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  • The Fed’s path to a ‘Goldilocks’ economy just got a little more complicated

    The Fed’s path to a ‘Goldilocks’ economy just got a little more complicated

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    A ‘help wanted’ sign is displayed in a window of a store in Manhattan on December 02, 2022 in New York City. 

    Spencer Platt | Getty Images

    As far as jobs reports go, November’s wasn’t exactly what the Federal Reserve was looking for.

    A higher-than-expected payrolls number and a hot wage reading that was twice what Wall Street had forecast only add to the delicate tightrope walk the Fed has to navigate.

    In normal times, a strong jobs market and surging worker paychecks would be considered high-class problems. But as the central bank seeks to stem persistent and troublesome inflation, this is too much of a good thing.

    “The Fed can ill afford to take its foot off the gas at this point for fear that inflation expectations will rebound higher,” wrote Jefferies chief financial economist Aneta Markowska in a post-nonfarm payrolls analysis in line with most of Wall Street Friday. “Wage growth remains consistent with inflation near 4%, and it shows how much more work the Fed still needs to do.”

    Payrolls grew by 263,000 in November, well ahead of the 200,000 Dow Jones estimate. Wages rose 0.6% on the month, double the estimate, while 12-month average hourly earnings accelerated 5.1%, above the 4.6% forecast.

    All of those things together add up to a prescription of more of the same for the Fed — continued interest rate hikes, even if they’re a bit smaller than the three-quarter percentage point per meeting run the central bank has been on since June.

    Little effect from policy moves

    The numbers would indicate that 3.75 percentage points worth of rate increases have so far had little impact on labor market conditions.

    “We really aren’t seeing the impact of the Fed’s policy on the labor market yet, and that’s concerning if the Fed is viewing job growth as a key indicator for their efforts,” said Elizabeth Crofoot, senior economist at Lightcast, a labor market analytics firm.

    Much of the Street analysis after the report was viewed through the prism of comments Fed Chairman Jerome Powell made Wednesday. The central bank chief outlined a set of criteria he was watching for clues about when inflation will come down.

    Among them were supply chain issues, housing growth, and labor cost, particularly wages. He also went about setting caveats on a few issues, such as his focus on services inflation minus housing, which he thinks will pull back on its own next year.

    “The labor market, which is especially important for inflation in core services ex housing, shows only tentative signs of rebalancing, and wage growth remains well above levels that would be consistent with 2 percent inflation over time,” Powell said. “Despite some promising developments, we have a long way to go in restoring price stability.”

    In a speech at the Brookings Institution, he said he expected the Fed could cut the size of its rate hikes — the part that markets seemed to hear as grounds for a post-Powell rally. He added that the Fed likely would have to take rates up higher than previously thought and leave them there for an extended period, which was the part the market seemed to ignore.

    “The November employment report … is precisely what Chair Powell told us earlier this week he was most worried about,” said Joseph LaVorgna, chief U.S. economist at SMBC Nikko Securities. “Wages are rising more than productivity, as labor supply continues to shrink. To restore labor demand and supply, monetary policy must become more restrictive and remain there for an extended period.”

    The path to ‘Goldilocks’

    To be sure, all is not lost.

    Powell said he still sees a path to a “soft landing” for the economy. That outcome probably looks something like either no recession or just a shallow one, nevertheless accompanied by an extended period of below-trend growth and at least some upward pressure on unemployment.

    Getting there, however, likely will require almost a perfect storm of circumstances: A reduction in labor demand without mass layoffs, continued easing in supply chain bottlenecks, a cessation of hostilities in Ukraine and a reversal in the upward trend of housing costs, particularly rents.

    From a pure labor market perspective, that would mean an eventual downshifting to maybe 175,000 new jobs a month — the 2022 average is 392,000 — with annual wage gains in the 3.5% range.

    There is some indication the labor market is cooling. The Labor Department’s household survey, which is used to calculate the unemployment rate, showed a decline of 138,000 in those saying they are working. Some economists think the household survey and the establishment survey, which counts jobs rather than workers, could converge soon and show a more muted employment picture.

    “The biggest disappointment was the strong wage growth number,” Mark Zandi, chief economist at Moody’s Analytics, said in an interview. “We’ve been at 5% since the beginning of the year. We’re not going anywhere fast, and that needs to come down. That’s the thing we need to most worry about.”

    Still, Zandi said he doubts Powell was too upset over Friday’s numbers.

    “The inflation outlook, while very uncertain at best, has a path forward that is consistent with a Goldilocks scenario,” Zandi said. “263,000 vs 200,000 — that’s not a meaningful difference.”

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  • Inflation and credit-card debt are on the rise, despite a strong job market. Tell us how the economy is affecting you.

    Inflation and credit-card debt are on the rise, despite a strong job market. Tell us how the economy is affecting you.

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    We want to hear from readers who have stories to share about the effects of increasing costs and a changing economy. If you’d like to share your experience, write to readerstories@marketwatch.com. Please include your name and the best way to reach you. A reporter may be in touch.

    For many people living in the U.S., these are tough — and confusing — times.

    On Friday, the Labor Department reported 263,000 new jobs in November, while the unemployment rate held steady at 3.7%. Layoffs remain low, despite mass job cuts in the tech sector. Average hourly wages have also risen 5.1% in the past year, but still lag behind inflation for many workers. And there were 10.3 million job openings in October — slightly down from the previous month’s 10.7 million. 

    Some people might see the latest economic data as both challenging and confusing.

    After all, the cost of living rose 7.7% on the year in October. The once red-hot housing market is finally cooling, thanks to mortgage rates that have more than doubled over the last year amid the Federal Reserve’s attempts to rein in inflation, and rents, while moderating, have surged from pre-pandemic levels. Borrowing money to cover increased precarity is becoming more expensive too, with the average credit-card APR at 19.2% as of Nov. 30, according to Bankrate.

    “‘It’s just mind-boggling, the disconnect that we’ve seen.’”

    Given all the conflicting signals, economists say it can be difficult for consumers to know exactly how to feel about the economy right now. “It’s not new, this disparity between the actual facts on the ground about what’s going on in the economy and the sentiment,” said Heidi Shierholz, president of the Economic Policy Institute, a left-leaning think tank. 

    “I remember this summer it was just unambiguously the strongest jobs recovery we’ve had in decades,” she added. “There’s just absolutely zero chance that we were in a recession — not only were we not in a recession, we were in just an extraordinarily fast recovery — and the polling, a huge share of people actually thought we were in a recession. It’s just mind-boggling, the disconnect that we’ve seen.”

    Still, the fact that inflation is eating into people’s savings — and that essential goods like food, energy and housing have spiked in cost — is bound to make many people unhappy. 

    Struggling to pay for rent and food

    “Going into the pandemic, more than seven out of every 10 extremely low-income renters were already spending more than half of their income on rent. And then the pandemic hits; we saw a lot of low-wage workers lose their jobs and see an income decline,” said Andrew Aurand, vice president for research at the National Low Income Housing Coalition. “Then in 2021, we see this huge spike in prices. For a variety of reasons, they’ve struggled for a long time, and since the pandemic, it’s gotten even worse.”

    Moderate-income Americans are struggling too. Maybe you can’t afford your favorite family meals, as the price of grocery store and supermarket purchases has jumped by 12.4% from last year. Or maybe you’re putting off a trip to see family this holiday season thanks to the higher cost of airfare, or you’re worried about losing your job as some business leaders warn of a recession. Perhaps you’re forced to rely on credit cards and personal loans, as credit-card debt is up 15% from a year ago.

