Pandemic nudging firms to address climate change, says Norway wealth fund


OSLO, Dec 14 (Reuters) - The coronavirus pandemic may be accelerating a shift among companies worldwide to make their operations more environmentally sustainable, a high-ranking official at Norway's $1.25 trillion sovereign wealth fund said on Monday.

The fund is one of the world's largest investors, channelling revenues from Norway's oil and gas production into the stocks of some 9,200 companies abroad, or 1.5% of the world's stocks. It also holds bonds and unlisted real estate.

"The pandemic has not weakened sustainability work, but perhaps strengthened it," Carine Smith Ihenacho, the fund's head of governance and compliance, told a news conference, citing a survey the fund had done among a sample of firms it invests in.

Some 67% of 1,521 companies it surveyed in 2020 said they had set long-term quantitative targets to cut their greenhouse gas emissions, up from 54% in 2019, when 1,500 firms were surveyed.

Some 48% of companies surveyed in 2020 had considered different climate scenarios in their business plans or strategy, up from 35% in 2019, the fund said.

"The head of a big European company told us that the pandemic has accelerated work on sustainability," Smith Ihenacho said. She did not name the firm or the executive.

She did not spell out why the pandemic was making more companies more inclined to sustainable operations.

Still, a majority of companies surveyed this year - 52% - has not considered different climate scenarios in their business plan or strategy.

The fund is canvassing companies because it wants to test the business model of the biggest CO2 emitters in its portfolio and see whether they have a business model that can survive in a low-carbon society.

The fund had previously said it was planning to publish, ahead of time, its voting intentions at the annual general meetings of the 9,200 companies it invests in.

On Monday, the fund said it would do so five days before the vote is scheduled, and that it would start doing so from next month, making the information searchable on its website nbim.no.

"We want to be world-leading on this," CEO Nicolai Tangen told a news conference.

(Reporting by Gwladys Fouche Editing by Mark Heinrich)

Europe's banks have a way to go on sustainability - BlackRock study

By Simon Jessop and Kate Abnett
Mon, December 14, 2020

The facade of the EU Commission headquarters is reflected in the windows of the EU Council building in Brussels

LONDON/BRUSSELS (Reuters) - Europe's banks are not integrating climate change and other sustainability concerns into their risk management systems as quickly as regulators expect, a study by BlackRock for the European Union showed on Monday.

In an interim report, BlackRock said it had analysed feedback from the region's lenders and found most were only just starting to reflect environmental, social and governance (ESG) related risks in their internal processes.


A final report, which will be used by Brussels to help develop new regulations, is due by April next year.

"While interviewed banks often state that they have initiatives in place to enhance the integration of ESG risks, the majority have not formalised an ESG risk integration strategy with clear timelines and responsibilities," it said.

"With respect to climate risk, many smaller banks stated that they have not yet started its integration into risk management," the report said.

It also found that only a minority of regulators provide guidance to banks on ESG risks or reflect it in their oversight processes, such as through climate-related stress tests.

"The majority of supervisors interviewed do not yet have any quantitative indicators in place to monitor and assess the exposure of supervised banks to ESG risks," the report said.

While some banks have begun to launch ESG-related products and make commitments to meet the terms of the Paris Agreement on climate, the report said that in the view of many civil society organisations, efforts by lenders so far fell short.

"The Commission is committed to transparency. As promised, we published BlackRock's interim report today," a European Commission spokesman said. "This report is only a preliminary analysis of data collected so far. The final report is to be submitted to the Commission at a later stage."

The EU's appointment in April of the world's biggest asset manager to help it plan future prudential regulations has raised concerns about conflicts of interest.

While the bloc's Ombudswoman said last month that the Commission had failed to consider such conflicts properly, she did not cancel the contract.

(This story corrects quotes attributed to the report throughout)

(Reporting by Simon Jessop and Kate Abnett; Editing by David Clarke)

Targeting Barclays, Climate Activists Fight Their Way to Draw

Alastair Marsh
Mon, December 14, 2020


(Bloomberg) -- Few people understand the seeming futility of getting big banks to do the right thing better than Catherine Howarth.

For three years, Barclays Plc, Europe’s biggest financier of corporate carbon emitters, ignored her entreaties. Then her non-profit, ShareAction, spent the best part of another year pushing a shareholder resolution -- the first of its kind in Europe -- for the lender to phase out funding for fossil-fuel companies.

The result: A pledge from Barclays to cut its net emissions to zero in three decades and, in the meantime, to ramp up its green financing activities.

“For the current directors of a company to commit to something that’s 30 years away does leave quite a lot of wiggle room,” the 46-year-old activist says.

It was better than nothing, but far less than Howarth wanted. While Barclays said in March that it planned to adjust its lending and capital markets activities to be compatible with the goals of the Paris climate agreement to limit global warming, the London-based bank didn’t commit to phase out financing to fossil-fuel companies that have no plans to contribute to those targets, the key objective of ShareAction’s resolution

The battle with Barclays, which Howarth insists isn’t over, highlights the gap between rhetoric and reality when good business and good intentions diverge.

“It’s not just a question for Barclays,” she says. “The global banking sector isn’t where we need it to be, and even though it’s moving really quite fast in the right direction, we’re in a climate emergency and so moving quite fast but not fast enough is what could take us over dangerous tipping points.”

The contest between ShareAction, a 55-person charity that until earlier this year was operating out of a re-purposed liquor warehouse on the edge of London’s financial district, and an institution with 80,000-plus employees and around $2 trillion in assets is the classic underdog story – but without the cinematic finale. Instead, it has provided a lesson in the limitations of shareholder activism on climate change.

