Government help blunted the pandemic’s financial fallout, but it still hit some hard.

American households reported sharply different economic experiences in 2020 as pandemic lockdowns threw workers out of jobs and left many less financially secure, a Federal Reserve report on household economic well-being released Monday showed.

“A clear pattern from the survey is that financial challenges in 2020 were uneven, and frequently left those who entered the year with fewer resources further behind,” according to the Fed’s annual Economic Well-Being of U.S. Households report.

The divergences arose even as Congress and the White House rolled out an enormous spending response meant to keep families financially afloat during a trying period. The data provide evidence that those programs helped — but they did not totally ameliorate the damage for vulnerable households.

The Fed’s online survey, which traces the experiences of U.S. adults older than 18, found that nearly a quarter of respondents said they were worse off financially compared with a year earlier — up from 14 percent in 2019. That came as job losses swept the nation, with roughly one in seven adults reporting that they experienced a layoff at some point in 2020.

“People who kept their jobs during the pandemic generally had stable or improving finances in 2020,” the report said. “However, those who suffered a layoff and an extended period of unemployment saw a deterioration of their financial circumstances.”

Less than a quarter of those who lost jobs had returned to their old positions by late in the year, even though more than 80 percent of laid-off workers had said in April 2020 that they expected to get their jobs back, the survey said.

The economic cost inflicted by state and local lockdowns, while widespread, was far from even. The share of households who reported doing “at least OK financially” held steady over all, but the gap between those with a bachelor’s degree reporting financial comfort and those with less than a high school diploma widened sharply last year — increasing 44 percentage points in 2020 from 34 percentage points in 2019. That happened as the pandemic shuttered service providers like restaurants and shopping malls, costing jobs that require less formal education.

Disparities also played out along racial lines. Black and Hispanic families were far less likely than white and Asian households to report coping financially, the survey showed. Under two-thirds of Black and Hispanic adults said they were doing “at least OK,” versus 80 percent of white adults and 84 percent of Asian adults.

A large share of households took advantage of government relief in 2020. As Congress expanded eligibility and enhanced the generosity of benefits for those experiencing job loss, the report found that 14 percent of adults said they had received unemployment income, up from 2 percent in 2019.

The report said that “many aspects of government stimulus measures” appear “to have blunted the negative financial effects of the pandemic for many families.”

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Tax Day 2021: Here’s What You Need to Know

It’s May 17 and it’s Tax Day, the deadline for filing your 2020 taxes. The Internal Revenue Service in March said that Americans who needed it could take extra time to file their taxes. That time has arrived.

The one-month delay from the usual April deadline did not offer as much extra time as the I.R.S. gave people last year, when the filing deadline was pushed to July 15. But the aim was the same: to make it easier for taxpayers to get a handle on their finances — as well as tax changes that took effect this year with the signing of the American Rescue Plan.

Still have questions? Here are some articles that might help.

How the Pandemic Has Changed Your Taxes

New rules for a new reality, from stimulus payments to retirement withdrawals to unemployment insurance, could cut your bill or even generate extra refunds.

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U.S. and Europe Move Closer to Truce in Trump-Era Trade Spat: Live Updates

steel and aluminum imports that was a major front in the Trump administration’s trade wars and a serious burden on trans-Atlantic relations.

As part of a truce announced Monday, the European Union will not, as planned, increase tariffs on products like United States whiskey, orange juice and motorcycles, which the bloc imposed in 2018 in retaliation for duties that the Trump administration imposed on European steel and aluminum. The higher tariffs were scheduled to take effect June 1.

The talks about steel and aluminum are part of an effort by the Biden administration to rebuild relations between the United States and Europe after the Trump administration treated the bloc like an adversary, sometimes threatening to leave NATO and citing national security as a justification for charging 25 percent tariffs on imports of European steel and 10 percent on aluminum.

In March, the United States and European Union temporarily suspended tariffs on billions of dollars of each others’ aircraft, wine, food and other products as they worked to settle a long-running dispute involving Boeing and Airbus, the two leading airplane manufacturers. The United States also temporarily suspended retaliatory tariffs against British products like Scotch whisky that had been imposed as part of the dispute over aircraft subsidies.