    MarketWatch has chronicled many of these changes, detailing renters’ frustrations, families’ tough choices at the grocery store, and the reality faced by would-be home buyers sidelined by higher rates and dwindling affordability. 

    But we would like your help telling an ongoing story about the American economy, centering the experiences of everyday people. Our readers know better than anyone about how today’s economic conditions have impacted their daily lives.

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  • U.S. adds 263,000 jobs in November and wages rise sharply — far too much for the Fed’s liking

    U.S. adds 263,000 jobs in November and wages rise sharply — far too much for the Fed’s liking

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    The numbers: The U.S. created a robust 263,000 new jobs in November, a historically strong pace of hiring that’s good for workers but that also threatens to prolong a bout of high U.S. inflation.

    The continued rapid gains in hiring have become a big source of angst at the Federal Reserve. Senior central bank officials worry that wage growth stemming from a tight labor market is adding upward pressure to already high U.S. inflation.

    The Fed is expected to keep raising interest rates — and pushing the economy closer to recession — until hiring slows, labor shortages ease and wage growth drops off.

    U.S. stocks fell in premarket trades and bond yields rose after the report. Economists polled by The Wall Street Journal had forecast a smaller increase in new jobs of 200,000.

    The U.S. economy created 263,000 new jobs in November — far more than Wall Street had expected.


    Justin Sullivan/Getty Images

    The unemployment rate was unchanged at 3.7%, the government said Friday, remaining close to a half-century low.

    Hourly pay, meanwhile, rose by a sharp 0.6% last month to an average of $32.82. That’s the biggest advance in 13 months and was far stronger than Wall Street expected.

    The increase in wages over the past year climbed to 5.1%, from 4.9% in the prior month. Wages are still rising much faster than they were before the pandemic, when they rose about 2% to 3% a year.

    The demand for labor is still strong,” said chief economist Steve Blitz of TS Lombard. “It’s still putting upward pressure on wages.”

    The Fed has embarked on a series of increases in U.S. interest rates to try to slow the economy just enough to tame inflation without tipping it into recession.

    The bank is trying to bring inflation back down to prepandemic levels of 2% from the current rate of 6%, based on the PCE price index.

    “The level of [hiring] is not conducive to getting the base inflation rate back to 2%,” Blitz said.

    The tough medicine, senior Fed officials figure, is likely to lift the unemployment rate to as high as 5% by 2023. Some Wall Street analysts believe the jobless rate will go even higher if a recession takes hold, as many are forecasting.

    Higher borrowing costs slow growth by depressing consumer spending and business investment, the two key pillars of the economy.

    Another potential pressure valve for the economy is also not offering any relief. The share of working-age people in the labor force — known as the labor-force participation rate — fell a tick to 62.1%, marking the third drop in a row.

    The lack of people looking for work is another big factor contributing to the labor shortage.

    Key details: The increase in employment last month was concentrated in hotels, restaurants and healthcare businesses. Americans have gone back to seeing their doctors and are spending more on travel and entertainment.

    Hiring also rose in construction and manufacturing, two areas of the economy that are under more duress, while government employment increased by 42,000.

    There were some signs of labor-market softness in the report. Retail employment shrank for the third month in a row, and warehouse and transportation jobs also declined.

    Hiring at professional businesses, a leader in employment, rose by a meager 6,000. That’s the smallest increase since April 2021.

    Hiring in October and September were little changed after government revisions. The economy added 284,000 jobs in October and 269,000 in September.

    Big picture: The economy is slowing, but the labor force is still an oasis of strength.

    For the Fed, it’s too much of a good thing. The central bank wants the demand and supply of labor to become more balanced to ease the pressure on wages.

    The ongoing labor shortage, however, might be a saving grace for the economy. Many businesses have told the Fed they plan to hold onto more workers than usual even if the economy slows, because it’s been so hard to hire people in the first place.

    If that’s the case, the economy might escape a recession altogether or only suffer a short and shallow downturn, some economists say.

    Looking ahead: “Job creation continues to top expectations, holding the unemployment rate near half-century lows,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

    “The Fed may be closing in on a point that the pace of rate hikes could be stepped down, but the combination of tight labor markets and stubbornly elevated inflation leaves policymakers with a clear directive: keep tightening.”

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -0.10%
    and S&P 500
    SPX,
    -0.12%
    were set to decline sharply in Friday trades.

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  • Senate approves bill enforcing railroad labor agreement before strike deadline, sends to Biden

    Senate approves bill enforcing railroad labor agreement before strike deadline, sends to Biden

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    The Senate passed legislation that would force a tentative rail labor agreement and thwart a national strike.

    A separate vote on adding seven days of paid sick leave to the agreement failed.

    The approved bill, passed by a vote of 80 to 15, now goes to President Joe Biden, who had urged Congress to act quickly before this month’s strike deadline and “send a bill to my desk for my signature immediately.” The measures come after talks had stalled between the railroads and four unions, which had previously rejected the agreement.

    Biden has said he was reluctant to override the vote against the contract by some unions but stressed that a rail shutdown would “devastate” the economy. Labor groups have said that enforcing an agreement with the legislation denies them the right to strike.

    In a statement after the Senate vote, Biden said he would sign the bill into law “as soon as Congress sends it to my desk.”

    “I know that many in Congress shared my reluctance to override the union ratification procedures. But in this case, the consequences of a shutdown were just too great for working families all across the country,” Biden said in the statement.

    An aerial view of shipping containers and freight railway trains at the BNSF Los Angeles Intermodal Facility rail yard in Los Angeles, California, September 15, 2022.

    Bing Guan | Reuters

    The legislation, which was approved by the House on Wednesday, enacts new contracts providing railroad workers with 24% pay increases over five years from 2020 through 2024, immediate payouts averaging $11,000 upon ratification and an extra paid day off.

    The House on Wednesday approved a separate measure that would have added seven days of paid sick leave to the contract instead of just one. That measure was defeated in the Senate vote. Paid sick leave has been the main point of disagreement during negotiations between railroads and the unions.

    SMART Transportation Division, which represents some of the rail workers, said in a statement it was “unfortunate” that its members weren’t able to approve the labor agreement, but thanked Biden and congressional leadership for attempting to “achieve more.”

    “Our members are forced to work more hours, have less stability, suffer more stress and receive less rest. The ask for sick leave was not out of preference, but rather out of necessity,” the union said. “No American worker should ever have to face the decision of going to work sick, fatigued or mentally unwell versus getting disciplined or being fired by their employer, yet that is exactly what is happening every single day on this nation’s largest freight railroads.”

    Rail union presidents: We will support those who support us now in the general election

    Jeremy Ferguson, president of SMART-TD, told CNBC earlier Thursday there’s growing concern that some rail workers will quit after receiving their backpay without guaranteed paid sick time.

    “I keep hearing that some are going to do that. It’s always a possibility,” he said. “I hope that doesn’t happen. I want every member to stay employed and enjoy all the benefits that we do have and we are going to need more employees if we’re going to have adequate time off.”

    The parties had until Dec. 9 to reach an agreement before workers promised a strike, which the industry estimated would cost the U.S. economy $2 billion per day. Without an agreement, rail movement of certain goods was set to be curtailed as soon as this weekend in preparation for the strike.

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  • Senate passes bill to prevent rail strike, rejects measure providing paid sick leave

    Senate passes bill to prevent rail strike, rejects measure providing paid sick leave

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    The U.S. Senate on Thursday voted 80-15 in favor of a bill that would prevent a rail strike by imposing a deal on freight-rail workers, after rejecting a separate House-passed measure that would require rail companies to provide those workers with seven days of paid sick leave per year.

