Biden administration pauses federal drilling program in climate push

By Nichola Groom and Jennifer Hiller

© Reuters/Nick Oxford FILE PHOTO: Pump jacks operate at sunset in Midland

(Reuters) - U.S. President Joe Biden's administration has temporarily suspended oil and gas permitting on federal lands and waters in the latest of a series of rapid-fire orders aimed at fighting climate change and tamping down the U.S. fossil fuel industry.

The order appeared to be a first step in delivering on newly sworn-in Biden's campaign pledge to permanently ban new drilling on federal acreage. Federal leases account for close to 25% of the nation's crude oil output, making them a big contributor to energy supply but also to America's greenhouse gas emissions.

Biden's predecessor Donald Trump had sought to maximize production of oil, gas and coal on federal acreage, and routinely downplayed threats from global warming.

The suspension was welcomed by environmentalists but derided by the oil and gas industry, which is struggling to secure a future under a new administration that has vowed to make countering global warming a top priority.

The 60-day pause strips Interior Department agencies and bureaus from their authority to issue drilling leases or permits while the administration reviews the legal and policy implications of the federal minerals leasing program, according to a Department of Interior memo. The order does not limit existing operations, it said.

Shares of U.S. shale producers with federal lands exposure fell following the news on Thursday.

EOG Resources Inc and Cimarex Energy Co closed down 8.6%, Devon Energy Corp fell 7.9% and Occidental Petroleum Corp closed down 6.4% on the New York Stock Exchange.

"This is a frack ban," Anne Bradbury, chief executive of the drilling trade group American Exploration & Production Council, said in an interview. "Even just for 60 days, it's a really aggressive move."

 

Many of the largest onshore drilling companies had stockpiled permits https://www.reuters.com/article/idUSKBN29Q1S5 in anticipation of a change in federal policy ahead of Biden's election, insulating them from a ban.

The order came close on the heels of a raft of other executive actions aimed at fighting climate change, including re-engaging the United States in the Paris climate accord and canceling a permit for the Keystone XL oil pipeline from Canada.

JOBS VERSUS CLIMATE

Jesse Prentice-Dunn, policy director of the environmental advocacy group Center for Western Priorities, said "the Biden administration is rightfully attempting to take stock of the damage and make sure the agency is following the law."

But big industry groups American Petroleum Institute and Western Energy Alliance swiftly issued statements condemning the pause and framing it as a threat to the economy.

"With this move, the administration is leading us toward more reliance on foreign energy," API President Mike Sommers said.

Limits on federal drilling will have the biggest impact on major Western producing states like New Mexico and Wyoming, which depend on revenue from their share of extraction royalties.

In a statement, the New Mexico Oil & Gas Association said that restricting development "risks the loss of more than 60,000 jobs and $800 million in support for our public schools, first responders, and healthcare services."

White House officials did not immediately return a request for comment.

(Reporting by Nichola Groom, Editing by Richard Valdmanis, Aurora Ellis and Marguerita Choy)

Big U.S. oil drillers have federal permits to mute effect of any Biden ban

By Jennifer Hiller and Nichola Groom

© Reuters/NICK OXFORD FILE PHOTO:

 A drilling rig operates in the Permian Basin oil and natural gas producing area in Lea County

(Reuters) - U.S. President Joe Biden's promised ban on new oil and gas drilling on federal lands would take years to shut off production from top shale drillers because they already have stockpiled permits, according to Reuters interviews with executives.

But smaller independent oil drillers without the resources of big corporations were more worried about Biden's vow to toughen regulations and stop issuing new permits on federal lands, part of his sweeping plan to combat climate change and bring the economy to net zero emissions by 2050.

Federal lands are the source of about 10% of U.S. oil and gas supply. Fossil fuels produced on federally managed lands and waters contribute nearly 25% of U.S. greenhouse gas emissions, according to government estimates, making them an easy target for the administration's climate agenda.

Biden's pledge would reverse former President Donald Trump's efforts to maximize drilling and mining on federal property. In an order dated Wednesday, the Biden administration suspended oil and gas leasing and permitting on federal lands for 60 days while it reviews the legal and policy implications of the mineral leasing program. But a freeze or ban will not end production in those areas overnight.

The seven companies that control half the federal supply onshore in the Lower 48 states have leases and permits in hand that could last years.

"We have always been very confident that we will continue to develop and drill on federal acreage," said David Hager, executive chairman of Devon Energy Corp, the biggest oil producer on onshore federal land in the Lower 48 states. "It's embedded into the rights we have in the leases and we're doing it the right way."

He said he expected the company's federal lands permits would last at least four years.

Other top producers on federal land include EOG Resources Inc, ExxonMobil Corp, Occidental Petroleum Corp, ConocoPhillips, and Mewbourne Oil Company.

Representatives at these companies did not comment for this article. But several have issued public statements saying they have solid stockpiles of federal permits and an ability to meet tougher emissions regulations expected under Biden. They have also said they can quickly shift drilling to state or private acreage once federal permits dry up.

EOG has said it has at least four years of federal permits. "When it comes to access to federal lands, that's one of the things we're not really worried about in our business. We have a lot of potential outside of federal land, too," Chief Operating Officer Billy Helms said during an investor conference last year.

Occidental said last year it had well over 200 federal drilling permits in hand and had requested another roughly 200 permits on New Mexico acreage, where some of the richest reserves lie beneath federally owned property.