Since the Paris climate agreement was signed in December 2015, Barclays has helped arrange $91.7 billion of bonds and loans for energy companies, excluding solar, wind and other renewable producers, more than any bank in Europe, according to data compiled by Bloomberg. That includes $20.8 billion in 2020 for clients including BP Plc and Exxon Mobil Corp.JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. have been the biggest lenders to corporate emitters, while HSBC Holdings Plc and BNP Paribas SA are among Europe’s largest financiers, Bloomberg data show. Since Barclays made its net-zero pledge, London-based HSBC and JPMorgan in New York have made similar commitments.

Barclays Chairman Nigel Higgins said Dec. 3 during a virtual conference hosted by the Financial Times that the company’s fossil-fuels business is commensurate with the scale of its overall investment-banking franchise and there’s no reason to think the bank took clients that its peers turned down. He wrote four days earlier in a letter to shareholders that the bank’s environmental journey “is far from complete’’ and it’s “committed to continuous improvement in our response to the climate challenge.’’

A spokesman for Barclays declined to comment for this story.

Howarth joined ShareAction in 2008 after several years campaigning for a living wage for low-paid workers. She credits her Irish mother for her passion for social justice, and for her thick red hair. For Howarth, the Barclays resolution is “one piece, one really exciting moment, in a much longer drama.”Just months after the Paris accord was announced, Howarth and a group of colleagues attended the general meetings of Britain’s largest banks to gauge their response. While some banks made board members available for discussion, what followed with Barclays was a series of fruitless meetings with its sustainability team, Howarth said.

Three more years of empty chat resulted in a more aggressive – but still courteous – strategy. It was time to force Barclays’s hand.Over the din of commuter trains winding into London Bridge station, Howarth and her team weighed the pros and cons of pursuing a resolution that would require Barclays to cease financing fossil-fuel companies that had no plan to reach the Paris agreement. They wanted the lender to set and disclose targets to wind down infrastructure funding, corporate loans and debt underwriting for oil and gas exploration, production, refining, marketing and storage, as well as for coal companies.

Signing up Barclays shareholders took time and effort. But by last Christmas, they reached the threshold of investors required to put a resolution on the agenda for the bank’s annual meeting in May. The supporters included more than 100 individual investors and a dozen institutions, including Brunel Pension Partnership Ltd. and Sarasin & Partners. The Church of England and Jupiter Asset Management also backed the proposal.

After the resolution became public, she finally did get an audience with the bank’s decision makers, including three meetings with Higgins. She declined to comment on the particulars of the discussions, citing confidentially agreements.

Dominic Burke, investment director at Lankelly Chase and part of the group that filed the resolution, attended some of the meetings and said Barclays didn’t engage with the substance of the group’s demands. Though the bank’s team suggested they shared the non-profit’s core concerns about climate change, they took issue with the wording of the resolution that requested a phasing out of fossil-fuel financing, he said. The bank’s alternative gave it more latitude to trumpet its green credentials and continue to finance polluters, Burke said.

While Howarth didn’t get what she wanted — only 24% of shareholders supported ShareAction’s resolution, which was far below the threshold required for Barclays to adopt it — she is playing the long game and considers the resolution to be a successful endeavor.If her experience of shareholder advocacy teaches her anything, it’s that patience pays. Seven years after ShareAction filed a resolution requesting that Royal Dutch Shell Plc stop investing in carbon-heavy tar sands projects, a proposal that received less than 15% shareholder support, the company said in 2017 it would sell most of its Canadian oil sands assets.

And Barclays has “moved an extraordinary distance in the last 12 months,” Howarth said. At the end of November, the bank said it joined an industry-wide group that measures emissions from lending and underwriting, developed its own methodology for calculating funded emissions, and affirmed its ambition to align its financing with the Paris agreement.

She also thinks she’s figured out the key to success for climate action in the finance industry: appeal to financiers’ animal spirits.

“You’re not going to get these people necessarily to do anything out of the goodness of their hearts, but if you can harness the competitive spirit between them, it can be extraordinarily productive,” Howarth said.

©2020 Bloomberg L.

Israel Should Heed Its New Arab Friends on Palestine

Seth J. Frantzman
Mon, December 14, 2020

(Bloomberg Opinion) -- Extraordinary opportunities are developing between Israel and the United Arab Emirates in the wake of the normalization deal the countries signed in September. At a recent technology conference in Dubai, more than 130 Israeli companies and a delegation of four hundred Israelis we able to explore trade opportunities. This, along with new interfaith initiatives, showcases rapidly developing relations between the two countries.

But Israel needs to listen to its new Arab peace partners and show that it is also serious about progress on talks with the Palestinians in the future.

The partnership between Israel and the UAE, underpinned by trade and travel initially, comes with assumptions from Abu Dhabi. The UAE said that it embraced the deal to “stop annexation and the potential of violence escalation.” It is also keen to maintain the viability of a two-state solution and increase stability in the region, especially in countries like Jordan that are very sensitive about changes to the status quo in Israel.

The Emirati Minister of State for Foreign Affairs Anwar Gargash said in a recent interview that the normalization agreement is not transactional but a strategic national choice. The deal, he said, is an important opportunity to show that prosperity and peace can be achieved for the region: “It should be bigger than the UAE and Israel.”

That means providing for a political solution between the Palestinians and Israelis.

The carefully worded statements from the Emiratis amount to a message that doesn’t always seem to get through to Israel. Prime Minister Benjamin Netanyahu is heading toward his fourth election campaign in two years, hoping to extend a long tenure in office in which he has made lack of progress on the Palestinian issue a core value.

This approach may have worked for him in the past, but now Netanyahu has secured peace deals with several Arab nations — with Morocco joining the USE, Bahrain and Sudan in the camp — he can’t ignore the concerns and demands of his new friends.

