Rob Siminoski is back running shows at Universal Studios, a short drive from downtown Los Angeles, but his schedule is uncertain. “Technically I’m back to work, but this week I had two days; a couple of weeks ago I had zero days,” he said. He says he has so few hours that he continues to qualify for unemployment benefits.

The Jacobs Theater in Manhattan hasn’t reopened yet. So Zoraida Rodriguez hasn’t returned to her cleaning job (she is working a three-month gig at her union, Local 32BJ of the Service Employees International Union). Neither has Kristinia Bellamy, who cleaned an office building in Midtown Manhattan until it was closed last year.

Altogether, some 3,000 of 21,000 office cleaners in 32BJ are on recall lists, waiting for their buildings to reopen, said Denis Johnston, who heads the local’s commercial building division.

That’s down from 7,000 in the spring of 2020. But as companies start delaying their plans to return to the office, progress has halted. “Six weeks ago we had so much momentum,” Mr. Johnston said. “For our members out of work, the idea that reopening is not going to happen until next year … it’s ugh.”

Could this all eventually snap back to the way things were before the pandemic? Enrico Moretti, an economist at the University of California, Berkeley, suggests that remote work will be reined in by employers who fear workers’ productivity will suffer.

Job offers allowing fully remote work jumped from about 2 percent of openings to 6 to 7 percent after the pandemic hit, he noted. But they have maintained that share since then. “It remains a niche phenomenon,” he argued.

He doesn’t expect that to grow much further. Employers may allow working from home a couple of days a week, he said, but Zoom is not a permanent replacement for the kind of interaction and collaboration on which innovation thrives.

Article source: https://www.nytimes.com/2021/09/03/business/economy/covid-urban-service-economy.html

“They should not cut these benefits off until there is a vaccine for all the little humans of all ages, because there are parents like me that have children that are high risk for Covid,” she said.

Ms. Rinehart is one of nearly half a million Pennsylvanians who will lose their benefits this weekend, according to estimates from the Century Foundation, a progressive research institute. The state has an unemployment rate of 6.6 percent, well above the national rate of 5.4 percent.

Pennsylvania, like the country as a whole, has experienced a significant economic rebound, but a partial one: Domestic tourists this summer again lined up to see Independence Hall and the Liberty Bell, and thrill-seekers again rode the roller coasters at Hersheypark. But many downtown offices in Philadelphia and Pittsburgh remain all but empty, and conventioneers have not yet returned to conference hotels, or to the restaurants and bars that relied on their business. Overall, Pennsylvania has regained about two-thirds of the jobs lost in the pandemic, compared with about three-quarters nationally.

“There’s been a partial recovery in a lot of the industries that are shut down, but it’s not back to where it was,” said Barney Oursler, director of the Mon Valley Unemployed Committee, a workers’ rights group in Pittsburgh. The committee was formed in the 1980s in response to layoffs in the steel industry; it has had a second life in the pandemic, helping thousands of Pennsylvanians navigate the state’s unemployment system.

Mr. Ocheret, 32, is a professional oboist in Philadelphia. Before the pandemic, he cobbled together a living as a freelancer, performing with symphonies and opera companies up and down the Eastern Seaboard, and picking up the occasional gig with pop artists who wanted onstage orchestra sections. It all dried up almost overnight in March 2020.

Performances began to return this spring, and Mr. Ocheret recently picked up a once-a-week gig that will last into September with an orchestra in New Jersey. But his calendar remains sparse this fall, and without unemployment benefits to fall back on, he isn’t sure how he will get by. He has signed up for computer coding courses to give him another option — one that he doesn’t want to take, but that he says he may have to consider if the industry doesn’t rebound by the end of the year.

“I hate to stop doing the thing I love,” Mr. Ocheret said. “But if things don’t start to improve, I may have to do something different.”

Article source: https://www.nytimes.com/2021/09/02/business/economy/federal-unemployment-benefit-cutoff.html

The system functions on the premise that people want to send equivalent amounts of money between two locations. Loans and transfers are recorded on ledgers, but money doesn’t have to change hands. Those features make it useful for evading taxes, paying bribes and laundering ill-gotten gains.

