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Top five Valentine’s Day gifts ideas for U.S. workers: Nothing spells ‘romance’ like a fair wage and quality jobs

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That’s why we decided to sum up what we think are the top five Valentine’s Day gifts ideas for working people across the country.

Power through collective action!

Our economy is out of balance. Corporations and CEOs hold too much power and wealth, and working people know it. Workers are mobilizing, organizing, protesting, and striking at a level not seen in decades, and they are winning pay raises and other real change by using their collective voices.

But, the fact is, it is still too difficult for working people to form a union at their workplace when they want to. The law gives employers too much power and puts too many roadblocks in the way of workers trying to organize a union. The Protecting the Right to Organize (PRO) Act will go a long way toward restoring workers’ right to join together to bargain for better wages and working conditions by streamlining the process when workers form a union, ensuring that they are successful in negotiating a first agreement, and holding employers accountable when they violate labor law. The U.S. Senate should join the House of Representatives and pass the PRO Act in order to restore power to working people.

Affording bread…and roses

The real (inflation-adjusted) minimum wage is now roughly 30 percent lower than it was in 1968, and it has been more than 10 years since congress raised the minimum wage—the longest stretch in history. To end this shameful streak, it is incumbent upon the Senate to take up and pass the Raise the Wage Act immediately. Raising the federal minimum wage to $15 by 2025 would lift wages for 33.5 million workers across the country—more than one-fifth of the wage-earning workforce. The increase would boost total annual wages for these low-wage workers by $92.5 billion, lifting annual earnings for the average affected year-round worker by $2,800. Recent survey data have shown that 74% of U.S. workers live paycheck to paycheck. Policymakers should give working people the ability to make ends meet—but also the ability to treat themselves occasionally.

Figure A

Pay workers for their hours worked, or give them their time back

The U.S. Department of Labor announced in September its final overtime rule, which will set the salary threshold under which salaried workers are automatically entitled to overtime pay to $35,568 a year. The rule leaves behind millions of workers who would have received overtime protections under the much stronger rule, published in 2016, that Trump administration chose to abandon. A stronger overtime protection would pay more workers for working more than 40 hours a week, or allow them extra time with their families.

Seven states have already taken steps to raise the overtime threshold, but without further action, it’s estimated that 8.2 million workers who would have benefited from the 2016 rule will be left behind by the Trump administration’s rule, including 3.2 million workers who would have gotten new overtime protections under the 2016 rule and 5.0 million who would have gotten strengthened overtime protections under the 2016 rule. States should follow suit and extend the overtime protections so workers don’t continue to lose out on their hard-earned wages.

Let your workers move on

At least 36 million workers—27.8% of the private-sector workforce—are required to enter noncompete agreements. Noncompete agreements are employment provisions that ban workers at one company from going to work for, or starting, a competing business within a certain period of time after leaving a job. Establishments with high pay or high levels of education among workers are more likely to use noncompetes, but noncompetes agreements are also common in workplaces with low pay and low levels of education. More than a quarter (29.0%) of private-sector workers with an average hourly wage below $13.00 require noncompetes for all their workers. Noncompetes are part of a disturbing trend of employers requiring workers to sign away their rights. Noncompetes may be contributing to weak wage growth, given that changing jobs is how workers often get a raise. And given that noncompetes limit the ability of individuals to start businesses or take other jobs, it also is not difficult to see that noncompetes may be contributing to the declines in dynamism in the U.S. labor market. Congress should pass the bipartisan legislationthe Workforce Mobility Act of 2019to prohibit noncompete agreements.

Labor protections for Uber drivers shuttling around Valentine’s couples

The General Counsel of the National Labor Relations Board recently released a memo claiming that Uber drivers are independent contractors, not employees of Uber. The reality is that these drivers have very little entrepreneurial freedom: Drivers can’t raise revenues because they can’t control prices or expand their customer base through marketing. Unlike a typical enterprise, Uber drivers do not build earnings as they get more experience. Uber drivers are not able to choose their customers—drivers are penalized for rejecting or not accepting trips. And after accounting for Uber’s commissions and fees and vehicle expenses, and taking into account the cost of a modest package of health insurance and other benefits equivalent to those earned by W-2 workers, Uber drivers earn the equivalent of $9.21 in hourly wages—less than what is earned by 90% of all other wage and salary earners, and below the minimum wage in 13 of the 20 major urban markets where Uber operates.

Recently, AB5 went into effect in California, a set of protections aimed at combatting the misclassification of workers as independent contractors, helping ensure that California’s employees have access to basic labor and employment protections denied to independent contractors including: minimum wage and overtime protections, paid sick days and family leave, workers’ compensation benefits, and unemployment insurance benefits. Policymakers across the country should take notice and provide similar protections to workers in their states.

