Tag: labor

UAW strike: 12,700 Ford, GM and Stellantis auto workers walk off the job

Nearly 13,000 U.S. auto workers went on strike early Friday after the Big Three and the United Auto Workers failed to reach an agreement before their national contract expired just before midnight.

UAW President Shawn Fain called the targeted strike at a Ford Motor
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plant in Michigan, a General Motors
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plant in Missouri and a Stellantis NV
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plant in Ohio. A strike at all three U.S. car makers is a break with tradition, as the union for many years has elected to center strike efforts at one company to protect its strike fund and picket-line firepower. Fain said the union could add more plants to strike as part of its strategy to keep the automakers guessing, and urged all 150,000 UAW members to be ready if and when they’re called to strike.

“This is our generation’s defining moment,” Fain said Thursday night as he addressed UAW workers by webcast two hours before the deadline. “The money is there. The cause is righteous.”

Fain said the union is committed to a contract that reflects the “incredible sacrifices and contributions” that its members have made for years. The union has said wages for auto workers who make the top rate have risen about 6% over the past four years, while the three automakers’ North American profits have increased about 65% during that time.

The union is asking for double-digit wage increases, an end to tiered wages and benefits, the restoration of pensions and cost-of-living adjustments, retiree pay increases and more.

A Stellantis spokesperson said the company is in contingency mode and sent the following statement: “We are extremely disappointed by the UAW leadership’s refusal to engage in a responsible manner to reach a fair agreement in the best interest of our employees, their families and our customers.”

A GM spokesperson said the company will continue to bargain with the union and that “we are disappointed by the UAW leadership’s actions, despite the unprecedented economic package GM put on the table, including historic wage increases and manufacturing commitments.”

Ford did not immediately comment after the strike began, but said in a statement earlier Thursday night that it was unhappy with the union’s counterproposal: “If implemented, the proposal would more than double Ford’s current UAW-related labor costs.”

GM’s Wentzville, Mo., plant, which the union said has about 3,600 UAW members, builds some of the car maker’s mid-size trucks and full-size vans, including the Chevy Colorado and the GMC Canyon. Ford’s plant in Wayne, Mich., makes Ford Broncos, and about 3,300 members who work in final assembly and paint would be striking. The Stellantis Toledo, Ohio, plant, which has about 5,800 UAW members, makes Jeep Gladiators and Wranglers.

UAW members join workers around the nation and across industries — such as Hollywood writers and actors, hotel staff and healthcare workers — who are on strike or are preparing to walk off their jobs. Fain reiterated to UAW members Thursday night that amid rising economic inequality, he looks at the auto workers’ strike as part of a larger battle between the haves and the have-nots.

Michelle Kaminski, associate professor in the School of HR and Labor Relations at Michigan State University, said in an interview with MarketWatch that “when the union president says this is a generational strike, I really agree with him.”

She added: “When I think about economic conditions, they are more favorable to the union now than [at any point] in the 30 years I’ve been in this field.” She said auto workers have “given up a lot” over the past couple of decades as the companies have needed both government help and worker concessions to survive.

Kaminski also cited the auto makers’ profit and financial position; the pandemic’s effect on the labor force and how workers’ commitments to their jobs have changed; and increasing inflation as factors in why she sees the timing as key. “The union’s window of opportunity is right now,” she said.

But CFRA analyst Garrett Nelson said in an interview with MarketWatch that the union “needs to be careful not to overplay their hand, as the balance sheets of the Detroit three are flush with cash and they can probably wait things out longer than the workers can.”

Automakers could weather a strike, although anything longer than about two weeks is viewed as more impactful and detrimental to the companies. GM has about $39 billion in cash and equivalents, while Ford has around $51 billion, according to a recent Moody’s Investors Service report. Stellantis’s cash and equivalent pile towers over the others, at $69 billion.

The union’s strike fund starts at $825 million, and striking workers will receive $500 a week. Fain said earlier this week that a targeted strike would help the union have flexibility and apply pressure to the companies as negotiations continue; analysts say it means the union wouldn’t deplete its strike fund so quickly.

See: Why United Auto Workers are fighting to end a two-tier system for wages and benefits

The effects of the strike could be far-reaching, both for the companies and workers who may not necessarily be on the picket lines.

Nelson said the union’s strategy of targeting specific plants could turn into a supply-chain “logistical nightmare” for the auto makers. They will have to adjust deliveries of specific parts to their assembly plants, and the average vehicle is made of more than 30,000 parts.

“The automotive supply chain is among the most complex of any industry,” Nelson said. “Not knowing which plants the UAW will target in advance could create a massive level of uncertainty and have a crippling impact on production. If the strike goes on for too long, we think auto suppliers could have to cut production and furlough workers at their plants, creating a ripple effect across the industry.”

Major suppliers’ balance sheets are not as strong, and GM, Ford and Stellantis together generally account for between 25% and 45% of their net sales, so the degradation of the supply chain is a major risk in the event of a prolonged strike.

The U.S. Chamber of Commerce this week warned about the potential widespread impact of a UAW strike. In a letter to President Joe Biden urging him to help the parties reach an agreement, the chamber said the “Detroit Three are critical to our economy.” More than 690,000 supplier jobs are tied to the auto makers, along with about 660,000 dealership jobs, the chamber said.

“A strike will quickly impact large segments of the economy, leading to layoffs and potentially even bankruptcies of U.S. businesses,” the chamber said.

See: Tesla may be the winner of Big Three-UAW labor talks

Also: Would a United Auto Workers strike push up used-car prices?

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September 14, 2023
Joe Biden’s “Pro-Union” Promise Is Being Fiercely Tested in Detroit

The deadline is Thursday at 11:59 p.m. More than 100,000 members of the United Auto Workers, the biggest auto union in America, will find out whether they’ve won anything close to the four-year contract with a 46% wage bump they’ve been demanding, or whether they will be launching a historic strike. Detroit’s Big Three automakers—Ford, General Motors, and Stellantis, the successor to Chrysler—might be forced to shutter factories just as the industry struggles to rebound from the pandemic.

Joe Biden has a lot at stake too. A ten-day strike could cost the economy an estimated $5 billion. But the ramifications for the president extend far beyond the particulars of how the immediate negotiations play out. Biden, who recently declared himself “the most pro-union president in American history,” has been lining up the support of major labor unions for his 2024 reelection campaign—with the glaring exception of the UAW, which has pointedly withheld an endorsement. When Biden, over Labor Day weekend, said he didn’t think a strike would happen, the UAW’s new president, Shawn Fain, threw a brushback pitch. “I think a strike can reaffirm to him where the working class people in this country stand. And, you know, it’s time for politicians in this country to pick a side,” Fain told CNBC. “Either you stand for a billionaire class where everybody else gets left behind, or you stand for the working class.”

A Democratic operative close to the issue tells me that Fain’s forceful flexing of leverage caught the Biden team somewhat off guard. The president has tried to walk a tricky line when it comes to the auto industry: Two of his prized legislative achievements—2021’s infrastructure bill and 2022’s Inflation Reduction Act—included hefty financial incentives for companies that invest in electric-vehicle plants. That angered the auto unions because fewer workers are needed to build EVs than traditional cars, and because most of the batteries needed for EVs are manufactured either overseas or in non-union American factories.

The administration tried playing catch-up in August, announcing $15.5 billion in funding and loans, the bulk of the money targeted at converting existing auto plants to EV facilities and retraining union workers. As you might expect, his presumed 2024 Republican challenger is trying to make mischief. “Biden’s Electric Vehicle mandate will murder the U.S. auto industry,” the Trump campaign claimed last week, “and kill countless union autoworker jobs forever.”

