Tag: labor

Takeaways from the AP’s investigation into how US prison labor supports many popular food brands

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In a sweeping two-year investigation, The Associated Press found goods linked to U.S. prisoners wind up in the supply chains of a dizzying array of products from Frosted Flakes cereal and Ball Park hot dogs to Gold Medal flour and Coca-Cola. They are on the shelves of most supermarkets, including Kroger, Target, Aldi and Whole Foods.

Here are takeaways from the AP’s investigation:

The U.S. has a history of locking up more people than any other country – currently around 2 million – and goods tied to prison labor have morphed into a massive multibillion-dollar empire, extending far beyond the classic images of people stamping license plates or working on road crews.

The prisoners who help produce these goods are disproportionately people of color. Some are sentenced to hard labor and forced to work – or face punishment – and are sometimes paid pennies an hour or nothing at all. They are often excluded from protections guaranteed to almost all other full-time workers, even when they are seriously injured or killed on the job. And it can be almost impossible for them to sue.

And it’s all legal, dating back largely to labor demands as the South struggled to rebuild its shattered economy after the Civil War. In 1865, the 13th Amendment to the U.S. Constitution outlawed slavery and involuntary labor– except as punishment for a crime. That clause is being challenged on the federal level, and efforts to remove similar language from state constitutions are expected to reach the ballot in about a dozen states this year.

The AP sought information from all 50 states through public records requests and inquiries to corrections departments, linking hundreds of millions of dollars’ worth of transactions to agriculture-based prison labor in state and federal facilities over the past six years. Those figures include everything from people leased out to work at private businesses to farmed goods and livestock sold on the open market. Many of these goods came from large operations in the South, though almost every state has some sort of agriculture program.

Reporters also found prison labor in the supply chains of giants like McDonald’s, Walmart and Costco – and in the supply chains of goods being shipped all over the world via multinational companies, including to countries that have been slapped with import bans by Washington in recent years for using prison and forced labor themselves.

Almost all of the country’s state and federal adult prisons have some sort of work programs, employing around 800,000 people, according to a 2022 report by the American Civil Liberties Union. The vast majority of those jobs are tied to tasks like maintaining prisons, laundry or kitchen work. Some prisoners also work for states and municipalities, doing everything from cleaning up after hurricanes and tornadoes to picking up trash along bustling highways.

But they also are contracted out to private companies either directly from their prisons or through work-release programs. They’re often hired in industries with severe labor shortages, doing some of the country’s dirtiest and most dangerous jobs like working in poultry plants, meat-processing centers and sawmills.

The AP found that prisoners with just a few months or years left on their sentences work at private companies nationwide. Unlike work crews picking up litter in orange jumpsuits, they go largely unnoticed, often wearing the same uniforms as their civilian counterparts.

Incarcerated people also have been contracted to companies that partner with prisons. In Idaho, they’ve sorted and packed the state’s famous potatoes, which are exported and sold to companies nationwide. In Kansas, they’ve been employed at Russell Stover chocolates and Cal-Maine Foods, the country’s largest egg producer. Though the company has since stopped, in recent years they were hired in Arizona by Taylor Farms, which sells salad kits in many major grocery stores nationwide and supplies popular fast-food chains and restaurants like Chipotle Mexican Grill.

While prison labor seeps into the supply chains of some companies through third-party suppliers without them knowing, others buy direct. Mammoth commodity traders that are essential to feeding the globe like Cargill, Bunge, Louis Dreyfus, Archer Daniels Midland and Consolidated Grain and Barge have been scooping up millions of dollars’ worth of soy, corn and wheat straight from prison farms.

The AP reached out for comment to the companies it identified as having connections to prison labor, but most did not respond.

Cargill acknowledged buying goods from prison farms in Tennessee, Arkansas and Ohio, saying they constituted only a small fraction of the company’s overall volume. It added that “we are now in the process of determining the appropriate remedial action.”

McDonald’s said it would investigate links to any such labor, and Archer Daniels Midland and General Mills, which produces Gold Medal flour, pointed to their policies in place restricting suppliers from using forced labor. Whole Foods responded flatly: “Whole Foods Market does not allow the use of prison labor in products sold at our stores.”

Bunge confirmed it had purchased grain from corrections departments but said it sold the facilities sourcing from them in 2021, so they are “no longer part of Bunge’s footprint.”

Corrections officials and other proponents note that not all work is forced and that prison jobs save taxpayers money. They also say workers are learning skills that can be used when they’re released and given a sense of purpose, which could help ward off repeat offenses. In some cases, labor can mean time shaved off a sentence. And the jobs provide a way to repay a debt to society, they say.

“A lot of these guys come from homes where they’ve never understood work and they’ve never understood the feeling at the end of the day for a job well-done,” said David Farabough, who oversees Arkansas’ prison farms.

While most critics don’t believe all jobs should be eliminated, they say incarcerated people should be paid fairly, treated humanely and that all work should be voluntary.

“They are largely uncompensated, they are being forced to work, and it’s unsafe. They also aren’t learning skills that will help them when they are released,” said law professor Andrea Armstrong, an expert on prison labor at Loyola University New Orleans.

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The Associated Press receives support from the Public Welfare Foundation for reporting focused on criminal justice. This story also was supported by Columbia University’s Ira A. Lipman Center for Journalism and Civil and Human Rights in conjunction with Arnold Ventures. The AP is solely responsible for all content.

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Contact AP’s global investigative team at Investigative@ap.org or https://www.ap.org/tips/

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January 29, 2024
A COVID-era program is awash in fraud. Congress aims to wind it down and expand the child tax credit

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WASHINGTON — When IRS Commissioner Danny Werfel met privately with senators recently, the chairman of the Senate Finance Committee asked for his assessment of a startling report: A whistleblower estimated that 95% of claims now being made by businesses for a COVID-era tax break were fraudulent.

“He looked at his shoes and he basically said, ‘Yeah,’” recalled the lawmaker who posed that question, Sen. Ron Wyden, D-Ore.

The answer explains why Congress is racing to wind down what is known as the employee retention tax credit. Congress established the program during the coronavirus pandemic as an incentive for businesses to keep workers on the payroll.

Demand for the credit soared as Congress extended the tax break and made it available to more companies. Aggressive marketers dangled the prospect of enormous refunds to business owners if they would just apply. As a result, what was expected to cost the federal government $55 billion has instead ballooned to nearly five times that amount as of July. Meanwhile, new claims are still pouring into the IRS each week, ensuring a growing price tag that lawmakers are anxious to cap.

Lawmakers across the political spectrum who rarely agree on little else — from liberal Sen. Elizabeth Warren, D-Mass., to conservative Sen. Ron Johnson, R-Wis. — agree it’s time to close down the program.

“I don’t have the exact number, but it’s like almost universal fraud in the program. It should be ended,” Johnson said. “I don’t see how anybody could support it.”

Warren added: “The standards were too loose and the oversight was too thin.”

The Joint Committee on Taxation estimates that winding down the program more quickly and increasing penalties for those companies promoting improper claims would generate about $79 billion over 10 years.

Lawmakers aim to use the savings to offset the cost of three business tax breaks and a more generous child tax credit for many low-income families. Households benefiting from the changes in the child tax credit would see an average tax cut of $680 in the first year, according to an estimate from the nonpartisan Tax Policy Center.

That tax credit is $2,000 per child, but only $1,600 is refundable, which makes it available to parents who owe little to nothing in federal income taxes. An agreement reached earlier this month by congressional tax-writers would increase the maximum refundable child tax credit to $1,800 for 2023 tax returns, $1,900 for the following year and $2,000 for 2025 tax returns. The Center on Budget and Policy Priorities, a liberal think tank and advocacy group, projected that about 16 million children in low-income families would benefit from the child tax credit expansion.