Significantly, these new friends are making common cause with older partners Netanyahu has previously ignored: The UAE and Bahrain recently hosted Jordan’s king, showcasing their support for a ruler who has had a cold relationship with Netanyahu.

The UAE is seeking to change the playbook for normalization between Arab states and Israel. The first model was “land for peace,” the basis for the 1979 deal between Egypt and Israel. The second, defined by the Saudi-led Arab Peace Initiative of 2002, required Israel to withdraw from the West Bank and Gaza, and the creation of a Palestinian state. The new model is recognition and normalization first, and then a push for a peace process.

Saudi Arabia and other Arab states are watching closely to see if their quiet support for the new diplomatic openings result in progress between Israel and the Palestinians. But Israeli officials seem not to be paying attention.

Israel is sticking to its well-worn line that the Palestinians must stop their “rejectionism” as a precursor to peace. For many years there has not been a clear Israeli policy on what the Palestinians would receive if they do meet this demand. The key issues, such as Jerusalem as a shared capital city, or borders and compensation for refugees, are not on the table from Israel’s point of view.

There are other factors at play, of course. Adversaries of Israel and the UAE have been backing Palestinian groups, like Hamas in Gaza, that are opposed to any peace efforts. A divided Palestinian polity with an aging leadership presents many challenges. But these facts only strengthen the argument for Israel to work closely with the UAE and other Arab states on the next steps.

Israel’s new Arab partners aren’t demanding that a Palestinian state needs to emerge immediately, but they have been saying they want to see movement in that direction as part of their normalization deals. It is incumbent on Israel to show that its relationship with these states is about more than trade deals and interfaith dialogue. This is a multi-layered peace project and it needs a layer in which Israel listens to its new friends.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Seth J. Frantzman covers Middle East affairs for the Jerusalem Post. He is the author of "After ISIS: America, Iran and the Struggle for the Middle East" and executive director of the Middle East Center for Reporting and Analysis.

Morocco's police disperse protest against ties with Israel

Mon, December 14, 2020

RABAT, Morocco (AP) — Moroccan authorities on Monday dispersed a group of activists who tried to hold a protest outside the parliament building in the capital to denounce the country's recent decision to establish diplomatic relations with Israel.

Dozens of police officers in riot gear were mobilized to push protesters away from parliament in Rabat. Demonstrators wanted to show solidarity with Palestinians and reject the normalization of ties between Rabat and Tel Aviv.

The U.S. brokered deal was announced last week by President Donald Trump.

Sion Assidon, a Moroccan Jew and a human rights activist, told reporters while being escorted away by authorities that “whoever expresses disagreement must put duct tape on their mouths.”

Abdessamad Fathi, president of the Moroccan Instance for the Support of Ummah Affairs, a group affiliated with the outlawed Al Adl Wal Ihsane movement, said on Facebook that authorities' decision to ban sit-in is an indication that normalizing relations with Israel is “imposed on Moroccans."

On Sunday, Moroccan authorities allowed a large gathering outside the Parliament building to support the recent deal that also included U.S. recognition of Morocco’s claim over the long-disputed Western Sahara region.

Another large rally was organized on Sunday in the city of Laayoune in Western Sahara, where thousands of Moroccans had chanted slogans in support of the agreement.

The royal palace in Rabat said in a statement that king Mohammed VI had promised President Donald Trump he would facilitate direct flights to transport Jews of Moroccan origin and Israeli tourists to and from Morocco and re-open the liaison offices. The announcement was cheered by political parties and provoked despair among Islamist groups.

UPDATES

#CAPPLETALI$M #WILDCAT STRIKE

Apple probes supplier after workers at Wistron plant in India rampage

An Apple logo hangs above the entrance to the Apple store on 5th Avenue in the Manhattan borough of New York City

By Sankalp Phartiyal and Chandini Monnappa

NEW DELHI/BENGALURU (Reuters) - Apple Inc said on Monday it is investigating whether a Taiwan contractor, Wistron Corp, flouted supplier guidelines at an iPhone manufacturing facility in India, after some workers ransacked the plant in a protest over unpaid wages.

Thousands of contract workers gathered on the grounds of the Wistron site on the outskirts of India's tech hub of Bengaluru on Saturday demanding unpaid wages and better working hours.

As police arrived, the crowd turned violent and video from the scene showed people armed with rods and sticks smashing equipment and vandalizing cars, causing what the company estimated at $60 million in damage.

"We have teams on the ground and have immediately launched a detailed investigation at Wistron's Narasapura facility," Apple said in an email, adding it was dedicated to ensuring everyone in its supply chain was treated with dignity and respect.

Apple said it was sending staff and auditors to the site and was cooperating with police in their investigation.

Wistron, one of Apple's top global suppliers, said in a regulatory filing in Taiwan it "always abides by the law, and fully supports and is cooperating with relevant authorities".

Wistron has been making iPhones in India for nearly four years and its operation has been seen as a success story for Prime Minister Narendra Modi's government that is looking to boost manufacturing.

"The incident hurts the 'Make in India' label," said independent brand consultant Harish Bijoor, referring to the government promotion campaign slogan. "Such events are small scars left on India as a manufacturing facility."

Apple, under the leadership of Tim Cook, has been looking to not only step up its marketing and presence in India - one of the biggest smartphone markets in the world - but also expand its sourcing footprint in the South Asian nation.

A minister for the state of Karnataka, where the factory is located, said the government was talking to all parties and that the labour department was investigating any underpayment of wages and non-clearance of other dues.

The unrest comes as Modi's government is under pressure from protesting farmers opposed to reforms in the agricultural sector, which they say threaten their livelihoods.