The dealmaking in Detroit is only one part of a wider struggle between workers, industry, and Washington politicians as technology reshapes the economy. Much like EVs, artificial intelligence is also a major point of contention—but in Hollywood, where studios and striking writers and actors have been locked in a months-long standstill. “The question is, Who is going to have the balance of power? Who is going to have control over these things and make money from them?” says Alex Colvin, the dean of Cornell’s School of Industrial and Labor Relations. “This is a critical period.”

For political alliances as well. Democrats have spent years chasing white working-class voters, mostly in vain. In 2020, Biden won back a crucial share of them in Pennsylvania, Wisconsin, and Michigan. Union membership rates in states like these remain at a historic low, but there are signs of a shift in momentum, with organizing efforts at Amazon warehouses and Starbucks stores as well as behind the Uber and Lyft wheels. Not to mention: the economic and racial mixture of unions has also grown more diverse. How Biden navigates all of these labor currents will have a big impact on what are likely to be close races in 2024 battleground states.

“We’re clearly seeing an upsurge of worker activity with an understanding that technology, whether it’s AI or other impacts on their workplace, is changing their leverage with employers,” says Neal Kwatra, a Democratic strategist who has worked with both labor unions and elected officials. “There are definitely some Democratic elected officials around the country who are pro-worker, who are pro-union, who are finding ways to be concretely and substantively helpful to these workers’ struggles. But I do not think the party as a whole understands the moment that we are in.”

One Democrat who clearly gets it is Elissa Slotkin. “What I’ve said to my friends and supporters in labor is, if we don’t use this moment, shame on us. You’re seeing that with UAW right now,” says the Michigan congresswoman, who is running to become one of Michigan’s US senators. “We’ve got to make sure that people at these new [EV] factories are paid a living wage. That’s what just went on in Lordstown—they unionized and they’re leveraging that affiliation for more money, more benefits. We have to get that right. But in terms of who is supporting policies that are pro-union, there is only one party doing that. I know Donald Trump has made electric vehicles his new ‘woke’ culture war. Those vehicles are going to be made. And I am always going to pick Team America over Team China making those damn vehicles.”

In the past year Biden has dodged three labor bullets—standoffs at UPS, West Coast ports, and in the freight railroad industry, all of which could have blown holes in the economy, ended in agreements, not strikes. Maybe he’ll get lucky again in Detroit tonight. Earning the votes of union members next year, though, is still going to take a lot more than luck.

Chris Smith

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September 14, 2023
Love pop music? Largest US newspaper chain is hiring Taylor Swift and Beyoncé Knowles-Carter writers

LOS ANGELES — This week the United States’ biggest newspaper chain posted to its site two unusual job listings: a Taylor Swift reporter and a Beyoncé Knowles-Carter reporter.

Gannett, which owns more than 200 daily papers, will employ these new hires through USA Today and The Tennessean, the company’s Nashville-based newspaper. The job description for the Swift-focused role announced Tuesday says the company is seeking “an energetic writer, photographer and social media pro who can quench an undeniable thirst for all things Taylor Swift with a steady stream of content across multiple platforms.”

“Seeing both the facts and the fury, the Taylor Swift reporter will identify why the pop star’s influence only expands, what her fanbase stands for in pop culture, and the effect she has across the music and business worlds,” the company’s website says.

Gannett announced Wednesday it’ll also hire a reporter dedicated to covering Beyoncé. The company says it’s looking for a writer who is “capable of a text and video-forward approach, who can capture Beyoncé Knowles-Carter’s effect not only on the many industries in which she operates, but also on society.”

Online criticism of these new roles come in part because of major layoffs at Gannett, where the workforce has shrunk 47% in the last three years due to layoffs and attrition, according to the NewsGuild. At some newspapers, the union said the headcount has fallen by as much as 90%. Last year alone, Gannett cut about 6% of its roughly 3,440-person U.S. media division.

Some journalists criticized the listings for presenting superfan behavior as a full-time journalism job, especially as job opportunities shrink and music journalists are paid low wages. And that’s compounded by the existential crises of the job, which is beholden to music streaming, algorithms and clicks.

Both of the Gannett positions require five years of journalism experience working in a digital-first newsroom and the ability to travel internationally. The hourly rates for these roles is listed in a range of $21.63 and $50.87.

Omise’eke Tinsley, academic and author of “Beyoncé in Formation: Remixing Black Feminism,” says this type of role makes space for more positive stories about Black women.

But also, she adds, the existence of both jobs directly reflects Beyoncé and Swift’s economic power. “If there wasn’t that component to it, there wouldn’t be a Beyoncé reporter,” Tinsley said.

It is not uncommon for journalists to develop a beat on a specific figure, particularly in politics — as evidenced by Amy Chozick, who the New York Times hired in 2013 to cover Hilary Clinton exclusively. But most entertainment journalists are responsible for reporting on a wide range of talent — even if they are subject matter experts on a specific artist.

That was the case for Los Angeles Times reporter Suzy Exposito, who called herself an “unofficial” beat reporter on popular reggaetonero Bad Bunny because she spent a disproportionate amount of time in a previous job covering him compared to other priorities.

“His near-weekly output became really overwhelming, and it took away focus from a lot of other artists who were also making compelling work,” Exposito said. “He’s so prolific that I think I literally ran out of new words to describe him at some point. He could use his own reporter, too.”

She said a major challenge for entertainment journalists is the sheer volume of releases from pop artists. “The business of music is a numbers game,” Exposito said. “Hit records become deluxe editions become sold-out world tours, and it can be dizzying for a general music journalist to keep up with when the market is flooded with more releases than ever before.”

So, are artist-specific jobs the future of music journalism?

“It is a bit odd, but Taylor Swift Inc., I guess you would call it, is a big economic driver right now,” said Eric Grode, director of the Goldring Arts Journalism and Communications program at Syracuse University. “Taylor Swift is doing a lot of newsworthy things beyond just selling concert tickets, so a reporter would have a lot of good material to work with.”

If a reporter takes the job seriously and provides more than breathless concert coverage, their established expertise could be valuable for a news organization, Grode said. Still, there are very few musicians who have such a wide cultural reach.

Some journalists pointed out that while hiring these massively popular artist-specific roles reflect their influence in pop culture, they do fail to invest in local journalism at a company known for its local dailies.

“At a time when so much serious news and local reporting is being cut, it’s a decision to raise some questions about,” Rick Edmonds, an expert at the journalism think tank Poynter Institute, said of the new positions.

“There lies the question of SEO — which is essential to drawing traffic to digital media sites — and the fact that people are more likely to click on stories about Taylor or Beyoncé makes it a pretty obvious motivating factor in designating beat reporters to them,” Exposito said. “Digital media is now competing with fan accounts on social media — not when it comes to accuracy, but when it comes to being the first source to report on pop stars’ developments.”

Top artists prioritize the attention and work of expert reporters, leading to what critic Soraya Roberts has called a “culture of sameness” — yet another barrier to local arts coverage.

Tinsley believes that posts on social media criticizing the focus of these new roles may reflect a culture of sexism. “Adding to the pantheon of what figures and representatives matter has the potential to do something important,” she said. “I believe some of the dismissals (of these roles) have to do with what we value and don’t value as a society — and I think there’s an implicit misogyny in it.”

Representatives for Taylor Swift and Beyoncé did not immediately respond to requests for comment.

___

AP Media Writer David Bauder contributed to this story from New York.

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September 13, 2023
UAW strike countdown: Union president says targeted strike possible at all Big Three automakers

United Auto Workers President Shawn Fain said Wednesday that autoworkers and the Big Three automakers are still far apart, although negotiations continue, and that the union may strike all of the Big Three at once.

“We’re keeping all of our options open. An all-out strike is still a possibility,” Fain said during a webcast with members.

The UAW and Ford Motor Co.
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General Motors Co.
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and Stellantis NV
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-0.42%
have made progress during their talks but were still far apart on the union’s key priorities, though negotiations will continue until the deadline of 11:59 p.m. Eastern on Thursday, Fain said.