The package was overwhelmingly approved by a House committee last week, 40-3, showing it has broad, bipartisan support.

But passage through Congress is not assured because many key senators have concerns about aspects of the bill. Wyden said a strong vote in the House could spur the Senate into quicker action. Still, passing major legislation in an election year is generally a heavy lift.

Under current law, taxpayers have until April 15, 2025, to claim the employee retention credit. The bill would bars new claims after Jan. 31 of this year. It also would impose stiff penalties on those who are promoting the employer retention tax credit if they know or have reason to know their advice will lead to an underreporting of tax liabilities.

When Congress created the tax break for employers at the pandemic’s onset, it proved so popular that lawmakers extended and amended the program three times. The credit, worth up to $26,000 per employee, can be claimed on wages paid through 2021.

To qualify, generally businesses must show that a local or state government order related to the COVID-19 pandemic resulted in their business having to close or partially suspend operations. Or the businesses must show they experienced a significant decline in revenues.

Larry Gray, a certified public accountant from Rolla, Missouri, said he had concerns early on about how the program could be abused.

“There was no documentation really to speak” and the IRS just sent out the checks, Gray said. ”They just started printing the checks and I believe Congress was wanting them to print the checks.”

His hunch has proven correct, judging by the filings that he has reviewed. He has even lost clients who didn’t want to hear that they did not qualify when others were telling them they did. Generally, he said, the businesses that don’t qualify are failing to cite the government order that resulted in their closure or partial suspension. They are also routinely citing reasons for reimbursement that don’t meet the program’s criteria. For example, one company said it was struggling to find employees and had to raise wages as a justification for qualifying.

“If I go through the narratives on the filings that I’m looking at, every business in America qualifies,” Gray said.

The IRS paused accepting claims for the tax credit in September last year, until 2024 due to rising concerns that an influx of applications are fraudulent. At that point, it had received 3.6 million claims.

Some fraud has been prolific. For instance, a New Jersey tax preparer was arrested in July on charges related to fraudulently seeking over $124 million from the IRS when he filed more than 1,000 tax returns claiming the employment tax credits.

In an update issued Thursday about the program, the IRS said that it has thousands of audit in the pipeline and that as of Dec. 31, it has initiated 352 criminal investigations involving more than $2.9 billion in potentially fraudulent claims. Separately, it has opened nine civil investigations of marketers that potentially misled employers on eligibility to file claims.

Werfel briefed the Senate Finance Committee recently on the measures that have been put into place to address the fraud, including developing a special withdrawal program for those with unprocessed claims and a voluntary disclosure program for those who believed they were improperly paid. Since then, the IRS has seen an immediate 40% decline in average weekly claims, he said.

Lawmakers emphasize that cutting down on the fraudulent claims should also help the IRS more quickly resolve the legitimate claims that businesses have filed and are still awaiting resolution. In early December, the IRS had a backlog of about 1 million claims.

Congress routinely has difficulty finding offsets to pay for new spending or tax cuts. But in this case, the employee retention tax credit appears to have few friends left on Capitol Hill.

“Well-intentioned, but boy oh boy,” said Sen. Mark Warner, D-Va., in summing up the program.

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January 27, 2024
Online retailer eBay is cutting 1,000 jobs. It's the latest tech company to reduce its workforce

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LONDON — Online retailer eBay Inc. will cut about 1,000 jobs, or an estimated 9% of its full-time workforce, saying its number of employees and costs have exceeded how much the business is growing in a slowing economy. It marks the latest layoffs in the tech industry.

CEO Jamie Iannone said in a message to employees on Tuesday that the company also will reduce how many “contracts we have within our alternate workforce over the coming months.”

Those who are being laid off will be told through Zoom calls with their bosses, Iannone said, requesting that people work from home Wednesday to allow privacy for those conversations.

“We need to better organize our teams for speed — allowing us to be more nimble, bring like-work together, and help us make decisions more quickly,” he said in the note, which was posted online.

“These changes are difficult, but I’m confident that by working together we will become stronger than ever,” Iannone added.

San Jose, California-based eBay is the latest tech company to roll out a series of layoffs after quickly ramping up hiring during the COVID-19 pandemic while people spent more time and money online.

Now, companies from Google to Amazon have been making painful job cuts to reduce costs and bolster their bottom lines.

Just this month, Google said it was laying off hundreds of employees working on its hardware, voice assistance and engineering teams, while TikTok said its shedding dozens of workers in ads and sales and video game developer Riot Games, behind the popular “League of Legends” multiplayer battle game, was trimming 11% of its staff.

Meanwhile, Amazon said this month that it is cutting several hundred jobs in its Prime Video and MGM Studios unit.

The online retail giant owns two other companies that announced major layoffs in January: Audible, the online audiobook and podcast service, which is trimming about 5% of its workforce, and streaming platform Twitch that is cutting more than 500 jobs.

Other tech companies, including Spotify, Microsoft, Meta and IBM, also have recently cut jobs.

They’re running into a slowing economy following rapid interest rate hikes unleashed by central banks around the world to combat soaring inflation.

The head of eBay pointed to those concerns in the need to trim its workforce: “Despite facing external pressures, like the challenging macroeconomic environment, we know we can be better with the factors we control,” Iannone said.

The company has also faced internal problems that hurt its business. The online retailer will pay a $3 million fine to resolve U.S. criminal charges over a harassment campaign waged by employees who sent live spiders, cockroaches and other disturbing items to the home of a Massachusetts couple, according to court documents this month.

The Justice Department charged eBay with stalking, witness tampering and obstruction of justice more than three years after the employees were prosecuted in an extensive scheme to intimidate a couple who produced an online newsletter called EcommerceBytes that upset eBay executives with its coverage.

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January 24, 2024
Tencent's 'League of Legends' developer Riot Games announces layoffs of 530 staff

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BANGKOK — Riot Games, the developer of the popular “League of Legends” multiplayer battle game, is joining other tech companies that have been trimming their payrolls with a layoff of 11% of its staff.

In a lengthy statement to staff issued late Monday, CEO Dylan Jadeja and chief product officer and co-founder of Riot Games Marc Merrill said the move was meant to “create focus and move us toward a sustainable future.” It said 530 jobs were being eliminated, accounting for about 11% of the headcount at the company, which is owned by the Chinese technology giant Tencent.

A note to customers said, “This isn’t to appease shareholders or to hit a quarterly earnings number—it’s a necessity.”

The Los Angeles, California-based company said it had expanded its investments across too many areas, doubling its staff in a few years, and now was cutting back to focus on games.

“Today we’re a company without a sharp enough focus, and simply put, we have too many things underway. Some of the investments we’ve made aren’t paying off the way we expected them to,” the statement said.

“To all the Rioters who are being laid off, we are deeply sorry that it has come to this,” it said.

Riot Games said it will pay staff who are laid off six months of salary at a minimum, cash bonuses and other benefits.

It said it would offer access to job placement services, counseling and visa support for staff who were working with visas. Those laid off can also request use of a laptop if needed, the company said.

Job cuts have been taking a toll on workers across various industries — including retail, tech, media and hospitality — over the last few years. In recent months, layoffs have been announced at Google, Amazon, Hasbro, LinkedIn and more.

Many have been in the tech sector, which hired heavily during the pandemic, when people whiled away time stuck at home playing games online.

Riot Games sponsors the League of Legends World Championship and the company said it remained committed to esports and entertainment in support of its games.

The company said it would make changes to its Legends of Runeterra to “move it to sustainability” and reduce the staff working on that team, shifting its focus to its “Path of Champions.” “Riot Forge” will be discontinued after the upcoming release of “Bandle Tale,” it said.

