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Jobless Americans face debt crunch without more federal aid as bills come due

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A new phase of the economic crisis is looming for the winner of Tuesday’s presidential election: potentially massive defaults by jobless Americans on consumer loans as the chances for more federal relief this year diminish.

Both President Donald Trump and Democrat Joe Biden have called for robust new rescue packages for an economy still suffering from the pandemic, but Congress’s inability to agree on key issues such as the size of unemployment benefits has kept the talks at an impasse for months. Now, millions of Americans are running out of money and will face hard choices between food purchases and payments on rent, credit cards and student loans.

Generous unemployment benefits and stimulus checks given out earlier this year helped many people weather the early months of the crisis — with some even managing to increase their savings. But that support has faded and some of it will run dry by the end of the year. JPMorgan Chase Institute found that in August alone, typical unemployed families spent two-thirds of the additional rainy day funds that they’d built up over the previous four months.

“I fear jobless workers are going to have to make tough choices,” said Fiona Greig, director of consumer research at the institute.

The “Lost Wages Assistance” aid program that Trump ordered after the expiration of more generous federal benefits — including a $600-a-week boost in jobless payments that ended on July 31 — helped bolster some families in September. But by early this month, much of that small pot of money had already been depleted. As a result, the largest U.S. banks warned investors this month that they expect credit card delinquencies to start mounting early next year.

And with coronavirus cases spiking in places like the Midwest, pressure could increase on already struggling small businesses, pushing jobless numbers back up.In a Census Bureau survey this month, roughly a third of small businesses reported only having enough cash to get them through a month or less.

The Labor Department said Thursday that more than 22 million people were claiming benefits in all federal programs as of the week ending Oct. 10.

Other government data released at the same time showed that the economy in the third quarter regained roughly 60 percent of the economic activity it lost, as many businesses have reopened. But Greig said without additional government support, the results could still be severe for many families, particularly if there is not more improvement in the job market.

“The GDP growth recovery looks much better than the job market numbers” because people are buying goods, but there’s still a severe drought in using many services, which is where most people are employed, said Greig, whose think tank has access to proprietary data from Chase Bank.

The burdens of the pandemic are falling disproportionately on lower-income workers; people making less than $27,000 have seen a nearly 20 percent drop in employment since January, while the job market is almost fully recovered among workers making more than $60,000, according to private-sector data compiled by Opportunity Insights.

Some relief measures are still in place; there’s a nationwide ban on evictions until the end of the year, and many borrowers have had the chance to put off credit card, student loan and mortgage payments. Roughly 7 percent of households with mortgages and 41 percent with student loans were skipping or making reduced payments as of the beginning of October, according to Goldman Sachs researchers.

But those debts are still piling up in the background, which could leave consumers with a crushing burden once those protections expire without something to keep them afloat.

“There will be a massive balloon payment on what people are supposed to pay,” said Megan Greene, an economist at Harvard’s Kennedy School of Government. “Lots of people won’t be able to afford that.”

“It’s been surprising to me how long consumers have been able to hold on,” she added. “We’re tempting fate by waiting until next year to re-up some of the stimulus measures.”

Thanks to government aid, aggregate personal income is still up from before the coronavirus crisis, even though wages and salaries are still below pre-pandemic levels, according to economic data released by the U.S. Bureau of Economic Analysis.

Personal income decreased $540.6 billion in the third quarter, after rising $1.45 trillion in the second quarter, a drop the agency attributed to a decrease in pandemic-related relief programs.

Part of the danger is that complete information isn’t available, so some areas may be suffering more than we know.

“A lot of the work I do focuses on rural communities, and there’s just not a lot of good data there,” said Gbenga Ajilore, senior economist at the Center for American Progress. “There are canaries in the coal mine, but … we don’t see the areas that are getting hurt because we don’t measure those areas.”

Researchers at Columbia University found that the monthly poverty rate increased to 16.7 percent in September from 15 percent in February, with about 8 million people falling into poverty since May.

Life has gotten harder for the poorest Americans. “We find that at the peak of the crisis (April 2020), the CARES Act successfully blunted a rise in poverty; however, it was not able to stop an increase in deep poverty, defined as resources less than half the poverty line,” that report said.

Maurice Jones heads up the Local Initiatives Support Corp., one of the largest community development financial institutions in the country, and said this has been the biggest year ever for the nonprofit — both in terms of donations and in relief they’re paying out.

“We have something called financial opportunity centers, and the focus of them historically has been on getting people prepared to compete successfully for living wage jobs — thinking more long term, if you will,” he said. “We have had to really adjust and focus on immediate relief. … People are literally having to choose between paying rent and buying groceries.”

Jones said his firm gave out $225 million in grants or forgivable loans between March and the end of September. “We’ve never had a six-month period like that in our history with that kind of deployment of those kinds of dollars,” he said.

He said it could be “a decade’s work” to get poor people back to where they were before the pandemic.

Also, many people don’t have ready access to aid from institutions like Jones’s, which focus on underserved markets, and banks have been tightening lending standards as the financial picture darkens for many borrowers. That means low-income Americans will turn to high-cost payday loans and check cashers to pay their bills, which can mean getting caught in a cycle of debt.

“These are not folks who are in a position to absorb loans at this stage of the game,” Jones said. “We’re not talking about a small chunk of the population. We’re talking tens of millions of people.”

“We gotta get this election behind us and get back to the federal government’s next chapter in helping folks weather the storm.”

This blog originally appeared at Politico at October 29, 2020. Reprinted with permission.

