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Tag: labor

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

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

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    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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  • Unemployment surge to 3.8% may be a summer-jobs mirage

    Unemployment surge to 3.8% may be a summer-jobs mirage

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

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

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    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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  • Rising tensions between employers and employees has put the labor back in this year’s Labor Day

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

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    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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  • Labor Day is just a ‘milestone’ in the marathon to get workers back to the office

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

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    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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  • Millions more workers would be entitled to overtime pay under a proposed Biden administration rule

    Millions more workers would be entitled to overtime pay under a proposed Biden administration rule

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    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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  • Dow ends up 200 points, stocks score back-to-back gains

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

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    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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  • UPS workers approve 5-year contract, capping contentious negotiations that threatened deliveries

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

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    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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  • UPS workers vote to approve ‘historic’ five-year contract

    UPS workers vote to approve ‘historic’ five-year contract

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    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,
    -0.97%

    “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,
    -0.32%

    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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  • Nvidia may be the AI stock for now, but here are the picks for later, says Goldman Sachs

    Nvidia may be the AI stock for now, but here are the picks for later, says Goldman Sachs

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    Wall Street looks ready to build on Monday’s gains, the first in five sessions for the S&P 500
    SPX
    and Nasdaq Composite
    COMP.
    That’s as expectations build around Nvidia, which has had a lackluster August, to knock it out of the park with earnings on Wednesday.

    Investors have had months to focus on AI darlings such as Nvidia. In our call of the day, Goldman Sachs takes a look at stocks to trade after the big AI trade. A team led by strategists Ryan Hammond and David Kostin complied a basket of companies with the biggest potential long-term earnings per share boost from the impact of AI adoption on labor productivity.

    Their analysis indicates that following widespread AI adoption, EPS for the median stock in that basket could be 72% higher than the baseline, versus 19% for the median Russell 1000 stock.

    “We estimate the potential productivity-related EPS boost from increased revenues or increased margins, using a combination of company-level estimates of the share of the wage bill exposed to AI automation and the labor cost to revenue ratio,” said the Goldman team.

    Since early 2023, when AI emerged as a theme for investors, they note their long-term basket of stocks has outperformed the equal-weight S&P 500 by just 6 percentage points, far less than near-term beneficiaries such as Nvidia
    NVDA,
    -0.49%
    ,
    Microsoft
    MSFT,
    +0.94%

    or Meta
    META,
    +0.51%
    .


    Goldman Sachs Investment Research

    “The estimated AI-driven earnings boost is likely to occur over the next few years, but should be reflected in stock valuations sooner. However, the eventual share price impact will depend on the ability of companies to use AI to enhance earnings,” said Goldman.

    While unable to pin it exactly, Goldman expects AI adoption will start to a have a “meaningful macro impact” between 2025 and 2030, with regulatory constraints and data privacy concerns likely to slow widespread adoption. Nearly 75% of CEOs see AI take-up impacting companies or cutting labor needs within the next five years, even if they don’t right now.

    Firms with the biggest workforce exposure to AI and larger and more innovative ones, will likely adopt generative AI earlier than others, say the strategists. They say to “expect valuation multiples for these companies to increase first as the adoption timeline crystallizes, even if actual adoption and the associated EPS boost is occur later.”

    Goldman’s estimates on the potential earnings boost for those long-term AI beneficiaries consist of several factors: the share of each company’s wage bill exposed to AI automation, how much of a company’s wage bill is exposed to AI automation and labor cost as a share of revenue.

    “For the typical Russell 1000 stock, 33% of the wage bill is potentially exposed to AI automation and labor costs currently represent 14% of total sales. The potential boost from higher sales would increase earnings by 11% and reduced labor costs would increase earnings by 26%, all else equal,” say the strategists.

    Here is a taster of their long-term AI beneficiaries basket:


    Goldman Sachs

    And a few more:


    Goldman Sachs

    Read: U.S. stocks may bounce this week, but summer selloff is only halfway done, analysts warn

    The markets

    U.S. stocks
    SPX

    COMP
    are trading mixed. The yield on the 10-year Treasury
    BX:TMUBMUSD10Y
    is steady at 4.33%.