    The vote for the bill imposing a deal keeps Washington on track to block a strike, as the House of Representatives passed it Wednesday. President Joe Biden is expected to sign the legislation into law given that he called on Monday for Congress to act.

    Business groups have been warning that even a short-term strike would have a tremendous impact and cause economic pain.

    The deal that would be imposed on rail employees includes a 24% increase in wages from 2020 through 2024, but workers have remained concerned about a lack of paid sick time.

    In the vote on sick leave, there were 52 senators in favor, while 43 were opposed, and 60 votes for it were needed. A half dozen Republican senators were in favor, while Sen. Joe Manchin of West Virginia was the only Democrat in opposition.

    “While I am sympathetic to the concerns union members have raised, I do not believe it is the role of Congress to renegotiate a collective bargaining agreement that has already been negotiated,” Manchin said in a statement. 

    Earlier Thursday, the Senate also voted against an amendment from Republican senators that aimed to deliver a cooling-off period so talks between rail companies and their workers could continue.

    Railroad operators’ stocks finished with gains Tuesday as traders reacted to Washington’s moves to prevent a strike, but Norfolk Southern Corp.
    NSC,
    -0.05%    ,
     CSX Corp. 
    CSX,
    -0.03%
    and Union Pacific Corp.
    UNP,
    -0.69%
    all lost ground Thursday as the broad market
    SPX,
    -0.09%

    DJIA,
    -0.56%
    closed mostly lower.

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  • Some University of California striking workers reach deal

    Some University of California striking workers reach deal

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    LOS ANGELES — Postdoctoral scholars and academic researchers on Tuesday reached a tentative labor agreement with the University of California but will remain on strike in solidarity with thousands of graduate student workers at all 10 of the university system’s campuses.

    The union representing the scholars and researchers hailed the deal as a major victory and said it would provide “substantial wage increases that address cost of living.”

    In addition to pay hikes of up to 29%, the agreement would provide increased family leave, childcare subsidies and lengthened appointments to ensure job security, according to a statement from United Auto Workers Local 5810.

    The agreement must be ratified in a vote by members.

    Letitia Silas, executive director of UC’s labor relations, said the university system was pleased to have reached a deal that honors the workers’ contributions.

    “These agreements also uphold our tradition of supporting these employees with compensation and benefits packages that are among the best in the country,” Silas said in a statement.

    The postdoctoral employees and academic researchers make up about 12,000 of the 48,000 union members who walked off the job and onto picket lines three weeks ago. About 36,000 graduate student teaching assistants, tutors and researchers are bargaining separately and remain on strike, calling for increased pay and benefits.

    Union leaders have said the strike could be the largest work stoppage the prestigious public university system has ever faced.

    The academic workers say with their current salaries they can’t afford to live in cities such as Los Angeles, San Diego and Berkeley, where housing costs are soaring.

    Organizers from the United Auto Workers, which represents the employees involved, have said there is no end date for the strike.

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  • Biden calls on Congress to head off potential rail strike

    Biden calls on Congress to head off potential rail strike

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    OMAHA, Neb. — President Joe Biden on Monday asked Congress to intervene and block a railroad strike before next month’s deadline in the stalled contract talks, and House Speaker Nancy Pelosi said lawmakers would take up legislation this week to impose the deal that unions agreed to in September.

    “Let me be clear: a rail shutdown would devastate our economy,” Biden said in a statement. “Without freight rail, many U.S. industries would shut down.”

    In a statement, Pelosi said: “We are reluctant to bypass the standard ratification process for the Tentative Agreement — but we must act to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt.”

    Pelosi said the House would not change the terms of the September agreement, which would challenge the Senate to approve the House bill without changes.

    The September agreement that Biden and Pelosi are calling for is a slight improvement over what the board of arbitrators recommended in the summer. The September agreement added three unpaid days off a year for engineers and conductors to tend to medical appointments as long as they scheduled them at least 30 days in advance. The railroads also promised in September not to penalize workers who are hospitalized and to negotiate further with the unions after the contract is approved about improving the regular scheduling of days off.

    Hundreds of business groups had been urging Congress and the president to step into the deadlocked contract talk and prevent a strike.

    Both the unions and railroads have been lobbying Congress while contract talks continue. If Congress acts, it will end talks between the railroads and four rail unions that rejected their deals Biden helped broker before the original strike deadline in September. Eight other unions have approved their five-year deals with the railroads and are in the process of getting back pay for their workers for the 24% raises that are retroactive to 2020.

    If Congress does what Biden suggests and imposes terms similar to what was agreed on in September, that will end the union’s push to add paid sick time. The four unions that have rejected their deals have been pressing for the railroads to add that benefit to help address workers’ quality of life concerns, but the railroads had refused to consider that.

    Biden said that as a “a proud pro-labor president” he was reluctant to override the views of people who voted against the agreement. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I believe Congress must use its powers to adopt this deal.”

    Biden’s remarks and Pelosi’s statement came after a coalition of more than 400 business groups sent a letter to congressional leaders Monday urging them to step into the stalled talks because of fears about the devastating potential impact of a strike that could force many businesses to shut down if they can’t get the rail deliveries they need. Commuter railroads and Amtrak would also be affected in a strike because many of them use tracks owned by the freight railroads.

    The business groups led by the U.S. Chamber of Commerce, National Association of Manufacturers and National Retail Federation said even a short-term strike would have a tremendous impact and the economic pain would start to be felt even before the Dec. 9 strike deadline. They said the railroads would stop hauling hazardous chemicals, fertilizers and perishable goods up to a week beforehand to keep those products from being stranded somewhere along the tracks.

    “A potential rail strike only adds to the headwinds facing the U.S. economy,” the businesses wrote. “A rail stoppage would immediately lead to supply shortages and higher prices. The cessation of Amtrak and commuter rail services would disrupt up to 7 million travelers a day. Many businesses would see their sales disrupted right in the middle of the critical holiday shopping season.”

    A similar group of businesses sent another letter to Biden last month urging him to play a more active role in resolving the contract dispute.

    On Monday, the Association of American Railroads trade group praised Biden’s action.

    “No one benefits from a rail work stoppage — not our customers, not rail employees and not the American economy,” said AAR President and CEO Ian Jefferies. “Now is the appropriate time for Congress to pass legislation to implement the agreements already ratified by eight of the twelve unions.”

    Business groups that have been pushing for Congress to settle this contract dispute praised Biden’s move.

    “The Biden administration’s endorsement of congressional intervention affirms what America’s food, beverage, household and personal care manufacturers have been saying: Freight rail operations cannot shut down and imperil the availability and affordability of consumers’ everyday essentials,” said Tom Madrecki, vice president of supply chain for the Consumer Brands Association. “The consequences to consumers if a strike were to occur are too serious, especially amid continued supply chain challenges and disruptions.”

    Clark Ballew, a spokesman for the Brotherhood of Maintenance of Way Employes Division, which represents track maintenance workers, said before Biden’s announcement that the union was “headed to D.C. this week to meet with lawmakers on the Hill from both parties. We have instructed our members to contact their federal lawmakers in the House and Senate for several weeks now.”

    The U.S. Chamber of Commerce’s Neil Bradley said Biden was correct in advocating for the deal already reached. “Congress must do what it has done 18 times before: intervene against a national rail strike,” Bradley said in a statement, and he called Congress enforcing the deal agreed to by railroads and union leaders the “only path to avoid crippling strike.”