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January 23, 2024
Los Angeles Times guild stages a 1-day walkout in protest of anticipated layoffs

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LOS ANGELES — Guild members of the Los Angeles Times walked off the job Friday to protest what it says are imminent layoffs, the first newsroom union work stoppage in the newspaper’s 143-year history.

The paper’s journalists and their supporters rallied in an LA civic center park, chanting and waving signs that read, “Don’t Cut Our Future.” The guild said members would also protest in other cities.

The guild said in a statement that the Times is planning to lay off a “significant” number of journalists, but that the union cannot specify the number because management has insisted on negotiating in meetings that are off the record. The guild also said the paper wants to gut seniority protections.

Dr. Patrick Soon-Shiong, a biotech billionaire, acquired the Times in 2018, returning it to local ownership two decades after it was sold to Tribune Co. The purchase raised hopes after years of cutbacks, circulation declines and leadership changes.

Last week, Executive Editor Kevin Merida abruptly left after a 2 1/2-year tenure. In June, more than 70 positions — about 13% of the newsroom — were cut.

A Times’ representative told the paper that revenue projections were under review and expenses were being carefully examined.

“We need to reduce our operating budget going into this year and anticipate layoffs,” spokeswoman Hillary Manning said in a statement.

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January 19, 2024
Tata announces plans to cut 2,800 steel jobs in a blow to Welsh town

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LONDON — Indian firm Tata Steel announced Friday it will close both blast furnaces at its plant in Port Talbot, Wales, eliminating 2,800 jobs, as part of plans to make its unprofitable U.K. operation leaner and greener.

Tata plans to switch from coal-fired blast furnaces to electric arc furnaces, which emit less carbon — and need fewer workers — using a half-billion pound ($634 million) investment from the British government.

The company said it would “commence statutory consultation as part of its plan to transform and restructure its U.K. business.”

“This plan is intended to reverse more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business,” it said.

The company said it expects about 2,800 jobs will be eliminated, most in the next 18 months, with a further 300 at longer-term risk.

The news is a major blow to Port Talbot, a town of about 35,000 people whose economy has been built on the steel industry since the early 1900s.

Unions have called for one blast furnace to remain open while the electric one is built, which would have meant fewer job cuts. They say Tata rejected their proposal.

The Unite union said it would “use everything in its armory” to fight job losses, including potential strikes.

At its height in the 1960s, the Port Talbot steelworks employed around 20,000 people, before cheaper offerings from China and other countries hit production. More than 300,000 people worked in Britain’s steel industry in 1971; by 2021 it was about 26,000.

The steel industry now accounts for 0.1 percent of the British economy and 2.4% of the country’s greenhouse gas emissions, according to research by the House of Commons Library.

Tata warned in 2022 that its U.K. operations were under threat unless it secured government funding to help it move to less carbon-intensive electric arc furnaces.

Last year the U.K. government gave Tata up to 500 million pounds ($634 million) to make the Port Talbot steelworks greener.

The British government said the investment would “secure a sustainable and competitive future for the U.K. steel sector.” Moving to electric furnaces would “transform the site and protect thousands of jobs, both in Port Talbot and throughout the supply chain,” it said.

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January 19, 2024
Macy’s to lay off 13% of corporate staff, close five stores

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Department-store chain Macy’s Inc. plans to cut 2,350 jobs and close five stores, the Wall Street Journal reported on Thursday, as the company tries to curb expenses and meet the demands of what it said was “an everchanging consumer and marketplace.”

The cuts, which amount to around 13% of Macy’s
M,
+0.39%
corporate staff and 3.5% of its staff overall, are part of an effort to shed costs, eliminate management layers and redirect spending toward improving customers’ shopping experience, the Journal said. The dismissals will begin on Jan. 26, according to a memo sent to employees cited by the publication.

“As we prepare to deploy a new strategy to meet the needs of an everchanging consumer and marketplace, we made the difficult decision to reduce our workforce by 3.5% to become a more streamlined company,” a Macy’s spokesperson said in a statement to MarketWatch.

The spokesperson said that the store closures were part of an effort to “reposition our store portfolio and evaluate the right mix of on- and off-mall locations,” adding that the five stores would close this year.

Shares of Macy’s were up 0.2% after hours on Thursday, after gaining 0.4% in the day’s trading.

The Journal reported that Macy’s plans to develop a more automated supply chain and would outsource some jobs. Citing a person familiar with the matter, the publication said the company would be “investing in areas that impact consumers, such as adding more visual-display managers to enhance the look of stores and upgrading digital functions to make online shopping more seamless.”

The job cuts were announced as the landscape for retailers remains uneven, as higher prices for groceries and other basics have hindered what inflation-hit shoppers can spend elsewhere.

“Despite our strong and tangible progress over the last few years, we remain under pressure,” according to the Macy’s memo cited by the Journal said.

The moves come as Macy’s President Tony Spring prepares to succeed the outgoing Jeff Gennette as the company’s chief executive next month. Macy’s is also facing a nearly $6 billion takeover bid by an investor group that’s looking to take the retailer private.

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January 18, 2024
Northern Ireland in 2024: A land of misery

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BELFAST — First its government collapsed. Then austerity began to bite. Now fresh elections are set to be cancelled, and tens of thousands of workers are going on strike.

This is Northern Ireland in 2024 — a land of political deadlock, public sector cuts and mass labor unrest, with neither British ministers in London nor local powerbrokers the Democratic Unionist Party (DUP) willing to do what is needed to restore a coherent government in this ever-divided corner of the United Kingdom.

Nearly two years after the DUP first sabotaged the Northern Ireland Executive — the cross-community government at the heart of the region’s decades-old peace process — its leadership appears no closer to ending its boycott on cooperation with Sinn Féin. The Irish republicans overtook their DUP opponents as the most popular party at the last Stormont election in May 2022, but have been waiting ever since to lead a government under a power-sharing system the DUP refuses to revive.

Similarly unwilling to fill the political vacuum is Northern Ireland Secretary Chris Heaton-Harris, who refuses to resume “direct rule” from Westminster. Northern Ireland was governed directly from London through most of its decades of bloodshed during the 20th century, and through a previous collapse of powersharing at Stormont between 2002-07.

At least partly filling the vacuum over the past year have been Northern Ireland’s senior civil servants, abandoned to run their country without the help of elected politicians. They protest they lack both the power and democratic mandate to make essential spending and cost-cutting decisions — a weakness that has left public services to wither from within.

This long-running crisis has triggered months of labor unrest, finally reducing Northern Ireland to a standstill on Thursday as 16 unions staged the region’s first coordinated mass strike in a half-century. It may not be the last.

“This is a campaign we will continue,” said Gerry Murphy of the Irish Congress of Trade Unions. “This is a campaign we will win.”

Labor pains

More than 170,000 workers — nearly a fifth of the entire workforce — shut down schools, transport links, non-emergency healthcare and almost all government-funded services on Thursday in a mass demand for long-withheld pay raises.

The promised salary hikes were secured in principle years ago as part of wider U.K. labor agreements, but most of this money has yet to reach paychecks and pensions in Northern Ireland because the relevant Stormont ministers aren’t in office. In their absence, the U.K. Treasury is withholding the required funds.

That was supposed to change as part of a conditional funding package that Heaton-Harris presented to local parties last month in a bid to break the DUP logjam. If Democratic Unionist leader Jeffrey Donaldson agreed to lead his party back to Stormont, Heaton-Harris announced, the U.K. would provide £3.3 billion in exceptional financial supports to make the relaunch of power-sharing a success. Included in the package: £584 million for the outstanding pay claims.