About the Author: Victoria Guida is a financial services reporter covering banking regulations and monetary policy for POLITICO Pro. She covers the Federal Reserve, the FDIC and the Office of the Comptroller of the Currency, as well as Treasury, after four years on the international trade beat, most recently for Pro and previously for Inside U.S. Trade.


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Do Your Employment References Really “Have Your Back?” Better Not Assume That Your References Will Offer a Favorable or Neutral Reference

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We’ve all heard that our former employers, when contacted for a reference, will only confirm (per company policy) employment dates and title. Right?

Wrong.

There is no guarantee that all corporate employees are aware of, or will abide be, such guidelines. Consider these verbatim comments documented by Allison & Taylor in checking employment references on behalf of job seekers:

“He had issues with his co-workers and management and is not eligible for rehire.”

“Is there a rating less than inadequate?”

“She made a good effort but was simply not able to meet our expectations.”

“I’d rather not comment – you can take that any way you like.”

“She didn’t resign from our company – she was terminated.”

“I am not allowed to say anything about this person as they were fired.”

Clearly, any prospective employer receiving such feedback on a job seeker is highly unlikely to hire them. What, then, should be your course of action if you are concerned about potential commentary from your former employer?

The first step is to confirm if you do indeed have a problem with at least one of your references. Do an honest self-assessment of your references that are most likely to be called by prospective employers. Very possibly you already have a good idea of who may be making your employment search a challenging one. And while you might be able to keep some former associates off of a prospective employer’s radar, it is unlikely that a former supervisor or HR department will be overlooked. The HR department is a traditional venue for reference checks, and HR reps of your most recent employers are almost certain to get a call from potential employers. Your former supervisors will be high on an employer’s list as well, as they know you better than HR and may also be willing to offer a more revealing profile about you.

Then, consider having a reference check(s) conducted on those business associates from your past who might be problematic. Avoid the temptation to have a friend or associate call and pose as a prospective employer – this could backfire on you, also any unfavorable input obtained in this manner would be inadmissible for legal purposes. Instead, have a reputable third party (e.g., www.allisontaylor.com) conduct these reference interviews on your behalf to best ensure that any negative input obtained can be legally addressed and neutralized.

If negative input from a reference is uncovered, what steps can you take? Your options will depend on the nature of the negative input. Where your reference’s communication was inaccurate, malicious, or wrongful you may have the ability – through an attorney – to pursue legal recourse. When a reference’s negative input is not unlawful but is nonetheless restricting your ability to secure future employment, it can sometimes be addressed through a Cease-&-Desist letter which is typically issued by your attorney to the senior management of the company where the negative reference originated, alerting the management of the negative reference’s identity and actions. Typically the very act of offering a negative reference is against corporate guidelines, which normally state that only a former employee’s title/dates of employment can be confirmed. The negative reference is cautioned by management not to offer additional comments and – out of self-interest – will usually not offer negative commentary again.

How to Set and Increase Your Freelance Writing Rates

Whether through a Cease-&-Desist letter or stronger legal measures, the prospects for neutralizing further negative input from a reference are excellent. Also, the “peace of mind” a reference verification brings to an employment candidate unsure of what their references are really saying, cannot be underestimated. If concern about your references is causing you some sleepless nights, it’s never too soon to document – and address – what they are really saying about you.

For more information on reference checking, and what to do if a negative reference is impeding your chances for a new job, please visit www.AllisonTaylor.com.

“This blog originally appeared at Allison & Taylor on December 21, 2017. Reprinted with permission.” 


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Jobless claims jump, hitting highest level since mid-August

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American workers continued to hit the unemployment line in large numbers last week, with 898,000 new claims filed for jobless benefits.

Economists surveyed by Dow Jones had been looking for 830,000.

The total for the week ended Oct. 10 was the highest number since Aug. 22 and another sign that the labor market continues to struggle to get back to its pre-coronavirus pandemic mark as cases rise and worries increase over a renewed wave in the fall and winter. The number represented a gain of 53,000 from the previous week’s upwardly revised total of 845,000.close dialogThe top moments in business and politics – wrapped with exclusive color and context – right in your ears

Despite the higher-than-expected total, the level of continuing claims continues to fall at a brisk pace, declining by 1.165 million to just over 10 million. Continuing claims data runs a week behind the headline claims number.

The economy has recaptured some 11.4 million positions, or about half those who were sidelined. The unemployment rate has come down to 7.9% but is still more than double its pre-pandemic level.

The four-week moving average of continuing claims fell by 682,250 to 11.48 million.

The insured unemployment rate, a simple measure that compares those receiving benefits against the total labor force, slid 0.9 percentage point to 6.8%.

Those receiving first-time benefits under the Pandemic Unemployment Assistance program continued to decline, sliding by more than 91,000 to 372,981. That program provides compensation to those who normally wouldn’t be eligible for benefits, such as freelancers and independent contractors.

However, recipients under the program accounted for more than half of those getting unemployment benefits as of Sept. 26. Those receiving benefits under the emergency claims portion of the pandemic program increased by more than 800,000, though that data also is two weeks old.

“Although the absolute level of claims remains well above the pre-pandemic level, the declining trend of continuing claims is more important to watch,” Citigroup economist Andrew Hollenhorst said in a note. “The decline in claims over the past few weeks, even after netting out those who transferred to federal PEUC, is encouraging, pointing to still-robust rehiring in late September, and should continue into Q4.”

Total benefit recipients also declined, to 25.3 million from 25.5 million, also as of the week ended Sept. 26.

