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Tag: labor

  • More than 55,000 global tech workers laid off in the first few weeks of 2023, says layoff tracking site

    More than 55,000 global tech workers laid off in the first few weeks of 2023, says layoff tracking site

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    More than 55,000 global technology sector employees have been laid off in the first few weeks of 2023, according to data compiled by the Layoffs.fyi website.

    The website’s tally of global tech layoffs has almost doubled from just over 25,000 on Tuesday.

    The data suggest 2023 is on pace to surpass 2022 for global tech redundancies, with 154 tech companies laying off 55,324 employees in the first few weeks of the year. Last year, 1,024 tech companies laid off 154,336 employees, according to Layoffs.fyi.

    Related: More than 25,000 global tech workers laid off in the first weeks of 2023, says layoff tracking site

    Layoffs.fyi was set up by San Francisco-based startup founder Roger Lee to track layoffs during the COVID-19 pandemic. Lee is the co-founder of Human Interest, a digital 401(k) provider for small businesses and Comprehensive, an employee compensation platform.

    Major U.S. tech companies are firmly in the layoffs spotlight. This week Google parent Alphabet Inc.
    GOOGL,
    +4.69%

    GOOG,
    +4.80%

    confirmed plans to lay off about 12,000 workers globally and Intel Corp.
    INTC,
    +1.62%

    said it is slashing hundreds of jobs in Silicon Valley.

    Microsoft Corp.
    MSFT,
    +3.19%

    confirmed plans to cut about 10,000 positions. The software maker’s layoffs did not come completely out of the blue. Earlier reports from Sky News and Bloomberg indicated that Microsoft was preparing to make cuts.

    See Now: Google joins Intel, Microsoft Amazon, Salesforce and other major companies laying off thousands of people

    In a blog post, Microsoft CEO Satya Nadella said that while the company is eliminating roles in some areas, the company will continue to hire in key strategic areas. The CEO did not specify which areas will see hiring but did describe advances in artificial intelligence as “the next major wave of computing.”

    Earlier this month Coinbase Global Inc.
    COIN,
    +8.56%

     announced 950 job cuts in an attempt to cut costs.

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  • Small businesses to tackle long list of challenges in 2023

    Small businesses to tackle long list of challenges in 2023

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    NEW YORK (AP) — Small businesses face a mix of old and new challenges as 2023 begins. A looming recession, still high (although easing) inflation and labor woes are some of issues carrying over from 2022 that small businesses will have to tackle. There are also new regulatory wrinkles, such as a proposed change in how to classify gig workers and more states requiring pay transparency. After three precarious pandemic years, what transpires in 2023 will make a big difference in whether small businesses across the country are able to stay afloat.

    RECESSION WORRIES

    In some ways, whether the economy is headed into a recession or not is less of an issue for small businesses than day-to-day operations.

    Nela Richardson, chief economist for payroll company ADP, said small business owners should focus on bigger issues like labor and wages.

    “Recession for the most part is an academic question,” she said. “We won’t know for several months until after it happens and no one on Main Street makes that call. It’s far removed from hiring and turnover.”

    Given the economic uncertainty, small businesses will have to keep a tight rein on costs and run their operations as efficiently as possible, said Ray Keating, chief economist for the Small Business & Entrepreneurship Council.

    Keating said technology can help with efficiency, and one way to keep costs down is to cast a wider net in terms of suppliers.

    INFLATION

    The reason businesses need to keep a firm grip on costs is inflation, which appears to have peaked last summer but remains high. According to the latest data from the government, consumer prices rose 7.1% in November from a year ago, down from an increase of 7.7% in October.

    Experts say inflation is unlikely to fall back to the levels seen prior to 2022, mostly because of higher wages and low employment. The monthly employment report released Friday showed wages rose by 4.6% year over year in December and the unemployment rate at just 3.5%.

    “We want the unemployment level to increase because if it does, wage growth will slow, and not only is there no evidence that’s happening, if anything wage growth is about to get rocket fuel this time of year when wages go up,” said David Lewis, CEO of HR firm Operations Inc., which advises small businesses.

    He said he expects inflation to stay in limbo.

    “I don’t see inflation dropping in any significant way … but I don’t see it going back up above that 8 percent level,” he said.

    LABOR

    An ongoing challenge for small businesses is hiring and keeping workers. The matter is particularly stark at the beginning of the year. Since businesses typically give raises or bonuses at the end of the year, many workers use the period from mid-January to mid-April to decide if they need to make a job change.

    “Everything we’re seeing, or hearing, suggests companies need to look at increases double to what they used to do in the last on average 15 years in order to keep up with everybody,” said Operations Inc.’s Lewis. “Unfortunately, smaller businesses have the fewest resources available to pony up.”

    Since small businesses can’t keep up with the raises at bigger companies, they will have to find new ways to retain workers in 2023.

    Keating, of the Small Business & Entrepreneurship Council, said one solution for small businesses in 2023 could be more extensive on the job training.

    “Not that they don’t train them now, but they need to go deeper than they have in the past and train all the way across the board. That’s one of the answers to these labor challenges,” he said.

    PROPOSED GIG WORKER RULE

    The Labor Department has proposed a rule that would make it easier to classify independent workers as employees, part of a long running debate about whether gig workers like Uber drivers or Instacart delivery workers are contractors or employees.

    The Labor Department said the proposal will protect workers and “even the playing field” for businesses that classify their workers correctly, reducing the number of misclassified employees.

    Workers classified as employees can qualify for benefits such as minimum wage and Social Security. But critics of the proposed rule say gig workers don’t always want employee status and the new rule will be a burden on small businesses

    The proposed rule is “much too broad, unwieldy, arbitrary and confusing, which means it will drag countless numbers of independent contractors and freelancing individuals into a ‘misclassified’ pit, if enacted,” said Karen Kerrigan CEO of advocacy group the Small Business & Entrepreneurship Council.

    The proposal applies only to laws that the Labor Department enforces, like the federal minimum wage. But employers and courts often use Labor Department rules as a guideline for wider issues.

    The Labor Department’s final ruling is expected this year, likely in the first quarter.

    MINIMUM WAGE CHANGES/STATE REGULATIONS

    Finally, small businesses should be aware of regulatory changes going into effect in 2023, particularly state regulations.

    There are 27 states raising minimum wages in 2023. For example, in Michigan, the minimum wage is set to increase from $9.87 to $10.10 per hour. California is setting the minimum wage at $15.50 per hour for all employees, regardless of size of employer. That’s changing from $15 for employers with 25 or more workers and $14 for employers with fewer than 25 workers.

    Pay transparency laws are going into effect too. Beginning Jan. 1, California began requiring employers with 15 or more workers to list salary ranges on job postings. In New York State, a salary transparency bill is expected to go into effect in September requiring pay ranges on job postings.

    Minimum wage and pay transparency laws vary widely by state, so small businesses should stay on top of their local laws to make sure they follow any changes.

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  • I ruined my family’s finances by withdrawing from my 401(k) to buy a house – I regret it

    I ruined my family’s finances by withdrawing from my 401(k) to buy a house – I regret it

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    I recently made a panic decision to withdraw all my money from one retirement account and I am now closing on a house in February (about $200,000). I am 36 years old, married and have a 1-year-old. Half of me is regretting it, and I’m worried about next year’s taxes due to the withdrawal and the 10% penalty I paid.

    I have been saving up money with my family in order to buy our first home. Recently, however, interest rates have risen, making me worry that this window to get an affordable house was closing. In a fit of panic, I withdrew all of our $26,000 saved money from my 401(k), putting it in a high-yield savings account (3.75%). We have now chosen a home and will be using around $18,000 of this money for the down payment. 

    I am now worried that I might have to pay income taxes and a penalty for the withdrawal itself. I am extremely anxious over this situation as I feel I have destroyed our family’s financial future and that we cannot afford to pay taxes on the money I withdrew. 

    My main concern or question is, is there a way to tell the IRS that this money is being used toward a house? Retroactively? 

    See: I’m a single dad maxing out my retirement accounts and earning $100,000 – how do I make the most of my retirement dollars?

    Dear reader, 

    The first thing you need to do: Take a breath. Most decisions should not be made in a panic, especially when involving money. 

    Because you withdrew from your 401(k), yes, you will have to pay taxes and a penalty. Had it been a loan, you’d have to pay interest on what you borrowed, but it would be to your own account. Keep in mind however that loans from your employer-based retirement plans are also risky – if you were to separate from your job, for whatever reason, you’d be responsible to pay it back or it would be treated as a distribution.

    I understand your sense of urgency in wanting to buy a home during a more favorable market, but your time now should be spent on getting yourself financially situated and saving for the future. 

    “I wouldn’t advise this or done it this way, but he’s not stuck and it’s not detrimental – it’s just a tough lesson to learn,” said Jordan Benold, a certified financial planner at Benold Financial Planning.  

    Get very serious about your current finances and find a way to earmark a portion of your income to savings if at all possible. There are a few things you should be doing. 