 



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What is Driving Markets?

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I have been mulling over a somewhat contrarian theory as to why the US markets seem to have decoupled from the U.S. economy. I have a commentary with lots of data on this coming Monday, but I wanted to discuss the evolution of my thinking about it today.

I began by asking the Fintwit community what they thought was driving markets, culled from some of the more popular tweets on the topic:

I was genuinely surprised about the response to that tweet; here is the FinTwit community reaction:

About 60% credited “The Fed” for the market rally off of the lows, while 30% believe it is a bubble; in the comments, more than a few people suggested it was both: a Fed induced bubble.

One option I considered was “Investors are looking past 2020 to 2021/22” (but I swapped it out as too nuanced and replaced it with “Bubble!”).

I half-jokingly noted that no one had suggested “Buybacks,” which if you can remember all the way back to 2019 was a popular explanation for what was driving markets over the prior 5-10 years. Suggestions to add “All of the Above” was thwarted by Twitter’s 4 choice limit for polls, but I think that is as valid an answer as any.

The biggest shock to me: No one whatsoever brought up anything related to “international” in any capacity. No one mentioned overseas regions are the biggest source of revenue for America’s biggest technology companies (and 42% of the S&P500).

I pulled this data form the most recent 10ks for the 6 FAANMG stocks — and it is pretty compelling.

 

The other item no one thought to mention:  How much better the rest of the world is doing than the US in managing its pandemic — in terms of handling the lockdown, communicating the importance of masks and social distancing, in re-opening. Germany and South Korea and Japan, and yes, even China, have all managed this crisis much, much better than we have.

I pointed this out in a tweet Monday, and (again) I was surprised by the responses. A handful of trolls on the other side of the argument, but generally, widespread support.

The difference between the two tweets is the poll at top was read by a financial audience, while this tweet was pushed into a political audience, thanks to retweets by George Conway, Rick Wilson, and the Mooch.

In finance, all of us tend to bring our confirmation bias to the table, typically reflecting our portfolios. But the political audience are hard core believers, and exist in a bubble within which it is very difficult to change any minds.

My job is to bridge the gap between these two disparate belief systems — politics and financial — to see if I can adhere to Ray Dalio’s prime directive to investors: “There is nothing more important than understanding how reality works and how to deal with it.

Say what you will about confirmation biases in finance, but all of us have the ability to cover a short and go long. We each change our portfolio allocations, we sell long held beloved companies. Buying and selling often reflect a change of perspective. The feedback loop in investing is very short — buy or sell something, and you usually know if you are right or wrong in a matter of days or weeks, if not hours.

That feedback loop in politics is decades, and it does not tend to encourage circumspection and thought when we are in error.

Mr. Market is cruel but fair, and intolerant of losing positions.

This is the real genesis of the upcoming analysis. See it here on Monday.

 

Lots of charts after the jump…

 


FAANMG Stocks (group) vs S&P500 March 23 lows to present

Source: YCharts
FAANMG Stocks (group) vs S&P500 2015 to present

Source: YCharts

 

FAANMG Stocks (individual) vs S&P500 2015 to present

Source: YCharts

 

FAANMG Stocks (individual) vs S&P500 March 23 lows to present

Source: YCharts

 

The post What is Driving Markets? appeared first on The Big Picture.



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Market Talk – July 10, 2020

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ASIA:

The United States has imposed sanctions on three senior officials of the Chinese Communist Party, including a member of the ruling politburo, for alleged human rights abuses targeting ethnic and religious minorities in the western part of the country. The decision to bar the three senior officials from entering the US is the latest in a series of actions the Trump administration has taken against China as relations deteriorate over the coronavirus pandemic, human rights, Hong Kong, and trade.

The United States is in talks with India on market access for its goods in exchange for reinstating New Delhi’s trade concessions under the Generalized System of Preferences (GSP), U.S. ambassador to India Kenneth Juster said on Thursday. Last year, the US scrapped India’s trade concessions under the GSP program that allowed duty-free entry to the US market for up to $5.6 billion of Indian exports in retaliation for India’s high tariffs and rules on e-commerce.