    The railroads, which include Union Pacific, BNSF, Norfolk Southern, CSX and Kansas City Southern, wanted any deal to closely follow the recommendations a special board of arbitrators that Biden appointed made this summer that called for the 24% raises and $5,000 in bonuses but didn’t resolve workers’ concerns about demanding schedules that make it hard to take a day off and other working conditions. That’s what Biden is calling on Congress to impose.

    ———

    Associated Press writer Colleen Long in Washington contributed to this report.

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  • Biden calls on Congress to head off potential rail strike

    Biden calls on Congress to head off potential rail strike

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    OMAHA, Neb. — President Joe Biden on Monday asked Congress to intervene and block a railroad strike before next month’s deadline in the stalled contract talks, and House Speaker Nancy Pelosi said lawmakers would take up legislation this week to impose the deal that unions agreed to in September.

    “Let me be clear: a rail shutdown would devastate our economy,” Biden said in a statement. “Without freight rail, many U.S. industries would shut down.”

    In a statement, Pelosi said: “We are reluctant to bypass the standard ratification process for the Tentative Agreement — but we must act to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt.”

    Pelosi said the House would not change the terms of the September agreement, which would challenge the Senate to approve the House bill without changes.

    The September agreement that Biden and Pelosi are calling for is a slight improvement over what the board of arbitrators recommended in the summer. The September agreement added three unpaid days off a year for engineers and conductors to tend to medical appointments as long as they scheduled them at least 30 days in advance. The railroads also promised in September not to penalize workers who are hospitalized and to negotiate further with the unions after the contract is approved about improving the regular scheduling of days off.

    Hundreds of business groups had been urging Congress and the president to step into the deadlocked contract talk and prevent a strike.

    Both the unions and railroads have been lobbying Congress while contract talks continue. If Congress acts, it will end talks between the railroads and four rail unions that rejected their deals Biden helped broker before the original strike deadline in September. Eight other unions have approved their five-year deals with the railroads and are in the process of getting back pay for their workers for the 24% raises that are retroactive to 2020.

    If Congress does what Biden suggests and imposes terms similar to what was agreed on in September, that will end the union’s push to add paid sick time. The four unions that have rejected their deals have been pressing for the railroads to add that benefit to help address workers’ quality of life concerns, but the railroads had refused to consider that.

    Biden said that as a “a proud pro-labor president” he was reluctant to override the views of people who voted against the agreement. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I believe Congress must use its powers to adopt this deal.”

    Biden’s remarks and Pelosi’s statement came after a coalition of more than 400 business groups sent a letter to congressional leaders Monday urging them to step into the stalled talks because of fears about the devastating potential impact of a strike that could force many businesses to shut down if they can’t get the rail deliveries they need. Commuter railroads and Amtrak would also be affected in a strike because many of them use tracks owned by the freight railroads.

    The business groups led by the U.S. Chamber of Commerce, National Association of Manufacturers and National Retail Federation said even a short-term strike would have a tremendous impact and the economic pain would start to be felt even before the Dec. 9 strike deadline. They said the railroads would stop hauling hazardous chemicals, fertilizers and perishable goods up to a week beforehand to keep those products from being stranded somewhere along the tracks.

    “A potential rail strike only adds to the headwinds facing the U.S. economy,” the businesses wrote. “A rail stoppage would immediately lead to supply shortages and higher prices. The cessation of Amtrak and commuter rail services would disrupt up to 7 million travelers a day. Many businesses would see their sales disrupted right in the middle of the critical holiday shopping season.”

    A similar group of businesses sent another letter to Biden last month urging him to play a more active role in resolving the contract dispute.

    On Monday, the Association of American Railroads trade group praised Biden’s action.

    “No one benefits from a rail work stoppage — not our customers, not rail employees and not the American economy,” said AAR President and CEO Ian Jefferies. “Now is the appropriate time for Congress to pass legislation to implement the agreements already ratified by eight of the twelve unions.”

    Business groups that have been pushing for Congress to settle this contract dispute praised Biden’s move.

    “The Biden administration’s endorsement of congressional intervention affirms what America’s food, beverage, household and personal care manufacturers have been saying: Freight rail operations cannot shut down and imperil the availability and affordability of consumers’ everyday essentials,” said Tom Madrecki, vice president of supply chain for the Consumer Brands Association. “The consequences to consumers if a strike were to occur are too serious, especially amid continued supply chain challenges and disruptions.”

    Clark Ballew, a spokesman for the Brotherhood of Maintenance of Way Employes Division, which represents track maintenance workers, said before Biden’s announcement that the union was “headed to D.C. this week to meet with lawmakers on the Hill from both parties. We have instructed our members to contact their federal lawmakers in the House and Senate for several weeks now.”

    The U.S. Chamber of Commerce’s Neil Bradley said Biden was correct in advocating for the deal already reached. “Congress must do what it has done 18 times before: intervene against a national rail strike,” Bradley said in a statement, and he called Congress enforcing the deal agreed to by railroads and union leaders the “only path to avoid crippling strike.”

    The railroads, which include Union Pacific, BNSF, Norfolk Southern, CSX and Kansas City Southern, wanted any deal to closely follow the recommendations a special board of arbitrators that Biden appointed made this summer that called for the 24% raises and $5,000 in bonuses but didn’t resolve workers’ concerns about demanding schedules that make it hard to take a day off and other working conditions. That’s what Biden is calling on Congress to impose.

    ———

    Associated Press writer Colleen Long in Washington contributed to this report.

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  • More than 150 agents back striking HarperCollins workers

    More than 150 agents back striking HarperCollins workers

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    NEW YORK — More than 150 literary agents, whose clients include Danielle Jackson, V.E. Schwab and L.A. Chandlar, have signed an open letter to HarperCollins vowing to “omit” the publisher from upcoming book submissions until it reaches an agreement with striking employees.

    Around 250 entry- and mid-level staff members, from publicists to editorial assistants, have been on strike since Nov. 10, with the two sides differing over wages, workforce diversity and other issues that have become increasingly prominent across the industry. No new talks are scheduled.

    “While many consider publishing to be a labor of love, we agents know how quickly that labor can lead to burnout, tension, missed opportunities for advancement, and mistakes,” the letter reads in part.

    “This generation of rising publishing professionals must contend with student loan debt, the rising cost of living, and the barriers inherent in working long hours without adequate compensation. These employees, many of whom bring with them the diverse viewpoints our industry lacks, have been essential to the production of the books we are so proud of.”

    Agents endorsing the letter come from Janklow & Nesbit Associates, Aevitas Creative Management, Root Literary and other firms. The letter was organized by Chelsea Hensley of the KT Literary Agency, who noted that the effort comes during a traditionally slow time of year for deal making.

    “I wanted them (HarperCollins) to know that even if they don’t think they’re seeing the effects of the strike now, they’ll definitely be seeing it come January, which is when agents will have the most new projects to share,” Hensley told The Associated Press.

    HarperCollins is the only major New York publisher with a union; striking employees are members of Local 2110 of the United Auto Workers. A spokesperson for the publisher did not immediately return a message seeking comment.

    “HarperCollins has agreed to a number of proposals that the United Auto Workers Union is seeking to include in a new contract,” according to a statement released Monday by the publisher. We are disappointed an agreement has not been reached and will continue to negotiate in good faith.”

