December 3, 2020

Pushed by Pandemic, Amazon Goes on a Hiring Spree Without Equal

Over the summer, Amazon converted most of the 175,000 temporary workers to permanent employees and ended the extra pay bumps for all workers. Since then, it has continued with waves of hiring.

The company has also almost tripled the number of U.S. warehouses used for last-mile deliveries this year, said Marc Wulfraat, founder of the logistics consulting firm MWPVL International, who tracks Amazon’s operations. The delivery drivers are usually contractors, so Amazon does not disclose their numbers in regulatory filings.

“They have built their own UPS in the last several years,” Mr. Wulfraat said. “This pace of change has never been seen before.”

Ms. Williams said Amazon also built relationships with companies that were reducing staff, such as Uber, American Airlines and Marriott, to promote its hiring.

“We dedicated a group that did nothing but connect with organizations who were furloughing people, whether it was temporary or permanent,” she said. “That allowed us to take a skilled, quality work force, and very quickly and easily move them into opportunities that were appropriate at Amazon.”

The effort has been aided by 1,000 technology workers who create software for Amazon’s human resources teams, many building portals and algorithms that automate hiring, she said. Prospective employees can find jobs, apply and be hired entirely online, without talking to a single person.

To grow so much, Amazon also needs to think long term, Ms. Williams said. As a result, she said, the company was already working with preschools to establish the foundation of tech education, so that “as our hiring demand unfolds over the next 10 years, that pipeline is there and ready.”

Michael Corkery contributed reporting from New York.

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Edward P. Lazear, Economist and Presidential Adviser, Dies at 72

In a statement, Mr. Bush called him “a trusted confidant” and “a beloved colleague.”

Edward Paul Lazear was born in New York City on Aug. 17, 1948, and grew up in Los Altos, Calif. He graduated from the University of California, Los Angeles, in 1971 and received his Ph.D. in economics from Harvard University. Professor Lazear began his professional career in 1974 as an assistant professor of economics at the University of Chicago where he met the Nobel Prize winner Gary Becker and adopted his approach of applying economic tools to new domains. Professor Lazear taught there for almost 20 years before joining the Stanford faculty.

“He was the most natural economist I ever came into contact with,” said Paul Oyer, an economist at Stanford’s Graduate School of Business. “He was a deep economic natural thinker; he was born to be an economist.”

Professor Lazear wrote a seminal paper about the relationship between worker pay and a company’s productivity and profits; it was based on a case study of the Safelight Glass Company. Productivity at the business soared when it shifted from paying workers an hourly wage to paying them according to the number of windshields they repaired. Professor Lazear figured out that this improvement hadn’t come about just because people had worked harder to earn more money. Rather, he found, the shift in wage policy had changed the composition of the installers: Slower workers had left the company and faster workers had taken their jobs.

Professor Lazear wrote another famous paper explaining the rationale behind mandatory retirement, which was outlawed by Congress in 1986. He proposed that it is worthwhile for companies to pay workers less than what they are worth to the business when they are young, and then to raise their wages over time, to the point where they are paying them more than they are worth. But that, he found, meant that employees would try to hang on to their job for too long. Mandatory retirement thus helped solve the problem.

“He is the father of a field that has had a lot of influence in the way firms design compensation and make hiring and retention policies,” said Erik Hurst, a labor economist at the University of Chicago. “This is of first-order importance for how people live their lives.”

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New Jersey’s American Dream Mall Is Still Waiting to Fully Open

Ms. Washburn said there was very little transparency into the mall’s finances for bond investors to look at so it was difficult to obtain an accurate picture of its situation. “The disclosure is very poor,” she said.

Investors are also watching a $27 million debt payment that is due next month.

When asked whether the debt payment would be made, Mr. Ghermezian said, “We are working with our lenders on a regular basis to put a plan in place that allows the center to continue to flourish.” American Dream is also working out other payments, including those to East Rutherford, he said.

“Yes, there’s some money that is owed,” he said. “But again, not unlike any other developer in the country that has had their projects shut down across the board, we need to work as true partners with the municipalities, with lenders, with tenants, to make sure everyone is taking a fair position and fair share in how to manage this pandemic.”

Mr. Ghermezian said that Triple Five still intended to build out “a couple million more square feet” in the Meadowlands, with plans in place for a convention center and roughly 3,000 to 3,500 hotel rooms. The firm anticipates that once tourism recovers, people, especially families, visiting New York would stay at American Dream before traveling into the city.

