Category Archives: Economy

Eight Million More Americans in Poverty

Remember that COVID-19 didn’t close our economies. State and local leaders did.

Some eight million Americans have fallen below the poverty level since May after federal stimulus money dried up and Congress did not follow up with more relief legislation, according to a new study.

Meanwhile, the economic recovery has slowed down as more than 55 million Americans are now earning less than $26,200 a year – which is what the federal government considers the poverty line.

Researchers at Columbia University tracked poverty levels from before the COVID-19 pandemic dealt a devastating blow to the US economy in spring, forcing businesses across many industries to shut down.

Wisconsinites Getting Back to Work

Great news.

Wisconsin added 23,800 total non-farm and 13,700 private-sector jobs in the month of September. Wisconsin’s unemployment rate for September was 5.4 percent, down from August’s revised rate of 6.3 percent.

Disney Reorganizes Around Streaming Content

The world has changed.

Seemingly absorbing some growing advice from industry pros, Walt Disney (NYSE:DIS) is announcing a major reorganization where it will be making streaming its “primary focus” for entertainment.

Shares are up 3.1% after hours.

The company will rearrange its media and entertainment divisions into a single organization responsible for content distribution, ad sales, and Disney Plus.

[…]

“Under the new structure, Disney’s world-class creative engines will focus on developing and producing original content for the Company’s streaming services, as well as for legacy platforms, while distribution and commercialization activities will be centralized into a single, global Media and Entertainment Distribution organization,” the company says.

Evers Administration Reneges on Foxconn Deal

So much for any other large business trusting the WEDC in a deal.

(The Center Square) – The state of Wisconsin is continuing to take a hard line on Foxconn and the billions of dollars in state tax credits the company thought it was receiving.

The Wisconsin Economic Development Corporation said in a letter Monday Foxconn will not get any tax credits for it’s being-built plant in Mt. Pleasant until the company agrees to a new contract with the state.

“Foxconn’s activities and investments in Wisconsin to date are not eligible for credit,” WEDC Secretary Missy Hughes said in the letter.

Hughes said Foxconn’s decision to shrink the size of its plant led to WEDC’s decision to refuse the company tax breaks.

Foxconn’s deal, signed under Gov. Scott Walker, promised up to $3 billion if Foxconn met its jobs and construction goals.

Foxconn has fallen short of all of those goals, but the company said it had hired enough people by the end of 2019 to qualify for some tax incentives.

Hughes, in her letter, said that is not enough. She wants either a new contract, or she said Wisconsin could take back some of the money already paid to Foxconn.

The State of Wisconsin made a deal with Foxconn. If Foxconn doesn’t live up to their side, then don’t give them the tax breaks. But to withhold those tax breaks to force a new deal is just scummy. If I were Foxconn, I’d walk. Why bother making another deal with a state that welched on the first one? Rerun the math and see if it still makes sense to keep building in Wisconsin.

WHO: Lockdowns Make “Poor People and Awful Lot Poorer”

Some of us have been saying this for going on eight months now.

The World Health Organisation has backflipped on its original COVID-19 stance after calling for world leaders to stop locking down their countries and economies.

Dr. David Nabarro from the WHO appealed to world leaders yesterday, telling them to stop “using lockdowns as your primary control method” of the coronavirus.

He also claimed that the only thing lockdowns achieved was poverty – with no mention of the potential lives saved.

“Lockdowns just have one consequence that you must never ever belittle, and that is making poor people an awful lot poorer,” he said.

“We in the World Health Organisation do not advocate lockdowns as the primary means of control of this virus,” Dr Nabarro told The Spectator.

“The only time we believe a lockdown is justified is to buy you time to reorganise, regroup, rebalance your resources, protect your health workers who are exhausted, but by and large, we’d rather not do it.”

Pay TV Revenue is Steadily Declining

As this happens and ad spending continues to spread out into the web, the downstream economic effects will be significant.

A new forecast suggests U.S. pay TV revenue will drop to $56B in 2025, and global pay TV revenue is headed for a 15-year low by then.

Digital TV Research says that U.S. figure will have declined from a peak of $105B in 2015.

And the global number will drop to $152B in 2025 – below even 2010’s $175B. That’s despite the fact that pay TV subscribers will have risen by 345M in that 15-year span.

And the revenue drop despite rising subscribers is due to the declines coming in mature, high-priced markets. The U.S. projected figure of $56B is still far higher than anywhere else.

Evers’ DWD Already Behind as it Awaits Onrush of New Unemployment Claims

The evidence is clear that Evers’ DWD failed to prepare for the onrush of unemployment claims when he closed the state in March. It took them weeks to begin reacting and months to get new people in place to handle the load. Based on the stonewalling by the Evers’ administration below, I highly doubt that he took any proactive steps to shore up the DWD when he issued his new order restricting restaurant capacity. There are a lot of cooks, servers, and other staff that will be looking for help from the DWD. Will they be able to get it?

