Sylvia Gaston, a waitress at a restaurant in Astoria, Queens, said her base wage is $7.50 an hour — even though New York City’s legal subminimum is $10, which must come to at least $15 after tips. Ms. Gaston, 40, who is from Mexico, feels that undocumented workers like her have a harder time fighting back when they are shortchanged.
“It doesn’t really matter if you have documents or not — I think folks are still getting underpaid in general,” she said. “However, when it comes to uplifting your voices and speaking about it, the folks who can get a little bit more harsh repercussions are people who are undocumented.”
Subminimum base pay for some tipped workers in the state, such as car washers, hairdressers and nail salon employees, was abolished in 2019 under an executive order by Gov. Andrew M. Cuomo, but workers in the food and drinks industry were left out.
Gov. Kathy Hochul, Mr. Cuomo’s successor, said while lieutenant governor in 2020 that she supported “a solid, full wage for restaurant workers.” And progressive legislators plan a bill in January that would eliminate the two-tier wage system by the end of 2025.
When The New York Times asked if she would support such changes, Ms. Hochul’s office did not answer directly. “We are always exploring the best ways to provide support” to service workers, it said.
Proponents of abandoning subminimum wages say there could be advantages for employers, including less turnover, better service and higher morale.
David Cooper, the director of the economic analysis and research network at the Economic Policy Institute, a progressive think tank, contends that when wage laws are changed to a single-tier system, business owners can have the assurance that “every single person they compete with is making the same exact adjustment,” reducing the specter of a competitive disadvantage.
In 2018, senior executives at one of the country’s largest nonprofit hospital chains, Providence, were frustrated. They were spending hundreds of millions of dollars providing free health care to patients. It was eating into their bottom line.
The executives, led by Providence’s chief financial officer at the time, devised a solution: a program called Rev-Up.
Rev-Up provided Providence’s employees with a detailed playbook for wringing money out of patients — even those who were supposed to receive free care because of their low incomes, a New York Times investigation found.
nonprofits like Providence. They enjoy lucrative tax exemptions; Providence avoids more than $1 billion a year in taxes. In exchange, the Internal Revenue Service requires them to provide services, such as free care for the poor, that benefit the communities in which they operate.
But in recent decades, many of the hospitals have become virtually indistinguishable from for-profit companies, adopting an unrelenting focus on the bottom line and straying from their traditional charitable missions.
focused on investments in rich communities at the expense of poorer ones.
And, as Providence illustrates, some hospital systems have not only reduced their emphasis on providing free care to the poor but also developed elaborate systems to convert needy patients into sources of revenue. The result, in the case of Providence, is that thousands of poor patients were saddled with debts that they never should have owed, The Times found.
provide. That was below the average of 2 percent for nonprofit hospitals nationwide, according to an analysis of hospital financial records by Ge Bai, a professor at the Johns Hopkins Bloomberg School of Public Health.
Ten states, however, have adopted their own laws that specify which patients, based on their income and family size, qualify for free or discounted care. Among them is Washington, where Providence is based. All hospitals in the state must provide free care for anyone who makes under 300 percent of the federal poverty level. For a family of four, that threshold is $83,250 a year.
In February, Bob Ferguson, the state’s attorney general, accused Providence of violating state law, in part by using debt collectors to pursue more than 55,000 patient accounts. The suit alleged that Providence wrongly claimed those patients owed a total of more than $73 million.
Providence, which is fighting the lawsuit, has said it will stop using debt collectors to pursue money from low-income patients who should qualify for free care in Washington.
But The Times found that the problems extend beyond Washington. In interviews, patients in California and Oregon who qualified for free care said they had been charged thousands of dollars and then harassed by collection agents. Many saw their credit scores ruined. Others had to cut back on groceries to pay what Providence claimed they owed. In both states, nonprofit hospitals are required by law to provide low-income patients with free or discounted care.
“I felt a little betrayed,” said Bev Kolpin, 57, who had worked as a sonogram technician at a Providence hospital in Oregon. Then she went on unpaid leave to have surgery to remove a cyst. The hospital billed her $8,000 even though she was eligible for discounted care, she said. “I had worked for them and given them so much, and they didn’t give me anything.” (The hospital forgave her debt only after a lawyer contacted Providence on Ms. Kolpin’s behalf.)
was a single room with four beds. The hospital charged patients $1 a day, not including extras like whiskey.
Patients rarely paid in cash, sometimes offering chickens, ducks and blankets in exchange for care.
At the time, hospitals in the United States were set up to do what Providence did — provide inexpensive care to the poor. Wealthier people usually hired doctors to treat them at home.
wrote to the Senate in 2005.
Some hospital executives have embraced the comparison to for-profit companies. Dr. Rod Hochman, Providence’s chief executive, told an industry publication in 2021 that “‘nonprofit health care’ is a misnomer.”
“It is tax-exempt health care,” he said. “It still makes profits.”
Those profits, he added, support the hospital’s mission. “Every dollar we make is going to go right back into Seattle, Portland, Los Angeles, Alaska and Montana.”
Since Dr. Hochman took over in 2013, Providence has become a financial powerhouse. Last year, it earned $1.2 billion in profits through investments. (So far this year, Providence has lost money.)
Providence also owes some of its wealth to its nonprofit status. In 2019, the latest year available, Providence received roughly $1.2 billion in federal, state and local tax breaks, according to the Lown Institute, a think tank that studies health care.
a speech by the Rev. Dr. Martin Luther King Jr.: “If it falls your lot to be a street sweeper, sweep streets like Michelangelo painted pictures.”
Ms. Tizon, the spokeswoman for Providence, said the intent of Rev-Up was “not to target or pressure those in financial distress.” Instead, she said, “it aimed to provide patients with greater pricing transparency.”