But to the exasperation of other parties, and despite Donaldson’s own efforts to telegraph a coming move, the DUP leader failed to persuade his most powerful deputies to grasp the offer as a moment for compromise.

Donaldson since has insisted that talks with U.K. government officials will drag out indefinitely until the DUP wins further concessions on Northern Ireland’s complex post-Brexit trading arrangements, which unionists fear are pushing the economy toward a united Ireland.

The DUP leader failed to persuade his most powerful deputies to grasp the offer as a moment for compromise | Charles McQuillan/Getty Images

Indeed, dangling billions in front of the DUP seems only to have backfired. Heaton-Harris has repeatedly said the £3.3 billion will not be forthcoming until the DUP returns to Stormont — a condition that both British unionists and Irish nationalists have denounced as blackmail.

Mass unrest

Reflecting that anger, tens of thousands of striking workers braved freezing conditions on Thursday to march in central Belfast, Londonderry and Enniskillen, venting their anger and demanding their salaries be boosted to the levels of their professional peers in England, Scotland and Wales.

As one example, they cited how a newly qualified teacher in Northern Ireland earns around £24,000 a year, versus £30,000 elsewhere in the U.K. Official U.K. statistics indicate that public sector workers in Northern Ireland have seen the value of their incomes fall by 11 percent in real terms during the past two years of government collapse.

Heaton-Harris, an arch Brexiteer who was appointed to the post by ex-PM Liz Truss during her brief Downing Street reign, has struggled to find any pressure point that works on Donaldson, whose DUP is frequently cited as the most stubborn political party in Europe.

Heaton-Harris’ most common threat — to call an early election for Stormont — has proved particularly absurd because it would potentially help the DUP. Donaldson would hope to claw back ground lost to politicians representing the moderate middle ground, who did unusually well in the 2022 vote.

Indeed, the prospect of fresh elections is one reason why Donaldson keeps playing for time. Accepting a deal now — and so accepting the current post-Brexit trade arrangements are here to stay — would likely split his party and drive support toward Traditional Unionist Voice, an even harder-line unionist rival that rejects working with Sinn Féin in all circumstances.

Reflecting that anger, tens of thousands of striking workers braved freezing conditions on Thursday to march in central Belfast | Paul Faith/AFP via Getty Images

And so the stasis — and the misery — looks set to continue.

The unions behind Thursday’s mass strike have vowed to conduct a rolling series of similar protests until Heaton-Harris untethers their pay demands from any proposed DUP sweetheart deal.

But Heaton-Harris looks poised to kick the Stormont can down the road yet again, meaning Northern Ireland’s public services keep suffering via piecemeal funding half-measures.

The minister is expected to unveil emergency legislation next week that gives both himself, and Northern Ireland’s permanent secretaries, a new “hybrid” mix of powers and responsibilities over the region.

But a former permanent secretary who oversaw the Brexit process in Northern Ireland, Andrew McCormick, said Heaton-Harris’ mismanagement of the situation to date meant neither the Stormont mandarins nor the secretary of state himself “have a legal basis for the strategic decisions that are needed. The government can and should change course as a matter of urgency. Abdication is not acceptable.”

The legislation also is expected to delay, once again, the legally required date for the next Stormont election to early 2025 — by which time a U.K.-wide general election will likely have ended the Conservative government’s 14-year reign and turned Northern Ireland into a problem for the British Labour Party.

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January 16, 2024
Robot baristas and AI chefs caused a stir at CES 2024 as casino union workers fear for their jobs

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LAS VEGAS — The barista tipped the jug of smooth, foamy milk over the latte, pouring slowly at first, then lifting and tilting the jug like a choreographed dance to paint the petals of a tulip.

Latte art is a skill that can take months if not years of practice to master — but not for this barista powered by artificial intelligence.

Robots of all kinds caused a stir on the show floor this week at the annual CES technology trade show in Las Vegas.

It’s innovations like this that worry Roman Alejo, a 34-year-old barista at the Sahara hotel-casino on the Las Vegas Strip, who can’t help but wonder if the clock is ticking on hospitality jobs in the age of AI.

“It is very scary because tomorrow is never promised,” he said. “A lot of AI is coming into this world. It is very scary and very eye-opening to see how humans can think of replacing other humans.”

The world’s largest tech show put those fears back under the spotlight just a little over a month after the casino workers union in Las Vegas ratified new contracts for 40,000 members, ending a bitter, high-profile fight that called attention to AI’s threat to union jobs.

“Technology was a strike issue and one of the very last issues to be resolved,” said Ted Pappageorge, the Culinary Workers Union’s secretary-treasurer who led the teams that negotiated new five-year contracts, narrowly averting a historic strike at more than a dozen hotel-casinos on the Strip.

Hospitality workers told The Associated Press in interviews over eight months of bargaining that they were willing to take a cut in pay while on strike to win stronger job protection against inevitable advancements in technology. That includes technology already at play at some resorts: self check-in stations, automated valet ticket services and robot bartenders known as “tipsy robots.”

Pappageorge said the emergence of robotics in the hospitality and service industry has been on the union’s radar for years. The difference now, he told The Associated Press this week, “is the combination of artificial intelligence and robotics.”

Experts say that breakthrough in AI technology has forced labor unions to rethink how they negotiate with companies.

Bill Werner, an associate professor in the hospitality department at the University of Nevada, Las Vegas, said unions now have to be “much more deliberate” in their negotiations for job security.

The types of casino union jobs at risk could look drastically different five years from now, for example, when the Culinary Union’s contract ends.

“What is going to happen to these people and what rights do they have?” he said. “And what happens to them if they lose their job to a robot?”

In its latest contract, the union cushioned its so-called safety net for workers, winning $2,000 in severance pay for each year worked if a job is eliminated by tech or AI, as well as the option to try to move to a different department within the company.

Pappageorge said they had to “develop new language” that protected workers both from today’s technology and “technology that we don’t even know is coming.”

“This idea that technology, robotics and artificial intelligence is just running wild with no control at all can do incredible damage,” Pappageorge said. “So what we have to do is get ahead of the curve, and CES is where it’s at.”

More than 100 union members attended the trade show this week to scope out emerging tech that could put more casino jobs at risk.

And there was plenty new on the show floor: Friendly-faced robots that complete deliveries in hotels and restaurants. A robotic masseuse. Bots that can prepare and serve coffee, ice cream or boba. AI-powered smart grills that can handle tasks like broiling and searing without a human in the kitchen. And chef-like robots teasing a future with “autonomous restaurants,” as one company put it.

Meng Wang, co-founder of food tech startup Artly Coffee, one of the more than 4,000 exhibitors at CES this year, said he isn’t in the business of eliminating jobs. Wang said Artly’s autonomous barista bots can help fill a labor shortage in the service industry.

“Baristas have a hard job. It’s very labor intensive, long hours. The pay is not that good,” he said. “What we are doing is not replacing jobs. We are filling the need in the market and we are bringing specialty coffee to more places.”

But Werner said AI poses a real threat to casino union jobs that don’t require face-to-face interaction with customers — housekeeping, food preparation and cooks, for example.

“When the industry doesn’t have to worry about the effect on customer service, then that takes a lot of the risk out of automation,” he said. That’s especially true for a people-pleasing tourist destination like the Las Vegas Strip, where customers expect top-notch service and experiences, including the latest trends in technology.

That makes Las Vegas “a good place to test these things and see how customers react to it,” he said.

The Culinary Union and its members, like Alejo, the barista, acknowledge that the hospitality industry is ever-evolving.

“The innovations are incredible,” Alejo said. “But it is very scary that in today’s world, everything seems to revolve around technology.”

___

Video producer James Brooks contributed to this report.