    For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

    The buzz

    Microsoft
    MSFT,
    +0.94%

    has proposed a Ubisoft license to win U.K. regulatory approval for its Activision Blizzard
    ATVI,
    +1.09%

    buyout. Activision shares and Ubisoft
    UBI,
    +9.93%

    surged in Paris.

    On the heels of a 7% surge, EV-maker Tesla
    TSLA,
    +2.77%

    is up 1.8%.

    Opinion: SoftBank’s Arm is going public, but it faces a rapidly growing threat

    Lowe’s shares
    LOW,
    +3.34%

    are up after the DIY retailer’s earnings topped expectations, though it notes lower discretionary demand.

    Among Monday’s late earnings news: Fabrinet
    FN,
    +27.25%

    is up 18% after the high-tech manufacturing services company upbeat forecast, with new AI products helping drive results. Videoconferencing group Zoom Video Communications
    ZM,
    -4.15%

    is up 4% after reporting an earnings jump and guidance.

    Read: Why Amazon is this analyst’s top internet stock pick

    The world’s biggest miner BHP
    BHP,
    -0.98%

    reported a 58% slump in annual profit amid tumbling commodity prices in part due to China’s economic troubles. U.S.-listed shares are up 4%.

    Arm Holdings filed its long-awaited IPO, which could be the year’s biggest. The chip designer aims to raise up to $10 billion with a valuation of $60 billion to $70 billion.

    Existing home sales for July are due at 10 a.m., with several Fed speakers throughout the day: Richmond Fed President Tom Barkin at 7:30 a.m. and Chicago Fed President Austan Goolsbee and Fed. Gov. Michelle Bowman both at 2:30 p.m.

    Best of the web

    ‘Own what the Mother of All Bubbles crowd doesn’t.’ This market strategist expects stagflation and is investing for it now.

    New video shows the day police raided 98-year old Kansas newspaper owner’s home.

    Hitler’s birth house in Austria will be turned into a police station with a human rights training center.

    The tickers

    These were the top tickers on MarketWatch as of 6 a.m.:

    Ticker

    Security name

    TSLA,
    +2.77%
    Tesla

    NVDA,
    -0.49%
    Nvidia

    AMC,
    -17.31%
    AMC Entertainment

    NIO,
    -1.87%
    Nio

    APE,
    -11.32%
    AMC Entertainment Holdings preferred shares

    TTOO,
    -6.13%
    T2 Biosystems

    GME,
    -3.63%
    GameStop

    AAPL,
    +0.63%
    Apple

    MULN,
    -19.19%
    Mullen Automotive

    AMZN,
    +0.15%
    Amazon.com

    The chart

    Is tech dancing to the beat of its own drum? The Chart Report flagged this one from Scott Brown, founder of Brown Technical Insights, showing performance of the Technology Select Sector SPDR ETF
    XLK
    :


    @scottcharts

    “It’s only been a week, but consensus and conventional wisdom suggest higher yields are bad for Growth/Tech stocks. Meanwhile, Tech is acting like it never got the memo. It’s still too early to tell if Tech is trying to tell us something, but Scott points out that the sector is facing a crucial test this week at the March 2022 highs (around $163). $XLK is solidly above $163 after today’s bounce, but where it ends the week will likely hinge on $NVDA, as the company releases earnings on Wednesday evening,” says Patrick Dunuwila, editor and co-founder of The Chart Report. 

    Random reads

    “We are the champions.” Spain erupted in celebrations to welcome its Women’s World Cup victors. And England’s Lionesses got a 1,000 soccer-ball tribute.

    No, Tropical Storm Hilary didn’t flood Dodger Stadium.

    These thirsty beer-drinking thieves are raccoons.

    Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

    Listen to the Best New Ideas in Money podcast with MarketWatch financial columnist James Rogers and economist Stephanie Kelton.

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  • Union Throws a Curveball in Battle for U.S. Steel

    Union Throws a Curveball in Battle for U.S. Steel

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    The battle for


    United States Steel


    has already taken a number of unexpected twists and turns. Investors just got another one.

