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.
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.
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.
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.”
Laid-off employees at Twitter’s Africa headquarters are accusing Twitter of “deliberately and recklessly flouting the laws of Ghana” and trying to “silence and intimidate” them after they were fired.
The team has hired a lawyer and sent a letter to the company demanding itcomply with the West African nation’s labor laws, provide them with additional severance pay and other relevant benefits, in line with what other Twitter employees will receive.
They have also petitioned the Ghanaian government to compel Twitter to “adhere to the laws of Ghana on redundancy and offer the employees a fair and just negotiation and redundancy pay,” according to a letter to the country’s Chief Labour Officer obtained by CNN.
“It is clear that Twitter, Inc. under Mr Elon Musk is either deliberately or recklessly flouting the laws of Ghana, is operating in bad faith and in a manner that seeks to silence and intimidate former employees into accepting any terms unilaterally thrown at them,” the letter states.
Twitter laid off all but one of the African employees just four days after the company opened a physical office in the capital Accra following Musk’s takeover. But the staff of about a dozen were not offered severance pay, which they say is required by Ghana’s labor laws, based on their employment contracts. They also claim they were not informed about the next steps — unlike employees in the United States and Europe — until a day after CNN reported on their situation.
CNN contacted Twitter for comment but received no response.
In the letter to Twitter Ghana Ltd, obtained by CNN, the African employees rejected a “Ghana Mutual Separation Agreement” from Twitter, which they say was sent to their personal emails offering final pay thatthe company claims to have been arrived at after a negotiation.
Several members of the team and their lawyer told CNN that there was no such negotiation on severance pay. They claim it was below what is required by law and contradicts what Musk tweeted that departing employees would receive.
“Everyone exited was offered 3 months of severance, which is 50% more than legally required,” Musk tweeted. Twitter informed the Ghana-based employees in early November that they would be paid until their last day of employment — December 4. And they will continue to receive full pay and benefits during the 30-day notice period.
“It was very vague, did not talk about outstanding leave or paid time off, and just asked us to sign if we agree. I never bothered to go back to the document because it is rubbish and is still in violation of labor laws here,” one former employee told CNN on condition of anonymity.
The Accra-based team accuses Twitter of dealing with them in bad faith, not being transparent, and discriminating against them compared to laid-off employees in other jurisdictions.
“The employees are distressed, humiliated, and intimidated by this turn of events. There are non-Ghanaian employees, some with young families, who moved here to take up jobs and have now been left unceremoniously in the lurch, with no provision for repatriation expenses and no way to communicate with Twitter, Inc. and discuss or plead their case,”the notice to Ghana’s Chief Labour Officer says.
Their attorney, Carla Olympio, says the sudden termination of almost the whole team violated Ghanaian employment law because it is considered a “redundancy” which requires three-month notice to authorities and a negotiation on redundancy pay.
“In stark contrast to internal company assurances given to Twitter employees worldwide prior to the takeover, it seems that little attempt was made to comply with Ghana’s labor laws, and the protections enshrined therein for workers in circumstances where companies are undertaking mass layoffs due to a restructuring or reorganization,” she wrote in a statement to CNN.
The employees said in their appeal to Ghana’s Chief Labour Officer that Twitter’s formal entry into the continent started with “great fanfare and with the support of the government,”and they expect similar attention to their plight now.
They are demanding 3 months’ gross salary as severance pay, repatriation expenses for non-Ghanaian staff, vesting of stock options provided in their contracts, and other benefits such as healthcare continuation that were offered to staff worldwide.
CNN has reached out to Ghana’s Employment and Labor Relations ministry for comment.
WILMINGTON, Del. — Tesla CEO Elon Musk took the witness stand Wednesday to defend himself in a shareholder lawsuit challenging a compensation package he was awarded by the company’s board of directors that is potentially worth more than $55 billion.
Musk denied that he dictated terms of the compensation package or attended any meetings at which the plan was discussed by the board, its compensation committee, or a working group that helped develop it.
“I was entirely focused on the execution of the company,” he said.
Plaintiff’s attorney Greg Varallo spent much of his early cross-examination trying to draw Musk into admitting that he controls Tesla to such an extent that he can sway the board to do his bidding. Among other things, Varallo questioned Musk about his title of “Technoking,” a role that Musk has previously noted comes with “panache” and “great dance moves.”
“I think comedy is legal,” Musk told Varallo, who had questioned whether Musk was “stone-cold sober” when he came up with the title.
Varallo also suggested that one of the reasons that Musk developed a “master plan” for Tesla was to let people know he was in charge. He also noted that Musk makes recommendations regarding compensation for senior executives, and that he unilaterally made the decision to pause Tesla’s policy of accepting bitcoin from vehicle purchasers.
“You’re asking complex questions that can’t be answered ‘yes’ or ‘no’,” Musk said when Varallo asked whether he came up with the vision for Tesla.
The lawsuit alleges that the performance-based stock option grant was negotiated by the compensation committee and approved by Tesla board members who had conflicts interest due to personal and professional ties to Musk, including investments in his companies. It also alleges the shareholder vote approving the compensation plan was based on a misleading proxy statement.
The shareholder plaintiff alleges that the proxy wrongly described members of the compensation committee as “independent,” and characterized all of the milestones that triggered vesting in the stock options as “stretch” goals meant to be difficult to achieve, even though internal projections indicated that three operational milestones were likely to be achieved within 18 months of the stockholder vote.
Attorneys for the defendants have noted that two institutional proxy advising firms that urged shareholders to reject the plan nevertheless noted that it would require “significant and perhaps historic achievements” and require growth that “appear stretching by any benchmark.”
The plan called for Musk to reap billions if Tesla hit certain market capitalization and operational milestones. For each incidence of simultaneously meeting a market cap milestone and an operational milestone, Musk, who owned about 22% of Tesla when the plan was approved, would get stock equal to 1% of outstanding shares at the time of the grant. His interest in the company would grow to about 28% if the company’s market capitalization grew by $600 billion.
Each milestone in the plan includes growing Tesla’s market capitalization by $50 billion and meeting aggressive revenue and pretax profit growth targets. Musk would receive the full benefit of the pay plan, $55.8 billion, only if Tesla hit a market capitalization of $650 billion and unprecedented revenue and earnings within a decade.
To date, Tesla has achieved all 12 of the market capitalization milestones and 11 operational milestones, resulting in the vesting of 11 of the grant’s 12 tranches and providing Musk over $52.4 billion in stock option gains, according to the lawsuit. Since the grant was awarded, Tesla’s market capitalization has increased from $59 billion to more than $613 billion now, having briefly hit $1 trillion early this year. Musk has sold Tesla stock to finance the Twitter purchase, adding downward pressure on the shares.
Shares of Tesla and other automakers have been battered this year, but the Austin, Texas, company earned $5.5 billion in 2021, blowing away the previous year’s profit of $721 million. It also produced a record 936,000 vehicles, nearly double vehicle production in 2020.
Attorneys for the plaintiff have suggested that incentivizing Musk to remain at Tesla’s helm by offering a huge compensation package was unnecessary, because he’s never suggested that he might leave. They’ve also suggested that Musk’s true motive in negotiating the package was to fund his dream to colonize Mars.
In a November 2017 email to former Tesla General Counsel Todd Maron, Musk expressed optimism that the compensation package would be seen in a favorable light.
“Given that this will all go to causes that at least aspirationally maximize the probability of a good future for humanity, plus all Tesla shareholders will be super happy, I think this will be received well,” he wrote, adding that “it should come across as an ultra bullish view of the future.”
While on the stand, Musk also said that he does not want to be the CEO of any company.
“I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” Musk said, according to multiple media reports.
NEW YORK — Donald Trump’s longtime finance chief took the witness stand Tuesday at the Trump Organization’s criminal tax fraud trial, making his long-awaited turn as the star prosecution witness after pleading guilty to evading taxes on $1.7 million in company-paid perks, including a Manhattan apartment and luxury cars.
Allen Weisselberg, a senior adviser and former chief financial officer at Trump’s company, has intimate knowledge of the company’s financial dealings from his nearly five decades working there. But he is not expected to implicate Trump or any members of the Trump family in his testimony.
Weisselberg’s testimony is required as part of a plea agreement he reached in August. If he testifies truthfully and meets other terms of the deal, he’ll be sentenced to five months in jail and could be released with good behavior after about 100 days. Otherwise, he could be sentenced to up to 15 years in prison.
Weisselberg will remain free on bail until he is formally sentenced following the company’s trial.