Some European officials had hoped President Biden would simply lift the Trump-era tariffs, which are unpopular with businesses on both sides of the Atlantic. But the administration is moving cautiously and is likely to seek something in return, mindful that the tariffs are welcomed in steelmaking regions like Pennsylvania.

In a joint statement, Katherine Tai, the U.S. trade representative; Gina M. Raimondo, the secretary of commerce; and Valdis Dombrovskis, the top European Union trade official, said they would discuss how to address a global glut in steel products that poses “a serious threat to the market-oriented E.U. and U.S. steel and aluminum industries and the workers in those industries.”

The United States and European Union are “allies and partners, sharing similar national security interests as democratic, market economies,” the officials said, adding that they would work together to “hold countries like China that support trade-distorting policies to account.”

It’s May 17 and it’s Tax Day, the deadline for filing your 2020 taxes. The Internal Revenue Service in March said that Americans who needed it could take extra time to file their taxes. That time has arrived.

The one-month delay from the usual April deadline did not offer as much extra time as the I.R.S. gave people last year, when the filing deadline was pushed to July 15. But the aim was the same: to make it easier for taxpayers to get a handle on their finances — as well as tax changes that took effect this year with the signing of the American Rescue Plan.

Still have questions? Here are some articles that might help.

How the Pandemic Has Changed Your Taxes

New rules for a new reality, from stimulus payments to retirement withdrawals to unemployment insurance, could cut your bill or even generate extra refunds.

The Tax Filing Deadline Was Delayed, but Read the Fine Print

The federal government and most states pushed back the date to May 17, but others have gone their own way. It’s a good idea to double-check deadlines.

The Tax Headaches of Working Remotely

“Each state has its own rules,” one tax expert says. So if you worked in a state other than your usual one in 2020, here are some tips on dealing with the tax season.

For Gig Workers and Business Owners, Taxes Are Even Trickier Now

Filing taxes has never been simple for freelancers and business owners, but the pandemic has made it far more complex.

A Break for Working Families

The government is allowing people who qualify for the earned-income tax credit to use income from either 2020 or 2019, whichever will result in a bigger credit.

Ryanair, the Irish low-cost airline, said it has seen signs that a recovery in air travel and tourism “has already begun.”
Credit…Albert Gea/Reuters

U.S. stocks are expected to slip when trading begins on Monday and most European equity indexes were lower, reversing some of Friday’s rally.

The Stoxx Europe 600 dropped 0.3 percent, led lower by energy stocks. On Friday, the index climbed 1.2 percent.

The S&P 500 was set to open about half a percentage point lower. The Wall Street benchmark rose on Friday, but the increase was not enough to reverse a decline of 1.4 percent for the week, when faster-than-expected inflation data rattled markets.

Traders are watching inflation data closely because if it shows signs of a substantial and sustained rise central bank policymakers might pull back on monetary stimulus. Later on Monday, the Fed vice chair, Richard H. Clarida, is speaking. On Wednesday, the central bank will publish minutes of its April policy meeting.

  • Discovery shares rose 17 percent in premarket trading after confirmation it would merge with AT&T’s media business, including the WarnerMedia assets, to create a new giant company. AT&T shares rose 3 percent.

  • The FTSE 100 in Britain fell 0.4 percent even as England entered the next stage of its exit from lockdown. Indoor dining and hotels reopened as well as entertainment venues such as museums and cinemas. But an increase in the number of cases of the coronavirus variant first detected in India has raised concerns about the easing of restrictions.

  • Ryanair shares rose 0.9 percent after the airline reported a loss of 815 million euros (or $991 million) in the year through March but said that it expected a “strong recovery” in air travel and tourism in the second half of this fiscal year. “The recent strong increases in weekly bookings since early April suggests that this recovery has already begun,” the earnings release said.

  • Taiwan’s stock index dropped 3 percent as the island battles its worst coronavirus outbreak. Its government imposed tougher restrictions, including closing cinemas and limiting the size of gatherings, and encouraged people not to panic buy essentials.