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  • Housing market has hit ‘rock bottom,’ says Redfin CEO Glenn Kelman

    Housing market has hit ‘rock bottom,’ says Redfin CEO Glenn Kelman

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    Housing market has hit ‘rock bottom,’ says Redfin CEO

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  • How much would a strike cost the Big Three automakers? Wall Street thinks it has an answer.

    How much would a strike cost the Big Three automakers? Wall Street thinks it has an answer.

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    Wall Street got busy Monday calculating the impact of a strike on the Big Three automakers amid increasingly fraught labor negotiations between union workers and companies, and a  “greater likelihood” of a walkout next month.

    Also on Monday, President Joe Biden weighed in, urging the United Auto Workers and Ford Motor Co.
    F,
    +0.49%
    ,
    General Motors Co.
    GM,
    +0.53%

    and Stellantis NV
    STLA,

    to “to work together to forge a fair agreement.”

    Negotiations so far have been tense, and the contract expires in one month.

    Citi analyst Itay Michaeli estimated that a strike at GM lasting about two weeks impacting roughly about 100,000 vehicles would result in an impact of around $1.3 billion before interest and taxes; a five-week one, impacting about 280,000 vehicles, would result in a $3.4 billion impact EBIT. That would be a similar hit as GM’s 2019 strike, he said.

    Recent headlines are “pointing to increasingly challenging labor negotiations and a greater likelihood of a strike next month,” Michaeli said.

    A longer stoppage would result in shrinking dealer inventory and possibly start to impact sales sometime during the second half of October.

    For Ford, Michaeli calculated an impact of about $1.6 billion EBIT for a two-week strike affecting about 130,000 Ford vehicles, growing to $4 billion in the case of a five-week strike affecting 330,000 Ford cars and trucks. Like GM, sales would be hobbled roughly by mid-October in the case of a longer strike.

    “For both companies, the exact volume impact will in part depend on the extent of any Canada/Mexico downtime, and to that, GM appears somewhat better positioned than Ford due to GM’s higher exposure to Mexico production (including for pickup trucks) and other supply-chain considerations,” the analyst said in his note Monday.

    Both companies likely can keep their guidance intact in the case of a brief, one-week strike, but a strike beyond the two-week mark “likely triggers a [fiscal-year guidance] cut, though it would set 2024 up with reduced inventory and greater volume/price recovery prospects,” Michaeli said.

    A big question is whether a strike targets one specific automaker, as it was the case with GM in 2019, or all three at the same time — with more industry volume loss but also potentially a shorter strike, Michaeli said.

    “To that, Ford is generally viewed to be the least likely to be selected as a target,” he said.

    Deutsche Bank analyst Emmanuel Rosner said in his note Monday that he estimates an impact on earnings of about $400 million to $500 million for every week of production for each automaker, for a total of about $1.4 billion.

    GM’s 2019 strike lasted almost six weeks, with a loss of about $3.6 billion EBIT; GM North America lowered revenue estimates as nearly 300,000 fewer vehicles were delivered.

    Extrapolating the same $13,000 per unit in EBIT hit, Ford, GM and Stellantis could see [$550 million, $480 million, and $400 million] in weekly profit impact, reaching that $1.4 billion-a-week estimate, Rosner said.

    “In a bad-case scenario with 8 weeks of strike against all 3 automakers, which would bring the UAW strike fund to very low levels, this could cause $11.2 billion in lost profits for the [Detroit 3],” Rosner said. “While this is considerable, it would still be considerably less than the impact from the lifetime of the 4-year contract,” which would create “a permanent raise in the OEMs’ cost,” he said.

    The analyst also quantified the cost of UAW’s demands, focusing on the union’s “higher-probability asks” such as converting temporary employees into full-time workers, the elimination of a tiered-wage system, and about 40% base wage increase over the four years of the life of the contract. He left out “unlikely” to be met demands around pensions and post-retirement healthcare benefits.

