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Tag: Income disparity

  • Nigeria’s president signs controversial bill for a presidential yacht and SUVs for lawmakers

    Nigeria’s president signs controversial bill for a presidential yacht and SUVs for lawmakers

    Nigeria’s president has signed a controversial bill that earmarks $6.1 million for a presidential yacht and millions more for sport utility vehicles for his wife and other top government officials

    ByDYEPKAZAH SHIBAYAN Associated Press

    November 9, 2023, 7:34 AM

    FILE – Nigeria’s new President Bola Ahmed Tinubu, center, inspects honour guards after taking an oath of office at a ceremony in Abuja, Nigeria, on May 29, 2023. Nigeria’s president has signed on Wednesday Nov. 8, 2023 a controversial bill that earmarks $6.1 million for a presidential yacht and millions more for sport utility vehicles for his wife and other top government officials. (AP Photo/Olamikan Gbemiga, File)

    The Associated Press

    ABUJA, Nigeria — Nigerian President Bola Tinubu’s approval of a supplementary budget earmarking millions of dollars for a presidential yacht and sport utility vehicles for his wife and top government officials has again stoked anger among ordinary Nigerians over what they see as a growing economic disparity.

    Tinubu on Wednesday signed into law the budget that allocates $38 million for the presidential air fleet and other renovations. Some $6.1 million budgeted earlier for the the yacht was assigned by lawmakers to “student loans” — with the senate’s approval.

    The country’s navy said it had taken delivery of the yacht, but “it has not been paid for.”

    Presidential spokesperson Anjuri Ngelale defended the supplemental budget as serving to “strengthen Nigeria’s security architecture and address Nigeria’s critical infrastructure deficit, amongst other considerations.”

    The spokesperson said about 30% of the money would be spent on security, and another 35% on “provision of critical infrastructure.”

    Recently, the country’s 460-member national assembly confirmed that all lawmakers will get each a new SUV reportedly at a cost of more than $150,000 each. The lawmakers said the vehicles would help them do their work better.

    Nigeria, one of the world’s poorest countries, is currently seeing food prices continue to soar to record highs. Also soaring is the frustration of ordinary Nigerians who see politicians earn huge salaries while others like medical professionals often have to go on strike to protest meager wages.

    “It is by the grace of God that I can eat. It is hard,” said Nduka Omeje, a trader in Apo resettlement in Nigeria’s capital city, Abuja.

    Labor unions struggled to get the government to raise the minimum wage for civil servants from a monthly $67 a month. The 2019 pay increase came after workers staged protests.

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    Follow AP’s Africa coverage at: https://apnews.com/hub/africa

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  • UAW strike brings blue-collar vs. billionaire battle to Detroit

    UAW strike brings blue-collar vs. billionaire battle to Detroit

    DETROIT — The United Auto Workers strike is bringing a blue-collar versus billionaire battle to the Motor City, just as UAW President Shawn Fain wanted.

    The outspoken union leader has weaponized striking — historically a last resort for the union — after less than 24 hours into a work stoppage arguably better than any UAW president has in modern times.

    It wasn’t by accident.

    Fain, a quirky yet emboldened leader, has meticulously brought the UAW back into the national spotlight after decades of near irrelevance. He wants to represent not just union members but also America’s embattled middle class, which UAW helped create.

    United Auto Workers union President Shawn Fain joins UAW members who are on a strike, on the picket line at the Ford Michigan Assembly Plant in Wayne, Michigan, September 15, 2023.

    Rebecca Cook | Reuters

    To do so, he has leveraged a yearslong national labor movement and a growing disgust for wealthy individuals and corporations among many Americans — starting with his first time addressing the union’s more than 400,000 members during his inauguration speech in March.

    “We’re here to come together to ready ourselves for the war against our only one and only true enemy, multibillion-dollar corporations and employers who refuse to give our members their fair share,” Fain said at the time. “It’s a new day in the UAW.”

    Fain’s comments Friday morning as he joined UAW members and supporters picketing outside a Ford plant in Michigan — one of three facilities the company is currently striking — echoed everything he said during that first speech.

    “We got to do what we got to do to get our share of economic and social justice in this strike,” Fain said outside the Ford Bronco SUV and Ranger pickup plant. “We’re going to be out here until we get our share of economic justice. And it doesn’t matter how long it takes.”