MILLIONS IN DAMAGES

Videos taken by employees in the Wistron factory showed men, many wearing masks due to the coronavirus outbreak, destroying security cameras, windows and other equipment.

The crowd smashed four cars, two golf carts, stole laptops and smartphones and destroyed other office equipment, according to a police report filed by Wistron and reviewed by Reuters.

In the complaint, Wistron accused more than 5,000 contract workers and some 2,000 unknown people of destruction of property. It put the losses at 4.38 billion rupees ($60 million).

Police have arrested 149 people over the violence, a senior officer said, while a search was on to identify and arrest more perpetrators as the investigation continues.

Trade union leader M.D. Harigovind said the violence was a direct result of the "brutal exploitation of workers and sweatshop like conditions".

Wistron, whose workers are not unionized, did not respond to questions seeking comment on the allegations, but said in a statement earlier it was "deeply shocked" by the violence it blamed on "unknown persons ... with unclear intentions".

(Reporting by Sankalp Phartiyal in New Delhi, Ben Blanchard in Taipei and Chandini Monnappa in Bengaluru; Writing by Nivedita Bhattacharjee; Editing by Euan Rocha, Arun Koyyur and Stephen Coates)

SABOTAGE BY ELIZABETH GURLEY FLYNN

 IWW.ORG

Originally published as SABOTAGE, THE CONSCIOUS WITHDRAWAL OF THE WORKERS' INDUSTRIAL EFFICIENCY, in October, 1916, by the IWW publishing bureau, in Cleveland

Apple supplier Wistron puts India plant damage at up to $7 million

Mon, December 14, 2020,

Men wearing protective face masks walk past broken windows of a facility run by Wistron Corp in Narsapura


TAIPEI (Reuters) - The ransacking of an iPhone manufacturing facility in India caused up to T$200 million ($7.12 million) in damage though production facilities were not as badly hit as reported, its Taiwan-based operator Wistron Corp said on Tuesday.

Thousands of contract workers gathered on the grounds of the Wistron site on the outskirts of India's tech hub of Bengaluru on Saturday demanding unpaid wages and better working hours.

As police arrived, the crowd turned violent and video from the scene showed people armed with rods and sticks smashing equipment and vandalising cars. In a police report seen by Reuters, Wistron estimated damages worth $60 million.

However, in a statement to the Taiwan Stock Exchange on Tuesday, the company said major production facilities and warehouses had not suffered as serious damage as reported by local media, and that it was initially estimating losses at T$100-200 million.

The company is doing its utmost to get the plant back up and running, it said. Wistron shares fell around 2.5% in early Asia trade, underperforming Taiwan's broader stock market.

"The company has cooperated with the relevant authorities and the police investigation and continues to negotiate with the insurance company," Wistron added, without elaborating.

Apple Inc said on Monday it was investigating whether Wistron had flouted supplier guidelines. Apple said it was sending staff and auditors to the site and was cooperating with police in their investigation. Wistron is one of Apple's top global suppliers.

It has been making iPhones in India for nearly four years and its operation has been seen as a success story for Prime Minister Narendra Modi's government that is looking to boost manufacturing.

($1 = 28.1040 Taiwan dollars)

(Reporting by Ben Blanchard; Additional reporting by Twinnie Siu in Hong Kong; Editing by Ana Nicolaci da Costa)

Apple Probes iPhone Supplier After Worker Protests Over Wages, Working Hours Turn Violent In India
Shivdeep Dhaliwal
Sun, December 13, 2020


An Apple Inc (NASDAQ: AAPL) supplier’s factory has been attacked by workers in India who claim they were brutally exploited, the Wall Street Journal reported Sunday.

What Happened: Taiwan-based Wistron Corporation, whose factory near Bengaluru is often showcased by Indian authorities as an example of homegrown manufacturing, saw violence including arson by workers angry over wages and working hours, according to the Journal.

M.D. Harigovind, an official from an Indian union, attributed the agitation to “the brutal exploitation of workers and sweatshop-like conditions.”

Wistron said it was “deeply shocked” by the unrest with a spokesperson reportedly saying “we follow the law and are supporting the authorities with their investigation.”

An Apple spokesperson said the tech giant is “dedicated to ensuring everyone in our supply chain is treated with dignity and respect,” the Journal reported. The Cupertino-based company told the Economic Times that it is probing the allegations against Wistron.

Why It Matters: Last month, Apple put another Taiwanese supplier, Pegatron Corporation, on probation after it discovered cases of labor violations.

In mainland China, Apple employees have alleged that the Tim Cook-led company is complicit in the violation of the country’s labor laws.

 

Most Americans want stimulus checks, reject GOP's 'red line' on liability protections, poll shows

Denitsa Tsekova·Reporter
Mon, December 14, 2020,


While Congress remains gridlocked on the next relief deal, Americans know what they want: A second round of stimulus checks, please. Liability protections and student loan forbearance can wait.

Two in three Americans said stimulus checks were the most important provision of the next relief deal, according to the latest Yahoo Finance-Harris Poll of 2,027 people, while fewer than 1 in 4 (23%) support the liability protection for businesses and only 1 in 5 back student loan payment deferrals.

“The liability shield just doesn't make sense to people. People don't understand why that would be a priority,” Gbenga Ajilore, a senior economist at the Center for American Progress, a nonprofit for public policy research and advocacy, told Yahoo Money. “A liability shield is not going to put food on the table, it’s not going to keep people in their homes.”