Ameredev II, which produces about 10,000 barrels of oil per day in New Mexico's Permian, also has federal drilling permits to last at least four years.

"We're trying to maximize our value against an uncertain range of possibilities," said CEO Parker Reese. 

Energy consultancy Rystad said it saw stockpiling of federal lands drilling permits in the run-up to the November presidential election, with federal permit requests rising to a 31% share of all permit requests in the major U.S. oilfields from 18% in 2019.

Biden's team did not respond to several requests for comment.

Most onshore federal drilling happens in Western states like New Mexico, Colorado and Wyoming, which get a share of extraction royalties and depend on that revenue. 

As Biden takes office, U.S. shale drilling industry has already declined sharply due to weak prices.

Total U.S. shale output is expected to fall to 7.5 million barrels per day in February, the U.S. Energy Department said on Tuesday, which would be the lowest since June 2020.

Shale drilling accounts for roughly two-thirds of U.S. crude oil production, but output is expected to decline throughout 2021 as producers rein in spending.

'EXISTENTIAL THREAT'

A large swathe of the industry is made up of smaller firms that lack the deep pockets to squirrel away permits, get a jumpstart on installing new emissions control technologies or take their business elsewhere.

"The impact on the independent oilman is a heck of a lot greater than it is on Big Oil," said Don Law, owner of Denver-based Prima Exploration Inc, which produces about half of its 1,000 barrels of oil a day on federal lands, mainly in Wyoming, New Mexico and North Dakota.

Law called Biden's promised policy "an existential threat" unlike any he has encountered in 40 years in the oil business, echoing the rhetoric used by some climate activists about the threat posed by global warming.

Many smaller drilling firms operate in a single state or basin, according to trade group Western Energy Alliance, and would struggle to pack up and leave.

"I actually live here," said Mark Murphy, a third-generation oilman in New Mexico. His company, Strata Production Co, has 15 employees and operates 47 wells, mostly on federal acreage.

Western Energy Alliance, the oil and gas industry trade group most focused on public lands policy, has pledged to fight any efforts to impose a leasing ban in court. States that rely heavily on revenues from federal oil and gas drilling are also ramping up opposition.

Last month Wyoming officials issued a study that said a ban would cost eight Western states $8.1 billion in tax revenue and $34.1 billion in investment in the next five years. The state's governor, Mark Gordon, called the predictions "devastating."

New Mexico's Democratic Governor Michelle Lujan Grisham said in late 2019 that she would seek a waiver from any drilling ban imposed by a future administration. But she has not discussed the issue publicly since, and her office did not respond to several requests for comment.

(Reporting by Jennifer Hiller and Nichola Groom; editing by Richard Valdmanis and David Gregorio)

US government approves routes for Wyoming CO2 pipelines

CASPER, Wyo. — The U.S. government has approved routes for a system of pipelines that would move carbon dioxide across Wyoming in what could be by far the largest such network in North America, if it is developed.

© Provided by The Canadian Press

The greenhouse gas would be captured from coal-fired power plants, keeping it out of the atmosphere where it causes global warming. The captured gas would instead be pumped underground to add pressure to and boost production from oil fields.

In all, the U.S. Bureau of Land Management designated 1,100 miles (1,770 kilometres) of federal land for pipeline development through the Wyoming Pipeline Corridor Initiative, the Casper Star-Tribune reported.

Interior Secretary David Bernhardt signed the plans last Friday, days before leaving office with the rest of President Donald Trump's administration. The approval allows companies to begin submitting pipeline construction proposals.

Wyoming officials including Republican Gov. Mark Gordon have promoted carbon capture as a way to boost the state's struggling coal mining industry.

Utilities nationwide have been turning away from coal-fired electricity in favour of cheaper and cleaner natural gas and renewable energy.

Video: Study: Fossil fuel production set to exceed Paris agreement limit (Global News)

“The ability to have a CO2 delivery system, as made possible by the pipeline corridor initiative, helps make CO2 commercially viable,” Gordon said in a statement Wednesday.

Whether a large system of carbon capture for oil production is technically and economically feasible remains to be seen. One of two such systems in North America, the Petra Nova facility in Texas, has been offline since global oil prices plummeted last year.

The Petra Nova system moves carbon dioxide 80 miles (130 kilometres) from a power plant to an oil field in southeastern Texas. In southeastern Saskatchewan, Canada, near the U.S. border, the Boundary Dam carbon dioxide system connects a power plant with an oil field 40 miles (65 kilometres) away.

Energy markets drive development of carbon capture projects for oil development, said Matt Fry, state of Wyoming project manager for the pipeline initiative.

“We’re just helping to incentivize and provide some sort of a bridge for folks to help them move forward. Hopefully, this and future federal incentives will help get the ball rolling, and we’ll get some projects on the ground,” Fry said.

Environmental groups including the Western Watersheds Project have criticized the pipeline corridor plan, saying the pipelines would cross habitat of sage grouse — brown, chicken-sized birds that spend most of their time on the ground.

Sage grouse numbers have dwindled substantially over the past century and much of their habitat in Wyoming carries development restrictions.

The Associated Press

Deutsche Bank starts probe in relation to engagement with some clients

By Kanishka Singh M 

© Reuters/RALPH ORLOWSKI FILE PHOTO: 

Germany's Deutsche Bank headquarters are pictured in Frankfurt

(Reuters) - Deutsche Bank AG said on Sunday it began a probe in relation to engagement with some clients after the Financial Times reported earlier that the German lender was investigating the alleged mis-selling of investment banking products.