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  • Disney CEO Robert Iger at Town Hall Vows to Focus on Creativity

    Disney CEO Robert Iger at Town Hall Vows to Focus on Creativity

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    Disney CEO Robert Iger at Town Hall Vows to Focus on Creativity

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  • Shutterfly CEO sees ‘choppy’ times through her economic lens

    Shutterfly CEO sees ‘choppy’ times through her economic lens

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    SAN FRANCISCO — While other technology companies lay off workers and try to cut other costs amid a post-pandemic comedown, Shutterfly CEO Hilary Schneider is gearing up for a busy holiday season. Orders are pouring in for the digital photo and printing company’s photo books, which capture moments from all the postponed vacations, weddings and other diversions people could finally enjoy this year.

    Schneider, who became Shutterfly’s CEO in 2020 shortly after Apollo Global Management took the company private in a $2.7 billion deal, also sympathizes with the belt-tightening at other technology companies. Her past experience includes being CEO of Red Herring, a technology magazine that collapsed during the dot-com bust 20 years ago, and working as a top executive at Yahoo during the Great Recession of 2008 and 2009. She recently shared her perspective with The Associated Press.

    Q: How do you view the current state of the economy?

    A: We’re certainly going through an economic reconciliation here. It’s hard to remember what that’s like because we have been in a bull market for so long. But those of us with some gray hair have seen this before. I think the reality is it’s a choppy environment. While we are not in a recession yet, there are certainly things that are impacting everyone already. You have the war in Ukraine, you have inflation, you have supply chain issues, and higher labor costs with nearly full employment.

    So that puts everyone in a cautious mode because of the lack of predictability about not only the next day or the next week, but what the next month is going to be. When my boys were young, I remember in soccer they would line them up and teach them to get into a crouch so you could react to the ball. I feel like that’s what all these businesses are doing right now,

    Q: We have seen thousands upon thousands of layoffs at major tech companies in recent weeks. Do you think this will be a prime opportunity for smaller tech firms to add talent?

    A: I was recently at a good friend’s 60th birthday party that had an interesting group there and everyone was talking about cutbacks. What I heard from the venture investors who were there is that they are in a more conservative mode just because they are trying to preserve cash for their existing portfolio (of funded companies). So you just look at number of new companies being funded, I think that number will go down. And that means there will be less of a call for new talent. Everybody is a little more risk averse in this current environment.

    Q: Do you expect the tougher economy to yield any new growth opportunities?

    A: The smarter companies — and I know we certainly are thinking about it this way — will remember the adage about not letting any downturn go by without taking advantage of it. Ultimately, I think some of the smarter companies are thinking, “OK, this is a harder economic environment but what are the jujitsu moves you can make right now?” So you are a company with more resources and more brand recognition than smaller competitors, you are going to be trying to make moves that allow you to come out of this downturn in a situation where you have actually gained market share.

    Q: Is it strange to see a company like Yahoo where you once worked go from a technology powerhouse to an afterthought?

    A: The interesting thing about something like Yahoo is there is still significant residual value in brands like that. I don’t know the specifics, but I think if you look at AOL, which was sort of the original internet, there is still a significant number of people with AOL email. There are habits that get formed and alliances that continue. There are companies that continue reinventing themselves, but unfortunately you also see technology companies that hit a peak and then didn’t catch that next wave.

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  • Railway workers in Austria to strike Monday in pay standoff

    Railway workers in Austria to strike Monday in pay standoff

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    BERLIN — Railway workers in Austria are set to hold a one-day strike on Monday after a failed round of talks in pay negotiations.

    The Austria Press Agency reported Sunday that both sides said the fifth round of talks on pay for some 50,000 employees of about 65 railway operators, including the main national operator OeBB, had failed.

    That means that there will be no regional, long-distance or night trains on Monday, and that only buses and other public transport run by municipal authorities will run.

    Labor union vida has called for an extra 400 euros ($416) per month for railway employees, which it says is equivalent to an average 12% increase.

    Employers have said that would amount to a 13.3% raise and is too much. OeBB said employers were offering an 8.44% increase and strongly criticized the strike.

    Like many other countries, Austria has seen inflation surge this year following the Russian invasion of Ukraine. The country’s annual inflation rate hit 11% in October.

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  • How Congress may make it easier to set money aside for emergency expenses

    How Congress may make it easier to set money aside for emergency expenses

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    Thomas Barwick | Digitalvision | Getty Images

    Many families struggle to come up with the cash when faced with an unexpected $400 expense.

    That lack of emergency savings may force them to borrow money at high interest rates to pay for the surprise expense, putting their financial security at risk.

    Now Congress has a window to address that issue by paving the way for new emergency savings plans in the lame duck session.

    Three emergency savings proposals may be included in a legislative package known as Secure 2.0, which is set to amplify changes to the retirement system brought by the Secure Act in 2019.

    “We’re on the cusp of a significant shift in how people save for emergencies in this country, thanks to public policy and private sector innovation,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center, during a recent web panel hosted by the Washington, D.C., think tank.

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    The panel discussion coincided with an open letter from the Bipartisan Policy Center Action with 40 organizations to Senate Majority Leader Chuck Schumer, D-N.Y., and Minority Leader Mitch McConnell, R-Ky., as well as House Speaker Nancy Pelosi, D-Calif., and Minority Leader Kevin McCarthy, R-Calif.

    The letter called for the inclusion of three bills that would amplify emergency savings in the pending retirement package.

    “We firmly believe emergency savings policy aligns with the goals of the U.S. retirement system and will help boost financial resiliency for American households,” they wrote.

    Why emergency savings falls short

    Anti-eviction banners are displayed on a rent-controlled building in Washington, D.C., on Aug. 9, 2020.

    Eric Baradat | AFP | Getty Images

    The Covid-19 pandemic was a stress test for many Americans’ finances.

    As many parts of the economy shut down, many individuals and families found their incomes were reduced or eliminated altogether.

    The federal government stepped in and sent unprecedented amounts of aid through three rounds of stimulus checks, enhanced federal unemployment benefits, direct monthly child tax credit payments to parents and other policies.

    Yet the pandemic still led some workers to withdraw funds from their 401(k) or other retirement savings accounts, putting their long-term financial futures at risk.

    Those that had at least $1,000 in emergency savings at the height of the pandemic were half as likely to withdraw from their retirement savings accounts, according to the Aspen Institute.

    “As people face that crisis, you need that liquid savings to protect your long-term investments and make sure you have a secure retirement and build wealth,” Tim Shaw, associate director of policy at the Aspen Financial Security Program, said during the Bipartisan Policy Center panel.

    Covid relief measures helped push the share of families who could cover an unexpected $400 expense with cash or an equivalent method to 68% in 2021, a 4-percentage point increase from 2020. It also marks the highest level since the Federal Reserve began the survey in 2013.

    Still, 1 in 3 households would need to borrow money to cover a $400 emergency, which is still “far too many,” Shaw noted.

    How 3 proposals may encourage savings

    Image Source | Getty Images

    Advocates are hoping three proposals that could help encourage emergency savings will be included in Secure 2.0.

    That includes two bills proposed by Sens. Cory Booker, D-N.J., and Todd Young, R-Ind., as well as a third created by Sens. James Lankford, R-Okla., and Michael Bennet, D-Colorado.

    One proposal from Booker and Young would enable employers to provide emergency savings accounts to workers in addition to their retirement savings accounts. Employees would be able to set aside up to $2,500 automatically that they could access at any time in case of an emergency.

    The second proposal from Booker and Young would allow for separate standalone plans outside of retirement accounts, which would be “really important” for employees who don’t currently have retirement plans through their employer, Akabas noted.