Reporting of claims continues to be impacted by California, which has halted processing of its claims as it cleans up backlogs and looks to implement technology aimed at preventing fraud. The Labor Department has been using the 225,000 figure reported the week before the effort began.

This blog originally appeared at CNBC on October 15, 2020. Reprinted with permission.

About the Author: Jeff Cox is the finance editor for CNBC.com where he manages coverage of the financial markets and Wall Street. His stories are routinely among the most-read items on the site each day as he interviews some of the smartest and most well-respected analysts and advisors in the financial world. He also is a frequent guest on CNBC.


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Hospital Workers Fight Job Cuts at Duluth’s Biggest Employer

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Our health care employer announced hundreds of unnecessary layoffs this spring. Outraged at its poorly disguised greed, we didn’t just rely on negotiations. Instead, the members of our union voted unanimously to take the fight to the streets and into the community. We spent the summer fighting back—including holding our local’s first-ever pickets.

Essentia Health is far and away the largest employer in Duluth, Minnesota. Its sprawling main campus is a neighborhood unto itself, and its clinics and other facilities spread out across the region into almost every community of more than a few thousand people. Its very well-paid CEO and other top executives have overseen year after year of dramatic expansion; now they’re building a new state-of-the-art $900 million hospital. Business has certainly been good for Essentia Health.

But much of Essentia’s growth has come at the expense of its workers. For years we have been made to take on more and more work, while vacancies are left unfilled. This is sadly a common trend throughout health care. The COVID-19 pandemic has only thrown more fuel on the fire.

SMOKE AND SPIN

This spring, despite receiving $112 million from the government, Essentia announced its intentions to permanently eliminate 900 jobs. Its PR statements talked about how this was necessary because of the hard times that the pandemic was causing the company, and said that even the top executives and physicians would be taking pay cuts.

But it was all smoke and spin. The reality is that Essentia wasn’t even in the red; in fact, it took in more revenue this year than last year. At the same time as the chain was eliminating jobs, it was spending tens of millions of dollars to buy out a hospital in Moose Lake, Minnesota, and continuing full speed ahead with the construction of a new hospital in Duluth.

The top brass of Essentia cut their salaries—but we’re skeptical how long that will last. In the meantime, we’re sure they won’t have trouble getting by after receiving exorbitant sums like the $1.5 million in compensation paid to CEO David Herman in 2019.

FIRST PICKET EVER

United Steelworkers Local 9460 is the largest union at Essentia. Members voted unanimously to launch a fightback campaign across the chain across our 11 units in the chain.

Our campaign kicked off on June 1, with a car caravan protest and informational picket at Essentia’s main campus in Duluth. Several dozen cars and trucks filled with union members and supporters waved their way through Duluth’s streets and drove around the Essentia Health campus for hours, honking the whole time. At the same time dozens of workers held signs and gave our leaflets at all of the intersections around their campus.

The response from the community was overwhelming. Numerous motorists spontaneously joined the caravan, and almost every pedestrian we encountered indicated support—some even joined the informational picket. A number of other unions participated, including the Food and Commercial Workers (UFCW), the Minnesota Nurses Association, and the Service Employees (SEIU), as well as miners from the nearby Iron Range who are also part of the Steelworkers. The impressive pickets and union solidarity that had been built around MNA’s 2019 contract fight at Essentia helped lay the groundwork for our campaign.

This was the first picket of our own that Local 9460 had ever organized in our 20-year history, and it created a buzz in the community, the local labor movement, and the media. Next we mounted an aggressive information campaign, distributing hundreds of “No Layoffs at Essentia!” yard signs and posters throughout the communities where Essentia Health has facilities, and putting up billboards in Duluth, Ashland, Hayward, Spooner, and the Iron Range. The message of the billboards was “Essentia Health: Putting Wealth Before Health Like Nowhere Else”—a pointed mocking of Essentia’s official advertising slogan, which is “Like Nowhere Else!”

The yard signs, posters, and billboards generated a new wave of media coverage—and legal threats from Essentia. But the union refused to back down, and in the end the billboards stayed up and were seen by hundreds of thousands.

‘BRING OUR JOBS BACK!’

As the summer went on, we held more actions, including an informational picket in downtown Spooner, Wisconsin, where our members work at an Essentia outpatient clinic. We promoted the pickets with full-page ads in the local newspapers and a series of guest editorials.

In the face of this resistance, Essentia unfortunately did forge ahead with its layoffs. They started with non-union workers and managers, before moving on to the different worksites where Local 9460 represents almost 2,000 Essentia workers.

By the time the layoffs ended this fall, our union had lost about 300 members. This was considerably less than had been expected, but it still represented a huge loss. The cuts ranged from clinical assistants to janitors. Few job categories were spared.

Essentia, of course, will never admit that the fightback campaign reduced the number of union members laid off, but we are confident that it did. And we’re even more confident that it will cause the company to think twice from here on out, now that management has seen that our union can and will fight back.

The battle is far from over. We still have members without jobs, and those who are working are doing so woefully short-staffed. Local 9460 is preparing to enter contract negotiations with Essentia, and to launch a new community campaign around the theme, “Bring Our Jobs Back!” The struggle continues.

This article originally appeared at Labor Notes on September 28, 2020. Reprinted with permission.

About the Author: Adam Ritscher is vice president of United Steelworkers Local 9460.


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Advocating for Your Rights Even in Your First Interview

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Going in for your first job interview can be a nerve-wracking experience, no matter what. Whether you’ve been out of the working world for a while, or you’re just looking for something new, it’s normal to be a bit nervous for interviews.