    Fain’s upbringing plays into his strong unionism and religious beliefs, which he has growingly talked about with members as he emphasizes “faith” in the UAW’s cause. Two of his grandparents were UAW GM retirees, and one grandfather started at Chrysler in 1937, the year the workers joined the union. Fain, who joined the UAW in 1994, even keeps one of his grandfather’s pay stubs in his wallet as “a reminder” of where he came from. 

    National media and others really started paying attention to Fain when he said the union would withhold a reelection endorsement of President Joe Biden, who has called himself the “most pro-union president in history.” Fain and Biden have spoken and met, but the union leader has not shown much support for the president. In response to comments by the president Friday, Fain said: “Working people are not afraid. You know who’s afraid? The corporate media is afraid. The White House is afraid. The companies are afraid.”

    While many past union leaders have talked such talk, Fain has thus far delivered on his promises to members without batting an eye — causing General Motors, Ford Motor and Stellantis to go into crisis mode this week as the UAW follows through on that promise to members.

    “We’ve never seen anything like this; it’s frustrating,” Ford CEO Jim Farley told CNBC’s Phil LeBeau Thursday as he criticized Fain and the union for what he said was a lack of communication and counteroffers. “I don’t know what Shawn Fain is doing, but he’s not negotiating this contract with us, as it expires.”

    In a statement Friday, Ford said that the UAW’s partial strike at its Michigan Assembly Plant has forced it to lay off about 600 workers.

    “This is not a lockout,” Ford said. “This layoff is a consequence of the strike at Michigan Assembly Plant’s final assembly and paint departments, because the components built by these 600 employees use materials that must be e-coated for protection. E-coating is completed in the paint department, which is on strike.”

    GM CEO Mary Barra echoed Farley’s feelings Friday morning on CNBC’s “Squawk Box.”

    “I’m extremely frustrated and disappointed,” she said. “We don’t need to be on strike right now.”

    Both CEOs said everything they could to indicate they believe Fain may not be bargaining in good faith without using those exact words, which could justify a complaint with the National Labor Relations Board.

    The UAW in late August filed unfair labor practice charges against GM and Stellantis with the NLRB, alleging they did not bargain with the union in good faith or a timely manner. It did not file a complaint against Ford. GM and Stellantis have denied those allegations.

    Ford CEO Jim Farley: No way we would be sustainable as a company with UAW's wage proposal

    Several past union leaders and company bargainers who spoke to CNBC hailed the way Fain has been able to propel the UAW into the national spotlight, including pausing bargaining for a Friday rally and march with Sen. Bernie Sanders, the progressive lawmaker from Vermont. Sanders, whose surprise 2016 Democratic presidential primary win in Michigan helped cement his national prominence, has lent support to numerous labor movements around the country as he rails against the billionaire class.

    “I think they’re just doing an outstanding job,” said respected former UAW President Bob King, who cited growing support for the union among the public and the union’s own members. “Both those measurements say that UAW communications has been outstanding.”

    UAW members have taken notice — especially after many of them disdained union leadership during and after a yearslong federal corruption investigation that landed two past UAW presidents and more than a dozen others in prison.

    “For all the years that I’ve worked here, it’s never been this strong,” said Anthony Dobbins, a 27-year autoworker, early Friday morning while picketing the Ford plant in Michigan. “This is going to make history right here because we are trying to get what we deserve.”

    Dobbins, a UAW Local 600 union representative, balked at current record offers by the automakers that have included roughly 20% pay increases, thousands of dollars in bonuses, retention of the union’s platinum health care and other sweetened benefits.

    “That’s not working for us. Give us what we asked for,” Dobbins said. “That’s what we want. We have to work seven days, overtime, just to make ends meet.”

    United Auto Workers President Shawn Fain, center, poses with Anthony Dobbins, right, a 27-year autoworker, and others as the union pickets a Ford plant in Wayne, Michigan, Sept. 15, 2023.

    Michael Wayland / CNBC

    Key demands from the union have included 40% hourly pay increases; a reduced, 32-hour, workweek; a shift back to traditional pensions; the elimination of compensation tiers; and a restoration of cost-of-living adjustments. Other items on the table include enhanced retiree benefits and better vacation and family leave benefits.

    Automakers have argued such demands would cripple the companies. Farley even said the company would have “gone bankrupt by now” under the union’s current proposals and members would not have benefited from $75,000 in average profit-sharing over the last decade.

    Ford sources said the automaker would have lost $14.4 billion over the last four years if the current demands had been in effect, instead of recording nearly $30 billion in profits.