"We initiated an investigation in relation to our engagement with a limited number of clients. We cannot comment on details of the investigation until it is complete", a Deutsche Bank spokesman said in an emailed statement late on Sunday.

The Financial Times reported that the lender was probing if its staff mis-sold sophisticated investment banking products to clients in breach of European Union rules and then colluded with individuals within these companies to share the profits.

The internal probe was triggered by client complaints last year, the newspaper reported, citing people familiar with the process, adding that the investigation initially focused on the desk in Spain, which sells hedges, swaps, derivatives and other financial products.

An audit had found that the bank wrongly categorised client firms under the Markets in Financial Instruments Directive (Mifid) rules, which require banks to separate their clients by levels of financial sophistication, according to the newspaper.

Sources told the newspaper that the lender believes some of its staff knowingly sold inappropriate or unsuitable products to customers who may not have been able to understand and shoulder the risk they were taking with these positions.

The probe, called Project Teal, is also looking into accusations that there was collusion between the German bank's employees and staff at some of the clients who bought the inappropriate products.

The scope of the investigation was subsequently extended to the rest of Europe, but it was believed only Spain and Portugal-based clients were impacted, a source told FT.

The probe is drawing to a conclusion and the bank will have to soon make final disclosures to regulators, the newspaper said, adding that the bank's primary regulators, BaFin and the European Central Bank, have been informed.

(Reporting by Kanishka Singh in Bengaluru; Editing by Peter Cooney and Diane Craft)

VOLUNTARY SELF REGULATION

Investor payouts and job cuts jar with U.S. companies' social pledge

By Jessica DiNapoli, Ross Kerber and Noel Randewich

© Reuters/MIKE BLAKE FILE PHOTO:

 The AT&T logo is pictures on a building in Los Angeles

(Reuters) - When Randall Stephenson joined 180 of his peers leading many of the richest U.S. companies in signing the Business Roundtable pledge on the "purpose of a corporation" in August 2019, the then-chief of AT&T Inc promised to look out for the interests of all the wireless carrier's stakeholders, not just shareholders.

Two months later, the Dallas-based company outlined a plan for cost reductions that also prioritized dividends and stock buybacks for shareholders, succumbing to pressure from $41 billion hedge fund Elliott Investment Management LP.

Activist investor Elliott had said its proposals would deliver "substantial benefits" for shareholders, consumers and employees, but not everybody came out ahead.

By the end of September 2020, AT&T had eliminated 23,000 positions, or about 9% of its workforce, many of them during the pandemic. Already one of the corporate world's top dividend payers with $14.9 billion spent in 2019, AT&T had raised its common dividend by 2% and bought back $7.5 billion of its stock.

"We are the face of AT&T and we go out of our way to help customers communicate with their families," said Darren Miller, a 35-year-old technician whose job was cut last July. "But we are a dime a dozen to them. If they can get someone cheaper to do the job, they will do it."

Miller, who worked in Reseda, California, said he accepted a buyout offer after managers told him he might be laid off later on less generous terms, something he said his local union representatives told him happened to dozens of other employees in the state.

AT&T spokesman Jim Kimberly said most of the workforce reductions "were from voluntary departure offers and attrition" and declined to comment on individual cases. He added the company had for years practiced a "meaningful commitment to all stakeholders" through programs that include worker retraining and environmental and social justice efforts. AT&T also ended share buybacks once the pandemic hit, and has not increased its dividend since, Kimberly said.

Elliott declined to comment.

Some advocates of a socially-minded stakeholder capitalism say AT&T's case is representative of the hurdles they face in challenging the leverage investors have over U.S. companies.

The voluntary governance pledge signed by the CEOs didn't spell out specific actions, but had the stated aim of moving away from "shareholder primacy". https://s3.amazonaws.com/brt.org/BRT-StatementonthePurposeofaCorporationOctober2020.pdf

Yet while signatories subsequently reduced payouts to shareholders as companies put away cash to shield themselves from the financial fallout of the COVID-19 pandemic, they still give a greater share to investors than those companies that did not sign the pledge, according to a Reuters analysis of data compiled by financial information provider Refinitiv.

The analysis found that the 171 publicly traded companies that signed the pledge returned a median 60% of net income to shareholders during the first three quarters of 2020 through dividends and buybacks, versus a 50% return among the 355 S&P 500 firms that did not sign the statement.

By comparison, in the first three quarters of 2019, the signatories returned a median 73% of net income to shareholders versus a 68% return among the firms that did not sign the pledge, the analysis found.

Tim Gaumer, Refinitiv's director of fundamental research, said pledge signatories returned more to investors because they had the ability to do so. "It is easier to pay out dividends and buybacks with confidence if your income stream is less volatile," he added.

Business Roundtable spokeswoman Jessica Boulanger said the analysis didn't account for how companies spent money they did not return to shareholders, nor for "industry differences, company size and longevity and trends in shareholder returns over time." She added that signatories had upheld their commitment to work for all stakeholders.