    First, assess how much you will be paying in taxes and penalties. I’m not sure what your tax bracket is, but did this distribution push you into a higher tax bracket? You can use a calculator or talk to an accountant to see what that withdrawal will incur in taxes – then make sure you can pay it, or talk to the Internal Revenue Service about an extension. There are penalties for failing to file your taxes or pay them, and you don’t want to add that on top of your stress. 

    Also see: We have 25 years until retirement and are saving 25% of our income – are we doing it right? And are we saving too much?

    The IRS may not be able to do anything for you in terms of waiving those penalties – though it doesn’t hurt to ask, even if you have to wait on the phone for a while to talk to someone – but communication and attention to detail are key when it comes to your taxes. Getting an IRS agent on the phone and talking through your situation won’t be time wasted. There are so many rules, and an agent can help make sense of your options.

    Read: The days of IRS forgiveness for RMD mistakes may soon be over

    Once you get that sorted, look extremely carefully at whatever money you have coming in and what’s going out. You’re about to close on a home, and that costs money – not just the home itself, but all of the extras associated with closing. You may also need money for insurance, furniture, any repairs and so on if you haven’t factored that in yet, so fit that into your budget for when you sign the papers. Beyond that, list every expense you expect to have for the next 12 months – home insurance and taxes, a mortgage or utilities, groceries, medicine, any other nonnegotiable costs and add it all up. Don’t forget anything – ask your partner if there’s anything you may have forgotten. 

    Then compare it to your income. Are you under? Are you over? What changes can you make without totally draining your happiness? I always advocate for a balance…yes, in some cases you have to omit a few expenses for the time being when building up an emergency savings account or paying down debt, but don’t completely rob yourself of joy or all of your hard work may backfire. If you really need to buckle down, make a separate list of activities and entertainment you can get for free (or as close to free as possible)—walks in the park or on the beach with your partner and child, museums on free days, pot lucks and at-home movie nights with family and friends and so on. 

    Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

    Earmark a portion of your income to replenish your retirement savings before you try saving for any other goals. (This is separate from an emergency savings account, however – you should have one of those.) You may do that with payroll deductions in your 401(k), or also by allocating some of your savings to an IRA outside of the 401(k). 

    Take some time to learn the rules of your retirement plans. For example, an IRA allows an investor to take $10,000 out of the account penalty-free if it’s for a first-time home purchase (whereas a 401(k) does not have that exception). It may be too late for that, but there are other perks with various retirement accounts. 

    The 401(k) has a higher contribution limit and also comes with the possibility of employer matches (if your company offers it), whereas an IRA allows for penalty-free withdrawals for college. With a traditional IRA, you’d have to pay taxes on the withdrawal, whereas with a Roth IRA you’ve already paid the taxes and won’t have to pay any more for withdrawing from your contributions (you may have to pay taxes on the earnings portion, so follow distribution rules closely).

    Remember – you don’t want to make distributions from your retirement savings for just anything. You can borrow money for a home or college, but you can’t borrow money for retirement, so it’s important to protect those accounts. Familiarize yourself with the pros and cons of all accounts so that you can maximize your savings and diversify your withdrawal options when you finally get to retirement. 

    So just buckle down, get yourself in order and think of the future. “He’s got plenty of time – 30 to 40 years to work,” Benold said. “This might be a distant memory that he hopes he can forget.” 

    Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

    Readers: Do you have suggestions for this reader? Add them in the comments below.

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  • Von der Leyen’s Davos tightrope: Calm Europe, reframe US spat

    Von der Leyen’s Davos tightrope: Calm Europe, reframe US spat

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    The EU chief argued Europe and the US should team up against China to secure a climate-friendly future.

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    Suzanne Lynch

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  • Trade partners see red over Europe’s green agenda

    Trade partners see red over Europe’s green agenda

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    Voiced by artificial intelligence.

    The EU’s green ambitions are, for its trading partners, turning into a case of the road to hell being paved with good intentions.

    Developing nations, especially, worry that Brussels is throwing up trade barriers in its pursuit of climate neutrality and sustainable food production. To them, it looks like all the EU can export is rules that will hold back their own economic progress.

    Indonesia, for example, has warned the EU should not attempt to dictate its green standards to countries in Southeast Asia. “There must be no coercion, no more parties who always dictate and assume that my standards are better than yours,” Indonesian President Joko Widodo told European leaders at the EU-ASEAN summit last month.

    In another striking example of the anger provoked by the EU’s green agenda, Malaysia has threatened to stop exports of palm oil to the bloc over new rules aimed at fighting deforestation.

    The EU’s ambitions to become climate neutral by 2050 — its so-called Green Deal — herald a huge economic transformation for the world’s largest trading bloc. 

    Now that the Green Deal is being translated into actual legislation, developing nations are waking up with a hangover of its effects. 

    One diplomat from a third country said Brussels is mishandling the power of the EU’s single market instead of respecting the sovereignty of its trading partners.

    “We see a regulatory imperialism by the EU whereby Brussels sees itself as an exporter of rules to third countries — as the legislators of the world,” said Philippe De Baere, managing partner at law firm Van Bael & Bellis.

    The Green Deal goes beyond the so-called Brussels effect, in which multinational companies use EU rules as global standards. De Baere said Brussels had gotten “drunk on its success” and started exporting environmental objectives to developing nations, “which are unable to comply economically, or if they comply, it is with an enormous economic cost.”

    Imposing new taxes 

    The EU’s carbon border levy is the latest, and most symbolic, measure to upset the EU’s trade partners. The idea is that producers importing carbon-intensive products into the bloc will have to buy permits to account for the difference between their domestic carbon price and the price paid by EU producers.

    “There must be no coercion, no more parties who always dictate and assume that my standards are better than yours,” Indonesian President Joko Widodo told European leaders | Lauren DeCicca/Getty Images

    The goal of the levy, called the Carbon Border Adjustment Mechanism (CBAM), was to level the playing field for EU producers and avoid companies moving their production over lower climate standards — so-called carbon leakage. For Brussels, the sense of climate urgency is too high to wait for others to follow suit, or to reach a deal at the multilateral or global level. 

    But there is a difference between the intent and real-word outcomes, said Milan Elkerbout of the Centre for European Policy Studies: “If you’re not in the internal logic of the European debate, this will just look like the perfect example of the EU having a protectionist intent.”

    Brazil, South Africa, India and China have jointly expressed their “grave concern regarding the proposal for introducing trade barriers, such as unilateral carbon border adjustment, that are discriminatory.” The measure is likely to be challenged at the World Trade Organization.

    Mohammed Chahim, a Dutch MEP who helped craft the CBAM, said the measure should be offset by the delivery of tens of billions in annual public financing promised for climate projects in the developing world.

    “I think they are absolutely right in their complaints about the EU (and other developed countries) not fulfilling their pledges,” he said of these emerging economies. But it would be impossible for the EU to end protections for heavy industry at home while granting exemptions to other countries.

    Even for the poorest countries, Chahim said, an exemption “would be the wrong signal, they also have to decarbonize their industry to make it futureproof.” But under the newly minted regulation, those countries were eligible for support to comply, he added.

    Making imports harder 

    The carbon border levy is far from the only measure to make exporting to the world’s biggest trading bloc harder. 

    Brussels’ Farm to Fork strategy seeks to prioritize sustainability in agriculture by slashing pesticide risk and use in half by 2030. A plan announced last September to ban imports of products containing residues of harmful neonicotinoid insecticides from 2026 has drawn “unprecedented” criticism from other countries, according to a senior European Commission official. 

    As the Green Deal tightens rules on pesticide use in the EU, new trade barriers are going up, said Koen Dekeyser of the European Centre for Development Policy Management (ECDPM). “Certain farmers can make those investments. Other, more small-scale farmers are likely to seek other markets, for example in Asia,” said Dekeyser.

    The EU’s effort to stop deforestation is likely to have similar results. 

    Under new rules, it will be illegal to sell or export certain commodities if they’ve been produced on deforested land. 

    Brussels’ Farm to Fork strategy seeks to prioritize sustainability in agriculture by slashing pesticide risk and use in half by 2030 | Jean-François Monier/AFP via Getty Images

    One third-country diplomat said it was easy for the EU to take a stand on deforestation in the developing world, having already deforested its own land in the past.

    Countries in Latin America, Africa and Southeast Asia have lobbied hard against the proposal, calling it “discriminatory and punitive in nature” and arguing in a letter to Commission President Ursula von der Leyen that it will result in “trade distortion and diplomatic tensions, without benefits to the environment.” 

    In technology, where the 27-country bloc has passed a series of rules to promote its standards on privacy, online competition and social media to the wider world, other countries, too, have chafed at what they see as overly bureaucratic rules that favor well-resourced regulators within the EU. These can be difficult to implement in developing countries with less expertise and money at their disposal.

    More far-reaching legislation is still underway. The EU is also preparing a sustainable production law for companies to police their supply chains against forced labor and environmental damage. Brussels wants to hold companies responsible for abuses throughout their supply chains. 

    Same goal, different roads 

    In their deforestation letter, the group of developing countries touch on a sensitive point. While they agree with the EU’s climate goals, they regret that Brussels is imposing its own measures instead of forging an international deal.