“We recognize the tone of the training materials developed by McKinsey was not consistent with our values,” she said, adding that Providence modified the materials “to ensure we are communicating with each patient with compassion and respect.”
But employees who were responsible for collecting money from patients said the aggressive tactics went beyond the scripts provided by McKinsey. In some Providence collection departments, wall-mounted charts shaped like oversize thermometers tracked employees’ progress toward hitting their monthly collection goals, the current and former Providence employees said.
On Halloween at one of Providence’s hospitals, an employee dressed up as a wrestler named Rev-Up Ricky, according to the Washington lawsuit. Another costume featured a giant cardboard dollar sign with “How” printed on top of it, referring to the way the staff was supposed to ask patients how, not whether, they would pay. Ms. Tizon said such costumes were “not the culture we strive for.”
financial assistance policy, his low income qualified him for free care.
In early 2021, Mr. Aguirre said, he received a bill from Providence for $4,394.45. He told Providence that he could not afford to pay.
Providence sent his account to Harris & Harris, a debt collection company. Mr. Aguirre said that Harris & Harris employees had called him repeatedly for weeks and that the ordeal made him wary of going to Providence again.
“I try my best not to go to their emergency room even though my daughters have gotten sick, and I got sick,” Mr. Aguirre said, noting that one of his daughters needed a biopsy and that he had trouble breathing when he had Covid. “I have this big fear in me.”
That is the outcome that hospitals like Providence may be hoping for, said Dean A. Zerbe, who investigated nonprofit hospitals when he worked for the Senate Finance Committee under Senator Charles E. Grassley, Republican of Iowa.
“They just want to make sure that they never come back to that hospital and they tell all their friends never to go back to that hospital,” Mr. Zerbe said.
The Everett Daily Herald, Providence forgave her bill and refunded the payments she had made.
In June, she got another letter from Providence. This one asked her to donate money to the hospital: “No gift is too small to make a meaningful impact.”
Following a Script ‘Like Robots’
In 2019, Vanessa Weller, a single mother who is a manager at a Wendy’s restaurant in Anchorage, went to Providence Alaska Medical Center, the state’s largest hospital.
She was 24 weeks pregnant and experiencing severe abdominal pains. “Let this just be cramps,” she recalled telling herself.
Ms. Weller was in labor. She gave birth via cesarean section to a boy who weighed barely a pound. She named him Isaiah. As she was lying in bed, pain radiating across her abdomen, she said, a hospital employee asked how she would like to pay. She replied that she had applied for Medicaid, which she hoped would cover the bill.
After five days in the hospital, Isaiah died.
Then Ms. Weller got caught up in Providence’s new, revenue-boosting policies.
The phone calls began about a month after she left the hospital. Ms. Weller remembers panicking when Providence employees told her what she owed: $125,000, or about four times her annual salary.
She said she had repeatedly told Providence that she was already stretched thin as a single mother with a toddler. Providence’s representatives asked if she could pay half the amount. On later calls, she said, she was offered a payment plan.
“It was like they were following some script,” she said. “Like robots.”
Later that year, a Providence executive questioned why Ms. Weller had a balance, given her low income, according to emails disclosed in Washington’s litigation with Providence. A colleague replied that her debts previously would have been forgiven but that Providence’s new policy meant that “balances after Medicaid are being excluded from presumptive charity process.”
Ms. Weller said she had to change her phone number to make the calls stop. Her credit score plummeted from a decent 650 to a lousy 400. She has not paid any of her bill.
Susan C. Beachy and Beena Raghavendran contributed research.
California Governor Gavin Newsom signed a bill that will give minimum wage workers more say in their pay and work conditions.
Fast food chain workers in one state could soon be making triple the federal minimum wage. And that shift might have national ripple effects for low-wage workers.
It comes from a recently passed law in California that gives new power to workers across the fast-food industry to set standards on wages and working conditions.
It’s a system that could start a new way for workers in other states to fight for a living wage, but restaurant owners, fast food companies and trade associations worry it could raise food prices in an economy suffering from inflation.
So, where did this come from? And how will it affect the fast-food industry?
California passed AB 257, also known as the FAST Recovery Act. It’s a law that Governor Gavin Newsom signed on Labor Day.
“We recognize there are sectors of our economy where we’re falling a bit short and one of those areas is fast food workers. A bill that empowers our workers, particularly in that sector giving them more voice, giving them more choice, creating a new council, and I’m proud on Labor Day, to sign that bill and enshrine it in law,” said Newsom.
Related StoryLabor Shortage Compounds Federal Firefighters’ Staffing Woes
It creates a fast food council system that will consist of workers, industry representatives, franchise owners and state officials. They’d work together to set labor standards for workers, including the minimum wage.
We should note we don’t know yet what number they would land on for a minimum wage, and an increase may be gradual. But the law says it can be anything up to $22 an hour.
That number on its own could be groundbreaking. It would be a 40% pay hike from the state’s existing minimum wage of $15 per hour for most workers. And it covers more than half a million employees who work at restaurants with 100 or more locations.
California is the third-most expensive state in the U.S. to live in and has half of the top ten most expensive metro areas, according to the Bureau of Economic Analysis.
Anneisha Williams, a single mother of six, is an employee at Jack In The Box. She’s fighting for $15 an hour.
“That will go to my bills because my rent has gone up. You know, they talk about how minimum wage is going up. We need it because the cost of living went up,” said Williams.
Fast food workers in California, like Los Angeles have had it especially rough in the past few years. Her challenges have led her to join the Fight for 15 Movement advocating for a higher minimum wage.
A study earlier this year by the UCLA Labor Center surveyed fast food workers in Los Angeles. It found that in addition to limited protections from COVID-19 infection, many workers faced threats of wage theft, lost hours and a lack of paid sick leave.
