McDonald’s is raising wages at its company-owned restaurants. It is also helping its franchisees hang on to workers with funding for backup child care, elder care and tuition assistance. Pay is up at Chipotle, too, and Papa John’s and many of its franchisees are offering hiring and referral bonuses.
The reason? “In January, 8 percent of restaurant operators rated recruitment and retention of work force as their top challenge,” Hudson Riehle, senior vice president for research at the National Restaurant Association, said in an email. “By May, that number had risen to 72 percent.”
Restaurant workers — burger flippers and bussers, cooks and waiters — have emerged from the pandemic recession to find themselves in a position they could not have imagined a couple of years ago: They have options. They can afford to wait for a better deal.
In the first five months of the year, restaurants put out 61 percent more “workers wanted” posts for waiters and waitresses than they had in the same months of 2018 and 2019, before the coronavirus pandemic shut down bars and restaurants around the country, according to data from Burning Glass, a job market analytics firm.
replace their face-to-face workers with robots and software. Yet there are signs that the country’s low-wage labor force might be in for more lasting raises.
Even before the pandemic, wages of less-educated workers were rising at the fastest rate in over a decade, propelled by shrinking unemployment. And after the temporary expansion of unemployment insurance ends, with Covid-19 under control and children back at school, workers may be unwilling to accept the deals they accepted in the past.
Jed Kolko, chief economist at the job placement site Indeed, pointed to one bit of evidence: the increase in the reservation wage — the lowest wage that workers will accept to take a job.
According to data from the Federal Reserve Bank of New York, the average reservation wage is growing fastest for workers without a college degree, hitting $61,483 in March, 26 percent more than a year earlier. Aside from a dip at the start of the pandemic, it has been rising since November 2017.
“That suggests it is a deeper trend,” Mr. Kolko noted. “It’s not just about the recovery.”
Other trends could support higher wages at the bottom. The aging of the population, notably, is shrinking the pool of able-bodied workers and increasing demand for care workers, who toil for low pay but are vital to support a growing cohort of older Americans.
“There was a work force crisis in the home care industry before Covid,” said Kevin Smith, chief executive of Best of Care in Quincy, Mass., and president of the state industry association. “Covid really laid that bare and exacerbated the crisis.”
more families turning their backs on nursing homes, which were early hotbeds of coronavirus infections, Mr. Smith said, personal care aides and home health aides are in even shorter supply.
“The demand for services like ours has never been higher,” he said. “That’s never going back.”
And some of the changes brought about by the pandemic might create new transition opportunities that are not yet in the Brookings data. The accelerated shift to online shopping may be a dire development for retail workers, but it will probably fuel demand for warehouse workers and delivery truck drivers.
The coronavirus outbreak induced such an unusual recession that any predictions are risky. And yet, as Ms. Escobari of Brookings pointed out, the recovery may provide rare opportunities for those toiling for low wages.
“This time, people searching for jobs may have a lot of different options,” she said. “That is not typical.”
As Federal Reserve Chair Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue.
Laurence D. Fink, the chief executive of BlackRock, the world’s largest asset manager, was in frequent touch with Mr. Mnuchin and Mr. Powell in the days before and after many of the Fed’s emergency rescue programs were announced in late March. Emails obtained by The New York Times through a records request, along with public releases, underscore the extent to which Mr. Fink planned alongside the government for parts of a financial rescue that his firm referred to in one message as “the project” that he and the Fed were “working on together.”
While some conversations were previously disclosed, the newly released emails, together with public calendar records, show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government.
60 recorded calls over the frantic Saturday and Sunday leading up to the Fed’s unveiling on Monday, March 23, of a policy package that included its first-ever program to buy corporate bonds, which were becoming nearly impossible to sell as investors sprinted to convert their holdings to cash. Mr. Mnuchin spoke to Mr. Fink five times that weekend, more than anyone other than the Fed chair, whom he spoke with nine times. Mr. Fink joined Mr. Mnuchin, Mr. Powell and Larry Kudlow, who was the White House National Economic Council director, for a brief call at 7:25 the evening before the Fed’s big announcement, based on Mr. Mnuchin’s calendars.
book on funds.
On March 24, 2020, the New York Fed announced that it had again hired BlackRock’s advisory arm, which operates separately from the company’s asset-management business but which Mr. Fink oversees, this time to carry out the Fed’s purchases of commercial mortgage-backed securities and corporate bonds.