Graphic: Roundtable signatory companies slash buybacks : 

https://graphics.reuters.com/USA-CORPORATIONS/STAKEHOLDERS/qmyvmymqnvr/chart.png

(Graphic: Roundtable signatory dividends hold up Roundtable signatory dividends hold up: https://graphics.reuters.com/USA-CORPORATIONS/STAKEHOLDERS/qzjpqmqaxpx/chart.png

'SIGNALING EXERCISE'

The CEOs signed the pledge without legally binding their companies and largely without approval from their boards. COVID-19 stress-tested their commitments, as large swathes of the economy were forced to shut down.

The pledge's lack of detail gave signatories wide discretion in deciding how the pandemic pain would be spread among shareholders, employees and other stakeholders.

"It's a political signaling exercise that doesn't mean very much," said Harvard Law School professor Jesse Fried, who is on the research advisory council of Glass, Lewis & Co which advises investors over how to vote on corporate governance.

Defenders of the Business Roundtable pledge say many contributions to society cannot be measured as easily as shareholder spending or layoffs. For example, JP Morgan Chase & Co pledged $30 billion to address racial injustices, and Apple Inc launched a $100 million diversity drive.

Indeed, some signatories have won praise from progressive-leaning organizations for standing by employees during the pandemic.

Among them, Target Corp raised its minimum wage to $15 an hour in July from $13, which was already well above the $7.25 national level.

Some executives and investors argue that unless companies are attractive to shareholders and keep their stock highly valued, they won't have the money to invest in their businesses for the benefit of all stakeholders.

"If you don't have access to capital, then you're not going to be around long enough to face tough societal issues like climate change," said Todd Ahlsten, chief investment officer for Parnassus Investments, a San Francisco-based firm with $40 billion under management.

EMPLOYEE REPRESENTATION

Less than two years after the signing of the pledge, key protagonists at AT&T moved on. Stephenson passed the reins to a successor, and Elliott sold what was once a $3.2 billion stake in the company.

AT&T's layoffs during the pandemic attracted the attention of Democratic senators Elizabeth Warren and Bernie Sanders, who wrote to the company last July objecting to "corporations using the pandemic as justification for continuing to make anti-worker decisions that are aimed at boosting share price."

"The long-term interests of our communities and employees cannot be met without attracting investor capital," AT&T executive vice president Timothy McKone responded in a letter.

BlackRock Inc and Vanguard Group Inc, whose CEOs also signed up to the pledge, were among the AT&T investors who voted down a proposal last April to have an employee representative on the company's board - a step its advocates argued would give stakeholders a voice. Both fund managers declined to comment.

SPENDING ON SHAREHOLDERS

Wharton School of the University of Pennsylvania researchers found that among signatories, the bigger share of profits companies subsequently returned to investors, the more likely they were to announce layoffs and furloughs.

A study from the London School of Economics and Columbia University found signatories violated environmental and labor-related rules and paid their CEOs more than similarly-sized peers.

Like AT&T, some companies that signed up continued payouts to shareholders even as they cut jobs during the pandemic.

Cisco Systems Inc bought back $800 million of its shares during the three months ended Oct. 24, 2020. The network equipment maker had announced a restructuring plan in August to cut $1 billion in costs annually, with the loss of about 3,500 jobs.

"Cisco believes in the Business Roundtable pledge balancing the needs of all of our stakeholders and fulfilling our own company's purpose of powering a more inclusive future for all," the company said in a statement.

Walgreens Boots Alliance Inc repurchased $522 million of its shares from April through July. That month, the pharmacy operator cut 4,000 jobs, some 7% of its headcount, bumped up its dividend and nixed its stock buyback program.

Walgreens did not respond to a request for comment.

The chairman of the Business Roundtable, Walmart Inc CEO Doug McMillon, downplayed the significance of the pledge in remarks to investors last February. He said "it didn't feel like news" because companies sought to balance the interests of all stakeholders anyway, and that "of course, our shareholders are our priority."

Walmart declined to make McMillon available for an interview. A company spokeswoman pointed to McMillon's previous comments on multi-stakeholder capitalism being "the answer to addressing our challenges holistically."

(Reporting by Jessica DiNapoli in New York, Ross Kerber in Boston and Noel Randewich in San Francisco; Editing by Greg Roumeliotis and Pravin Char)

US corporate buybacks are on the rise, lifting investor hopes

By Caroline Valetkevitch and Stephen Culp

© Reuters/Brendan McDermid FILE PHOTO: 

Traders at the New York Stock Exchange during the coronavirus pandemic

NEW YORK (Reuters) - U.S. corporate share buyback levels are slowly increasing after last year's pandemic-driven drop-off in spending, and investors are eager to see how much buybacks may support market gains.

Buybacks are not likely to return this year to pre-pandemic levels, but recent buyback talk from companies has lifted investor hopes that repurchase trends have turned the corner, thanks to optimism over the rollout of vaccines to fight COVID-19.

Netflix last week said it would explore returning excess cash to shareholders via share buybacks, and investors have cheered recent buyback announcements from some big investment banks.

"Companies are starting to put their foot back in the water," said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. "That's a good sign, ... it means cash flow is available."

S&P Dow Jones Indices projects share repurchases for S&P 500 companies to have totaled about $116 billion in the fourth quarter of last year, up from $102 billion in the third quarter.

That's still far below the $182 billion in the 2019 fourth quarter, and the record $223 billion in the last quarter of 2018. S&P 500 buybacks are projected to rise to $651 billion in 2021 from an estimated $505 billion last year, based on S&P's data.

Looking at buyback announcements from companies listed on U.S. exchanges, TrimTabs Research said U.S. companies became more bullish toward the end of last year and buyback announcements hit a 15-month high of $88.4 billion in December.