    “Our analysis suggests accommodating these demands would likely constitute a large but not destructive headwind to OEMs’ earnings in year 1, with incremental costs stepping up even further in subsequent years,” Rosner said in the note.

    If these demands are granted with cost-of-living raises on top, Rosner estimated costs to all three automakers around $3.6 billion in the first year of the contract, amounting to $23 billion in total for the four years, “with highest hit to Stellantis, followed by GM and then Ford.”

    “Specifically, we estimate that the conversion of temporary employees to full-time workers would cost D3 a total of $1.4 billion, not yet factoring in wage increases, with the highest impact to Stellantis given the higher [percentage] of temporary employees used currently relative” to GM and Ford, the analyst said.

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  • Roblox Will Soon Start To Interview Some Job Seekers In-Game

    Roblox Will Soon Start To Interview Some Job Seekers In-Game

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    Interviewing for a job isn’t fun. Today, so many companies make candidates jump through numerous hoops and several interviews just to get a chance to work for them. And now, the company behind the free-to-play online game Roblox is preparing to take the next, horrible step: interviewing people in-game.

    Roblox is a giant online video game/content creation platform that allows players around the world to create and sell their own games and in-game items to others. Millions of players log in every day to play Roblox, though some reports suggest the whole thing might be pretty shady and not a safe place for creators or kids. Now it seems Roblox Corporation wants to use its own massive video game to help find new employees and even host interviews in its corporate metaverse.

    Read More: You Can Be An Extreme Storm Chaser In This Game

    On August 10, Roblox revealed its new “Roblox Career Center,” an in-game location created by the company as a way to provide “early career candidates” with a “firsthand” look at what it’s like to be a part of its workforce. The Career Center includes an Innovation Lab where candidates can see what’s coming next for the game, and a Podcast Lounge where you can listen to the company’s Tech Talk show hosted by co-founder & CEO Dave Baszucki. Also included is The Library, which holds a “curated selection of books and other reading materials” that job seekers can look over and read before their interview.

    Roblox says its new Career Center will let the company “reach early career candidates across the world” while removing “geographic constraints” from the process. I feel like an email, video call or phone conversation can also remove those kinds of limitations, but okay. What is worse and more nightmarish is the hint, buried in Roblox’s blog post, that it will start interviewing people in the game itself in the future.

    “Coming soon, we’ll be inviting candidates to conduct certain initial interviews directly within the experience,” teased Roblox, like a person with a spray bottle threatening a dog. Thankfully, it seems these in-game interviews will initially be “opt-in”, according to Axios.

    Why Roblox is using its game to find employees

    Roblox says its in-game career center is designed for candidates and applicants who have likely grown up playing Roblox and who will feel comfortable looking for work and interviewing in it.

    Look, I get that this might seem like it’s breaking down barriers and letting more people be interviewed by Roblox. Yet, the idea of directly looking for employees from the pool of young people who play your game a lot inside that very game seems a little predatory and very weird.

    And as mentioned already, there are already so many pre-existing ways to interview and talk to people around the world. If only one good thing came from the covid pandemic, it’s the realization that many more people can work remotely and more places should support remote work in order to bring more diversity to their workplaces. Instead, what if desperate job seekers might one day be forced to download Roblox or some other awful metaverse, then forced to jump through another hoop in the hopes of finding employment to support themselves and their family? We continue to live in the worst timeline.

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    Zack Zwiezen

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  • Why have frozen fruit and vegetable prices soared by almost 12% — but the cost of fresh produce has not?

    Why have frozen fruit and vegetable prices soared by almost 12% — but the cost of fresh produce has not?

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    What’s going on with frozen fruit and vegetables?

    Food prices rose 0.2% on the month in July after remaining unchanged in June, and they rose 4.9% on the year, while the cost of food at home rose 3.6% on the year, government data released Thursday showed. Prices of fresh fruits and vegetables rose just 1.2% year over year.

    However, there were some big — even alarming — outliers: Frozen fruit and vegetable prices increased by 11.8% in July over last year, frozen vegetable prices rose 17.1% and frozen noncarbonated juice and drink prices rose 16.3%.