The Trump Organization — the entity through which former President Donald Trump manages his real estate holdings, marketing deals and other ventures — is accused of helping some top executives avoid paying income taxes on compensation they got in addition to their salaries over a 15-year span.
Prosecutors argue that the Trump Organization — through its subsidiaries Trump Corp. and Trump Payroll Corp. — is liable for the scheme because Weisselberg, the longtime finance chief, was a “high managerial agent” entrusted to act on behalf of the company and its various entities.
In pleading guilty, the 75-year-old Weisselberg pinned blame for the scheme on himself and other top company executives, including senior vice president and controller, Jeffrey McConney, who testified for the trial’s first five days.
The Trump Organization has denied wrongdoing. Its lawyers allege that Weisselberg concocted the scheme on his own, without Trump or the Trump family’s knowledge, and that the company didn’t benefit from his actions. If convicted, the company could be fined more than $1 million.
The company’s lawyers spent part of Monday and Tuesday’s court sessions attempting to preempt Weisselberg testimony, using their cross-examination questioning to underscore their assertion that others at the company, including Trump, knew nothing about the scheme.
The first two prosecution witnesses — McConney and company accounts payable supervisor Deborah Tarasoff — portrayed Weisselberg as a rogue agent who stressed secrecy about his various financial arrangements.
Both witnesses worked under Weisselberg, and both testified that they aided him in hiding benefits — telling jurors that they were just following orders. Tarasoff agreed with a defense lawyer’s description of Weisselberg as an exacting, authoritarian but deeply trusted micromanager.
Tarasoff said she prepared company checks for Weisselberg to pay his apartment rent and car lease payments. She said she prepared checks from Trump’s private account to pay tuition for private schooling for Weisselberg’s grandchildren.
In September 2016, as Trump’s presidential election neared, Tarasoff said Weisselberg ordered her to start deleting notations about some of the transactions in the company’s bookkeeping system. Tarasoff said she didn’t think Weisselberg was asking her to do anything illegal. But even if he had, she said: “I guess I would because he’s the boss and he told me to do it.”
Weisselberg is the only person to face criminal charges so far in the Manhattan district attorney’s investigation of the company.
Weisselberg started working for the company in 1973, when it was run by Trump’s father, Fred. Following his July 2021 arrest, the company changed his title from CFO to senior adviser. The CFO position remains vacant.
Prosecutors alleged that the Trump Organization gave untaxed fringe benefits to senior executives, including Weisselberg, for 15 years. Weisselberg alone was accused of defrauding the federal government, state and city out of more than $900,000 in unpaid taxes and undeserved tax refunds.
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President Joe Biden’s federal student loan forgiveness program, which promises to deliver up to $20,000 of debt relief for millions of borrowers, is on hold indefinitely as legal challenges work their way through the courts.
About 26 million people had already applied by the time a federal district court judge struck down the program on November 10 – prompting the government to stop taking applications. No debt has been canceled thus far.
The administration officially launched the application on October 17, following a brief “beta period” during which its team assessed whether tweaks were needed.
If the courts ultimately allow the program to move forward, not every student loan borrower is eligible for the debt relief. First, only federally held student loans qualify. Private student loans are excluded.
Second, high-income borrowers are generally excluded from receiving debt forgiveness. Individual borrowers who make less than $125,000 a year and married couples or heads of households who make less than $250,000 annually will see up to $10,000 of their federal student loan debt forgiven.
If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 of debt forgiveness. Pell grants are awarded to millions of low-income students each year, based on factors including their family’s size and income and the cost charged by their college. These borrowers are also more likely to struggle to repay their student debt and end up in default.
Here’s what else borrowers need to know about the new student loan forgiveness plan:
It’s unclear when, or if, borrowers will see debt relief under Biden’s program.
Administration officials expected to be able to grant relief before federal student loan payments are set to resume in January, when the pandemic-related pause expires. But now that timeline is in jeopardy.
The White House has said that it has already approved 16 million applications for debt relief. The Department of Education will hold on to that information so it can quickly process those borrowers’ relief if the government prevails in court.
If and when the program moves forward, an estimated 8 million borrowers may receive debt relief automatically because the Department of Education already has their income on file.
Applicants can expect to receive an email confirmation once their application is successfully submitted. Then, borrowers will be notified by their loan servicer when the debt cancellation has been applied to their account.
Borrowers were expected to have until December 31, 2023, to submit an application.
There are a variety of federal student loans and not all are eligible for relief. Federal Direct Loans, including subsidized loans, unsubsidized loans, parent PLUS loans and graduate PLUS loans, are eligible.
But federal student loans that are guaranteed by the government but held by private lenders are not eligible unless the borrower applied to consolidate those loans into a Direct Loan by September 29.
The Department of Education initially said these privately held loans, many of which were made under the former Federal Family Education Loan program and Federal Perkins Loan program, would be eligible for the one-time forgiveness action – but reversed course in September when six Republican-led states sued the Biden administration, arguing that forgiving the privately held loans would financially hurt states and student loan servicers.
Defaulted Federal Family Education Loans and defaulted Perkins Loans are still eligible for the debt relief even if they are privately held.
If Biden’s program is allowed to move forward, eligibility is based on a borrower’s adjusted gross income for either tax year 2020 or 2021. Adjusted gross income can be lower than your total wages because it considers tax deductions and adjustments, like contributions made to a 401(k) retirement plan.
A taxpayer’s adjusted gross income can be found on line 11 of IRS Form 1040.
The Department of Education says it already had income information for nearly 8 million borrowers, likely because of financial aid forms or previously submitted income-driven repayment plan applications. If the program is allowed to move forward, those borrowers will automatically receive the debt relief if they meet the income requirement, unless they choose to opt out. The department has said it will email borrowers who will be considered for debt relief but don’t need to apply.
Millions of other borrowers will need to apply for student loan forgiveness if the Department of Education doesn’t have their income information on file. When they submit the application, borrowers are required to self-attest that their income is under the eligibility threshold. They are required to certify that the information provided is accurate upon penalty of perjury.
The Biden administration has said that applicants who are “more likely to exceed the income cutoff” will be required to submit additional information, like a tax transcript. Officials expect that just 5% of borrowers with eligible federal student loans would not qualify due to the income threshold.
Borrowers will not have to pay federal income tax on the student loan debt forgiven, thanks to a provision in the American Rescue Plan Act that Congress passed last year.
But it’s possible that some borrowers may have to pay state income tax on the amount of debt forgiven. There are a handful of states that may tax discharged debt if state legislative or administrative changes are not made beforehand, according to the Tax Policy Center. The tax liability could be hundreds of dollars, depending on the state.
Yes, some current students are eligible. Eligibility for borrowers who filed the Free Application for Federal Student Aid, known as the FAFSA, as an independent will be based on the individual’s own household income.
Eligibility for borrowers who are enrolled as dependent students, generally those under the age of 24, will be based on parental income for either 2020 or 2021.
Yes, if your income meets the eligibility threshold.
Yes, if your income meets the eligibility threshold. A parent borrower with federal Parent PLUS loans for multiple children is still only eligible for up to $20,000 of loan forgiveness.
But a parent is only eligible for up to $20,000 in debt relief if he or she received a Pell grant for his or her own education. If only the child received a Pell grant, the parent is eligible for up to $10,000 in forgiveness.
Most borrowers can log in to Studentaid.gov to see if they received a Pell grant while enrolled in college. Information about Pell grants received is displayed on the account dashboard and on the My Aid page. This is also where borrowers can find out how much they owe and what kind of loans they have.
Borrowers who received a Pell grant before 1994 won’t see their Pell grant information online, but they are still eligible for the $20,000 in student loan forgiveness.
As long as borrowers received at least one Pell grant, they are eligible.
The Biden administration has said that eligible borrowers who have received Pell grants will automatically receive the additional debt relief.
Yes, defaulted federal student loans are eligible for debt relief.
For borrowers who have a remaining balance on their defaulted student loans after the cancellation is applied, there will be an opportunity to get out of default once payments resume in January 2023 as part of what the Department of Education is calling its “Fresh Start” initiative.
The Biden administration is facing several lawsuits over the student loan forgiveness program. Many of the plaintiffs argue that the Department of Education is overstepping its authority.
In one case, a federal judge in Texas struck down the program on November 10, declaring it illegal. The Department of Justice has appealed the ruling to the 5th US Circuit Court of Appeals, but debt relief is on hold while that case plays out.