“For the first time in our history, we may strike all of the Big Three at once,” Fain said, adding that he looked at this time as “our defining moment.”

He said if no deal is reached, there’s also the possibility of doing “standup strikes” at certain plants, designed to keep the companies guessing. These could escalate and spread elsewhere in order to give the union leverage in bargaining. He told UAW members that they should not strike unless their local is called to do so.

A targeted strike helps the UAW avoid distributing strike pay, set recently at $500 a week per member, to all 150,000 of its members. But it could have a broader effect.

“It is possible for strikes at critical parts plants to have much wider implications,” Marick Masters, a business professor at Wayne State University in Detroit, said in an interview with MarketWatch on Wednesday.

He noted that the 1998 strike against GM, a work stoppage by 9,200 workers at two of that company’s plants in Flint, Mich., resulted in shutdowns that affected more than 150,000 workers.

See: These Ford, GM plants are the most likely strike targets

Jody Calemine, a senior fellow and director of labor and employment policy at the Century Foundation, a progressive think tank, said Wednesday that the union is employing an interesting strategy.

“It will turn the screws slowly and probe for weaknesses, and try to get as much movement out of companies as possible while keeping the options to escalate,” he said.

Calemine said Fain has done a “masterful job” of painting the fight as a “real showdown” between working families and the companies. But he added that “the principal danger for the union would be losing the narrative. Other places would continue to work, or get laid off or locked out.”

That’s reflected in some of the online comments by UAW members who watched Fain’s update. One worker said on Facebook: “Strike us all or none at all.”

The UAW president quoted scripture, repeated his calls for unity and said the “strike plan is driven by faith that together we can and will move mountains.”

Fain said the companies have revised some of their offers: On wages, Ford has put forward a 20% increase over the life of the four-year contract, up from its previous offer of 9%, while GM’s latest offer is 18% and Stellantis’s offer is 17.5%. That’s compared to a wage increase of 40% — or 46% when compounded annually — that the union sought originally and later revised to 36%.

“Their proposals don’t reflect the massive profits that we’ve generated for these companies,” Fain said.

The union has pointed out that while the Big Three’s profit has risen 65% over the past four years, and the pay of each of the companies’ chief executives have risen 40%, the UAW top wage rate has risen 6% over that time.

See: Why United Auto Workers are fighting to end a two-tier system for wages and benefits

A GM spokesperson said Wednesday that the company continues to bargain in good faith and sent a statement that reads in part: “We are making progress in key areas that we believe are most important to our represented team members. This includes historic guaranteed annual wage increases, investments in our U.S. manufacturing plants to provide opportunities for all, and shortening the time for in-progression employees to reach maximum wages.”

Ford and Stellantis did not immediately return a request for comment.

The most recent U.S. autoworkers’ strike was at GM in 2019, which lasted for nearly six weeks and involved about 50,000 workers.

See: Would a United Auto Workers strike provide an opportunity for Tesla — and push up used-car prices?

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September 13, 2023
Howard Schultz steps down from Starbucks board of directors

Starbucks Corp. on Wednesday said former Chief Executive Howard Schultz is stepping down from its board of directors, capping a nearly 40-year career during which the company grew from a handful of stores in Seattle into a global coffee chain.

Schultz’s retirement from the board, which ends his involvement in the company’s leadership, took effect Wednesday and was part of a planned transition, the coffee chain said. Schultz stepped down as Starbucks
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+0.72%
chief executive in March.

The company on Wednesday also said that it had elected Wei Zhang to its board of directors, effective Oct. 1. Zhang was most recently a senior adviser to Chinese e-commerce giant Alibaba Group
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-0.75%
and also held leadership positions at News Corp China and CNBC China.

Shares of Starbucks were down 0.7% after hours on Wednesday.

Starbucks said Schultz “will now turn his attention with his wife, Sheri, to focus on a range of philanthropic and entrepreneurial investments to create greater opportunity, accessible to all.” The company noted that the two were co-founders of the Schultz Family Foundation in 1996, and of the emes project.

Although he was not technically the founder of the coffee chain, Schultz became the modern face of it. Schultz joined Starbucks in 1982 as its director of operations and marketing. After a brief hiatus from the company, he returned in 1987 as chief executive and bought the business with backing from local investors, according to a biography on the Starbucks website. The chain went public in 1992.

As the chain’s footprint expanded beyond the U.S., Schultz stepped down from the CEO role in 2000 but returned in 2008. He retired from Starbucks in 2018, then came back as interim chief executive and board member last year.

Over those years, Starbucks has banked on China for international growth — even as that country’s economy remains turbulent following the postpandemic reopening. It also added food and cold and customizable drinks to its menus and built out its mobile-ordering infrastructure.

The company has branded itself as a progressive employer and a supporter of social justice. But over the past two years, the company, and Schultz in particular, have faced criticism over the handling of employees who were trying to unionize. Union members have accused the chain of unfair labor practices, retaliation for organizing and delaying contract negotiations, leading to deeper scrutiny from lawmakers.

“We hope this is an opportunity for Starbucks to change course and leave their union-busting behind them,” Starbucks Workers United, the union representing those workers, said Wednesday in a tweet.

Still, even as inflation has eaten into consumer savings, Schultz said coffee has remained an “affordable luxury” for many customers. And Starbucks management said that younger, loyal consumers and customizable drinks would help sustain demand.

According to a filing on Wednesday, Schultz will still be connected to the company in other ways. Starbucks said it would amend Schultz’s retirement agreement from 2018 and continue to provide him and his spouse with security services.

“The security services will be provided for a period of 10 years and will be evaluated on an annual basis,” the filing said. “In recognition of Mr. Schultz’s leadership as the company’s founder and chairman emeritus, the company will also provide Mr. Schultz with the reimbursement of his monthly healthcare insurance premiums.”

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September 13, 2023
Nasdaq ends 1% down, leading stocks lower as tech shares slump

U.S. stocks closed lower on Tuesday, with the Nasdaq Composite leading the way down, as Apple’s unveiling of its new iPhone and watch failed to boost appetite for equities. The Dow Jones Industrial Average
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shed about 16 points, or about 0.1%, to end near 34,647, while the S&P 500 index
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closed 0.6% lower and the Nasdaq Composite Index
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-1.04%
slumped 1%, according to preliminary FactSet data. That was the biggest daily percentage drop in about a week for the Nasdaq. Shares of Apple Inc.
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were a focus Tuesday as it rolled out a lineup of new consumer products, including its iPhone Pro Max, which will now start at $1,199 instead of $1,099, while its Pro model’s price stays the same. Investors also remain focused on the inflation data, including the release on Wednesday of the consumer-price index for August, before the U.S. stock market’s open. Apple shares fell 1.9% on Tuesday. Climbing bond yields can pressure high-growth stocks as borrowing costs rise. The benchmark 10-year Treasury yield
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4.297%
edged down 2.4 basis points to 4.263% Tuesday, but was still near its highest level of the year.

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September 12, 2023
Walmart Cuts Starting Wages

Walmart has made adjustments to its pay scale, lowering the starting hourly wages for some jobs such as shelf stockers and those who pack online orders. What do you think?

“Wage cuts are an unavoidable part of running a massively profitable business.”

Don Barlett, Systems Analyst

Department Of Transportation Announces $1 Billion Investment In Horses

“Where else can you make cuts if not from the people who have almost nothing?”

Carol Richling, Audience Recruiter

“Wages should reflect the cost of living on the streets.”

Anthony Pareira, Freelance Resuscitator

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September 12, 2023
California fast food workers to get $20 minimum wage under new deal between labor and the industry

SACRAMENTO, Calif. — Most fast food workers in California would be paid at least $20 per hour next year under a new bill in the state Legislature aimed at ending a standoff between the industry and labor unions over wages and working conditions.