    The Paris climate agreement is based on the logic of common, but differentiated, responsibilities. At least, that allows countries to move at their own speed and determine their policies toward the same goal.

    “Now, not only is the EU telling them what to do, but a lot of developing countries also feel they are now prohibited to do what Western countries have done for decades: industrialize without thinking about pollution and subsidizing infant industries,” said Ferdi De Ville, a professor in European political economy at the University of Ghent.

    The unilateral character of a lot of these measures is creating resentment, argues De Ville, especially given the bloc’s huge market power.

    “In Brussels, everyone looks at these measures separately,” said another diplomat from a third country. “But who looks at it together and thinks about what it means to us? CBAM, deforestation, the Farm to Fork strategy. These are all unilateral measures which are making things harder for our exporters.” 

    European officials stress, however, that Brussels is not inflicting its Green Deal on the rest of the world.

    But Brussels is also being pushed by NGOs to lead by example. “Europe is one of the major contributors to the current crises related to climate, biodiversity, energy and human rights violations around the world. Therefore we consider it the responsibility of the European Union and other countries in the Global North to urgently start tackling these crises through lawmaking,” said Jill McArdle from the NGO Friends of the Earth.

    Agreeing on new rules on the multilateral front remains the EU’s first best option. But, in the absence of a well-functioning World Trade Organization, Brussels has little choice but to go at it alone, EU officials and diplomats argue. “If we want to achieve the Paris targets, there is no time to wait,” one EU official said.

    Mark Scott contributed reporting. This story has been updated.

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    Karl Mathiesen and Barbara Moens

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  • U.S. adds robust 223,000 jobs in December, but wage growth slows in sign of ebbing inflation pressures

    U.S. adds robust 223,000 jobs in December, but wage growth slows in sign of ebbing inflation pressures

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    The numbers: The U.S. generated 223,000 new jobs in December to mark the smallest increase in two years, but the labor market still showed surprising vigor even as the economy faced rising headwinds.

    The unemployment rate, meanwhile, slipped to 3.5% from 3.6%, the government said Friday.

    The jobless rate has touched 3.5% several times since 2019. That matches the lowest rate since 1969.

    One good sign for Wall Street and the Federal Reserve. Hourly pay rose a modest 0.3% last month, suggesting wages are coming off a boil.

    The increase in wages over the past year also slowed to 4.6% from 4.8%, marking the smallest gain since the summer of 2021.

    U.S. stocks
    DJIA,
    -1.02%

     
    SPX,
    -1.16%

    rose in premarket trades and bond yields edged higher after the report.

    Economists polled by The Wall Street Journal had forecast a smaller increase in new jobs of 200,000.

    The resilient labor market is a double-edged sword for the Federal Reserve.

    For one thing, a scarcity of workers has driven up wages and threatens to prolong a bout of high inflation. The Fed wants the labor market to cool off further to ease the upward pressure on prices.

    Yet the strong labor market also offers the best hope for the Fed to avert a recession as it jacks up interest rates to the highest level in years. Higher rates reduce inflation by slowing the economy.

    James Bullard, president of the St. Louis Federal Reserve, said on Thursday the odds of so-called soft landing have gone up in part because of the sturdy labor market. He was referring to a Goldilocks scenario in which the central bank vanquishes inflation without causing a recession.

    Senior Fed officials still want to see the jobs market slacken some more, however. They are likely to keep raising rates — and keep them high — until demand for labor, goods and services ease up.

    Big picture: The U.S. economy has shown more fragility, especially in segments like housing and manufacturing that are sensitive to high interest rates. Many economists predict a recession is likely this year due to the higher cost of borrowing.

    The Fed, for its part, is trying to thread the needle: Bring down high inflation and keep the economy out of recession.

    Whatever the outcome, one thing is virtually certain: The unemployment rate is expected to rise as U.S. growth wanes. Whether it’s enough to help the Fed achieve is far from clear. 

    Key details: Health care providers, hotels and restaurants accounted for most of the increase in employment last month. They added a combined 150,000-plus jobs.

    Hiring was weaker in most other sectors, suggesting that the labor market is likely to soften further.

    High-tech has been hit particularly hard and is experiencing a wave of layoffs.

    Employment in so-called professional businesses, which includes some tech, fell by 6,000, largely reflecting fewer temps being hired. It was the only major category to post a decline.

    The share of working-age people in the labor force — known as the participation rate — rose a tick to 62.3%.. A lack of people looking for work is a chief source of the labor shortage.

    Hiring in November and October was little changed after government revisions. The economy added 256,000 jobs in November and 263,000 in October.

     Market reaction:  The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open higher in Friday trades.

    Investors worry a strong labor market will push the Fed to take sterner measures to slow the economy. The slowdown in hiring and wage growth is likely to be seen in a positive light.

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  • Amazon confirms more than 18,000 layoffs, far more than originally expected

    Amazon confirms more than 18,000 layoffs, far more than originally expected

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    Amazon.com Inc.’s
    AMZN,
    -0.79%

    layoffs will affect more than 18,000 employees, the highest reduction tally revealed in the past year at a major technology company as the industry pares back amid economic uncertainty.

    The Seattle-based company in November said that it was beginning layoffs among its corporate workforce, with cuts concentrated on its devices business, recruiting and retail operations. At the time, The Wall Street Journal reported the cuts would total about 10,000 people. Thousands of those cuts began last year.

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  • U.S job openings stay high at 10.5 million and show labor market still very strong

    U.S job openings stay high at 10.5 million and show labor market still very strong

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    The numbers: Job openings in the U.S. fell slightly to 10.46 million in November, but workers were still quitting in droves in a sign the labor market remains quite strong — too strong for the Federal Reserve.

    Job listings declined from 10.51 million in October, the Labor Department said Wednesday. But openings in October were also revised higher.

    The number of job openings is seen as a cue on the health of the labor market and broader U.S. economy. Job postings have slowly receded since hitting an all-time high of 11.9 million last spring.

    The jobs market is still too hot for the Fed, however. The Fed is worried high inflation will persist unless hiring slows and a rapid increase in wages tapers off.

    There were 1.7 job openings for each unemployed worker in November, well above pre-pandemic levels of 1.2. The Fed is watching that ratio closely and wants to see if fall back to pre-pandemic norms.

    Key details: The number of people hired in November dipped to 6.06 million, marking the smallest increase since February 2021.

    Rising interest rates, a slowing economy and worries about recession have spurred businesses to fill fewer open jobs.

    Yet the number of job quitters edged up to 4.17 million. Quits have topped 4 million for a record 18 months in a row. People quit more often when they think it’s easy to get a better job.

    The so-called quits rate among private-sector workers rose to 3% from 2.9%. It peaked at 3.4% near the end of 2021.

    Big picture: The Fed is raising interest rates to slow the economy and reduce the demand for labor as part of a broader strategy to rein in the worst inflation in 40 years.

    Fed officials say the appetite for labor is still too strong and needs to slacken. The ratio of job openings to unemployed workers has slipped from a record 2.0 last spring, but that’s still too high for the central bank.

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -0.03%

    and S&P 500
    SPX,
    +0.13%

    fell after the job-openings report.

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  • I retired at 50, went back to work at 53, and then a medical issue left me jobless: ‘There’s no such thing as a safe amount of money’

    I retired at 50, went back to work at 53, and then a medical issue left me jobless: ‘There’s no such thing as a safe amount of money’

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    I had always said I was going to retire when I was 50. I had worked and saved since I was 16. Retiring without Medicare and Social Security is a scary thing. I wound up retiring then going back to work. At 53, I took a part-time job with a decent salary for the hours but I was sooooo bored. And then life rang my bell. 

    I had major medical problems. So major that when I was able to return to work they let me go because they didn’t think I could keep up with the workflow. They were probably right. Nobody else felt comfortable enough with my health issues to hire me. I applied for disability but was denied. I appealed and got my rejection to the appeal while I was in ICU. I appealed again and I was denied because they didn’t think anything changed from my original application.

    I am assuming you can imagine what my savings is now. I took early retirement, with the penalty, because I needed income. $4,000 a month wouldn’t have put a dent in my prescriptions.

    Everybody needs to know there’s no such thing as a safe amount of money set aside for retirement. Life happens and in the blink of an eye your whole life and everything you worked for can be gone. 

    See: I’m 68, my husband is terminally ill, and his $3 million estate will go to his son. I want to spend the rest of my days traveling – will I have enough money?

    Dear reader, 

    I normally only feature letters with questions for this column, but your note was just so important for other readers that I had to respond — and let others see what you’ve shared. 

    I’m so very sorry that you experienced this. Wanting to retire early isn’t inherently wrong — so many people wish to do it, especially after decades of working. But without the proper planning, it could lead to despair, especially if an emergency occurs.

    “Retiring early is a dream for many people,” said Landon Tan, a certified financial planner. “But those years of not working diminish your chance of a successful retirement more than almost any other metric we toggle when making financial plans.” 

    Retiring early means there are more years you need to be able to financially cover, and that requires money — a lot of it. When planning to retire early, those extra years need to be considered — at the forefront of retirement, but also in the back end if you live longer than anticipated. 