The Wisconsin Department of Workforce Development says it’s made significant progress processing unemployment claims. But tens of thousands of claims are still waiting to be processed while people struggled to get by.

[…]

However this week, the Department of Workforce Development announced progress. It says about 91 percent of claims have been processed, but that still leaves more than 80,000 people waiting for their money.

[…]

And now, as COVID-19 cases surge, Gov. Evers issued a new executive order limiting stores, restaurants and other businesses to 25 percent capacity. That could lead to a new unemployment spike.

CBS 58 Investigates asked DWD if it’s ready but they did not return calls or emails for comment.

During a news conference Tuesday, Gov. Evers said he’s confident they can handle it.

“We are in the last couple of weeks, we have made significant changes within the process of issuing money to claimants on unemployment insurance,” Gov. Evers said.

We asked the governor’s office for specifics about those changes and details about the plan to prevent another backlog. We didn’t hear back.

Wisconsin Republicans Are Complicit in Evers Shutdown

They have the power to act. They refuse to do so. As I said in my column supporting Trump… watch what people do – not what they say. All of this from Vos and Fitz is just useless bloviating. If they refuse to act when they have the power, then they are tacitly agreeing to locking down Wisconsin’s businesses and putting people out of work. Make no mistake, it is Evers’ fault, but the refusal of Republicans to act makes them collaborators. I understand the politics involved, but the business owners and employees being harmed deserve action.

MADISON — Speaker Robin Vos says Gov. Tony Evers’ emergency order requiring public gatherings in indoor spaces to be limited to 25 percent of capacity violates state law, following the Wisconsin Supreme Court’s recent ruling blocking the governor’s earlier stay-at-home order.

“With cases once again rising, it’s clear the governor’s go-it-alone, grab bag approach to responding to the coronavirus has been a failure,” Vos (R-Rochester) said in a statement Wednesday afternoon.

The speaker further called on Department of Health Services Secretary-Designee Andrea Palm to submit the emergency order to the Joint Commitee for Review of Administrative Rules, “as required by law.”

 

Almost Half of Wisconsin Hotels Might Close

We’re going to feel the economic ripples of this for a very long time. Remember that many of these businesses are owned by small business owners. Their capital is wiped out and they will be unable or unwilling to take another rick to start another business. We need a new generation of risk-taking entrepreneurs to take the helm and the Millennial generation has proven to be risk-averse.

Elliott said the extent of damage caused by the COVID-19 pandemic is becoming clear. A recent internal survey shows a staggering 47% of Wisconsin lodging establishments could be forced to close in the next year without loan or grant assistance.

“We need help from the federal level,” said Elliott. “We need help from the state level.”

More than 50% of hotel staff in the state remain furloughed or laid off.

Evers’ DWD failed Wisconsin

My column for the Washington County Daily News is online and in print. Here’s a part:

Beginning the week of March 15, the number of initial claims skyrocketed. It peaked the week of March 22 with 116,129 initial claims filed and was half that by the week of April 5. The DWD call centers received 1.4 million calls the week of March 22 and almost 6 million calls the week of April 12. All told, there were 41.1 million calls made to the DWD call centers between March 15 and June 30. Of those, 93.3% were blocked or received a busy signal; 6.2% of callers got through but hung up before being answered; and only 0.5% of calls were answered.

The DWD woefully underreported the extent of the problem to the Joint Legislative Audit Committee. The DWD reported the number of calls blocked, abandoned, and answered. The calls it reported as “blocked” were calls that reached the system and the caller was told to call later and disconnected. They did not report the number of callers who just received a busy signal. In doing so, the DWD failed to report 75% of the calls that were unable to reach the call centers.

When challenges arise, leaders rise. Unfortunately, there were not any to be found at the DWD or in the governor’s mansion.

It is important to follow the dates…

[…]

If Wisconsin had a competent governor with a competent administration, they would have anticipated the rush of Wisconsinites seeking to file unemployment claims when they effectively shut down the state’s economy. They would have aggressively worked to expand the capacity of the DWD UI staff, expanded hours, worked overtime, accelerated outsourcing, and done everything possible to serve Wisconsinites who were forced out of work due to government action. Instead, the governor, DWD secretary, and agency bureaucrats plodded along at government speed while unemployed Wisconsinites waited and worried.

Governor Evers forced his DWD secretary to resign as the administration’s scapegoat, but he should take a hard look in the mirror and ask why his administration failed precisely when so many Wisconsinites needed it most.

 

Justice Department Builds Antitrust Case Against Google

This could have far-reaching implications.