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January 12, 2024
Supreme Court agrees to hear Starbucks appeal in Memphis union case

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WASHINGTON — The Supreme Court on Friday agreed to hear an appeal from Starbucks in a dispute with the National Labor Relations Board over efforts by workers to unionize at a store in Memphis, Tennessee.

The case has been among the most closely watched in the more than 2-year-old effort to unionize Starbucks’ company-owned U.S. stores.

Starbucks fired seven employees in Memphis in February 2022, citing safety. The Seattle coffee giant said they violated company policy by reopening a store after closing time and inviting non-employees — including a television crew — to come inside and move throughout the store.

But the NLRB intervened, saying the company was unlawfully interfering in workers’ right to organize and that the store had routinely allowed employees to gather there after closing time. The NLRB asked a federal judge for an immediate injunction requiring Starbucks to reinstate the workers.

In August 2022, a federal judge agreed and ordered Starbucks to reinstate the workers. That decision was later affirmed by the Sixth U.S. Circuit Court of Appeals. Starbucks appealed to the Supreme Court.

The legal issue in the case is the standard courts should use when deciding whether to issue an order against a business in the midst of a labor dispute. Starbucks said the lower courts in this case used a relaxed standard when deciding to grant the injunction to the labor board, while other federal courts have used a tougher standard.

“We are pleased the Supreme Court has decided to consider our request to level the playing field for all U.S. employers by ensuring that a single standard is applied as federal district courts determine whether to grant injunctions pursued by the National Labor Relations Board,” the company said Friday.

Workers United, the union organizing Starbucks workers, said the company is trying to weaken the labor board’s ability to hold companies accountable.

“There’s no doubt that Starbucks broke federal law by firing workers in Memphis for joining together in a union,” Workers United said. “The district court determined that, and the decision was affirmed by one of the most conservative courts in the nation.”

The Memphis store did eventually vote to unionize. It is one of at least 370 Starbucks stores that have voted to unionize since late 2021.

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January 12, 2024
Even Cloudflare's CEO says that viral firing video is 'painful' — here's what went wrong

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A tech employee’s recording of the meeting firing her from a sales role at Cloudflare
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has spurred criticism of the company — and a broader conversation about the right way to let employees go.

Viewers have called the roughly 10-minute TikTok video, which went viral this week, “sad” and a “disaster.” Even Cloudflare CEO Matthew Prince responded on X (formerly Twitter) that it was “painful for me to watch.”

In the video captioned, “POV: You’re about to get laid off,” former Cloudflare account executive Brittany Pietsch logs into a virtual meeting with an HR representative and a director at the company, both of whom she says she’s never met before. In a caption, Pietsch writes that she assumed they were meeting to let her go, because she had heard from coworkers who had been axed already.

In the video, the company reps say that Pietsch hadn’t met performance expectations, and that Cloudflare had decided to “part ways” with her. Pietsch’s response is what has pushed this clip to be shared all over social-media newsfeeds: She asks for an explanation for why she, specifically, is being let go by the company, particularly because she’s a new employee who hasn’t heard any negative feedback. She also asks why her manager isn’t a part of this termination meeting.

“Every single one-on-one [meeting] I’ve had with my manager, every conversation I’ve had with him — he’s been giving me nothing but ‘I am doing a great job,’” she says during the meeting. “I’m just definitely very confused and would love an explanation that makes sense.”

The director, who can’t be seen in the video, says he “won’t be able to go into specifics” on Pietsch’s performance.

In a statement to MarketWatch, a Cloudflare spokesperson clarified that the company did not conduct layoffs, and is not engaged in a reduction of force. “When we do make the decision to part ways with an employee, we base the decision on a review of an employee’s ability to meet measurable performance targets,” the Cloudflare statement said. “We regularly review team members’ performance and let go of those who aren’t right for our team. There is nothing unique about that review process or the number of people we let go after performance review this quarter.”

Pietsch did not immediately respond to a request for comment.

Company CEO Prince added on X, formerly known as Twitter, that the company fired 40 salespeople out of 1,500 in its go-to-market division. “That’s a normal quarter,” he wrote in his post. “When we’re doing performance management right, we can often tell within 3 months or less of a sales hire, even during the holidays, whether they’re going to be successful or not.”

But he also added: “We try to fire perfectly. In this case, clearly we were far from perfect. The video is painful for me to watch. Managers should always be involved. HR should be involved, but it shouldn’t be outsourced to them … We don’t always get it right.”

Many viewers seem to agree, as the video has drawn close to 200,000 views on TikTok and millions of views on X, along with going viral on Reddit.

“Total disaster on both sides,” lawyer Eric Pacifici said.

“Totally unfair to her,” wrote Austen Allred, CEO of the online-coding bootcamp Bloom Institute of Technology. “Pretty sad across the board.”

On LinkedIn, Pietsch gave her own response to the social-media uproar. She said that her manager was unaware that she was being let go, and that she asked questions during the meeting not to try and save her job, but rather to get greater clarity on why she had been singled out for termination.

“I’ll never be able to wrap my mind around it,” she wrote in the post. “We as employees are expected to give 2 weeks notice and yet we don’t deserve even a sliver of respect when the roles are reversed?”

What’s the right way to fire an employee?

It’s never easy to part ways with an employee, according to Molly, a human-resources consultant who runs the TikTok account HR Molly, which has 80,000 followers. She asked only to be identified by her first name for privacy reasons.

But that being said, it’s very important to treat affected employees with respect. That can include sharing as much information as possible about why the decision is being made.

“I tell people that even if you catch someone stealing, even that termination meeting should have a level of decency,” she said. “It seems like there’s a significant consensus that the meeting [in the viral video] lacked some dignity.”

It’s also important to understand these kinds of conversations will be difficult for an employee no matter what, Molly added.

“We know this impacts people and we know this is emotional and that it’s harmful. How can we do it in a way that creates the least amount of additional harm?” she said, noting that she picked up the concept from fellow TikTok creator and diversity consultant Ciarra Jones. “Companies need to prioritize the well-being of the employee that’s impacted.”

As for recording your layoff or firing meeting — that can be risky, Molly said, and downright illegal in states that require you to receive consent before doing so.

But companies and HR professionals would be wise to remind themselves that, in this day and age, it can happen, she said. And if a camera or tape recorder would change the way you handle an interaction, it’s a good sign to reevaluate.

According to its company website, Cloudflare has dozens of job postings for open positions across the company, including sales roles.

In her LinkedIn post, Pietsch said that she’s not very concerned about any backlash over the video that might impede her chances of getting another job.

“Any company that wouldn’t want to hire me because I shared a video of how a company fired me or because I asked questions as to why I was being let go is not a company I would ever want to work for anyway,” she wrote.

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January 12, 2024
12 Days Into 2024 And 2700+ Video Game Layoffs Have Been Announced

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Within the last few years, video game industry layoffs have unfortunately become more commonplace. In 2023, we saw near-weekly layoffs across the entire industry. When the dust had settled, at least 6,000 jobs across publishers, developers, and other video game-related companies had happened. Sadly, it appears 2024 will outpace that, if the first few weeks of the year are any indication.

Lego Star Wars: The Skywalker Saga’s Air Combos Make Me Feel Skilled AF

Most folks didn’t expect 2024 to be much better, but I’m not sure anyone was ready for it to be possibly worse—yet this year has kicked off with a string of big and small layoffs signaling that the corporate bloodletting rituals aren’t ending anytime soon. So Kotaku is going to try and track all of 2024’s layoffs as they happen. Hopefully, we don’t have to update this post that much.

Archiact – Unknown

On January 4, 2024, the first round of video game layoffs (that we know of) happened at VR games developer Archiact. The company, known for its Doom 3 VR port, announced on social media that it had laid off an unspecified number of staff.