    “Today’s retirees are expecting their accumulated assets to work for them for 10-20 years longer than before,” said Glenn Downing, a certified financial planner and founder of CameronDowning. “Centenarians are no longer uncommon. For that to happen successfully, there needs to be more assets — simple as that.” Anyone should prepare to live longer than expected so their money does not outlast them, which can feel daunting. 

    Those missing years may also affect your Social Security benefits, which so many elderly Americans rely on for most of their retirement income. People retiring early should have a clear picture of what to expect from Social Security in the future, and how their plans may impact those expectations.  

    Leaving the workforce also means possibly losing out on participating in a group health plan, and I think we can say with certainty the pandemic has shown just how crucial health insurance can be in dire times. 

    You’re absolutely right: Retiring before Medicare is scary. Healthcare is expensive even without an emergency. Not everyone considers this expense when they’re dreaming about calling it quits in their 50s, but if they don’t have proper insurance lined up when they retire they could be blowing through their retirement budget quickly — or putting themselves in a very dangerous situation. Those years can feel long when Medicare eligibility only begins at age 65 for most Americans. And it also doesn’t take into consideration long-term care, which is an entirely other expense. Think nursing homes, home health aides and necessary medical equipment for daily activities.  

    Don’t miss: Retiring early this year? Look through Affordable Care Act plans now before the deadline Saturday

    Knowing how much is enough to have saved for retirement is very difficult. There is no such thing as one “safe” number before you retire, but there are a few guidelines one can follow to find security in old age. 

    Part of that equation comes down to personal circumstance: how much you typically spent in your pre-retirement life, how much you anticipate spending in retirement, various financial factors like taxes and cost of housing and utilities, and so on. And as you have experienced — and considerately reminding others — major unexpected emergencies can absolutely derail any sort of financial security. 

    Another factor is what is available to you in your older years. I’ll get to that in a moment in hopes it may help you or others in similar situations. 

    Retirees tend to focus on short-term changes, which can cause them to be unprepared for what the future holds, a recent survey found. Many retirees just deal with these emergencies as they come, according to research from the Society of Actuaries. The organization found more than seven in 10 retirees have thought about how their lives will change in the following decades, but only 27% feel financially prepared for it. 

    More than half of the retirees in the survey said they could not afford more than $25,000 for an unexpected emergency without jeopardizing their retirement security. More than half of Black respondents and Latino respondents said they couldn’t afford to spend $10,000 for a financial shock. 

    “The world can change around you really quickly, and you need to be prepared for the change and to deal with change,” said Anna Rappaport, a member of the Society of Actuaries Research Institute’s Aging and Retirement Program. Americans didn’t often plan for the shocks life could bring before the pandemic, and that hasn’t necessarily changed since, she said.  “The shocks were there before and the landscape just changed a little.” 

    Check out MarketWatch’s column “Retirement Hacks” for actionable pieces of advice for your own retirement savings journey 

    But you’re not alone. Many people have fallen into hard times before and during retirement, pandemic or no pandemic. You may already be exhausting all avenues, but this one retiree shared the steps he took when he lost his job at 58. He searched for another job for 18 months before taking one with a 40% pay cut, and had to live a lot leaner until he officially retired at age 64. That lifestyle included taking in a roommate, buying some household items at the dollar store and extreme meal planning. Here’s what he says about his retirement now

    If your medical condition allows, could you take on some part-time work, or find some ways to make money while working from home? Or could you possibly downsize where you live or take in a roommate? 

    I know you didn’t ask for any suggestions and I’m sure you’re already doing as much as you can to live comfortably, but there are plenty of resources you might want to consider if you haven’t already. 

    Have you explored any government benefits, such as assistance in costs for housing, heating or groceries? There are many federal and state programs available for seniors with needs for financial assistance — not just Supplemental Security Insurance and Medicaid, though of course those are the most prominently known. 

    AARP created a list of resources, broken up by state, and has its own services, such as helping people get back to work in their 50s and beyond. GoFundMe also has a list for financial assistance for older Americans. It includes options for housing, food, medicine and getting back into the workforce. States, and sometimes even individual cities, have departments and offices dedicated to aging issues, which you may want to try calling as well. There is help out there, even if it may not feel easy to find.  

    I wish you the best. 

    Readers: Do you have suggestions for this reader? Add them in the comments below.

    Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

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  • Here are MarketWatch’s most popular Moneyist advice columns of 2022

    Here are MarketWatch’s most popular Moneyist advice columns of 2022

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    What fresh shenanigans and money dilemmas enthralled readers in 2022?

    Another year of broken promises, dodgy dealings and moving letters about how to get back on one’s feet after divorce, unemployment and even a 15-year abusive relationship

    The most widely-read Moneyist of 2022, however, was actually one of the shortest letters from someone called ‘Surprised Sister.” The answer, as is often the case, was not so simple, nor so short.

    Here is the No. 1 Moneyist column of the year: We are surprised and bewildered’: My brother passed away and left his house, cash and possessions to charity. Can his siblings contest his will?

    My response: There are times to contest a will: a parent who was being controlled by a new friend or greedy child, and/or someone who was forced to change their will when they were not of sound mind.

    But her own legal advice notwithstanding, I suggested she should accept your brother’s wishes. Feeling aggrieved that she did not inherit his estate is not enough to break his will. 

    Separate the emotions from the finance, and the answer often reveals itself. But there were others that ran the gamut from romance to stocks. They other most-read columns are an eclectic bunch:

    Here are the 5 runner-ups:

    1. I had a date with a great guy. I didn’t drink, but his wine added $36 to our bill. We split the check evenly. Should I have spoken up?

    It would be nice to offer to take the booze off the check, you were a non-drinker, would you speak up at one drink or two or three, if your date split the entire bill 50/50? 

    The financial intricacies of dating are like an onion that can be peeled ad infinitum. We’ve had plenty to chew over. Paying for one of your date’s drinks is OK, paying for two is pushing it.

    1. My father offered his 3 kids equal monetary gifts. My siblings took cash. I took stock. It’s soared in value — now they’re crying foul

    “The Other Brother” wrote that his father offered three children a choice: stocks or cash. The other two siblings took the cash. He took the cash. The stock soared. Dems are the breaks.

    Her siblings could have chosen stocks over cash, but they wanted immediate gratification. That was their decision, and they are going to have to take ownership of their choice and live with it.

    1. I’m an unmarried stay-at-home mother in a 20-year relationship, but my boyfriend won’t put my name on the deed of our house. Am I unreasonable?

    They have been in a 20-year relationship and have a 10-year-old child. “Not on the Deed” said she and her partner have had several tense “discussions” about adding me to the deed.

    I told her that her contribution to your partnership is valuable, her sense of worth is valuable, and her role as a homemaker and a mother is also valuable. Yes, he should add her.

    1. My friend got us free theater tickets. When I got home, she texted me, ‘Can you get our next meal or activity?’ Am I obliged to treat her?

    Even amidst the fights over inheritances, some breaches of social and financial etiquette seem so bizarre some people might think, ‘That behavior is too outrageous to be believable.” 

    The letter writer received free theater tickets, they split the bill 50/50 even though her friend had a cocktail, and she paid $10 for parking. Is he obliged to take her out again? No-can-do.

    1. My date chose an exclusive L.A. restaurant. After dinner, he accepted my credit card — and we split a $600 bill. Shouldn’t he have paid?

    Another dating story, this time where the guy chose a fancy restaurant and, as the date wore on, things took a turn for the worst, at least in the letter writer’s eyes: She was asked to split the bill.

    What if they didn’t get along? What if he was an abortion-rights supporter and she was anti-abortion? What if he was a Republican and she was a Democrat? Or vice-versa?  Always be prepared to pay.

    Follow Quentin Fottrell on Twitter.

    You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

    Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

    The Moneyist regrets he cannot reply to questions individually.

    More from Quentin Fottrell:

    ‘I’m left with a $100 Bûche de Noël for 10 people — and no place to go’: My friends canceled Christmas dinner. Should I end the 30-year friendship?

    I met my wife in 2019 and we married in 2020. I put her name on the deed of my $998,000 California home. Now I want a divorce. What can I do?

    I want to meet someone rich. Is that so wrong?’ I’m 46, earn $210,000, and own a $700,000 home. I’m tired of dating ‘losers.’

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  • Eat, drink and be merry: Here’s where shoppers have been spending the most money this holiday season

    Eat, drink and be merry: Here’s where shoppers have been spending the most money this holiday season

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    Restaurants are set to become the biggest winners of a holiday season that could turn out to be the most normalized since the onset of the pandemic.

    That’s according to a new Mastercard SpendingPulse survey released on Monday, which showed spending at dining establishments surging 15.1% over the 2021 holiday period. Total retail expenditures for the Nov. 1–to–Dec. 24 period in 2022 rose 7.6%, with in-store spending up 6.8% and online spending up 10.6%.

    Restaurant spending beat out several other categories, such as apparel, where spending was up 4.4% from 2021, and electronics and jewelry, where a respective 5.3% and 5.4% less were spent, and department stores, which saw spending rise 1%.