  • Oil prices rose slightly. The West Texas Intermediate, the U.S. benchmark, rose 0.3 percent to $65.58 a barrel.

  • Bitcoin fell to about $45,000 on Monday morning, though it recovered some of its losses from the weekend after Elon Musk said Tesla hadn’t sold any Bitcoin. The electric carmaker bought $1.5 billion of the cryptocurrency earlier this year but Mr. Musk recently suspended plans to accept Bitcoin for car payments.

The paper’s conclusions suggest that economic programs embraced by President Biden may be useful in raising wages.
Credit…Stefani Reynolds for The New York Times

Two economists at the liberal Economic Policy Institute conclude in a new paper that the government is to blame for the fact that pay for middle-income workers has increased only slightly since the 1970s.

“Intentional policy decisions (either of commission or omission) have generated wage suppression,” write Lawrence Mishel and Josh Bivens.

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.

Dr. Mishel and Dr. Bivens argue that a decades-long loss of leverage largely explains the gap between the pay increases that workers would have received had they benefited fully from rising productivity, and the smaller wage and benefit increases that workers actually received, Noam Scheiber reports for The New York Times.

Drawing on existing measures of the relationship between unemployment and wages, Dr. Mishel and Dr. Bivens estimate that excess unemployment lowered wages by about 10 percent since the 1970s, explaining nearly one-quarter of the gap between wages and productivity growth.

They perform similar calculations for other factors that undermined workers’ bargaining power: the 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.

Together, Dr. Mishel and Dr. Bivens conclude, these factors explain more than three-quarters of the gap between the typical worker’s actual increases in compensation and their expected increases, given the productivity gains.

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Unemployment Job Search Requirements Return. Is It Too Soon?

A tenet of the American unemployment system has been that anyone collecting benefits, in good times and bad, must look for work.

That quid pro quo changed early in the pandemic. Profound fears of contagion and the sudden need for millions of workers to become caregivers led states to lift the requirements for reasons both practical and compassionate.

But as vaccinations increase and the economy revs back to life, more than half of all states have revived their work search requirements. Arkansas and Louisiana did so months ago in an effort to push workers off their swollen unemployment rolls. Others, like Vermont and Kentucky, have followed in the last few weeks.

ordered the Labor Department to “work with the remaining states, as health and safety conditions allow,” to put such requirements in place as the pandemic abates.

Research suggests that work search requirements of some form in normal economic times can compel workers to find their next job and reduce their time on unemployment. But the pandemic has added a new layer to a debate over how to balance relief with the presumption that joblessness is only transitory. Most states cut off unemployment benefits after 26 weeks.

Business groups say bringing back work search requirements will help juice the labor market and dissuade workers from waiting to return to their old employers or holding out for remote or better-paying jobs.

Opponents contend that the mandate keeps undue numbers of Americans from continuing to receive needed benefits because it can be hard to meet the sometimes arduous requirements, including documenting the search efforts. And they say workers may be forced to apply for and accept lower-paying or less-satisfying jobs at a time when the pandemic has caused some to reassess the way they think about their work, their family needs and their prospects.

“I think the work search requirement is necessary as an economist,” said Marta Lachowska, an economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich., who has studied the effects of work search requirements on employment. But she added, “Perhaps given the big disruption we have observed to the labor market, people should be given some slack.”

In Washington, the issue has become part of a larger clash over jobless benefits that intensified after the disappointing April jobs report, with Republicans asserting that Mr. Biden’s policies are deterring people from looking for work and holding back the economic recovery.

A rising number of Republican governors have taken matters into their own hands, moving to end a weekly $300 unemployment supplement and other federally funded emergency assistance that otherwise isn’t due to expire until September.

Job openings rose in March to 8.1 million, the Labor Department reported on Tuesday, yet there are more than eight million fewer people working than before the pandemic. Economists ascribe some of the incongruity to a temporary mismatch between the jobs on offer and the skills or background of those looking for work. They say that in a recovering labor market like the current one, there may not be enough suitable jobs for people seeking re-employment, which can frustrate workers and drive them to apply to positions haphazardly.