WASHINGTON (AP) — The Justice Department is expected to bring an antitrust action against Google in coming weeks, focusing on its dominance in online search and whether it was used to stifle competition and hurt consumers, a person familiar with the matter told The Associated Press Thursday.

The department also is examining Google’s online advertising practices, said the person, who could not discuss an ongoing investigation publicly and spoke on condition of anonymity. Antitrust officials at the department briefed state attorneys general Thursday on the planned action against Google, seeking support from states across the country that share concerns about Google’s conduct.

The anticipated lawsuit against Google could be the government’s biggest legal offensive to protect competition since the groundbreaking case against Microsoft almost 20 years ago.

Lawmakers and consumer advocates accuse Google of abusing its dominance in online search and advertising to stifle competition and boost its profits.

BlackRock Requires Full Disclosure of Relationships

Yikes.

The world’s largest money manager has introduced a new policy forcing its 16,000 employees to disclose ‘personal relationships’ with all the company’s clients, in what is being described as the toughest policy yet on office romances.

BlackRock, the New York-based firm which manages $7.4 trillion in assets, introduced the new rules last week.

They are in addition to existing policies which forced the disclosure of relationships with other staff members.

Given that BlackRock, on behalf of the funds it runs, is one of the five largest shareholders in nearly every corporation in the S&P 500, the impact of the new policy is expected to be significant.

[…]
‘It takes the assessment of what is or is not a conflict out of the employees’ hands and puts it into the hands of HR and lawyers — which makes it eminently enforceable,’ the executive said.
That’s comforting…

Evers Fires DWD Secretary

I know everyone is focused on Washington right now, but let’s not let this get lost in the shuffle.

MADISON — Wisconsin Department of Workforce Development Secretary Caleb Frostman has resigned over persistent issues processing unemployment claims amid the pandemic.

Gov. Tony Evers said Friday that he asked for, and received, the resignation from 35-year-old Frostman, effective immediately.

Evers cites significant delays in processing unemployment claims amid the pandemic. DWD is in charge of that process.

[…]

Between March 15 and Sept. 12, DWD reports 6,546,554 claims have been filed. Just under 11 percent – or 713,508 – of those claims are still being processed.

[…]

Evers argues he has worked to provide DWD the resources to deal with the surge, including additional staffing. In additional 130 DWD employees have been reassigned to the Unemployment Insurance Division. The DWD now has more than 1,500 employees working on UI cases, a 250 percent spike from 600 workers before, according to the governor’s office.

It appears, though, that assistance failed to materialize into an improvement in processing claims under Frostman’s DWD.

Even though Evers took his customary cheap shots at Republicans in the announcement, he is acknowledging his responsibility for the failure. Good for him for acting. But shuffling the bureaucrats won’t be enough. Evers needs to hire a task master and empower him or her to act aggressively.

Another Iconic Wisconsin Business Closes Due to Evers’ Shutdown

What a shame.

WISCONSIN DELLS, Wis. — After nearly seven decades, the Tommy Bartlett Show in Wisconsin Dells announced Wednesday it will close permanently due to business losses during the pandemic.

In April, the owners of the water-ski, sky and stage show made the decision to close its attraction this summer due to restrictions on large gatherings.

[…]

“Uncertainty is the biggest detriment to business,” said Diehl. “You can’t make a decision because you’ve been here 54 years and the show’s been here 69 years. You can’t make a decision (on that), it has to be based on probability of success. And to me there was zero probability going forward.”

The company made the announcement in a press release Wednesday morning.

“From May through September 6, we experienced a complete loss of revenue when we had to cancel our 2020 summer season on Lake Delton due to the pandemic. Each fall, we begin to plan for the next season, and with so much uncertainty surrounding the future of the pandemic and travel, we cannot undergo additional financial risk and investment to begin planning for summer 2021.

Median Household Income Was Highest in 50 Years Before Rona

Let’s get back to this, mmmmkay?

(CNN)Median US household income was $68,700 in 2019, the highest since 1967, the first year records were kept, according to inflation-adjusted data released by the Census Bureau Tuesday.

That’s up 6.8% from the year before.
The poverty rate fell to 10.5% last year, the lowest since 1959, Census said. That’s down about 1.3 percentage points in 2018. Some 34 million were in poverty, 4.2 million fewer than the year before.
All these gains, however, were upended by the coronavirus pandemic this year, which resulted in the steepest decline in employment on record. While millions of jobs have come back, some 13.6 million Americans remained unemployed in August.

State Might… MIGHT… Catch Up on Unemployment Backlog By End of Year

Utter. Incompetence.

Secretary Caleb Frostman told WISN 12 News since March, they’ve “paid about 510,000 people about $3.6 billion. There are 96,000 claimants in Wisconsin still waiting on at least one payment in our adjudication area, so we’re making progress week over week, continuing to grind through those oldest claims first, but obviously we’ve got continued work ahead of us, as we continue to grind down the mountain of claims that have piled up since COVID hit Wisconsin.”