Speaker of the House Nancy Pelosi (D-CA) and Senate Majority Leader Mitch McConnell (R-KY) arrive to watch the casket with the remains of Rep. John Lewis (D-GA) being carried from the U.S. Capitol building, in Washington, U.S., July 29, 2020. Brendan Smialowski/Pool via REUTERS

The liability shield would protect businesses, educational institutions, and other employers from coronavirus-related claims from workers who get sick while regularly going to work. It’s what Senate Majority Leader Mitch McConnell called a “red line” for Republicans during stimulus negotiations, but could be left out of the next deal if Democrats agree to nix their key provision — aid for state and local governments.

Not only are stimulus checks the most important provision for Americans, but they should be included in the next deal, according to 7 in 10 of respondents from a second round of polling of 1,026 people. Under the CARES Act, around 160 million Americans received a stimulus payment of up to $1,200 — plus $500 for any child dependent.

Two of the main proposals on the negotiating table — McConnell’s (R-KY) around $500 billion package and the Democrat-backed $908 billion bipartisan proposal — don’t include a provision on direct payments. The White House’s $916 billion proposal is the only one that includes checks, but leaves out supplemental unemployment benefits, which Democratic leaders called “unacceptable.”

There’s also a standalone bill on direct payments introduced by Sen. Josh Hawley (R-MO) and Sen. Bernie Sanders (I-VT). But experts said it may not have enough votes to become law if a bigger deal on stimulus is not reached.

‘Saved money won’t last long when nothing's coming in’

Nearly 7 in 10 Americans expected and budgeted in the hopes that Congress would pass another bill providing extra financial aid between August and now, the poll also found.

“It wasn't an unreasonable assumption that Congress would pass some sort of relief,” Ajilore said. “What’s unreasonable is the fact that they haven’t.”

Nearly nine months after the CARES Act passed, many of its provisions have expired or are set to expire if no stimulus deal is reached by the end of the year.

Up to 12 million Americans are expected to lose unemployment benefits coverage when two programs enacted under the act expire on December 26. Additionally, the federal eviction moratorium, paid sick leave, aid to state and local governments, among other relief, will lapse.

Both the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs are set to expire on December 26 unless Congress reaches a stimulus deal.

“If people had known that Congress was going to be derelict in their duty, and not provide any relief after the CARES Act, people would have done things a lot more differently,” Ajilore said. “Still, people saved their money, but saved money won’t last long when nothing's coming in.”
‘Certain people are going to struggle a lot more’

More than half of respondents (53%) say they’ll need more than seven months for their household finances to return to pre-pandemic levels, with 1 in 3 saying it may take more than a year, the survey found.

“Certain people are going to struggle a lot more,” Alijore said. “People are taking on more debt now, because they have to pay the bills.”

More than a third of Americans (33.9%) reported they’ve had a somewhat to very difficult time paying basic household expenses in the first week of November, according to a recent report by the Census Bureau released last week.


While jobless workers more than doubled their liquid savings between March and July, according to a study from the JPMorgan Chase Institute, they spent two-thirds of those accumulated funds in August alone. That occurred as the extra $600 in weekly unemployment benefits expired at the end of July, followed by the September expiration of the extra $300 under the Lost Wages Assistance program.

“This is going to be really tough for them,” Alijore said. “The more debt you take on, the further it is going to be before you can become whole again.”

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.

     

 

   

.

 

U.S. needs estimated $4.5 trillion in stimulus to recover, analysis argues

Denitsa Tsekova
·Reporter
Sat, December 12, 2020

VIDEO Flight attendant union president on the need for additional stimulus

The economy may need up to five times more money than what lawmakers are considering to return to pre-pandemic levels, according to a new analysis.

The Groundwork Collaborative, a progressive economic think tank, found that a stimulus package worth $3 trillion to $4.5 trillion would be required for American businesses and workers to work at their full potential and the real unemployment rate to fall to 3.5%.

“We need stimulus, and we need it fast,” Mark Paul, a political economist at the New College of Florida and co-author of the report, told Yahoo Money. “Every day that we wait, we risk disenfranchising more people from the economy. Every day that we wait, more people are facing evictions and falling behind on bills.”

The $3.4 trillion HEROES Act passed the Democratic-controlled House on October 1 but was never considered by the GOP-controlled Senate after Majority Leader Mitch McConnell’s (R-KY) called the legislation a “socialist manifesto.”

Speaker of the House Nancy Pelosi (D-CA) speaks during her weekly news conference at the U.S. Capitol April 30, 2020 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)

The latest bipartisan stimulus proposal would cost $908 billion, though negotiations are in disarray as House Democrats, Senate Republicans, and the White House continue to disagree on key issues such as stimulus checks, aid for sate governments, and liability provisions for companies amid the pandemic.

Democratic leaders are backing the $908 billion proposal, McConnell stands by a roughly $500 billion proposal, and the White House floated a $916 billion proposal that was quickly rejected.

“Congress is debating a stimulus package right now that would leave our estimate of true unemployment still hovering around double digits,” Paul said. “We have the tools to put the economy back on track. Unfortunately, Congress lacks the political will to act.”

The analysis is based on an estimate that the current unemployment rate in November is 13%. While the official unemployment rate for November is 6.7%, economists warn the true number is much higher if adjusted for the fall in labor force participation since February.

“Taking 3.5 percent as the full employment level of unemployment and 13 percent as a better estimate of actual unemployment gives an unemployment gap of 9.5 percentage points,” the analysis asserts. “Taking this gap together with an estimate of current GDP in November of nearly $21.3 trillion, implies a potential GDP of more than $25.7 trillion, or an output gap of $4.5 trillion that fiscal policy needs to fill.”

Source: "How Much Emergency Relief Will it Take to Revive the US Economy?"

‘Costs of going too small ... far outweigh the costs of going too big’


The highest price tag of a Republican stimulus proposal was their $1 trillion proposal from July, while the White House’s highest proposal was around $1.9 trillion before the election. Both of those proposals are no longer being considered.

