Economics and Workforce
Friday, December 2, 2022

November Jobs Report 

According to data released by the Labor Department on Friday morning, December 2, 263,000 jobs were added to the U.S. economy in November with an unemployment rate of 3.7%.  The report was stronger than expected and is noteworthy because the Federal Reserve will be taking this data into account in weighing its decision to raise interest rates at the upcoming Federal Open Market Committee meeting (see related items below).  You can read more about the November jobs report in this CNBC article. 

 

Federal Reserve Updates 

FOMC November Minutes:  The November meeting minutes of the Federal Open Market Committee (FOMC), the policymaking arm of the Federal Reserve, were released on November 23.  Analysts interpreted the minutes as indicating that future interest rate increases may finally be smaller than the historically large increases that have been implemented recently given the Fed’s attempts to curb inflation.  The formal minutes can be found here.  A related CNBC article can be found here. 

 New Beige Book:  A new edition of the Beige Book was released on Wednesday, November 30.  The Beige Book contains qualitative information about economic conditions throughout the Federal Reserve districts across the U.S. and is issued prior to the next FOMC meeting, which is scheduled for December 13-14.  The overall national summary on page 1 indicates that, “Inflation pushed low-to-moderate income consumers to substitute increasingly to lower-priced goods.”  The summary for the Federal Reserve Bank of Philadelphia (Third District) reads as follows: 

On balance, business activity in the Third District appears to be teetering on the edge of a decline but managed to hold fast since the prior Beige Book period. Inflation has driven consumers to lower-priced items and lower-priced stores. Rising interest rates have discouraged consumers from buying big-ticket items, including homes and autos. Employment continued to grow slightly, despite the onset of some layoffs. Wage growth and inflation continued to subside but remained at a moderate pace. Overall, firms noted less difficulty in hiring and fewer supply chain disruptions. On balance, expectations for economic growth over the next six months deteriorated for all firms; however, the index for nonmanufacturers remained positive, while the index for manufacturers remained negative. Expectations for all firms remained well below their nonrecessionary historical averages. On average, conditions and sentiment appeared more positive in the Greater Philadelphia region than in the outlying areas of the Third District. 

Powell’s Speech at Brookings:  On Wednesday, November 30, Federal Reserve Chair Jerome Powell delivered remarks at the Brookings Institution.  Analysts paid close attention to these remarks since they were Powell’s last public remarks before the quiet period leading up to the next FOMC meeting.  Powell indicated that interest rate hikes may not be as drastic beginning in December, but also that, “We have a long way to go,” to bring inflation down to what the Fed considers a satisfactory level.  Powell closed his remarks by stating, “We will stay the course until the job is done.”  You can read a full transcript of Powell’s remarks and link to a video recording by
clicking here. 

New Chicago Fed President:  On Thursday, December 1, an announcement was made that economist Austan Goolsbee will become the next president of the Federal Reserve Bank of Chicago, replacing Charles Evans, who is retiring.  Goolsbee, currently on the faculty of the University of Chicago’s Booth School of Business, served as Chair of the Council of Economic Advisors from 2010-11 during the Obama Administration.  You can read more here. 

 

Federal Government Faces Yet Another Funding Deadline 

From previous Policy Updates, recall that, in September, Congress passed a temporary stopgap continuing resolution to fund the federal government until December 16.  The deadline is quickly approaching for Congress to act again, either with a permanent funding bill or another temporary stopgap bill.  If legislation is not passed, the federal government faces the possibility of a shutdown.  You can read the current status in this article from The Hill.  The IA team is monitoring developments. 

 

Debt Ceiling is Coming Back into Focus 

Besides continued funding for the federal government as written above, CBS News reports that there have been calls among some Democrats for action on the debt ceiling before the Republicans take control of the House in January.  A potentially disastrous standoff is feared.  Briefly said, the debt ceiling is the total amount of money the U.S. government can borrow to meet its obligations.  Recall the last action taken on the debt ceiling was estimated to allow the federal government to meet its obligations part way through calendar year 2023.  This is another situation the IA team is monitoring. 

 

COP27 Results in Establishment of Historic Loss and Damage Fund 

Following up on the Policy Updates issued before the Thanksgiving holiday, it is important to note that COP27, the United Nations Climate Conference, resulted in the historic establishment of a Loss and Damage Fund to compensate poor countries for the inordinate burden of climate change they assume (i.e., climate reparations).  There are many details to be worked out regarding contributions to the fund and how funding will be distributed.  The IA team will continue to monitor developments.  You can learn more about the Loss and Damage Fund in this
explainer from the United Nations. 