California’s minimum wage is already among the highest in the country at $15.50 per hour. The bill, filed Monday with the blessing of both labor unions and the fast food industry, would increase the minimum wage to $20 per hour for workers at restaurants in California that have at least 60 locations nationwide — with an exception for restaurants that make and sell their own bread, like Panera Bread.

The bill will impact about 500,000 fast food workers in California, according to the Service Employees International Union, which has been working to unionize fast food workers in the state. They include Ingrid Vilorio, who works at a Jack In The Box in the San Francisco Bay Area. She said the raise will help her family, who until recently was sharing a house with two other families to afford rent.

“A lot of us (in the fast-food industry) have to have two jobs to make ends meet, this will give us some breathing space,” said Vilorio, who also works as a nanny.

The bill is the first of what could be multiple victories for labor unions at the California Legislature this year on the heels of high-profile strikes in the entertainment and hospitality industries dubbed by some as “hot labor summer.” On Monday, the state Assembly voted to advance a proposal to give striking workers unemployment benefits — a policy change that could eventually benefit Hollywood actors and writers and Los Angeles-area hotel workers who have been on strike for much of this year.

And health care workers are pushing for a $25 minimum wage in a bill that could get a vote before the state Legislature adjourns for the year on Thursday.

“For us the big victory here is a seat at the table with employers,” said Mary Kay Henry, international president of the Service Employees International Union. “We think the lesson here is major corporations in the United States that operate globally can sit down and think through common issues in their industry with workers.”

It’s unusual, but not unprecedented, for states to have minimum wages for specific industries. Minnesota lawmakers created a council to set wages for nursing home workers. In 2021, Colorado announced a $15 minimum wage for direct care workers in home and community based services.

In California, most fast food workers are over 18 and the main providers for their family, according to Enrique Lopezlira, director of the University of California-Berkeley Labor Center’s Low Wage Work Program.

Raising the minimum wage can both benefit and hinder the economy, according to Sung Won Sohn, an economist at Loyola Marymount University. He said any time wages increase in one sector, it tends to increase salaries in other sectors, too — meaning many other workers will benefit. But higher wages generally mean higher inflation, which increase the price of goods for everyone. Sohn said he estimates about two-thirds of the consumer price index — a measure of the change in prices for goods and services — can be explained by labor costs.

“From a purely economic analysis, the consequences are pretty clear,” Sohn said. “From a social point of view, many of the workers who are engaged in lower wage jobs — they really need it.”

The fast food industry’s unique structure — with independent owners operating franchises under the umbrella of large corporations — have made it difficult for governments to regulate and labor unions to organize. Last year, California Democratic Gov. Gavin Newsom signed a law to create a Fast Food Council with the authority to raise wages and set workplace standards for the fast food industry.

Before the law could take effect, the fast food industry gathered enough signatures to qualify a referendum on the law in the November 2024 election. That meant the law would be on hold until voters could decide whether to overturn it.

Furious, labor unions responded by sponsoring legislation this year that make fast food companies like McDonald’s liable for any misdeeds of their mostly independent franchise operators in the state. Democratic lawmakers also restored funding to the Industrial Welfare Commission, a long-dormant state agency that has the power to set wage and workplace standards for multiple industries.

Both of those moves alarmed the business groups. They agreed to withdraw their referendum and to increase the minimum wage in exchange for labor unions dropping both of those issues.

“This agreement protects local restaurant owners from significant threats that would have made it difficult to continue to operate in California,” said Sean Kennedy, executive vice president for public affairs for the National Restaurant Association.

The bill must still be approved by the Democratic-controlled state Legislature and signed into law by Newsom. If passed and signed, the bill can only take effect if the restaurant groups pull their referendum from the ballot. In the past, a referendum couldn’t be removed from the ballot, but Newsom signed a law last week allowing it.

The $20 hourly wage would be a starting point. The nine-member Fast Food Council, which would include representatives from the restaurant industry and labor, would have the power to increase that minimum wage each year by up to 3.5% or the change in the U.S. consumer price index for urban wage earners and clerical workers, whichever is lower.

___

Reporter Olga R. Rodriguez contributed from San Francisco.

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September 11, 2023
FTC Issues Fines For Sassy Retail Employees Who Cut Declined Credit Cards In Half

WASHINGTON—Cracking down on the common but unethical practice seemingly rampant in department stores, the Federal Trade Commission began issuing fines this week for any sassy retail employee who held up a customer’s declined credit card and cut it in half. “A lot of these snobbish retail employees seem to derive a sick pleasure out of dramatically snipping the credit card belonging to a self-described shopaholic in half, rather than the standard procedure of handing the card back and simply informing them it’s been declined,” said FTC chair Lina Khan, explaining that these workers got away with the practice for years by blaming the credit card companies, claiming “they told me to do that” on the phone when the shopper looked at them, shocked. “This has been happening since the early ’90s, and it’s time we took it seriously—that’s why there will now be a $200 minimum fine for any gum-smacking cashier with scissors in their hand, no exceptions. It’s not only about financial privacy concerns, we also want to cut down on the mental anguish that a consumer is put through when these rude sales associates inform them that they must go and have a little chat with their manager, which they proceed to do behind a nearby door with a little window, allowing them to look back at the customer and snicker within view. These people need to learn that just because you work at a mall, you do not get to be a smug mean girl and get away with it.” At press time, the FTC had issued a warning to American consumers to be especially wary of any retail employee possessing a vaguely French accent and dressed in all black.

Economy Collapses After 10-Year-Old Boy Spends Entire U.S. GDP On Fortnite Skins

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September 8, 2023
Biden Touts Unions and Job Growth During Labor Day Parade in Philadelphia

President Joe Biden returned to the state that put him over the top in 2020 to deliver an address marking Philadelphia’s Tri-State Labor Day Parade. “We’re celebrating jobs. Good paying jobs. Jobs you can raise a family on. Union jobs,” Biden said, touting 13.5 million jobs created so far in his term, which includes 800,000 manufacturing jobs.

“There are a lot of politicians in this country who don’t know how to say the word ‘union,’” he said. “I’m proud to say union. I’m proud to be the most pro-union president, according to the experts, in American history.”

The president touted his administration’s actions protecting pensions and overtime pay, renewing infrastructure, and redistributing the tax burden, among other policies, and called on Congress yet again to pass the PRO Act, which would make it easier for workers to organize unions.

Biden’s visit comes as polls of voters’ attitudes toward Biden’s economy remain unfavorable, despite welcome news on inflation and job growth. Friday’s job report showed robust—if slightly slowing—job growth, despite higher interest rates imposed by the Federal Reserve. NBC News reported on Sunday that the Biden campaign’s plan is to continue to avoid wading into Trump’s legal business for the rest of the year, and to focus on touting what has become known as “Bidenomics.”

In the speech, which took place at the Sheet Metal Workers Local 19 office, Biden did not mention Donald Trump by name, only referring to him as “the guy who held this job before me” and “the last guy.” “When the last guy was here, he looked at the world from Park Avenue,” he said. “I look at it from Scranton, Pennsylvania. I look at it from Claymont, Delaware.” Biden also said his predecessor was one of just two presidents in U.S. history who ended a term with net job losses. The other, he said with obvious relish, was Herbert Hoover.

Biden’s visit marks the seventh time he’s traveled to Philadelphia this year, and at least the 14th since he began his term. Biden’s first campaign rally of his re-election bid came in front of 2,000 union members assembled at the Philadelphia Convention Center, and immediately followed a major joint endorsement by the AFL-CIO and 17 other unions.

The visit also comes at the end of what has been called “the summer of strikes,” with major work stoppages, including an ongoing writers’ strike, which entered its fifth-month last weekend.

Jack McCordick

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September 4, 2023
From strikes to new union contracts, Labor Day’s organizing roots are especially strong this year

NEW YORK — Labor Day is right around the corner, along with the big sales and barbecues that come with it. But the activist roots of the holiday are especially visible this year as unions challenge how workers are treated — from Hollywood to the auto production lines of Detroit.