But, don’t let those nerves overshadow your own rights.

When you stand up for your rights in the first interview, you will have a better idea of everything from company culture to any signs of discrimination within the business. That can make it easier to determine if it’s the right place of employment for you.

So, how can you better advocate for your rights in an interview? What should you ask? What do you need to know about what your interviewer can and can’t ask?

What Can’t Interviewers Ask?

There are certain questions that may come up in an interview that should be considered red flags. Additionally, there are questions that interviewers simply aren’t allowed to ask you. Arming yourself with the knowledge of these questions can make it easier to determine if there might be some discriminatory behavior going on. Some questions an interviewer cannot ask you include:

  • What’s your religion?
  • Do you have a disability (unless it is obvious or noticeable)?
  • What is your race?
  • What is your family status?
  • What is your gender?

Employers also can’t ask you about your specific age. You aren’t required to put your date of birth (DOB) on your resume, and interviewers can’t force you to answer questions about it. Even though there are legal protections in place, age discrimination can be a big problem in the workplace, so leaving your DOB off of your resume and knowing you don’t have to answer questions about it can help you to feel empowered.

Interviewers can ask personal questions about things like what motivates you and what makes you unique. But, when it comes to any specific questions about your race, culture, religion, or gender, you don’t have to answer and give fuel to the discriminatory fire.

How to Learn More About the Company During an Interview

It’s important to know what kind of company culture you might be walking into. You might be going back to work for the first time after being a stay-at-home parent. Does the company you’re interviewing with encourage a healthy work-life balance? Do they offer extended time off or childcare services?

You should also develop a strong understanding of how the company feels about employee wellness. Workplace stress is a huge problem, with 25% of people stating that work is their number one source of stress. When an employer takes the health and wellness of their employees into consideration, it shows that they value them. Corporate wellness programs can include:

  • Meditation sessions
  • An on-site quiet room for rest
  • Encouraging physical activity
  • Making sure employees are using their vacation days

In addition to wellness, a positive workplace culture should also be inclusive to people of different ages, races, genders, and identities. Don’t be afraid to ask questions during the interview that are important to you. You’ll want to make sure you feel comfortable within the culture before accepting a job. Knowing your rights when it comes to questions you have to answer, and asking the right ones yourself can make a big difference advocating for your rights during your first interview.

About the Author: Luke Smith is a writer and researcher turned blogger. Since finishing college he is trying his hand at being a freelance writer. He enjoys writing on a variety of topics but business and technology topics are his favorite. When he isn’t writing you can find him traveling, hiking, or gaming.


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A growing side effect of the pandemic: Permanent job loss

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More jobs are disappearing for good, dashing hopes of a rapid economic rebound.

Tens of millions of Americans have lost their jobs in the coronavirus recession, but for many of them the news is getting even worse: Their positions are going away forever.

Permanent losses have so far made up only a fraction of the jobs that have vanished since states began shutting down their economies in March, with the vast majority of unemployed workers classified as on temporary layoff. But those numbers are steadily increasing — reaching 2.9 million in June — as companies start to move from temporary layoffs to permanent cuts. The number is widely expected to rise further when the Labor Department reports July data on Friday.

Workers themselves are growing increasingly pessimistic as the permanent losses spread beyond the service industry to occupations like paralegals and financial analysts who weren’t initially affected by the shutdowns. Nearly half of American families whose households have seen a layoff now believe that job is probably or definitely not coming back, an AP-NORC poll found late last month. That marks a steep drop from the April survey, which showed nearly four in five respondents expecting their job loss to be temporary.

The rise in permanent job loss is the latest signal that the economic damage from the coronavirus is likely to be long-lasting, and that the Trump administration’s dream of a quick, V-shaped recovery is at odds with what workers are seeing across the country. That could create the need for even more government spending and long-term solutions beyond the temporary fixes that Congress has been debating.

“This recession has been really confused, because what we had was really a suppression where we told everybody to stay home — and that wasn’t really job loss,” said Betsey Stevenson, a former chief economist at the Labor Department and a member of the Council of Economic Advisers during the Obama administration. “The real question is, when you end the suppression, how many jobs are left? And boy, it sure looks like we lost a whole lot of jobs.”

Permanent layoffs have already begun spreading beyond industries directly affected by the pandemic. Nick Bunker, the director of economic research with the Indeed Hiring Lab, found that while permanent losses were concentrated in April in service-sector occupations that have been the hardest hit — waiters and retail salespersons, for example — they had spread by June throughout the labor market.

The trend appears poised to get worse. The number of Americans applying for unemployment aid has risen in recent weeks after months of steady decline, as the coronavirus surges across much of the country and a majority of states have either paused or reversed reopening plans. Another 1.2 million workers filed a new unemployment claim last week, the Labor Department reported on Thursday, marking the 20th consecutive week that applications have risen above 1 million. More than 32 million people are receiving either state or federal unemployment benefits, according to the most recent data.

Layoffs taking place now are more likely to be permanent rather than a temporary furlough. A Goldman Sachs analysis from July 31 found that 83 percent of job losses since February had been deemed temporary. But of all new layoffs in July in California, which it used as an example, only 35 percent were temporary.

“What’s happening now is more companies that thought they could survive are giving up,” said Nicholas Bloom, an economics professor at Stanford. “The most painful time to lose your job may well be coming up.”

The permanent losses hold greater weight than temporary layoffs, economists say, because they are far more likely to lead to long-term unemployment that would prolong any economic recovery. While a furloughed worker is likely to get his or her job back as soon as consumer behavior returns to normal, a permanently laid-off worker has to wait for an employer to create a new job, then apply and get matched with the right one.