Triple Five, which is named for three generations of the Ghermezian family and its five founders, is also continuing to pursue a similarly ambitious mall project in Miami, though perhaps at a slower pace than it did before Covid-19, Mr. Ghermezian said. While he acknowledged the challenges facing shopping centers, he said that projects like American Dream stood apart from typical malls and stores.

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U.S. Economy Stumbles as the Coronavirus Spreads Widely

Any reversal would be disappointing after months of economic progress. But it would hardly be surprising given the new wave of lockdowns and business restrictions that made further layoffs all but inevitable. In recent weeks, Chicago has imposed a new stay-at-home order, Los Angeles County has suspended outdoor dining and Philadelphia has banned most indoor private gatherings. Several states have ended or restricted indoor dining. And even where officials have enacted no new rules, many consumers are likely to restrict their activity voluntarily to avoid contracting the virus.

“The most obvious culprit for rising claims is the surging pandemic,” said Daniel Zhao, senior economist for the career site Glassdoor. “It seems like it was only a matter of time before it started to show up in the economic data.”

The latest data is not universally bleak. The Commerce Department reported on Wednesday that orders for big-ticket goods like machinery, a measure of business confidence, rose in October. New home sales also jumped, as rock-bottom interest rates continue to lift the housing market. Households have $1 trillion more in savings than before the pandemic, money that could fuel consumer spending when vaccines become widely available and the threat of the virus fades. And the stock market, that highly imperfect barometer of the economy, has set new highs.

But for the people and industries most exposed, the outlook is bleak. In addition to the new round of business restrictions, a new wave of school closings could push parents — and particularly mothers — back out of the work force. A growing number of economists are forecasting a “double-dip” recession, in which economic activity contracts again early next year.

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Who Will Miss the Coins When They’re Gone?

In the 1860s, the problem was hoarding — a side effect of the Civil War — so merchants, corporations and local governments tried printing their own money, called shinplasters. Congress tried to stamp out the practice with an 1862 law outlawing such private currency, but the shinplasters flooded cities from New York to Richmond, Va.

“We think of the sovereign or the state as having a monopoly on investing money with value, but American history has shown repeatedly that’s not the case,” said Joshua Greenberg, a historian and the editor of Commonplace, a journal of early American life. “Whenever there’s a downturn or a shortage, maybe you just lived somewhere pretty rural, shinplasters filled that void.”

Arguably, isolated versions of shinplasters have re-emerged in recent years, he said. In Western Massachusetts, you can exchange federal notes for BerkShares. Northern Michigan has Bay Bucks. In Central Florida, Disney Dollars can still get you a soda or fries.

Coins will always have defenders in curators and collectors like the 26,000 members of the American Numismatic Association. The group’s education director, Rod Gillis, hopes they never stop circulating. “I would really hate for us to become a cashless society,” he said. “I would hate for us to lose our historical perspective.”

He called coins representations of our history and culture at any given moment. Before the penny featured Lincoln, it showed Lady Liberty in a Native American headdress. President Franklin D. Roosevelt landed on the dime because of his efforts to stop polio through the “March of Dimes” of the 1940s.

“The designs don’t just happen out of happenstance,” he said. “You can learn so much about our culture from just learning about what appears on our coins.”

And coins have survived other inventions — paper bills, stock markets, E-ZPass — outlasting many of the monarchies, republics and empires they were made to hold together. Their value as artifacts is “wonderful,” said Dr. Fleur Kemmers, an archaeologist at Goethe University Frankfurt. She called ancient coins “historic documents,” passed down by people across centuries and continents as they haggled, hoarded and made their way through daily life. She said that in their design, material makeup and discovered locations, coins can reveal clues about culture, politics, religion, industry, trade and household life.

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Janet Yellen Has Excelled at Big Jobs. This Will Be the Hardest One Yet.

One particularly interesting area to watch will be the relationship between fiscal policy — the power to tax and spend, soon to be partly under Ms. Yellen’s stewardship — and her former domain of monetary policy, the power to adjust the supply of money. Those lines have become more blurred this year. The pandemic response has been organized as a joint effort between the Treasury, which is putting up billions of dollars in capital to support debt markets, and the Fed, which administers the programs and lends billions more from its own limitless balance sheet to make them more powerful.

But there have been clear schisms thus far. The Fed has been more inclined to structure the programs to help the economy more but with greater risk that the Treasury will lose money, while the Trump Treasury has been more cautious.