The early-September tribute to workers has been an official holiday for almost 130 years — but an emboldened labor movement has created an environment closer to the era from which Labor Day was born. Like the late 1800s, workers are facing rapid economic transformation — and a growing gap in pay between themselves and new billionaire leaders of industry, mirroring the stark inequalities seen more than a century ago.

“There’s a lot of historical rhyming between the period of the origins of Labor Day and today,” Todd Vachon, an assistant professor in the Rutgers School of Management and Labor Relations, told The Associated Press. “Then, they had the Carnegies and the Rockefellers. Today, we have the Musks and the Bezoses. … It’s a similar period of transition and change and also of resistance — of working people wanting to have some kind of dignity.”

Between writers and actors on strike, contentious contract negotiations that led up to a new labor deal for 340,000 unionized UPS workers and active picket lines across multiple industries, the labor in Labor Day is again at the forefront of the holiday arguably more than it has been in recent memory.

Here are some things to know about Labor Day this year.

WHEN WAS THE FIRST LABOR DAY OBSERVED?

The origins of Labor Day date back to the late 19th century, when activists first sought to establish a day that would pay tribute to workers.

The first U.S. Labor Day celebration took place in New York City on Sept. 5, 1882. Some 10,000 workers marched in a parade organized by the Central Labor Union and the Knights of Labor.

A handful of cities and states began to adopt laws recognizing Labor Day in the years that followed, yet it took more than a decade before President Grover Cleveland signed a congressional act in 1894 establishing the first Monday of September as a legal holiday.

Canada’s Labour Day became official that same year, more than two decades after trade unions were legalized in the country.

The national holidays were established during a period of pivotal actions by organized labor. In the U.S., Vachon points to the Pullman Railroad Strike that began in May 1894, which effectively shut down rail traffic in much of the country.

“The federal government intervened to break the strike in a very violent way — that left more than a dozen workers dead,” Vachon says. Cleveland soon made Labor Day a national holiday in an attempt “to repair the trust of the workers.”

A broader push from organized labor had been in the works for some time. Workers demanded an 8-hour workday in 1886 during the deadly Haymarket Affair in Chicago, notes George Villanueva, an associate professor of communication and journalism at Texas A&M University. In commemoration of that clash, May Day was established as a larger international holiday, he said.

Part of the impetus in the U.S. to create a separate federal holiday was to shift attention away from May Day — which had been more closely linked with socialist and radical labor movements in other countries, Vachon said.

HOW HAS LABOR DAY EVOLVED OVER THE YEARS?

The meaning of Labor Day has changed a lot since that first parade in New York City.

It’s become a long weekend for millions that come with big sales, end-of-summer celebrations and, of course, a last chance to dress in white fashionably. Whether celebrations remain faithful to the holiday’s origins depends where you live

New York and Chicago, for example, hold parades for thousands of workers and their unions. Such festivities aren’t practiced as much in regions where unionization has historically been eroded, Vachon said, or didn’t take a strong hold in the first place.

When Labor Day became a federal holiday in 1894, unions in the U.S. were largely contested and courts would often rule strikes illegal, Vachon said, leading to violent disputes. It wasn’t until the National Labor Relations Act of 1935 that private sector employees were granted the right to join unions. Later into the 20th century, states also began passing legislation to allow unionization in the public sector — but even today, not all states allow collective bargaining for public workers.

Rates of organized labor have been on the decline nationally for decades. More than 35% of private sector workers had a union in 1953 compared with about 6% today. Political leanings in different regions has also played a big roll, with blue states tending to have higher unionization rates.

Hawaii and New York had the highest rates of union membership in 2022, respectively, followed by Washington, California and Rhode Island, according to data from the Bureau of Labor Statistics,

Nationwide, the number of both public and private sector workers belonging to unions actually grew by 273,000 thousand last year, the Bureau of Labor Statistics found. But the total workforce increased at an even faster rate — meaning the total percentage of those belonging to unions has fallen slightly.

WHAT LABOR ACTIONS ARE WE SEEING THIS YEAR?

Despite this percentage dip, a reinvigorated labor movement is back in the national spotlight.

In Hollywood, screenwriters have been on strike for nearly four months — surpassing a 100-day work stoppage that ground many productions to a halt in 2007-2008. Negotiations are set to resume Friday. Actors joined the picket lines in July — as both unions seek better compensation and protections on the use of artificial intelligence.

Unionized workers at UPS threatened a mass walkout before approving a new contract last month that includes increased pay and safety protections for workers. A strike at UPS would have disrupted the supply chain nationwide.

Last month, auto workers also overwhelmingly voted to give union leaders the authority to call strikes against Detroit car companies if a contract agreement isn’t reached by the Sept. 14 deadline. And flight attendants at American Airlines also voted to authorize a strike this week.

“I think there’s going to be definitely more attention given to labor this Labor Day than there may have been in many recent years,” Vachon said. Organizing around labor rights has “come back into the national attention. … And (workers) are standing up and fighting for it.”

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September 1, 2023
Fed rate hikes can end now that U.S. job gains are the size of an economy like Australia’s, says BlackRock

The Federal Reserve can probably end its inflation fight now that the U.S. labor market is cooling after generating a historic 26 million jobs in roughly the past three years, according to BlackRock’s Rick Rieder.

“In fact, 26 million jobs is like adding an economy the size of Australia or Taiwan (including every man, woman, and child),” said Rieder, BlackRock’s chief investment officer in global fixed income, in emailed commentary following Friday’s monthly jobs report for August.

The August nonfarm-payrolls report showed the U.S. adding 187,000 jobs, slightly more than had been forecast, but also pointing to an uptick in the unemployment rate to 3.8% from 3.5%.

“Remarkably, 22 million people were hired between May 2020 and April 2022, and 11 million were added to the workforce from June 2021 to May 2023, as the economy has opened up massive amounts of roles for fulfillment,” said Rieder.

He expects wage pressures to ease, he said, and thinks the “economy may now have fulfilled many of its needs,” which should make the Fed feel more confident in “the permanence of lower levels of inflation,” so that it can slow or stop its interest-rate rises by year-end.

Hiring in the U.S. has slowed, except in education and in healthcare services, when looking at private payrolls based on a three-month moving average.

Payrolls are slowing in many sectors, expect education and healthcare

Bureau of Labor Statistics, BlackRock

The Fed has already raised interest rates in July to a 5.25%-to-5.5% range, a 22-year high, with traders in federal-funds futures on Friday pricing in only about a 7% chance of a Fed rate hike in September and favoring no hike again at the central bank’s November policy meeting.

Rieder of BlackRock, one of the world’s largest asset managers with $2.7 trillion in assets under management, said he thinks a Fed pause or outright end to rate hikes could calm markets, even if the Fed, as BlackRock expects, keeps rates high for a time.

U.S. closed mostly higher Friday ahead of the Labor Day holiday weekend, with the Dow Jones Industrial Average
DJIA
up 0.3%, the S&P 500 index
SPX
up 0.2% and the Nasdaq Composite Index
COMP
0.02% lower, according to FactSet.

The 10-year Treasury yield
BX:TMUBMUSD10Y
was at 4.173%, after hitting its highest level since 2007 in late August, adding to volatility that has wiped out earlier yearly gains in the roughly $25 trillion Treasury market.

Read on: This hadn’t happened on the U.S. Treasury market in 250 years. Now it has.

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September 1, 2023
Unemployment surge to 3.8% may be a summer-jobs mirage

The U.S. unemployment rate jumped to an 18-month high of 3.8% in August. Does that mean the economy is tottering and layoffs are rising from near record lows? Ah, no.

The big increase in the jobless rate — from 3.5% in July — stemmed almost entirely from more people in the labor force.