Indian state-owned lender, Punjab National Bank, said on Thursday it had reported loans made to Dewan Housing Finance Corporation Ltd worth 36.89 billion rupees ($491 million) to India’s central bank as “fraud.” Indian state-owned lender PNB, which was hit by a $2 billion fraud involving billionaire Nirav Modi in 2018, had already set aside 12.5 billion rupees in provisions for the loans to DHFL, which is in bankruptcy proceedings. Other banks including State Bank of India and Union Bank have also reported DHFL’s accounts as fraudulent.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 238.48 points or -1.06% to 22,290.81
  • Shanghai decreased 67.27 points or -1.95% to 3,383.32
  • Hang Seng decreased 482.75 points or -1.84% to 25,727.41
  • ASX 200 decreased 36.30 points or -0.61% to 5,919.20
  • Kospi decreased 17.65 points or -0.81% to 2,150.25
  • SENSEX decreased 143.36 points or -0.39% to 36,594.33
  • Nifty50 decreased 45.4 points or -0.42% to 10,768.05

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00141 or -0.20% to 0.69463
  • NZDUSD increased 0.0001 or 0.01% to 0.65707
  • USDJPY decreased 0.29 or -0.27% to 106.92
  • USDCNY increased 0.01336 or 0.19% to 7.01052

Precious Metals:

  • Gold decreased 7.10 USD/t oz. or -0.39% to 1,796.95
  • Silver decreased 0.02 USD/t. oz or -0.12% to 18.6465

Some economic news from last night:

China:

China Thomson Reuters IPSOS PCSI (Jul) increase from 67.89 to 72.52

Japan:

M2 Money Stock (YoY) increased from 5.1% to 7.2%

PPI (MoM) (Jun) increased from -0.5% to 0.6%

PPI (YoY) (Jun) increased from -2.8% to -1.6%

Thomson Reuters IPSOS PCSI (Jul) increased from 33.63 to 33.82

New Zealand:

Electronic Card Retail Sales (YoY) (Jun) increased from -6.0% to 8.0%

Electronic Card Retail Sales (MoM) (Jun) decreased from 78.9% to 16.3%

Some economic news from today:

China:

M2 Money Stock (YoY) (Jun) remain the same at 11.1%

New Loans (Jun) increased from 1,480.0B to 1,810.0B

Outstanding Loan Growth (YoY) (Jun) remain the same at 13.2%

India:

FX Reserves, USD increased from 506.84B to 513.25B

Cumulative Industrial Production (May) decreased from -0.70% to -45.80%

Industrial Production (YoY) (May) increased from -57.6% to -34.7%

EUROPE/EMEA:

The UK government has relaxed quarantine rules for travelers from a number of destinations, including France, Italy, Belgium, Germany, and Spain. From July 10, visitors arriving in England from 58 selected countries will no longer be required to self-isolate for 14 days. The US, China, and Portugal are among the destinations that have been left off the list, which is to be kept “under constant review.”

A British-Palestinian MP and staunch opponent of Donald Trump’s Middle East peace plan is running for the leadership of one of Britain’s main political parties after its dismal showing in the 2019 general election. Layla Moran – born to a British diplomat father and Palestinian mother from Jerusalem – is in a two-horse race to head the Liberal Democrats, the fourth largest party in the UK Parliament.

German lawmakers have finalized the country’s long-awaited phase out of coal as an energy source, backing a plan that environmental groups say is not ambitious enough and free marketers criticize as a waste of taxpayers’ money. Bills approved by both houses of the German parliament on Friday envision shutting down the last coal-fired power plant by 2038 and spending about 40 billion euros ($45 billion) to help affected regions cope with the transition.

France, the second-biggest economy in the European Union, returned to growth this month even as activity in the rest of the region continued to decline. The $3 trillion French economy grew this month for the first time since February, as coronavirus restrictions were eased and domestic consumption ticked up, according to a closely-watched survey. An initial reading of the country’s Purchasing Managers’ Index, which tracks activity in the manufacturing and services sectors, jumped to 51.3 in June from 32.1 in May. Readings above 50 indicate an expansion.

The major Europe stock markets had a green day:

  • CAC 40 increased 49.47 points or 1.01% to 4,970.48
  • FTSE 100 increased 45.79 points or 0.76% to 6,095.41
  • DAX 30 increased 144.25 points or 1.15% to 12,633.71

The major Europe currency markets had a green day today:

  • EURUSD increased 0.00102 or 0.09% to 1.13004
  • GBPUSD increased 0.00216 or 0.17% to 1.26303
  • USDCHF increased 0.0008 or 0.08% to 0.94101

Some economic news from Europe today:

Norway:

Core CPI YTD (Jun) increased from 3.0% to 3.1%

Core Inflation (MoM) (Jun) increased from 0.1% to 0.4%

CPI (YoY) (Jun) increased from 1.3% to 1.4%

CPI (MoM) (Jun) remain the same at 0.2%

PPI (YoY) (Jun) increased from -17.5% to -14.4%

Italy:

Italian Industrial Production (YoY) (May) increased from -43.4% to -20.3%

Italian Industrial Production (MoM) (May) increased from -20.5% to 42.1%

France:

French Industrial Production (MoM) (May) increased from -20.6% to 19.6%

US/AMERICAS:

In a landmark ruling, the US Supreme Court has declared nearly half of the state of Oklahoma to be an Native American Indian reservation. The 5-4 ruling was based on a promise to the Muscogee Creek Nation prior to Oklahoma becoming an official state. “Today we are asked whether the land these treaties promised remains an Indian reservation for purposes of fed­eral criminal law. Because Congress has not said otherwise, we hold the government to its word,” Justice Neil Gorsuch stated. Dissenting Justice John Roberts warned that the ruling would impact the government’s ability to prosecute crimes and “may destabilize the governance of vast swathes of Oklahoma.”

Today, China rejected the proposal for a nuclear arms discussion with the US, with Foreign Ministry spokesperson Zhao Lijian claiming the US was “neither serious nor sincere.” China currently possesses the third-largest nuclear arsenal behind the US and Russia. The Chinese government faulted the US for allowing Russia to propose an extension of the New START treaty that limits the number of nuclear weapons but is set to expire in February. Although the Trump administration would like China to participate in discussions, spokesperson Lijian confirmed, “China’s objection to the so-called trilateral arms control negotiation is very clear, and the US knows it very well.”

The coronavirus outbreak that originated in Wuhan, China, has “severely damaged” US-China relations, President Trump stated this Friday. The US president declared that phase two of the prolonged trade deal is no longer a top priority, as the world is still recovering from the economic damage caused by the outbreak. Furthermore, the president allegedly stated that China had the ability to stop the spread of the virus but chose not to do so.

Police chiefs in Canada are asking the federal government to decriminalize recreational drug use. The Canadian Association of Chiefs of Police believes the matter should be considered a health crisis rather than a criminal offense, and reframing the act could lead to a decrease in overall drug usage, deaths, and drug-induced crimes.

According to Statistics Canada, 953,000 jobs were added to the Canadian economy in June. The total accounts for 488,000 full-time and 465,000 part-time jobs. The current unemployment rate sits at 12.3%, down from 13.7% in May. However, Statistics Canada noted that the real unemployment rate is closer to 16.3% as they did not include those who were not actively seeking employment.

US Market Closings:

  • Dow advanced 369.21 points or 1.44% to 26,075.30
  • S&P 500 advanced 32.99 points or 1.05% to 3,185.04
  • Nasdaq advanced 69.69 points or 0.66% to 10,617.44
  • Russell 2000 advanced 23.76 points or 1.70% to 1,422.68

Canada Market Closings:

  • TSX Composite advanced 145.18 points or 0.93% to 15,713.82
  • TSX 60 advanced 9.67 points or 1.03% to 945.35

Brazil Market Closing:

  • Bovespa advanced 871.50 points or 0.88% to 100,031.83

ENERGY:

The oil markets had a green day today:

  • Crude Oil increased 0.91 USD/BBL or 2.30% to 40.5300
  • Brent increased 0.84 USD/BBL or 1.98% to 43.1900
  • Natural gas increased 0.025 USD/MMBtu or 1.40% to 1.8080
  • Gasoline increased 0.0288 USD/GAL or 2.30% to 1.2795
  • Heating oil increased 0.0171 USD/GAL or 1.40% to 1.2400

The above data was collected around 15:00 EST on Friday.

  • Top commodity gainers: Lumber (7.41%), Cotton (2.43%), Copper (2.55%), and Canola (3.80%)
  • Top commodity losers: Bitumen (-2.63%), Corn (-3.14%), Ethanol (-6.45%), and Coffee (-2.87%)

The above data was collected around 15:05 EST on Friday.

BONDS:

Japan 0.02%(-0bp), US 2’s 0.15% (-0bps), US 10’s 0.62%(+2bps); US 30’s 1.31%(-0bps), Bunds -0.46% (+3bp), France -0.13% (+1bp), Italy 1.31% (+2bp), Turkey 12.39% (+2bp), Greece 1.27% (+16bp), Portugal 0.45% (+2bp); Spain 0.44% (+10bp) and UK Gilts 0.16% (+0bp).

 

  • Italian 12-Month BOT Auction decreased from 0.014% to -0.124%

 



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Extending the $600 weekly unemployment boost would support millions of workers: See updated state unemployment data

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The U.S. Department of Labor (DOL) released the most recent unemployment insurance (UI) claims data yesterday, showing that another 1.4 million people filed for regular UI benefits last week (not seasonally adjusted) and 1.0 million for Pandemic Unemployment Assistance (PUA), the new program for workers who aren’t eligible for regular UI, such as gig workers. As of last week, more than 35 million people in the workforce are either receiving or have recently applied for unemployment benefits—regular or PUA.