    “This holiday retail season looked different than years past,” said Steve Sadove, senior adviser for Mastercard and former CEO and chairman of Saks Inc. “Retailers discounted heavily but consumers diversified their holiday spending to accommodate rising prices and an appetite for experiences and festive gatherings postpandemic.”

    Government data for November showed consumer spending was up just 0.1%, reflecting cautiousness among households and price cutting by retailers to lure those hesitant shoppers in. But the data also showed more spending on holiday recreation and travel, expected to go in the books as a busy season even if deadly winter storm may have wreaked havoc on the plans of many Americans over the Christmas weekend.

    Of course, even as some merrymakers felt confident enough to make more plans and see more friends and family this year, the virus of course continues to cause illness and death. The U.S. reported 70,000 newly diagnosed cases for the first time since September on Thursday, while 422 people died of COVID-19 on Wednesday.

    Don’t miss: As COVID cases rise, how to steer clear of viruses during the holiday season

    Also see: 4 tips for staying healthy while traveling during this ‘tripledemic’ cold and flu season

    The Mastercard SpendingPulse data measure in-store and online retail sales for all payment forms and are not inflation-adjusted.

    As for the companies that might be benefiting from that increased traffic, the year-end cheer probably won’t be enough to make a dent in what has been a difficult year with would-be consumers juggling worries over inflation, rising interest rates and a war in Europe.

    The Invesco Dynamic Leisure & Entertainment exchange-traded fund
    PEJ,
    +0.79%
    ,
    whose holdings include Chipotle Mexican Grill
    CMG,
    +0.32%
    ,
    McDonald’s
    MCD,
    +0.68%

    and First Watch Restaurant Group
    FWRG,
    +0.42%
    ,
    has gained 6.5% to date in the fourth quarter and is down 20% for the year as of Thursday. The broad benchmark S&P 500
    SPX,
    +0.59%

    is poised for a nearly 20% loss in 2022.

    Read: How a Santa Claus rally, or lack thereof, sets the stage for the stock market in first quarter

    And: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices

     

     

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  • Micron sales could dive more than 50%, and more belt-tightening is expected before outlook improves

    Micron sales could dive more than 50%, and more belt-tightening is expected before outlook improves

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    Micron Technology Inc.’s revenue declines could worsen to more than 50% before inventory-saturated customers work though that product and boost sales in the second half of 2023, but before then the memory-chip maker is implementing some austerity measures.

    Micron
    MU,
    +1.01%

    said it expects an adjusted loss of between 72 cents and 52 cents a share on revenue of $3.6 billion to $4 billion for the fiscal second quarter, with the midpoint 51% lower than last year’s second-quarter revenue total of $7.78 billion. Analysts had forecast an adjusted loss of 32 cents a share on revenue of $3.92 billion.

    In a filing with the Securities and Exchange Commission, the memory-chip specialist disclosed that management plans to cut about 10% of its staff in 2023, “through a combination of voluntary attrition and personnel reductions.” About $30 million in restructuring costs are expected, all in the fiscal second quarter.

    Along with headcount reductions, Micron said in 2023 it will also suspend share buybacks, productivity programs and company bonuses, and that executive salaries would be “cured” for the rest of the fiscal year. Sanjay Mehrotra, Micron’s chief executive, also told analysts after the release of results that he expected profitability to remain challenged through 2023.

    Micron specializes in DRAM, or dynamic random access memory, the type of memory commonly used in PCs and servers, and NAND chips, which are the flash memory chips used in smaller devices like smartphones and USB drives.

    Micron shares were down less than 1% after hours, following a 1% rise to close the regular session at $51.19. Micron shares are down 45% for the year compared with a 19% fall by the S&P 500 index
    SPX,
    +1.49%

    and a 32% drop by the Nasdaq Composite Index
    COMP,
    +1.54%

    and a 33% drop on the PHLX Semiconductor Index
    SOX,
    +2.36%
    .

    Mehrotra said he expects DRAM growth to rise by about 10% and NAND to rise by around 20%. “For both years, demand in DRAM and NAND is well below historical trends and future expectations of growth largely due to reductions in the end demand in most markets, high inventories at customers, the impact of the macroeconomic environment and the regional factors in Europe and China,” Mehrotra said.

    “But the largest impact to the profitability and financial outlook for us is the supply-demand balance, and the rate and pace of this improvement is going to be a function of aligning supply with demand, and we’re taking decisive actions on CapEx and utilization to address it,” Mark Murphy, Micron’s chief financial officer, told analysts on the call.

    Data-center and cloud sales were considered relatively safe, but in another potentially developing crack, Mehrotra said the current environment showed some softness in cloud data-center demand, given tighter consumer spending.

    “We do absolutely expect that once we get past the current macroeconomic environment and macroeconomic weakening, longer-term trends for cloud will remain strong,” Mehrotra said. “In terms of the current environment, yes, inventory adjustments and some impact of cloud and demand weakening as well. That’s impacting our overall data-center outlook.”

    The CEO also told analysts he expects customers to be in a much better position in the burning off of their inventories by the middle of 2023.

    “By mid-calendar ’23, we are projecting, even though we don’t have perfect visibility, but based on all of our discussions with our customers, we are projecting that inventory at customers will be in relatively healthier position by that time.”

    “And that’s where we say that our second half of fiscal-year revenue will be greater than first half, and we would expect continued improvements beyond the second half as well,” the CEO said.

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  • Elon Musk ‘a perfect recruitment tool’ for organized labor, says new UK unions boss

    Elon Musk ‘a perfect recruitment tool’ for organized labor, says new UK unions boss

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    Press play to listen to this article

    Voiced by artificial intelligence.

    LONDON — Elon Musk’s controversial Twitter firing spree is sending workers into the arms of organized labor, according to the new head of Britain’s Trades Union Congress.

    “Elon Musk is a perfect recruitment tool for the trade union movement,” Paul Nowak told POLITICO. Since the Tesla billionaire took over the social media platform in October, Prospect, one of the trade union federation’s 48 affiliates, “has seen its membership in Twitter go up tenfold,” he said.

    The influx is “precisely in response” to Musk, argued Nowak, who “thinks he can issue a directive from San Francisco that somehow just happens all around the world with no regard to employment law.”

    Musk has fired roughly 3,700 employees — nearly half of Twitter’s workforce — in a round of mass layoffs since buying the company.

    U.K. Twitter employees earmarked for an exit received an email saying their job would be “potentially” impacted or “at risk,” because, under British law, firms are required to consult with staff over mass redundancies.

    In November, Musk meanwhile gave staff an email ultimatum to either go “extremely hardcore” by “working long hours at high intensity” or quit the company.

    Musk’s behavior is, Nowak said, “a great recruiting tool for us.”

    “If I was a young worker in tech, I’d be thinking that being a union member might be a good investment at the moment,” he said. “If it can happen at Twitter, it can happen anywhere.”

    Unions have in recent years ramped up their activity in another part of the tech world: the gig economy. Uber and food delivery service Deliveroo recently signed agreements with unions, while some Apple stores have voted for union recognition. Last year also saw the first-ever industrial action ballots at a U.K. Amazon warehouse.

    Organized labor is “beginning to make inroads” in tech, Nowak said — but it still needs “to step up that work.” Twitter had not responded to a request for comment by the time of publication.

    Strikes

    Nowak takes the helm at the TUC at a time of major industrial unrest in the U.K, as employees in a host of sectors rail against stagnant wages amid soaring inflation.

    U.K. Twitter employees earmarked for an exit received an email saying their job would be “potentially” impacted or “at risk” | Justin Sullivan/Getty Images

    “It doesn’t matter whether it’s railway workers, postal workers, nurses, paramedics, our members aren’t on strike for the sake of it,” he said.

    Since the financial crisis in 2008, the median income in Britain has fallen behind neighboring countries in Europe. An analysis by the TUC shows workers are £20,000 poorer, on average, since 2008 because pay has failed to keep up with inflation. By 2025 the union group expects that gap to increase to £24,000, with even larger gulfs for frontline healthcare staff who are striking.

    Britain’s Retail Price Index measure inflation reached 14 percent last year, and economists forecast inflation — in part spurred by the pandemic and Russia’s invasion of Ukraine — will persist longer in the U.K. than among its G7 partners.  

    “Households can’t afford as much as they have been able to in the past,” said Josie Dent, managing economist at the Centre for Economics and Business Research. “Naturally that creates weaker demand.”

    Against that backdrop, Novak said he wants the British government to stimulate domestic demand by putting more pay in workers’ pockets. The government argues boosting public sector pay will further fuel inflation and push its already shaky public finances further into the red.

    “What do our members do when our members get paid and get decent pay rises? They go and spend that money in local shops, hotels, restaurants,” said Nowak, and “they don’t squirrel it away in offshore bank accounts, or save it away for a rainy day.”

    “You have to create demand internally in the economy as well,” he added. “We’ve had the government sort of turn that common sense on its head.”

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    Graham Lanktree

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  • University of California Reaches Tentative Contract Deal with Striking Academic Workers

    University of California Reaches Tentative Contract Deal with Striking Academic Workers

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    The University of California system reached a tentative agreement with striking graduate students late Friday that, if ratified, could bring an end to a monthlong strike that has paralyzed the 10-campus system.