    Such profits are exactly what Fain has said UAW members deserve to share in. But his strategy to get workers a larger piece of the pie carries great risks.

    “This is not going to be positive from an industry perspective or for GM,” Barra said Friday.

    Many outside the union believe if Fain pushes too hard, it could lead to long-term job losses for the union. A former high-ranking bargainer for one of the automakers told CNBC that it’s nearly guaranteed the companies cut union jobs through product allocation, plant closures or other means to offset increased labor costs.

    “They’re going to have to pay up. The question is how much,” said the longtime bargainer, who agreed to speak on the condition of anonymity. “This ends up with fewer jobs. That’s how the automakers cut costs.”

    Fain and other union leaders have argued that meeting the companies in the middle has led to dozens of plant closures, fewer union members and a growing divide between blue-collar workers and the wealthy.

    So why not fight?

    “This is about us doing what we got to do to take care of the working class,” Fain said Friday. “This isn’t just about the UAW. This is about working people everywhere in this country. No matter what you do for a living, you deserve your fair share of equity.”

    GM CEO Mary Barra on UAW strike: We put a historic offer on the table

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  • Cairo’s BBC staff begin a three-day strike, calling for equal pay with other Mideast colleagues

    Cairo’s BBC staff begin a three-day strike, calling for equal pay with other Mideast colleagues

    BBC’s employees in Cairo have gone on a three-day strike to demand equal pay with other colleagues in the Middle East as Egypt’s economic crisis deepens further

    CAIRO — BBC’s staff in Cairo went on a three-day strike Monday to demand equal pay with other colleagues in the Middle East as Egypt’s economic crisis deepens further.

    According to Khaled el-Balshy, the strikers’ spokesperson and head of Egypt’s journalism union, the 75 staff members from the broadcaster’s Cairo bureau are demanding to be paid in dollars — like other BBC employees in the region, including in Beirut and Istanbul.

    The walkout is to end on Wednesday.

    Over the past year, the Egyptian pound has lost over 50% of its value against the dollar, with annual inflation reaching 36.8% in June, up from 33.7% recorded in May. The country’s economy is reeling from years of government austerity measures, the coronavirus pandemic and fallout from the Ukraine war. Egypt is a top wheat importer from Russia and Ukraine.

    El-Balshy posted on Facebook that the BBC staff in Egypt consider the disparity in pay as a form of “systematic discrimination.” They had earlier asked for their salaries to be re-evaluated in light of the Egyptian pound’s depreciation but this request was first ignored before “meagre increases” were eventually offered.

    The BBC said the broadcaster was aware of Egypt’s economic situation and has been planning “increasing salaries by 27% between March and July this year to mitigate the levels of high inflation in the country.” The statement did not elaborate.

    El-Balshy told The Associated Press the strikers may consider legal action and extending the walkout if their demands are not met. Last month, the BBC Cairo staff held a one-day strike over unequal pay.

    BBC staff declined to comment on the walkout and referred media questions to el-Balshy, who was to hold a news conference on the industrial action on Wednesday.

    ___

    This story has been corrected throughout to show that the spelling of the family name of the strikers’ spokesperson and head of Egypt’s journalism union is el-Balshy.

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  • As ‘bougie broke’ videos trend on social media, experts say that’s not necessarily a bad thing

    As ‘bougie broke’ videos trend on social media, experts say that’s not necessarily a bad thing

    Photo taken in Amalfi, Italy

    Sergio_pulp | Istock | Getty Images

    “Have you ever been broke, but no one believes you because you don’t look like a broke person?”

    New videos trending on social media platforms such as TikTok and Instagram are asking that very question.

    “The thing is, like you broke, but like a bougie broke, like you ‘broque,’” one narrator said.

    “Even on payday you broque,” also spelled “broké.”

    The reels are often accompanied by lavish scenes, from restaurant meals with abundant food to travel scenes from locales such as Positano, Italy.

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    Social media has upped the ante when it comes to showing off users’ lifestyle or experiences. The new videos show off the same coveted lifestyles with a wink: “You think I can afford this, but little do you know what’s in my bank account.”

    Experts say that’s not necessarily a bad thing.

    “Money is so taboo,” said Emily Irwin, managing director of advice and planning at Wells Fargo’s Wealth & Investment Management.

    “To talk about that, to put it out there in a very vulnerable way, I think is also empowering of others to even start the conversation,” Irwin said.