    Those price rises are at odds with overall inflation figures. U.S. consumer prices rose to 3.2% in July from 3% in the prior month, the Bureau of Labor Statistics said this week. It was the first increase in 13 months.  

    Why have the prices of frozen fruits and vegetables shot up over the past 12 months, while the cost of fresh fruits and vegetables has increased so little? 

    Climate change and extreme weather conditions — from heavy rainfall to drought, particularly in California — have led to big problems for farmers. This has been compounded by issues related to the war in Ukraine and an ongoing increase in the cost of labor, experts said.

    As a result, a large proportion of the fruits and vegetables grown were destined to be sold as fresh produce — which led to a shortage of ingredients for frozen goods, said Brad Rubin, sector manager at Wells Fargo Agri-Food Institute. “Because of the late crop, lots of produce is being pushed to the fresh market to keep up with demand,” he said.

    California weather

    California has experienced some drastic weather conditions over the last 12 months. Some 78 trillion gallons of water fell in California during winter 2022 and early spring 2023, according to data from the National Weather Service, delaying planting. And all that snow and rain was followed by a months-long drought in the region.

    What happens in California is felt by consumers across the country. 

    “California produces nearly half of U.S.-grown fruits, nuts and vegetables,” according to estimates from the Sciences College of Agriculture, Food & Environmental Sciences at California Polytechnic State University in San Luis Obispo. “California is the only state in the U.S. to export the following commodities: almonds, artichokes, dates, dried plums, figs, garlic, kiwifruit, olives, pistachios, raisins and walnuts,” it says.

    The subsequent price rises hit ingredients like strawberries and raspberries especially hard, Rubin added. Inventories of frozen berries are “near five-year lows” after winter storms in Watsonville flooded agricultural fields, damaging and delaying the strawberry crop. Most of the strawberries in the U.S. are grown in California. 

    Labor costs

    Frozen fruits and vegetables have a longer supply chain than fresh produce, which can make them more vulnerable to disruptions in inventory, experts say. Rising energy prices are also pushing up the cost of cold storage. 

    In addition to those issues, U.S. farmers are dealing with increased labor costs and fewer migrant workers, partly due to changes in government policies and the closure of borders during the COVID-19 pandemic, according to a February 2023 report from the Federal Reserve Bank of San Francisco. 

    “Immigration has traditionally provided an important contribution to the U.S. labor force,” the report said. “The flow of immigrants into the United States began to slow in 2017 due to various government policies, then declined further due to border closures in 2020-21 associated with the COVID-19 pandemic. This decline in immigration has had a notable effect on the share of immigrants in the U.S. labor force.”

    Russia’s invasion of Ukraine also continues to affect agricultural production in the U.S., said Curt Covington, senior director of institutional business at AgAmerica Lending, a financial-services company providing agricultural loans. Because the war disrupted supplies of commodities like wheat and corn — also pushing up prices for those goods — farmers have been prioritizing planting those crops over vegetables. 

    “These escalating frozen-vegetable prices present a challenge for farmers as they grapple with increased production costs and labor pressures,” and that presents a long-term challenge for farmers, “potentially impacting their profitability,” Covington said. 

    All of these factors — from international supply chains to extreme weather conditions — will have an effect on the cost of frozen goods in U.S. supermarkets. Ultimately, experts said, consumers will end up paying the price.

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  • State and local pensions look healthier — even with asset market turbulence

    State and local pensions look healthier — even with asset market turbulence

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    My colleagues JP Aubry and Yimeng Yin just released an update on state and local pension plans. Their analysis compared 2023 to 2019 – the year before all the craziness began. Think of the unusual events that have occurred in the last few years: 1) the onset of COVID; 2) the subsequent COVID stimulus; 3) declining interest rates; 4) rising inflation; and then 5) rising interest rates. 

    Despite the volatility of asset values over this period, the 2023 funded status of state and local pension plans is about 78%, which is 5 percentage points higher than in 2019 (see Figure 1). Of course, the numbers for 2023 are estimates based on plan-by-plan projections, but these projections have an excellent track record.   