“The most frustrating aspect of this is that the macroeconomic policy community is essentially in full agreement that the costs of going too small on stimulus far outweigh the costs of going too big,” Paul said. “The worst that can happen is we end up with some additional public parks or hand out a few extra dollars to low and middle-income Americans that haven't seen a pay increase in a generation.”

And the risks of spending less than needed on stimulus are higher than spending more, economists warn.

“The risk of overdoing it is less than risk of under-doing it,” Federal Reserve Chairman Jay Powell told the Senate Banking Committee last week. “Fiscal support at this point will really move th

‘Too small today is better than no stimulus at all’

If no stimulus deal is reached by the end of the year, up to 12 million Americans are expected to lose unemployment benefits coverage when two programs enacted under the CARES Act expire on December 26. The federal eviction moratorium, paid sick leave, aid to state and local governments, among other relief, also will lapse.

“We're looking at critical programs that are just going to be running out of money,” Paul said. “These are just simple policy choices that are fully avoidable.”

Both the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs are set to expire on December 26 unless Congress reaches a stimulus deal.

Both McConnell and House Speaker Nancy Pelosi (D-CA) have said that if they reach a deal now, they can continue discussing another stimulus package after President-elect Joe Biden’s inauguration.

But the packages offered by Republicans have become progressively smaller in size as the economy appears to be recovering, even though millions of Americans are being pushed to the financial brink.

“I'm deeply troubled by the current bill on offer,” Paul said. “But I do think a stimulus that is too small today is better than no stimulus at all.”

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.

Up to 15 million Americans face a devastating loss of pandemic stimulus 'the day after Christmas'

Denitsa Tsekova
·Reporter
November 13, 2020·

Another fiscal cliff is looming for millions of unemployed Americans.

The Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs are set to expire at the end of 2020, leaving around 15 million jobless workers without any unemployment benefits unless Congress steps in.

“You're really seeing a huge black-and-white change from very aggressive help to the unemployed, to almost nothing in a matter of months,” Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. “It's just a really untimely and very disastrous situation to let these benefits expire the day after Christmas.”

Read more: Here’s what you need to know about unemployment benefits eligibility

The expiration of those benefits, along with the exhausted savings of out-of-work Americans, could significantly reduce consumer spending and slow the economic recovery.

People receive food at the Thessalonica Christian Church during a distribution site on October 17, 2020 in New York City. The Bronx, a borough which has long struggled with poverty and neglect, has been especially impacted by the COVID-19 pandemic. 

(Photo by Spencer Platt/Getty Images)

‘We pay attention to unemployment insurance when there's a recession’

Currently, 9.4 million workers rely on PUA, which provides unemployment benefits to contractors, self-employed, and other workers — all of which will get their last payment on December 26 or 27.

Another 6 million will lose eligibility for PEUC at the end of the year, according to estimates by Ernie Tedeschi, a managing director and policy economist for Evercore ISI. PEUC provides an additional 13 weeks of benefits once jobless workers exhaust what their state typically provides — approximately 26 weeks of benefits. Currently, 4 million receive PEUC, but more people are relying on it each week that passes by.

“Think about PEUC as being a shadow of the layoffs that we had earlier in the pandemic,” Tedeschi told Yahoo Money. “All the people who got laid off in March and April — coincidentally six months ago — are just now exhausting their state benefits and going over into PEUC.”

Some of the people on PEUC may be able to move to Extended Benefits (EB) a federal program that provides additional 13 weeks but that program is also expiring in many states as their unemployment rates decrease.

The expiration of PUA and PEUC would be the third financial cliff jobless Americans have faced: first, the expiration of the extra $600 in weekly unemployment benefits under the CARES Act in July and second, the expiration of the extra $300 under Lost Wages Assistance (LWA) program in September.

Read more: How long will your unemployment benefits last?

This comes as unemployment claims remain elevated with over 700,000 Americans filing for first-time unemployment benefits last week.

“What usually happens is we pay attention to unemployment insurance when there's a recession,” Michele Evermore, a senior policy analyst at the National Employment Law Project, told Yahoo Money. “Then when it's over, most people go back to their lives and stop paying attention to unemployment.”

‘The recovery loses even more momentum’

While some unemployed Americans survived on accumulated savings over the last few weeks, most of that extra money will be depleted by mid-December if no more stimulus is passed, according to an analysis by Evercore ISI.

Jobless workers more than doubled their liquid savings between March and July, but two-thirds burned through those accumulated savings in August alone, according to a study from the JPMorgan Chase Institute.


“Unemployed workers wisely and prudently saved some of their benefits throughout the year,” Tedeschi said. “These workers will have mostly exhausted whatever savings they had by December.”

They’ve also reined in their spending, recording a 14% drop in August, following a 22% increase when the unemployed received that extra $600 in benefits, the JPMorgan Chase Institute study found.

Read more: Do you have to pay taxes on unemployment benefits?

At the beginning of November, spending was down by 6.4%, after being down just 3.5% in mid-October, according to data from Opportunity Insights and JPMorgan Chase. That trend will likely continue until the end of 2020 and accelerate even more in the beginning of 2021, according to Tedeschi, weighing on the economic recovery.

“It's very possible that when you look at the aggregate, the United States would continue to grow after these programs expire,” Tedeschi said. But “I would expect that it grows at a slower rate and that the recovery loses even more momentum.”

VIDEO https://money.yahoo.com/15-million-americans-face-a-loss-of-pandemic-stimulus-221322561.html

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.