Previously, the 8th US Circuit Court of Appeals put a temporary, administrative hold on the program on October 21, barring the administration from canceling loans covered under the policy while the court considers a challenge brought by six Republican-led states. The appeals court then granted an injunction on the program on November 14, which will remain in place until the appeals court, or the Supreme Court, issues a further order in the case.
A lower court judge dismissed the lawsuit on October 20, ruling that the plaintiffs did not have the legal standing to bring the challenge.
On the same day as the lower court dismissal, Supreme Court Justice Amy Coney Barrett rejected a separate challenge to Biden’s student loan forgiveness program, declining to take up an appeal brought by a Wisconsin taxpayers group.
The Biden administration is also facing lawsuits from Arizona Attorney General Mark Brnovich and the Cato Institute, a libertarian think tank.
Lawyers for the government say that Congress gave the secretary of education “expansive authority to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies,” like the Covid-19 pandemic, according to a memo fromthe Department of Justice.
Borrowers who have debt remaining after either $10,000 or $20,000 is wiped away could see their monthly payment amounts recalculated if they are enrolled in a standard repayment plan. Under a standard repayment plan, borrowers pay a fixed amount that ensures loans are paid off within 10 years.
Borrowers who are already enrolled in an income-driven repayment plan are not likely to see their monthly payment amounts change due to the forgiveness, because their payments are based on household income and family size.
Borrowers have not been required to make payments on their federal student loans since March 2020 because of the government’s pandemic-related pause. Biden has extended the pause through the end of this year, and payments will resume in January 2023.
Along with Biden’s August announcement about canceling some federal student loan debt, he also said he would create a new plan that would make repayment more manageable for borrowers.
There are currently several repayment plans available for federal student loan borrowers that lower monthly payments by capping them at a portion of their income.
The new income-driven repayment plan that Biden is expected to propose would cap payments at 5% of a borrower’s discretionary income, down from 10% that is offered in most current plans, as well as reduce the amount of income that is considered discretionary. It would also forgive remaining balances after 10 years of repayment, instead of 20 years.
Biden is also proposing that the new plan cover the borrower’s unpaid monthly interest. This could be very helpful for people whose monthly payments are so low that they don’t cover their monthly interest charge and end up seeing their balances explode, growing larger than what was originally borrowed.
But we don’t know when these changes will take effect. The Department of Education has not provided any sense of timing, but has said it will propose a new rule to create the repayment plan. The department’s formal rule-making process usually includes soliciting public comments and can take months, if not more than a year.
Yes. Borrowers have not been required to make payments on their federal student loans since March 13, 2020, because of the pandemic-related pause. But if borrowers did make payments, they are allowed to contact their loan servicer to request a refund.
This story has been updated with additional information.
NEW YORK — Some 250 copy editors, marketing assistants and other employees at HarperCollins Publishers went on strike Thursday, with the two sides differing over wages and benefits, diversity policy and union protection. It was a rare work stoppage in book publishing, where HarperCollins is the only company among the industry’s so-called “Big Five” to have a labor union.
“We feel really good about we’re doing and the spirit we’re doing it with,” said Carly Katz, an audio coordinator at HarperCollins and one of more than 100 striking staff members who picketed outside of the publisher’s offices in downtown Manhattan.
“We feel like this is the kind of action we need to take to make things happen,” said Parrish Turner, an editorial assistant in the children’s division of HarperCollins.
The HarperCollins union, Local 2110 of the United Auto Workers, struck for one day last summer and this time plans to stay out indefinitely until an agreement is reached. Employees had been working without a contract since April.
“HarperCollins has agreed to a number of proposals that the United Auto Workers Union is seeking to include in a new contract,” a HarperCollins spokesperson said in a statement. “We are disappointed an agreement has not been reached and will continue to negotiate in good faith.”
No new negotiations are currently scheduled.
The strikers represent a small percentage of HarperCollins’ worldwide personnel, which totals around 4,000. The publisher is owned by Rupert Murdoch’s News Corp. and earlier this fall laid off a “small number” of employees, citing cost management and uncertainly about the publishing market. This week, News Corp. reported an 11 percent drop in sales for HarperCollins during the fiscal first quarter, citing the strong U.S. dollar and warehousing issues at Amazon.com as factors.
In recent years, entry- and mid-level employees throughout publishing have been increasingly vocal on social media about their unhappiness with wages, workloads and diversity. Book publishing has long been a predominantly white, low-paying industry, and starting salaries remain below $50,000 at many companies, making it increasingly difficult for staffers to afford to live in New York City.
Numerous authors and agents have expressed support for the union. Tara Gonzalez of the Erin Murphy Literary Agency tweeted that she would send no submissions to HarperCollins until an agreement was reached. During the walkout in July, Neil Gaiman noted that he was published by HarperCollins in the U.S. and tweeted “I hope that the terrific people working there, who get my books made and onto the shelves, succeed in their demands.”
In a company memo sent last week and since widely circulated, Zandra Magariño, the publisher’s senior vice president for personnel, wrote that “While our goal remains to reach agreement on a fair contract with the United Auto Workers Union that is beneficial to both parties, HarperCollins has implemented plans to ensure that operations continue uninterrupted during a potential strike.”
Union representation at HarperCollins long precedes the ownership of Murdoch, who purchased what was then Collins and Harper & Row in the 1980s. In 1974, employees at Harper & Row went on strike for 2 1-2 weeks before agreeing to a new contract.
While few publishers have unions, organizing efforts have grown sharply at independent bookstores around the country, with employees citing the pandemic as making them more sensitive to working conditions. Moe’s Books in Berkeley, California and McNally Jackson stores in New York City are among the sellers whose staffers have formed or joined unions.
OMAHA, Neb. — Another one of the 12 railroad unions narrowly approved its deal with the major freight railroads Saturday, offering some hope that the contract dispute might be resolved without a strike even though two other unions rejected their agreements last month.
Now that 52% of International Association of Machinists and Aerospace Workers members who voted approved their deal, seven railroad unions have ratified contracts that include 24% raises and $5,000 in bonuses, but all 12 have to approve contracts to prevent a strike.
Concerns remain about the possibility of an economically devastating strike because the Brotherhood of Maintenance of Way Employes Division and Brotherhood of Railroad Signalmen unions voted down their contracts, and many workers say these deals just don’t address their quality-of life concerns. No strike is imminent because those unions agreed to return to the bargaining table to try to work out a new deal, but those talks have been deadlocked over the unions’ demands for paid sick time and there is a Nov. 19 deadline.
The railroads have rejected union demands for paid sick time because they say the deals they’ve been offering include higher wages that are intended to compensate workers for the lack of sick time and their other quality of life concerns. The railroads want any deal to closely follow the recommendations made this summer by a special panel of arbitrators that President Joe Biden appointed.
The railroads have also maintained that the unions have agreed over the years to forego paid sick leave in favor of better wages and strong short-term disability benefits.
The group that negotiates on behalf of Norfolk Southern, Union Pacific, BNSF, Kansas City Southern, CSX and other railroads said the deal the Machinists approved includes “the largest wage package in nearly five decades” and implements the recommendations the Presidential Emergency Board made.
The deal the Machinists approved this weekend was the second one they voted on after rejecting their first agreement. This one includes all the raises and an additional paid leave day that was in the original deal, but it also included several additional benefits including a cap on health insurance expenses, an agreement that the railroads will study how much overtime employees are being forced to work and a promise that each railroad will negotiate individually over expense reimbursement.
The railroads also promised the Machinists that they won’t force workers to share hotel rooms when they’re on the road for work.
“Our union recognizes that the agreement wasn’t accepted overwhelmingly, so our team will continue conversing with our members at our rail yards across the nation,” the Machinists union’s District 19 unit said in a statement. “This agreement is the first step in addressing some of the issues in our industry. Our fight was able to shine a light on the work-life balance issues as well as the lack of proper paid sick leave.”
Three other unions are scheduled to vote later this month, including the largest ones that represent engineers and conductors.
The workers represented by the Machinists union generally have more regular schedules than the engineers and conductors who say the railroads’ strict attendance policies keep them on call 24/7. And the Brotherhood of Locomotive Engineers and Trainmen and the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers unions won’t even release the results of their votes until after the current Nov. 19 deadline in the BMWED talks.
Because of the fears about a possible strike, business groups have urged Biden and Congress to be ready to intervene if both sides can’t reach an agreement. Biden played an active role in securing these original deals back in September, and Congress has the power to block a strike and impose terms on the workers if there is a walkout.
