August 6, 2021

Digital Currency Is a Divided Issue at the Federal Reserve

“I just, I can’t wrap my head around that,” she said. “That just doesn’t sound like a sustainable future to me.”

Mr. Waller, by contrast, suggested that there is little a central bank digital offering could do that the private sector cannot and that the potential benefits of a digital dollar are likely overstated, while the risks are substantial. He added that the United States need not worry about the U.S. dollar being supplanted by China’s digital offering.

“I am left with the conclusion that a C.B.D.C. remains a solution in search of a problem,” Mr. Waller said on Thursday, referring to a central bank digital currency. He also voiced concerns that a central bank currency would give the Fed too much information about private citizens.

Mr. Waller is not alone in his skepticism. Randal K. Quarles, the Fed’s vice chair for supervision, has also sounded dubious about the need for a central bank digital currency, painting the idea as a passing fad. Jerome H. Powell, the Fed chair, has at times questioned whether such an offering is necessary, but he has more recently stressed that it is important to investigate the idea and has called himself “legitimately undecided.”

Supporters of central bank digital currency say that it is critical for the United States to stay on top of the technology, even if it is not yet clear what benefits such currencies will offer in practice. Some suggest that a Fed digital dollar could prevent stablecoins — private digital assets backed by a bundle of currencies or other assets — from becoming dominant and creating a big financial stability risk.

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Europe’s Pandemic Aid Is Winding Down. Is Now the Best Time?

Germany recently allowed the expiration of a rule excusing firms from declaring bankruptcy if they can’t pay their bills. Debt repayment holidays for companies that took cheap government-backed loans will soon wind down in most eurozone economies.

And after repeated extensions, state-backed job retention schemes, which have cost European Union countries over 540 billion, are set to end in September in Spain, the Netherlands, Sweden and Ireland, and become less generous in neighboring countries in all but the hard-hit tourism and hospitality sectors.

Aid programs that helped cushion income losses for 60 million people at the height of the crisis continue to pay for millions of workers on standby. Businesses and the self-employed have access to billions in low-interest loans, state-funded grants and tax holidays.

Meanwhile, employees have begun returning to offices, shops and factory floors. Global automakers are working to adapt to supply-chain issues. Small retailers are offering click-and-collect sales, and cafes are providing takeout service.

Governments are betting that the growth momentum will be enough to wean their economies off life support.

“We can’t use public money to make up for losses in the private sector forever,” said Guntram Wolff, the director of Bruegel, an economic research institution based in Brussels. “That’s why we need to find a strategy for exiting.”

Governments are looking to reallocate more spending toward areas of the economy that promise future growth.

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Companies Begin to Mandate Covid Vaccines for Employees

Some of the nation’s largest employers, for months reluctant to wade into the fraught issue of whether Covid-19 vaccinations should be mandatory for workers, have in recent days been compelled to act as infections have surged again.

On Tuesday, Tyson Foods told its 120,000 workers in offices, slaughterhouses and poultry plants across the country that they would need to be vaccinated by Nov. 1 as a “condition of employment.” And Microsoft, which employs roughly 100,000 people in the United States, said it would require proof of vaccination for all employees, vendors and guests to gain access to its offices.

Last week, Google said it would require employees who returned to the company’s offices to be vaccinated, while Disney announced a mandate for all salaried and nonunion hourly workers who work on site.

Other companies, including Walmart, the largest private employer in the United States, and Lyft and Uber, have taken a less forceful approach, mandating vaccines for white-collar workers but not for millions of frontline workers. Those moves essentially set up a divide between the employees who work in offices and employees who deal directly with the public and, collectively, have been more reluctant to get the shots.

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Amazon Faces Wider Fight Over Labor Practices

Perhaps the most prominent voice in this discussion is the more than one-million-member International Brotherhood of Teamsters, which approved a resolution at its convention in June committing the union to “supply all resources necessary” to organize workers at the company and help them win a union contract.