    A third, the Lankford-Bennet plan, would allow workers to take out up to $1,000 from their retirement accounts penalty-free in case of an emergency. Those withdrawals would only be allowed once per year; additional contributions would be required before making another withdrawal.

    Chantel Sheaks, executive director of retirement policy at the U.S. Chamber of Commerce, said she has “fingers crossed” that all three proposals will make it into Secure 2.0 and that the legislation will pass.

    “From an employer’s viewpoint, we need choice,” Sheaks said.

    What may work for one employer may not work for another, she noted. The three proposals would allow for more options, including possibly encouraging employers who do not current have retirement plans to think about adopting them, Sheaks said.

    Moreover, because hardship withdrawals can reduce workers’ retirement security, these emergency savings options can help prevent those stumbling blocks to building wealth.

    “People have emergency needs today, and we can’t forget about those emergency needs,” Sheaks said. “We need to find a way to balance today’s needs with tomorrow’s needs.”

     

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  • Thanksgiving travel rush is back with some new habits

    Thanksgiving travel rush is back with some new habits

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    The Thanksgiving travel rush was back on this year, as people caught planes in numbers not seen in years, setting aside inflation concerns to reunite with loved ones and enjoy some normalcy after two holiday seasons marked by COVID-19 restrictions.

    Changing habits around work and play, however, might spread out the crowds and reduce the usual amount of holiday travel stress. Experts say many people will start holiday trips early or return home later than normal because they will spend a few days working remotely — or at least tell the boss they’re working remotely.

    The busiest travel days during Thanksgiving week are usually Tuesday, Wednesday and the Sunday after the holiday. This year, the Federal Aviation Administration expects Tuesday to be the busiest travel day with roughly 48,000 scheduled flights.

    Chris Williams, of Raleigh, North Carolina, flew Tuesday morning with his wife and two kids to Atlanta, Georgia, to spend the holiday with extended family.

    “Of course it’s a stressful and expensive time to fly,” said Williams, 44, who works in finance. “But after a couple years of not getting to spend Thanksgiving with our extended family, I’d say we’re feeling thankful that the world’s gotten to a safe enough place where we can be with loved ones again.”

    Although Williams said the family’s budget has been tight this year, he’s capitalized on the opportunity to teach his kids some personal finance basics. His youngest, 11, has been learning how to budget her allowance money since March and is excited to buy small gifts for her friends on Black Friday or Cyber Monday. “Probably slime,” she said, “with glitter.”

    The Transportation Security Administration screened nearly 2.3 million travelers on Tuesday, down from more than 2.4 million screened the Tuesday before Thanksgiving in 2019. On Monday, the numbers were up versus 2019 — more than 2.6 million travelers compared with 2.5 million. That same trend occurred Sunday, marking the first year that the number of people catching planes on Thanksgiving week surpassed pre-pandemic levels.

    “People are traveling on different days. Not everyone is traveling on that Wednesday night,” says Sharon Pinkerton, senior vice president at the trade group Airlines for America. “People are spreading their travel out throughout the week, which I also think will help ensure smoother operations.”

    AAA predicts that 54.6 million people will travel at least 50 miles from home in the U.S. this week, a 1.5% bump over Thanksgiving last year and only 2% less than in 2019. The auto club and insurance seller says nearly 49 million of those will travel by car, and 4.5 million will fly between Wednesday and Sunday.

    U.S. airlines struggled to keep up as the number of passengers surged this year.

    “We did have a challenging summer,” said Pinkerton, whose group speaks for members including American, United and Delta. She said that airlines have pared their schedules and hired thousands of workers — they now have more pilots than before the pandemic. “As a result, we’re confident that the week is going to go well.”

    U.S. airlines plan to operate 13% fewer flights this week than during Thanksgiving week in 2019. However, by using larger planes on average, the number of seats will drop only 2%, according to data from travel-researcher Cirium.

    Airlines continue to blame flight disruptions on shortages of air traffic controllers, especially in Florida, a major holiday destination.

    Controllers, who work for the Federal Aviation Administration, “get tested around the holidays. That seems to be when we have challenges,” Frontier Airlines CEO Barry Biffle said a few days ago. “The FAA is adding another 10% to headcount, hopefully that’s enough.”

    Transportation Secretary Pete Buttigieg has disputed such claims, saying that the vast majority of delays and cancellations are caused by the airlines themselves.

    TSA expects airports to be busier than last year and probably about on par with 2019. The busiest day in TSA’s history came on the Sunday after Thanksgiving in 2019, when nearly 2.9 million people were screened at airport checkpoints.

    Stephanie Escutia, traveling with four children, her husband and her mother, said it took the family four hours to get through checking and security at the Orlando airport early Tuesday. The family was returning to Kansas City in time for Thanksgiving after a birthday trip to Disney World.

    “We were surprised at how full the park was,” said Escutia, 32. “We thought it might be down some but it was packed.”

    She welcomed the sense of normalcy, and said her family would be gathering for Thanksgiving without worrying about keeping their distance this year. “Now we are back to normal and looking forward to a nice holiday,” she said.

    People getting behind the wheel or boarding a plane don’t seem fazed by higher gasoline and airfare prices than last year or the widespread concern about inflation and the economy. That is already leading to predictions of strong travel over Christmas and New Year’s.

    “This pent-up demand for travel is still a real thing. It doesn’t feel like it’s going away,” says Tom Hall, a vice president and longtime writer for Lonely Planet, the publisher of travel guides. “That’s keeping planes full, that’s keeping prices high.”

    ———

    Associated Press writers Hannah Schoenbaum in Raleigh, North Carolina, Margaret Stafford in Kansas City and AP video journalist Terence Chea in Oakland, California contributed to this report.

    ———

    David Koenig can be reached at twitter.com/airlinewriter

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  • Biden administration loosens Trump-era investing rules around environment, social and governance funds for 401(k) plans

    Biden administration loosens Trump-era investing rules around environment, social and governance funds for 401(k) plans

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    Justin Paget | Digitalvision | Getty Images

    The Biden administration on Tuesday issued a final rule that makes it easier for employers to consider climate change and other so-called environment, social and governance factors when picking investment funds for their 401(k) plans.

    The U.S. Department of Labor rule, which takes effect in 60 days, undoes regulations put in place during the Trump administration.

    Those prior rules, issued in 2020, had a “chilling” effect that effectively sidelined employers from weighing ESG factors when selecting 401(k) funds, senior Labor Department officials said during a press call Tuesday.

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    ESG investing is also known as sustainable or impact investing. There are many flavors of ESG funds; they may, for example, funnel investor money into wind and solar companies or those with diverse board members, or steer funds away from firms involved in fossil fuels.

    ESG funds have grown more popular in recent years. Investors poured $69.2 billion into them in 2021, an annual record, according to Morningstar. Uptake in 401(k) plans has been slow, however.

    The Inflation Reduction Act is expected to further bolster the popularity of ESG investing. The law, which President Joe Biden signed in August, represents the largest federal investment to fight climate change in U.S. history.

    What the new Biden ESG rules do

    Employers have a legal duty to thoroughly assess funds’ risk and return when picking 401(k) plan investments; for example, they can’t subordinate the financial interests of workers in favor of a cause like climate change.

    The new ESG rules don’t change these duties.

    However, they clarify that businesses can “include the economic effects of climate change and other ESG considerations” when making investment choices — something Lisa Gomez, assistant secretary of labor for the Employee Benefits Security Administration, called “common sense.”