    ‘Bougie broke’ is changing money conversations

    “Bougie broke” describes the state of “always barely having adequate funds,” whether it be in cash, accounts or on credit cards, according to the Urban Dictionary.

    The term is not new.

    But the term is trending in a unique set of circumstances — inflation that recently pushed the rate of price increases to the highest in four decades, an already high cost of living that has made achieving major life goals such as buying a home feel out of reach, and a pandemic that tempted more people to prioritize live-for-today experiences.

    Generally, “hedonic or conspicuous” spending with the aim of making other people see you in a certain way is not a good thing, according to Dan Egan, vice president of behavioral finance and investing at Betterment.

    But the new bougie broke videos may have a positive influence in destigmatizing an uncomfortable topic — feeling conflicted about spending decisions.

    It’s like asking, “What do other people think? Am I the only one here who feels this way?” Egan said.

    “There’s definitely a trend towards every generation being a little bit more comfortable talking about things that were serious stigmas in previous generations,” Egan said.

    The bougie broke videos highlight the fact that people prioritize different things, and you never know what’s totally behind what you’re seeing, Irwin said.

    While you may assume someone’s flashy lifestyle comes with plenty of extra room for savings and the achievement of other big financial goals, that is not necessarily true, she said.

    “To dispel that whole notion is really cool, I think,” Irwin said.

    This could be a super-interesting way to put your goals out there and hold yourself accountable.

    Emily Irwin

    managing director of advice and planning at Wells Fargo’s Wealth & Investment Management

    Not only do the videos take the stigma out of admitting you’re “bougie broke,” the platforms also offer a new way to share personal goals and hold yourself accountable, she said.

    “One of the most impactful steps of setting goals is actually communicating them with someone,” Irwin said.

    Whether it’s an audience of one or 1 million, knowing people are listening can help push you to keep going, she said.

    “This could be a super-interesting way to put your goals out there and hold yourself accountable,” Irwin said.

    Next up: ‘quiet luxury,’ ‘premium mediocre’

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  • Pregnancy and sports a challenging combination for female professional athletes

    Pregnancy and sports a challenging combination for female professional athletes

    LOS ANGELES — LOS ANGELES (AP) — Pro soccer player Jess McDonald was traded across six teams in her first five years as a single parent, making it difficult to find, let alone afford, child care in new cities. She and her then-8-month-old son were often forced to share a hotel room with a teammate — and sometimes she had no choice but to bring him with her to practice.

    “If I’d have a bad game, you know, my kid would be blamed for it at times, and it was just like, ‘Oh, was your kid up late at night?’” the U.S. Women’s National Team player said in a recent interview.

    Arizona State basketball coach Charli Turner Thorne had three children without taking maternity leave. And New York Liberty head coach and former WNBA player Sandy Brondello — acknowledging the difficulties that she would face if she got pregnant — waited to have kids until she retired as a player at age 38.

    Juggling the demands of parenthood with those of a professional sports career is just one of myriad challenges female athletes face in an industry that also has been rife with pay disparities, harassment and bullying in the 27 years since the WNBA, the first women’s professional sports league, was formed.

    The issue once again drew national attention right before the season began, when WNBA player Dearica Hamby said she had been harassed by her coach for getting pregnant during the season.

    Las Vegas Aces Coach Becky Hammon, one of the league’s marquee figures and a six-time WNBA All-Star, denied bullying Hamby; she said the player wasn’t traded to the Los Angeles Sparks because she was pregnant. The trade, she said, had “everything to do with freeing up money to sign free agents.”

    Still, Hammon said she may have made a “misstep” by asking Hamby at one point about her pregnancy, and she indicated that the rules in the WNBA “regarding pregnant players and how that looks within an organization” have to be better defined, shining a light on the balancing act of having a family and maintaining a professional sports career.

    Women have never been formally banned from the WNBA for getting pregnant; in fact, the first player to sign with the league in 1997, Sheryl Swoopes, was expecting when she did so. But pregnant athletes have encountered attitudes ranging from ambivalent to outright hostile from leagues, coaches, fellow players and sponsors throughout the years.

    As recently as 2019, Olympic runners Allyson Felix and Kara Goucher spoke out against Nike for slashing their pay and then dropping them for becoming pregnant. And it’s taken years for professional women’s leagues to provide their athletes with the support systems they need to balance their family and career obligations.

    “I’ve been walking on eggshells as a mom in this league since Day 1,” said McDonald, who last week announced her second pregnancy.