“I did lose out on wages, you know, because I had to take off for school. And they don’t pay you for taking off. I don’t have sick time to take off for work, so I had no choice but to lose out on those wages for the time that I did so. It was two, on two occasions that I had to miss out for a couple of days out on work because of COVID,” said Williams.
Nearly two-thirds of workers experienced wage theft, including a lack of reimbursements for supplies, late paychecks and limited breaks. And nearly a third of workers, including Anneisha, said they weren’t provided with paid sick time.
Related StoryAmericans Face Tough Decisions As Food Prices Continue To Soar
“With this bill, AB 257— that will help us be able to collect our wages that we missed out on in case, you know, things like that happen. Our kids get sick or we get sick or something, you know? That right there would have our back, you know, that would be it for us. You know, who, who wants to miss out on money when they’re sick?” she said.
Businesses already have some worries about this. Large chains including Chipotle, Chick-Fil-A and In-N-Out are sponsoring efforts to block the bill.
The National Restaurant Association and the International Franchise Association put out a joint statement condemning the bill for unfairly punishing small businesses and portraying restaurants as bad employers. They worry the law could lead to food prices rising too quickly.
Jeff Hanscom is the vice president of state and local govt. relations at the International Franchise Association.
“There’s no doubt that 257 and the wage council will ultimately, ultimately lead to higher labor costs, which will then ultimately lead to higher food costs for the consumer. And for franchisees who are already operating on very thin margins and not just franchisees, it will affect restaurant owners who are already operating on very thin margins. You have to pass the cost along somewhere,” said Hanscom.
But the numbers seem to indicate the effects on prices may be relatively small. Michael Reich, a UC Berkeley economist and wage expert, told Newsy that a study by researchers at the Boston Federal Reserve and MIT found that a sudden minimum wage bump from $15 to $22 would increase prices, but just a pinch.
“My calculation is that just looking at this business model, the increase in prices going up to $22 would be about 2 to 3%. So that means for something like a $2 Burger King bacon cheeseburger, is one example, or the Taco Bell burrito, that’s $2. That’s about a nickel increase. That isn’t going to really deter people from buying those items,” said Reich.
Industry groups have also supported a referendum that could block the law from taking effect. If they get enough signatures by December 1, the law would be put on hold until a statewide referendum in 2024.
Industry advocates warn this law targets not just large fast-food providers, but the smaller, usually locally-owned franchisee businesses that run individual locations.
“We’re talking about nearly 15,000 franchise businesses that are impacted by 257 or at least 15,000 units in California that are part of chains with 100 or more locations. But 70% of those — 70% of the franchisees in California — only own one store,” said Hanscom.
Legal challenges could also be on the way, as there are questions about whether this setup that allows bargaining for industry-wide standards could be blocked because it’s not one covered by the existing federal law called the National Labor Relations Act.
San Francisco-based lawyer Ellen Bronchetti works with employers in labor law cases and says that businesses could use this route in an effort to block AB 257 from taking effect.
“There’s an argument that the NLRA is the sole and exclusive law that should govern how employees can work together collectively to force their employers to increase, to provide better wages and working conditions,” said Bronchetti.
If the council system takes effect, this could have consequences for fast food workers in other parts of the country, if other states try a system like this that relies on bargaining agreements that cover entire industries.
“This type of system has had various degrees of success overseas in places like Europe and South America and Canada, but it’s not recognized as a standard in the United States. This type of council proposal in the statute, in effect, does create what I would view as the first of its kind sectoral bargaining mandate that we’ve seen, and it could have a huge ripple effect if it’s successful not just on the fast food industry, but on other industries,” said Bronchetti.
And companies are already moving forward, at least on minimum wage increases. That’s in line with data showing that the previous minimum wage increase in California, a gradual rise to $15 an hour, drove wages even higher than that.
“Wages have been rising since just before the pandemic and through the pandemic, and especially in restaurants. And so now the actual entry wage, the starting wage is well above $15. It’s more like $17, $18 in many parts of California,” said Hanscom.
The amount of students in college classrooms is dropping, which could have long-term impacts for society as a whole.
Colleges are seeing more empty seats in the classroom now that school is back in session.
There are 4 million fewer college students than there were a decade ago. Among students who graduated high school in 2016, 70% began college that fall. In 2020, that number dropped to 63%.
There are a few possible explanations for this: Some people point to the pandemic as the main factor, as many students may have pushed college off until later to avoid learning from home in their high school bedrooms. While this could be part of it, the decline of students started long before COVID was even a thought.
Other factors should be considered, though, like cost. A Georgetown report found that between 1980 and 2020, the price of tuition, fees, and room and board for undergrad students rose by 169%, while wages for young Americans haven’t increased at the same rate. Many people may simply not have the money or aren’t willing to go into debt. Student loan debt is close to $30,000 on average for four-year college graduates.
Related StoryEnrollment Down At Public Schools Around The Country
But higher education experts say it’s important to consider the long-term tradeoffs. Data from the Social Security Administration says that people with bachelor’s degrees earn between $600,000 and $900,000 more over the course of their lifetime than someone with just a high school diploma. Data is scarce on how that advantage compares to previous generations of college graduates.
Tolani Britton, a professor who studies the economics of higher education, says it’s a complex matter.
“I don’t think that it’s simply like, get those loans, you are going to be fine long term — I don’t think that’s quite the case,” Britton said. “At the same time, I also think, well, what are the other options? And, are those other options both in the short term and long term as beneficial?”
Let’s take a look at those other options: One alternative is students going to a community college for two years, then transferring to a four-year school to offset costs. However, only 8% of community college students who want a bachelor’s degree go on to achieve it. They face common roadblocks, like finding out most of their credits won’t transfer, and they’ll have to start from scratch at a four-year school to get a degree.