S&P 500 share buybacks reached a peak of $806 billion in 2018, according to S&P, when massive tax breaks for U.S. companies boosted cash levels.

Share repurchases are often cited as a key support for U.S. stocks, and investors are weighing the potential for support with U.S. stocks already at record highs this year. Buybacks decrease the number of a company's shares outstanding, boosting per share earnings and driving down the price-to-earnings ratio, a key benchmark.

"With the market being as expensive as it seems, share repurchases could drive the market that much higher," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

"It adds to the Street's belief that there's an underlying bid, we're not in this alone, and someone else is going to support the stock and that's the company," he said. "It turns out to be a good thing for share prices. But they run the risk of overvaluing stocks, and it speaks to the broader question about why companies are doing it."

In his firm's 2021 outlook, David Joy, chief market strategist at Ameriprise Financial, said the firm's base case is for corporate stock buybacks to gradually increase through 2021, while a more favorable scenario would be for buybacks to "accelerate back to pre-pandemic levels."

Banks in particular have come into the spotlight.

Following the Federal Reserve's second "stress test" of banks for 2020 - which measures banks' financial health and determines if they have sufficient reserves to protect against losses - the Fed in December relaxed restrictions on buybacks. That was quickly followed by announcements from some large firms, including JPMorgan Chase and Goldman Sachs, that they planned to buy back stock beginning in 2021.

JPMorgan's board authorized a share repurchase program of $30 billion.

The S&P 500 Buyback index has tripled in value since the end of the global financial crisis, and its rebound from the pandemic recession was as abrupt as its plunge.

Graphic: SP buyback index and GDP - 

https://graphics.reuters.com/USA-STOCKS/bdwvkyjlqvm/buyback.png

Silverblatt said not all industries will be prepared to increase buybacks at this point, most notably hotel, entertainment and other industries that have been hit particularly hard by the pandemic.

(Reporting by Caroline Valetkevitch; Additional reporting by Stephen Culp; Editing by Alden Bentley and Leslie Adler)

 A $15 minimum wage would barely hurt business and be life-changing for many workers

© Tayfun Coskun/Anadolu Agency/Getty Images A group of BLM demonstrators protest the Federal Reserve Bank about $15 minimum wage in NYC to solidarity nationwide in Lower Manhattan at the financial district in New York, United States on July 20, 2020 Tayfun Coskun/Anadolu Agency/Getty Images

President Biden wants to raise the federal minimum wage to $15 an hour.

Some fear that would hurt businesses or employment, but it would likely have a minimal effect.

And for workers currently making less than $15 an hour, it would be life-changing.

The federal minimum wage hasn't changed since the last time President Joe Biden held office.

In 2009, the federal minimum wage was raised to $7.25 - where it remains today. Some individual states have raised their own minimums since then. But, as of 2019, 392,000 workers earned the federal minimum wage, and 1.2 million earned less, according to a Bureau of Labor Statistics report.

Now, President Joe Biden wants to more than double the federal minimum wage to $15 an hour, a move that has already seen some pushback. Some conservatives have argued that the raise could lead to job loss; in her confirmation hearing, Treasury Secretary nominee Janet Yellen said the move would have a "minimal, if anything" impact on jobs. 

But for Drew Board, who works in online grocery pickup at a Walmart in North Carolina, an increase in the minimum wage would have more than a minimal impact. At his current wage of $13.50 an hour - the highest-paying job he's been able to find - he's sometimes found himself having to ask for help to buy essentials like food. 

"Last year, my dog was due for her annual shots, and that was like a hundred and some dollars," Board told Insider. "So do I use my money to put that into savings, or pay off a couple of my student loans, or do I spend it on my dog?"

He's been involved with United for Respect, a labor activist group, for the past year. He said that he's been advocating for basic rights for all retail workers: "If everyone is created equal, everyone should have that equal chance to live." 
An increase to the minimum wage would have minimal impact (if any) on employment

Ben Zipperer, an economist at the Economic Policy Institute (EPI), told Insider that there's a "theoretical horror story" of businesses hiring less - and thereby hurting the lowest-paid workers - when the minimum wage is increased. He said that those effects are smaller or even nonexistent in the real world.

"What happens is that yes, it is true that when you raise the minimum wage employers hire fewer low wage workers, that is correct," Zipperer said. "On the other hand, the factor that's really offsetting that is that, even though employers are hiring fewer workers, fewer workers are leaving their jobs." 

Those workers can stick around, become more experienced, and even potentially more productive. And low wage businesses will have to spend less time and money finding and training new workers - making the employment effects "much smaller." 

"Boosting the federal minimum wage would lift millions out of poverty and serve as a huge additional pandemic stimulus boost for the entire economy," Chuck Collins, the Director of the Program on Inequality and the Common Good at the Institute for Policy Studies, said in a statement to Insider. "We have seen how many frontline essential workers are poorly paid and most vulnerable. Boosting their pay is both morally right and economically smart."

Gallery: Every state raising its minimum wage in 2021 (Business Insider)

Full Screen

1/25 SLIDES © Tayfun Coskun/Anadolu Agency/Getty Images

EVERY STATE RAISING ITS MINIMUM WAGE IN 2021

To kick off 2021, 20 states raised their minimum wages.
According to a report from the National Employment Law Project, a record-breaking number of jurisdictions are set to increase their minimum wages this year. 
President-elect Joe Biden's newly announced stimulus package calls for raising the federal minimum wage to $15 an hour.
Visit Business Insider's homepage for more stories.