The Teamsters argue that holding union votes at individual work sites is typically futile at a company like Amazon, because labor law allows employers to wage aggressive anti-union campaigns, and because high turnover means union supporters often leave the company before they have a chance to vote.

Instead, the Teamsters favor a combination of tactics like strikes, protests and boycotts that pressure the company to come to the bargaining table and negotiate a contract covering wages, benefits and working conditions. While the union hasn’t laid out its tactics in detail, it recently organized walkouts involving drivers and dockworkers at a port in Southern California to protest the drivers’ treatment there.

They hope to enlist the help of workers at other companies, sympathetic consumers and even local businesses threatened by a giant like Amazon, partly to mitigate the challenges presented by high employee turnover.

“Building our relationships within the community itself is the way to deal with that,” Randy Korgan, a Teamsters official from Southern California who is the union’s national director for Amazon, said in a recent interview. “We could have filed for an election in a number of places in the last more than a year, gotten into that process, but we realize that the election process has its shortcomings.”

The union believes that it can pull a variety of political levers to help put the company on the defensive. Mr. Korgan cited a recent vote by the City Council in Fort Wayne, Ind., denying Amazon a tax abatement after a local Teamsters official spoke out against it, and a vote by the City Council in Arvada, Colo., to reject a more than 100,000-square-foot Amazon delivery station. While the Arvada vote centered on traffic concerns, Teamsters played a role in drumming up opposition.

In California, the Teamsters have joined forces with the Los Angeles County Federation of Labor and the Warehouse Worker Resource Center, an advocacy group, to back a bill that would require certain employers to disclose the often opaque productivity quotas applied to workers, which they can be disciplined or fired for failing to meet. The legislative language makes it clear that Amazon is the main target.

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Big Economic Challenges Await Biden and the Fed This Fall

Mr. Powell said at his news conference last week that “we’re some way away from having had substantial further progress toward the maximum employment goal.”

“I would want to see some strong job numbers,” he added.

In the text of a speech on Friday, Lael Brainard, an influential Fed governor, said she wanted to see September economic data to assess whether the labor market was strong enough for the Fed to begin dialing back support, which suggests she would not favor signaling a start to the slowdown until later this fall. But her colleague Christopher J. Waller said in a CNBC interview on Monday that he would probably prefer to begin pulling back bond purchases quickly, if jobs data hold up, perhaps as soon as October.

Increases in interest rates — the Fed’s more traditional, and more potent, tool — remain farther away. Most Fed officials in June projected that they would not lift their federal funds rate until 2023 at earliest, because they would like the labor market to return to full strength first.

How rapidly the economy can achieve that goal is an open question. Employers regularly complain about the enhanced benefits, but even they have sent mixed messages on whether those are the main driver keeping labor at bay.

“Many contacts were optimistic that labor availability would improve in the fall as schools restart and enhanced unemployment benefits end,” the Atlanta Fed’s qualitative report on business conditions found in June. “However, there were several who do not expect labor supply to improve for six to nine months.”

Peter Ganong, an economist at the University of Chicago, said that if the pattern that he and his fellow researchers had seen in employment data held, he would not expect a wave of workers to jump back into jobs just because supplemental benefits expired.

“So far, we see small employment differences even when vaccines are becoming available,” he said. Mr. Ganong and his co-authors compared the job-finding rates of people whose wages were more fully replaced by supplemental benefits and people whose wages were less fully replaced. They found small and relatively steady differences, even as the economy reopened.

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Lack of Foreign Workers Has Seasonal Businesses Scrambling

Mr. Doyle spent nearly $30,000 advertising for workers as far away as Nevada and got no response, he said. For the last year, he has had a 20-foot trailer parked outside his office, emblazoned with a sign proclaiming: “NOW HIRING. WALK-INS WELCOME.”

“I had two people drop in all year,” he said.

Higher wages could encourage more American-born workers to apply to these jobs, said Muzaffar Chishti, director of the Migration Policy Institute at the New York University Law School. But he argues that in every labor market, there are difficult, unpleasant, low-paid jobs with no opportunity for advancement — like agricultural work or meatpacking — that are considered less desirable both for economic and for cultural reasons.