    One of the two bargaining units representing the striking workers, UAW 2865, wrote on Twitter that the tentative agreement includes raises of up to 80 percent for the lowest-paid workers. The strike will continue, it said, until the union’s members ratify the deal.

    The university’s statement said it would provide minimum salary scales for academic student workers, including TAs and graduate-student researchers, as well as multiyear pay raises, paid dependent access to university health care, and enhanced paid family leave. If approved, the contracts would be in effect through May 31, 2025.

    By October 1, 2024, the minimum nine-month salary for TAs working about 20 hours a week would be $34,000, the university said of the agreement. Currently, the lowest-paid workers earn $23,000. The rates would be slightly higher at the Berkeley, San Francisco, and UCLA campuses, where housing prices are especially high.

    The UC strike, which began November 14, started with four bargaining units representing 48,000 graduate students, postdocs, and researchers. It’s created a chaotic end of semester with many professors saying they would be either unable or unwilling to submit final grades, even with extended deadlines. Some said they would forego grading to support striking workers, while others said that without readers or TAs, they couldn’t handle the volume.

    Postdocs and researchers were back at work this week after overwhelmingly approving new contracts that included higher wages, paid family leave, and transit benefits. The academic workers who remained on strike agreed to continue negotiating with the university through an outside mediator, Sacramento Mayor Darrell Steinberg.

    In a statement, the university system’s president, Michael V. Drake, thanked negotiators “for coming together in a spirit of compromise to reach this tentative agreement. This is a positive step forward for the university and for our students, and I am grateful for the progress we have made together,” he said.

    “These agreements will place our graduate student employees among the best supported in public higher education,” Drake said.

    In a statement, UAW President Ray Curry said the tentative agreements include “major pay increases and expanded benefits which will improve the quality of life for all members of the bargaining unit.” He added that “Our members stood up to show the university that academic workers are vital to UC’s success. They deserve nothing less than a contract that reflects the important role they play and the reality of working in cities with extremely high costs of living.”

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    Katherine Mangan

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  • Starbucks workers plan 3-day walkout at 100 US stores

    Starbucks workers plan 3-day walkout at 100 US stores

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    Starbucks workers around the U.S. are planning a three-day strike starting Friday as part of their effort to unionize the coffee chain’s stores.

    More than 1,000 baristas at 100 stores are planning to walk out, according to Starbucks Workers United, the labor group organizing the effort. The strike will be the longest in the year-old unionization campaign.

    This is the second major strike in a month by Starbucks’ U.S. workers. On Nov. 17, workers at 110 Starbucks stores held a one-day walkout. That effort coincided with Starbucks’ annual Red Cup Day, when the company gives reusable cups to customers who order a holiday drink.

    More than 264 of Starbucks’ 9,000 company-run U.S. stores have voted to unionize since late last year.

    Starbucks opposes the unionization effort, saying the company functions better when it works directly with employees. But the company said last month that it respects employees’ lawful right to protest.

    Tori Tambellini, a former Starbucks shift supervisor and union organizer who was fired in July, said she will be picketing in Pittsburgh this weekend. Tambellini said workers are protesting understaffed stores, poor management and what she calls Starbucks’ “scorched earth method of union busting,” including closing stores that have unionized.

    Workers United noted that Starbucks recently closed the first store to unionize in Seattle, the company’s hometown. Starbucks has said the store was closed for safety reasons.

    Starbucks and the union have begun contract talks in about 50 stores but no agreements have been reached.

    The process has been contentious. According to the National Labor Relations Board, Workers United has filed at least 446 unfair labor practice charges against Starbucks since late last year, including that the company fired labor organizers and refused to bargain. The company, meanwhile, has filed 47 charges against the union, among them allegations that it defied bargaining rules when it recorded sessions and posted the recordings online.

    So far, the labor disputes haven’t appeared to dent Starbucks’ sales. Starbucks said in November that its revenue rose 3% to a record $8.41 billion in the July-September period.

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  • Jobless claims drop to 11-week low of 211,000 in early December

    Jobless claims drop to 11-week low of 211,000 in early December

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    The numbers: The number of Americans who applied for unemployment benefits in early December fell to a nearly three-month low of 211,000, indicating layoffs around the holiday season remain low even as the economy softens.

    New unemployment filings declined by 20,000 from 231,000 in the prior week, the government said Thursday.

    Economists…

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  • ‘It’s a Mess’: Grades Are Due Soon, and U. of California Professors Are Struggling

    ‘It’s a Mess’: Grades Are Due Soon, and U. of California Professors Are Struggling

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    Professors nationwide are currently immersed in an end-of-term ritual: grading. At the University of California, however, fall grades have been thrown into disarray as a strike involving teaching assistants reached its one-month mark.

    Many professors say they are forgoing the submission of final grades, either out of solidarity with striking workers, or because they simply can’t grade hundreds of assignments without the help of readers and TAs — even with grading deadlines extended through the holidays.

    Several faculty members told The Chronicle that communication from administrators — on a campus- and system-wide level — has been vague and unrealistic, with messages repeatedly stressing the obligation to maintain “continuity of instruction.“

    “It’s a mess,” said Paul V.A. Fine, a professor in the integrative biology department at UC-Berkeley. “I’m surprised that the administration hasn’t been taken more to task by this, because I feel like they’re letting us all down.”

    Instruction he received from his department for administering finals and grades, Fine said, was essentially reduced to a general directive: “Follow your conscience.”

    UC officials say they’re trying to mitigate the impacts of the strike. Berkeley lecturers are being offered additional pay for picking up extra grading work at the end of the term, according to a university spokesperson.

    At Berkeley, grading has been extended to December 31; other UC campuses are taking a similar approach. But Fine is frustrated. “Even if you extend the grade deadline, [then] what? You’re supposed to just do that instead of enjoying a holiday break? Forget that. That’s ridiculous,” he said.

    Despite the strike, Fine continued teaching his undergraduate course on the ecosystems of California. Typically a graduate student works alongside him as an instructor and is responsible for half of the course’s grading. The course’s enrollment is small enough — 22 students — that he could complete grading by the deadline. But he said he won’t turn in grades until the strike is over, in solidarity with the graduate students.

    “Although I am doing my job because I care a lot about my undergraduates’ education, I’m not going to do extra work,” Fine said.

    Adding to the turmoil are questions about next term, which starts in a couple of weeks. Some classes don’t have teaching assistants assigned to them yet. On Wednesday, the UC-Davis Academic Senate sent out guidance suggesting that professors could do some of their winter-term teaching asynchronously and continue with modified instruction for up to two weeks after the strike ends.

    ‘At a Breaking Point’

    The strike, which began November 14, initially involved four bargaining units made up of 48,000 UC graduate students, postdocs, and researchers.

    Last week, postdocs and researchers overwhelmingly approved new contracts with the university system that secured wage increases, transit benefits, and paid family leave. They ended their strike on Monday. University officials and the union representing the remaining academic workers have agreed to continue negotiations through a third-party mediator.

    “We remain committed to securing a fair and reasonable contract with the union that honors the hard work of our valued graduate student employees,” Letitia Silas, executive director of systemwide labor relations, said in a statement. “With the help of a neutral mediator, we hope to secure that agreement quickly.”

    In the meantime, UC campuses have been scrambling to find solutions to the chaos — including paying lecturers to grade assignments.

    The union that represents lecturers across the UC system, UC-AFT, released a cease-and-desist letter alleging that Berkeley’s offer interferes with lecturers’ right to refuse to pick up struck work under California law. The letter states that the union is aware of similar plans on “several other campuses.”

    When asked if UC-Irvine was extending similar offers to their faculty, a university spokesperson said that deans and department chairs “have been advised to consider a range of approaches to support continuity of instruction,” which may include tapping lecturers to help. The Chronicle did not receive responses from the other UC campuses on Wednesday.

    They have to figure out a way to solve this strike in a way that doesn’t harm students and also doesn’t try to exploit other vulnerable workers.

    Unlike tenured professors, lecturers have a no-strike clause in their contracts. While some faculty members opted out of teaching their courses in solidarity after the strike began, lecturers had to continue.

    Joanna Reed, a continuing lecturer in the sociology department at Berkeley, kept teaching, though she said lecture attendance “absolutely plunged” after the strike started. But she has told her students to expect a delay in getting their grades. (Reed is married to Fine.)

    Reed would usually have eight readers to do the vast majority of grading for her two undergraduate lecture classes, for which the combined enrollment is over 300. It would be physically impossible, she said, to grade hundreds of assignments before the end of the month.

    Still, she’s pushing ahead with the work she’d usually do at the end of the semester: preparing rubrics and answer keys, dealing with plagiarism issues, and getting the gradebook cleaned up. She’ll submit final grades after the strike ends and the graduate students can resume their work.

    As Reed sees it, refusing to grade final assignments, which is considered struck work, is a way she can show solidarity with graduate students while continuing to fulfill her contractual obligations as a lecturer.

    A lecturer at UCLA, who asked to remain anonymous because he fears speaking out could put his job at risk, said he feels pressure — both from the university and from students — to submit final grades.