Some hourly workers will see larger paychecks in 2021. Twenty states already increased their minimum wages at the start of the year, and several more will see boosts in the coming months. 

Workers in New Mexico will get the largest bump. They'll receive an additional $1.50 an hour, with the state's hourly wage now cracking four digits. 

Overall, the movement to increase the minimum wage saw major gains in 2020, and the federal minimum wage could see a major boost in 2021: President-elect Joe Biden's new stimulus plan would boost the federal minimum wage to $15 per hour.

"Nobody working 40 hours a week should be living below the poverty line," Biden said in a speech Thursday.

As Insider's Joseph Zeballos-Roig noted in an analysis, raising the minimum wage has not consistently negatively impacted employment - and could put more money in the pockets of 27 million workers.

A 2019 Pew Research Center poll found that 67% of Americans support raising the minimum wage to $15 an hour; Insider polling from 2019 also found that 63% of respondents supported the increase. 

A record-breaking number of jurisdictions will increase their minimum wages in 2021, according to a report from the National Unemployment Law Project. Here's where workers are already getting paid more - and where they will soon.
Read the original article on Business Insider


Read more: These maps show how the minimum wage has become another crack in the country's economic divide
Huge boost for workers - and the potential to bridge a racial wage inequities

Gloria Machuca has worked for McDonald's for 20 years. Until recently she worked at two different McDonald's, working 80 hours a week - she just left to try and sell perfumes to make ends meet. 

Machuca, who has six kids, makes $9.50 an hour. She said that it's not enough for her bills. She got involved with Fight for 15, a group advocating for a $15 minimum wage, five years ago.

For her, a $15 minimum wage would make a huge difference.

"It would change my life a lot," she said. "Right now, I work all day and I rarely spend time with my family, my kids." 

"The debate among elected leaders who have the responsibility to set the minimum wage is an important one that McDonald's looks to advance, not impede," McDonald's USA said in a statement to Insider.

"The company does not lobby against raising the minimum wage and believes any changes introduced should balance the needs of employees and small business owners - including the nearly 2,000 small business owners who own and operate more than 95% of McDonald's US restaurants. We look forward to engaging with elected leaders to provide our perspective on this conversation."

Zipperer said that women and workers of color are paid disproportionately low wages in the US. A minimum wage increase won't just increase family incomes and pull more workers out of poverty - it can also be an important step towards racial equity.

"In the late 1960s, there were a series of sizable minimum wage increases," Zipperer said. "Recent research has found that those minimum wage increases were responsible for about 20% of the fall in Black to white earnings gaps during that time period, so the minimum wage has played a very sizable role in reducing racial earnings inequality."

Read more: 7 charts that show the glaring gap between men's and women's salaries in the US
Biden has already made headway in raising the minimum wage

As Insider's Grace Dean reported, Biden is planning on signing an executive order that aims to boost all federal workers' wages to $15 an hour. He also plans on signing an additional executive order within his first 100 days that would make sure federal contractors pay $15 an hour (and provide paid emergency leave).

Still, the proposed wage increase may prove to be a sticking point for some conservatives. During Yellen's confirmation hearing, Republican Sen. Tim Scott of South Carolina questioned the $15 minimum wage proposal and its potential to negatively impact jobs.

"How do we grapple with parts of this package that really are philosophical in nature and denies the practical reality that comes from it?" he said.

Machuca asks that politicians opposed to the measure put themselves in the shoes of workers like her. 

She added she wants them to know "that we're all human beings, that we have our depths, that we have our bills to pay. It is not fair that we work so much and that we have to suffer this much."

Read the original article on Business Insider

Target is giving all store workers another bonus

 of at least $500

© Provided by Business Insider AP 

Target plans to give all its employees a bonus after a strong year for sales during the pandemic.
Hourly employees will receive $500, while salaried employees and store leadership will receive up to $2,000.

It's the fifth round of bonuses Target's given out since the pandemic began nearly a year ago.

Target employees will receive another round of bonuses starting at $500 after a strong year for the retail giant despite the coronavirus pandemic.

The bonuses will amount to $200 million, the company said in a Monday press release. All hourly employees in stores, distribution centers and offices will receive $500. Store leadership and salaried employees will receive bonuses between $1,000 and $2,000, Target said.

This is the fifth time Target has given out bonuses since April 2020. The first bonuses went to individual store team leads in April. In July, hourly workers received $200 bonuses and leadership and store directors received performance bonuses. In October, Target gave $200 bonuses to 350,000 of the store's frontline workers.

Target also upped its minimum wage to $15 an hour in July 2020.

Despite the pandemic, Target reported strong sales numbers throughout 2020, and the chain saw major gains during the holiday season. Online sales also jumped 102% in 2020 compared to 2019, while in-store sales rose 17%.

Read more: Target is pushing harder into advertising with a new tool that shows if people buy a product after seeing an ad for it

The company's third-quarter earnings report, released in November 2020, showed that comparable sales were up by 20.7%. Shares of Target rose 52% in 2020, easily outpacing the broader stock market. 

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#SPACERACE2.0

Investment in space companies put at record $8.9 billion in 2020 despite Covid

Private investment in space companies last year set a new annual record with $8.9 billion, according to a report on Monday by New York-based firm Space Capital.