That has been the case for Rie Wilson, 45, who worked in venue sales for a nonprofit in New York City before she lost her job last summer.

To fulfill New York’s work search requirement, which generally makes unemployment applicants complete at least three job search activities each week, Ms. Wilson has had to apply for positions she would not typically consider, like administrative assistant jobs, she said.

The prospect of accepting such a job makes her anxious.

“There is always a thought in my mind that, ‘Well, what if I do get pulled in this direction just because I’m being forced to apply for these jobs? What does that look like for my career?’” she said.

The process has been time-consuming, she said, “and it’s also a mental wear and tear because you’re literally pulled from all angles in a very stressful situation.”

Alexa Tapia, the unemployment insurance campaign coordinator at the National Employment Law Project, a worker advocacy group, said work search requirements “harm more than they help,” especially during the pandemic.

In particular, she said, such requirements perpetuate systemic racism by trapping people of color, especially women, in underpaid work with fewer benefits. And she noted that people of color were more likely to be denied benefits on the basis of such requirements.

With state unemployment offices already overtaxed, she added, work search requirements are “just another barrier being put to claimants, and it can be a very demoralizing barrier.”

In states that have reinstated work search requirements, worker advocates say an especially frustrating obstacle has been a lack of guidance.

Sue Berkowitz, the director of the South Carolina Appleseed Legal Justice Center, which works with low-income South Carolinians, said unemployed workers in the state largely wanted to go back to work. But the information on the state’s website about work search requirements is so confusing, she said, that she worries workers won’t understand it.

Before the state reimposed the requirements last month, Ms. Berkowitz sent a marked-up copy of the proposed language to the chief of staff at the South Carolina Department of Employment and Workforce urging clarifications and changes. One of her biggest concerns was that the language as it stood was at a 12th-grade reading level, while the typical reading level of adult Americans is much lower. She did not hear back. “It was crickets,” she said.

More broadly, employees in South Carolina, where the minimum wage is $7.25 an hour, can be reluctant to take a job that pays less than the one they had before the pandemic, Ms. Berkowitz said.

“It’s not that they are below taking a job that makes a lot less, but their financial needs are high enough that they need to continue to make a certain salary,” she said.

Although work search requirements have become a political issue, their restoration does not fall solely along partisan lines. Florida, for instance, where the Republican governor has repeatedly flouted virus restrictions, had kept the work search waiver in place before announcing recently that it would reinstate the requirement at the end of the month.

But many other states, particularly Republican ones, have rushed to bring their work search requirements back.

That is what Crista San Martin found when they left their job out of health concerns at a dog boarding facility in Cypress, Texas, which reinstated its work search requirement in November.

Mx. San Martin, 27, who uses the pronouns they and them, said there were very few job openings near them in the pet care industry, making finding a position onerous.

“That made it really difficult for me to log any work searches, because there simply weren’t enough jobs that I would actually want to take for my career,” they said. The first job they applied to was at a Panera, “which is not in my field of interest at all.”

Above all, applying to arbitrary jobs felt risky, they said, because there was no way to assess potential employers’ Covid-19 safety protocols. Mx. San Martin has since returned to their old job.

“It’s pretty unfair,” they said. “Going out and just casting a wide net and seeing whether a random business will take you is not safe.”

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What Is Happening in Israel and Gaza? Here’s What to Know.

JERUSALEM — Twenty-seven days before the first rocket was fired from Gaza this week, a squad of Israeli police officers entered the Aqsa Mosque in Jerusalem, brushed the Palestinian attendants aside and strode across its vast limestone courtyard. Then they cut the cables to the loudspeakers that broadcast prayers to the faithful from four medieval minarets.

It was the night of April 13, the first day of the Muslim holy month of Ramadan. It was also Memorial Day in Israel, which honors those who died fighting for the country. The Israeli president was delivering a speech at the Western Wall, a sacred Jewish site that lies below the mosque, and Israeli officials were concerned that the prayers would drown it out.