BlackRock’s ability to directly profit from its regular contact with the government during rescue planning was limited. The firm signed a nondisclosure agreement with the New York Fed on March 22, restricting involved officials from sharing information about the coming programs.
were contracting and its business outlook hinged on what happened in certain markets.
While the Fed and Treasury consulted with many financial firms as they drew up their response — and practically all of Wall Street and much of Main Street benefited — no other company was as front and center.
Simply being in touch throughout the government’s planning was good for BlackRock, potentially burnishing its image over the longer run, Mr. Birdthistle said. BlackRock would have benefited through “tons of information, tons of secondary financial benefits,” he said.
Mr. Mnuchin could not be reached for comment. Asked whether top Fed officials discussed program details with Mr. Fink before his firm had signed the nondisclosure agreement, the Fed said Mr. Powell and Randal K. Quarles, a Fed vice chair who also appears in the emails, “have no recollection of discussing the terms of either facility with Mr. Fink.”
“Nor did they have any reason to do so because the Federal Reserve Bank of New York handled the process with great care and transparency,” the central bank added in its statement.
Brian Beades, a spokesman for BlackRock, highlighted that the firm had “stringent information barriers in place that ensure separation between BlackRock Financial Markets Advisory and the firm’s investment business.” He said it was “proud to have been in a position to assist the Federal Reserve in addressing the severe downturn in financial markets during the depths of the crisis.”
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The disclosed emails between Fed and BlackRock officials — 11 in all across March and early April — do not make clear whether the company knew about any of the Fed and Treasury programs’ designs or whether they were simply providing market information.
Fed chair’s official schedule from that March. Those calendars generally track scheduled events, and may have missed meetings in early 2020 when staff members were frantically working on the market rescue and the Fed was shifting to work from home, a central bank spokesman said.
Mr. Powell’s calendars did show that he talked to Mr. Fink in March, April and May, and he has previously answered questions about those discussions.
“I can’t recall exactly what those conversations were, but they would have been about what he is seeing in the markets and things like that, to generally exchanging information,” Mr. Powell said at a July news conference, adding that it wasn’t “very many” conversations. “He’s typically trying to make sure that we are getting good service from the company that he founded and leads.”
BlackRock’s connections to Washington are not new. It was a critical player in the 2008 crisis response, when the New York Fed retained the firm’s advisory arm to manage the mortgage assets of the insurance giant American International Group and Bear Stearns.
Several former BlackRock employees have been named to top roles in President Biden’s administration, including Brian Deese, who heads the White House National Economic Council, and Wally Adeyemo, who was Mr. Fink’s chief of staff and is now the No. 2 official at the Treasury.
in early 2009 to $7.4 trillion in 2019. By the end of last year, they were $8.7 trillion.
As it expanded, it has stepped up its lobbying. In 2004, BlackRock Inc. registered two lobbyists and spent less than $200,000 on its efforts. By 2019 it had 20 lobbyists and spent nearly $2.5 million, though that declined slightly last year, based on OpenSecrets data. Campaign contributions tied to the firm also jumped, touching $1.7 million in 2020 (80 percent to Democrats, 20 percent to Republicans) from next to nothing as recently as 2004.
short-term debt markets that came under intense stress as people and companies rushed to move all of their holdings into cash. And problems were brewing in the corporate debt market, including in exchange-traded funds, which track bundles of corporate debt and other assets but trade like stocks. Corporate bonds were difficult to trade and near impossible to issue in mid-March 2020. Prices on some high-grade corporate debt E.T.F.s, including one of BlackRock’s, were out of whack relative to the values of the underlying assets, which is unusual.
People could still pull their money from E.T.F.s, which both the industry and several outside academics have heralded as a sign of their resiliency. But investors would have had to take a financial hit to do so, relative to the quoted value of the underlying bonds. That could have bruised the product’s reputation in the eyes of some retail savers.
fund recovery was nearly instant.
When the New York Fed retained BlackRock’s advisory arm to make the purchases, it rapidly disclosed details of those contracts to the public. The firm did the program cheaply for the government, waiving fees for exchange-traded fund buying and rebating fees from its own iShares E.T.F.s back to the New York Fed.
The Fed has explained the decision to hire the advisory side of the house in terms of practicality.