Some of the attitudes toward jobs, particularly in the service sectors, are changing, he said, but “we haven’t quite understood yet the impact of pandemic.”

Temporary guest workers have also gotten entangled in broader and more bitter arguments over immigration. There is a widespread misconception, Mr. Chishti said, that all foreign workers are eager to settle in the United States.

“A lot of workers don’t necessarily want to come and live here forever,” he said. “They want to work legally and travel back and forth. Their life in Mexico, for example, may be better than life in a U.S. city.”

In the meantime, employers are struggling. Small resort towns often depend on international seasonal workers because their population isn’t sufficient to fill all of the suddenly available slots at hotels, restaurants, ice cream shops or ski slopes that serve the hordes of tourists who appear and then vanish.

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Eviction Moratorium Set to Lapse as Biden Aid Effort Falters

A crash effort followed, led by Gene Sperling, who was appointed in March to oversee Mr. Biden’s pandemic relief efforts, including emergency rental assistance programs created by coronavirus aid laws enacted in 2020 and 2021.

Mr. Sperling, working with officials in the Treasury Department, moved to loosen application requirements and increase coordination among the state governments, legal aid lawyers, housing court officials and local nonprofits with expertise in mediating landlord-tenant disputes.

In June, 290,000 tenants received $1.5 billion in pandemic relief, according to Treasury Department statistics released last week. To date, about 600,000 tenants have been helped under the program.

But administration officials concede the improvements have not progressed quickly enough. Over the past week, Mr. Sperling; Brian Deese, the director of the National Economic Council; Susan Rice, Mr. Biden’s top domestic policy adviser; and Ms. Rice’s deputy on housing policy, Erika C. Poethig, made a late plea for Mr. Biden to extend the freeze, according to two people familiar with the situation who spoke on the condition of anonymity to describe internal deliberations.

Dana Remus, the White House counsel, expressed concerns that an extension was not a legally available option, and other officials suggested it could prompt the Supreme Court to strike down the administration’s broad use of public health laws to justify a range of federal policies, and their view prevailed, the officials said.

In a statement Friday evening, Mr. Biden sought to put the onus on local officials to provide housing aid, saying “there can be no excuse for any state or locality not accelerating funds to landlords and tenants.”

“Every state and local government must get these funds out to ensure we prevent every eviction we can,” he added.

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The Fed’s Favorite Price Index Rose 4 Percent. What Comes Next?

Michael Patrick, a chef and restaurateur in Memphis, has had to raise pay for cooks and dishwashers to entice them to return to his upscale Southern food restaurant, Rizzo’s by Michael Patrick. His food costs have risen, too, because supply-chain issues have made it hard to get chicken and other key ingredients. So he has responded by raising menu prices twice in recent months. So far, his customers aren’t complaining.

“People aren’t even blinking,” he said. “Not one person has said to me, ‘I can’t believe you raised your price on meatloaf two dollars.’”

But Mr. Patrick is concerned about the effects of the Delta variant. Both he and his customers have learned to navigate pandemic life, he said, so he is confident he will be able to maintain sales. But if the resurgence of the virus leads to more shutdowns at meat-processing plants and other food producers, that could pose a bigger challenge.

“Canola oil, beef, chicken — it’s all going up because the supplies just weren’t there,” he said. “Hopefully, at the end of the day, these variants don’t cause a lot of these companies to close their doors again.”

It will matter for workers how quickly today’s robust price gains fade. Higher prices are taking a bite out of workers’ paychecks. Income after taxes fell 0.5 percent June, accounting for the impact of inflation. Over the past year, inflation has more than offset a modest rise in after-tax income.

The data released Friday showed that core inflation, which strips out volatile food and fuel prices and can give a cleaner reading on price trends, picked up by 3.5 percent in June from a year earlier, for the highest annual reading in 30 years.

The headline index climbed 0.5 percent from May to June, slightly less than the 0.6 percent that economists in a Bloomberg survey had expected.