NEW YORK — For years, as Donald Trump was soaring from reality TV star to the White House, his real estate empire was bankrolling big perks for some of his most trusted senior executives, including apartments and luxury cars.
Now Trump’s company, the Trump Organization, is on trial this week for criminal tax fraud — on the hook for what prosecutors say was a 15-year scheme by top officials to hide the plums and avoid paying taxes.
Opening statements and the first witnesses are expected Monday in New York. Last week, 12 jurors and six alternates were picked for the case, the only criminal trial to arise from the Manhattan district attorney’s three-year investigation of the former president.
Among the key prosecution witnesses: Trump’s longtime finance chief Allen Weisselberg, who pleaded guilty and has agreed to testify against the company in exchange for a five-month jail sentence.
If convicted, the Trump Organization could be fined more than $1 million and could face difficulty in securing new loans and deals. Some partners and government entities could seek to cut ties with the company. It could also hamper its ability to do business with the U.S. Secret Service, which sometimes pays the company for lodging and services while protecting Trump as a former president.
Neither Trump nor any of his children who have worked as Trump Organization executives are charged or accused of wrongdoing. Trump is not expected to testify or even attend the trial.
Prosecutors have said they do not need to prove Trump knew about the scheme to get a conviction and that the case is “not about Donald Trump.” But a defense lawyer, William J. Brennan, said even if he’s not physically there, Trump is “ever present, like the mist in the room.”
That’s because Trump is synonymous with the Trump Organization, the entity through which he manages his many ventures, including his investments in golf courses, luxury towers and other real estate, his many marketing deals and his TV pursuits.
Trump signed some of the checks at the center of the case. His name is on memos and other company documents. Witnesses could testify about conversations they had with Trump. They are even expected to enter Trump’s personal general ledgers as evidence.
Prosecutors say The Trump Organization — through its subsidiaries Trump Corp. and Trump Payroll Corp. — is liable in part because former Weisselberg was a “high managerial agent” entrusted to act on behalf of the company and its various entities.
The Trump Organization has said it did nothing wrong. The company’s lawyers argue that Weisselberg and other executives acted on their own and that, if anything, their actions harmed the company financially.
Weisselberg, who has pleaded guilty to taking $1.7 million in off-the-books compensation, pinned blame on himself and other top Trump Organization executives, including senior vice president and controller Jeffrey McConney.
But he disagreed with the notion that the company was harmed, saying the perks actually saved the company money because it avoiding having to give raises.
Prosecutors have said they expect to call 15 witnesses, including Weisselberg and McConney, who was granted limited immunity to testify last year before a grand jury.
Judge Juan Manuel Merchan expects the trial to take at least four weeks, though a defense lawyer estimated last week that the prosecution case alone could go on for two months. Court will meet for a full day on Mondays, Tuesdays and Thursday and for a half-day on Friday. The trial is off on Wednesday so the judge can attend to other matters.
OMAHA, Neb. — The U.S.’s third largest railroad union rejected a deal with employers Monday, renewing the possibility of a strike that could cripple the economy. B oth sides will return to the bargaining table before that happens.
Over half of track maintenance workers represented by the Brotherhood of Maintenance of Way Employes Division who voted opposed the five-year contract despite 24% raises and $5,000 in bonuses. Union President Tony Cardwell said the railroads didn’t do enough to address the lack of paid time off — particularly sick time — and working conditions after the major railroads eliminated nearly one-third of their jobs over the past six years.
“Railroaders are discouraged and upset with working conditions and compensation and hold their employer in low regard. Railroaders do not feel valued,” Cardwell said in a statement. “They resent the fact that management holds no regard for their quality of life, illustrated by their stubborn reluctance to provide a higher quantity of paid time off, especially for sickness.”
The group that represents the railroads in negotiations said they were disappointed the union rejected the agreement, but emphasized that no immediate threat of a strike exists because the union agreed to keep working for now.
Four other railroad unions have approved their agreements with freight railroads including BNSF, Union Pacific, Kansas City Southern, CSX and Norfolk Southern, but all 12 unions representing 115,000 workers must ratify their contracts to prevent a strike. Another union, the International Association of Machinists and Aerospace Workers, initially rejected its deal but has since renegotiated a new contract. Voting will be completed in mid-November.
President Joe Biden pressured the railroads and unions to reach a deal last month ahead of a mid-September deadline to allow a strike or walkout. Many businesses also urged Congress to be ready to intervene in the dispute and block a strike if an agreement wasn’t reached because so many companies rely on railroads to deliver their raw materials and finished products.
In general, the deals the unions agreed to closely follow the recommendations a special panel of arbitrators that Biden appointed made this summer. That Presidential Emergency Board recommended what would be the biggest raises rail workers have seen in more than four decades, but it didn’t resolve the unions’ concerns about working conditions. Instead it said the unions should pursue additional negotiations or arbitration that can take years with each railroad individually.
The Brotherhood of Maintenance of Way union said it agreed to delay any strike until five days after Congress reconvenes in mid November to allow time for additional negotiations.
Quality of life issues took center stage at the end of these negotiations, with unions representing conductors and engineers holding out until the end for three unpaid leave days a year for medical appointments and a promise that railroads will negotiate further about giving those employees regularly scheduled days off when they aren’t on call. Engineers and conductors have complained that strict attendance policies make it hard to take any time off.
Track maintenance workers in the BMWED generally have more regular schedules than engineers and conductors, but all the rail unions have objected to the lack of paid sick time in the industry — particularly after working to keep trains moving throughout the pandemic.
Rutgers University professor Todd Vachon, who teaches labor relations classes, said he’s not entirely surprised the contract was rejected given how emboldened union members feel to fight for better working conditions amidst the current worker shortage.
“The biggest sticking issue is quality of life — especially access to paid time off and paid sick time. If the railroads can make some movement in that area, it will likely go a long way with rail workers who currently feel they are not being respected by their employers,” Vachon said. “Wages and resource allocation are one important part of contract negotiations, but feeling respected by one’s employer remains one of the top reasons that workers form and join unions.”
Although a strike is now possible, Vachon said he’s not too worried yet because both sides have more than a month to reach a new agreement.
Though people are returning to in-office work, the option for remote work remains high and is likely to keep growing.
The share of jobs that explicitly say workers can be remote has nearly tripled from pre-pandemic, from roughly 4% of in 2019 to nearly 12% of jobs in 2022, according to ZipRecruiter data.
Some previous growth is now reversing as people resume in-person activities, particularly in education, tourism, agriculture and sports and recreation jobs, according to the job-search platform. Remote roles in business, arts and entertainment, and finance and insurance have leveled off throughout the last two years.
But elsewhere, remote opportunities are rapidly expanding: technology, legal, engineering and science jobs are well-suited for remote work, and organizations — especially in health care, financial services and tech — are continuing to offer them.
Here are the top 10 companies hiring for the largest share of remote-capable jobs on ZipRecruiter in 2022:
Anthem: 60,445 remote jobs listed this year
CBRE: 51,304 remote jobs listed this year
USAA: 42,311 remote jobs listed this year
Capital One: 36,336 remote jobs listed this year
Cerebral: 34,526 remote jobs listed this year
Change Healthcare: 30,602 remote jobs listed this year
Meta: 29,052 remote jobs listed this year
SAP: 282,62 remote jobs listed this year
Kronos: 25,965 remote jobs listed this year
SelectQuote: 25,799 remote jobs listed this year
Upwards of 60% of job seekers hope to find remote opportunities, according to ZipRecruiter data. And a similar share, 56%, of full-time U.S. workers — more than 70 million people — say their job can be done working remotely from home, according to Gallup.
Women are more likely than men to prefer remote work, and Black, Asian American and Latino workers are more likely than white peers to want the setup, per ZipRecruiter. Workplace experts have said throughout the pandemic that a greater adoption of flexible work arrangements could help boost company diversity, equity and inclusion efforts.
Since the beginning of 2022, workers say Covid concerns are becoming less of a reason for wanting to work remotely, but a desire to save on commuting costs has gone up considerably. The typical job-seeker would even take a 14% pay cut in order to work remotely, with younger workers and higher earners willing to give up even more for the flexibility.
Looking ahead, Gallup estimates 55% of jobs in the future will be done in a hybrid setup, and 22% will be done fully remote — nearly three times the share of exclusively remote jobs available before the pandemic. It projects just 23% of jobs will be done exclusively from a worksite, down from 60% of solely in-person work done in 2019.