“We hired BlackRock for their expertise in these markets,” Mr. Powell has since said in defense of the rapid move. “It was done very quickly due to the urgency and need for their expertise.”
The discussion could shape the path ahead for economic policy, helping to determine how much support President Biden has for infrastructure spending proposals and how patient the Fed can be in removing emergency monetary policy supports.
“This is the largest year-over-year increase in prices since the Great Recession, and massive stimulus spending is a contributing factor,” Senator Mike Crapo, Republican of Idaho, wrote on Twitter. “Proposals for further federal spending, coupled with job-killing tax hikes, are not the remedy for economic recovery.”
The White House has been focused on alleviating bottlenecks where it can, reviewing the supply chain for semiconductors and critical minerals used in all sorts of products. But controlling inflation falls largely to the Fed.
The data comes less than a week before the central bank’s June meeting, which will give the Fed chair, Jerome H. Powell, another opportunity to address how he and his colleagues plan to achieve their two key goals — stable prices and full employment — in the tricky post-pandemic economic environment.
“The Fed has never said how big a reopening spike it expected, but we’re guessing that policymakers have been surprised by the past two months’ numbers,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note following the release.
The big policy question facing the Fed is when, and how quickly, it will begin to slow its $120 billion in monthly government-backed bond purchases. That policy is meant to keep borrowing of all kinds cheap and stoke demand, and because it bolsters stock prices, markets are very attuned to when central bankers will taper it.
Mr. Powell and his colleagues have repeatedly said that they need to see “substantial” further progress toward maximum employment and stable inflation that averages 2 percent over time before they pull back from that policy.
Turn on the news, scroll through Facebook, or listen to a White House briefing these days and there’s a good chance you’ll catch the Federal Reserve’s least-favorite word: Inflation. If that bubbling popular concern about prices gets too ingrained in America’s psyche, it could spell trouble for the nation’s central bank.
Interest in inflation has jumped this year for both political and practical reasons. Republicans, and even some Democrats, have been warning that the government’s hefty pandemic spending could push inflation higher.And as the economy gains steam, demand is coming back faster than supply. It’s a recipe for bigger price tags for everything from airline tickets to used cars, at least temporarily.
The Fed, which Congress has put in charge of controlling inflation, thinks the jump in prices this year will fade as data quirks, supply bottlenecks and a reopening-induced pop in demand work their way through the system. For now, officials see no reason to tap the brakes by slowing down large-scale bond purchases or raising interest rates, policy changes that would slacken demand as an antidote to accelerating inflation.
And the Fed has big reasons to avoid overreacting: The problem in the wake of the 2007 to 2009 recession was tepid price gains that risked an economically damaging downward spiral, not fast ones. Inflation far above the central bank’s comfort level hasn’t been a feature of the economic landscape since the 1980s.
data from the Gdelt Project. On Fox News Channel, mentions of inflation have surged to six times the normal rate.
Google searches for “inflation” have taken off, Twitter inflation hashtags have increased, and monthly price data reports have newly become front-page headlines.
The surge in attention comes amid stories of computer chip shortages, gas lines, and surging lumber prices, and also as overall measures of real-world price gains are speeding up.
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Consumer Price Inflation surprised economists by rocketing higher in April, data released last week showed, rising by 4.2 percent. While prices were expected to climb for technical reasons, supply bottlenecks and resurgent demand combined to push the data point much higher than the 3.6 percent analysts had penciled in. Fed officials use a different but related index to define their inflation goal.
Eye-popping gains are widely expected to cool down as supply catches up with demand and reopening quirks clear, but as they catch consumer attention, inflation expectations are shooting higher across a range of measures. And that poses a risk.
highest level since 2006 last week. A consumer survey collected by the University of Michigan — and closely watched by top Fed officials — jumped in preliminary May data, rising to 4.6 percent for the next year and 3.1 percent for the next five, the highest level in a decade.
The gap between short- and long-term expectations is echoed in the Federal Reserve Bank of New York’s Survey of Consumer Expectations. Americans’ year-ahead inflation expectations rose to the highest level since 2013 in April, but the outlook for inflation over the next three years has been much more stable.
Fed policymakers have taken heart in the fact that households seem to be preparing more for a short-term pop — something central bankers have said they are willing to look past without lifting rates — than for years of superfast price gains.