    But the lecturer, who teaches two courses with 300 students total, said it’ll be impossible for him to release accurate grades at the end of the semester. The lecturer has hundreds of essays from the semester ungraded — work that is partly done by the lecturer’s team of TAs. That’s not including the finals the classes completed last week. It doesn’t help, he said, that guidance from the administration on finals and grading arrived in the last week of classes after he had already put together plans for his final.

    Although the deadline to turn in grades has been extended to January 2, he doesn’t plan to release grades.

    “Those of us who don’t have job security, like me, are just at a breaking point,” he said.

    Uncertainty Abounds

    Many faculty members say they are torn between wanting to respect the picket line and feeling an obligation to their undergraduate students.

    Catherine Liu, a professor of film and media studies at UC-Irvine, said she won’t file final grades with the registrar until the strike is resolved. But she plans to evaluate her students’ work and share grades with them directly. At 39 students, her class is small, and she doesn’t depend on a TA to help with grading. At UC-Irvine, the deadline to submit grades was extended to January 19.

    Debates about obligation are complicated by questions about how withholding grades may impact undergraduates — including student athletes, veterans, students on financial aid, and graduating students seeking jobs. Some campuses have stressed that these students will not be affected if grades are not submitted. On other campuses, the possible implications remain unclear to faculty, and some are making arrangements for students in vulnerable situations.

    At Berkeley, Reed said, some graduate students in her department have said they will work with professors to make sure students with a documented need receive grades. But Reed said the burden shouldn’t fall on instructors to protect students.

    “The university created this situation with their unfair labor practices. So in my mind, it’s their problem to solve,” Reed said. “They have to figure out a way to solve this strike in a way that doesn’t harm students and also doesn’t try to exploit other vulnerable workers.”

    And if the graduate-student strike continues into 2023, professors will have to figure out what to do about the next term.

    This is a question that we’re all asking ourselves this week: What do we do in January?

    With uncertainty about whether TAs will be on the job in January, UC-Davis instructors will be allowed to switch lab hours and discussion sections, normally taught by TAs, to asynchronous instruction, according to the Academic Senate’s guidance. Instructors must maintain the same amount of instructional time with students in a course.

    The university “will allow these course adjustments to remain in place for up to two weeks after the end of the strike, at which point courses must return to their normal instructional modes,” the guidance states.

    “I have a feeling that this is going to make a lot of faculty pretty unhappy,” said Stacy Fahrenthold, an associate professor of history at UC-Davis. “The implicit language in this policy is that faculty will be responsible for taking on not only the grading but also the instructional duties of their TAs if they remain on strike.”

    Fahrenthold, who is scheduled to teach two undergraduate courses with a combined enrollment of 150 in the winter term, said she won’t be opting into the asynchronous option. “I see it as an attempt to break the strike or remediate its impacts,” she said. As for what next quarter will look like for her courses, she said that’s an open question.

    “There’s about 450 faculty who are actively on sympathy strike,” she said. “And I think this is a question that we’re all asking ourselves this week: What do we do in January?”

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    Carolyn Kuimelis and Grace Mayer

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  • Vanguard sees a recession in 2023 — and one ‘silver lining’ for investors

    Vanguard sees a recession in 2023 — and one ‘silver lining’ for investors

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    The last 12 months was a year of fast-rising inflation, fast-rising interest rates and fast-rising questions about a future recession.

    Prices went up while stock markets and savings account balances went down, leaving consumers and investors dizzy and their wallets hurting.

    There may be more financial pain, that’s pretty sure — but it might not be as bad as feared, according to Vanguard’s look ahead to 2023.

    The likely recession will not send jobless rates charging sharply higher, sticker shock will fade for the price of goods, and the rise in rent and mortgages will also ease, Vanguard said.

    On Tuesday, inflation data for November showed prices are continuing to cool. Analysts say that makes a 50-basis point increase, rather than a 75-basis-point increase, more likely.

    The good news: This opens up chances for stocks to rebound, the asset-manager added.

    The outlook, released this week, comes as Americans are trying to guess what 2023 holds for their finances while they manage their holiday shopping budgets, and 2022 investments.

    On Tuesday, inflation data for November showed prices are continuing to cool. From October to November, the cost of living nudged up 0.1%, lower than the 0.3% forecast, the Consumer Price Index showed. Year over year, the inflation rate receded to 7.1% from 7.7% in October, according to the CPI data.

    On Wednesday, the Federal Reserve will announce its latest decision on interest rate increases. A 50-basis point increase is widely expected after four jumbo-sized 75-basis point hikes from the central bank.

    Here’s one roadmap for what’s next, as far as Vanguard’s researchers and experts can see.

    Hot inflation will cool

    Inflation rates during 2022 climbed to four-decade highs. There have been signs of easing, such as smaller-than-expected price increases in October.

    “As we step into 2023, early signs of a recovery in goods supply and softening demand could help balance supply and demand for consumption goods and bring prices lower,” the authors noted ahead of Tuesday’s CPI numbers.

    But the cost and demand of services are going to prevent a quick fall, they noted. Signs of slowing price increases are already emerging in rents and mortgages, but they will take longer to ease than prices of consumer goods, the authors said.

    That echoes the view from Treasury Secretary Janet Yellen, who said Sunday there will be “much lower inflation,” absent any unanticipated shocks to the economy.

    But while hot inflation will cool, it will still be warm to the touch. The Fed says 2% inflation is its target goal; Vanguard sees 3% inflation by the end of 2023.

    A recession is very much on the cards

    As “generationally high inflation” slowed economies across the world, the Fed and other central banks have countered with interest-rate increases to tame price increases. That “will ultimately succeed, but at a cost of a global recession in 2023,” according to Vanguard’s report. Vanguard sees a 90% chance of a recession in the United States by the end of next year.

    Vanguard is hardly alone in the recession call, so the question is how bad could the big picture look?

    In Vanguard’s view, it’s not so bad. “Households, businesses, and financial institutions are in a much better position to handle the eventual downturn, such that drawing parallels with the 1970s, 1980s, 2008, or 2020 seems misplaced,” the authors wrote.

    Job losses may be clustered

    For now, the jobless rate in a tight labor market is 3.7%, which is just a little above the lowest levels in five decades. That stands against the headline-grabbing list of companies where layoffs are mounting, notably in the tech sector.

    When a recession, in all likelihood, lands next year, “unemployment may peak around 5%, a historically low rate for a recession,” the Vanguard outlook said. As interest rates climb, the job losses “should be most concentrated in the technology and real estate sectors, which were among the strongest beneficiaries of the zero-rate environment.”

    The unemployment rate going from 3.7% to the 5% vicinity is “a sizable move,” Roger Aliaga-Díaz, Americas chief economist for Vanguard, said in a Monday press conference on the report. “But it is less dramatic of a rise than compared to past recessions perhaps.”

    Spotting the opportunities

    When interest rates go up, bond prices go down. So it’s been difficult for bonds with lower returns and “near-term pain” for investors this year, the Vanguard outlook said.

    “However the bright side of higher rates is higher interest payments. These have led our return expectations for U.S. and international bonds to increase by more than twofold,” the report said.

    Vanguard said U.S. bond return projections could be 4.1% – 5.1% annually over the next year versus its 1.4% – 2.4% return estimate last year. For U.S. stocks, the forecast could be 4.7% – 6.7% annually, while returns in emerging market equities could be between 7% and 9%.

    On Tuesday morning, stock markets are soaring higher on the cooler than expected inflation data, igniting hopes of an end of year Santa Claus rally.

    ‘There’s one silver lining of our outlook for a modest global recession. And it’s the clear silver lining of higher expected returns for investors.’


    — Joseph Davis, Vanguard’s chief global economist

    Still, the Dow Jones Industrial Average
    DJIA,
    +0.30%

    is down nearly 5% year to date. The S&P 500
    SPX,
    +0.73%

    is off 14% in that time and for the Nasdaq Composite
    COMP,
    +0.38%

    is down more than 26%.

    When the market hits bottom is impossible to know, the outlook said — but it noted “valuations and yields are clearly more attractive than they were a year ago.”

    “There’s one silver lining of our outlook for a modest global recession. And it’s the clear silver lining of higher expected returns for investors,” said Joseph Davis, Vanguard’s chief global economist.

    “We’re long concerned that the low rate environment was both unsustainable and ultimately a tax and a headwind for savers and long term investors,” Davis said.

    But even with all the turbulence this year, “we certainly are starting to see the dividends to higher real interest rates around the world in the higher projected returns that we anticipate for investors over the coming decade.”

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  • Shoppers, workers clash over post-pandemic expectations

    Shoppers, workers clash over post-pandemic expectations

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    NEW YORK — Before the pandemic, Cheryl Woodard used to take her daughter and her friends to eat at a local IHOP in Laurel, Maryland after their dance practice. But now they hardly go there anymore because it closes too early.

    “It is a little frustrating because it’s not as convenient as it used to be,” said Woodard, 54, who also does most of her shopping online these days instead of in person because of stores limiting their hours.