Hawala was a necessity under the Taliban-led Afghanistan of two decades ago, before the American invasion in 2001, when money from illicit sources greased the country’s financial wheels. In addition to hawala, opium from the country’s vast poppy fields and smuggling brought the country money from the rest of the world, offsetting weak trade. As insurgents, the Taliban funded themselves by taxing smuggled goods like televisions and fuel, in transactions often financed through hawala, and through the drug trade.

But the Afghanistan of 2021 is a country transformed. The economy, though its growth has been unsteady over the past decade, is five times the size it was in the early 2000s. Once scarce in most places, electricity is now widely available. Smartphones and internet access are common.

Foreign money helped. Over the two decades, the United States spent more than $145 billion on reconstruction activities in Afghanistan, according to the U.S. government. Much of it was used to build the Afghan security forces, but funds also went toward large-scale infrastructure projects and an economic support fund. More than three quarters of the Afghan government’s $11 billion annual public expenditures was paid for by donor funding.

The Taliban will be hard-pressed to make up that shortfall.

Since taking over Afghanistan, the Taliban have said they will stop production of opium. But for the hawala system to work, Afghanistan must ultimately find sources of hard currency to lubricate the lines of credit that would snake back into the country. With exports in 2019 of about $870 million — mostly carpets, plus figs, licorice and other agricultural products — Afghanistan has little to offer on a large scale that is as lucrative as opium.

The Taliban could see support from governments like Pakistan, Iran and China that might have their own reasons for keeping relations with Afghanistan warm. Trade has already started up again with Iran, said David Mansfield, an independent consultant and an expert on rural Afghanistan, citing satellite imagery of fuel tankers and transit trucks moving across the border. He has estimated that during its insurgency, the Taliban was able to raise more than $100 million a year from informally taxing goods from Iran and southern Afghanistan.

Even if the Taliban raised several multiples more than that, it would mean a return to the minimalist state like the 1990s.

Article source: https://www.nytimes.com/2021/09/02/business/economy/afghanistan-taliban-financial-crisis.html

Treasury Secretary Janet L. Yellen told The New York Times this summer that tariffs had harmed American consumers, but she has also warned that Chinese subsidies for exporters pose a challenge for the United States. The United States trade representative, Katherine Tai, has described the tariffs as providing leverage.

Asked on Wednesday about the administration’s review of the tariffs, Jen Psaki, the White House press secretary, said, “I don’t have any timeline for you on when that review will be completed.”

Business impatience with the administration’s approach is mounting. Corporate leaders say they need clarity about whether American companies will be able to do business with China, which is one of the biggest and fastest-growing markets. Business groups say their members are being put at a competitive disadvantage by the tariffs, which have raised costs for American importers.

“We should be doing everything we can to increase China’s use and dependence on American technology products,” Patrick Gelsinger, the chief executive of Intel, said in an interview last week. The administration is “struggling to lay out a framework for how they have a policy-driven engagement with China,” he said.

“To me, just saying, ‘Let’s be tough on China,’ that’s not a policy, that’s a campaign slogan,” he added. “It’s time to get to the real work of having a real policy of trade relationships and engagement around business exports and technology with China.”

In early August, a group of influential U.S. business groups sent a letter to Ms. Yellen and Ms. Tai urging the administration to restart trade talks with China and cut tariffs on imported Chinese goods.

“The main kind of dilemma that companies face right now is just uncertainty,” said Craig Allen, the president of the U.S.-China Business Council, which organized the letter. “Will the tariffs remain in place? Are they in place in perpetuity? What is the exclusion process to request an exemption from the tariffs? Nobody knows.”

Article source: https://www.nytimes.com/2021/09/01/business/economy/biden-china-trade-policy.html

The lockdowns in 2021 were nowhere near as severe as the nationwide curbs last year, which pushed millions of people out of cities and into rural areas, often on foot because rail and other transportation had been suspended.

Throughout the second wave, core infrastructure projects across the country, which employ millions of domestic migrant workers, were exempted from restrictions. More than 15,000 miles of Indian highway projects, along with rail and city metro improvements, continued.

On Tuesday, Dr. Pant said India’s growth estimates of 20.1 percent for the April-through-June period were nothing but an “illusion.” Growth contracted so sharply around the same period last year, by a record 24 percent, that even double-digit gains this year would leave the economy behind where it was two years ago.

Economists say India needs to spend, even splurge, to unlock the full potential of its huge low-skilled work force. “There is a need for very simple primary health facilities, primary services to deliver nutrition to children,” Mr. Vyas said. “All these are highly labor intensive jobs, and these are government services largely.”