Figure A and Table 1 show the total number of workers who either made it through at least the first round of regular state UI processing as of June 27 (these are known as “continued” claims) or filed initial regular UI claims during the week ending July 4. Three states had more than one million workers either receiving regular UI benefits or waiting for their claim to be approved: California (3.1 million), New York (1.7 million), and Texas (1.4 million). Seven additional states had more than half a million workers receiving or awaiting benefits.

While the largest U.S. states unsurprisingly have the highest numbers of UI claimants, some smaller states have larger shares of the workforce filing for unemployment. Figure A and Table 1 also show the numbers of workers in each state who are receiving or waiting for regular UI benefits as a share of the pre-pandemic labor force in February 2020. In four states and the District of Columbia, more than one in six workers are receiving regular UI benefits or waiting on their claim to be approved: Hawaii (19.7%), Nevada (19.3%), New York (17.8%), District of Columbia (17.6%), and Oregon (17.0%).

Figure A

Figure A and Table 2 show the total number of workers who either made it through at least the first round of PUA processing—the new federal program that extends unemployment compensation to workers who are not eligible for regular UI but are out of work due to the pandemic—by June 20 or filed initial PUA claims during the weeks of June 27 or July 4. We do not sum the PUA claims with regular UI claims because some states have misreported PUA claims in their initial claims data, leading to potential double counting.1

As of last week, DOL reported that over 15 million workers across 48 states and the District of Columbia are receiving or waiting on a decision for PUA benefits, which underscores the importance of extending benefits to those who would otherwise not have been eligible. Five states have at least a million workers in this category: Pennsylvania (3.0 million), Arizona (2.3 million), California (1.9 million), Michigan (1.1 million), and New York (1.1 million). New Hampshire and West Virginia still have not reported any PUA claims. Florida, Georgia, and Oklahoma have reported initial PUA claims, but have yet to report any continuing claims.

We should despair for the millions who have lost their jobs and for their families, and our top priority as a country should be protecting the health and safety of workers and our broader communities by paying workers to stay home when possible, whether that means working from home some or all of the time, using paid leave, or claiming UI benefits. When workers are providing absolutely essential services, they must have access to adequate personal protective equipment (PPE) and paid sick leave. The current spike in coronavirus cases across the country—and subsequent re-shuttering of certain businesses—show the devastating costs of reopening the economy prematurely.

As we look at the aggregate measures of economic harm, it is also important to remember that this recession is deepening racial inequalities. Black communities are suffering more from this pandemic—both physically and economically—as a result of, and in addition to, systemic racism and violence. Both Black and Hispanic workers are more likely than white workers to be worried about exposure to the coronavirus at work and bringing it home to their families. These communities, and Black women in particular, should be centered in policy solutions.

To mitigate the economic harm to workers, Congress should extend the across-the-board $600 increase in weekly unemployment benefits well past its expiration at the end of July. If Congress does not extend these benefits through next year, it could cost us more than 5 million jobs and $500 million in personal income. Figure B, at the end of this post, shows these expected job losses by state.

As part of the next federal relief and recovery package, Congress should also include worker protections, investments in our democracy, and resources for coronavirus testing and contact tracing (which is necessary to reopen the economy). At the same time, policymakers should prioritize long-overdue overhauls of federal labor law and continue to strengthen wage standards that protect workers and help boost consumer demand.

The package should also include substantial aid to state and local governments so that they can invest in the services that will allow the economy to recover, particularly public health and education. Without this aid, a prolonged depression is inevitable, especially if state and local governments make the same budget and employment cuts that slowed the recovery after the Great Recession. More than five million workers would likely lose their jobs by the end of 2021, harming women and Black workers in particular since they are disproportionately likely to work for state and local governments.

Figure B

Figure B

Table 1

Table 1

Table 2

Table 2

1. Unless otherwise noted, the numbers in this blog post are the ones reported by the U.S. Department of Labor (DOL), which they receive from the state agencies that administer UI. While DOL is asking states to report regular UI claims and PUA claims separately, many states are also including some or all PUA claimants in their reported regular UI claims. As state agencies work to get these new programs up and running, there will likely continue to be some misreporting. Since the number of UI claims is one of the most up-to-date measures of labor market weakness and access to benefits, we will still be analyzing it regularly as reported by DOL, but we ask that you keep these caveats in mind when interpreting the data.

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