People generally look for a job when they think it’s easy to find one and the pay is good. That’s a sign of a robust labor market, not a weakening one.

An estimated 736,000 people entered the labor force last month, but only about one-third found a job.

The other half million didn’t find a job right away, so they would be considered unemployed. The government includes anyone without a job who is actively searching for work in the unemployment rate.

Ergo, that’s why the jobless rate jumped three-tenths to 3.8%.

Digging a little deeper, the summer-jobs market for young people may have played an outsized role.

About 45% of the people who reportedly entered the labor force in August were between the ages of between 16 and 24 years old, noted Omair Sharif, president of Inflation Insights.

As it turns out, a similar 724,000 spike in the size of the labor force took place in August 2022. And once again it was driven by an increase in young jobseekers.

What’s going on? Young people working summer jobs may have simply stayed on a bit longer than the government’s employment survey could account for.

“This looks like an anomaly associated with the summer jobs market,” said chief economist Stephen Stanley of Santander Capital Markets.

What happened after August 2022? The size of the labor force fell or moved sideways for the next three months. The unemployment rate also declined.

If the same scenario plays out again this fall and the labor force shrinks, the unemployment rate could drop back down again in the next few months.

There also could be another, less positive, explanation for the large increase in the number of people seeking work in August. Maybe they need the spending money to keep their current standard of living in light of high inflation and the depletion of their Covid-era savings.

“This could also be a possible sign of stress, with households having to come back to the labor market to pay bills and maintain current spending habits,” said senior economist Sam Bullard of Wells Fargo.

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September 1, 2023
US employers added a solid 187,000 jobs in August in sign of a still-resilient labor market

WASHINGTON — The nation’s employers added 187,000 jobs in August, evidence of a slowing but still-resilient labor market despite the high interest rates the Federal Reserve has imposed.

The job growth marked an increase from July’s revised gain of 157,000 but still pointed to a moderating pace of hiring compared with earlier this year. From June through August, the economy added 449,000 jobs, the lowest three-month total in three years.

Friday’s report from the Labor Department showed that the unemployment rate rose from 3.5% to 3.8%, the highest level since February 2022 though still low by historical standards. But the rate rose for an encouraging reason: A sizable number of people — 736,000 — began looking for work last month, the most since January, and not all of them found jobs right away. Only people who are actively looking for a job are counted as unemployed.

Indeed, the proportion of Americans who either have a job or are looking for one rose in August to 62.8%, the highest level since the February 2020, before COVID-19 slammed into the U.S. economy.

The August jobs report also showed that wage gains are easing, a trend that may help signal to the Fed that inflation pressures are cooling: Average hourly wages rose 0.2% from July to August and are up 4.3% from August 2022. The year-over-year increase was down from 4.4% in both July and June.

In addition to reporting August job growth, the Labor Department on Friday revised down the gains for June and July by a combined 110,000. A decelerating job market could help shift the economy into a slower gear and reassure the Fed that inflation will continue to decelerate. The Fed’s streak of 11 interest rate hikes have helped slow inflation from a peak of 9.1% last year to 3.2% now. Given signs that inflation has continued to ease, many economists think the Fed may decide no further rate hikes are necessary.

The Fed wants to see hiring slow because intense demand for labor tends to inflate wages and feed inflation. The central bank hopes to achieve a rare “soft landing,” in which its rate hikes would manage to slow hiring, borrowing and spending enough to curb high inflation without causing a deep recession.

Optimism about a soft landing has been growing. The economy, though growing more slowly than it did in the boom that followed the pandemic recession of 2020, has defied the squeeze of increasingly high borrowing costs. The gross domestic product — the economy’s total output of goods and services — rose at a respectable 2.1% annual rate from April to June. Consumers continued to spend, and businesses increased their investments.

The Fed wants to see hiring decelerate because strong demand for workers tends to inflate wages and feed inflation.

So far, the job market has been cooling in the least painful way possible — with few layoffs. The Labor Department reported Thursday that the number of Americans applying for unemployment benefits — a proxy for job cuts — fell for a third straight week.

Instead of slashing jobs, companies are posting fewer openings — 8.8 million in July, the fewest since March 2021. And American workers are less likely to leave their jobs in search of better pay, benefits and working conditions elsewhere: 3.5 million people quit their jobs in July, the fewest since February 2021. A lower pace of quits tends to ease pressure on companies to raise pay to keep their existing employees or to attract new ones.

Economists and financial market analysts increasingly think the Fed may be done raising interest rates: Nearly nine in 10 analysts surveyed by the CME Group expect the Fed to leave rates unchanged at its next meeting, Sept. 19-20.

Despite what appears to be a clear trend toward slower hiring, Friday’s jobs report could get complicated. The reopening of school can cause problems for the Labor Department’s attempts to adjust hiring numbers for seasonal fluctuations: Many teachers are leaving temporary summer jobs to return to the classroom.

And the shutdown of the big trucking firm Yellow and the strike by Hollywood actors and writers are thought to have kept a lid on August job growth.

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September 1, 2023
Rising tensions between employers and employees has put the labor back in this year’s Labor Day

NEW YORK — Labor Day is right around the corner, along with the big sales and barbecues that come with it. But the activist roots of the holiday are especially visible this year as unions challenge how workers are treated — from Hollywood to the auto production lines of Detroit.

The early-September tribute to workers has been an official holiday for almost 130 years — but an emboldened labor movement has created an environment closer to the era from which Labor Day was born. Like the late 1800s, workers are facing rapid economic transformation — and a growing gap in pay between themselves and new billionaire leaders of industry, mirroring the stark inequalities seen more than a century ago.

“There’s a lot of historical rhyming between the period of the origins of Labor Day and today,” Todd Vachon, an assistant professor in the Rutgers School of Management and Labor Relations, told The Associated Press. “Then, they had the Carnegies and the Rockefellers. Today, we have the Musks and the Bezoses. … It’s a similar period of transition and change and also of resistance — of working people wanting to have some kind of dignity.”

Between writers and actors on strike, contentious contract negotiations that led up to a new labor deal for 340,000 unionized UPS workers and active picket lines across multiple industries, the labor in Labor Day is again at the forefront of the holiday arguably more than it has been in recent memory.

Here are some things to know about Labor Day this year.

WHEN WAS THE FIRST LABOR DAY OBSERVED?

The origins of Labor Day date back to the late 19th century, when activists first sought to establish a day that would pay tribute to workers.

The first U.S. Labor Day celebration took place in New York City on Sept. 5, 1882. Some 10,000 workers marched in a parade organized by the Central Labor Union and the Knights of Labor, according to the Labor Department and Encyclopaedia Britannica.

A handful of cities and states began to adopt laws recognizing Labor Day in the years that followed, yet it took more than a decade before President Grover Cleveland signed a congressional act in 1894 establishing the first Monday of September as a legal holiday.

Canada’s Labour Day became official that same year, more than two decades after trade unions were legalized in the country, according to Encyclopaedia Britannica.

The national holidays were established during a period of pivotal actions by organized labor. In the U.S., Vachon points to the Pullman Railroad Strike that began in May 1894, which effectively shut down rail traffic in much of the country.

“The federal government intervened to break the strike in a very violent way — that left more than a dozen workers dead,” Vachon says. Cleveland soon made Labor Day a national holiday in an attempt “to repair the trust of the workers.”

A broader push from organized labor had been in the works for some time. Workers demanded an 8-hour workday in 1886 during the deadly Haymarket Affair in Chicago, notes George Villanueva, an associate professor of communication and journalism at Texas A&M University. In commemoration of that clash, May Day was established as a larger international holiday, he said.

Part of the impetus in the U.S. to create a separate federal holiday was to shift attention away from May Day — which had been more closely linked with socialist and radical labor movements in other countries, Vachon said.

HOW HAS LABOR DAY EVOLVED OVER THE YEARS?