 

Pete Buttigieg Talks Road Safety, Infrastructure with Tribal Leaders in Southwest 

Transportation Secretary Pete Buttigieg recently met with various tribal leaders in New Mexico and Arizona to discuss infrastructure investments. Topics discussed include road safety, public safety, and the historic underinvestments of America into Indian Country infrastructure. A stop at the Southwestern Indian Polytechnic Institute was to view traffic safety presentations, such as a mobile police vehicle with blood alcohol testing capabilities, what color clothing should be worn while cycling, and proper buckling of a car seat. With about 60% of roads in tribal communities unpaved and American Indian pedestrian fatality rates over three times higher than white counterparts, Secretary Buttigieg stated that one of his goals is to make rural communities safer and more accessible. New Mexico is the deadliest state in the country for pedestrian fatalities. 

 

White House Releases Fact Sheet on Impacts of Bipartisan Infrastructure Law 

The White House has released a fact sheet highlighting the impacts of the Bipartisan Infrastructure Law implementation one year after it was signed into law. This funding law is the single largest investment into infrastructure and international competitiveness in nearly a century. Separate fact sheets are available for the 50 states, 5 US territories, DC, and Tribal communities. The fact sheet covers problem areas for each of these regions, with information on the funding and sample announced projects for sectors that vary by area, such as roads and bridges, internet, water infrastructure, public transit, airports, clean energy, ports and waterways, electric vehicle charging, climate resilience, and legacy pollution cleanup efforts. 

 

Advocates Warn Against Expansion of I-94 in Milwaukee 

Against the wishes of the community, the Wisconsin Department of Transportation (WisDOT) has chosen an eight-lane expansion plan for Interstate 94 in Milwaukee. The plan goes against calls from community activists and environmental advocates to keep the road at six lanes and instead focus on safety improvements and roadway maintenance instead. Elizabeth Ward, director of Sierra Club Wisconsin Chapter, claims that the proposal will increase water and climate pollution, health problems, and racial disparities. Local council members add that the plan will disrupt businesses and homeowners without traffic volume justification for the expansion, and that it represents spending priorities that do not align with what the community wants. 

The highway expansion is at odds with other proposals for Milwaukee highways Interstate 794 and Wisconsin Highway 175. These proposals suggest tearing down these highways crisscrossing through the city and replacing them with boulevard roads. These proposals would result in the reconnection of neighborhoods that had been divided by the highway construction decades ago, an issue the IA team has been following. They would also result in more green space and building developments for the city.  

 

Labor Updates 

Railroad Strike:  At the request of President Biden, Congress has passed legislation to avert a railroad strike.  The House passed the legislation on Wednesday, November 30, while the Senate passed it on Thursday, December 1.  The final vote in the Senate was 80 to 15.  The legislation now goes to President Biden for signature.  Without it, a strike with the potential to cripple the U.S. economy during the holiday season could have occurred beginning December 9.  Progressives in the House attempted to address workers’ demands around sick leave through a separate bill which passed in the House but failed in the Senate.  

It is important to note that, unlike in most other labor situations, Congress has the authority to act to prevent a railroad strike through its Constitutional power to regulate interstate commerce as well as the Railway Labor Act (RLA) of 1926, as amended.  You can read a helpful explainer by the Congressional Research Service for additional details on Congressional authority related to the railroads.  According to CNN, President Biden, who has carefully crafted his reputation as a pro-labor president, told reporters: 

I negotiated a contract no one else could negotiate – the only thing that was left out was whether or not there was a paid leave…You know, I’ve been trying to get paid leave, not just rail workers, but for everybody…Now, within this agreement, we’re gonna avoid the rail strike, keep the rails running, keep things moving, and we’re gonna go back and we’re gonna get paid leave – not just for rail workers, but for all workers. 

According to CNBC, union leaders have warned that there will be election consequences as a result of the failure to address the sick leave issue. 

Starbucks Strike:  Starbucks employees at more than 100 stores across the U.S. organized a one-day strike on November 17, known as Red Cup Day, the day the retailer hands out reusable holiday cups.  You can read more here. 

Amazon:  A U.S. District Judge has ordered Amazon to read out a public notice that it will not retaliate for organizing activity at the Staten Island facility where workers successfully voted to unionize.  The readout is schedule for Thursday, December 1.  The judge issued the order in response to the termination of Amazon employee Gerald Bryson in April 2020.  In a related development, Amazon workers protested outside the New York Times’ DealBook event where Amazon CEO Andy Jassy was speaking about recent layoffs. 

 

PA Minor League Teams That Were Left Out of Unionization Efforts 

Historically, the level of compensation for players in minor league sports has hovered somewhere around the poverty level, a stark contrast to the massive earnings major leaguers take home. After a summertime push by the Major League Baseball Players Association (MLBPA) that added several thousand minor league players to its rankings, the union is set to negotiate its first-ever collective bargaining agreement with Major League Baseball (MLB), including over minor league pain points such as salaries, housing, and travel expenses. This comes against a background of factors in the union’s favor, such as the above linked settlement over minimum wage and overtime pay violations, scrutiny over the MLB’s monopolistic antitrust exemptions via a US senate inquiry, mounting support for a minor leagues union in state capitals and DC, and general public support for labor unions at the moment. 