But they have been clear that there are limits to tolerable increases, without precisely defining what those would be.
If expectations started to rise “month after month after month,” that would be concerning, Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said during an interview on May 10, before the latest Michigan data were released. She declined to put a number on what would worry her.
Inflation expectations data are notoriously hard to parse, and the consumer trackers tend to be heavily influenced by gas prices. The Fed has recently been using a quarterly measure that has moved up by less. But the speed of recent adjustments has called into question how much acceleration would be a problem, signaling that people have come to accept inflation in a way that will keep actual prices rising.
The inflation outlook is uncertain both because of the unusual moment — the economy has never reopened from a pandemic before — and because the way the government approaches economic policy has shifted over the past year.
The Fed’s new policy approach, adopted last August, both aims for periods of higher inflation and doubles down on the central bank’s full employment goal. Practically, it means the central bank plans to leave rates low for years, and it has helped to justify continuing a huge bond-buying program that the Fed began at the start of the pandemic downturn. Those policies make money cheap to borrow, ultimately bolstering demand for goods and services and helping prices to rise.
At the same time, the federal government has drastically loosened its purse strings, spending trillions of dollars to pull the economy out of the pandemic recession. Both the fiscal and the monetary response are meant to keep households economically whole through a challenging period, so there was also a risk to having less-ambitious policies.
Things will most likely work out, economists have predicted. The demand boom anticipated in 2021 is unlikely to last, because consumers’ pandemic savings will eventually be exhausted. Supply issues should be resolved, though it is not clear when. Many analysts expect prices to moderate over the next year or so.
But some underline that expectations are the vulnerability to watch when it comes to inflation, in case they shift before the smoke clears and prices slow their ascent.
“This is something people are talking about in their daily lives, it’s not just a Washington thing,” said Michael Strain, a researcher at the American Enterprise Institute. “My expectation is that expectations will remain anchored — but it’s clearly a huge risk.”
But in recent years, that compact has begun to fracture. Democrats, pushed by progressive activists, have shifted further to the left on a wide range of economic policy issues. Under Mr. Trump, Republicans became more hostile to free trade and immigration. After the Jan. 6 storming of the Capitol, some prominent companies and business groups announced they would cut off donations to Republicans who had joined an effort to challenge in Congress the results of Mr. Trump’s November loss to Mr. Biden, prompting some Republican lawmakers to swear off corporate donations.
Many top executives feel they have little choice. They are being pressured by customers and increasingly by young, progressive employees to speak out publicly on major issues. And in the era of social media, companies can get into just as much trouble by staying silent as by weighing in.
Polling data shows the squeeze. A Gallup poll conducted in January, in the days leading up to and immediately following the Capitol riot, found that just 31 percent of Republicans were satisfied with the “size and influence of major corporations.” That was down from 57 percent a year earlier.
And in a survey conducted last month for The New York Times by the online research platform SurveyMonkey, 81 percent of Republicans who knew enough to form an opinion said it was inappropriate for business leaders to speak out against the Georgia law. And 78 percent of Republicans said large corporations had too much influence over American life in general. (The survey was conducted before two coalitions of business leaders released letters calling for expanded voting rights in Texas.)
Elena Adams, a survey respondent in Northern California, said she began to feel that corporate America was shifting against her a few years ago, when Nike embraced Colin Kaepernick, the former San Francisco 49ers quarterback who drew widespread attention for kneeling during the national anthem to protest police violence.
“Basically I think we’re celebrating people who are not for the United States and pushing the agenda that we should be ashamed if we’re not people of color,” she said. “This whole narrative of the race thing, it’s reverse racism, is what’s happening.”
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Ms. Adams, 66, said she had stopped flying Delta and buying Coca-Cola products. Since Major League Baseball relocated the All-Star Game from Atlanta over the Georgia voting law, she has quit following the Oakland Athletics. She has abandoned social media, believing that companies such as Facebook and Twitter are unfair to conservatives, and told the purchasing managers at the emergency response business where she is a partner to avoid buying from companies that espouse liberal positions, although she said it was too difficult to avoid companies like Amazon and Google altogether.
One of the most urgent questions in economics is why pay for middle-income workers has increased only slightly since the 1970s, even as pay for those near the top has escalated.