The incident was confirmed by six mosque officials, three of whom witnessed it; the Israeli police declined to comment. In the outside world, it barely registered.

But in hindsight, the police raid on the mosque, one of the holiest sites in Islam, was one of several actions that led, less than a month later, to the sudden resumption of war between Israel and Hamas, the militant group that rules the Gaza Strip, and the outbreak of civil unrest between Arabs and Jews across Israel itself.

recognized the city as Israel’s capital and nominally moved the United States Embassy there. There were no mass protests after four Arab countries normalized relations with Israel, abandoning a long-held consensus that they would never do so until the Palestinian-Israeli conflict had been resolved.

Two months ago, few in the Israeli military establishment were expecting anything like this.

In private briefings, military officials said the biggest threat to Israel was 1,000 miles away in Iran, or across the northern border in Lebanon.

When diplomats met in March with the two generals who oversee administrative aspects of Israeli military affairs in Gaza and the West Bank, they found the pair relaxed about the possibility of significant violence and celebrating an extended period of relative quiet, according to a senior foreign diplomat who asked to remain anonymous in order to speak freely.

Sheikh Jarrah, a Palestinian neighborhood in East Jerusalem. With a final court decision on their case due in the first half of May, regular protests were held throughout April — demonstrations that accelerated after Palestinians drew a connection between the events at Damascus Gate and the plight of the residents.

video and images showed they engaged in violence themselves. As the images began to circulate online, the neighborhood turned into a rallying point for Palestinians not just across the occupied territories and Israel, but among the diaspora.

The experience of the families, who had already been displaced from what became Israel in 1948, was something “every single Palestinian in the diaspora can relate to,” said Jehan Bseiso, a Palestinian poet living in Lebanon.

And it highlighted a piece of legal discrimination: Israeli law allows Jews to reclaim land in East Jerusalem that was owned by Jews before 1948. But the descendants of hundreds of thousands of Palestinians who fled their homes that year have no legal means to reclaim their families’ land.

sight of stun grenades and bullets inside the prayer hall of one of the holiest sites in Islam — on the last Friday of Ramadan, one of its holiest nights — was seen as a grievous insult to all Muslims.

scenes that were broadcast across the world.

At the last minute, the government rerouted the Jerusalem Day march away from the Muslim Quarter, after receiving an intelligence briefing about the risk of escalation if it went ahead.

But that was too little, and far too late. By then, the Israeli Army had already begun to order civilians away from the Gaza perimeter.

Shortly after 6 p.m. on Monday, the rocket fire from Gaza began.

Rami Nazzal contributed reporting from Ramallah, West Bank, and Iyad Abuhweila from Gaza City.

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Amid Economic Turmoil, Biden Stays Focused on Longer Term

Administration officials express confidence that recent price surges in used cars, airfare and other sectors of the economy will prove temporary, and that job growth will speed up again as more working-aged Americans are vaccinated against Covid-19 and regain access to child care during work hours. They say Mr. Biden’s $1.9 trillion economic aid package, which he signed in March, will lift job growth in the coming months, noting that new claims for unemployment fell to a pandemic-era low on Thursday.

The officials also said it was appropriate for the president to look past the current crisis and push efforts to strengthen the economy long term.

The two halves of Mr. Biden’s $4 trillion agenda, the American Jobs Plan and the American Families Plan, are premised on the economy returning to a low unemployment rate where essentially every American who wants to work is able to find a job, Cecilia Rouse, the chair of the Council of Economic Advisers, said in an interview.

“The American Rescue Plan was rescue,” Dr. Rouse said. “It was meant as stimulus as we work through this hopefully once-in-a-century, if not longer, pandemic. The American Jobs Plan, American Families Plan are saying, look, that’s behind us, but we knew going into the pandemic that there were structural problems in our country and in our economy.”

Mr. Biden’s plans would raise taxes on high earners and corporations to fund new federal spending on physical infrastructure, care for children and older Americans, expanded access to education, an accelerated transition to low-carbon energy and more.