    While the aggregate funded ratio provides a useful measure of the public pension landscape at large, it also can obscure variations in funding at the plan level. Figure 2 separates the plans into thirds based on their current actuarial funded status. The average 2023 funded ratio for each group was 57.6% for the bottom third, 79.5% for the middle third, and 91.1% for the top third.

    The major reason for the improvement in plans’ funded status is that, despite the turbulence in the economy, total annualized returns, which include interest and dividends, have risen noticeably for almost all major asset class indexes over the 2019-2023 period (see Figure 3). The exception over this short and volatile period is fixed-income assets, which have declined in value.

    The effect of fixed income’s decline on overall portfolio performance has been modest because, since 2019, fixed income has averaged only about 20% of pension fund assets (see Figure 4).

    So, things are looking a little better for state and local pensions. Yes, the funded ratios are biased upward because plans use the assumed return on their portfolios – roughly 7% – to discount promised benefits. That said, trends are important, and the trend is good. 

    Moreover, annual state and local benefit payments as a share of the economy are approaching their peak for two reasons. First, most pension plans do not fully index retiree benefits for inflation, which lowers the real value of benefits over time. Second, the benefit reductions for new hires – introduced in the wake of the Great Recession – have started to have an impact.

    With liabilities in check and solid asset performance, maybe we can all relax a bit about the future of the state and local pension system.

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  • $1.8 million to retire? Are you kidding?

    $1.8 million to retire? Are you kidding?

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    This time it’s in the latest Charles Schwab Retirement Survey. Among 1,000 people surveyed, the average respondent figured he or she needed to save $1.8 million to retire. (That figure is up from $1.7 million in the same survey a year earlier.)

    Touchingly, 86% also told Schwab they were either “somewhat” or “very” likely to achieve their goals.

    Er, no.

    If the numbers show anything, it’s that most people don’t understand math, don’t understand finance and are wildly out of touch with reality.

    Some simple calculations will show that these figures are all wrong.

    First, let’s start with the bad news. There is no way 86% of people should be “very” or “somewhat” confident that they are going to hit that $1.8 million target, or anything like it. Let alone that 37% think they are “very” likely to hit it.

    Median retirement-account balance at the moment? Try $27,000 and change, says 401(k) giant Vanguard.

    Even that’s overstating the picture. The Federal Reserve’s most recent triennial Survey of Consumer Finances says the median American household has $26,000 in total financial assets, including savings accounts, life insurance, 401(k) plan and the like. Among those aged 45 to 54, the figure is $37,000, and among those 55 to 64 it’s $47,000. How anyone thinks they are getting from there to $1.8 million by retirement age is a mystery. Magic carpets? Magic beans?

    Granted, the survey is from 2019, but the intervening pandemic period won’t have changed the picture that much — in either direction.

    It’s not clear from the survey whether those polled included the value of the equity in their homes. Throw that in, and the median household’s total net worth rises to $122,000. Among those aged 45 to 54 it rises to $169,000, and among those 55 to 64 to $213,000. COVID policies helped drive up average U.S. home prices by about 30%, so those figures will have risen since 2019.

    But again we are not nearing $1.8 million.

    Not even close.

    The good news, though, is that you don’t actually need this amount or anything like it to retire.

    Naturally if someone hasn’t figured life out by the time they retire, and they still think that buying yet more stuff is the route to happiness, no amount is going to be enough.

    How much we’d like and how much we need are very different things.

    A $1.8 million balance would buy a 65-year-old couple an immediate annuity paying a guaranteed lifetime income of $9,500 a month, or just over $110,000 a year.

    The average Social Security benefit on top of that for a retired couple is just under $3,000 a month, or $36,000 a year. So in total you’d be on about $146,000 a year. What are these people planning to do in retirement?

    Even with a 3% annual rise, to account for inflation risk, that annuity will pay out $83,000 a year, and that’s for a couple, not just for one person. The money continues until both of you have gone.

    How much do we really need? Well, while acknowledging that each person and each person’s situation is going to be different, let’s do some simple math.