    McDonald said that back in 2012, she trained up until two weeks before giving birth; it wasn’t until last year that players in the league were guaranteed paid maternity leave. Arizona State’s Thorne told the AP she once returned to work just two days after giving birth.

    “We’re light years ahead of where we were, you know, 20-some years ago in terms of people understanding that they have to support women’s rights,” Thorne said. Still, “there is pressure on you as the athlete, as the coach, as that person, that woman either starting their family or having kids, to get back to their job” soon after giving birth.

    Under the WNBA’s most recent collective bargaining agreement, which was ratified in 2020, league members receive their full salary while on maternity leave, though each player has to individually negotiate the length of her leave. During the season, players with children under 13 can receive up to $5,000 a year for child care, and a paid-for two-bedroom apartment.

    A small number of elite, veteran athletes who have played eight or more seasons can be reimbursed up to $20,000 per year for costs directly related to adoption, surrogacy, egg freezing or other fertility treatments. Per player, the amount is capped at a total of $60,000. Compared to other industries, this is a progressive offering that is inclusive of LGBTQ+ athletes.

    “We’ve made strides and everything,” Thorne said, but she added that the leagues still have a long way to go to support athletes who become mothers.

    “There’s always this little asterisk, that it has to be after your eighth year of service to get” fertility benefits, said four-time WNBA All-Star Breanna Stewart, who plays for the New York Liberty and has a 2-year-old daughter with her wife. Stewart’s wife is pregnant with their second child now.

    Stewart said child care stipends aren’t dispensed freely without requiring something in return: She said she and other players have to submit itemized receipts for such necessities as diapers and babysitters. “If you don’t go to them, they don’t give it to you,” Stewart said. “You have to go and send invoices and it’s a little bit more complicated than it seems.”

    Facing these challenges, many women in sports, like Brondello, decide to have kids after they retire — or to forgo parenthood altogether.

    “Female athletes shouldn’t have to give up motherhood because they want to be an athlete,” said Dr. Kathryn Ackerman, a sports medicine physician based in Boston and the co-chair of the U.S. Olympic and Paralympic Committee’s women’s health task force.

    Ackerman said there’s a fear that when female athletes become parents, they may not value being an athlete as much. She said that is a fallacy.

    The record books are replete with examples of female athletes who became parents and continued to perform at the highest level.

    Former tennis star Serena Williams famously won a grand slam when she was about eight weeks pregnant. Professional swimmers, runners and basketball players have all competed while pregnant: Beach volleyball player Kerri Walsh Jennings even won Olympic medals.

    Mothers “often are better athletes because they learn how to manage their time better, they understand their bodies better,” Ackerman said. “And they may be peaking even later in life.”

    ___

    AP Basketball Writer Doug Feinberg in New York contributed to this report.

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  • New York, California probing workplace discrimination at NFL

    New York, California probing workplace discrimination at NFL

    NEW YORK — The attorneys general of New York and California announced Thursday that they are investigating allegations of workplace discrimination at the NFL, citing lawsuits filed by employees that describe sex, racial and age bias, sexual harassment, and a hostile work environment.

    Attorneys General Letitia James, of New York, and Rob Bonta, of California, said they have issued subpoenas to NFL executives as part of an examination into the workplace culture at the the league’s corporate offices in both states.

    The officials, both Democrats, said they are exercising their legal authority to seek information from the NFL regarding allegations of gender pay disparities, harassment, and gender and racial discrimination.

    The investigation focuses on the league’s corporate offices, not specific teams or players.

    “No person should ever have to endure harassment, discrimination, or objectification in the workplace,” James said in a statement. Bonta said he and James have “serious concerns about the NFL’s role in creating an extremely hostile and detrimental work environment.”

    The league said it would cooperate with the investigation but called the allegations “entirely inconsistent with the NFL’s values and practices.”

    “The NFL offices are places where employees of all genders, races and backgrounds thrive. We do not tolerate discrimination in any form,” league officials said in a statement.

    James and Bonta cited a 2022 New York Times story that detailed allegations of gender discrimination by more than 30 former female NFL employees.

    The women described a sexist culture at the NFL that they said persisted despite promises of reform that Commissioner Roger Goodell made after the 2014 release of a video that showed Baltimore Ravens running back Ray Rice punching his fiancee.

    One former NFL executive, Theresa Locklear, who held the position of director of business intelligence and optimization, told the Times that after the Rice video became public, managers were told to speak to their staffs about the video and the league’s response to it.