Amazon on Wednesday said it is raising the average starting pay for its warehouse workers and delivery drivers to more than $19 an hour, up from $18 previously, at a time when union pushes continue to spread across several of its facilities.
With the increase, which takes effect next month, Amazon’s frontline employees in the United States will earn between $16 and $26 per hour depending on their position and location in the country, the company said.
Amazon is investing nearly $1 billion in the pay increase and other worker benefits, according to the company.
The announcement comes ahead of the busy holiday season for the e-commerce giant, and as rising inflation has more broadly been eroding Americans’ take-home pay.
The moves also come as Amazon has confronted labor organizing efforts at multiple warehouses, much of which was borne out of workers’ frustration with how the company treated them during the pandemic as well as increased national attention to racial justice and equity.
Workers at a warehouse in Staten Island, New York, made history earlier this year when they voted to form the company’s first US labor union. Another union election at an Amazon facility near Albany, New York, is set to take place next month. These workers are seeking to unionize with the same grassroots worker group, Amazon Labor Union, that succeeded in Staten Island.
Through organizing efforts, Amazon workers have been seeking higher wages, job security, improved conditions at facilities and to have more of a voice in their workplace.
In addition to the wage increase, the company said Wednesday that it is expanding its pay access program, dubbed Anytime Pay, to all employees across its US operations. The program provides Amazon employees access to up to 70% of their eligible earned pay whenever they choose during the month, and without fees. Previously, most Amazon employees received their paychecks once or twice monthly.
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.
New York CNN Business
—
Investors, economists and members of the Federal Reserve will be poring over the September jobs report on Friday morning for clues about the health of the economy. But one figure may matter more than most…and it’s not the number of jobs added or the unemployment rate. It’s wage growth.
Inflation is not just a function of the price of oil and other commodities and production costs like manufacturing and shipping. How much workers take home in their paychecks is also a big part of the inflation picture.
When people have more money in their wallets (virtual or good old-fashioned leather ones), they tend to be more willing to spend it. That gives companies additional flexibility to raise prices.
Average hourly wages rose 5.2% over the past 12 months according to the August jobs report. That’s down from a 2022 peak growth rate of 5.6% in March.
Companies can’t raise prices as much if workers are making less or they risk big destruction in demand.
The problem is that wage growth above 5% is still historically high. Before the pandemic, wages typically rose just 3% year-over-year. But labor shortages, due to Covid-19 and people dropping out of the workforce, shifted power from employers to employees when it came to worker pay.
That’s another reason why companies have continued to raise prices: To offset rising costs.
The government reported Friday that its preferred inflation metric, personal consumption expenditures (PCE), rose 6.2% from a year ago in August. That was lower than July’s reading.
But the so-called core PCE figure, which excludes food and energy prices, rose 4.9% through August, up from a 4.7% increase in July.
What’s more, the Fed typically is looking for just a 2% growth rate in the headline PCE number as a sign of price stability. That’s not going to happen anytime soon. In fact, the Fed’s latest forecasts suggest that the central bank thinks PCE will rise 5.4% this year, up from projections of 5.2% in June.
“I don’t see anything in the near-term to give the Fed tons of comfort that inflation is on the trajectory to 2%,” said David Petrosinelli, senior trader with InspireX. “Wages will remain elevated and that will keep the Fed in a pickle.”
“Wages are a real pain point. People are paying more but not making more,” said Marta Norton, chief investment officer of the Americas with Morningstar Investment Management. With that in mind, Norton said there is a “higher probability of stagflation.”
Stagflation is the nasty economic combination of stagnant growth and persistent inflation.
Retail sales have held up relatively well despite inflation pressures, but Norton warns that can’t last forever. American shoppers would eventually reach their breaking point and just start buying essentials. A slowdown in consumption will inevitably lead to lower prices…but also slower economic growth.
“Inflation is its own cure. Consumers have the power to spend or not spend,” she said.
The third quarter is mercifully over. It’s been another doozy for the market. September in particular was bleak. It was the worst month for the Dow since the start of the pandemic in March 2020.
But even though we’re seemingly in a bear market for everything as bonds, gold and bitcoin have all tumbled this year as well, there are some hopeful signs for the next few months.
The fourth quarter is typically a festive time on Wall Street. Investors tend to buy stocks in anticipation of robust consumer shopping during the holidays. Businesses typically spend more as well to flush out those yearly budgets. And major companies also often give rosy guidance in October about earnings expectations for the coming year.
“October has been a turnaround month—a ‘bear killer’ if you will,” said Jeff Hirsch, editor-in-chief of the Stock Trader’s Almanac, in a recent blog post.
Hirsch added that a dozen bear markets since World War II have ended in the month of October. And of those twelve, seven market bottoms happened during midterm election years.
Traders will definitely be keeping close tabs on Washington this fall to see if Republicans gain control of the House. That could lead to more gridlock in DC, which investors tend to like.
Whether or not Corporate America and investors are going to be so bullish this October is up for debate given the concerns about inflation, interest rates and the global economy. After all, October is also famous for huge crashes, most recently in 2008 but also in 1987 and, of course, 1929.
So stocks definitely could take another turn for the worse. But experts are hopeful that the end of the bear market is in sight.
“We’re nearer to a bottom,” said Christopher Wolfe, chief investment officer of First Republic Private Wealth Management. “A lot of quality companies are on sale. It’s a time to be patient and reposition.”
Monday: US ISM manufacturing; China stock markets closed all week
Tuesday: US job openings and labor turnover (JOLTS); Japan inflation; Australia interest rate decision
Wednesday: US ADP private sector jobs; US ISM services; OPEC+ meeting
Thursday: US weekly jobless claims; earnings from ConAgra
(CAG), Constellation Brands
(STZ), McCormick
(MKC) and Levi Strauss
(LEVI)
Friday: US jobs report; Germany industrial production; earnings from Tilray
(TLRY)
OAKLAND, Calif. — Former executives and directors of Pacific Gas & Electric have agreed to pay $117 million to settle a lawsuit over devastating 2017 and 2018 California wildfires sparked by the utility’s equipment, it was announced Thursday.
The settlement was announced by the PG&E Fire Victim Trust, which was established to handle claims filed by more than 80,000 victims of deadly wildfires ignited by PG&E’s rickety electrical grid. The trust’s lawsuit, filed last year, alleged that former officers and board members neglected their duty to ensure the utility’s equipment wouldn’t kill people.
The complaint was an offshoot of a $13.5 billion settlement that PG&E reached with the wildfire victims while the utility was mired in bankruptcy from January 2019 through June 2020.
As part of that deal, PG&E granted the victims the right to go after the utility’s hierarchy leading up to and during a series of wind-driven wildfires that killed more than 100 people and destroyed more than 25,000 homes and businesses, including the 2018 Camp Fire, which killed 85 people and destroyed much of the town of Paradise in Butte County.
PG&E pleaded guilty to 84 felony counts of involuntary manslaughter for causing the fire and was fined $4 million, the maximum penalty allowed.
All told, PG&E has been blamed for more than 30 wildfires since 2017 that wiped out more than 23,000 homes and businesses and killed more than 100 people.
Those sued by the fire trust included two of PG&E’s former chief executives, Anthony Earley and Geisha Williams, who were paid millions of dollars during their terms, and former board members. They were covered by liability insurance secured by the utility, the trust has said.
PG&E is the nation’s largest utility, with an estimated 16 million customers in central and Northern California.
In a statement, PG&E said the settlement is “another step forward in PG&E’s ongoing effort to resolve issues outstanding from before its bankruptcy and to move forward focused on our commitments to deliver safe, clean and reliable energy to our customers, and to continue the important work of reducing risk across our energy system.”
The settlement money won’t go to fire victims. Instead, under a bankruptcy court order, the money will be used to satisfy “the vast majority” of claims made by federal agencies, such as the U.S. Forest Service, that helped fight the blazes and assist the victims, said a statement from Frank M. Pitre, lead attorney for the trust.
That means the money won’t have to come out of funds earmarked for the trust, which has paid out $4.9 billion to victims.
The trust has said it faces a huge shortfall because half of the promised settlement consisted of PG&E stock that has consistently traded at less than what was hoped for when the deal was struck toward the end of 2019.
The stock closed Thursday at $12.38 a share on the New York Stock Exchange, down more than 30 cents.
Would-be investors might be spooked by PG&E’s continuing wildfire woes. In June, the company pleaded not guilty to involuntary manslaughter and other charges it faces after its equipment sparked the Zogg Fire, which killed four people and destroyed hundreds of homes in Northern California two years ago.