Another option is trade school. Programs in trades like construction, HVAC and mechanics have seen an increase in enrollment as high as 40%. The highest-paying trade jobs can make up to nearly six figures. Plus, there are apprenticeships where companies pay students to learn how to do a trade.
If a student doesn’t want to go to community college or trade school, they can also go straight into the workforce after high school. Minimum wage jobs that don’t require any degree or training have seen an increase in pay. About half of states raised their minimum wage this year, and a lot of companies decided to raise it on their own in recent years. But as those wages have risen, so has the cost of everything else due to inflation.
Experts wonder if the short-term gain from going straight into the workforce is worth it over pursing postsecondary education.
“Some of the questions that I would ask are, ‘Are the jobs that they’re taking currently, do they have advancement potential?'” Britton said. “If we think about those same jobs in 10 years and they’re paying relatively similar salaries, would they be able to support themselves and a family? What does it mean for their potential children, for example, if they don’t necessarily return and get a college degree?”
There are also long-term benefits to getting a degree that experts say are important to consider, like better health outcomes, both mental and physical, and the lower likelihood of being unemployed.
Related StoryData Shows Reading, Math Scores Fell Sharply During Pandemic
Jason Lane, a dean at Miami University in Ohio, told Newsy that as fewer students go to college, this could have long-term impacts for our society as a whole.
“The loss of individuals going into college will have long-term implications on the country’s innovation ecosystem, on our economic productivity,” Lane said. “It will make it harder for us as a country to compete internationally in terms of new knowledge development, new innovations, new inventions, things that the U.S. has historically led on.”
So, what can be done to get more students back to school? Education professionals say high schools and colleges can work together to close the information gap and make sure students and their families have all of the information they need to make informed decisions about postsecondary education.
There’s not only a gap in general information about college, but gaps in information about financial aid and how to get it. A study by ACT found that most students don’t understand the financial aid process.
“We also need to think about, it’s not just the traditional high school population,” Lane said. “We’ve got to be reaching out to adult populations, folks who are looking to retool, to reskill, who are looking to increase, I think, their own social mobility and economic viability and the economy. To do that, we’ve actually got to be more accessible. We’ve got to find new pathways and entry points for them to come into higher education.”
The dancers say they’ve been seeking better protection, pay, safety and workplace conditions from their management for a long time.
Strippers who work at a club in Southern California have filed with the National Labor Relations Board in an effort to unionize. As on stage performers, they want to join the Actors Equity Association (AEA).
The performers say they have been seeking better protection, better pay, better safety and better workplace conditions from their management for a long time — but they haven’t gotten it.
“They’ve reported significant wage theft that leaves them going home often without having even made minimum wage — and physical safety — glass on the stage, being touched without consent by patrons, things you might expect, but things that we think a union contract will help protect against,” said Kate Shindle, president of the AEA.
Should their efforts succeed, the move to unionize could set a real precedent for workers all over the country.
The next step for these dancers is a formal vote, which the National Labor Relations Board will oversee. If a majority of the performers at the club do vote to unionize, they’ll start negotiating their very first contract with the AEA and their management.
Although child care has seen increasing bipartisan support in recent years, some Republican leaders are cautious about expanding government aid.
Difficulties in finding affordable child care cost Enoshja Ruffin her job three years ago. The mother of six was let go from her position as a counselor for kids with cerebral palsy after she missed three shifts because she had trouble finding babysitters.
After three months on a waiting list, though, she placed her children in a day care center whose cost was covered by government subsidies and the center’s financial assistance program.
“Had I not gotten financial help, I would not be successful. I would not have a degree. I would just be another statistic,” said Ruffin, 28, of Utica, New York, who was able to take college classes while her kids were in day care. She now works as an organizer for the liberal political group Citizen Action.
Democrats in Washington had big ambitions this year to boost child care subsidies nationally as part of a broad domestic spending bill. But with those plans stalled because of a lack of bipartisan support, some states moved ahead with plans of their own.
New York lawmakers passed a state budget in the spring that calls for it to spend $7 billion to make child care more affordable over the next four years.
The legislation will double previous state support for government subsidies that help families shoulder part or all of their child care costs. Eligibility will be expanded to more middle-income families. Under the new rules, a family of four with an annual household income of up to $83,250 will be eligible for subsidies.
New Mexico last spring raised income eligibility for subsidies to the highest level of any state. A family of four with an annual household income of up to $111,000 can now qualify for at least some government aid. Until June 2023, New Mexico will also waive child care copays, which saves families $400 to $900 per month, based on their income level.
Rhode Island lawmakers passed a state budget last month that provides a one-time tax credit of $250 per child to help pay for child care, nearly doubles the number of seats available in government-funded prekindergarten programs, and provides subsidies for child care workers.
All those steps were intended to address an affordability challenge. In 2019, child care centers in the U.S. charged an average of $406 per week for children under 18 months old, $315 per week for children ages 18-35 months and $289 per week for 3- to 5-year-olds.
Ronora James, a child care provider based in Rochester, New York, said she lost staff to fast-food restaurants that offer competitive wages.
Child care workers made an average hourly wage of $13.22 in the U.S. in May 2021, according to the Bureau of Labor Statistics. The minimum wage in New York ranges from $13.20 to $15 per hour, depending on the part of the state.
“People have to go where the money is to survive, and that is an issue for us,” James said.
“In New York City, we have some of the highest minimum wages in the country, but a minimum wage worker has to work 26 weeks at a minimum wage to pay for the child care for their family,” New York Gov. Kathy Hochul, a Democrat, said Monday at an event promoting the state’s child care investments. “That’s asking too much of our families.”
Although child care has seen increasing bipartisan support in recent years, some Republican leaders are cautious about expanding government aid.