    Before the pandemic, consumers had gotten accustomed to instant gratification: packages and groceries delivered to their doorstep in less than an hour, stores that stayed open around the clock to serve their every need.

    But more than two and a half years later in a world yearning for normalcy, many workers are fed up and don’t want to go back to the way things were. They are demanding better schedules, and sometimes even quitting their jobs altogether.

    As a consequence, many businesses still haven’t been able to resume the same hours of operations or services as they continue to grapple with labor shortages. Others have made changes in the name of efficiency. For instance, Walmart, the nation’s largest retailer and private employer, announced this past summer it doesn’t have any plans for its supercenters to return to its pre-pandemic 24-hour daily operations.

    IHOP says a vast majority of its locations have returned to their pre-pandemic hours and some have even expanded them. But others, like the Laurel location that Woodward used to frequent, have indeed cut back.

    The changes are creating a disconnect between customers who want to shop and dine like they used to during pre-pandemic times and exhausted employees who no longer want to work those long hours — a push-pull that is only being heightened during the busy holiday shopping season.

    “Nobody is winning,” said Sadie Cherney, a franchise owner with three resale Clothes Mentor boutiques in South Carolina. “It is so demoralizing to see that you are falling short on both ends.”

    Across all industries, the average number of hours worked per week per worker totaled 34.4 hours in November, unchanged from February 2020, according to the Bureau of Labor Statistics. But for the retail industry, it slipped 1.6% to 30.2 hours per week during the same period. Hours worked at restaurants were down by similar amount in October, according to the most recent data.

    Meanwhile, the National Restaurant Association’s most recent monthly survey of 4,200 restaurant operators conducted in early August found that 60% of restaurants reduced hours of operation on the days they were open, while 38% closed on the days they would normally be open compared to right before the pandemic. And a report published by food and beverage research firm Dataessential showed the average U.S. restaurant as of October was open around six fewer hours per week than in 2019 — a 7.5% decline.

    Cherney noted her stores returned to pre-pandemic hours last year but with the worsening labor shortages and higher labor costs, she has struggled to keep those same hours this year.

    Her store in Columbia is open one hour later, but she had to offer wage increases to her workers. For her two other locations in Greenville and Spartanburg, hours have been reduced for personal shopping appointments throughout the week, and no longer accept second-hand clothing from shoppers on Sundays.

    Cherney noted customers often complain about long waits to process their second-hand offerings, while her staff is overextended because they’re working 20% more than what they would like. The end result: Cash flow and profitability have both taken a hit.

    Mani Bhushan, owner of Taco Ocho, a taco restaurant with four locations in the Dallas area, still struggles to hire cooks at his McKinney location, which opened in July 2021. He said many workers can’t afford to live in this upscale suburb and have to travel from elsewhere. Several times a week he’s had to close the location early — something he has never had to do in the 40 years he has worked in the business.

    Even when Bhushan is able to keep his normal hours of operation, he still has to cut off online orders earlier in the day and the service is not up to par with his other locations.

    “I am a perfectionist,” he said. ”I am not happy. But I can’t fix it right now.”

    The worker shortages should remain acute into next year even as several big tech companies have reduced staff or have frozen corporate hiring. The economy added 263,000 jobs while the unemployment rate remained at 3.7% in November, still near a 53-year low, according to the Labor Department. And while U.S. job openings dropped in October from September, the number ticked up 3% in retail.

    For mall operator Taubman Centers, which manages or leases 24 premier centers in the U.S. and Asia, many stores are opening later than its centers to save on employee costs, according to Bill Taubman, president and chief operating officer. However, he said that causes frustration among customers who go to the mall thinking the store where they want to shop will be open.

    Vicky Thai, a 27-year-old studying to be a physician’s assistant in West Hartford, Connecticut, said she’s often frustrated over the waits to get served at restaurants and stores. She recalled a recent restaurant experience where it took a long time just to get some water; at a local clothing store, she spent 30 minutes in line to buy an item because of staffing shortages.

    But for every frustrated customer, there is a frustrated worker. Artavia Milliam, 39, of Brooklyn, New York, is a visual merchandiser at H&M in Times Square. She said she spends more of her time helping out on the sales floor than updating the mannequins because of the shortage of staff.

    “It can get overwhelming,” she said. “Everyday, I encounter someone who is rude.”

    ——

    Associated Press Business Writer Haleluya Hadero in New York contributed to this report.

    —————

    Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

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  • Shoppers, workers clash over post-pandemic expectations

    Shoppers, workers clash over post-pandemic expectations

    [ad_1]

    NEW YORK — Before the pandemic, Cheryl Woodard used to take her daughter and her friends to eat at a local IHOP in Laurel, Maryland after their dance practice. But now they hardly go there anymore because it closes too early.

    “It is a little frustrating because it’s not as convenient as it used to be,” said Woodard, 54, who also does most of her shopping online these days instead of in person because of stores limiting their hours.

    Before the pandemic, consumers had gotten accustomed to instant gratification: packages and groceries delivered to their doorstep in less than an hour, stores that stayed open around the clock to serve their every need.

    But more than two and a half years later in a world yearning for normalcy, many workers are fed up and don’t want to go back to the way things were. They are demanding better schedules, and sometimes even quitting their jobs altogether.

    As a consequence, many businesses still haven’t been able to resume the same hours of operations or services as they continue to grapple with labor shortages. Others have made changes in the name of efficiency. For instance, Walmart, the nation’s largest retailer and private employer, announced this past summer it doesn’t have any plans for its supercenters to return to its pre-pandemic 24-hour daily operations.

    IHOP says a vast majority of its locations have returned to their pre-pandemic hours and some have even expanded them. But others, like the Laurel location that Woodward used to frequent, have indeed cut back.

    The changes are creating a disconnect between customers who want to shop and dine like they used to during pre-pandemic times and exhausted employees who no longer want to work those long hours — a push-pull that is only being heightened during the busy holiday shopping season.

    “Nobody is winning,” said Sadie Cherney, a franchise owner with three resale Clothes Mentor boutiques in South Carolina. “It is so demoralizing to see that you are falling short on both ends.”

    Across all industries, the average number of hours worked per week per worker totaled 34.4 hours in November, unchanged from February 2020, according to the Bureau of Labor Statistics. But for the retail industry, it slipped 1.6% to 30.2 hours per week during the same period. Hours worked at restaurants were down by similar amount in October, according to the most recent data.

    Meanwhile, the National Restaurant Association’s most recent monthly survey of 4,200 restaurant operators conducted in early August found that 60% of restaurants reduced hours of operation on the days they were open, while 38% closed on the days they would normally be open compared to right before the pandemic. And a report published by food and beverage research firm Dataessential showed the average U.S. restaurant as of October was open around six fewer hours per week than in 2019 — a 7.5% decline.

    Cherney noted her stores returned to pre-pandemic hours last year but with the worsening labor shortages and higher labor costs, she has struggled to keep those same hours this year.

    Her store in Columbia is open one hour later, but she had to offer wage increases to her workers. For her two other locations in Greenville and Spartanburg, hours have been reduced for personal shopping appointments throughout the week, and no longer accept second-hand clothing from shoppers on Sundays.

    Cherney noted customers often complain about long waits to process their second-hand offerings, while her staff is overextended because they’re working 20% more than what they would like. The end result: Cash flow and profitability have both taken a hit.

    Mani Bhushan, owner of Taco Ocho, a taco restaurant with four locations in the Dallas area, still struggles to hire cooks at his McKinney location, which opened in July 2021. He said many workers can’t afford to live in this upscale suburb and have to travel from elsewhere. Several times a week he’s had to close the location early — something he has never had to do in the 40 years he has worked in the business.

    Even when Bhushan is able to keep his normal hours of operation, he still has to cut off online orders earlier in the day and the service is not up to par with his other locations.

    “I am a perfectionist,” he said. ”I am not happy. But I can’t fix it right now.”

    The worker shortages should remain acute into next year even as several big tech companies have reduced staff or have frozen corporate hiring. The economy added 263,000 jobs while the unemployment rate remained at 3.7% in November, still near a 53-year low, according to the Labor Department. And while U.S. job openings dropped in October from September, the number ticked up 3% in retail.

    For mall operator Taubman Centers, which manages or leases 24 premier centers in the U.S. and Asia, many stores are opening later than its centers to save on employee costs, according to Bill Taubman, president and chief operating officer. However, he said that causes frustration among customers who go to the mall thinking the store where they want to shop will be open.

    Vicky Thai, a 27-year-old studying to be a physician’s assistant in West Hartford, Connecticut, said she’s often frustrated over the waits to get served at restaurants and stores. She recalled a recent restaurant experience where it took a long time just to get some water; at a local clothing store, she spent 30 minutes in line to buy an item because of staffing shortages.

    But for every frustrated customer, there is a frustrated worker. Artavia Milliam, 39, of Brooklyn, New York, is a visual merchandiser at H&M in Times Square. She said she spends more of her time helping out on the sales floor than updating the mannequins because of the shortage of staff.

    “It can get overwhelming,” she said. “Everyday, I encounter someone who is rude.”

    ——

    Associated Press Business Writer Haleluya Hadero in New York contributed to this report.

    —————

    Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

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