Meanwhile, the Fed is buying vast sums of Treasury bonds and keeping interest rates close to zero indefinitely, seeking to stimulate the economy — and effectively giving the government carte blanche to spend as necessary to contain the economic fallout of the pandemic. It raises knotty questions about just how independent the central bank is, and should be, from the rest of the government at a time of crisis.

Ms. Yellen will approach these questions steeped in the institutional values of the Fed, where she started her career as a young researcher. She has served as president of the San Francisco outpost of the central bank, as its vice-chair, and four years as its leader. She and Jerome Powell, the current Fed chair, were colleagues for many years. She entrusted him with much of the hard, unglamorous work of overseeing the central bank’s operations.

When she and Mr. Powell have the regular breakfasts and lunches that are typical for the occupants of their jobs, there will be an irony that she, as an economist, has a more conventional résumé for a Fed chair and he, a lawyer and former Wall Street and Treasury official, has a job history more typical of a Treasury secretary.

Still, expect her to push for more liberal use of emergency credit facilities to support the economy, while also maintaining a relatively traditional view of the importance of Fed independence and its ability to shape monetary policy without being second-guessed by political authorities. A Treasury secretary with less attachment to the Fed might take a more flexible view of the roles of the two organizations.

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Janet Yellen Set to Lead Treasury Department Under Biden

She is relatively moderate on many topics, including trade. Mr. Akerlof recalled in a biographical note in 2001 that when he met her: “Not only did our personalities mesh perfectly, but we have also always been in all but perfect agreement about macroeconomics. Our lone disagreement is that she is a bit more supportive of free trade than I.”

Ms. Yellen has been a major influence on leading officials at the Fed. John C. Williams, who worked for her in San Francisco, now leads the Federal Reserve Bank of New York. Mary C. Daly, who now leads the San Francisco Fed, cites Ms. Yellen as a key mentor.

That, along with Ms. Yellen’s experience working with Mr. Powell, could help facilitate the kind of close relationship needed between the Fed and Treasury, which are collaborating on a variety of crisis response programs.

Henry M. Paulson Jr., who served as Treasury secretary under President George W. Bush, praised the selection. He said Ms. Yellen “will have a tough job ahead of her, but she has the experience, talent, credibility and relationships with members of Congress on both sides of the aisle to make a real difference.”

While the other leading contenders for the job also had extensive experience that spanned fiscal and monetary policy, Ms. Yellen was seen as well placed to make it through Senate confirmation, even if Republicans maintain control of the chamber.

Lael Brainard, another top candidate for the role, is the only remaining Fed governor from the Democratic Party on the seven-member board, which currently has two open slots. She might have been difficult to replace at the Fed: Nominees have been hard to confirm over the past decade, and the Senate may remain under Republican control.

While leading the Fed, Ms. Yellen at times had a testy relationship with congressional Republicans. In one instance, Representative Mick Mulvaney, then a South Carolina Republican, said Ms. Yellen was overstepping her boundaries by talking about inequality.

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Biden Team, Pushing Quick Stimulus Deal, Prepares for Renewed Recession

A dispute over the size of the package has stalled talks for months. Democrats have rejected multiple Senate Republican proposals — the latest at about $500 billion — as insufficient to address the economy’s needs, particularly because they do not include money for state and local governments to plug budget holes and avoid public-sector layoffs. Mr. Zandi said that such a package “maybe barely gets you through to a vaccine” but risks running out when the economy still needs help.

Several Republicans have expressed wariness about spending much more, revisiting concerns about the national debt and insisting that the economy is improving.

“We want to reach agreement on all the areas where compromise is well within reach, send hundreds of billions of dollars to urgent and uncontroversial programs, and let Washington argue over the rest later,” Mr. McConnell said in a speech on the Senate floor this week, deriding the Democratic offer. “By playing all-or-nothing hardball with a proposal this radical, our colleagues have thus far guaranteed that American workers and families get nothing at all.”

The legislative window before the start of the next Congress in January is quickly tightening, leaving many skeptical that a stimulus package could be passed before the end of the year. Most of the discussion around spending has centered on avoiding a government shutdown and approving the necessary dozen annual spending bills. About one week of scheduled legislative days remain, during which lawmakers will need to pass legislation to fund the government beyond Dec. 11. It is unclear whether either chamber will remain in Washington if that deadline is met, particularly when Capitol Hill is struggling to stem the spread of the coronavirus among the rank and file.