The MLBPA now covers players at all four affiliation levels (Triple-A, Double-A, High-A, and Low-A). In Pennsylvania, the teams represented include the Altoona Curve, Erie SeaWolves, Harrisburg Senators, Lehigh Valley IronPigs, Reading Fightin’ Phils, and the Scranton/Wilkes-Barre RailRiders. Unrepresented teams and teams not part of the unionization drive include the State College Spikes, Williamsport Crosscutters, Lancaster Barnstormers, Washington Wild Things, York Revolution, and the Johnstown Mill Rats. These latter teams are either part of MLB partner leagues or unpaid collegiate summer leagues.  

However, hundreds of players on dozens of teams not associated with the MLBPA will not be represented at the bargaining table and will likely not see improvements in their working conditions. One general victory for labor has been for the MLB to require major league teams that control minor league clubs to provide housing for their minor league players, as previously players found themselves bunking with teammates, sleeping in cars, or staying with host families. It is possible that these other teams may unionize in the future, but there are greater obstacles such as more transient players and a very different cash flow than affiliate teams. The Morning Call’s report on unionization in minor league baseball can be read here. 

 

Camden City and County Have Lowest Unemployment in History 

The New Jersey Department of Labor and Workforce Development (LWD) has released unemployment numbers for Camden County and the City of Camden. According to the November 2 report, both the county and the city fell to their lowest unemployment rates on record in the month of September. Camden City’s unemployment in September was 5.5%, while the County’s was 3%. During July 2020, the height of the pandemic, the unemployment was 22% for the city and 16.2% for the county. 

In 2017, the City of Camden was cited by the Bureau of Labor Statistics as having the highest employment growth in the nation. While the pandemic nationally knocked all employment growth off-track, over the past year the entire county has seen businesses return to normal. City Mayor Victor Carstarphen the city’s rebound to investments and local employment efforts from the eds and meds, corporate partner, small business, and non-profit sectors. Christina M. Renna, president and CEO of the Chamber of Commerce Southern New Jersey, states that the county has seen many positive economic indicators, such as residential expansion and new commercial and industrial growth, which have created new access and opportunity for jobs in the region. 

 

Pennsylvania Receives C Minus Grade for Infrastructure 

The American Society of Civil Engineers recently released a report card for Pennsylvania’s infrastructure condition. The report card is essentially a “wellness check” for the conditions of our roads and bridges. Overall, Pennsylvania’s infrastructure received a C- grade.  Pennsylvania fared the best in its aviation and hazardous waste networks, which received a B- grade. Its lowest-performing system is its aging wastewater infrastructure (D-). At unveiling events around the state, society engineers highlighted the benefits that the Bipartisan Infrastructure Law signed into law last year is bringing, but overall equated it to a down payment on long-overdue repairs and improvements that will benefit communities. Water infrastructure is the largest area of improvement needed, with the organization recommending upgrades and financial investments needed to stop contaminants and water leaks in state water systems. Roads, long a sore spot with residents, also came under attack, with generally terrible maintenance, poor design leading to traffic clogging, and a lack of transit and biking alternatives. 

To date, Pennsylvania has received $7.9 billion in funding from this law, with over 150 projects so far identified as funding opportunities. Said Governor Wolf in his press release statement, “This investment is really an investment in people. It’s an investment in safe travels to work, family, and friends; an investment in a secure supply chain, the food we eat, the water we drink, and the air we breathe.” 

 

Center City Business District Traffic is Looking Up 

After the pandemic took a toll on Center City shopping and office life, one report is showing that activity in Philadelphia’s central district is back on the rise. According to the study, foot traffic has increased more than 100% since 2021 and has reached 77% of what it was in October 2019. Following the return of hybrid employees at companies like Comcast, more people are patronizing Center City establishments. Retail occupancy has risen in the last year including among “digitally native brands” that began online. To learn more about the renaissance in Center City, click here.  

 

Bill to Change Residency Requirements for City Employment 

Before resigning her seat to run for mayor (see related item below), Councilmember Helen Gym introduced legislation to update the residency requirement for applicants for City jobs. Facing vacancies in many departments, such as the Police, Fire, and Library, the legislation would change the residency requirements from needing to have resided in Philadelphia for at least a year prior to employment (the current status) to requiring new hires to move into the city within six months of hiring. There are currently over 4,000 vacancies in City employment.  You can read more in this Inquirer article.