“We are working with these individuals to offset this difficult transition as much as possible, including through reverse recruiting,” said the studio in its announcement post.

Bossa Studios – 19 people

This technically happened in late 2023, but was reported and confirmed on January 5, 2024. According to Gameindustry.biz, 19 people were cut from the studio. The layoffs were mostly QA and production roles as well as some non-UK employees.

Unity Software – 1,800 people

On January 8, 2024, Reuters reported the first truly massive round of layoffs for the year as Unity confirmed that it planned to cut nearly 25% of its staff as part of a continued “reset” at the company. This is reportedly the largest round of layoffs in the software company’s history and it will be completed by the end of March.

Twitch – 500 people

On January 9, 2024, Bloomberg reported that Twitch was preparing to lay off 500 employees by the end of January. This is about 35% of its total staff. The Amazon-owned video game streaming website previously laid off hundreds of employees last year in March and later in October.

Playtika – 300-400 people

As reported by CTech on January 11, 2024, mobile game publisher and developer Playtika plans to lay off up to 400 employees, or about 10% of the company’s total workforce. Playtika previously laid off 900 employees in 2022. In 2023, the company agreed to pay up to $300 million to acquire Innplay Labs, another mobile developer.

Discord – 170 people

The Verge reported on January 11, 2024 that popular video game chat software developer Discord was planning to lay off around 17% of the company’s total staff. The layoffs were announced in an all-hands meeting and an internal memo obtained by The Verge. CEO Jason Citron explained in the memo that the company had grown “quickly” since 2020 and took on too many projects.

“Today, we are increasingly clear on the need to sharpen our focus and improve the way we work together to bring more agility to our organization,” Citron told employees in the memo. “This is what largely drove the decision to reduce the size of our workforce.”

Lost Boys Interactive – Unknown

On January 12, Aftermath reported that an unknown amount of employees at Gearbox-owned developer Lost Boys Interactive had been laid off.

“It seems a sizable portion of Lost Boys Interactive was laid off today, including myself,” wrote Jared Pace, a producer at the studio, on Linkedin. Pace reportedly told Aftermath that layoffs “affected all disciplines at all levels.”

Funselektor – 3 people

The Canadian indie studio behind Art of Rally announced on January 12 that three developers had been laid off.

“Unfortunately, we’ve had to make some positions redundant at Funselektor,” tweeted the studio’s founder Dune Casu. “We’d like to help them in their employment hunt in the video game sector, so we recommend these awesome Australians: @AdrianGenerator, @PezzleSp, @h4ypal.”

As of January 11, 2024, at least 2,792 people have been (or will be) laid off this year.

The video game industry is bigger and makes more money than movies and music combined, bringing in $180 billion in 2021 alone. It’s also an industry that becomes riskier and more expensive each year as AAA games take longer and cost more to make, leading to a situation where even a single flop can sink a studio or publisher. And the whole industry is also in desperate need of unions to help protect its millions of workers when things don’t work out as planned.

Until then, corporate greed, industry consolidation, and poor leadership will likely continue to cost thousands of people their jobs as we’ve seen at Twitch and Unity.

.

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January 12, 2024
New labor rules aim to offer gig workers more security, though some employers won't likely be happy

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The Biden administration enacted a new labor rule Tuesday that aims to prevent the misclassification of workers as “independent contractors,” a step that could bolster both legal protections and compensation for many in the U.S. workforce.

The Labor Department rule, which the administration proposed 15 months ago, replaces a scrapped Trump-era standard that lowered the bar for classifying employees as contractors. Such workers neither receive federal minimum wage protections nor qualify for employee benefits, such as health coverage and paid sick days.

The changes have long been viewed as especially bad news for companies like Uber and DoorDash — pioneers of the so-called gig economy, in which companies essentially rely on armies of freelance drivers, delivery people and others to provide services without traditional labor protections. Some gig workers say they prefer things this way, extolling the freedom to set their own hours and schedules. But others complain of exploitation by companies.

Financial markets appeared to shrug off leaked news of the agreement on Monday. Shares of Uber and Lyft, which dropped 10% and 12% respectively when the administration unveiled the proposed rules in October 2022, rose 2.5% and 5.8% on Monday. Shares were down about 1% before the opening bell Tuesday.

One significant change in the new rules, which take effect March 11, involves the way the Labor Department — and federal judges — decide whether workers have been properly classified as independent contractors. In particular, employers will be required to consider whether the jobs performed by such workers are an integral part of the employer’s business.

That could affect app-based companies that rely almost entirely on freelance workers. In such cases, that provision could tip the scales toward classifying such people as regular employees rather than contractors.

The new rule directs employers to consider six criteria for determining whether a worker is an employee or a contractor, without predetermining whether one outweighs the other. The criteria also include the degree of control by the employer, whether the work requires special skills, the degree of permanence of the relationship between worker and employer, and the investment a worker makes, such as car payments.

The rule, however, does not carry the same weight as laws passed by Congress or state legislatures, nor does it specify whether any specific company or industry should reclassify their workers. It basically just offers an interpretation of who should qualify for protections under the 1938 Fair Labor Standards Act.

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January 9, 2024
New labor rules aim to offer gig workers more security, though some employers won't likely be happy

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The Biden administration enacted a new labor rule Tuesday that aims to prevent the misclassification of workers as “independent contractors,” a step that could bolster both legal protections and compensation for many in the U.S. workforce.

The Labor Department rule, which the administration proposed 15 months ago, replaces a scrapped Trump-era standard that lowered the bar for classifying employees as contractors. Such workers neither receive federal minimum wage protections nor qualify for employee benefits, such as health coverage and paid sick days.

The changes have long been viewed as especially bad news for companies like Uber and DoorDash — pioneers of the so-called gig economy, in which companies essentially rely on armies of freelance drivers, delivery people and others to provide services without traditional labor protections. Some gig workers say they prefer things this way, extolling the freedom to set their own hours and schedules. But others complain of exploitation by companies.

Financial markets appeared to shrug off leaked news of the agreement on Monday. Shares of Uber and Lyft, which dropped 10% and 12% respectively when the administration unveiled the proposed rules in October 2022, rose 2.5% and 5.8% on Monday. Shares were down about 1% before the opening bell Tuesday.

One significant change in the new rules, which take effect March 11, involves the way the Labor Department — and federal judges — decide whether workers have been properly classified as independent contractors. In particular, employers will be required to consider whether the jobs performed by such workers are an integral part of the employer’s business.

That could affect app-based companies that rely almost entirely on freelance workers. In such cases, that provision could tip the scales toward classifying such people as regular employees rather than contractors.

The new rule directs employers to consider six criteria for determining whether a worker is an employee or a contractor, without predetermining whether one outweighs the other. The criteria also include the degree of control by the employer, whether the work requires special skills, the degree of permanence of the relationship between worker and employer, and the investment a worker makes, such as car payments.

The rule, however, does not carry the same weight as laws passed by Congress or state legislatures, nor does it specify whether any specific company or industry should reclassify their workers. It basically just offers an interpretation of who should qualify for protections under the 1938 Fair Labor Standards Act.

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January 9, 2024
Stock market today: Wall Street shaves off some losses to close its worst week in the last 10

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NEW YORK — Wall Street closed its worst week since Halloween with a listless Friday after reports showed workers are getting bigger raises, but key parts of the economy still don’t look like they’re overheating.

The S&P 500 rose 8.56 points, or 0.2%, to 4,697.24 after drifting between small gains and losses through the day. It capped the first down week for the index in the last 10, after it roared into 2024 on hopes that inflation and the overall economy are cooling enough for the Federal Reserve to cut interest rates sharply through the year.