For years, the rough consensus among economists was that inexorable forces like technology and globalization explained much of the trend. But in a new paper, Lawrence Mishel and Josh Bivens, economists at the liberal Economic Policy Institute, conclude that government is to blame. “Intentional policy decisions (either of commission or omission) have generated wage suppression,” they write.
Included among these decisions are policymakers’ willingness to tolerate high unemployment and to let employers fight unions aggressively; trade deals that force workers to compete with low-paid labor abroad; and the tacit or explicit blessing of new legal arrangements, like employment contracts that make it harder for workers to seek new jobs.
Together, Dr. Mishel and Dr. Bivens argue, these developments deprived workers of bargaining power, which kept their wages low.
decline of unions; a succession of trade deals with low-wage countries; and increasingly common arrangements like “fissuring,” in which companies outsource work to lower-paying firms, and noncompete clauses in employment contracts, which make it hard for workers to leave for a competitor.
also written about unions and other reasons that workers have lost leverage, said the portion of the wage gap that Dr. Mishel and Dr. Bivens attribute to such factors probably overstated their impact.
The reason, he said, is that their effects can’t simply be added up. If excessive unemployment explains 25 percent of the gap and weaker unions explain 20 percent, it is not necessarily the case that they combine to explain 45 percent of the gap, as Dr. Mishel and Dr. Bivens imply. The effects overlap somewhat.
Dr. Katz added that education plays a complementary role to bargaining power in determining wages, citing a historical increase in wages for Black workers as an example. In the first several decades of the 20th century, philanthropists and the N.A.A.C.P. worked to improve educational opportunities for Black students in the South. That helped raise wages once a major policy change — the Civil Rights Act of 1964 — increased workers’ power.
“Education by itself wasn’t enough given the Jim Crow apartheid system,” Dr. Katz said. “But it’s not clear you could have gotten the same increase in wages if there had not been earlier activism to provide education.”
Daron Acemoglu, an M.I.T. economist who has studied the effects of technology on wages and employment, said Dr. Mishel and Dr. Bivens were right to push the field to think more deeply about how institutions like unions affect workers’ bargaining power.
But he said they were too dismissive of the role of market forces like the demand for skilled workers, noting that even as the so-called college premium has mostly flattened over the last two decades, the premium for graduate degrees has continued to increase, most likely contributing to inequality.
Still, other economists cautioned that it was important not to lose sight of the overall trend that Dr. Mishel and Dr. Bivens highlight. “There is just an increasing body of work trying to quantify both the direct and indirect effects of declining worker bargaining power,” said Anna Stansbury, the co-author of a well-received paper on the subject with former Treasury Secretary Lawrence Summers. After receiving her doctorate, she will join the faculty of the M.I.T. Sloan School of Management this fall.
“Whether it explains three-quarters or one-half” of the slowdown in wage growth, she continued, “for me the evidence is very compelling that it’s a nontrivial amount.”
WASHINGTON — President Biden ordered the Labor Department on Monday to ensure that unemployed Americans cannot draw enhanced federal jobless benefits if they turn down a suitable job offer, even as he rejected claims by Republicans that his weekly unemployment bonus is undermining efforts to get millions of Americans back to work.
Stung from a weekend of criticism over a disappointing April jobs report, Mr. Biden struck a defiant tone, seeking to make clear that he expects workers to return to jobs if they are available, while defending his signature economic policy effort thus far and blaming corporate America, in part, for not doing more to entice people to go back to work.
The president told reporters at the White House that child care constraints, school closures and fears of contracting the coronavirus had hindered job creation last month, and he challenged companies to help workers gain access to vaccines and to raise their pay.
“The last Congress, before I became president, gave businesses over $1.4 trillion in Covid relief,” Mr. Biden said. “Congress may have approved that money, but let’s be clear: The money came from the American people, and it went from the American people to American businesses, many of them big businesses, to help them get through this pandemic and keep their doors open.”
legal confrontation over whether states can cut taxes after taking relief money and using it to solidify their budgets.
the guidance said.
Treasury and White House officials made clear that they would scrutinize how the funds were being used to ensure that state budgets were not being gamed to violate the intent of the law. A new recovery office at the Treasury Department will coordinate with states to help determine if their policies are in line with conditions set forth in the law.
The relief money also cannot be paid into state pension funds to reduce unfunded liabilities.