    Locklear said that when she met with her team, a male employee, Aaron Jones, argued that Rice’s fiancée was partly at fault because she had egged Rice on, and other men on the call seemed to agree.

    Jones told the Times that he had never spoken to Locklear about Rice and would never have argued that a woman was to blame for her assault.

    The attorneys general also cited a lawsuit filed this year in Los Angeles Superior Court by Jennifer Love, a former director for NFL Enterprises, who attributed her 2022 layoff to retaliation for her complaints of “pervasive sexism” and a “boys’ club” mentality.

    NFL spokesperson Alex Riethmiller said the league had no comment on the Love’s lawsuit.

    The wide-ranging investigation by New York and California officials into employment practices at the NFL appears to be unprecedented, although complaints of race and sex discrimination have dogged the league and individual teams.

    The Washington Commanders, owner Dan Snyder, the NFL and Goodell were sued by the attorney general for the District of Columbia in November for colluding to deceive fans by lying about an inquiry into “sexual misconduct and a persistently hostile work environment” within the team. D.C. and Maryland also investigated and settled with the team over withholding fans’ season-ticket deposit money.

    Fired Miami Dolphins coach Brian Flores filed a federal lawsuit against the NFL and three teams last year over alleged racist hiring practices for coaches and general managers, saying the league remains “rife with racism.”

    The NFL has said Flores’ claims are without merit.

    _______

    Associated Press writers Rob Maaddi and Stephen Whyno contributed.

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  • U.S. cities are filling up with luxury apartments despite ‘housing recession’

    U.S. cities are filling up with luxury apartments despite ‘housing recession’

    Scores of luxury homes are coming to major cities across the United States.

    Analysts at Yardi Matrix projected that more than 400,000 units were completed in 2022, and they expect another strong showing in 2023. Experts believe much of this new stock is built with upper-tier customers in mind.

    “You often see new housing branded as ‘luxury,’ in part because it’s new,” said Ethan Handelman, deputy assistant secretary at the U.S. Department of Housing and Urban Development. “When you get to affordable housing, we need to be providing some additional capital and/or rental assistance to help make that housing affordable to the people who need it most.”

    Market-rate rents for new apartments can easily be multiple thousands of dollars monthly. For many high-wage earners in cities, this is achievable. But for moderate-income Americans, the sky-high prices appear disconnected from reality.

    “The marketplace is structured not to house certain people. We need to admit that,” said Dominic Moulden, a resource organizer at Organizing Neighborhood Equity DC.

    Builders say the high cost of housing in the U.S. is related to the large amount of regulation in the housing sector. For example, they say, many U.S. cities are short on land due to restrictive zoning codes.

    “Currently, 40% of the cost of multifamily development is in regulation,” said Sharon Wilson Géno, president at the National Multifamily Housing Council. “We have to do something about that if we’re going to build more housing.”

    In 2022, the Biden administration announced a housing action plan that aims to shore up housing supply within five years. But these efforts may not have a material impact on prices for some time.

    “Unfortunately, I don’t think we’re going to see rents going down a whole lot over the next one to two years,” said Al Otero, a portfolio manager at Armada ETF Advisors. “Developers cannot make a profit at those more affordable price points. Therefore, we see the development and the new construction at the much higher, higher end of the spectrum.”

    Watch the video above to see why the United States is awash in new luxury apartments.

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  • Tunisia’s political experiment threatens economic collapse

    Tunisia’s political experiment threatens economic collapse

    NICE, France — Tunisia’s increasingly authoritarian president appears determined to upend the country’s political system. The strategy is not only threatening a democracy once seen as a model for the Arab world, experts say it is also sending the economy toward a tailspin.

    The International Monetary Fund has frozen an agreement meant to help the government get loans to pay public sector salaries and fill budget gaps aggravated by the COVID-19 pandemic and the fallout from Russia’s war in Ukraine.

    Foreign investors are pulling out of Tunisia, and ratings agencies are on alert. Inflation and joblessness are on the rise, and many Tunisians, once proud of their country’s relative prosperity, now struggle to make ends meet.

    An election debacle a week ago has made matters worse: Just 11% of voters took part in a first-round vote for a new parliament meant to replace a legislature disbanded last year by President Kais Saied. Opposition figures, including from the popular Islamist movement Ennahdha, are demanding that he step down, and unions are threatening a general strike.

    Saied himself designed the elections to replace and reshape the parliament, as part of broad reforms that bolster his powers and that he says will solve Tunisia’s multiple crises. But voter disillusionment with the ruling class amid dire economic troubles contributed to a near-boycott of the election.