The Dow Jones Industrial Average rose 25.77, or 0.1%, to 37.466.11 and inched closer to its record set earlier in the week. The Nasdaq composite added 13.77, or 0.1%, to 14,524.07.

Treasury yields swung sharply in the bond market following the economic reports. They initially climbed after the latest monthly jobs report showed U.S. employers unexpectedly accelerated their hiring last month. Average hourly pay for workers also rose, when economists had been forecasting a dip.

Such strong numbers are good news for workers, and they should keep the economy humming. That’s a positive for corporate profits, which are one of the main factors that set prices for stocks.

But Wall Street’s worry is the strong data could also convince the Federal Reserve upward pressure remains on inflation. That in turn could mean the Fed will hold interest rates high for longer than expected. Interest rates affect the other big factor setting stock prices, with high ones hurting financial markets.

The jobs report briefly forced traders to push out their forecasts for when the Fed could begin to cut rates. But a report later in the morning showed that growth for finance, real estate and other companies in the U.S. services industries slowed by more than economists expected last month.

Following that report, traders quickly built bets back up for the Fed to begin cutting rates in March. They’re now forecasting a nearly two-in-three chance of that, similar to a day earlier, according to data from CME Group.

Altogether, the data could bolster Wall Street’s building hopes for a perfect landing for the economy, one where it slows just enough through high interest rates to stamp out high inflation but not so much that it causes a recession.

After climbing as high as 4.09% immediately after the jobs report, the yield on the 10-year Treasury fell to back to 3.96% following the weaker-than-expected report on services industries. It eventually pulled back to 4.04%, compared with 4.00% late Thursday.

On Wall Street, Constellation Brands climbed 2.1% after the seller of Corona and Modelo beers in the United States reported stronger profit for the latest quarter than analysts expected.

Travel-related companies were also strong and clawing back more of their losses from earlier in the week. Carnival rose 2.8%, and American Airlines gained 3.9%.

On the losing end was Apple, whose 0.4% dip Friday sent it to a 5.9% loss for the week, its worst since September. It’s a sharp turnaround from last year, when the market’s most influential stock soared more than 48%.

This week’s broad pullback for stocks was not a surprise for many on Wall Street, who had been calling its big run since autumn overdone. Critics say the six rate cuts traders are betting on for 2024 is unlikely unless a recession occurs. The Fed itself indicated in its latest summary of economic projections, or SEP, that three cuts may be more likely.

“Many who assume that the Fed will need to move faster and more aggressively than its SEP projections or recent statements likely received a dose of reality this week,” said Rick Rieder, chief investment officer of global fixed income at BlackRock. “Things are cooling, but in a more moderate way than historically, similarly to the weather these days. There are spurts of faster cooling in some areas, but generally nothing that people should panic about, or aggressively seek shelter from.”

In stock markets abroad, indexes were mostly lower in Europe after data showed showed inflation rose to 2.9% in December. The rebound after seven monthly declines fueled debate over how soon the European Central Bank could cut its own interest rates.

Indexes were also lower across much of Asia. Japan’s Nikkei 225 was an exception and rose 0.3%.

Japanese exporters are betting a boost from the falling value of the yen against other currencies. The yen has weakened in recent days amid speculation the Bank of Japan might go slowly on changing its ultra-aggressive policy on interest rates following Monday’s major earthquake in central Japan.

___

AP Business Writers Yuri Kageyama and Matt Ott contributed.

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January 5, 2024
Jobs report for December will likely conclude another solid year of hiring in 2023

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WASHINGTON — Bringing resurgent inflation down was never expected to be so relatively pain-free.

Federal Reserve Chair Jerome Powell warned of hard times ahead after the Fed began jacking up interest rates in the spring of 2022 to attack high inflation. Economists predicted that the much higher borrowing costs that resulted would cause a recession, with layoffs and rising unemployment, in 2023.

Yet the recession never arrived, and none appears to be on the horizon. The nation’s labor market, though cooler than in the sizzling-hot years of 2022 and 2023, is still cranking out enough jobs to keep the unemployment rate near historic lows.

The trend toward slower, but still healthy, hiring likely continued in December. The Labor Department is expected to report Friday that employers added a still-solid 160,000 jobs last month, according to a survey of forecasters by the data firm FactSet. That would mean that the economy had added 2.7 million jobs in 2023 — an average of 226,000 a month.

Economists have predicted that the unemployment rate ticked up from 3.7% to 3.8%. But even that modest rise would mean that the jobless rate remained below 4% for the 23rd straight month — the longest such streak since the 1960s.

The resilience of the job market has been matched by the durability of the overall economy. Far from collapsing into a recession, the U.S. gross domestic product — the total output of goods and services — grew at a vigorous 4.9% annual pace from July through September. Strong consumer spending and business investment drove much of the expansion.

Despite the economy’s steady growth, low unemployment, healthy hiring and cooling inflation, polls show many Americans are dissatisfied with the economy. That disconnect, which will likely be an issue in the 2024 elections, has puzzled economists and political analysts.

A key factor, though, is the public’s exasperation with higher prices. Though inflation has been falling more or less steadily for a year and a half, prices are still 17% higher than they were before the inflation surge began in the spring of 2021.

At the same time, though, average hourly pay has outpaced inflation over the past year, leaving Americans with more money to spend. Indeed, as they did for much of 2023, consumers, a huge engine for U.S. economic growth, hit the stores in November, shopped online, went out to restaurants or traveled.

Since March 2022, the Fed has raised its benchmark interest rate 11 times, lifting it to a 22-year high of about 5.4%. Those higher rates have made loans costlier for companies and households, but they are on their way toward achieving their goal: Conquering inflation.

Consumer prices were up 3.1% in November from a year earlier, down drastically from a four-decade high 9.1% in June 2022. The Fed is so satisfied with the progress so far that it hasn’t raised rates since July and has signaled that it expects to make three rate cuts this year.

Beyond a hard hit to the housing market, higher rates haven’t taken much of an economic toll.

“A lot of the resilience was in parts of the economy that aren’t particularly sensitive to interest rates,’’ like healthcare and government, said Nick Bunker, economic research director for North America at the Indeed Hiring Lab.

The job market has cooled as inflation has subsided, though nowhere near enough to signal that a recession is on the way. Job growth in 2023 amounted to a monthly average of 232,000 through November, a solid figure but down from a record 606,000 a month in 2021 and 399,000 in 2022. And much of the hiring in recent months has been confined to only a few industries. Just three sectors of the economy — healthcare, governments and hotels and restaurants — accounted for 91% of the 199,000 added jobs in November.

Normally, slowing job growth might be a cause for concern. But under the current circumstances, with inflation still above the Fed’s 2% annual target, a more moderate pace of hiring is seen as just what the economy needs. Lower demand for workers tends to ease the pressure on employers to raise pay to keep or attract workers — and to then pass on their higher labor costs to their customers by raising prices.

And the labor market appears to be decelerating in a relatively painless way: Employers are posting fewer job openings but not laying off many workers. The number of Americans who apply each week for unemployment benefits — a proxy for job cuts — has remained unusually and consistently low.

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January 4, 2024
SpaceX accused of unlawfully firing employees who were critical of Elon Musk

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NEW YORK — A U.S. labor agency has accused SpaceX of unlawfully firing employees who penned an open letter critical of CEO Elon Musk and creating an impression that worker activities were under surveillance by the rocket ship company.

A Los Angeles-based regional director for the National Labor Relations Board on Wednesday filed a complaint that consolidates eight unfair labor practice charges against SpaceX. The cases stem from the company’s alleged actions following the circulation of the employees’ letter back in June 2022.