The meaning of Labor Day has changed a lot since that first parade in New York City.

It’s become a long weekend for millions that come with big sales, end-of-summer celebrations and, of course, a last chance to dress in white fashionably. The origins of Labor Day remain faithful depending on where you live.

New York and Chicago, for example, hold parades for thousands of workers and their unions. Such festivities aren’t practiced as much in regions where unionization has historically been eroded, Vachon said, or didn’t take a strong hold in the first place.

When Labor Day became a federal holiday in 1894, unions in the U.S. were largely contested and courts would often rule strikes illegal, Vachon said, leading to violent disputes. It wasn’t until the National Labor Relations Act of 1935 that private sector employees were granted the right to join unions. Later into the 20th century, states also began passing legislation to allow unionization in the public sector — but even today, not all states allow collective bargaining for public workers.

Rates of organized labor have been on the decline nationally for decades. More than 35% of private sector workers had a union in 1953 compared with about 6% today. Political leanings in different regions has also played a big roll, with blue states tending to have higher unionization rates.

Hawaii and New York had the highest rates of union membership in 2022, respectively, followed by Washington, California and Rhode Island, according to data from the Bureau of Labor Statistics,

Nationwide, the number of both public and private sector workers belonging to unions actually grew by 273,000 thousand last year, the Bureau of Labor Statistics found. But the total workforce increased at an even faster rate — meaning the total percentage of those belonging to unions has fallen slightly.

WHAT LABOR ACTIONS ARE WE SEEING THIS YEAR?

Despite this percentage dip, a reinvigorated labor movement is back in the national spotlight.

In Hollywood, screenwriters have been on strike for nearly four months — surpassing a 100-day work stoppage that ground many productions to a halt in 2007-2008. Negotiations are set to resume Friday. Actors joined the picket lines in July — as both unions seek better compensation and protections on the use of artificial intelligence.

Unionized workers at UPS threatened a mass walkout before approving a new contract last month that includes increased pay and safety protections for workers. A strike at UPS would have disrupted the supply chain nationwide.

Last month, auto workers also overwhelmingly voted to give union leaders the authority to call strikes against Detroit car companies if a contract agreement isn’t reached by the Sept. 14 deadline. And flight attendants at American Airlines also voted to authorize a strike this week.

“I think there’s going to be definitely more attention given to labor this Labor Day than there may have been in many recent years,” Vachon said. Organizing around labor rights has “come back into the national attention. … And (workers) are standing up and fighting for it.”

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September 1, 2023
Labor Day is just a ‘milestone’ in the marathon to get workers back to the office

The U.S. Labor Day holiday will mark another milestone in the marathon to bring workers back to the office, but it won’t be a quick fix for landlords, according to Thomas LaSalvia, head of commercial real estate economics at Moody’s Analytics.

Employers from Facebook parent Meta
META,
+0.27%
to Goldman Sachs
GS,
-0.26%
recently laid out mandates for staff to return to the office more frequently, starting this fall, including the big one — the federal government.

“A lot of companies are saying that after Labor Day, ‘We expect more out of you,” LaSalvia said, referring to days in the office. Still, office attendance, he argues, likely only stages a fuller comeback if a job or promotion is on the line.

Amazon.com Inc.’s
AMZN,
+2.18%
Chief Executive Andy Jassy has been trying to drive home the point by warning staff to return at least three days a week, or face the consequences.

That could prove difficult, with Friday’s U.S. jobs report for August expected to show U.S. unemployment at a scant 3.5%, near the lowest levels since the late 1960s, even if hiring has been slowing. The labor market, so far, appears unfazed by the Federal Reserve’s benchmark rate reaching a 22-year high.

It has been a different story for landlords facing a roughly 19% vacancy rate nationally and piles of debt coming due, especially for owners of older Class B and C office buildings with a bleak outlook or properties in cities with wobbling business centers.

See: San Francisco’s office market erases all gains since 2017 as prices sag nationally

As with shopping malls, LaSalvia said it’s largely a problem of oversupply, with many office properties at risk of becoming obsolete as tenants flock to better buildings and locations staging a rebirth. The trend can be traced in leasing data since 2021, with Class A properties in central business districts (blue line) showing a big advantage over less desirable buildings in the heart of cities (orange line).

Return to office isn’t going to save the entire office property market

Moody’s Analytics

“Little by little, we are finding the office isn’t dead,” LaSalvia said, but he also sees more promise in neighborhoods with a new purpose, those catering to hybrid work and communities that bring people together.

Another way to look at the trend is through rents. Manhattan’s Penn Station submarket, with its estimated $13 billion overhaul and neighboring Hudson Yards development, has seen asking rents jump 32% to $74.87 a square foot in the second quarter since the fourth quarter of 2019, according to Moody’s Analytics. That compares with a 2% bump in asking rents in downtown New York City to $61.39 a square foot for the same period.

The push for a return to the office also doesn’t mean a repeat of prepandemic ways. Goldman Sachs analysts estimate that part-time remote work in the U.S. has stabilized around 20%-25%, in a late August report, but that’s still up from 2.6% before the 2020 lockdowns.

Furthermore, the persistence of remote work will likely add another 171 million square feet of vacant U.S. office space through 2029, a period that also will see tenants’ long-term leases expire and many companies opting for less space. The additional vacancies would roughly translate to 57% of Los Angeles roughly 300 million square feet of office space sitting empty.

“The fundamental reason why we had offices in the first place have not completely disintegrated,” LaSalvia said. “But for some of those Class B and C offices, the writing was on the wall before the pandemic.”

U.S. stocks were mixed Thursday, but headed for losses in a tough August for stocks, with the S&P 500 index
SPX
off about 1.5% for the month, the Dow Jones Industrial Average
DJIA
2.1% lower and the Nasdaq Composite
COMP
down 2% in August, according to FactSet.

Related: Some employers mandate etiquette classes as returning office workers walk barefoot, burp loudly and microwave fish

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August 31, 2023
Millions more workers would be entitled to overtime pay under a proposed Biden administration rule

NEW YORK — The Biden administration will propose a new rule Tuesday that would make 3.6 million more U.S. workers eligible for overtime pay, reviving an Obama-era policy effort that was ultimately scuttled in court.

The new rule, shared with The Associated Press ahead of the announcement, would require employers to pay overtime to so-called white collar workers who make less than $55,000 a year. That’s up from the current threshold of $35,568, which has been in place since 2019 when Trump administration raised it from $23,660. In another significant change, the rule proposes automatic increases to the salary level each year.

Labor advocates and liberal lawmakers have long pushed a strong expansion of overtime protections, which have sharply eroded over the past decades due to wage stagnation and inflation. The new rule, which is subject to a publicly commentary period and wouldn’t take effect for months, would have the biggest impact on retail, food, hospitality, manufacturing and other industries where many managerial employees meet the new threshold.

“I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices,” Acting Secretary of Labor Julie Su said in a statement.

The new rule could face pushback from business groups that mounted a successful legal challenge against similar regulation that Biden announced as vice president during the Obama administration, when he sought to raise the threshold to more than $47,000. But it also falls short of the demands by some liberal lawmakers and unions for an even higher salary threshold than the proposed $55,000.

Under the Fair Labor Standards Act, almost all U.S. hourly workers are entitled to overtime pay after 40 hours a week, at no less than time-and-half their regular rates. But salaried workers who perform executive, administrative or professional roles are exempt from that requirement unless they earn below a certain level.

The left-leaning Economic Policy Institute has estimated that about 15% of full-time salaried workers are entitled to overtime pay under the Trump-era policy. That’s compared to more than 60% in the 1970s. Under the new rule, 27% of salaried workers would be entitled to overtime pay because they make less than the threshold, according to the Labor Department.