A White House official would not comment on whether initiatives like Montana’s return-to-work bonuses could be funded using relief money. States and cities are being given broad discretion on how they can use the money, which is intended to replace public sector revenue that was lost during the pandemic; to provide extra pay for essential workers; and to be invested in sewer, water and broadband infrastructure.
Treasury Secretary Janet L. Yellen’s guidance failed to clarify the matter.
“Arizona should not be put in a position of losing billions of dollars because the federal government wants to commandeer states’ tax policies,” Mr. Brnovich said.
The allocation of the funds is also likely to be a contentious matter as the money starts to flow. Some states have complained that states that managed the pandemic well are essentially being penalized because the formula for awarding aid is based on state unemployment rates.
The Treasury Department said on Monday that the states that were hardest hit economically by the pandemic would also get their money faster.
Local governments will generally receive half of the money this month and the rest next year. But states that currently have a net increase in unemployment of more than two percentage points since February 2020 will get the funds in a lump sum right away.
Officials also said Monday that the administration would issue new guidelines meant to speed money from the recovery act to help child care centers reopen, and that the Labor Department would highlight a program that allows some unemployed workers to accept offers of part-time jobs without losing access to the federally supplemented benefits.
Mr. Biden said that the efforts would help the economy recover — and that the rebound from recession remained on track.
“Let’s be clear: Our economic plan is working,” he said. But he said recovery would not always prove to be easy or even. “Some months will exceed expectations,” he said, “others will fall short.”
LONDON — Sober, cerebral and with the poise of the top-shelf lawyer he once was, Keir Starmer promised competence rather than charisma when he became leader of Britain’s opposition Labour Party last year, following its crushing general election defeat in 2019.
But his panicky response to last week’s poor local election results and a clumsy reshuffle of his top team have left his party in turmoil, diminishing his authority and raising doubts about whether Labour has a credible path back to power.
Mr. Starmer found himself embroiled in fierce recriminations over local election results that, with smoother communication, could have been explained away as disappointing, but instead pointed to a deeper crisis.
“The one thing Keir Starmer was supposed to be was competent,” said Steven Fielding, professor of political history at the University of Nottingham. “The election results were not good but they weren’t as bad as some people liked to present them. He completely messed up his reaction, and that highlights concerns about his ability to communicate.”
under its last leader, Jeremy Corbyn, said on Twitter.
claims Mr. Johnson broke electoral rules over the financing of a pricey refurbishment of his apartment.
But Britons apparently ignored those goings on in Westminster, and with the country now emerging from Covid-19 restrictions seemed to reward politicians who controlled health policies. The ruling Scottish National Party in Scotland performed strongly, as did the governing Labour Party in Wales.
In England, Mr. Johnson was forgiven for his chaotic early handling of the pandemic and rewarded for the country’s highly successfulvaccination roll out.
Not all is lost for Mr. Starmer, particularly when the entirety of last week’s results are taken into account. According to a BBC analysis projecting the local voting into a national vote share, Labour was seven points behind the Conservatives, hardly a good result but progress on the 12-point deficit recorded in the 2019 general election.
With no credible challenger waiting in the wings, Mr. Starmer is unlikely to face any immediate threat to his leadership. Nonetheless, the speed with which critics attacked his reshuffle raises pressure on Mr. Starmer to at least identify a message that can appeal to two very different groups of Britons — the old working class stalwarts and the more youthful, liberal and better educated city dwellers.
“Under Starmer it has been two steps forward and one step back,” said Mr. Fielding, “and he hasn’t addressed the problem of how you win back the red wall without losing metropolitan liberal voters.”
JERUSALEM — Yair Lapid, the centrist leader of the Israeli opposition, was asked on Wednesday to try to form a coalition government after Prime Minister Benjamin Netanyahu failed to do so by a Tuesday deadline.
Mr. Netanyahu remains caretaker prime minister and if Mr. Lapid cannot cobble together a government, the country could face another election this summer, its fifth general election in a little more than two years.
Mr. Lapid has 28 days to persuade a majority of the 120-seat Parliament to support him after the president, Reuven Rivlin, gave him the mandate to begin coalition negotiations.
In the March election campaign, Mr. Lapid, 57, ran on a promise to preserve checks and balances, and to prevent Mr. Netanyahu from remaining in office at the head of a right-wing, religious alliance that seeks to curb the power of the judiciary.
divisions and complexities of Israeli politics currently make it impossible for Mr. Lapid to win office without reaching a compromise with parts of the far right.
general election in March with 17 seats, behind Mr. Netanyahu’s right-wing party, Likud, with 30 seats.
offering Mr. Bennett a power-sharing deal in which, like the deal proposed by Mr. Lapid, Mr. Bennett would go first as prime minister.