Also earlier this year, PG&E agreed to pay more than $55 million to avoid criminal prosecution for two other major wildfires sparked by its aging Northern California power lines. But the company didn’t acknowledge wrongdoing in those cases.
And last week, federal investigators seized a utility transmission pole and attached equipment in a criminal probe into what started the Mosquito Fire in the Sierra Nevada foothills.
The fire that broke out on Sept. 6 destroyed nearly 80 homes and other buildings. The fire, which has burned nearly 120 square miles (311 square kilometers), was 85% contained Thursday.
As the US attempts to wean itself off its heavy reliance on fossil fuels and shift to cleaner energy sources, many experts are eyeing a promising solution: your neighborhood big-box stores and shopping malls.
The rooftops and parking lot space available at retail giants like Walmart, Target and Costco is massive. And these largely empty spaces are being touted as untapped potential for solar power that could help the US reduce its dependency on foreign energy, slash planet-warming emissions and save companies millions of dollars in the process.
At the IKEA store in Baltimore, installing solar panels on the roof and over the store’s parking lot cut the amount of energy it needed to purchase by 84%, slashing its costs by 57% from September to December of 2020, according to the company. (The panels also provide some beneficial shade to keep customers’ cars cool on hot, sunny days.)
As of February 2021, IKEA had 54 solar arrays installed across 90% of its US locations.
Big-box stores and shopping centers have enough roof space to produce half of their annual electricity needs from solar, according to a report from nonprofit Environment America and research firm Frontier Group.
Leveraging the full rooftop solar potential of these superstores would generate enough electricity to power nearly 8 million average homes, the report concluded, and would cut the same amount of planet-warming emissions as pulling 11.3 million gas-powered cars off the road.
The average Walmart store, for example, has 180,000 square feet of rooftop, according to the report. That’s roughly the size of three football fields and enough space to support solar energy that could power the equivalent of 200 homes, the report said.
“Every rooftop in America that isn’t producing solar energy is a rooftop wasted as we work to break our dependence on fossil fuels and the geopolitical conflicts that come with them,” Johanna Neumann, senior director for Environment America’s campaign for 100% Renewable, told CNN. “Now is the time to lean into local renewable energy production, and there’s no better place than the roofs of America’s big-box superstores.”
Advocates involved in clean energy worker-training programs tell CNN that a solar revolution in big-box retail would also be a significant windfall for local communities, spurring economic growth while tackling the climate crisis, which has inflicted disproportionate harm on marginalized communities.
Yet only a fraction of big-box stores in the US have solar on their rooftops or solar canopies in parking lots, the report’s authors told CNN.
CNN reached out to five of the top US retailers — Walmart, Kroger, Home Depot, Costco and Target — to ask: Why not invest in more rooftop solar?
Many renewable energy experts point to solar as a relatively simple solution to cut down on costs and help rein in fossil fuel emissions, but the companies point to several roadblocks — regulations, labor costs and structural integrity of the rooftops themselves — that are preventing more widespread adoption.
The need for these kinds of clean energy initiatives is becoming “unquestionably urgent” as the climate crisis accelerates, said Edwin Cowen, professor of civil and environmental engineering at Cornell University.
“We are behind the eight ball, to put it mildly,” Cowen told CNN. “I would have loved to see policy help incentivize rooftop solar 15 years ago instead of five years ago in the commercial space. There’s still a tremendous amount of work to do.”
Neumann said Walmart, the nation’s largest retailer, possesses by far the largest solar potential. Walmart has around 5,000 stores in the US and more than 783 million square feet of rooftop space — an area larger than Manhattan — and more than 8,974 gigawatt hours of annual rooftop solar potential, according to the report.
It’s enough electricity to power more than 842,000 homes, the report said.
Walmart spokesperson Mariel Messier told CNN the company is involved in renewable energy projects around the world, but many of them are not rooftop solar installations. The company has reported having completed on- and off-site wind and solar projects or had others under development with a capacity to produce more than 2.3 gigawatts of renewable energy.
Neumann said Environment America has met with Walmart a few times, urging the retailer to commit to installing solar panels on roofs and in parking lots. The company has said it’s aiming to source 100% of its energy through renewable projects by 2035.
“Of all the retailers in America, Walmart stands to make the biggest impact if they put rooftop solar on all of their stores,” Neumann told CNN. “And for us, this report just underscores just how much of an impact they could make if they make that decision.”
According to Environment America, Walmart had installed almost 194 megawatts of solar capacity on its US facilities as of the end of the 2021 fiscal year and additional capacity in off-site solar farms. The company’s installations in California were expected to provide between 20% to 30% of each location’s electricity needs.
Target ranked No. 1 for on-site solar capacity in 2019, according to industry trade group Solar Energy Industries Association’s most recent report. It currently has 542 locations with rooftop solar — around a quarter of the company’s stores — a Target spokesperson told CNN. Rooftop solar generates enough energy to meet 15% to 40% of Target properties’ energy needs, the spokesperson said.
Richard Galanti, the chief financial officer at Costco, said the company has 121 stores with rooftop solar around the world, 95 of which are in the US.
Walmart, Target and Costco did not share with CNN what their biggest barriers are to adding rooftop or parking lot solar panels to more stores.
Approximate number of households companies could power with rooftop solar
Walmart — 842,700
Target — 259,900
Home Depot — 256,600
Kroger — 192,500
Costco — 87,500
Source: Environment America, Frontier Group report, “Solar on Superstores”
“My suspicion is that they want an even stronger business case for deviating from business-as-usual,” Neumann said. “Historically, all those roofs have done is cover their stores, and rethinking how [they] use their buildings and thinking of them as energy generators, not just protection from rain, requires a small change in their business model.”
Home Depot, which has around 2,300 stores, currently has 75 completed rooftop solar projects, 12 in construction and more than 30 planned for future development, said Craig D’Arcy, the company’s director of energy management. Solar power generates around half of these stores’ energy needs on average, he said.
Aging rooftops at stores are a “huge impediment” to solar installation, D’Arcy added. If a roof needs to be replaced in the next 15 to 20 years or sooner, it doesn’t make financial sense for Home Depot to add solar systems today, he said.
“We have a goal of implementing solar rooftop where the economics are attractive,” D’Arcy told CNN.
CNN also reached out to Kroger, which owns about 2,800 stores across the US. Kristal Howard, a Kroger spokesperson, said the company currently has 15 properties — stores, distribution centers and manufacturing plants — with solar installations. One of the “multiple factors affecting the viability of a solar installation” was the stores’ ability to support a solar installation on the roofs, Howard said.
Cowen, the engineering professor at Cornell, said solar is already attractive, but that labor costs, incentives and the different layers of regulation likely pose some financial challenges in solar installations.
“For them, this means usually hiring a local site firm that can do that installation that also knows local policy,” Cowen said. “It’s just another layer of complexity that I think is beginning to make sense because the costs have come down enough, but it needs kind of reopening that door of getting into an existing building.”
Rep. Sean Casten of Illinois, who co-chairs the power sector task force in the House, said the US has “failed to provide the incentives to people who have the expertise to go in and build these things.” The reason both retail companies and the power sector have not made much progress on solar is because “our system is so disjointed” and has a complex regulation structure, Casten said.
“Why aren’t we doing something that makes economic sense? The answer is this horribly disjointed federal policy where we massively subsidize fossil energy extraction, and we penalize clean energy production,” Casten told CNN. “For a long, long time, if you wanted to build a solar panel on the rooftop of Walmart, your biggest enemy was going to be your local utility because they didn’t want to lose the load.
“We could have done this decades ago,” Casten added. “And had we done it, we would not be in this dire position with the climate, but we’d also have a lot more money in our pocket.”
For Charles Callaway, director of organizing at the nonprofit group WE ACT for Environmental Justice, strengthening the rooftop solar capacity in big box retail stores is a no-brainer, especially if companies allow the local community to reap benefits either through installation jobs or sharing the electricity produced later.
Either way, it would put a massive dent in curbing the climate crisis and help usher in an equitable transition away from fossil fuels — and it’s doable, Callaway told CNN.
The New York City resident led a worker training program that helped train more than 100 local community members, mostly people of color, to become solar installers. He also formed a solar workers cooperative to ensure many of the participants of the training program get jobs in a tough market.
In the last two years, Callaway said his group has not only installed solar panels on roofs of affordable housing units, but also equipment capable of producing 2 megawatts of solar energy on shopping malls up in upstate New York. He emphasized that hiring locally would be most beneficial since local installers know the community and local regulations best.
