reflects working hours and begin working through your “to do list.”

Depending on your circumstances, you may feel that some self-improvement is necessary. Go for it. Find out what courses or books might help provide you with the insights and skills you need to take you to the next level. Perhaps even consider meditation if you don’t practice it already. A clear mind is ready for new challenges.

From there, of course, you’ll want to think about creating income. In other words, finding a new job. Spend time updating your resume, portfolio, and LinkedIn profile. While you’re on LinkedIn, consider reaching out to your connections. Someone you know in your industry might already be hiring for your next dream job. Never forget to ask for the job at the end of a meeting for just help in general. I always try to remember to ask people how I can help them for good measure, as well. Create a list of job prospects and keep it updated as your conversations progress.

Be proactive about staying positive.

Finding a new job might happen fast, or it might take some time. What should you do if the negative thoughts persist? Repurpose them into something constructive. Gamify it.

  • I’m not good enough = Work through a tutorial on YouTube and learn a new skill
  • Nobody will hire me = Make three new connections on LinkedIn or apply for three jobs
  • Nobody likes me = Read a chapter of a self-improvement book of your choice
  • I don’t have a network = Go to one event per week (virtual!) and meet three people

What came of my job losses?

I used all of my negative experiences as momentum and pure energy to drive forward. I went all-in on working toward setting meetings and interviews.

And you can do that, too.

After my last firing, I came to terms with my desire to run my own companies again rather than defer to others. Public speaking came first. I landed a ton of talks at meetups, keynotes, and guest lectures. When talking about what I was working on, I had a sense of humor about my job loss and used the opportunity to also mention I was looking for new clients and investment.

Ultimately, I went full in on my digital marketing/growth-hacking agency and proptech startup for architects.

Losing your job is not your identity, so don’t make it into one. Unemployment is temporary.

Remember things always get better when you’re being constructive. Building a to-do list and sticking with it should be your goal for now.

And whatever you do, don’t feed negative thoughts. They grow every time you give them a chance. Use any negative inclinations that spring up as momentum to get more done.

Never be afraid of asking for help. Put yourself out there. I’ve certainly done it here.

By: Taylor Ryan CEO Klint Marketing

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Five Points To Consider When Looking At The Latest Labor Market Data

1

The Bureau of Labor Statistics released its latest estimates for the state of the labor market on August 7. The economy gained 1.8 million jobs in July and the unemployment rate fell to 10.2% in July from 11.1% in June. Still, 16.3 million workers were looking for a job but unable to find one and the unemployment rate stayed at double digits for the fourth month in a row. Moreover, the pace of job gains has markedly slowed from 4.8 million new jobs in June to a little over a third of that rate with 1.8 million new jobs in July.

The U.S. is looking at a deep, prolonged recession with massive economic pain for many workers. The continuation of the labor market picture requires swift and large-scale policy interventions from helping the workers hurt the most by the recession and from further worsening the economic outlook.

Five points are worth highlighting with respect to the latest jobs data.

First, the job market slowdown occurred as many states bungled their pandemic response. Several states rushed to reopen their economies in May, even as the virus’ spread was not under control. Many experienced massive surges in new infections. These surges prompted new public health measures, while people also curbed their own activities. Businesses closed and laid off people anew. Job gains stalled and economic pain deepened in states that had taken fewer precautions to stemming the virus’ spread. It is now abundantly clear that getting the spread of the novel coronavirus under control is key to a sustained economic recovery and to quickly bringing people back to work.

Related: How to start a real estate business by investing of only 500$

Second, this is still a recession that heavily falls on women. White, Latina and Asian women have higher unemployment rates than is the case for White, Latino and Asian men.

This trend reversed, though, among African-American men and women over the spring. Initially, Black women had higher unemployment rates than Black men, but Black men have had higher unemployment rates than Black women in June and July. In July, the unemployment rate for Black men stood at 15.2%, while that for Black women was 13.5%.

Third, all communities of color suffer from higher unemployment than white workers do. The unemployment rate was 14.6% for Black workers, 12.9% for Latinx workers and 12.0% for Asian workers in July 2020. In comparison, the unemployment rate for white workers fell below 10% with 9.2% last month. The difference in unemployment rates by race or ethnicity was thus largest between Black and white workers.