Those efforts “reflect the empirical evidence that a strong economy depends on a solid foundation of public investment, and that investments in workers, families and communities can pay off for decades to come,” Mr. Biden’s advisers wrote. “These plans are not emergency legislation; they address longstanding challenges.”

The five-page brief focuses on arguments about what drives productivity, wage growth, innovation and equity in the economy. The issues predate the coronavirus recession and recovery, and Democrats in particular have pledged for years to address them.

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McDonald’s Will Raise Wages at Company-Owned Restaurants

Battling to hire employees in a tight job market, McDonald’s on Thursday joined a growing list of fast-food and restaurant companies that are lifting hourly wages in the hopes of attracting job seekers.

Earlier this week, Chipotle said it was raising hourly pay at its restaurants in the hopes of hiring 20,000 new employees and, in late March, Olive Garden said it was raising workers’ pay.

Fast-food and casual dining restaurants have struggled to find workers in parts of the country. As coronavirus vaccinations have increased and government restrictions have eased, the restaurant industry, which laid off or furloughed millions of employees during the pandemic, has begun a hiring spree, as have several other service-related industries.

But even as McDonald’s and other restaurant chains raise wages, union activists say it is not enough for the employees who went to work daily during the pandemic and helped the restaurants survive or even thrive.

report released last week showed a significant jump in the number of workers hired in the restaurant and bar sector, employment levels at full-service restaurants in February remained 20 percent lower than they were a year ago, according to the National Restaurant Association. That’s the equivalent of 1.1 million jobs. Employment at fast-food and fast-casual restaurants was down 6 percent over the same period.

Some restaurants say the challenge of hiring workers could slow their own recoveries from the pandemic. But some potential employees — whether concerned about the safety of serving customers dining indoors, buoyed by government stimulus checks or simply unhappy with the pay being offered — are wary of returning to work.

“We’re not only competing with our peer companies out there, and I know everybody is challenged with that,” Greg Levin, the president and chief financial officer of B.J.’s Restaurants, an American grill chain, told Wall Street analysts in April. “We’re also right now kind of competing with the federal government and somewhat of the unemployment subsidies.”

The company estimates that it needs to hire an additional 5,000 employees to return to prepandemic sales levels.

But some analysts say other factors may be playing a role in making it difficult for the restaurant industry to hire, namely employees who left permanently after the volatility of the past year and others who may have found jobs in other, faster-growing sectors.

added more than 400,000 employees last year, and on Thursday said it was planning to hire an additional 75,000 workers. It will offer a $1,000 signing bonus in some locations, and pay an average of $17 an hour.

McDonald’s, hoping to add 10,000 new employees in the next three months, said it would increase hourly wages for current employees by an average of 10 percent and that the entry-level wage for new employees would rise to $11 to $17 an hour, based on the location of the restaurant.

At its company-owned restaurants, McDonald’s said the average employee wage would increase to $13 an hour, with some restaurants getting to an average wage of $15 an hour later this year. All company-owned restaurants are expected to be at an average hourly wage of $15 by 2024, the company said.

But while the coffee chain Starbucks said last year it would raise the pay for all employees to $15 an hour over a three-year span, McDonald’s has been reluctant to commit to a similar minimum-wage move.

In 2019, the company said it would no longer use its powerful lobbying arm to fight attempts to raise the minimum wage to $15 an hour at the federal, state and local level. In a call with Wall Street analysts in January, Mr. Kempczinski, the McDonald’s C.E.O., said the company was doing “just fine” in the more than two dozen states that had increased minimum wages in a phased-in way.

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Middle-Class Pay Lost Pace. Is Washington to Blame?

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.”

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McDonald’s to Increase Wages as Job Market Tightens: Live Updates

Chipotle, McDonald’s said it hoped the higher pay would attract as many as 10,000 new employees in the next three months, as the busy summer season approaches and dine-in restrictions are removed at many of its restaurants.

At its company-owned restaurants, McDonald’s said the average employee wage would increase to $13 an hour, with some restaurants achieving an average wage of $15 an hour later this year. All company-owned restaurants expected to be at an average salary of $15 by 2024, the company noted.