“One of my huge concerns is social equity,” Cowen said. “Access to renewable energy is a fairly privileged position these days, and we’ve got to figure out ways to make that not true.”
Jasmine Graham, WE ACT’s energy justice policy manager, said the potential of building rooftop solar on big box superstores is encouraging, only “if these projects use local labor, if they are paying prevailing wages, and if this solar is being used in a manner such as community solar, which would allow [utility] bill discounts for folks that live in the same utility zone.”
Pressure is mounting for global leaders to act urgently on the climate crisis after a UN report in late February warned the window for action is rapidly closing.
Neumann believes the US can meet its energy demand with renewables. All it takes, she said, is the political will to make that switch, and the inclusion of the local community so no one gets left behind in the transition.
“The sooner we make that transition, the sooner we’ll have cleaner air, the sooner we’ll have a more protected environment and better health and the sooner we’ll have a more livable future for our kids,” Neumann said. “And even if that requires investment, it is an investment worth making.”
Twitter failed to pay out annual bonuses to staff after its acquisition by billionaire Elon Musk despite repeated assurances from executives in the lead-up to the deal closing that the company would do so, according to a new lawsuit filed on behalf of employees.
The lawsuit was filed in a San Francisco federal court on Tuesday by Mark Schobinger, who was a senior director of compensation at Twitter until he left the company late last month. The suit is seeking class action status for former and current Twitter employees who did not receive their 2022 bonus.
“We estimate about a couple thousand employees would have been eligible for the bonuses,” Shannon Liss-Riordan, the attorney representing Schobinger, said in a statement to CNN. “While I don’t have an exact number, we expect the amount owed is in the tens of millions.”
Twitter, which has cut much of is public relations team, did not respond to CNN’s request for comment.
The complaint states that after it was announced that Musk was acquiring the social media company last April, “many employees raised concerns” over the fate of “their compensation and annual bonus” if and when the deal closed.
In the months leading up to Musk completing his acquisition of Twitter, company executives repeatedly promised employees that 2022 bonuses would be paid out at 50% of the target, according to the complaint. “The promise was repeated following Musk’s acquisition,” the complaint said.
Despite the promises, however, Twitter has yet to pay out bonuses, the lawsuit says. Schobinger left the company last month following “Twitter’s reneging on various promises it had made to employees, including its failure to pay promised bonuses,” according to the complaint.
The lawsuit is the latest in a string of legal actions taken by former Twitter employees after Musk’s acquired the company and slashed 80% of the staff in an urgent bid to cut costs.
Liss-Riordan previously brought multiple proposed class action suits against Twitter, including on behalf of female employees and disabled employees. Another suit was filed by a group of former employees who accused Twitter of breach of contract because it allegedly failed to follow through on promises to allow remote work and provide consistent severance benefits after the acquisition.
Twitter has denied the breach of contract allegations in the lawsuit brought by former employees about remote work and severance. The proposed class action suits on behalf of female and disabled employees were dismissed by federal judges last month. The suits were later refiled.
Many have raised alarms about the potential for artificial intelligence to displace jobs in the years ahead, but it’s already causing upheaval in one industry where workers once seemed invincible: tech.
A small but growing number of tech firms have cited AI as a reason for laying off workers and rethinking new hires in recent months, as Silicon Valley races to adapt to rapid advances in the technology being developed in its own backyard.
Chegg, an education technology company, disclosed in a regulatory filing last month that it was cutting 4% of its workforce, or about 80 employees, “to better position the Company to execute against its AI strategy and to create long-term, sustainable value for its students and investors.”
IBM CEO Arvind Krishna said in an interview with Bloomberg in May that the company expects to pause hiring for roles it thinks could be replaced with AI in the coming years. (In a subsequent interview with Barrons, however, Krishna said that he felt his earlier comments were taken out of context and stressed that “AI is going to create more jobs than it takes away.”)
And in late April, file-storage service Dropbox said that it was cutting about 16% of its workforce, or about 500 people, also citing AI.
In its most-recent layoffs report, outplacement firm Challenger, Gray & Christmas said 3,900 people were laid off in May due to AI, marking its first time breaking out job cuts based on that factor. All of those cuts occurred in the tech sector, according to the firm.
With these moves, Silicon Valley may not only be leading the charge in developing AI but also offering an early glimpse into how businesses may adapt to those tools. Rather than render entire skill sets obsolete overnight, as some might fear, the more immediate impact of a new crop of AI tools appears to be forcing companies to shift resources to better take advantage of the technology — and placing a premium on workers with AI expertise.
“Over the last few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated,” Dropbox CEO Drew Houston wrote in a note to staff announcing the job cuts. “Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development.”
In response to a request for comment on how its realignment around AI is playing out, Dropbox directed CNN to its careers page, where it is currently hiring for multiple roles focused on “New AI Initiatives.”
Dan Wang, a professor at Columbia Business School, told CNN that AI “will cause organizations to restructure,” but also doesn’t see it playing out as machines replacing humans just yet.
“AI, as far as I see it, doesn’t necessarily replace humans, but rather enhances the work of humans,” Wang said. “I think that the kind of competition that we all should be thinking more about is that human specialists will be replaced by human specialists who can take advantage of AI tools.”
The AI-driven tech layoffs come amid broader cuts in the industry. Many tech companies have been readjusting to an uncertain economic environment and waning levels of demand for digital services more than three years into the pandemic.
Some 212,294 workers in the tech industry have been laid off in 2023 alone, according to data tracked by Layoffs.fyi, already surpassing the 164,709 recorded in 2022.
But in the shadow of those mass layoffs, the tech industry has also been gripped by an AI fervor and invested heavily in AI talent and tech.
In January, just days after Microsoft announced plans to lay off 10,000 employees as part of broader cost-cutting measures, the company also confirmed it was making a “multibillion dollar” investment into OpenAI, the company behind ChatGPT. And in March, in the same letter to staff Mark Zuckerberg used to announce plans to lay off another 10,000 workers (after cutting 11,000 positions last November), the Meta CEO also outlined plans for investing heavily in AI.
Even software engineers in Silicon Valley who once seemed uniquely in demand now appear to be at risk of losing their jobs, or losing out on salary gains to those with more AI expertise.
Roger Lee, a startup founder who has been tracking tech industry layoffs via his website Layoffs.fyi, also runsComprehensive.io, which examines job listings and compensation data across some 3,000 tech companies.
Lee told CNN that a recent analysis of data from Comprehensive.io shows the average salary for a senior software engineer specializing in artificial intelligence or machine learning is 12% higherthan for those who don’t specialize in that area, a data point he dubs “the AI premium.” The average salary for a senior software engineer specializing in AI or machine learning has also increased by some 4% since the beginning of the year, whereas the average salary for senior software engineers as a whole has stayed flat, he said.
Lee noted Dropbox as an example of a company offering notably high pay for AI roles, citing a base salary listing of $276,300 to $373,800 for a Principal Machine Learning Engineer role. (By comparison, Comprehensive.io’s data puts the current average salary for a senior software engineer at $171,895.)
Those looking to thrive in the tech industry and beyond may need to brush up on their AI skills.
Wang, the professor at Columbia Business School, told CNN that starting this past spring semester, he began requiring his students to familiarize themselves with the new crop of generative AI tools on the market. “That type of exposure I think is absolutely critical for setting themselves up for success and once they graduate,” Wang said.
It’s not that everyone needs to become AI specialists, Wang added, but rather that workers should know how to use AI tools to become more efficient at whatever they’re doing.
“That’s where the kind of a battleground for talent is really shifting,” Wang said, “as differentiation in terms of talent comes from creative and effective ways to integrate AI into daily tasks.”
Former employees of Twitter Africa who were laid off as part of a global cost-cutting measure after Elon Musk’s acquisition have not received any severance pay more than seven months since leaving the company, several sources told CNN.
In late May, the former employees, who were based in the Ghanaian capital Accra, accepted Twitter’s
(TWTR) offer to pay them three months worth of severance, the cost of repatriating foreign staff and legal expenses incurred during negotiations with the company, but they have not received the money or any further communication, the sources said.
“They literally ghosted us,” one former Twitter Africa employee told CNN.
“Although Twitter has eventually settled former staff in other locations, Africa staff have still been left in the lurch despite us eventually agreeing to specific negotiated terms.”
The former employees say they reluctantly agreed to the severance package without benefits, even though it was less than what colleagues elsewhere received.