Moreover, the unemployment rate has declined more for white workers than for either Black or Asian American workers. The unemployment rate for white workers dropped by five percentage points from April to July 2020, a little less than the six percentage point drop for Latinx workers. In contrast, the unemployment rate only fell by 2.1 percentage points for Black workers and by 2.5 percentage points for Asian American workers. Slower labor market improvements for African-Americans than for white workers reflect the pattern of “first fired, last hired.” In any recession, Black workers suffer from more widespread, longer-term unemployment than white workers do.

Fourth, people are looking longer for a new job as the deep recession persists. The share of unemployed workers who have permanently lost their jobs grew from 11.1% in April to 22.6% in July. At the same time, the average length of unemployment almost tripled from 6.1 weeks in April to 17.9 weeks in July. As a growing share of workers have difficulties finding a new job amid double-digit unemployment rates, they will face economic hardships such as delayed or deferred rent payments and an inability to regularly pay for food.

Fifth, older workers now have relatively high unemployment rates. The unemployment rate for workers 55 years old and older was 8.8% in July, while that for workers from 35 to 44 years old was 8.1% and that for that for workers from 45 to 54 years old was 7.8%. This is a reversal from prior recessions, when older workers typically had lower unemployment rates than younger ones. Many older workers are staying in the labor market because they often lack savings and have high costs, for instance, from widespread debt and insufficient health insurance.

The Trump administration has abdicated responsibility for identifying and coordinating a national pandemic response. State and local governments have not gotten the pandemic under control in large parts of the country. With the public’s health at a high risk, people are slowing down on their own to protect their health and governments reimpose measures to control the spread of the virus on businesses. Job losses and widespread unemployment continue on a massive scale. To avoid making the recession even worse, Congress will need to quickly provide assistance to unemployed workers, struggling businesses and cash strapped state and local governments at the front line of the efforts to defeat the virus and bring the job market back.

Follow me on Twitter.

I am an economist focusing on retirement security, wealth inequality and economic policy. I care about how people handle economic risks and whether policies to address these risks can help reduce inequality. My research appears both in academic publications and as policy reports for Washington think tanks. I am a professor of public policy at the University of Massachusetts Boston and a senior fellow at the Center for American Progress, Washington, DC.

Source: forbes.com

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Tesla (TSLA) Price Sees Slight Gain as Fremont Workers Set to Return

An ongoing back-and-forth between Tesla (NASDAQ: TSLA) and the state of California seems to have come to a head, as 30% of Tesla workers are now scheduled to return to work at their Freemont, CA plant on May 8 and resume auto production.

The overnight move has had a slight effect on the company’s stock price, which opened the day about 2% higher in today’s U.S. trading. At time of writing, price has continued to increase at a fast clip climbing past $815 already.

The move has come after the governor of California, Gavin Newsom, released a statewide plan on Thursday to begin an incremental return to normal business operations. Part of this “Phase II” loosening includes lifting of some restrictions on the manufacturing sector, which Tesla falls under.

off to a strong start

The cavalcade of news out of Tesla keeps on rolling, as just yesterday CryptoGlobe reported on Tesla CEO Elon Musk’s dramatic claim of selling all his possessions on the Joe Rogan podcast. Also yesterday, several investment analysts called Tesla stock a buy, even amid the challenges of a post-corona world.

This past week was dramatic in general, as tech companies across the board released Q1 earnings reports. One surprise was the 700% uptick in Square’s Bitcoin-derived business, through its money transfer platform Cash App. However, the actual sum is less impressive, amounting to only about $7 million.