But Mr. Bennett rejected it because the proposed alliance would still not have commanded a parliamentary majority.
Right-wing parties hold a majority in Parliament, but have been unable to form a functional government over the past two years because they are divided between those who support Mr. Netanyahu, and those who believe he should resign to focus on his corruption trial.
That split has redrawn the Israeli political map — as political ideology has become defined more by perceptions of Mr. Netanyahu than by economic policy or approaches to the Israeli-Palestinian conflict.
LONDON — The Group of 7 was created to help coordinate economic policy among the world’s top industrial powers. In the four decades since, it has acted to combat energy shortages, global poverty and financial crises.
But as Secretary of State Antony J. Blinken meets with fellow Group of 7 foreign ministers in London this week, a key item on the agenda will be what Mr. Blinken called, in remarks to the press on Monday, “defending democratic values and open societies.”
Implicitly, that defense is against China and, to a lesser extent, Russia. While the economic and public tasks of recovering from the coronavirus remain paramount, Mr. Blinken is also employing the Group of 7 — composed of the United States, Britain, Canada, France, Germany, Italy, and Japan — to coordinate with allies in an emerging global competition between democracy and the authoritarian visions of Moscow and Beijing.
One twist in the meeting this week is the presence of nations that are not formal Group of 7 members: India, South Korea, Australia and South Africa. Also in attendance is Brunei, the current chair of the Association of South East Asian Nations.
Ash Jain, a senior fellow at the Atlantic Council.
Mr. Jain noted the way the group is now emphasizing common values over shared economic interests. “The G-7 is being rebranded as a group of like-minded democracies, as opposed to a group of ‘highly industrialized nations.’ They’re changing the emphasis,” he said.
Many of the countries represented at the meeting do big business with China and Russia, complicating efforts to align them against those nations. China’s pattern of economic coercion was one specific topic of conversation on Tuesday, participants said.
was expelled in 2014 from what was then the Group of 8 after its annexation of Crimea from Ukraine.
Nor is it likely a coincidence that the expanded guest list matches, with the additions of South Africa and Brunei, a group of 10 countries and the European Union, collectively short-handed as the “D-10” by proponents of organizing them in a new world body. Those proponents include Prime Minister Boris Johnson of Britain, the host of this week’s gathering and architect of its guest list.
Mr. Johnson has also invited India, Australia and South Korea to send their heads of state to this summer’s Group of 7 summit in Cornwall, citing his “ambition to work with a group of like-minded democracies to advance shared interests and tackle common challenges.”
President Biden has similarly suggested that the world is grouping into competing camps, divided by the openness of their political systems. In his address to Congress last week, Mr. Biden said that “America’s adversaries, the autocrats of the world, are betting” that the nation’s battered democracy cannot be restored.
also committed to holding a “Summit for Democracy” during his first year in office, and officials say planning for such an event is underway. Asked in a Tuesday interview with The Financial Times which countries might be invited to such a summit, Mr. Blinken did not answer directly.
And Wednesday’s agenda for the gathering includes a session on open societies, including issues of media freedom and disinformation. Other sessions over the two days include Syria, Russia and its neighbors Ukraine and Belarus, Myanmar, and Afghanistan.
interview with CBS’s “60 Minutes” broadcast the night before, Mr. Blinken made clear how the United States views China’s rise.
Jeremy Shapiro, a former State Department official in the Obama administration who is now research director at the European Council on Foreign Relations, said that informally expanding the Group of 7 is far easier than constructing a new body.
“It is always a pain, from a governmental perspective, to invent a new forum, because you need to have an endless discussion about who’s in and who’s out, and how it works, and its relationship to the U.N.,” Mr. Shapiro said.
He added that the Group of 7, whose mission had grown nebulous in recent years, may have acquired a new sense of purpose as it tries to organize a post-Trump democratic world in the face of Chinese and Russian threats.
“You would be hard-pressed to look back the past five years or more since they kicked out Russia to name a single thing the G-7 has done of interest,” Mr. Shapiro said. “It didn’t have much to do.”