“I support steps to create more quality, accessible and reliable child care options, especially as costs continue to rise,” said New York’s GOP Assembly Minority Leader William Barclay in a statement. “However, as we’ve seen repeatedly in state programs, the level of spending and how funds are distributed must be closely monitored. Too often, state-run programs spiral out of control and fail to provide the intended services. Despite the governor’s lofty promises, we can’t allow that to happen here.”
New York’s legislation also increased state reimbursements to child care providers, which the industry said was necessary to help centers remain financially viable.
Since January 2020, the number of center- and family-based child care facilities in the state has shrunk by about 1,326, according to Pete Nabozny, policy director at The Children’s Agenda. Most of those programs are operated by women and people of color, he said.
Some New York lawmakers say they want to eventually make child care freely available as early as kindergarten. Sen. Jessica Ramos and Assemblymember Sarah Clark, both Democrats, said they hope to get support in the state’s next legislative session for more changes, including expanding eligibility even more and boosting pay for providers.
“I think child care is one of the few places where it’s hard to fix one piece of it. You have to fix the whole system at one time. I’m hoping we can continue to build on what we’ve done so far and do more,” Clark said.
Russian natural gas has fired the furnaces that create molten stainless steel at Clemens Schmees’s family foundry since 1961, when his father set up shop in a garage in the western part of Germany.
It never crossed Clemens’s mind that this energy flow could one day become unaffordable or cease altogether. Now Mr. Schmees, like thousands of other chieftains at companies across Germany, is scrambling to prepare for the possibility that his operations could face stringent rationing this winter if Russia turns off the gas.
“We’ve had many crises,” he said, sitting in the company’s branch office in the eastern city of Pirna, overlooking the Elbe River valley. “But we have never before had such instability and uncertainty, all at once.”
Nord Stream 1, the direct gas pipeline between Russia and Europe, was shut down for 10 days of scheduled maintenance.
“gas crisis” and triggered an emergency energy plan. Already landlords, schools and municipalities have begun to lower thermostats, ration hot water, close swimming pools, turn off air-conditioners, dim streetlights and exhort the benefits of cold showers. Analysts predict that a recession in Germany is “imminent.” Government officials are racing to bail out the largest importer of Russian gas, a company called Uniper. And political leaders warn that Germany’s “social peace” could unravel.
The crisis has not only set off a frantic clamber to manage a potentially painful crunch this winter. It has also prompted a reassessment of the economic model that turned Germany into a global powerhouse and produced enormous wealth for decades.
Jacob Kirkegaard, a senior fellow at the German Marshall Fund in Brussels.
The Russia-Ukraine War and the Global Economy
Card 1 of 7
A far-reaching conflict. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes. The conflict has caused dizzying spikes in gas prices and product shortages, and has pushed Europe to reconsider its reliance on Russian energy sources.
Russia’s economy faces slowdown. Though pro-Ukraine countries continue to adopt sanctions against the Kremlin in response to its aggression, the Russian economy has avoided a crippling collapse for now thanks to capital controls and interest rate increases. But Russia’s central bank chief warned that the country is likely to face a steep economic downturn as its inventory of imported goods and parts runs low.
Trade barriers go up. The invasion of Ukraine has also unleashed a wave of protectionism as governments, desperate to secure goods for their citizens amid shortages and rising prices, erect new barriers to stop exports. But the restrictions are making the products more expensive and even harder to come by.
Prices of essential metals soar. The price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.
More than any other economy in the region, Germany’s is built on industrial giants — mighty chemical, auto, glass and steel producers — that consume enormous amounts of fuel, two-thirds of it imported. The chemical and pharmaceutical industries alone use 27 percent of the country’s gas supply.
Most of it came from Russia. Before Mr. Putin invaded Ukraine five months ago and set off retaliatory sanctions from Europe, the United States and their allies, Russia delivered 40 percent of Germany’s imported oil and more than 55 percent of its imported gas.
Gazprom, Russia’s gas monopoly, cut deliveries in June, and if they are reduced further, German industries may soon confront fuel shortages that will compel them to scale back production, Mr. Kirkegaard said. “I don’t think there are that many other European countries that have to do that,” he said.
Over the next five to eight years, until more of an ongoing transition to renewable energy is completed, the country will be “under acute pressure,” he added. “That is the time period when Germany’s economy is still basically going to be fueled by fossil fuels.”
China, Germany’s biggest trading partner, is expected to see substantially slower growth than in the previous decade, reporting on Friday that the economy expanded just 0.4 percent in the second quarter. That slowdown is likely to ripple through other emerging nations in Asia, dragging down their growth as well.
security risks of globalized trade?
Some economists have argued that the German business models were partly based on an erroneous assumption and that cheap Russian gas wasn’t as cheap as it looked.
The economist Joseph Stiglitz, a Nobel laureate, said the market failed to accurately price in the risk — however unlikely it may have seemed at the time — that Russia could decide to reduce or withhold gas to apply political pressure.
It would be like figuring the costs of building a ship without including the cost of lifeboats.
“They didn’t take into account what could happen,” Mr. Stiglitz said.
Inflation last month was 7.6 percent. Investor confidence in Germany has dropped to its lowest point in a decade.
Households, hospitals and essential services will be considered priorities if gas rationing becomes unavoidable, but industrial representatives have been pleading their cases in Berlin.
as much as 12 percent once ripple effects on industries beyond energy and consumers were taken into account.
Looking ahead to the winter, Mr. Krebs said much depended on the temperature and Russian gas delivery levels.
“The best case is stagnation with high inflation,” he said. But over the longer term, he argued, Germany could come out more competitive if it manages the energy transition well and provides speedy and significant public investment to create the requisite infrastructure.