Featured Image Credit: Photo via Pixabay.com

By: Colin Muller

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This didn’t drop Tesla (TSLA) stock price; this did. It’s simple. Watch this video to see what really changes the price of product exchanged on the stock market. We’ll also update you on Tesla’s (TSLA) price prediction/forecast. It’s time to stop the confusion. Join Us!!! Join This Elite Group – Sign Up Here: https://www.huefinancial.com Follow us on Twitter @HueFin_News Follow us on Instagram – huefinnews Follow us on Facebook – HueFin News Inquiries: contact us at huefinnews@gmail.com Here at HueFin News we will show you that you do not need to buy expensive charting software or use indicators to understand where the market is going. The cryptocurrency market, stock market, and commodities market all speak through the charts. It is a language and it is spoken through volume and bars. It is our purpose to give you market analysis and news that is not confusing. In order to be a profitable trader you have to PREDICT with HIGH CONFIDENCE where price is LIKELY to move. Understanding market language will allow you see where price is going to move with high precision. That’s why we are giving you news (before it happens) according to the charts. Article: https://techcrunch.com/2019/04/26/elo… Make sure you subscribe to this channel to get a better understanding of the market without indicators, shapes, patterns, or expensive software. Also, leave a comment if you have any questions. HueFin News will also speak on topics that are important to you. Some topics include: cryptocurrency news, gold, silver, oil, fiat currencies, fintech, stocks, economic metrics, day trading, swing trading, FOREX, and many other topics that we feel is vital to your profitability in the financial markets. **This is not investment advice** **Trading involves risk** **This is for educational purposes only** #tesla #stockmarket #elonmusk

Coronavirus Layoffs: A Running List Of Job Losses Caused By The Pandemic

Topline: As the coronavirus pandemic wipes out markets, closes schools and colleges, suspends major conferences, sports leagues and cultural events as well as upends the travel industry, businesses losing out on cash flow have started laying off workers.

Here’s who’s axed staff so far:

  • Norwegian Air said Thursday that it would temporarily lay off up to 50% of its workforce (and suspend 4,000 flights) due to the pandemic.
  • 50 employees of music and culture festival South By Southwest were let go after this year’s event was canceled, the Washington Post reported.
  • The Port of Los Angeles let go of 145 drivers after ships from China stopped arriving.
  • Christie Lights, an Orlando, Florida, based stage lighting company, laid off 100 employees.
  • HMSHost, a Seattle, Washington, global restaurant-services provider said it would lay off 200 people and an area corporate shuttle service would lay off 75, HuffPost reported, while an area hotel chain eliminated an entire department, according to the Post.
  • Travel agencies in Los Angeles, California, along with Atlanta, Georgia, had to let employees go as the pandemic battered their industry.
  • Aid workers in Las Vegas are reportedly seeing a surge in requests for food assistance and other help as events and trade shows get canceled.

What to watch for: If any U.S. airlines end up laying off workers. Delta Airlines said Tuesday it was cutting flights and freezing hiring. American Airlines is also cutting flights, and delaying trainings for new flight attendants and pilots. Reuters reported Thursday that jobless claims are down for the week, but coronavirus-related layoffs are likely on the horizon.

Big number: 2,352 points. That’s how far the Dow Jones Industrial Average plummeted Thursday, which is a 10% drop. The S&P 500 fell 9.5%, while the Nasdaq Composite sank 9.4%.

Key background: There are now more than 1,300 reported coronavirus cases in the U.S. and at least 38 deaths, according to data from Johns Hopkins University. Worldwide cases now amount to almost 128,000 infected and more than 4,700 dead. Meanwhile, Congress is in conflicted talks over a coronavirus relief bill that may not pass this week, while New York and other state governments begin to implement bans on large gatherings to stem the spread of disease. Cancelations of concerts, sports leagues, festivals, religious gatherings and other large events have impacted millions of people. At least 135 colleges have so far canceled in-person classes. On Wednesday night, President Trump announced a 30 day travel ban from Europe (excluding the U.K. and Ireland) that sent airlines and travelers scrambling to adjust.

Follow me on Twitter. Send me a secure tip.

I’m a New York-based journalist covering breaking news at Forbes. I hold a master’s degree from Columbia University’s Graduate School of Journalism. Previous bylines: Gotham Gazette, Bklyner, Thrillist, Task & Purpose and xoJane.

Source: Coronavirus Layoffs: A Running List Of Job Losses Caused By The Pandemic

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Andy Challenger of Challenger, Gray and Christmas, a global outplacement and career transitioning firm, joins ‘Power Lunch’ to discuss the four waves of layoffs they see happening as a result of the coronavirus impact. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://www.cnbc.com/pro/?__source=yo… » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

Retail Workers Are Trying to Escape the ‘Merry-Go-Round’

February 17, 2019 – Orlando, Florida, United States – A Payless ShoeSource store is seen in Orlando, Florida on February 17, 2019, the first day of the firm’s liquidation sale after confirming on February 15, 2019 that it will close its 2,100 stores in the U.S. and Puerto Rico. The company filed bankruptcy in 2017 and closed 673 stores. (Photo by Paul Hennessy/NurPhoto via Getty Images)

Sue Reich worked for 27 years at Shopko, a Midwest retailer that sold clothing, shoes, housewares, and electronics, until, one day, her employer didn’t exist anymore. Shopko, which employed 14,000 people across 26 states, filed for bankruptcy last year and closed all its stores last summer after it couldn’t find a buyer.