Economists are increasingly stressing the need for lawmakers to act quickly, even if that means reaching agreement on smaller package. A bipartisan group convened by the Aspen Institute’s Economic Strategy Group — including former Treasury secretaries under Democratic and Republican administrations — urged lawmakers on Thursday to approve a package that includes aid to small businesses, individuals and state and local governments, saying the economy “cannot wait until 2021” for relief.

“What I’m really worried about is the millions of people who are going to be without food or without a home during the winter,” said Melissa S. Kearney, the economist who directs the strategy group. “That level of individual suffering, really, to me, should be everyone’s priority and move them past their political differences.”

Nicholas Fandos and Thomas Kaplan contributed reporting.

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Mnuchin Cites Principles in Clawing Back Fed Money. Democrats See Politics.

But the Congressional Budget Office, in assessing the budget impact of the money dedicated to Fed programs, found it to be nearly free of cost. The idea was that the loans the money backed would eventually be returned, and fees and interest earnings would cover any expenses. So if the money is clawed back and repurposed for spending — not lending — it would add toward the deficit for accounting purposes.

Top Republicans have suggested that leaving the programs operational for too long could distort markets, which is a genuine concern with such backstops. In his letter announcing his intent to close the programs, Mr. Mnuchin noted that normal market conditions prevail.

It’s true that corporate bond issuance has been rapid and states and localities are able to fund themselves at low rates. But virus cases are also spiking, suggesting that conditions could worsen and Fed backstops might again be needed.

Over the summer, Mr. Mnuchin agreed to extend the programs until Dec. 31 at a time when coronavirus infections were much lower than they are today, markets were functioning well, and companies were issuing bonds at breakneck speed.

Treasury’s move to claw back the funding limits Mr. Biden. The Fed and the next Treasury secretary can use the Exchange Stabilization Fund to back up bond purchases and business lending.

But it contains much less money than the government would have had with the congressional appropriation. That could hamper a goal that had been percolating among Democrats: to restart the programs, make them more generous and use them as a backup option if additional stimulus was tough to get through Congress.

Senator Mitch McConnell of Kentucky, the majority leader, said the request to end the programs and return the money was “fully aligned with the letter of the law and the intent of the Congress.”

Democrats reacted with outrage.

“It is clear that Trump and Mnuchin are willing to spitefully destroy the economy and make it as difficult as possible for the incoming Biden Administration to turn this crisis around and lead the nation to a recovery,” Representative Maxine Waters of California said in a letter.

Jim Tankersley contributed reporting.

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Economic Policy Has Become a Partisan Game. That Could Do Long-Term Harm.

It created the appearance that she was a partisan actor who, rather than apply a consistent philosophy to try to make the American economy as healthy as it can be, would pivot on a dime to try to strengthen the economy during a Republican administration and slow it in a Democratic one.

On Tuesday, in a dramatic moment, with Senator Kamala Harris (now also the vice president- elect) racing to Washington and two Republican senators rendered unavailable for coronavirus-related reasons, Ms. Shelton fell just short of the votes needed to put her on track to join the Fed’s board of governors.

There is no modern precedent for a president to try to fill Fed governor seats while a lame duck, and if confirmed Ms. Shelton would be the first Fed governor to take office without confirmation votes from the opposite party. (The Senate still has time to confirm her, but the math is tenuous.)

To Democrats, the last-ditch effort to confirm Ms. Shelton implied not only that Mr. Biden would have one less important economic policy appointment to make, but also that he might have to deal with a policymaker seeking to undermine his administration from within the central bank. (Mr. Trump has also nominated a second Fed governor, Christopher Waller, who may well be confirmed before Mr. Biden takes office — though he falls more squarely in the tradition of Fed governors with technocratic independence, and has attracted some Democratic support.)

Only a dozen years ago, consider what happened during the transition from George W. Bush to President Obama. The economy was in the worst phase of the global financial crisis, and President Bush had secured a $700 billion financial rescue package from Congress just before the election.

That bank rescue, known as the Troubled Asset Relief Program, was divided into two $350 billion tranches, with the president required to ask Congress for the second tranche to obtain it. Not only did President Bush not try to block the Obama team from having access to the bailout money upon taking office, but at Mr. Obama’s request he also took the politically unpopular step of requesting the second tranche in January 2009, days before Mr. Obama was inaugurated.

That step helped keep a bipartisan gloss on the financial rescue, gave the Obama administration access to the funds sooner rather than later, and enabled Mr. Obama to take office without making one of his first actions the politically toxic act of asking for more bank bailout money.

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