Stock market highs, booming housing, and millions unemployed: A tale of two Americas amid the coronavirus pandemic
Dhara Singh and Denitsa Tsekova
September 19, 2020·6 min read

Six months after getting laid off from a Chicago restaurant, Torianna Chess is still jobless and struggling to stretch her unemployment benefits to cover her bills.

“All I have in my savings is enough to cover September’s rent,” Chess, 27, told Yahoo Money. “I'm not really sure about October, November, and the next couple of months.”

More than 2,100 miles west in San Diego, the fortunes are reversed for Maresa Friedman and her husband. Both remain employed and aren’t spending money for travel, work meals, or other everyday perks since the pandemic began.

“I’ve been able to save around $5,000 to 6,000,” she said.

Maresa Friedman and her family. Photo: Courtesy of Maresa Friedman

Welcome to the pandemic economy in America.

As stocks and housing bounce back in big ways, the net worth of many higher earners — whose jobs also remain intact — is booming after initial setbacks in the spring. But for many lower to middle-income Americans, the coronavirus crisis has erased livelihoods, jeopardized housing, and made it harder to achieve financial stability.

“Everyone suffered when the economy shut down, but the recovery looks so different,” said Claudia Sahm, a former principal economist at the Federal Reserve Board of Governors and now director of macroeconomic policy at the Washington Center for Equitable Growth. “For high-income [earners], their stock portfolios are back, better than they were. But there are millions of Americans that still don't have jobs, they don't have the income they had before.”

Thomas Kennerly stopped by his mom's house where he spent some time with his granddaughter (R) Kaiylan (age 4) in Oxon Hill, Maryland on July 16, 2020. (Photo: Michael S. Williamson/The Washington Post via Getty Images)

‘The pain is concentrated at the bottom’

High- and middle-income earners did feel the pain from this recession early on, absorbing wage cuts during the pandemic. Even entrepreneurs such as Friendman had to change gears.

After the pandemic crushed her event-planning business, Friedman transitioned to creating virtual conferences. The pivot succeeded, with her new business bringing in six figures, while her husband kept his job as a vice president at a major bank.

But that wasn’t the case for everyone.

“Big contracts and events dried up overnight. A lot of people lost jobs and contracts,” Friedman said, noting that people she knew worked in tourism or hospitality, two sectors that employ many lower earners who have borne the brunt of job losses.

Jobless claims remain stubbornly high. (David Foster/Yahoo Finance)

In a typical recession, the hardest-hit industries are manufacturing and construction, which shed a lot of relatively high-paid jobs, said Dean Baker, senior economist at the Center for Economic and Policy Research. But in this recession, the service sector has been on the front lines of job losses.

“It's a very, very different story than what we typically see in a recession,” Baker said. “Overwhelmingly, the pain is concentrated at the bottom.”

Read more: Here’s what you need to know about unemployment benefits eligibility

The service industry is also taking a longer time to recover. Chess has been looking for a service job for months, but has had no luck.

“There aren’t any jobs for me currently hiring,” she said. “They're just rehiring people that were working for them before and that weren't working due to the pandemic.”

Extra Unemployment Benefits for States Beginning to Run Out

‘My phone bill is $60 a month’

Homeowners like Friedman are also enjoying an increase in home values, even after the housing market hit pause in April during the state shutdowns.

Housing values increased 4.3% in June, according to the latest S&P CoreLogic Case-Shiller home price index, with San Diego — where Friedman lives — rising 5%.

That gain adds to the equity she built up in the last decade. Her townhome, which she shares with her husband and two teenage children, has increased in value from $300,000 to $610,000. With only $72,000 left to pay in her mortgage, she’s accumulated an estimated $530,000 in equity.

“We have tons of equity in the home” Friedman, 36, said, “and people thought we were crazy to live in a townhome.”

Torianna Chess, who lost her job in March, is still jobless and struggling to stretch her unemployment benefits to cover her bills. Photo: Courtesy of Torianna Chess.

Chess also lives in a townhome with her disabled brother and her six-year-old son, but one that she rents for $900 a month. When she was getting the extra $600 a week in unemployment benefits under the CARES Act, she could manage her rent. But since those benefits expired, she only gets $242 a month in unemployment and struggles to pay for everything.

Read more: Rental aid: Here's where you can find help in every state

“My phone bill is $60 a month,” said Chess, who has to deal with both joblessness and housing insecurity.

“There are people who already own their homes and have their jobs and who are in a [better] financial position,” said Mark Zandi, chief economist at Moody’s Analytics, “whereas renters along with low- and middle-income earners are struggling with unemployment and having trouble making rent.”
‘I don’t have stocks’

Following the swoon in March, the stock market has increased by 51% and Americans with investments in retirement or brokerage accounts have reaped the benefits. Those without missed out.

“I think the benefits of the stronger stock market are very concentrated as only half of Americans own any stock, and they are generally boomers and white Americans,” Zandi said. “The vast majority of Americans and minority groups do not benefit.”

Friedman and her husband, a pair of “cash hoarders” as they call themselves, lost 10% in their retirement account that they haven’t yet recovered. But they aren’t concerned.

“I figure over time it will build,” she said. “It’s a short-term thing.”

Chess, who is part of the 45% of Americans and the 98.4% of Black Americans who don’t own stocks, also doesn’t worry about the market.

“It doesn’t help me,” she said, “because I don’t have stocks.”
‘It's likely that wealth inequality has increased’

This so-called K-shaped recovery — where higher earners are bouncing back, but low earners are not — could widen the wealth inequality in the country unless there’s more government stimulus.

“There's going to be a big cleavage opening up,” Sahm said, “or at least that's where we're headed.”

Newly built and ultra slim residential towers continue to grow along the New York City skyline on February 13, 2019 in New York City. (Photo by Spencer Platt/Getty Images)

More government intervention could mitigate that, Sahm said. Thanks to stimulus checks and expanded unemployment benefits, personal income grew in the second quarter when the nation’s GDP shrunk. But that support has evaporated with nothing yet to replace it.