One of the reasons Indian governments typically have not spent in those areas, Mr. Vyas said, is that it has been considered “not a sexy thing to do.” Another is the governments’ “dogmatic fixation” with keeping fiscal deficits in control, he said. The government simply can’t rely on private sector alone for creating jobs, Mr. Vyas said.

The “only solution,” he said, is for the government to spend and spur private investment. “You have a de-motivated private sector because there isn’t enough demand. That’s what’s holding India back.”

Article source: https://www.nytimes.com/2021/08/31/business/economy/india-economy-covid.html

Long term, the actuaries said they did not think Covid-19 itself would have substantial influence on Medicare spending on hospital care. On the one hand, the death of many vulnerable, older Americans from the virus may reduce future spending they would otherwise have received. On the other, the actuaries expect that some people may have additional health care needs from the syndrome known as long Covid.

The actuaries declined to make any estimates on the effect of Aduhelm, a very expensive Alzheimer’s treatment that was recently approved by the Food and Drug Administration. The report said that officials were waiting for Medicare to issue guidance on how the drug will be covered before making any calculations. The drug could represent tens of billions of dollars in spending each year.

Democrats in Congress are considering a host of changes to the Medicare program, such as adding new benefits, including coverage for dental, hearing and vision care. While these changes are expected to influence Medicare’s overall finances, none of them are likely to have major effects on the trust fund, which covers only hospital care.

“Medicare trust fund solvency is an incredibly important, longstanding issue, and we are committed to working with Congress to continue building a vibrant, equitable, and sustainable Medicare program,” said Chiquita Brooks-LaSure, the administrator for the Centers for Medicare and Medicaid Services.

Article source: https://www.nytimes.com/2021/08/31/business/economy/social-security-funding.html

The lockdowns in 2021 were nowhere near as severe as the nationwide curbs last year, which pushed millions of people out of cities and into rural areas, often on foot because rail and other transportation had been suspended.

Throughout the second wave, core infrastructure projects across the country, which employ millions of domestic migrant workers, were exempted from restrictions. More than 15,000 miles of Indian highway projects, along with rail and city metro improvements, continued.

On Tuesday, Dr. Pant said India’s growth estimates of 20.1 percent for the April-through-June period were nothing but an “illusion.” Growth contracted so sharply around the same period last year, by a record 24 percent, that even double-digit gains this year would leave the economy behind where it was two years ago.

Economists say India needs to spend, even splurge, to unlock the full potential of its huge low-skilled work force. “There is a need for very simple primary health facilities, primary services to deliver nutrition to children,” Mr. Vyas said. “All these are highly labor intensive jobs, and these are government services largely.”

One of the reasons Indian governments typically have not spent in those areas, Mr. Vyas said, is that it has been considered “not a sexy thing to do.” Another is the governments’ “dogmatic fixation” with keeping fiscal deficits in control, he said. The government simply can’t rely on private sector alone for creating jobs, Mr. Vyas said.

The “only solution,” he said, is for the government to spend and spur private investment. “You have a de-motivated private sector because there isn’t enough demand. That’s what’s holding India back.”

Article source: https://www.nytimes.com/2021/08/31/business/economy/india-economy-covid.html

Compounding the problem, employment in the biggest cities fell further than in smaller cities and rural areas, and it has rebounded more slowly. Employment among workers without a college degree living in the biggest cities is down more than 5 percent since February 2020, compared with about 2 percent for workers without a college degree in other parts of the country.

Even as millions of people remain out of work, businesses across the country are struggling to fill a record number of job openings. Many businesses have blamed expanded unemployment benefits for the labor shortage. If they are right, a flood of workers should be returning to the job market when the benefits end after Labor Day. But recent research has suggested that the benefits are playing at most a small role in keeping people out of the work force. That suggests that other factors are holding potential workers back, such as health concerns and child care issues, which might not ease quickly.

The Michigan sentiment data and the fade-out of stimulus benefits suggest consumers may be set to pull back spending further. But other data shows Americans increased their savings during the pandemic, in part by banking previous rounds of government support, and could draw on those funds to maintain spending for months to come.

Administration officials hope to buck up consumers and workers by pushing Congress to pass the two halves of Mr. Biden’s longer-term economic agenda: a bipartisan infrastructure bill and a larger spending bill that could extend expanded tax credits for parents, subsidize child care and reduce prescription drug costs, among other initiatives.