The letter, among other workplace concerns, called on executives to condemn Musk’s public behavior on X — the platform then-known as Twitter — and hold everyone accountable for unacceptable conduct. Musk’s actions included making light of sexual harassment allegations against him, which the billionaire denied.

“As our CEO and most prominent spokesperson, Elon is seen as the face of SpaceX — every tweet that Elon sends is a de facto public statement by the company,” the open letter said at the time. The letter also referred to Musk’s actions as a ”frequent source of distraction and embarrassment.”

A total of nine employees were soon terminated for their involvement in the letter, according to a November 2022 filing made on behalf of one of the employees to the NLRB, although only eight are included in Wednesday’s complaint.

In addition to the firings, the complaint accuses SpaceX of interrogating other workers about the letter, announcing that employees were terminated for their participation in the letter and “inviting employees to quit if they disagreed with the behavior of Chief Executive Officer Elon Musk.”

The complaint also alleges that some were shown screen shots of communications between employees about the letter, which “created an impression among (SpaceX’s) employees that their protected concerted activities were under surveillance.”

SpaceX did not immediately respond to The Associated Press’ requests for comment Thursday.

The Hawthorne, California, company has until mid-January to respond to the complaint, according to Wednesday’s filing. The complaint marks the NLRB’s first step towards litigating these allegations and seeking a settlement. If a settlement isn’t reached, a hearing is scheduled to begin on March 5 in Los Angeles.

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January 4, 2024
Applications for jobless benefits fall again as job market continues to show strength

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The number of Americans applying for unemployment benefits fell last week as the labor market continues to show resilience despite elevated interest rates.

Jobless claims fell to 202,000 for the week ending Dec. 30, down by 18,000 from the previous week, the Labor Department reported Thursday. The four-week average of claims, which evens out some of the week-to-week volatility, fell by 4,750 to 207,750.

Overall, 1.86 million Americans were collecting jobless benefits during the week that ended Dec. 23, a decrease of 31,000 from the previous week and the fewest in two months.

Weekly unemployment claims are a proxy for layoffs. They have remained at extraordinarily low levels in the face of high interest rates.

In an effort to extinguish the four-decade high inflation that took hold after an unusually strong economic rebound from the COVID-19 recession of 2020, the Federal Reserve raised its benchmark rate 11 times since March of 2022.

Inflation has eased considerably during the past year, but remains slightly above the Fed’s 2% target. The Fed has left rates alone at its last three meetings and is now signaling that it could cut rates three times next year.

When the Fed started raising rates, it was widely predicted that the U.S. economy would slide into recession. But the economy and the job market remained surprisingly resilient. The unemployment rate has been below 4% for 22 straight months, the longest such streak since the 1960s.

The number of job openings has fallen, but remain at historically healthy levels. On Wednesday, the government reported that America’s employers posted 8.8 million job openings in November, down slightly from October and the fewest since March 2021. However, demand for workers remains strong by historical standards.

The combination of decelerating inflation and low unemployment has raised hopes that the Fed is managing a so-called soft landing: raising rates just enough to bring down prices without causing a recession.

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January 4, 2024
A boozy banana drink in Uganda is under threat as authorities restrict home brewers

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MBARARA, Uganda — At least once a week, Girino Ndyanabo’s family converges around a pit in which bananas have been left to ripen. The bananas are peeled and thrown into a wooden vat carved like a boat, and the patriarch steps in with bare feet.

The sweet juice he presses out is filtered and sprinkled with grains of sorghum, which converts the juice into ethanol, and left to ferment for up to a day. The result is a beverage Ugandans call tonto, or tontomera, a word in the Luganda language that alludes to drinkers’ poor coordination. Weaker than bottled beer, the drink has a fruity aroma and bits of sorghum floating on its dark surface.

Tonto is legendary in Uganda. Folk singers have crooned about it, politicians seeking a common touch take a sip when hunting for votes, and traditional ceremonies terminate at dusk with tonto parties. Its devotees are many, ranging from officials in suits to laborers in sandals.

But its production is under threat as cheap bottled beer becomes more attractive to drinkers and as authorities move to curb the production of what are considered illicit home brews, which have the risk of sometimes deadly contamination. And because tonto production takes place outside official purview, authorities are unable to collect revenue from its sale.

A bill in the national assembly seeking to regulate the production and sale of alcohol would criminalize the activities of home brewers of tonto, along with other traditional brews made across this East African country.

But farmers have a more pressing concern: Not enough new banana juice cultivars are being planted to produce the brew. Communities are prioritizing the more commercially viable varieties that are boiled and eaten as a popular mash called matooke.

Ndyanabo, a farmer in the western district of Mbarara whose first experience with tonto was as a little boy in the 1970s, said he has only a few plants left of the cultivars from which the banana juice is extracted.

He sources his bananas one bunch at a time from farmers near him until he can fill the small pit on his plantation. The natural underground heat ripens the bananas within days as Ndyanabo prepares for the weekly pressing.

The event is so important in the family’s routine that they can’t imagine a time when there would no tonto to sell.

While Ndyanabo said his weekly brew has an assured market, he has seen both demand and supply slow in recent years. This is partly because the retail price of tonto has been largely static over the decades, while the process of brewing it has become more cumbersome.

The distances traveled in search of bananas have grown. The price of sorghum has gone up.

“You take a lot of time doing this work. It’s not as easy as someone who cuts matooke, puts it on a bicycle and sells it for cash immediately,” Ndyanabo said of the green bananas that are eaten raw as a Ugandan staple. “Alcohol comes from very far.”

He’s been trying to plant more of the banana juice cultivars that are known to grow faster. And his son, Mathias Kamukama, is always there to help.

The family makes five or six 20-liter jerricans in each batch. A jerrican’s worth sells for the equivalent of about $8. A half-liter of tonto retails for about 27 cents, compared to 67 cents for the cheapest bottled beer.

One customer is Benson Muhereza, an electrician who regularly visits a small bar in a poor suburb of Mbarara.

“It’s like a favorite drink when you have your lunch. It’s like a juice. When you don’t want to take beer, you come and have your tonto,” Muhereza said.

He described tonto like a “porridge” that doesn’t give him a hangover. “Every day you should have it,” he said.

Christine Kyomuhangi, the tonto seller, said she receives two jerricans of the brew every day. She acknowledged the threats to her business but smiled, insisting her work is sustainable. She said customers come from all over the city.

“Tonto will never get finished,” she said.

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January 1, 2024
The Empire State rings in the new year with a pay bump for minimum-wage workers

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ALBANY, N.Y. — New York’s minimum-wage workers had more than just the new year to celebrate Monday, with a pay bump kicking in as the clock ticked over to 2024.

In the first of a series of annual increases slated for the Empire State, the minimum wage increased to $16 in New York City and some of its suburbs, up from $15. In the rest of the state, the new minimum wage is $15, up from $14.20.

The state’s minimum wage is expected to increase every year until it reaches $17 in New York City and its suburbs, and $16 in the rest of the state by 2026. Future hikes will be tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, a measurement of inflation.

New York is one of 22 states getting minimum wage rises in the new year, according to a recent report by the Economic Policy Institute.

In California, the minimum wage increased to $16, up from $15.50, while in Connecticut it increased to $15.69 from the previous rate of $15.

This most recent pay bump in New York is part of an agreement made last year between Democratic Gov. Kathy Hochul and the state Legislature. The deal came over the objections of some employers, as well as some liberal Democrats who said it didn’t go high enough.

The federal minimum wage in the United States has stayed at $7.25 per hour since 2009, but states and some localities are free to set higher amounts. Thirty states, including New Mexico and Washington, have done so.

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January 1, 2024