“That’s what recessions are made of — that’s why they are so costly. That’s why they take so long to clean up,” said Adam Ozimek, chief economist at Upwork, a platform that connects businesses with freelancers.

Workers who remain unemployed over the long term end up increasingly less likely to return to the labor market for a number of reasons: Their skills may erode; they may lose motivation or employers may discriminate against them, Bloom said. Even after returning to the labor market, they could see effects like lower pay that linger throughout their careers.

“The reason that’s important from a macro perspective is, if you have this army of long-term unemployed, it becomes almost impossible to have a rapid rebound,” said Bloom, who co-authored a study in May that found that 42 percent of recent layoffs were likely to become permanent.

Economists argue the growing trend toward permanent job losses highlights a need for further federal spending to support laid-off workers, to keep consumer spending close to normal levels and to help small- and medium-size firms in particular weather the shutdowns.

Without more aid, business closures are likely only to increase, in turn keeping unemployment high. A recent Goldman Sachs survey found that 84 percent of business owners who had received loans under the Paycheck Protection Program said they would exhaust the funding by this week. And only one in six reported being “very confident” they would be able to maintain their payroll without further aid.

As more businesses close, it also becomes harder to restart the economy once consumer demand does start to return because there are fewer places for people to spend their money.

Even when consumers want to go out to eat or travel again, “That’s going to take a long time to turn into job benefits if you’ve had massive amounts of small business closures there,” Ozimek said.

Regardless of whether the July data shows the headline unemployment rate rising or falling for the month, the share of permanently unemployed workers is likely to continue to rise, complicating the administration’s touting of what President Donald Trump has previously called a “rocket-ship” economic recovery. And it underscores that even if states begin to reopen their doors in the near future, any return to normal for the labor market is likely years away.

“So are we moving in the right direction? I think not,” said Stevenson, now a professor at the University of Michigan. “I think most people went home from work in March, April or May and thought, ‘Surely they’re going to bring me back to work.’ And what’s happened is fewer of them were brought back than were expecting it.”

This blog originally appeared at Politico on August 6, 2020. Reprinted with permission.

About the Author: Megan Cassella is a trade reporter for POLITICO Pro.


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Trump thinks tariffs will add U.S. manufacturing jobs. Economic reality says they won’t.

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Adam BehsudiWhen then-Gov. Nikki Haley of South Carolina went to a ribbon-cutting ceremony for Kent International in 2014, the bicycle company had grand plans for expansion at its assembly plant to make its products in the United States.

“Manufacturing, it’s never as easy as it looks and people kind of laughed at us, but won’t be laughing very much longer,” Kent International Chairman and CEO Arnold Kamler said. “We are not reinventing the wheel; we just have a really talented bunch of workers and managers.“

President Donald Trump had promised that his steep tariffs on Chinese goods would help bring jobs back to the U.S. But five years later, paradoxically, it is the very tariffs that Trump has imposed that have kept that plant in Manning, S.C., from expanding, Kamler said in an interview.

Firms are indeed moving out of China but are not flocking to the United States, undermining the central promise of Trump’s trade war. Cheaper labor markets in Southeast Asia are the ones benefiting the most amid the trade war that has ratcheted up duties on Chinese goods.

In fact, the administration’s actions have prompted Kent International to still rely on its joint venture partner, Shanghai General Sports, to supply more of its bicycles. For its part, Shanghai General is planning to build a factory on a plot of land in Cambodia. By the end of year, 40,000 square feet of production capacity will be complete.

Kamler estimates that 30 percent of the company’s annual production of 3 million bicycles will come from Cambodia, at the expense of China.

The tariffs are also taking a toll on Kent International’s ambitions to bring jobs to the U.S. The company needs steel tubes as components in the welding assembly line, which currently can only be bought at a reasonable price from foreign suppliers.

The administration’s tariffs on steel and aluminum imports — as well as the threat of new tariffs on the majority of the components used in bicycle production — has meant that additional phases of bringing jobs to the U.S. have yet to happen.

The latest U.S. economic trends aren’t helping efforts. U.S. economic growth has slowed this year and the 3 percent growth Trump promised last year was revised down to almost 2.5 percent.

Manufacturing job trends are also cooling. The latest U.S. jobs report showed manufacturing employment rose by an average of 8,000 per month so far in 2019, compared with an increase of 22,000 jobs per month in the sector in 2018.

Across-the-board tariffs on all Chinese imports could create more than 1 million U.S. jobs in five years, contends the Coalition for a Prosperous America, a major backer of Trump’s tariffs. The reality, however, is other nations with lower wages are the ones benefiting from the president’s strategy.

“The majority of jobs are going to other countries,” said Jeff Ferry, chief economist for the coalition, which has advocated a complete decoupling from the Chinese economy to benefit the U.S.

The group‘s study found only a small gain in production returning to the U.S. the first year of a blanket tariff, representing only about 0.2 percent of the more than $500 billion worth of imports from China. By year 5 though, that number would increase to 13 percent compared to the value of last year’s imports from China, he said.

For his part, Trump pledged that his strategy to escalate the trade war against China would create jobs in the U.S. in the long term.

“Tariffs are a great negotiating tool, a great revenue producer and, most importantly, a powerful way to get companies to come to the USA and to get companies that have left us for other lands to COME BACK HOME,” Trump tweetedlast month.

Acecdotal evidence, not hard numbers.

There have been some prominent announcements from companies trumpeting that they have “reshored,” or brought jobs back to the United States.

