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The State of the Economy Thread - “Falling inflation, rising growth give U.S. the world’s best recovery”


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  • 2 weeks later...

McDonald’s, In-N-Out, and Chipotle are spending millions to block raises for their workers

 

California voters will decide next year on a referendum that could overturn a landmark new state law setting worker conditions and minimum wages up to $22 an hour for fast-food employees in the nation’s largest state.

 

Chipotle, Starbucks, Chick-fil-A, McDonald’s, In-N-Out Burger and KFC-owner Yum! Brands each donated $1 million to Save Local Restaurants, a coalition opposing the law. Other top fast-food companies, business groups, franchise owners, and many small restaurants also have criticized the legislation and spent millions of dollars opposing it.

 

The measure, known as the FAST Act, was signed last year by California Gov. Gavin Newsom and was set to go into effect on January 1. On Tuesday, California’s secretary of state announced that a petition to stop the law’s implementation had gathered enough signatures to quality for a vote on the state’s 2024 general election ballot.

 

The closely-watched initiative could transform the fast-food industry in California and serve as a bellwether for similar policies in other parts of the country, proponents and critics of the measure argued.

 

The law is the first of its kind in the United States, and authorized the formation of a 10-member Fast Food Council comprised of labor, employer and government representatives to oversee standards for workers in the state’s fast-food industry.

 

The council had the authority to set sector-wide minimum standards for wages, health and safety protections, time-off policies, and worker retaliation remedies at fast-food restaurants with more than 100 locations nationally.

 

The council could raise the fast-food industry minimum wage as high as $22 an hour, versus a $15.50 minimum for the rest of the state. From there, that minimum would rise annually based on inflation.

 

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Michigan court ruling halts $13.03 minimum wage increase

 

A move by Republicans in the 2018 Michigan Legislature to weaken minimum wage and sick leave laws was declared constitutional by an appeals court Thursday, reversing a lower court’s ruling last year that would have increased minimum wage in the state by nearly $3 in February.

 

The Michigan Court of Appeals' unanimous decision stops minimum wage in the state from increasing from $10.10 to $13.03 on Feb. 2 and keeps current wage and benefit requirements intact.

 

The decision will be appealed to the Michigan Supreme Court.

 

In July of last year, a judge on the Court of Claims threw out changes made late in 2018 as Republican Gov. Rick Snyder was near the end of his term and Democrats were preparing to take over top statewide posts.

 

Advocates had turned in enough signatures to raise the minimum wage to $12 an hour by 2022 and eventually eliminate a lower tipped wage in the restaurant industry. The minimum wage now is $10.10 per hour, less for tipped workers.

 

There was also a successful petition drive to expand sick leave opportunities.

 

The Legislature adopted both in 2018 instead of letting voters have their say. But lawmakers then returned a few months later and watered them down by a simple majority vote.

 

The appeals court ruled Thursday that the Legislature in 2018 had the constitutional power to change the laws initiated by citizens through a petition process.

 

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Fed hikes rates by 0.25 percentage points, with inflation easing

 

https://www.washingtonpost.com/business/2023/02/01/fed-rate-hike-inflation/

 

Quote

The Federal Reserve is not letting up on its inflation, and will continue raising interest rates until it is confident that price increases do not become a permanent feature of the U.S. economy, even at the risk of rising unemployment.

 

In its latest move, the central bank hiked interest rates by a quarter of a percentage point. That was a slower pace than last year, when Fed officials scrambled to get control of inflation that soared to the highest level in 40 years.

 

But Fed Chair Jerome H. Powell said the scaled-down hike should not be misinterpreted for a scaled-down inflation fight. Inflation has eased for the past six months, but the Fed aims to fully root out price increases throughout the economy.

 

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  • PleaseBlitz changed the title to The State of the Economy Thread - “Astonishing labor market growth”

https://www.washingtonpost.com/business/2023/02/03/january-jobs-labor-market/
 

Employers added 517,000 jobs in January, astonishing labor market growth
 

Quote

The labor market shattered expectations in January, as the economy added 517,000 jobs, despite tens of thousands of layoffs in the tech sector.

 

The unemployment rate dropped to 3.4 percent reaching a low not seen since May 1969, , according to data released Friday from the Bureau of Labor Statistics.

 

Job gains had been steadily dropping for months, but January’s stunning job growth reflects unexpected tightness in the labor market , even amid fears of a looming recession. 

 

The Federal Reserve has been in an all-out effort to lower inflation, hoping it can manage to hoist interest rates without slowing the economy so much that it undercuts strength in the labor market. But that task appears much more difficult to pull off, with pay growth coming in stronger than previously realized, and scant signs of a cooldown in a labor market that is still piping hot.

 

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The labor market isn't something I would expect to soften given demographics.  With an aging workforce, we will be in a spot where we can't find employees to replace all retirements.  So without any new businesses, the labor market would tighten.  Now we still have a growing economy at the moment.  So that will require more employees to fill the new jobs.  Thus, it should be no surprise to see reports like this one.   We need more workers. Luckily, we have a population to our South sending us workers...when we let them.

 

As Louis Jacobson said, "Demographics is destiny." 

 

 

Edited by gbear
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Remember when Obama inherited The Great Recession, and Republicans were all insisting that the economy was terrible until jobs returned to what they were before the recession?  (Because they knew that hiring was always the last part of the economy to recover.)  

 

I keep updating this stat:  

 

Jobs growth, per month, in thousands of jobs.  

 

Biden:  484

Trump:  -56

 

Trump, first three years:  179

Three years preceding Trump:  224

 

Edited by Larry
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1)  I wouldn't be surprised if there's a recession coming soon.  

1a)  The Republicans seem to be trying to cause one.  And then yell that somebody else did it.

 

2)  I recall the expression that economists have correctly predicted 9 of the last 4 recessions.  

 

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17 minutes ago, Renegade7 said:

 

I wish Biden would ask the Fed to chill TF out, it's not working, try something else.

I’m curious why you say it’s not working?

 

my understanding was inflation has leveled off/started declining over the last 6 months?

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Just now, tshile said:

I’m curious why you say it’s not working?

 

my understanding was inflation has leveled off/started declining over the last 6 months?

Causation is debatable there. Don’t you think it would take longer for the effect of higher interest rates to be seen? If anything I could see higher interest rates making the supply chain crisis worse, as businesses avoid higher interests loans to pay for capital improvements

Edited by CousinsCowgirl84
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Just now, CousinsCowgirl84 said:

Causation is debatable there.

I’m not aware of any reputable person saying the rising rates hasn’t impacted things?

 

im not saying it’s the only reason but to say it isn’t working implies it’s had no effect and I’m just not clear which reputable people are arguing that…

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26 minutes ago, tshile said:

I’m curious why you say it’s not working?

 

my understanding was inflation has leveled off/started declining over the last 6 months?

 

I'd like to see that we are actually spending less to ease the demand side of the supply not able to keep up...I thought that was the point of the interest hikes. 

 

It doesn't seem like the economy is slowing down, maybe certain sectors, but I'd argue more effort needs to be put in addressing supply chain issues before these rate hikes work more then they want them to.

 

I don't like the idea of punishing the consumer because the economy is doing well. Life is hard enough as it is.

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