Marcel Fratzscher, president of the German Institute for Economic Research, agreed. Germany’s industrial success is based on added value more than cheap energy, he said. Most German exports, he said, are “highly specialized products — that gives them an advantage and makes them competitive.”
Labor policy, too, will have an impact.
Wage negotiations for the industrial sector are scheduled to begin in September. The powerful I.G. Metall union will seek an 8 percent wage increase for its 3.9 million members. And starting Oct. 1, a new minimum wage law will establish for the first time a single national rate — 12 euros an hour.
For now, supply chain breakdowns are still causing headaches, and businesses that were only beginning to recover from the Covid-19 pandemic are busy devising contingency plans for gas shortages.
Beiersdorf, maker of skin care products including Nivea, has had a crisis team in place since May to draw up backup plans — including readying diesel generators — to ensure production keeps running.
At Schmees, high costs have already forced the shutdown of one furnace, cutting into the foundry’s ability to meet deadlines. Customers waiting for deliveries of stainless steel include companies that run massive turbines used in icebreaker ships and artists who use it in their sculptures.
Mr. Schmees, an energetic man who prides himself on having nurtured a strong company culture, is planning to ask his employees to work a six-day week through the end of the year, to ensure that he can fill all of the firm’s orders by December. That is how long he’s betting that Germany’s natural gas supplies will hold if Russia cuts off the flow entirely.
“The tragedy,” Mr. Schmees said, “is that we have only now realized what we’ve gambled away with this cheap gas from Russia.”
Katrin Bennhold contributed reporting from Berlin.
To hear more audio stories from publications like The New York Times, download Audm for iPhone or Android.
GONZALES, Calif. — It looks like a century-old picture of farming in California: a few dozen Mexican men on their knees, plucking radishes from the ground, tying them into bundles. But the crews on Sabor Farms’ radish patch, about a mile south of the Salinas River, represent the cutting edge of change, a revolution in how America pulls food from the land.
For starters, the young men on their knees are working alongside technology unseen even 10 years ago. Crouched behind what looks like a tractor retrofitted with a packing plant, they place bunches of radishes on a conveyor belt within arm’s reach, which carries them through a cold wash and delivers them to be packed into crates and delivered for distribution in a refrigerated truck.
The other change is more subtle, but no less revolutionary. None of the workers are in the United States illegally.
are not coming in the numbers they once did.
There are a variety of reasons: The aging of Mexico’s population slimmed the cohort of potential migrants. Mexico’s relative stability after the financial crises of the 1980s and 1990s reduced the pressures for them to leave, while the collapse of the housing bubble in the United States slashed demand for their work north of the border. Stricter border enforcement by the United States, notably during the Trump administration, has further dented the flow.
the economists Gordon Hanson and Craig McIntosh wrote.
As a consequence, the total population of unauthorized immigrants in the United States peaked in 2007 and has declined slightly since then. California felt it first. From 2010 to 2018, the unauthorized immigrant population in the state declined by some 10 percent, to 2.6 million. And the dwindling flow sharply reduced the supply of young workers to till fields and harvest crops on the cheap.
The state reports that from 2010 to 2020, the average number of workers on California farms declined to 150,000 from 170,000. The number of undocumented immigrant workers declined even faster. The Labor Department’s most recent National Agricultural Workers Survey reports that in 2017 and 2018, unauthorized immigrants accounted for only 36 percent of crop workers hired by California farms. That was down from 66 percent, according to the surveys performed 10 years earlier.
The immigrant work force has also aged. In 2017 and 2018, the average crop worker hired locally on a California farm was 43, according to the survey, eight years older than in the surveys performed from 2007 to 2009. The share of workers under the age of 25 dropped to 7 percent from a quarter.
hire the younger immigrants who kept on coming illegally across the border. (Employers must demand documents proving workers’ eligibility to work, but these are fairly easy to fake.)
That is no longer the case. There are some 35,000 workers on H-2A visas across California, 14 times as many as in 2007. During the harvest they crowd the low-end motels dotting California’s farm towns. A 1,200-bed housing facility exclusive to H-2A workers just opened in Salinas. In King City, some 50 miles south, a former tomato processing shed was retrofitted to house them.
“In the United States we have an aging and settled illegal work force,” said Philip Martin, an expert on farm labor and migration at the University of California, Davis. “The fresh blood are the H-2As.”
Immigrant guest workers are unlikely to fill the labor hole on America’s farms, though. For starters, they are costlier than the largely unauthorized workers they are replacing. The adverse effect wage rate in California this year is $17.51, well above the $15 minimum wage that farmers must pay workers hired locally.
So farmers are also looking elsewhere. “We are living on borrowed time,” saidDave Puglia, president and chief executive of Western Growers, the lobby group for farmers in the West. “I want half the produce harvest mechanized in 10 years. There’s no other solution.”
Produce that is hardy or doesn’t need to look pretty is largely harvested mechanically already, from processed tomatoes and wine grapes to mixed salad greens and tree nuts. Sabor Farms has been using machines to harvest salad mix for decades.
survey by the Western Growers Center for Innovation and Technology found that about two-thirds of growers of specialty crops like fresh fruits, vegetables and nuts have invested in automation over the last three years. Still, they expect that only about 20 percent of the lettuce, apple and broccoli harvest — and none of the strawberry harvest — will be automated by 2025.
Some crops are unlikely to survive. Acreage devoted to crops like bell peppers, broccoli and fresh tomatoes is declining. And foreign suppliers are picking up much of the slack. Fresh and frozen fruit and vegetable imports almost doubled over the last five years, to $31 billion in 2021.