Business leaders argue that setting the salary requirement too high will exacerbate staffing challenges for small businesses, and could force many companies to convert salaried workers to hourly ones to track working time. Business who challenged the Obama-era rule had praised the Trump administration policy as balanced, while progressive groups said it left behind millions of workers.

A group of Democratic lawmakers had urged the Labor Department to raise the salary threshold to $82,732 by 2026, in line with the 55th percentile of earnings of full-time salaried workers.

A senior Labor Department official said new rule would bring threshold in line with the 35th percentile of earnings by full-time salaried workers. That’s above the 20th percentile in the current rule but less than the 40th percentile in the scuttled Obama-era policy.

The National Association of Manufacturers last year warned last year that it may challenge any expansion of overtime coverage, saying such changes would be disruptive at time of lingering supply chain and labor supply difficulties.

Under the new rule, some 300,000 more manufacturing workers would be entitled to overtime pay, according to the Labor Department. A similar number of retail workers would be eligible, along with 180,000 hospitality and leisure workers, and 600,000 in the health care and social services sector.

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August 30, 2023
Dow ends up 200 points, stocks score back-to-back gains

U.S. stocks scored back-to-back gains on Monday in an attempt to claw back ground in a rough August for equities. The Dow Jones Industrial Average
DJIA,
+0.62%
rose about 213 points, or 0.6%, ending near 34,560, according to preliminary data from FactSet. The S&P 500 index
SPX,
+0.63%
closed 0.6% higher and the Nasdaq Composite Index
COMP,
+0.84%
gained 0.8%. Investors kicked of the final week of August on an upbeat note, while largely focusing on Thursday’s inflation data and Friday’s monthly jobs report to help inform the Federal Reserve’s path on interest rates and its inflation fight. The 10-year Treasury yield
TMUBMUSD10Y,
4.203%
eased back to about 4.20% late Monday after its sharp rise a week ago to its highest level since 2007. The Dow still was off about 2.8% so far in August, while the S&P 500 index was 3.4% lower and the Nasdaq was down 4.5%, according to FactSet.

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August 28, 2023
UPS workers approve 5-year contract, capping contentious negotiations that threatened deliveries

The union representing 340,000 UPS workers said Tuesday that its members voted to approve the tentative contract agreement reached last month, putting a final seal on contentious labor negotiations that threatened to disrupt package deliveries for millions of businesses and households nationwide.

The Teamsters said in a statement that 86% of the votes casts were in favor of ratifying the national contract. They also said it was passed by the highest vote for a contract in the history of the Teamsters at UPS.

The union said more than 40 supplemental agreements were also ratified, except for one that covers roughly 170 members in Florida. The national master agreement will go into effect as soon as that supplement is renegotiated and ratified, it said.

UPS said voting results for deals covering employees under two locals are expected soon.

“Our members just ratified the most lucrative agreement the Teamsters have ever negotiated at UPS,” Teamsters General President Sean M. O’Brien said in a statement. “This contract will improve the lives of hundreds of thousands of workers.”

He said the contract set a new standard for pay and benefits.

“This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention,” O’Brien said, giving a nod to the union’s growing ambitions to take on the e-commerce behemoth.

Voting on the new five-year contract began Aug. 3 and concluded Tuesday.

After negotiations broke down in early July, Atlanta-based UPS reached a tentative contract agreement with the Teamsters just days before an Aug. 1 deadline. It came as large and small businesses were working on contingency plans in the event of a strike, which would have spiked shipping prices and scrambled supply chains.

Earlier this month, the delivery company reported its revenue fell for the second quarter as package volume declined amid negotiations with the union. The shipping industry has also been impacted by unpredictable consumer spending.

The company, which has lowered its full-year revenue expectations by $4 billion, had said it expected bargaining to restart if members rejected the deal. But that outcome could have also opened the door to a strike with the potential to cause widespread disruption.

Under the tentative agreement, full- and part-time union workers will get $2.75 more per hour in 2023, and $7.50 more in total by the end of the five-year contract. Starting hourly pay for part-time employees also got bumped up to $21, but some workers said that fell short of their expectations.

UPS says that by the end of the new contract, the average UPS full-time driver will make about $170,000 annually in pay and benefits. It’s not clear how much of that figure benefits account for.

As part of the deal, the delivery company also agreed to make Martin Luther King Jr. Day a full holiday, end forced overtime on drivers’ days off and stop using driver-facing cameras in cabs, among a host of other issues. It eliminated a two-tier wage system for drivers and tentative deals on safety issues were also reached, including equipping more trucks with air conditioning.

Union members, angered by a contract they say union leadership forced on them five years ago, argued in the lead up to the deal that they have shouldered the more than 140% profit growth at UPS as the pandemic increased delivery demand. Unionized workers said they wanted to fix what they saw as a bad contract.

The Teamsters’ leadership was upended two years ago with the election of O’Brien, a vocal critic of union President James Hoffa — son of the famed Teamsters firebrand — who signed off on the previous contract in 2018.

The 24 million packages UPS ships daily amount to about a quarter of all U.S. parcel volume, according to the global shipping and logistics firm Pitney Bowes. UPS says that’s equivalent to about 6% of the nation’s gross domestic product.

This isn’t the first showdown the union has had with the delivery company. During the last breakdown in labor talks a quarter of a century ago, 185,000 UPS workers walked out for 15 days, crippling the company’s ability to function.

A walkout this time would have had much further-reaching implications, with millions of Americans now accustomed to online shopping and speedy delivery. The consulting firm Anderson Economic Group estimated a 10-day UPS strike could have cost the U.S. economy more than $7 billion and triggered “significant and lasting harm” to the business and workers.

Labor experts say they see the showdown as a demonstration of labor power at a time of low U.S. union membership. This summer, Hollywood actors and screenwriters have been picketing over pay issues. United Auto Workers are considering a potential strike.

“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” Carol Tomé, UPS CEO, said when the tentative deal was announced.

Industry groups, the U.S. Chamber of Commerce, labor leaders and President Joe Biden also applauded the deal.

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August 22, 2023
UPS workers vote to approve ‘historic’ five-year contract

UPS employees approved a new five-year union contract with the delivery giant Tuesday, about a month after reaching a tentative deal that averted a strike of 340,000 United Parcel Services workers.

The Teamsters said 86.3% of members voted for the “historic” deal, saying it was “the highest vote for a contract in the history of the Teamsters at UPS.”
UPS,
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“Teamsters have set a new standard and raised the bar for pay, benefits and working conditions in the package-delivery industry,” Teamsters General President Sean O’Brien said in a statement. “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon
AMZN,
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better pay attention.”

Among the parts of the contract the union highlighted were $2.75-an-hour raises for existing full- and part-time union members this year, and a total of a $7.50-an-hour raise over five years. All existing part-timers will earn at least $21 an hour starting immediately per the contract, according to the Teamsters.

The union also noted that the pay increases for full-timers will keep UPS Teamsters as the highest-paid delivery drivers in the country, with the average top rate rising to $49 an hour. In addition, the Teamsters said the new contract ends what it called the two-tier wage system at the company, with all UPS Teamster drivers currently classified as “22.4s” — or hybrid drivers and warehouse workers who were paid less than full-time drivers — to be reclassified immediately as RPCDs, or regular package car drivers.

A UPS spokesperson sent the following statement from the company: “Our Teamsters-represented employees have voted to overwhelmingly ratify a new five-year National Master Agreement that covers more than 300,000 full- and part-time UPS employees in the U.S.”

Amazon did not immediately respond to a request for comment.

One local supplemental agreement that affects 174 workers in Florida will be renegotiated, the union said. The national master agreement will go into effect as soon as that supplement, which is one of 44 local supplements, has been renegotiated and ratified, the union said.

See: UPS blames ‘late and loud’ Teamsters talks for revenue miss, outlook cut

Also: Actors, writers, hotel housekeepers and grad-student workers are all striking for the same reason

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August 22, 2023