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How Biden Got the Infrastructure Deal Trump Couldn’t

As Mr. Biden pushed toward a deal in recent weeks with a group of Republican and Democratic negotiators in the Senate — including Senator Mitt Romney, Republican of Utah, a longtime foil of Mr. Trump’s — the former president blasted out news releases, urging his party to walk away.

“Hard to believe our Senate Republicans are dealing with the radical left Democrats in making a so-called bipartisan bill on ‘infrastructure,’ with our negotiators headed up by super RINO Mitt Romney,” Mr. Trump wrote in a Wednesday statement, referring to the Utah senator with the acronym for Republican in name only. “This will be a victory for the Biden administration and Democrats, and will be heavily used in the 2022 election. It is a loser for the U.S.A., a terrible deal, and makes the Republicans look weak, foolish and dumb.”

Soon after, the agreement moved forward in the Senate. Seventeen Republicans voted to take it up, including the Republican leader, Mitch McConnell of Kentucky, who has taken pains to distance himself from Mr. Trump in recent months. It was not clear whether the minority leader, who has previously said he was “100 percent focused” on stopping Mr. Biden’s agenda, would ultimately support the bill.

Still, Mr. Biden — who once brokered deals with Mr. McConnell — was personally invested in pursuing a compromise, administration officials said, calling upon his experience as a deal-maker in the Senate.

“Biden and his team was willing to patiently work together with Republicans, and Trump and his team were not willing to do that with Democrats,” said Senator Tim Kaine, Democrat of Virginia. He added, “I give tremendous credit to the senators who’ve done this, but I will have to say, an ingredient that is necessary is a White House that really wants to do it, that will reach out across the aisle and will stay at the table.”

Mr. Biden also dispatched top legislative aides and members of his Cabinet to reach out to lawmakers in both parties. Senator Kevin Cramer, Republican of North Dakota, said he received repeated calls from Jennifer Granholm, the secretary of energy, and legislative staff members — “always very gently and respectfully” — to discuss the emerging deal and “take my temperature” before he voted to advance the measure.

Multiple senators said the president and his team spent hours with them in person on Capitol Hill and on the phone hashing out the details of the legislation, including thorny disagreements over how to finance billions of dollars in new spending.

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Who Discriminates in Hiring? A New Study Can Tell.

The Berkeley and Chicago researchers found that discrimination isn’t uniform across the corporate landscape. Some companies discriminate little, responding similarly to applications by Molly and Latifa. Others show a measurable bias.

All told, for every 1,000 applications received, the researchers found, white candidates got about 250 responses, compared with about 230 for Black candidates. But among one-fifth of companies, the average gap grew to 50 callbacks. Even allowing that some patterns of discrimination could be random, rather than the result of racism, they concluded that 23 companies from their selection were “very likely to be engaged in systemic discrimination against Black applicants.”

There are 13 companies in automotive retailing and services in the Fortune 500 list. Five are among the 10 most discriminatory companies on the researchers’ list. Of the companies very likely to discriminate based on race, according to the findings, eight are federal contractors, which are bound by particularly stringent anti-discrimination rules and could lose their government contracts as a consequence.

“Discriminatory behavior is clustered in particular firms,” the researchers wrote. “The identity of many of these firms can be deduced with high confidence.”

The researchers also identified some overall patterns. For starters, discriminating companies tend to be less profitable, a finding consistent with the proposition by Gary Becker, who first studied discrimination in the workplace in the 1950s, that it is costly for firms to discriminate against productive workers.

The study found no strong link between discrimination and geography: Applications for jobs in the South fared no worse than anywhere else. Retailers and restaurants and bars discriminate more than average. And employers with more centralized personnel operations handling job applications tend to discriminate less, suggesting that uniform rules and procedures across a company can help reduce racial biases.

An early precedent for the paper published this week is a 1978 study that sent pairs of fake applications with similar qualifications but different photos, showing a white or a Black applicant. Interestingly, that study found some evidence of “reverse” discrimination against white applicants.

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