That may mean a longer recovery for those at the bottom, like Chess, who said she’ll need at least six months — and a job — to return to where she was before the pandemic hit.

“It really messed up my life,” she said. “It's going to be hard to come back.”

Dhara are Denitsa are reporters Yahoo Money and Cashay. Follow them on Twitter at @Dsinghx and @denitsa_tsekova.

ANTI-RACISM
How Racial Injustice And The Climate Crisis Are Inseparable Emergencies

BY NYLAH BURTON BRITISH VOGUE JUNE 2020


Black, brown, and indigenous people around the world are already bearing the brunt of the environmental crisis, showing how racial and climate justice are intertwined.

For many people, the climate crisis is a modern-day phenomenon. But for black and indigenous people, as well as other colonised people of colour, we know that the roots of the environmental crisis go back much further and are inseparable from racial injustice

The exploitation of our planet’s natural resources has always been closely linked to the exploitation of people of colour. My 72-year-old grandmother, Clara, was a sharecropper in Alabama during the late ’50s. From the age of 11, she was forced to work the same fields her enslaved ancestors had, pricking her finger on the boll of the cotton, sucking the blood out as she fearfully looked down, worried about poisonous snakes striking her heels. She tended to the land, helping white folks extract everything that could be sold. As she grew up, eventually leaving Alabama, she never wanted to touch the land again. It was full of too much pain and too much fear.

Attempting to dismantle the main drivers of climate change, including fossil fuel industries, is impossible if we do not dismantle the systems that uphold white supremacy, built to make a profit off the backs of black, brown and indigenous people. For it is this evil, which stretches back to when colonisation began, that has led humanity to its greatest existential crisis yet.

An everyday reality for people of colour

Climate change is already an everyday reality for people of colour; it’s not something that’s going to happen in the distant future. We’re the ones more likely to be facing severe droughts or floods, or have our homes destroyed by hurricanes and cyclones.

What will it take to convince people that racial justice and climate justice are inseparable? Even if they do not feel it in their bones, as I and so many of my black, brown and indigenous siblings do, why do they not hear it screaming from the newspaper headlines? 

Residents look on as flames burn through the bush in Lake Tabourie, Australia, January 2020.
© Photography Getty Images


The most recent Australian wildfire crisis, from June 2019 to March 2020, caused outrage around the world. But you’re unlikely to have read about how the fires have affected Indigenous Australians. Cyclone Amphan, which led to at least 98 deaths and millions of people across Bangladesh and India being displaced in May, in the middle of the pandemic, also received less attention worldwide with western media continuing to put more value on white lives over those of people of colour.

There are countless other examples of how black, brown and indigenous people are already bearing the brunt of the climate crisis. We’ve seen severe droughts in Southern Africa, leading to food shortages for millions of people. We’ve seen black people in Louisiana’s ‘Cancer Alley’ die as a result of the toxic chemicals released by the large number of industrial plants located in or near their communities.

We’ve seen Indigenous land guardians in the Amazon such as Paulo Paulino Guajajara slaughtered by extractive loggers. We’ve seen the US and Canadian governments give the go-ahead for oil pipelines — harming protesters in the process — to be built through indigenous lands, not caring about the numerous health and food sovereignty risks to the people who live there.

We need to tackle racism to tackle climate change and vice versa

During the Covid-19 pandemic, we’ve also seen black and Hispanic people die at much higher rates in the US, with similar findings for black and minority ethnic communities in the UK. It’s likely that air pollution in the most marginalised neighbourhoods has put poorer communities and people of colour at greater risk of hospitalisation and death from Covid-19.

Environmental racism is undoubtedly a huge issue all over the world. It’s why people living in black communities in the US are three times more likely to die from exposure to pollution than white people. It’s why waste from the US, UK and Australia is sent overseas to countries including Thailand, the Philippines and Malaysia, creating a health hazard for the people living there. It’s why garment workers in countries such as Bangladesh, India and Cambodia are more likely to be exposed to hazardous chemicals, which pollute their waterways.


READ MORE“Racism Is A Global Issue”: Edward Enninful On The Importance Of Cultivating An Anti-Racist Agenda
BY EDWARD ENNINFUL



The global uprising we now see against racism, following the death of George Floyd in the US, is also a global uprising against the forces that put our planet and our existence as humans at risk. We must dismantle every system that oppresses each of us if we are to end the climate crisis and ensure that our communities are resilient and strong.


Quintella Williams feeds her baby whilst she awaits evacuation in New Orleans following Hurricane Katrina, September 2005.

© Photography Getty Images

Institutional racism in the criminal justice system (which sees black people incarcerated at five times the rate of white people) means that black and brown prisoners are disproportionately impacted by the climate crisis, too; during Hurricane Katrina in 2005, incarcerated people in the Orleans Parish Prison were left chest-deep in water, without any of the supplies they needed. Meanwhile, New York City had no evacuation plan for Rikers Island jail during Hurricane Sandy in 2012, despite the fact that the jail was in an evacuation zone.

Citizens of New Orleans photographed on an overpass where they waited for days for evacuation following Hurricane Katrina, August 2005.

© Photography Getty Image

Maybe it’s overwhelming for people to see just how many injustices are linked to the climate crisis. But Earth is our only home. Everything we are, or will be, stems from it. And so much of the injustice that this world contains was created by racism and colonialism, of feeling the need to own or destroy another’s body so that one could take from Earth.

The land has been weeping tears of our blood for a long time. Maybe now, in this global moment of reckoning, we will be able to wash those tears away.