“Twitter was non-responsive until we agreed to the three months because we were all so stressed and exhausted and tired of the uncertainty, reluctant to take on the extra burdens of a court case so we felt we had no choice but to settle,” another former employee told CNN.
The former employees spoke to CNN on condition of anonymity because they said they were asked to sign non-disclosure agreements as part of their exit terms.
According to Carla Olympio, an attorney who is representing the former employees, the last communication from Twitter or its lawyers was in May, shortly after settlement was agreed.
CNN reached out to Twitter for comment on the status of the severance package for the former employees in the Ghana office but received an automated response – a poop emoji. It’s unclear whether Twitter still has a media relations department.
In March, Musk tweeted that Twitter would respond to all press inquiries with the poop emoji. He completed a deal to buy the social media platform in October.
CNN also asked Ghana’s Ministry of Employment and Labor Relations for comment. A spokesperson said they are investigating the claims.
Whether Ghanaian authorities can compel Twitter to comply with the settlement is uncertain. The former employees and their attorney say the offer was never finalized.
The dozen or so team members were laid off just four days after the social network opened a physical office in Accra last November.
Some of them said they had moved to Ghana from other African nations, and depended on their jobs at Twitter to support their legal status in the country.
“Unfortunately, it appears that after having unethically implemented their terminations in violation of their own promises and Ghana’s laws, dragging the negotiation process out for over half a year, now that we have come to the point of almost settlement, there has been complete silence from them for several weeks,” Olympio said.
Twitter and Musk face multiple lawsuits where plaintiffs are claiming the company has failed to pay former stafferswhat they are owed.
Last week, a former US employee filed a proposed class action lawsuit claiming the company didn’t pay the full amount of severance benefits it promised last November prior to mass layoffs.
The plaintiff said Twitter promised senior employees severance of six months of base pay plus one week for every year of service, in addition to other benefits. Instead, the plaintiff said they received a total of three months of pay, according to the lawsuit. In response to a request for comment on the lawsuit, Twitter sent CNN an automated poop emoji.
In April, Musk told the BBC more than 6,000 people had been laid off since he completed his acquisition of the company in late October.
“We’re exploring our options with respect to causes of action against Twitter in various jurisdictions including Ghana,” Olympio told CNN.
Twitter did not open negotiations with the African team until after CNN reported in November that they had been offered separation terms that differed from those offered to departing staff in Europe and North America.
There’s a reason why politicians have long shied away from addressing Social Security’s massive financial problems. The commonly proposed solutions involve cutting benefits or raising taxes, which would spark an outcry from a range of powerful constituents, including senior citizens and the business community.
The situation, however, is only growing more critical. The combined Social Security trust funds are projected to run dry in 2034, according to the latest annual report from the entitlement program’s trustees that was released last week. At that time, the funds’ reserves will be depleted, and the program’s continuing income will only cover 80% of benefits owed.
The estimate is one year earlier than the trustees projected last year.
About 66 million Americans received Social Security benefits in 2022. It’s a vital lifeline for many of them. Some 42% of elderly women and 37% of elderly men rely on the monthly payments for at least half their income, according to the Social Security Administration.
Though congressional Republicans’ drive to cut spending amid debt ceiling negotiations this year has prompted renewed interest in the entitlement’s finances, little is likely to happen, experts say. The insolvency date is still too far in the future.
The last time Congress enacted a major overhaul, in 1983, Social Security was only months away from being able to pay full benefits. At that time, Democratic lawmakers who controlled the House agreed with Senate Republicans and then-GOP President Ronald Reagan to increase payroll taxes and gradually raise the full retirement age from 65 to 67, among other reforms.
While President Joe Biden has promised to strengthen Social Security and defend it from any cuts by Republicans, he has yet to lay out a concrete vision for protecting the program. It was not included in his annual budget proposal this year, though he did suggest a financial fix for Medicare, which is facing its own solvency issues.
Asked about the president’s plan, the White House said that the budget “clearly states his principles for strengthening Social Security.”
“He looks forward to working with Congress to responsibly strengthen Social Security by ensuring that high-income individuals pay their fair share, without increasing taxes on anyone making less than $400,000,” said Robyn Patterson, assistant press secretary at the White House.
A multitude of proposals have been floated over the years to address Social Security’s shortfall, many of which have multiple measures.
Several options focus on saving the entitlement program money, though left-leaning advocates and senior citizen groups are quick to point out that these moves are actually benefit cuts that they would strenuously oppose.
One common proposal is raising the retirement age. Currently, Americans can start collecting Social Security benefits at 62, though doing so would reduce their lifetime payments by as much as 30%.
The full retirement age, which had been 65 for much of the program’s existence, is slowly rising to 67 for Americans born in 1960 or later.
Some policymakers advocate for raising the full retirement age to 70 for future retirees, bringing it more in line with changes in life expectancy. That would mean those retiring earlier than that would get smaller monthly checks than under current law.
Doing so could wipe out about a third of the Social Security trust fund’s 75-year deficit.
Last year, the conservative Republican Study Committee released a budget plan that called for raising the full retirement age for future retirees at a rate of three months per year until it is increased to 70 for those born in 1978. It would then link the retirement age to future increases in life expectancy, as well as adjust the number of working years included in benefit calculations to 40 years, up from 35 years.
Other options include reducing benefits for higher-income Americans, which was also included in the Republican Study Committee’s budget plan.
New retirees’ Social Security benefits are one-third higher today than they were for folks who retired 20 years ago, even after accounting for inflation, according to Andrew Biggs, senior fellow at the right-leaning American Enterprise Institute. Plus, the maximum Social Security benefit in the US is two to three times higher than the maximum retirement benefit in Canada, the United Kingdom, Australia and New Zealand.
Biggs supports placing a cap on the maximum benefit that the highest-earning retirees can receive. The maximum benefit this year is about $43,000 and will rise to $59,000 by 2050, he said. Though such a cap would only solve about 10% to 15% of the long-term solvency gap, Biggs argues it’s one step, and it only affects those who he says don’t depend on the benefits.
“We’re going way, way beyond a pure safety net program,” Biggs said at a recent webinar hosted by the Committee for a Responsible Federal Budget, a government watchdog group. “Here we’re looking at a retirement program for middle income and upper income people.”
Other suggestions that have been floated include changing the formulas that determine the benefits Americans get upon retirement or the annual cost-of-living adjustment retirees receive to slow the growth of payments.
The main way to bring more money into the Social Security system is to increase the amount of payroll taxes collected.
A proposal popular among Democrats and left-leaning experts is to lift the wage cap so that higher-income earners have to shell out more in payroll taxes.
The Social Security tax rate of 6.2% is levied on both employers and employees, for a total rate of 12.4%. However, in 2023, it’s only applied to annual wages of up to $160,200. (By contrast, Medicare’s 2.9% total payroll tax rate is applied to all wages, and higher-income Americans are subject to an additional 0.9% Medicare tax.)
When payroll taxes for Social Security were first collected in 1937, about 92% of earnings from jobs covered by the program were subject to the payroll tax, according to the Congressional Budget Office. By 2020, that figure had fallen to about 83% as income inequality has increased.
Several congressional Democrats have floated proposals to raise the amount of wages subject to the payroll tax. Rep. John Larson of Connecticut wants to apply the payroll tax to wages above $400,000, which he says would extend the program’s solvency by nine years.
Vermont Sen. Bernie Sanders, an independent, and Massachusetts Sen. Elizabeth Warren, a Democrat, introduced a bill earlier this year that would make multiple changes to Social Security, including subjecting all income above $250,000 to the payroll tax and applying it to investment and business income. They say their reforms would extend the entitlement’s solvency for 75 years.
But changing the wage cap could also alter the fundamental design of Social Security, in which retirees’ benefits are tied to the amount of taxes they paid into the system while working.
For instance, the proposal from Sanders and Warren would not credit the additional taxed earnings toward benefits. That would increase the beneficial impact on solvency but would also raise resistance among some advocates who believe the link between taxes and benefits should be maintained.
Another option is raising the payroll tax rate. Increasing it to a total of 16% would just about assure 75 years of solvency, said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget.
Most lawmakers, however, would not find that type of tax hike very palatable, particularly not Republicans who control the House.
While experts disagree on the best way to address Social Security’s shortfall, one thing they are generally united on is that waiting will only result in having to employ harsher solutions. But that isn’t spurring elected officials to action.
“Nobody’s acting as if that’s something they’ve got to take seriously,” Biggs said. “So I’ll just be honest and say I’m worried about how this thing plays out.”