Consider asparagus, a particularly labor-intensive crop. Only 4,000 acres of it were harvested across the state in 2020, down from 37,000 two decades earlier. The state minimum wage of $15, added to the new requirement to pay overtime after 40 hours a week, is squeezing it further after growers in the Mexican state of Sinaloa — where workers make some $330 a month — increased the asparagus acreage almost threefold over 15 years, to 47,000 acres in 2020.
H-2A workers won’t help fend off the cheaper Mexican asparagus. They are even more expensive than local workers, about half of whom are immigrants from earlier waves that gained legal status; about a third are undocumented. And capital is not rushing in to automate the crop.
“There are no unicorns there,” said Neill Callis, who manages the asparagus packing shed at the Turlock Fruit Company, which grows some 300 acres of asparagus in the San Joaquin Valley east of Salinas. “You can’t seduce a V.C. with the opportunity to solve a $2-per-carton problem for 50 million cartons,” he said.
While Turlock has automated where it can, introducing a German machine to sort, trim and bunch spears in the packing shed, the harvest is still done by hand — hunched workers walk up the rows stabbing at the spears with an 18-inch-long knife.
These days, Mr. Callis said, Turlock is hanging on to the asparagus crop mainly to ensure its labor supply. Providing jobs during the asparagus harvest from February to May helps the farm hang on to its regular workers — 240 in the field and about 180 in the shed it co-owns with another farm — for the critical summer harvest of 3,500 acres of melons.
Losing its source of cheap illegal immigrant workers will change California. Other employers heavily reliant on cheap labor — like builders, landscapers, restaurants and hotels — will have to adjust.
Paradoxically, the changes raking across California’s fields seem to threaten the undocumented local work force farmers once relied on. Ancelmo Zamudio from Chilapa, in Mexico’s state of Guerrero, and José Luis Hernández from Ejutla in Oaxaca crossed into the United States when they were barely in their teens, over 15 years ago. Now they live in Stockton, working mostly on the vineyards in Lodi and Napa.
They were building a life in the United States. They brought their wives with them; had children; hoped that they might be able to legalize their status somehow, perhaps through another shot at immigration reform like the one of 1986.
Things to them look decidedly cloudier. “We used to prune the leaves on the vine with our hands, but they brought in the robots last year,” Mr. Zamudio complained. “They said it was because there were no people.”
Mr. Hernández grumbles about H-2A workers, who earn more even if they have less experience, and don’t have to pay rent or support a family. He worries about rising rents — pushed higher by new arrivals from the Bay Area. The rule compelling farmers to pay overtime after 40 hours of work per week is costing him money, he complains, because farmers slashed overtime and cut his workweek from six days to five.
He worries about the future. “It scares me that they are coming with H-2As and also with robots,” he said. “That’s going to take us down.”
It was a union organizing campaign that few expected to have a chance. A handful of employees at Amazon’s massive warehouse on Staten Island, operating without support from national labor organizations, took on one of the most powerful companies in the world.
And, somehow, they won.
Workers at the facility voted by a wide margin to form a union, according to results released on Friday, in one of the biggest victories for organized labor in a generation.
Employees cast 2,654 votes to be represented by Amazon Labor Union and 2,131 against, giving the union a win by more than 10 percentage points, according to the National Labor Relations Board. More than 8,300 workers at the warehouse, which is the only Amazon fulfillment center in New York City, were eligible to vote.
The win on Staten Island comes at a perilous moment for labor unions in the United States, which saw the portion of workers in unions drop last year to 10.3 percent, the lowest rate in decades, despite high demand for workers, pockets of successful labor activity and rising public approval.
including some labor officials — say that traditional unions haven’t spent enough money or shown enough imagination in organizing campaigns and that they have often bet on the wrong fights. Some point to tawdry corruption scandals.
The union victory at Amazon, the first at the company in the United States after years of worker activism there, offers an enormous opportunity to change that trajectory and build on recent wins. Many union leaders regard Amazon as an existential threat to labor standards because it touches so many industries and frequently dominates them.
likely to be a narrow loss by the Retail, Wholesale and Department Store Union at a large Amazon warehouse in Alabama. The vote is close enough that the results will not be known for several weeks as contested ballots are litigated.
The surprising strength shown by unions in both locations most likely means that Amazon will face years of pressure at other company facilities from labor groups and progressive activists working with them. As a recent string of union victories at Starbucks have shown, wins at one location can provide encouragement at others.
Amazon hired voraciously over the past two years and now has 1.6 million employees globally. But it has been plagued by high turnover, and the pandemic gave employees a growing sense of power while fueling worries about workplace safety. The Staten Island warehouse, known as JFK8, was the subject of a New York Times investigation last year, which found that it was emblematic of the stresses — including inadvertent firings and sky-high attrition — on workers caused by Amazon’s employment model.
“The pandemic has fundamentally changed the labor landscape” by giving workers more leverage with their employers, said John Logan, a professor of labor studies at San Francisco State University. “It’s just a question of whether unions can take advantage of the opportunity that transformation has opened up.”
Standing outside the N.L.R.B. office in Brooklyn, where the ballots were tallied, Christian Smalls, a former Amazon employee who started the union, popped a bottle of champagne before a crowd of supporters and press. “To the first Amazon union in American history,” he cheered.
asked a judge to force Amazon to swiftly rectify “flagrant unfair labor practices” it said took place when Amazon fired a worker who became involved with the union. Amazon argued in court that the labor board abandoned “the neutrality of their office” by filing the injunction just before the election.
Amazon would need to prove that any claims of undue influence undermined the so-called laboratory conditions necessary for a fair election, said Wilma B. Liebman, the chair of the N.L.R.B. under President Barack Obama.
President Biden was “glad to see workers ensure their voices are heard” at the Amazon facility, Jen Psaki, the White House press secretary, told reporters. “He believes firmly that every worker in every state must have a free and fair choice to join a union,” she said.