    Actual seniors are living on median annual incomes of around $45,000 to $50,000, says the Federal Reserve. And most of them say they are either reasonably satisfied with retirement or actually happy. So, at least, they tell Gallup and the Employee Benefit Research Institute.

    Meanwhile, a new survey from Schroders finds that the average person thinks a comfortable retirement can be had on around $5,000 a month, or $60,000 a year.

    The average Social Security benefit for a retired couple is $36,000 a year. To bring that income up to $50,000 you’d need an annuity paying $14,000 a year.

    Current cost in the annuities market: $225,000.

    To bring that up to $60,000 the annuity would cost $385,000.

    For $350,000 you can get an income of $18,000 with a 3% annual increase to deal with inflation.

    For $800,000 you can double your Social Security income, bringing in another $36,000 a year — with a 3% annual increase to deal with inflation.

    The cost of housing is a major component for retirees. No, someone doesn’t have to move to Iowa to be able to retire in comfort. But they can move the dial by cashing in their home in an expensive neighborhood — especially the kind of location they may have moved to for a high-paying job or the best schools — and moving somewhere cheaper. Away from coastal California or the “Acela” corridor in the Northeast, a lot of U.S. homes are really cheap.

    Retirement savings generally are grossly inadequate, and many people face genuine hardship in their senior years. And, of course, pretty much everyone could use more money. On the other hand, you can retire in comfort with a lot less than $1.8 million.

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  • Yellow Files for Bankruptcy. The Stock Is Down After Quadrupling.

    Yellow Files for Bankruptcy. The Stock Is Down After Quadrupling.

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    Yellow


    one of the country’s largest and oldest trucking companies, has filed for bankruptcy amid mounting debt and a labor dispute with the Teamsters union.

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  • British Columbia port workers ratify contract offer, ending Canada labor dispute

    British Columbia port workers ratify contract offer, ending Canada labor dispute

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    British Columbia’s port workers have voted almost 75% in favor of a contract offer, ending weeks of turbulent job action that stopped billions of dollars’ worth of goods from being shipped in Canada

    VANCOUVER, British Columbia — British Columbia’s port workers voted almost 75% in favor of a contract offer, ending weeks of turbulent job action that stopped billions of dollars’ worth of goods from being shipped in Canada.

    In a statement on the International Longshore and Warehouse Union Canada website late Friday, president Rob Ashton confirmed the result. The dispute had shut down ports on Canada’s west coast last month for nearly two weeks and spurred several business groups and political leaders to call for back-to-work legislation.

    Federal Labor Minister Seamus O’Regan tweeted that both the ILWU and the BC Maritime Employers Association ratified the deal, ending the dispute. O’Regan said, however, that he is directing federal officials to review the entire case to avoid a port disruption of this magnitude from happening in the future.

    The employers association said in a statement that it ratified the four-year deal, which “includes increases in wages, benefits and training that recognizes the skills and efforts of B.C.’s waterfront workforce.”

    The approval of the contract, which covers about 7,400 workers, comes after the union rejected a mediated settlement twice in July — once through the group’s leadership caucus, another by full membership.

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  • Power at the gas pump: Oregon lets drivers fuel their own cars, lifting decades-old self-serve ban

    Power at the gas pump: Oregon lets drivers fuel their own cars, lifting decades-old self-serve ban

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    SALEM, Ore. — For the first time in 72 years, Oregon motorists can grab a fuel nozzle and pump gas into their cars on their own, since a decades-old ban on self-serve gas stations has been revoked.

    Gov. Tina Kotek signed a bill on Friday allowing people across the state to choose between having an attendant pump gas or doing it themselves. The law takes immediate effect.

    That leaves New Jersey as the only state that prohibits motorists from pumping their own gas. A few countries also ban it, including South Africa, where attendants offer to check fluid levels and clean the windshield, with tipping expected.

    “It’s about time. It’s long overdue,” said Karen Cooper, who lives in Salem, said shortly before the bill was signed.

    “I’ve spent a lot of time in California,” Cooper said. “I know how to pump my own. Everybody should know how to pump their own gas.”