“Our hope is that the new normal coming out of this crisis is not simply a return to the status quo and the economy, which was one that was not working for most working families,” Mr. Deese said.

The virus remains the biggest wild card for the outlook. There is little evidence in government data that the spread of the Delta variant has suppressed spending in retail stores. But air travel, as measured by the number of people screened at airport security checkpoints, has tailed off in recent days after returning to about 80 percent of where it was during the same week in 2019.

Article source: https://www.nytimes.com/2021/08/31/business/economy/biden-economy.html

They found that the role of higher inequality was far more important than that of demographics.

It’s not that the high earners increased their savings rates. Rather, they were winning a bigger piece of the economic pie; by the researchers’ calculations, the share of income going to the top 10 percent of earners rose to more than 45 percent in recent years, up from about 30 percent in the early 1970s.

The result of high earners making more, and thus saving more, amounts to trillions of dollars in additional savings over the years — accounting for 30 percent to 40 percent of private savings from 1995 to 2019.

So whatever the causes of rising income inequality — most likely a combination of technological change; decline in union power; globalization; changes in tax policy; and winner-take-all market dynamics — it has set in motion skyrocketing asset values for those wealthy people.

“As the rich get richer in terms of income, it creates a saving glut,” Professor Mian said. “The saving glut forces interest rates to fall, which makes the rich even wealthier. Inequality begets inequality. It is a vicious cycle, and we are stuck in it.”

Their paper is hardly definitive, and other economists at the symposium noted a few issues — for example, that the decline in the natural rate of interest has been a global phenomenon, taking place even in countries with different income inequality trends than those in the United States. And Jason Furman, the Harvard economist, noted that the widening of inequality was most intense in the years before 2000, while the decline in the natural interest rate has mostly taken place since then.

But regardless of just how strong a factor income inequality is in driving low rates, high asset prices and higher wealth inequality, the situation does put the Fed and other global central banks in a difficult spot.

“These forces pushing down r-star are probably so powerful that the Fed could never fight against them,” Professor Sufi said in an email.

Article source: https://www.nytimes.com/2021/08/28/upshot/low-interest-rates.html

“Economists are not known for looking at the glass half full,” said Ms. Coronado.

(It is an enduring observation about her profession. Thomas Carlyle in the 19th century labeled the entire economics profession “the dismal science,” and given its ring of truth, the dreary title stuck.)

Besides inflation, economists are worrying about possible asset bubbles. Central bank officials including Robert S. Kaplan, head of the Dallas Fed, and James Bullard, head of the St. Louis branch, have warned that policymakers should be keeping a careful eye on rising real estate prices. And as Delta surges, analysts of all stripes are watching closely to ensure that it does not slow shopping, traveling and dining out — while worrying that it will.

The gray cloud that seems to hang over the profession might have a silver lining. It could be the case that by monitoring the risks around high inflation and watching for impending doom, the profession is setting up America for a more sustainable expansion down the road — one where government spending policy is more carefully crafted not to tax overextended industries, and where investors believe the Fed will act if needed, keeping exuberance in check.

Mr. Dutta, an eternal optimist who has a habit of releasing all-caps tirades against his profession’s endemic pessimism, thinks people could be a little bit more excited without overdoing it.

“THIS IS A CONSUMER SLOWDOWN??” he wrote in a recent note, pointing out that credit card spending data is holding up. He celebrated the last employment report, a robust reading, by titling it “JULY FIREWORKS.”

He points out that many people think the economy would be even stronger right now if supply bottlenecks weren’t holding back production and preventing spending. At least some of that spending will presumably eventually take place when those holdups clear, setting up for stronger future growth. Plus, he points out that people are making decisions that they would not if they had a glum future in mind: Families are buying houses, which he calls the “the most irreversible-decision asset.” Businesses are buying equipment.

He talks with an air of exasperation, like someone who has been right before. That is, in part, because he recently has been: Mr. Dutta, who has a bachelor’s from New York University but who lacks the fancy doctorates many of his counterparts claim, correctly argued that the economy would not slump headed into 2021, at a time when some Wall Street economists were looking for flat or even negative growth readings as infections surged.

Article source: https://www.nytimes.com/2021/08/27/business/economy/why-would-an-economist-ever-look-on-the-bright-side.html