[…]

Frostman also said they hope to catch up on the backlog by the end of the year.

 

Evers Administration Still Failing with Processing Unemployment Benefits

It has been so long that either they want the backlog or they are just too incompetent to deal with it. Meanwhile, real people are hurting.

According to the DWD, the department received more than 6 million weekly claims from March 15 through September 5. Nearly 700,000 of them are still being processed.

“They have had significant backlogs due to the workload of the historic layoff through this pandemic,” Workforce Connections executive director Teresa Pierce said.

Pierce says the DWD moved most of their staff to the unemployment insurance sector.

“There’s been a substantial increase in the number of calls we’ve received at the job center,” Pierce said. “And then we refer them to Madison.”

Xbox Financing Options

If you are financing your game console, you suck at personal finance. You are paying $840 for a $500 piece of technology for purely entertainment purposes. The fact that this option will be so popular is a window into America’s inability and unwillingness to control government spending and debt.

The high-end Xbox Series X will cost $499 while the entry-level Xbox Series S will cost $299. Microsoft will also offer a financing plan that allows customers to pay for either console over 24 months.The Xbox Series S costs $24.99 per month on that plan while the Xbox Series X will cost $34.99 per month.

Microsoft said the financing plans also include access to Xbox Game Pass Ultimate and EA Play, which allows you to download or stream more than 100 games to Xbox or PC. It will also include Microsoft’s new mobile streaming services that lets you stream from the cloud to an Android phone. You’ll have to buy a Game Pass subscription plan separately, which starts at $9.99 per month, if you don’t finance.

“Insurance Will Cover It”

Nope.

Like dozens of other investors whose properties were severely damaged in the May riots, the Kim family was stunned to discover that the money it would collect from its insurance company for demolition won’t come close to the actual costs of doing the job. Most policies limit reimbursement to $25,000 to $50,000, but contractors have been submitting bids of $200,000 to $300,000. In many cases, the price of the work is not much lower than the actual value of the property, records show.

“I think that is price-gouging and they should contact the attorney general,” said Andrea Jenkins, vice president of the Minneapolis City Council. “That is a symbol of capitalism run amok.”

Contractors acknowledge that prices for riot-related work are far higher than usual, but they said that is because government regulations require them to treat all debris from a burned-out building as hazardous. Industry veteran Don Rachel said those rules can double demolition costs.

[…]

Islam decided to move forward on a $125,000 bid; insurance will cover just $50,000 of those costs.

“Our neighborhood looks like a war zone,” Islam said. “As a property owner, it is my moral responsibility to somehow get it done.”

The move will leave him with almost no money for rebuilding. Most of the money he got from his policy went to pay off his mortgage.

Other immigrant property owners are facing the same situation. Faisal Demaag said a contractor first offered to demolish his store, Chicago Furniture Warehouse, for $18,000. Then the company started revising the price. He is now facing a total bill of $133,000 if he moves forward.

[…]

Ade Alabi said he was billed $75,000 by the city of Minneapolis after contractors knocked down his 32,700-square-foot retail complex on East Lake Street, but he said he has struggled to find a company willing to finish the job. Two of the three contractors he contacted last month have yet to submit a bid, and the third told him last week that it will cost $363,000 just to haul away the debris.

“The guy down the road paid $114,000 for demolition and removal,” Alabi said.

Alabi said he will have just $200,000 left for rebuilding after paying off his $3.4 million mortgage — leaving him far short of what he needs to rebuild.

“I don’t know what to do,” he said. “I think the city should have helped us more, but they haven’t.”

Uncollected Strip Club Fees Defund Rape Crisis Centers

More negative consequences of the unconstitutional stripping of civil rights.

The Texas Sexual Assault Prevention and Crisis Services Program pays for an array of services designed to help crime victims, including rape crisis centers and training for specialized nurse examiners.

But it is funded mainly by a $5-per-patron fee charged to adult businesses, such as strip clubs — shuttered this spring as the government tried to slow the spread of the novel coronavirus.

The uncollected “pole taxes” have drained $5.35 million from the program.

All the stories, all the time

Inmates who work for Texas Correctional Industries typically make garments and other items whose sale contributes revenue to the Department of Criminal Justice. But this spring, in response to a shortage of personal protective equipment, the inmates switched to manufacturing masks, costing the corrections department $3 million in profits.

The Office of Risk Management, the state’s self-insurance agency, says that in recent months it has processed double to triple the typical number of workers’ compensation claims. As of mid-August, the state’s risk managers had received 5,130 claims “potentially related to COVID-19,” spokeswoman Janice McCoy said. Covering the claims could top $6 million.