    Tunisia’s Western allies, like the United States and France, have expressed concern and urged the president to forge an inclusive political dialogue that would benefit the sluggish economy. Tunisia was the birthplace of Arab Spring democratic uprisings 12 years ago.

    Saied rejected criticism over the low voter turnout, saying what really matters is the second round of voting Jan. 19. He says his reforms are needed to rid the country of the corrupt political class and Tunisia’s foreign enemies. He lashed out at his political foes in the Ennahdha party, which had the largest number of lawmakers in the previous parliament, and ordered the arrest this week of its vice-president and former Prime Minister Ali Larayedeh on terrorism-related charges.

    “Saied seems impervious to criticism and intent on bulldozing his way to a new political system no matter how few Tunisians are engaged in the process,” said Monica Marks, a Tunisia expert and professor of Middle East politics at the New York University in Abu Dhabi.

    “No Tunisian asked Saied to reinvent the wheel of Tunisian politics, to write a new constitution and revamp the election law,” Marks said. “What Tunisians have been asking for is a more respectful government that meets their bread-and-butter needs and gives them economic dignity.”

    Saied’s promises to stabilize the economy helped ensure his landslide victory in the 2019 presidential election.

    But he has yet to present an economic recovery plan or strategy for his deeply indebted government to secure funds to pay for food and energy subsidies. The president has sidelined economists in state institutions, stalling the country’s budget and souring the environment for foreign investors.

    Tunisians have been hit with soaring food prices and shortages of fuel and basic staples like sugar, vegetable oil and rice in recent months. Inflation has reached 9.1%, the highest in three decades, according to the National Institute of Statistics, and unemployment is at 18% percent, according to the World Bank.

    “President Saied naively seems to think that if only he can complete his political roadmap, the economy will fix itself,” said Geoff Porter, a New York City-based North Africa risk assessment analyst, in a recent brief.

    Tunisia reached a preliminary agreement with the IMF on a $1.9 billion loan in October. It would enable the heavily indebted Tunisian government to access loans from other donors over a four-year period in return for sweeping economic reforms that include shrinking the public administration sector — one of the world’s largest — and a gradual lifting of subsidies.

    The agreement was subject to the IMF executive board’s approval, scheduled for Dec. 19. The state news agency TAP reported that “the government and the IMF have agreed to postpone” the final decision on the loan to give Tunisian officials “more time to present a new reform plan for the country’s sluggish economy.”

    Tunisia desperately needs access to the special drawing rights in order to avoid defaulting on external debt and to stabilize the economy, Porter said. He added: “Without the IMF funds, Tunisia’s economic freefall will accelerate.”

    Foreign investors operating in Tunisia are worried.

    Pharmaceutical manufacturers Novartis, Bayer and GlaxoSmithKline are leaving the country because they are not getting paid by the insufficiently funded state pharmaceutical distributor.

    Royal Dutch Shell, which operates two gas fields that accounted for 40% of Tunisia’s domestic production, announced in November it will exit Tunisia by year’s end. Despite hype over the country’s hydrogen sector, nothing has been done to attract investors as the country’s regulatory institutions are paralyzed by Saied’s political moves, Porter said.

    The president has also lost the tentative support of the country’s powerful trade union, the UGTT, for the IMF-prescribed reform plan in exchange for a bailout.

    UGTT leader Noureddine Taboubi agreed with the government in August to discuss a new “social contract” to help Tunisians in financial distress, the state TAP news agency reported. But Taboubi, whose influential union represents 67% of Tunisia’s work force, mainly employed in the public sector, recently pulled back on his commitment. He renewed his opposition to the IMF’s main demands to receive a loan program: a public sector wage freeze and restructuring of state-owned enterprises.

    ———

    Bouazza ben Bouazza contributed from Tunis, Tunisia.

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  • Tunisia’s political experiment threatens economic collapse

    Tunisia’s political experiment threatens economic collapse

    NICE, France — Tunisia’s increasingly authoritarian president appears determined to upend the country’s political system. The strategy is not only threatening a democracy once seen as a model for the Arab world, experts say it is also sending the economy toward a tailspin.

    The International Monetary Fund has frozen an agreement meant to help the government get loans to pay public sector salaries and fill budget gaps aggravated by the COVID-19 pandemic and the fallout from Russia’s war in Ukraine.