"Despite expectations that [space] Infrastructure would be hardest hit by the pandemic, 2020 turned out to be a record for investment," Space Capital managing partner Chad Anderson wrote in the report.

Space Capital also highlighted the "accelerating space ambitions" of Amazon and Microsoft as "one of the most overlooked stories of 2020, which we expect to have a significant impact in 2021 and beyond."

© Provided by CNBC A composite image showing a Falcon 9 rocket booster lifting off and a few minutes later landing back near the launchpad.

Private investment in space companies last year set a new annual record, defying industry fears that Covid-19 would stop the past decade's momentum, according to a report Monday by New York-based firm Space Capital.

"With another $2.9 billion invested in Q4, 2020 was a record year for [space infrastructure companies] with $8.9 billion invested," Space Capital managing partner Chad Anderson wrote in the report. "Despite expectations that Infrastructure would be hardest hit by the pandemic, 2020 turned out to be a record for investment."

© Provided by CNBC

The quarterly Space Capital report divides investment in the industry into three technology layers, with space infrastructure including what many would typically consider to be space companies: Those that build rockets and satellites, such as SpaceX, Blue Origin, Relativity Space, Rocket Lab, Planet Labs and Spire Global.


In addition to record investment, there were also 24 exits for infrastructure space companies in 2020, with investors liquidating $7.9 billion of value. An exit happens when the company owner or investor can sell the firm to an outside party.

"Nearly all of the Infrastructure exits over the past decade have come in the form of acquisitions," Anderson wrote. "The low-interest rate environment has acted as a tailwind for M&A activity with 2020 being the most active year on record."

Overall, Space Capital found that the infrastructure layer has brought in $30.9 billion in total equity investment since 2011.

The other two layers in the report are application and distribution – the former of which includes space-dependent services like ride-hailing or navigation and the latter of which represents terrestrial-based technologies that connect to space-based networks – which in 2020 brought in $15.9 billion and $800 million, respectively.

Amazon and Microsoft ones to watch in 2021

Why SpaceX and Amazon plan to drastically increase the number of satellites orbiting Earth

Additionally, Space Capital's Q4 report highlighted the "accelerating space ambitions" of Amazon and Microsoft as "one of the most overlooked stories of 2020, which we expect to have a significant impact in 2021 and beyond."

The two tech giants made several space moves last year.

Amazon set up a new unit within its Amazon Web Services (AWS) cloud division, as well as made progress with its Project Kuiper satellite internet program. Microsoft unveiled its Azure Orbital service in partnership with SpaceX's Starlink as a competitor to Amazon's existing AWS Ground Station service.

"Azure Space and AWS Space are removing complexity across the value chain, making a global network of space-based communication and data collection infrastructure accessible to the tech community to innovate upon," Anderson wrote.

"In the same way that every company today is a technology company, the companies of tomorrow will all be space companies," he added.

GREEN CAPITALI$M

ECB pledges to buy green bonds as pressure rises on Bank of England over climate change

© ECB handout/Getty Christine Lagarde said the ECB would create a specialist team to focus on climate change ECB handout/Getty

The European Central Bank stepped up its focus on climate change on Monday.

It will invest in a green bond fund and create a dedicated "climate center".

UK lawmakers pressured the Bank of England over its support for polluters.

The European Central Bank stepped up its focus on climate change on Monday, announcing that it will create a specialist team to look into the issue and start investing in a "green bond" fund.

It comes as central banks face growing scrutiny over their investments, with a group of British lawmakers on Monday calling on the Bank of England to stop funding polluters through its bond-buying programs.

Central banks have increased their attention to climate change in recent years. Many are now members of the Network for Greening the Financial System, which aims to manage the risk of climate change through financial systems.

But central banks have loaned billions of dollars to polluters including oil and chemicals companies during the pandemic through various schemes designed to prop up economies, drawing the ire of climate campaigners.

Today, ECB president Christine Lagarde signalled a renewed focus on climate change. She said the ECB would create "a new climate change center to bring together more efficiently the different expertise and strands of work on climate across the Bank".

It followed an earlier announcement from the ECB that it would use part of its own funds to invest in a euro-denominated green bond investment fund. The fund was established by the Bank for International Settlements, an international organization owned by central banks.

The BIS fund invests in bonds that support renewable energy production, energy efficiency and other environmentally-friendly projects.

Yet campaigners said the ECB needed to go further, in particular by reconsidering the bonds it buys through its €1.85 trillion ($2.24 trillion) coronavirus asset-purchase program.

Paul Schreiber of campaign group Reclaim Finance said the ECB is "trying to use the purchase of green bonds to distract from its support for fossil fuels". A Reclaim Finance study from May 2020 found that the ECB finances 38 corporations active in fossil fuels.

In the UK, a group of lawmakers on Monday made similar points about the Bank of England's bond-buying, saying the BoE should limit its support to companies in "high-carbon sectors". It comes as the UK prepares to host the UN climate summit known as COP26 in November.

The Environmental Audit Committee, which scrutinizes public bodies over climate change, wrote to BoE governor Andrew Bailey, saying: "The Bank must begin a process of aligning its corporate bond purchasing programme with Paris Agreement goals as a matter of urgency." The Paris Agreement between governments pledges to limit the rise in global temperatures to 2C (3.6F).

A Bank of England spokesperson said: "The Bank will respond in full to the Environmental Audit Committee letter in due course.