    Kacy Willson, 32, who has lived in Oregon her whole life, said she doesn’t have much interest in pumping her own gas. She’s only tried it a few times in her life.

    “It’s kind of nice to have someone do that,” she said at a Portland gas station Friday. “I don’t really leave Oregon very much, and when I do, I have to ask someone how to pump gas, and I feel weird.”

    When Oregon prohibited self-service in 1951, lawmakers cited safety concerns, including motorists slipping on the slick surfaces at filling stations subject to Oregon’s notoriously rainy weather. In recent years legislators relaxed the rule and allowed rural counties to have self-serve gas available at night. Then they extended it to all hours in eastern Oregon’s sparsely populated areas, where motorists low on gas could be stranded when there’s no attendant on duty.

    The COVID-19 pandemic labor shortage helped drive a renewed push to allow self-serve across the state.

    “We live in a small town in a large county and can’t find employees to pump fuel,” Steve Rodgers, whose community is at the base of the snow-capped Cascade Mountains, complained to lawmakers. “We are paying top dollar and also offering insurance, paid time off and retirement benefits, and still cannot fully staff.”

    Haseeb Shojai, who immigrated from Afghanistan in 2004 and owns gas stations in central Oregon’s high desert, also lamented the labor shortage and described how wildfires, with increased intensity and frequency due to climate change, are having a major effect. The state fire marshal lifted the self-serve ban during dangerous heat waves the past couple of summers.

    “Wildfires have been a factor in operating our business in the summer months, when it is hard for our gas attendants to stay for long periods outside in smoke and in heat,” Shojai said. “We don’t know if we can stay open tomorrow or the next day or even next week due to the labor shortage.”

    A union representing workers at grocery store fuel stations in Oregon predicted job losses and called the the law a “blatant cash grab for large corporations.”

    “With over 2,000 gas stations in Oregon, laying off just one employee per location represents millions of dollars a year that giant corporations are not paying in wages, benefits and public payroll taxes,” said Sandy Humphrey, the secretary-treasurer of UFCW Local 555.

    Under the new law, there can’t be more self-service pumps at a gas station than full-service ones. And prices for motorists must be the same at both types.

    Still, opponents of the measure worry that it could lead to the demise of full-service pumps, depriving older adults and people with disabilities of that option.

    “I have some real concerns that we are progressively getting closer and closer to eliminating Oregon’s fuel service law entirely,” Democratic state Sen. Lew Frederick said on the Senate floor in June before voting against the bill.

    Brandon Venable, a service station manager, had urged lawmakers to reject the bill, saying some customers are careless and that attendants keep people safe.

    “I deal with many dangerous situations daily created by people smoking, leaving their engines running, getting in and out of their vehicles creating static electricity, trying to fill up random bottles and jugs, and driving off with the pump still in the vehicle,” Venable said.

    Others wonder if motorists who are now clamoring to pump their own gas might be less keen on doing so when they have to stand out in the rain, cold and snow instead of remaining in their warm, dry cars.

    Republican state Sen. Tim Knopp, who leads the minority GOP caucus, downplayed safety concerns as he described being allowed to pump his own gas because he belongs to a commercial fueling cooperative.

    “I have yet to light myself on fire. I have yet to cause any problems whatsoever as it relates to self-serve gas,” Knopp said during debate on the bill. “So, colleagues, let’s make New Jersey the only state in the country that has a law against self-serve gas.”

    The state Senate then approved the bill on a 16-9 vote. The House earlier passed it 47-10.

    New Jersey’s 1949 ban on self-service pumps remains a source of pride for some in a state where bumper stickers declare “Jersey Girls Don’t Pump Gas.”

    Since New Jersey has lower gas prices than New York and Pennsylvania, many drivers from neighboring states cross the state line to fuel up.

    In 2015, lawmakers proposed ending the New Jersey ban, but the measure died because of opposition from the powerful state Senate president.

    ___

    Associated Press reporters Michael Catalini in Trenton, New Jersey, and Claire Rush in Portland, Oregon, contributed to this report.

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