The same story is happening across the country as the retail apocalypse continues. In 2019, retailers including Payless ShoeSource, Dress Barn, and Barney’s closed 9,200 stores; Payless alone cut 16,000 jobs. Already this year, chains including Macy’s, Pier 1, and Fairway have announced closures and layoffs. Employment in retail in January was down 8 percent from the same time last year, according to new Bureau of Labor Statistics (BLS) data released Friday morning, at the same time, jobs in transportation and warehousing, industries critical for e-commerce, were up 28 percent. Department stores have shed 241,000 employees in the last five years, according to BLS data, and clothing stores cut 67,000 jobs.

But there is no national outcry as workers like Reich lose their jobs, no movement to protect the people being thrust out of work, calling for an end to store closures, or to find funding to ensure these workers end up in better jobs. Sure, there was a @SaveBarneys campaign, but it traded on nostalgia, featuring vintage TV spots and magazine ads, rather than on concern for workers, and it failed. The high-end retailer, which filed for bankruptcy last year, was sold to Authentic Brands Group, which started closing and liquidating stores in November.

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Compare this with the commotions that have surrounded smaller job losses in industries such as manufacturing or mining. When Carrier, an air-conditioning company, said it was moving 1,400 jobs to Mexico, then-candidate Donald J. Trump seized on the issue in his stump speech and eventually struck a deal to keep some of the jobs in Indiana. “We hear politicians talk about the loss of factories and manufacturing and mining, but there has not been the same level of outcry around the loss of retail jobs,” says Nicole Mason, the president of the Institute for Women’s Policy Research, a think tank based in Washington, D.C..

“I would conjecture that one of the reasons we’re not talking about it is that it impacts predominantly women.” Nearly 80 percent of cashiers were women in 2018, according to IWPR data. As online shopping grows, and employment in warehouses grows, retail jobs for women are shrinking, while men’s jobs are growing — an IWPR analysis found that the retail industry lost 54,300 jobs between 2016 and 2017; over that time, women lost 160,300 jobs while men gained 106,000.

In the past, when factories shut down or jobs moved overseas, the government stepped in to protect workers who lost their jobs. The federal Trade Adjustment Assistance (TAA) program, first authorized in 1962 and expanded in 1974, 2002, and 2009, assists workers whose jobs have been displaced because of trade; it offers training subsidies and a weekly income for people who have run out of unemployment benefits.

Workers over 50 who find new jobs at a lower wage than they’d been making can also receive money from a wage insurance program to supplement their new income. But those funds aren’t available to retail workers. “Because they weren’t trade-affected, they can’t get that monthly stipend,” says Liz Skenandore, a career services specialist at Great Lakes Training and Development in Wisconsin, who deals with a steady flow of laid-off retail workers. “It would be ideal, if there was a ‘you were affected due to the internet’ category.”

Similarly, in the 1980s, after a series of factory shutdowns in the Rust Belt, a group of Ohio legislators pushed for the WARN Act, which required employers to give advance notice of mass layoffs and plant closings and to pay back wages if they did not provide that warning. Around the same time, under pressure from unions, Congress created Manufacturing Extension Partnership programs, which use federal, state, and private dollars to retrain displaced manufacturing workers for jobs in high-demand fields.

Another thing Sue Reich didn’t receive when she was laid off from Shopko: severance pay. She spent decades working for the company, and says she was told that if she worked through the store’s liquidation, she’d receive severance. But Shopko never paid Reich or workers like her anything beyond a small sum for vacation days they hadn’t taken. “It’s been challenging every month,” says Reich, who scrambled to find another job and now works part-time at a credit union, though it has not turned into full-time work as she had hoped.