Stanley Black & Decker said this year it would move production of its Craftsman line of tools, which it acquired from Sears, from China to Texas where it would add 500 jobs. High-end furniture seller Restoration Hardware said in a recent earnings report that tariffs were spurring it to bring some manufacturing to the U.S.

The U.S. Commerce Department published this year a “case study” on reinvesting in the U.S., highlighting the experiences of six companies moving production to America. The report makes the case “that anecdotal evidence of hundreds of reshoring cases is very real,” but it also admits that tariffs are a “challenge” for companies wanting to move production to the U.S.

Half of the companies profiled by the Commerce Department highlight the harm of tariffs on investment decisions.

Quality Electrodynamics, an Ohio-based company that designs and produces parts for medical devices, “recommended that the U.S. government could promote reshoring and expansion in the United States by revising U.S. tariffs on Chinese components in a way that does not disadvantage U.S. companies.”

Those working to find ways to increase reshoring say the tariffs are making it harder for companies to make decisions on where, or even whether, to add capacity.

Harry Moser, president of the nonprofit Reshoring Initiative, said he agrees 100 percent with the goals of Trump’s tariffs, but said they have had a “modest net negative” effect on jobs coming back to the U.S. as companies look elsewhere to relocate production.

Based on the Reshoring Initiative’s own study, 2018 was a banner year for the return of jobs to the U.S., but that progress dropped off in 2019. Already, $250 billion worth of imports are subject to a 25 percent tariff, and Trump has threatened to slap duties on almost all that the U.S. brings in from China.

Trump has announced that he would hit an estimated $112 billion in imports from China with a 10 percent as of Sept. 1, while another $160 billion subject to the duty as of Dec. 15.

“Clearly Trump caused work to come here more by the things he did on taxes than by pounding on the table with tariffs,” Moser said. “The uncertainty caused by the tariffs are hurting reshoring and foreign direct investment.”

Trump’s trade chief, U.S. Trade Representative Robert Lighthizer, acknowledged recently that tariffs were diverting some production to the U.S. but also to other countries.

“The imposition of tariffs can have many effects, including modifications to supply chains,” he wrote in a response to a written questions from Congress on whether tariffs are benefiting producers in other countries.

“I have closely followed reports of manufacturing coming back to the United States from China or going to third countries in some instances,” he said.

Sebastien Breteau, the CEO of Hong Kong-based supply chain inspection company Qima, said the data his firm collects supports the theory that neither China nor the U.S. is winning the trade war.

The company, which has 6,000 clients worldwide, has seen a 13 percent drop for China-based inspections from U.S. companies.

Meanwhile, inspections for U.S. clients increased 21 percent in Vietnam, 25 percent in Indonesia and 15 percent in Cambodia. Mexico inspections for U.S. clients jumped by a staggering 119 percent in the first six months of 2019.

“There is a clear sign that in the trade war between the U.S. and China, the winner is not going to be the U.S. and it’s not going to be China,” he said. The winners are “going to be Vietnam, Indonesia, Cambodia and very likely Mexico and Bangladesh.”

The Qima data is supported by a recent report from consulting firm AT Kearney, which found that imports from low-cost Asian countries in 2019 outpaced U.S. manufacturing output.

A report by the investment firm China International Capital Corporation released last month estimated that across eight manufacturing sub-sectors in China, the first two batches of tariffs from the United States would likely result in 1.5 million job losses in China. The authors said that looking across the whole manufacturing sector, “this estimate may be low.”

However, there is little evidence to suggest that many of these jobs are flocking to the United States.

George Whittier, CEO of Morey, a Chicago-based custom electronics manufacturer, said his company still relies on imported parts to make GPS tracking devices and controllers for vehicles. Most of those components imported from China are subject to tariffs, but the finished products are not. The result is more time spent haggling over costs with existing customers rather than expanding production and jobs.

Whittier also questioned whether the U.S. labor pool could absorb a major increase in manufacturing. He said he has 15 positions open that he has been unable to fill even after raising the offered salaries twice.

“If there was this big boom of manufacturing coming back from China into the U.S., I gotta be honest, I have no idea where the workers are going to come from,” he said.

Kamler, of Kent International, said previous discussions with the Trump administration had been frustrating because of a perspective that only goods made from “start-to-finish in the U.S.” count as “real” domestic manufacturing. But he added that recent talks with the Commerce Department had been more fruitful.

Kamler has formed a coalition of 12 American companies in an attempt to bring an entire supply chain cluster back to the United States. If the alliance can prove that it’s assembling entire bicycles in the United States, it would “be able to import all the component parts for five years, duty free,” Kamler said.

Still, he said he was told the alliance would only get the tariffs eliminated if it could prove that it could increase U.S. bicycle assembly from 600,000 annually to 4 or 5 million. Kamler said the industry would ultimately have to seek permanent relief from tariffs through legislation, which he said is in the early stages of being developed.

“These things don’t happen so fast, but this is a long-term play and this is actually my hope and part of my legacy that I’m hoping to leave, that I can help bring back the American bike industry,” he said.

Counterfeiting, not tariffs, prompt some moves

For other companies, the threat of intellectual property, or I.P., theft and not tariffs has driven decisions to relocate production to the U.S.

Isaac Larian is the chief executive officer of MGA Entertainment, the world’s largest privately owned toy company. Last year, one of his company’s brands, Little Tikes, reshored production of fashion accessories for its line of L.O.L. Surprise! Dolls to an existing plant in Hudson, Ohio, in a bid to avoid fake versions of its products from being sold to consumers.