    Foreign investors are pulling out of Tunisia, and ratings agencies are on alert. Inflation and joblessness are on the rise, and many Tunisians, once proud of their country’s relative prosperity, now struggle to make ends meet.

    An election debacle a week ago has made matters worse: Just 11% of voters took part in a first-round vote for a new parliament meant to replace a legislature disbanded last year by President Kais Saied. Opposition figures, including from the popular Islamist movement Ennahdha, are demanding that he step down, and unions are threatening a general strike.

    Saied himself designed the elections to replace and reshape the parliament, as part of broad reforms that bolster his powers and that he says will solve Tunisia’s multiple crises. But voter disillusionment with the ruling class amid dire economic troubles contributed to a near-boycott of the election.

    Tunisia’s Western allies, like the United States and France, have expressed concern and urged the president to forge an inclusive political dialogue that would benefit the sluggish economy. Tunisia was the birthplace of Arab Spring democratic uprisings 12 years ago.

    Saied rejected criticism over the low voter turnout, saying what really matters is the second round of voting Jan. 19. He says his reforms are needed to rid the country of the corrupt political class and Tunisia’s foreign enemies. He lashed out at his political foes in the Ennahdha party, which had the largest number of lawmakers in the previous parliament, and ordered the arrest this week of its vice-president and former Prime Minister Ali Larayedeh on terrorism-related charges.

    “Saied seems impervious to criticism and intent on bulldozing his way to a new political system no matter how few Tunisians are engaged in the process,” said Monica Marks, a Tunisia expert and professor of Middle East politics at the New York University in Abu Dhabi.

    “No Tunisian asked Saied to reinvent the wheel of Tunisian politics, to write a new constitution and revamp the election law,” Marks said. “What Tunisians have been asking for is a more respectful government that meets their bread-and-butter needs and gives them economic dignity.”

    Saied’s promises to stabilize the economy helped ensure his landslide victory in the 2019 presidential election.

    But he has yet to present an economic recovery plan or strategy for his deeply indebted government to secure funds to pay for food and energy subsidies. The president has sidelined economists in state institutions, stalling the country’s budget and souring the environment for foreign investors.

    Tunisians have been hit with soaring food prices and shortages of fuel and basic staples like sugar, vegetable oil and rice in recent months. Inflation has reached 9.1%, the highest in three decades, according to the National Institute of Statistics, and unemployment is at 18% percent, according to the World Bank.

    “President Saied naively seems to think that if only he can complete his political roadmap, the economy will fix itself,” said Geoff Porter, a New York City-based North Africa risk assessment analyst, in a recent brief.

    Tunisia reached a preliminary agreement with the IMF on a $1.9 billion loan in October. It would enable the heavily indebted Tunisian government to access loans from other donors over a four-year period in return for sweeping economic reforms that include shrinking the public administration sector — one of the world’s largest — and a gradual lifting of subsidies.

    The agreement was subject to the IMF executive board’s approval, scheduled for Dec. 19. The state news agency TAP reported that “the government and the IMF have agreed to postpone” the final decision on the loan to give Tunisian officials “more time to present a new reform plan for the country’s sluggish economy.”

    Tunisia desperately needs access to the special drawing rights in order to avoid defaulting on external debt and to stabilize the economy, Porter said. He added: “Without the IMF funds, Tunisia’s economic freefall will accelerate.”

    Foreign investors operating in Tunisia are worried.

    Pharmaceutical manufacturers Novartis and Bayer are leaving the country because they are not getting paid by the insufficiently funded state pharmaceutical distributor.

    Royal Dutch Shell, which operates two gas fields that accounted for 40% of Tunisia’s domestic production, announced in November it will exit Tunisia by year’s end. Despite hype over the country’s hydrogen sector, nothing has been done to attract investors as the country’s regulatory institutions are paralyzed by Saied’s political moves, Porter said.

    The president has also lost the tentative support of the country’s powerful trade union, the UGTT, for the IMF-prescribed reform plan in exchange for a bailout.

    UGTT leader Noureddine Taboubi agreed in August to discuss a new “social contract” to help Tunisians in financial distress, the state TAP news agency reported. But Taboubi, whose influential union represents 67% of Tunisia’s work force, mainly employed in the public sector, recently pulled back on his commitment. He renewed his opposition to the IMF’s main demands to receive a loan program: a public sector wage freeze and restructuring of state-owned enterprises.

    ———

    Bouazza ben Bouazza contributed from Tunis, Tunisia.

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