Her husband, a saw operator at a factory, is working overtime so the family can pay its bills. In contrast, the thousands of workers who have lost jobs at places such as General Motors and Ford over the past year have received months of severance pay based on the amount of time they had worked at the companies. Sun Capital, a private equity firm that owned Shopko, did not respond to TIME’s request for comment.

It’s no accident that there are government policies protecting workers in industries such as manufacturing. These are industries that have long been unionized, and in the 1980s and 1990s, as the United States negotiated trade deals such as NAFTA, unions worked with elected officials from districts that were in danger of losing factories, says Kate Bronfenbrenner, a professor at Cornell University’s School of Industrial and Labor Relations. They made sure that any trade deal included programs to help workers who would be displaced. To sell the trade deal, Congress had to agree to fund worker retraining and subsidy programs. Lawrence Katz, a Harvard economist who served in the Labor Department under President Clinton, says the administration tried to introduce a universal dislocated worker training program in the 1990s that would have helped retrain any displaced worker, but couldn’t get widespread support.

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But retail is disappearing not because of a trade deal, but because the way consumers buy things is changing. Tech companies like Amazon didn’t have to negotiate with Congress to be able to sell things online; they could just start doing it. That’s meant that there is no constituency that must make sure retail workers end up on their feet in order to get a bill passed. “When people lose their jobs in the service sector and retail sector, those are women and people of color, and there is no Congressional constituent for them like the ones that were negotiating the trade bill,” Bronfenbrenner says.

Factory shutdowns are visually jarring; hulking. Abandoned factories dot landscapes across the United States; in Detroit, entrepreneurs made a business out of giving tours of the ruin. Retail’s meltdown is also visually jarring, but is hidden inside America’s malls. TIME recently walked through a mall in Green Bay, Wisconsin that had lost a Shopko and Payless store, and there were twice as many vacant stores as operating ones. The lights were off in large sections of the mall that were blocked off with crime tape, and the only foot traffic was women in workout clothes walking the long, wide corridors for exercise in the cold winter months.

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As more sudden retail layoffs happen, Jack Raisner, a professor of law at St. John’s University, says he sees an opening for states or the federal government to pass more protections for retail workers. He recently helped New Jersey pass a bill that updates the WARN Act to apply to more retail workers, which he hopes will inspire similar bills in other states. The New Jersey bill, which was signed into law last month, was a response to mass layoffs that left hundreds of Toys “R” US workers who had worked through the holidays with the promise of severance without any such pay, he says. It says that any company that employees at least 50 people in the state is required to give 90 days notice of a mass layoff; without such notice, it must pay all laid-off workers at least four weeks of back pay.

If they don’t give 90 days notice, employers must also pay terminated employees one week’s pay for every year they’ve worked there. “Putting people out on the street after years of service without anything is a horror and a tax on the public,” says Raisner. He also worked with Senators Sherrod Brown of Ohio and Chuck Schumer of New York to craft the Fair Warning Act of 2019, which would update the WARN Act nationally. The bill was introduced in November. “The anxiety over these layoffs is unabated despite what everyone says about this economy,” Raisner says. “I think there’s a real grassroots movement interested in something happening about this.”

Though business owners in New Jersey say that the state’s new law will deter companies from coming to the state, broader protections for retail workers in the form of retraining or re-education programs could be good for the larger economy. As technology changes the nature of work, people who get more education or increase their skills are best positioned to do the types of jobs that computers and robots can’t yet do. This in turn grows the nation’s productivity rate, and its economy. Now, technological change is happening faster than ever before; McKinsey estimates that by 2030, growing automation will mean that as many as 375 million workers (14 percent of the global workforce) will need to switch occupational categories.

In retail, where the average hourly wage for people who aren’t managers is just $16.86, laid-off workers don’t have the resources to stop working for six months or two years to get a certification or degree in another industry. “For the most part, these workers are living paycheck to paycheck, and the idea of being without a job is scary,” says Anthony Snyder, the chief executive officer of the Fox Valley Workforce Development Board in Northeast Wisconsin, which helps laid-off workers find new jobs. That’s why many retail workers are on what Snyder calls the “retail merry-go-round,” where their employer dissolves or closes down, they find another retail-related job, and then get laid off from it, too.