“The biggest problem we face in China is the theft of I.P. There are over 200 factories in China that make L.O.L. Surprise! counterfeit products and very little can be done about it,” Larian said. “These counterfeit products are unsafe for children.”

He said MGA tested moving one item’s production to the U.S. and found it was successful. Now, it plans to move more accessories, especially because toys made in China are among the items subject to a 10 percent tariff as of Dec. 15.

“It will definitely affect business due to lower sales, and we are looking at options” to move more manufacturing out of China, he said, adding that “it is too late for this year.”

Another toy seller, Unit Bricks, examined moving production to the U.S. by pricing out the plastic elements of its production as well as packaging. But the company decided it was unaffordable at this stage because profit margins on toy sales are too thin to justify the costs of relocating production to the U.S.

“Everything is about margins,” said Timothy Stuart, the owner of the educational toy maker. “The issue with the U.S. is that labor intensive items become too expensive.”

“All production is in China for us: plastic, wood, packaging. Industry follows labor, and America can’t afford cheap labor,” said Stuart.

With the threat of a new tariffs looming, Stuart said that his business could absorb a 10 percent levy, but should it rise to 25 percent, “we would have zero choice at that point” but to leave China.

“Frankly, I still have hope that the 10 percent won’t hit, but we are prepared for it and have already spoken to customers. They’ve increased the quantities of their orders, so that helps,” said Stuart.

But should things escalate, the U.S. and Poland are both active options but due to the higher cost, “the U.S. is the last resort.”

This article was originally published at Politico on August 24, 2019. Reprinted with permission.

About the Author: Adam Behsudi is a trade reporter for POLITICO Pro. Prior to joining POLITICO, he covered international trade policy for Inside U.S. Trade, where he tracked down the latest news on the Trans-Pacific Partnership from exotic locales such as Auckland, New Zealand; Kota Kinabalu, Malaysia; and Leesburg, Va.Before writing about anti-dumping, export controls and other trade subjects, Behsudi covered city hall for the Frederick News-Post. He got his start in journalism chasing crooked sheriffs and other crime-related news in the mountains of western North Carolina for the Asheville Citizen-Times

Behsudi earned his bachelor’s degree in 2005 from the University of Missouri. With the hope that journalism could return as a growth industry within his lifetime, he earned a master’s degree in interactive journalism from American University in 2010.


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Trump administration backs off from slashing Job Corps centers after bipartisan outcry from Congress

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The Trump administration’s move to slash federal jobs and job training for rural youth hasn’t gone according to plan. In fact, it’s not going to go at all after bipartisan outcry. The plan to shut down nine Job Corps Civilian Conservation Centers, with 16 more to be privatized or shifted to state control, was scrapped Wednesday.

More than 1,100 federal workers at centers that train disadvantaged youth and young adults were slated to be laid off under the plan, which would have hit some rural communities hard. Those rural communities are often represented by Republicans, who objected vociferously to the layoffs and closures. That’s why Senate Majority Leader Mitch McConnell opposed the plan, which would have closed two centers in Kentucky, and why a letter from 51 members of the House and Senate was resoundingly bipartisan. (It more or less goes without saying that if the closures had targeted heavily Democratic areas, Republican lawmakers would have been all for it.)

“[In] 2017 1,200 students at CCCs participated in fire assessments, providing the equivalent of 450,000 hours of service during the height of the fire season,” the 51 lawmakers wrote. “Students at CCCs also provided 5,000 hours of support in response to Hurricane Harvey.”

And what do you know? The Trump administration decided it was easier to back down than to anger all those rural Republicans—the elected ones writing letters and, presumably, the average people who were going to lose out because of the closures. Funny how that works.

This blog was originally published at Daily Kos on June 20, 2019. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos.

 


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Renewable industry employed 11 million people in 2018

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The number of workers employed by the renewable energy industry keeps growing. In 2018, at least 11 million people around the world held jobs across the renewables sector, from manufacturing and trading to installation.

According to the sixth annual jobs report by the International Renewable Energy Agency, the majority of these jobs are concentrated in China, the European Union, Brazil, and the United States.

The figures show a steady increase over the years. In 2017, there were 10.3 million jobs. This was up from 9.8 million in 2016 and 8.1 million in 2015.

This growth comes at the same time as countries are setting clean energy generation records. The U.K. recently went at least 10 days without generating any coal power, while last month in the U.S. renewable energy generation surpassed coal generation for the first time in history.

11 million people were employed in the renewables industry in 2018. Credit: IRENA.
11 MILLION PEOPLE WERE EMPLOYED IN THE RENEWABLES INDUSTRY IN 2018. CREDIT: IRENA.

In the United States, the number of people working in renewables is just under the amount employed by the fossil fuel industry. Last year saw a slight uptick in these jobs, with just over 1.1 million people employed in petroleum fuels, natural gas, coal, and biomass across the country.

According to the IRENA report, solar power remains the top employer within the renewables industry, providing 3.6 million jobs last year, accounting for a third of the entire industry’s workflow. This is in part due to expansion in India and Southeast Asia as well as Brazil. China, however, remains the leading solar employer, representing 61% of all jobs in 2018.

Meanwhile, 2.1 million people worked in the biofuel industry, another 2.1 million jobs were in hydropower, and wind employed 1.2 million people.

A third of all renewable jobs globally, the report states, are held by women. This is compared to a 22% average in the oil and gas industry. However, previous reports have shown that at least in the solar industry in the United States, the majority of jobs still go white men.