    “While climate change is a critical issue, that’s not [just] what this rule is about,” Gomez said.

    Employers also don’t violate their legal duty by taking workers’ ESG interests into account when crafting a lineup of 401(k) investment funds, according to the new rule; that may lead to more engagement among workers and therefore more retirement security, it said.

    The Biden administration’s action Tuesday follows a March 2021 directive that it wouldn’t enforce the Trump-era rules. The administration then proposed a revision to those rules in October 2021; Tuesday’s action updates that proposal according to comments received from the public.  

    The new Biden regulations scrap certain elements of the Trump-era rules that Labor Department officials said stymied employers from using ESG funds.

    For example, the prior rules didn’t explicitly mention ESG, and they required employers to choose investments based only on “pecuniary” factors — a term that essentially disallowed employers from selecting funds with any sort of “moral” component, Labor Department officials said.

    The new Biden administration rules erase that requirement.

    “Whether E, S or G, … direct or indirect, big or small, the [ESG] factor also furthers a moral component,” said a senior Labor Department official, who spoke on condition of background only. “ESG has an inherent duality of purpose.”

    The new rules also erase a restriction that disallowed employers from using an ESG fund as a default option for workers automatically enrolled in their 401(k) plans — an increasingly popular avenue to boost retirement security. In legal parlance, these funds are known as a “qualified defined investment alternative,” or QDIA.  

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  • Consumers could pay price if railroads, unions can’t agree

    Consumers could pay price if railroads, unions can’t agree

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    OMAHA, Neb. — Consumers could see higher gas prices and shortages of some of their favorite groceries during the winter holiday season if railroads and all of their unions can’t agree on new contracts by an early-December deadline that had already been pushed back.

    The likelihood of a strike that would paralyze the nation’s rail traffic grew on Monday when the largest of the 12 rail unions, which represents mostly conductors, rejected management’s latest offering that included 24% raises and $5,000 in bonuses. With four of the 12 unions that represent half of the 115,000 rail workers holding out for a better deal, it might fall to Congress to impose one to protect the U.S. economy.

    The Retail Industry Leaders Association said a rail strike “would cause enormous disruption” although retail stores are well stocked for the crucial holiday shopping season. It’s not clear what a strike would mean for packages because FedEx and UPS, which both rely on rail to some degree, haven’t commented in detail.

    “Fortunately, this year’s holiday gifts have already landed on store shelves. But an interruption to rail transportation does pose a significant challenge to getting items like perishable food products and e-commerce shipments delivered on time, and it will undoubtedly add to the inflationary pressures already hitting the U.S. economy,” said Jess Dankert with the group that represents more than 200 major retailers.

    Even getting close to the deadline could cause problems because railroads will freeze shipments of dangerous chemicals and perishable goods ahead of time. And commuters could be stranded if there is a strike because so many passenger railroads operate on tracks owned by the freight railroads.

    Just about every industry could be affected because so many businesses need railroads to deliver their raw materials and completed products, and there aren’t enough trucks to pick up the slack.

    Tom Madrecki with the Consumer Brands Association said a rail strike “would effectively bring hundreds of America’s largest food, beverage, household and personal care manufacturing operations to a halt in a matter of days as inputs and ingredients run out. On-shelf availability and accessibility will quickly drop, compounded by almost inevitable panic buying.”

    There’s no immediate threat of a strike even though four unions have rejected deals the Biden administration helped broker before the original strike deadline in September. Those unions agreed to try to hash out a contract before a new Dec. 5 strike deadline. But those talks have deadlocked because the railroads refuse to add paid sick time to what they’ve already offered.

    Railroad engineers voted Monday to join seven smaller unions in approving the deal, but conductors’ union rejected its contract, joining three unions that previously voted no.

    It appears increasingly likely that Congress will have to settle the dispute. Lawmakers have the power to impose contract terms, and hundreds of business groups have urged Congress and President Joe Biden to be ready to intervene.

    White House press secretary Karine Jean-Pierre reiterated to reporters on Monday that Biden believes “a shutdown is unacceptable” but that “the best option is still for the parties to resolve this themselves.”

    Workers frustrated with the demanding schedules and deep job cuts in the industry pushed to reject these contracts because they wouldn’t do enough to resolve their quality-of-life concerns. The deals for the engineers and conductors did include a promise to improve the scheduling of regular days off and negotiate the details of those schedules further at each railroad. Those two unions also received three unpaid days off a year to tend to medical needs as long they were scheduled at least 30 days in advance and the railroads said they wouldn’t penalize workers who were hospitalized.

    The railroads also lost out on their bid to cut crew sizes to one person as part of the negotiations. But the conductors in the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers union still narrowly rejected the deal. A small division of the SMART-TD union did approve it.

    “The ball is now in the railroads’ court. Let’s see what they do. They can settle this at the bargaining table,” SMART-TD President Jeremy Ferguson said. “But, the railroad executives who constantly complain about government interference and regularly bad-mouth regulators and Congress now want Congress to do the bargaining for them.”

    Dennis Pierce, the president of the Brotherhood of Locomotive Engineers and Trainmen union, said the deal engineers ratified should help improve working conditions somewhat, but that the railroads must address workers’ frustrations, especially after they cut nearly one-third of their jobs over the past six years as they overhauled their operations.

    “When you’ve got to offer $20,000 to get somebody to go to work for the railroad in Lincoln, Nebraska, you’ve got a problem. People used to stand in line there,” Pierce said. “The reason for that is the word is out that if you go to work here, you’re not going to ever see your family.”

    The railroads maintain that the deals with the unions should closely follow the recommendations made this summer by a special panel of arbitrators Biden appointed. That’s part of the reason why they don’t want to offer paid sick time. Plus, the railroads say the unions have agreed over the years to forgo paid sick time in favor of higher pay and strong short-term disability benefits.

    The unions say it is long overdue for the railroads to offer paid sick time and that the pandemic highlighted the need for it.

    The group that negotiates on behalf of the railroads that include Union Pacific, Norfolk Southern, BNSF, Kansas City Southern and CSX said Monday that the unions that rejected their deals shouldn’t expect to receive more than the Presidential Emergency Board of arbitrators recommended.

    It’s unclear what Congress might do given the deep political divisions in Washington D.C. and a single lawmaker could hold up a resolution. But the head of the Association of American Railroads trade group, Ian Jefferies, said “if the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy.”

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  • Disney taps ex-CEO Bob Iger to return, set strategy

    Disney taps ex-CEO Bob Iger to return, set strategy

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    BURBANK, Calif. — The Walt Disney Company has tapped its former CEO Bob Iger to return to head the company for two years, firing his successor Bob Chapek in a move that stunned the entertainment industry.

    Chapek is leaving after the company posted lower than expected earnings in the last quarter. Hollywood’s creative community had grumbled about Chapek’s cost-cutting measures and sometimes blunt approach to talent, while theme park regulars had been unhappy with price hikes.

    So, it’s back to Iger.

    “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period,” Susan Arnold, Disney’s chairman, said in a statement.

    Arnold thanked Chapek for leading the company through the pandemic, while enthusing over Iger’s stature within the company, which he led for 15 years before his ouster in early 2020.

    Iger has the “deep respect of Disney’s senior leadership team,” she said. She added that he was “greatly admired by Disney employees worldwide.”

    “The company’s robust pipeline of content is a testament to his leadership and vision,” the company’s statement said.

    Iger said in the statement that he was “thrilled” to return and “extremely optimistic” about Disney’s future.