Amanda Padgett has been on this merry-go-round for years. Padgett, a 36-year-old mother of two, was laid off from Shopko last year. Before that, she worked at an ice cream store and a call center for a national retail chain that laid off all its employees. With each layoff, she has wanted to go back to school and get a degree in something that would get her out of retail—maybe learning to become a medical coder or a radiology tech. But as long as she needs to pay the rent, put food on the table and take care of her kids, she needs to bring in a paycheck, so she finds herself in another low-wage job, making minimum wage, until it, too ends. When she heard the rumblings last year that Shopko was closing, Padgett says, “all I could think was, ‘here we go again.’”

The United States has systematically disinvested in resources that would help low-wage workers without a big financial cushion go back to school. Federal investments in workforce training have fallen 40 percent over the past 15 years, when adjusted for inflation, according to the National Skills Coalition, a group that advocates for worker training. This means many federally funded job centers only offer perfunctory classes such as building a resume or using a computer, rather than the type of longer-term interventions that typically help people switch careers, says Amanda Bergson-Shilcock, a senior fellow at the National Skills Coalition.

“You have a lot of workforce boards trying to figure out what interventions they can provide that are meaningful to the lives of workers and responsive to the needs of the industry,” says Bergson-Shilcock. “But at the same time, they’re doing it with less and less money from the federal level.”

There are some scattershot examples of states trying to help retail workers specifically. In Wisconsin, a grant for laid-off retail workers will pay for tuition for retraining in high-demand fields as well as help with mortgage payments and cover books, transportation, and child-care. It’s helped people like Ginger Gillis, 42, who did data entry for Shopko for 14 years until the company closed. Gillis always wanted to go back to school but never could make the financials work; she’s now getting an associate’s degree in Architectural Technology from Northeast Wisconsin Technical College. But Gillis has an advantage: her husband has a good job, which means she doesn’t have to worry about having an income while she’s going back to school. Many retail workers “don’t have a nest egg, so they run into the next retail job before we can even talk to them,” says Snyder, of the Fox Valley Workforce Development Board. Only 27 of the 400 dislocated retail workers in his district have taken advantage of the grant, and even then, he’s run out of money to give out. “There is not enough money to serve everyone we’d like to serve with the greatest investment,” he says.

Other countries have much more robust safety nets for laid-off workers, whether in retail or other fields. In Canada, workers whose jobs are eliminated in mass layoffs are guaranteed termination pay if their employer doesn’t give at least eight weeks’ notice, and severance pay if they have worked for an employer for five or more years. In European countries like Sweden, laid-off workers receive financial support, a job counselor, and money for retraining, provided they are members of a union, which about 70 percent of Sweden’s workers are.

In the United States, those types of strong supports are almost only available to workers in a union, which is a shrinking share of the workforce (just 10.3 percent of American workers were members of a union in 2019.) But those unionized workers are reaping the benefits. Some partnerships between labor and management have started training low-wage workers for new positions before they even lose their jobs. In the Building Skills Partnership in California, a local union struck a deal with dozens of businesses, agreeing that the businesses could take a small amount out of workers’ paychecks to fund retraining efforts. UNITE-HERE, a union that represents service workers in Las Vegas, bargained with casinos such as MGM Resorts International to require that they alert the union to new technology being used and guarantee job training for all displaced workers.

The question now is whether the government will step in to protect retail workers as it did manufacturing workers, even though retail is not unionized. Economists largely agree that retail is about to go through what manufacturing did, says Anthony Carnevale, the director of Georgetown’s Center on Education and the Workforce. Manufacturing was once one-third of the workforce; now it’s eight percent. “There’s no question,” he says, “that retail is up next.”

By Alana Semuels February 7, 2020

Source: Retail Workers Are Trying to Escape the ‘Merry-Go-Round’

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Older Workers Need Further Labor Market Improvements

Older workers in particular need the labor market to continue its growth streak. Employers added 312,000 new jobs in December 2018, according to the Bureau of Labor Statistics. This is welcome news, but the labor market needs to continue improving, so that older workers will see real economic security. Additional job gains could make it easier for unemployed older workers to find a new job. And continued job market growth could further shrink inequalities in job market outcomes for older workers, for instance, by race and ethnicity…..

Source: Older Workers Need Further Labor Market Improvements

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