Still, that falls short of the minimum wage of $15 an hour being demanded by the Fight for $15 organization, which is backed by the Service Employees International Union. The Fight for $15 organization is spearheading a strike by McDonald’s employees in several cities across the country on Wednesday ahead of the company’s annual shareholder meeting.

A leader for Fight for $15 dismissed McDonald’s move to bolster wages, saying it wasn’t enough.

“We’ve showed up to work day after day in the middle of a global pandemic, risking our lives without proper P.P.E. or paid time off to keep your stores open and corporate profits flowing,” Doneshia Babbitt, a McDonald’s employee in St. Louis and union leader, said in a statement. “You’ve called us essential for over a year, but your announcement today proves that you’ve seen us as disposable all along.”

The strikes in 15 cities on Wednesday, she said, would go on as planned.

In 2019, McDonald’s announced it would no longer use its powerful lobbying arm to fight attempts to raise the minimum wage to $15 an hour at the federal, state and local level. In a call with Wall Street analysts in January, the McDonald’s chief executive, Chris Kempczinski, said the company was doing “just fine” in the more than two dozen states that had increased minimum wages in a phased-in way.

In fact, despite having many of its dining rooms closed or with limited capacity in parts of the country for much of the pandemic, the strength of McDonald’s drive-throughs helped push its profit to more than $4.7 billion in 2020. It paid its shareholders more than $3.7 billion in dividends and spent another $874 million repurchasing shares before suspending the program in early March of last year.

Mr. Kempczinski agreed to cut his base salary in half last year, but his total compensation was still more than $10.8 million.

Elon Musk, the chief executive of Tesla, has been a big Bitcoin advocate.
Credit…Susan Walsh/Associated Press

Elon Musk has been a big cryptocurrency booster of late, even directing Tesla to buy $1.5 billion in Bitcoin for its corporate treasury earlier this year. On Thursday, he abruptly reversed course, tweeting that Tesla would stop accepting Bitcoin as payment for cars, citing environmental reasons.

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” he said.

Bitcoin’s price promptly plunged by more than 10 percent, and Tesla’s shares dropped more than 4 percent, but recovered when trading began on Thursday.

Bitcoin price

Tesla said it would begin accepting the cryptocurrency a few months ago, when it also revealed a billion-dollar Bitcoin buy, pushing the price up by more than 10 percent. Bitcoin seems remarkably sensitive to the billionaire’s tweets. “If one person can dramatically alter spending power, the ‘stable store of value’ criteria of a currency is not met,” Paul Donovan of UBS wrote in a note to clients on Thursday.

Mining Bitcoin is energy-intensive, and the more it is worth, the more power it takes a network of computers to create the tokens, by design. Bitcoin’s climate problem is hardly a secret. The DealBook newsletter asks: What gives?

Mr. Musk can be an unreliable narrator. On Tuesday, he asked his followers on Twitter if Tesla should accept Dogecoin, the jokey cryptocurrency. (Most said yes.) On Sunday, he announced that SpaceX had taken Dogecoin as payment for shuttling a satellite to the moon. And as host of “Saturday Night Live,” he said that cryptocurrency was both “the future of currency” and “a hustle.”

Servers at a restaurant in Columbia, Mo., last week. The labor market is struggling to return to normal after more than a year of being whipsawed by the pandemic.
Credit…Jacob Moscovitch for The New York Times

New claims for unemployment benefits fell last week, the government reported on Thursday, as the labor market slowly recovers from the staggering losses wreaked by the coronavirus pandemic.

About 487,000 workers filed first-time claims for state benefits during the week that ended May 8, the Labor Department said, a decrease from 514,000 the week before. In addition, about 104,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits.

Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 473,000.

After more than a year of being whipsawed by the pandemic, the economy has been showing new life. Restrictions are lifting, businesses are reopening and job listings are on the upswing. But hiring in April was weaker than expected.