    “I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling,” said Iger, who is 71.

    He replaced Michael Eisner as CEO in 2005 and the former TV weather man won over Wall Street and Hollywood with bold acquisitions and public displays of respect for the creative community and the company’s storied history.

    During his 15 years at the helm, Disney absorbed Pixar, Lucasfilm, Marvel and Fox’s entertainment businesses, then launched its Disney+ streaming service.

    After Chapek became CEO in 2020, Iger remained as chairman through 2021.

    Chapek is stepping down in what has been a tough year for Disney. He faced blowback earlier this year for not using the company’s vast influence in Florida to help quash a Republican bill that would prevent teachers from instructing early grades on LGBTQ issues. The bill sparked a spat between Disney and Republican Gov. Ron DeSantis.

    He also was criticized for his handling of Scarlett Johansson’s lawsuit last year over her pay for “Black Widow,” an unusually public conflict between the studio and a top Hollywood star. The 2021 Marvel film was released simultaneously in theaters and through Disney+ for a $30 rental.

    There are reports of plans for major layoffs as the company maneuvers to improve its profitability.

    Currently, Disney+ now is ad-free, but in December it will launch a new tiered service in December for U.S. subscribers. The basic Disney+ service that costs $7.99 per month will run ads. A subscriber who wants no ads will have to upgrade to a premium service that starts at $10.99 per month, a 38% increase over current prices.

    Disney said it ended its fiscal year with more than 235 million subscribers to its streaming services. That was above analysts’ expectations of 231.5 million.

    Disney’s share price is at about the level it was at when Iger stepped down as CEO in early 2020, closing at $91.80 pm Friday. That’s about half its peak of just over $200 a share in March 2021.

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  • Disney announces ex-CEO Bob Iger to return for 2 years

    Disney announces ex-CEO Bob Iger to return for 2 years

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    BURBANK, Calif. — The Walt Disney Company announced late Sunday that former CEO Bob Iger would return to head the company for two years in a move that surprised the entertainment industry.

    Disney said Bob Chapek, who succeeded Iger in 2020, had stepped down from the position.

    “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period,” board Chair Susan Arnold said in a statement from Disney.

    Arnold thanked Chapek for his service, including his time during “the unprecedented challenges of the pandemic.”

    Iger steered Disney through its absorption of Lucasfilm, Pixar, Marvel and Fox’s entertainment businesses and the launch of Disney Plus.

    Earlier this month, Disney posted lower than expected results for its fiscal fourth quarter.

    Iger led Disney for 15 years before stepping down in 2020.

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  • Infantino says double standard behind World Cup critics

    Infantino says double standard behind World Cup critics

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    DOHA, Qatar — FIFA president Gianni Infantino targeted European critics of World Cup host Qatar on Saturday and suggested a moral double standard in his home continent.

    Infantino listed Europe’s problems on the eve of Qatar kicking off its home tournament that has been dogged for years by criticism of the emirate’s record on human rights and treatment of migrant workers who built stadiums and infrastructure.

    “What we Europeans have been doing for the past 3,000 years we should be apologizing for the next 3,000 years before we start giving moral lessons to people,” Infantino said to hundreds of international media.

    He said Qatar and capital city Doha will be ready to host the “best World Cup ever.”

    “Today I feel Qatari,” Infantino said. “Today I feel Arab. Today I feel African. Today I feel gay. Today I feel a migrant worker.”

    Infantino related the criticism to bullying and discrimination he said he experienced as a child of Italian parents who moved to work in Switzerland.

    He said European nations now closed its borders to immigrants who wanted to work there, whereas Qatar had offered opportunities to workers from India, Bangladesh and other southeast Asian nations through legal channels.

    Migrant laborers who built Qatar’s World Cup stadiums often worked long hours under harsh conditions and were subjected to discrimination, wage theft and other abuses as their employers evaded accountability, London-based rights group Equidem said in a 75-page report released this month.

    Under heavy international scrutiny, Qatar has enacted a number of labor reforms in recent years that have been praised by Equidem and other rights groups. But advocates say abuses are still widespread and that workers have few avenues for redress.

    “What has been put on the table in the past few months is something quite incredible,” the FIFA leader said of criticism of Qatar from Western media.

    ———

    AP World Cup coverage: https://apnews.com/hub/world-cup and https://twitter.com/AP—Sports

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  • Read Elon Musk’s Friday emails to Twitter engineers asking them to come to the office

    Read Elon Musk’s Friday emails to Twitter engineers asking them to come to the office

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    The Twitter logo is displayed on the exterior of Twitter headquarters on October 26, 2022 in San Francisco, California.

    Justin Sullivan | Getty Images

    After Twitter told employees it would be closing its offices until Monday, new owner and CEO Elon Musk has called engineering staff into the San Francisco headquarters office, according to internal emails obtained by CNBC.

    Late Thursday, Twitter sent out a companywide email saying its offices would be closed from Friday until Monday, and badge access would cut off during that temporary closure.

    Then, in a pair of widely distributed emails sent at the start of business Friday, Musk called for “anyone who actually writes software” to report to Twitter’s headquarters by Friday afternoon. First, though, he asked them to send him a high-level report of the best code they have worked on in the last six months.

    After the initial call for engineers to come into the office, he also sent a follow-up encouraging people to fly to San Francisco to present in person. He said, in one of his emails, he would be working late into the night at the company’s headquarters office Friday and again on Saturday morning.

    Musk said the point of sharing all this code and meeting with him in the office would be to do “short, technical interviews” that would help him “better understand the Twitter tech stack.”

    Musk said those authorized to work remotely could request to speak with him by video. But quixotically he also said, “Only those who cannot get to Twitter HQ or have a family emergency are excused.”

    The mixed messages on returning to the office come after a wave of Twitter employees resigned Thursday.

    Their new “Chief Twit,” as Musk humorously calls himself, had issued an ultimatum a day earlier telling them they would need to commit to his vision for Twitter 2.0, and agree to work “long hours at high intensity.”

    Three employees who resigned Thursday told CNBC they still had access to some internal systems at Twitter on Friday morning.

    One believed that so many people from Twitter’s human resources and IT teams had resigned or been laid off that it may take a long time for the company to figure out whose access to email, Slack and other systems should be switched off.

    These people asked to remain unnamed, citing fear of professional repercussions.

    Here are the emails sent from Elon Musk to employees at Twitter early on Friday (transcribed by CNBC) over the first few hours of the business day in San Francisco:

    From: Elon Musk

    To: Team

    Subj. All Software Engineers

    Date: Nov. 18, 2022 [time stamp removed]

    Anyone who actually writes software, please report to the 10th floor at 2 p.m. today.

    Before doing so, please email me a bullet point summary of what your code commits have achieved in the past 6 months, along with up to 10 screenshots of the most salient lines of code. 

    Thanks,

    Elon

    From: Elon Musk

    To: Team

    Subj. All Software Engineers

    Date: Nov. 18, 2022 [time stamp removed]

    If you’re working remotely, please email the request below nonetheless and I will try to speak to you via video. Only those who cannot physically get to Twitter HQ or have a family emergency are excused.

    These will be short, technical interviews that allow me to better understand the Twitter tech stack.

    Thanks,

    Elon

    From: Elon Musk

    To: Team at Twitter

    Subj. All Software Engineers

    Date: Nov. 18, 2022 [time stamp removed]

    If possible, I would appreciate it if you could fly to SF to be present in person. I will be at Twitter HQ until midnight and then back again tomorrow morning.

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