"Climate change is a strategic priority for the Bank. We have an ambitious work programme on climate change, from the stress testing of the largest UK banks and insurers against climate-related financial risks through to working internationally with the central bank Network for Greening the Financial System - a network of which we were a founding member.

"As the governor told the Treasury Select Committee in November, work to consider how best to take account of climate considerations in our corporate bond portfolio is already underway at the Bank."

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Bernie Sanders meme to raise money for charity

A single photo of US Senator Bernie Sanders has inspired countless memes worldwide. The Democrat said he would use the viral image to help feed the hungry.

Fans of Bernie Sanders are now able to buy sweatshirts imprinted with the viral photo of the US senator from Joe Biden inauguration, with all proceeds going to charity.

When asked by CNN for comment about his newly-found fame on meme sites, Sanders said he was overjoyed that it could be turned to good use via online sales.

"What we are doing here in Vermont is we're going to be selling around the country sweatshirts and T-shirts, and all of the money that's going to be raised – which I expect will be a couple of million dollars – will be going to programs like 'Meals on Wheels,' that feed low-income senior citizens," Sanders said on Sunday.

From 'Baby Yoda' to the Sistine Chapel

The now-famous photo of the 79-year-old Bernie Sanders was taken by AFP photographer Brendan Smialowski at US President Joe Biden's inauguration.

It shows the independent Vermont senator huddled in a chair against the cold, socially distancing as he keeps his arms folded above a distinctly unglamorous average-guy winter coat. 

Sanders' overall look – and his curmudgeonly glare — has prompted a river of creative memes as people worldwide have superimposed Sanders on famous works of art and into family photos. 

In recent days Sanders has been shown in Zoom meetings: 

Or sitting on the Iron Throne from "Games of Thrones", or alongside Franklin D. Roosevelt, Winston Churchill and Joseph Stalin in Yalta in 1945. 

Beyond appearing in countless "Star Wars" scenes or cradling "Baby Yoda", 

others have depicted him in his mittens touching Michelangelo's Hand of God in the Sistine Chapel.

When asked about his outfit on Wednesday, the typically non-plussed Sanders grinned slightly while telling interviewers on CBS: "You know in Vermont, we dress warm, we know something about the cold, and we're not so concerned about good fashion."
Not your typical mittens

The woman who created the thick brown and beige mittens, Jennifer Ellis, hadn't even met Sanders before the inauguration.

A 42-year-old elementary school teacher from the town of Essex Junction, Vt, Ellis made the gloves from repurposed wool sweaters, using fleece made from recycled plastic bottles for the inside lining.

She first sent a pair to Sanders after he lost to Hillary Clinton in the 2016 Democratic presidential primary.

Last year, when Sanders was again running for president, Ellis learned that he liked wearing her creations. She was so touched after finding out that he'd lent them to someone in need that she sent him another 10 pairs.

Ellis is thrilled the mittens and meme-making are bringing people joy.

"I mean, people are so funny. And that's what we need right now: it's a very tough time for a lot of people. They need something to laugh about that's totally harmless and not political," Ellis said.

mb/dj (Reuters, AFP, AP)

Bernie Sanders' inauguration jacket is selling out as his mittens meme continues to dominate social media

© Brendan Smialowski/Getty Images Bernie Sanders is making money for charity thanks to his virtual inauguration meme. Brendan Smialowski/Getty Images

The Burton jacket Bernie Sanders wore on inauguration day has sold out.

Bloomberg reports Burton saw sales of the jacket more than double on Wednesday compared to cumulative sales of the past 17 days.

The jacket is available in other colors, though supplies are going fast.

Bernie Sanders might not have been the most lavishly dressed on inauguration day, but his outfit choice has not only caused a barrage of memes, but booming sales for Burton, the company behind the senator's jacket.

The jacket Sanders wore on inauguration day has sold out, Bloomberg recently reported.

The company, based out of Sanders' home state of Vermont, saw a large increase of interest and sales after the inauguration. By Wednesday, Bloomberg reports the Edgecomb down jacket Sanders had worn had more than doubled in sales compared to the past 2.5 weeks combined.

The jacket is available in other colors, though Sander's taupe colored jacket sold out fast.

Sander's mittens also gained notoriety. The mittens, which were given to Sanders by second-grade teacher, Jen Ellis, are made from recycled sweaters.

Ellis said she has received numerous requests to make the mittens as well as turn them into a business, according to Slate.





Video: Bernie Sanders Turns Inauguration Meme Into a Sweatshirt for Charity (Money Talks News)

A photo of Sanders dressed for cold weather amidst celebrities like Lady Gaga and Jennifer Lopez, who dressed up for the occasion, went viral on Wednesday and has continued to spread on social media since. Celebrities, including Ryan Seacrest, Whoopi Goldberg, and Guy Fieri, as well as brands like IKEA have gotten in on the fun.

Ikea used the image for a new marketing campaign, using the image of Sanders with the title. "Get the look," to sell a folding chair and similar open gloves.

Sanders responded to the memes during NBC's "Late Night with Seth Meyers."

"I was just sitting there trying to keep warm, trying to pay attention to what was going on," Sanders said.

Sanders also turned the inauguration meme into an opportunity to raise money for charity, selling sweatshirts online with the meme on it for $45 with the proceeds going to Vermont's Meals on Wheels.

The sweatshirt has already sold out on the campaign store website.

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