President Donald Trump has repeatedly said that tackling climate change means losing jobs. But as this report shows, in fact the opposite is true.

The findings in IRENA’s latest report support a study released last December by the International Labour Review which found that accelerating the transition to clean energy could add 24 million jobs globally by 2030.

In a press statement Thursday, Francesco La Camera, the director-general of IRENA, said countries are investing in renewables not just because of climate concerns, but also because it makes economic sense.

“Beyond climate goals,” he said, “governments are prioritizing renewables as a driver of low-carbon economic growth in recognition of the numerous employment opportunities created by the transition to renewables.”

This article was originally published at AFL-CIO on June 13, 2019. Reprinted with permission.

About the Author: Kyla Mandel is the editor for the climate team. Her work has appeared in National Geographic, Mother Jones, and Vice. She has a master’s degree from Columbia University’s Graduate School of Journalism, specializing in science, health, and environment reporting. You can reach her at [email protected], or on Twitter at .

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Trump takes aim at firefighting jobs with largest federal cut in a decade

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The Trump administration is planning to cut over a thousand jobs — including many wildland firefighting jobs — in what’s thought to be the largest federal jobs cut in a decade. The move comes ahead of another wildfire season and amid threatened halts to financial assistance following deadly fires last year.

The latest attempt in what appears to undermine wildfire preparedness includes ending a federal program that trains young people for jobs including wildfire fighting, while at the same time withholding wildfire reimbursements California officials say are owed from last year. All of this serves to deepen the feud between President Donald Trump and West Coast states over disaster assistance. Meanwhile, multiple states are preparing for another brutal wildfire season based on current federal projections.

In an announcement buried on the Friday before the Memorial Day weekend, the Trump administration announced that it will end a program under the Forest Service, run by the U.S. Department of Agriculture (USDA). The Job Corps Civilian Conservation Centers (CCCs) train young people between the ages 16 to 24 in rural and disadvantaged areas for jobs including wildland firefighting and forestry, in addition to disaster recovery. The 25 centers are predominantly in the South and West and located on federal lands, with more than 3,000 students employed by the program.

Nine of the centers will close, with another 16 set to move to state control or to be taken over by private entities, as control of the program shifts to the Labor Department. Centers in Washington, Oregon, Kentucky, Montana, Wisconsin, Arkansas, Virginia, and North Carolina are all slated for closure. Roughly 1,100 jobs will be lost — potentially the largest federal workforce reduction in a decade.

“As USDA looks to the future, it is imperative that the Forest Service focus on and prioritize our core natural resource mission to improve the condition and resilience of our Nation’s forests, and step away from activities and programs that are not essential to that core mission,” USDA head Sonny Perdue wrote in a letter to Labor Secretary Alexander Acosta on Friday.

The program has suffered from safety issues, along with inconsistencies in job placement. But lawmakers on both sides of the aisle have expressed dismay over the massive job cuts, while union leaders have slammed the decision as “a coordinated attack on the most vulnerable populations in the country.”

In a statement following the announcement, National Federation of Federal Employees (NFFE) National President Randy Erwin lamented the potential implications for wildfire fighting in particular.

“[O]nly the CCC’s [sic] train students to serve as wildland forest firefighters to help with fire suppression operations during fire season,” Erwin said. “There is no plan for this loss of resources to the country which has seen more powerful fires with each passing year.”

Wildfires have become significantly more deadly and destructive in recent years, with the season now considered to run virtually year-round amid worsening climate impacts and urban sprawl.

According to Wildfire Today, one of the CCCs slated to close in Kentucky sent personnel on 40 assignments in 2016 alone. And a review by NFFE found that more than 300 students provided more than 200,000 hours of wildfire-related support in 2017. It is unclear, however, what the loss of the CCCs might mean for efforts to combat wildfires during this year’s fire season.

That reduction in wildfire assistance comes amid ongoing sparring between Trump and California. Last November, the president largely blamed the state for its wildfire problems, accusing California of “gross mismanagement of the forests” and threatening to withhold federal aid. Now, the Forest Service is accusing California of overbilling with its $72 million reimbursement request, money the state owes its fire agencies for last year’s work on federal lands.

The Forest Service is demanding proof of “actual expenses” for the services rendered on public lands and has launched an audit into the California Fire Assistance Agreement (CFAA), which reimburses the state for such costs. That means the federal government is now withholding more than $9 million of the total amount requested from California, even as the state stares down another wildfire season.

The 2018 wildfire season is connected with at least 100 deaths and involved the efforts of thousands of firefighters in California alone. This year could be equally dire, with western parts of Washington already prepared for an exceptionally bad season. That area has seen an abnormally dry year so far, with outdoor burns already reported throughout the month of March, which is unusual.

“Scared,” Dave Skrinde, a fire district chief in Washington, told local reporters, speaking about the wildfire season. “That’s my gut feeling.”

And according to the National Interagency Fire Center, Washington isn’t the only statethat needs to be on heightened alert for wildfires over the next few months. Areas across the West — including parts of Oregon, which is losing a CCC — are at risk. Warming temperatures in Alaska, meanwhile, have made the state more vulnerable to wildfires, with southeast Alaska currently experiencing its first recorded extreme drought in history.

This article was originally published at Think Progress on May 28, 2019. Reprinted with permission. 

About the Author: E.A. (Ev) Crunden covers climate policy and environmental issues at ThinkProgress. Originally from Texas, Ev has reported from many parts of the country and previously covered world issues for Muftah Magazine, with an emphasis on South Asia and Eastern Europe. Reach them at: [email protected]


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