The near-term question facing the labor movement and other progressive groups is the extent to which they will help the upstart Amazon Labor Union withstand potential challenges to the result and negotiate a first contract, such as by providing resources and legal talent.
“The company will appeal, drag it out — it’s going to be an ongoing fight,” said Gene Bruskin, a longtime organizer who helped notch one of labor’s last victories on this scale, at a Smithfield meat-processing plant in 2008, and has informally advised the Staten Island workers. “The labor movement has to figure out how to support them.”
Sean O’Brien, the new president of the 1.3 million-member International Brotherhood of Teamsters, said in an interview on Thursday that the union was prepared to spend hundreds of millions of dollars unionizing Amazon and to collaborate with a variety of other unions and progressive groups.
said he became alarmed in March 2020 after encountering a co-worker who was clearly ill. He pleaded with management to close the facility for two weeks. The company fired him after he helped lead a walkout over safety conditions in late March that year.
Amazon said at the time that it had taken “extreme measures” to keep workers safe, including deep cleaning and social distancing. It said it had fired Mr. Smalls for violating social distancing guidelines and attending the walkout even though he had been placed in a quarantine.
After workers at Amazon’s warehouse in Bessemer, Ala., overwhelmingly rejected the retail workers union in its first election last spring, Mr. Smalls and Derrick Palmer, an Amazon employee who is his friend, decided to form a new union, called Amazon Labor Union.
While the organizing in Alabama included high-profile tactics, with progressive supporters like Senator Bernie Sanders visiting the area, the organizers at JFK8 benefited from being insiders.
For months, they set up shop at the bus stop outside the warehouse, grilling meat at barbecues and at one point even passing out pot.(The retail workers said they were hamstrung by Covid during their initial election in Alabama.)
nationwide agreement to allow workers more access to organize on-site.
At times the Amazon Labor Union stumbled. The labor board determined this fall that the fledgling union, which spent months collecting signatures from workers requesting a vote, had not demonstrated sufficient support to warrant an election. But the organizers kept trying, and by late January they had finally gathered enough signatures.
Amazon played up its minimum wage of $15 an hour in advertising and other public relations efforts. The company also waged a full-throated campaign against the union, texting employees and mandating attendance at anti-union meetings. It spent $4.3 million on anti-union consultants nationwide last year, according to annual disclosures filed on Thursday with the Labor Department.
In February, Mr. Smalls was arrested at the facility after managers said he was trespassing while delivering food to co-workers and called the police. Two current employees were also arrested during the incident, which appeared to galvanize interest in the union.
The difference in outcomes in Bessemer and Staten Island may reflect a difference in receptiveness toward unions in the two states — roughly 6 percent of workers in Alabama are union members, versus 22 percent in New York — as well as the difference between a mail-in election and one conducted in person.
But it may also suggest the advantages of organizing through an independent, worker-led union. In Alabama, union officials and professional organizers were still barred from the facility under the settlement with the labor board. But at the Staten Island site, a larger portion of the union leadership and organizers were current employees.
“What we were trying to say all along is that having workers on the inside is the most powerful tool,” said Mr. Palmer, who makes $21.50 an hour. “People didn’t believe it, but you can’t beat workers organizing other workers.”
The independence of the Amazon Labor Union also appeared to undermine Amazon’s anti-union talking points, which cast the union as an interloping “third party.”
On March 25, workers at JFK8 started lining up outside a tent in the parking lot to vote. And over five voting days, they cast their ballots to form what could become the first union at Amazon’s operations in the United States.
Another election, brought also by Amazon Labor Union at a neighboring Staten Island facility, is scheduled for late April.
As a designer who specializes in residential structures, Luis Martinez has lived this at home, and has now made it his career. His design business, Studioo15, has surged over the past two years as residents across Los Angeles have used the new state laws to add thousands of backyard units. Yet about half of his clients, he said, are people like his parents who want to have existing units legalized.
Bernardo and Tomasa Martinez, both in their early 60s, immigrated to Los Angeles from Mexico in 1989. Working in the low-wage service sector — she was a waitress; he worked as a laborer loading a truck — they settled in a two-bedroom house in South Los Angeles that had four families and 16 people. Luis Martinez, who crossed the border as a child, was surrounded by love and family, in a house where money was tight and privacy nonexistent.
Eventually the family was able to buy a small three-bedroom in Boyle Heights, on the east side of Los Angeles. It sits on a block of fading homes that have chain link fences in the front and a detached garage out back. To supplement the family income, the Martinezes converted the garage into a rental unit without a permit. Bernardo Martinez and a group of local handymen raised the floor and installed plumbing that fed into the main house, while Luis helped with painting.
Luis remembers that nobody complained, probably because the neighbors were doing the same thing. “It was normal,” he said, “like, ‘I live in the garage’ and some garages were nicer than others.”
Mr. Martinez went to East Los Angeles College after high school, then transferred to the University of California, Berkeley, where he got an architecture degree in 2005. In the years after graduation, when the Great Recession struck, his father lost his job and, after a spell of unemployment, took a minimum wage job mowing the lawn at a golf course. To help with bills, they rented the garage unit to Bernardo Martinez’s brother for $500 a month. “Withthe minimum wage, you can’t afford to pay a mortgage and food for everybody,” Tomasa Martinez said.
‘Home Sweet Legal Home’
The point of informal housing is that it’s hard to see — it is built to elude zoning authorities or anyone else who might notice from the street.
Jake Wegmann, a professor of urban planning at the University of Texas at Austin, describes this as “horizontal density,” by which he means additions that make use of driveways and yard space, instead of going up a second or third floor. Because both the tenants and owners of these units don’t want to be discovered, there is essentially no advocacy on behalf of illegal housing dwellers, even though the number of tenants easily goes into the millions nationwide.