“Over all, jobless claims are about three times as high as they were pre-Covid, but they’re coming down” said Heidi Shierholz, senior economist at the left-leaning Economic Policy Institute.

Some employers, particularly in the restaurant and hospitality sectors, have complained of having trouble finding workers. The U.S. Chamber of Commerce and several Republican governors have asserted that a temporary $300-a-week federal unemployment supplement has made workers reluctant to return to the job.

The U.S. Labor Department said that as of Wednesday, six states — Iowa, Mississippi, Missouri, Montana, North Dakota and South Carolina — had notified the department that they were terminating a network of federal pandemic-related unemployment benefits ahead of the Sept. 6 expiration date.

Several other states with Republican governors, including Tennessee, Arkansas, Alabama, Wyoming and Idaho, have said they also plan to withdraw from the federal programs in the next month or so.

In most cases, that would mean an end not only to the weekly supplements, but also to gig workers’ Pandemic Unemployment Assistance and extended benefits for those who have exhausted other state and federal jobless insurance.

Oxford Economics estimates that roughly 279,000 people in 11 states will lose the $300-a-week stipend, while an additional 609,000 will lose all benefits.

The unemployment rates in those states in March, the latest month for which data is available, ranged from 3.2 percent in Idaho to 6.3 percent in Mississippi.

Mississippi, Tennessee and Alabama are among the states that offer the lowest maximum benefit to qualified individuals — $275 or less each week. Nationwide, the average weekly benefit without federal supplements is $387, according to the Center for Budget and Policy Priorities.

Economists are skeptical that supplemental jobless benefits are playing anything more than a bit part in the pace of the job market’s recovery.

“There is tremendous churn in this labor market,” said Gregory Daco, chief U.S. economist at Oxford Economics. “There are still major supply constraints and unemployment benefits are not the most important one. The virus is.”

Many workers have children at home who are not attending school in person. Others are wary of returning to jobs that require face-to-face encounters. Covid-19 infections have decreased since September, but there are still 38,000 new cases being reported each day and 600 Covid-related deaths. Less than half the population is fully vaccinated.

There is halting progress from employers as well, as businesses continually update their assessment of costs and customer demand. “The hiring pattern isn’t going to be smooth,” Mr. Daco said. “Businesses hire and then reassess. They need to find the right balance, it’s a trial-and-error process more than anything.”

Prematurely halting federal jobless benefits is “detrimental to the economy,” Mr. Daco said. “You’re voluntarily hurting certain vulnerable tranches of the population.”

Nationwide, the unemployment rate was 6.1 percent, and there are 8.2 million fewer jobs than in February 2020.

An empty gas pump, in Chapel Hill, N.C. Colonial Pipeline said Wednesday it had restarted operations along its Texas-to-New Jersey pipeline, but full restoration of service was expected to take days.
Credit…Jonathan Drake/Reuters

U.S. stocks rebound on Thursday following a sell-off in European and Asian equities after faster-than-expected inflation data in the United States rattled markets the previous day.

The S&P 500 open nearly 1 percent higher, after a 2.1 percent drop on Wednesday. The Nasdaq climbed more than 1 percent.

The Stoxx Europe 600 index fell 0.4 percent, recovering from a 1.7 percent decline earlier. The Nikkei 225 slumped 2.5 percent in Japan, and the Hang Seng in Hong Kong dropped 1.8 percent.

The U.S. Consumer Price Index, a measure of inflation, climbed 4.2 percent in April from a year earlier, the fastest pace of increase since 2008. From March to April, prices increased 0.8 percent; economists surveyed by Bloomberg only forecast a 0.2 percent increase.

The yield on 10-year Treasury notes held steady at about 1.69 percent after jumping seven basis points, or 0.07 percentage point, on Wednesday.

Federal Reserve policymakers have said that they expect the current increase in inflation to be transitory and would not set off a pullback in monetary stimulus. But the increase in April’s inflation reading, beyond what other analysts forecast, has some traders testing this view.

Oil prices fell on Thursday after Colonial Pipeline said it had begun to restart operations along its massive pipeline, which transports gasoline, diesel and jet fuel from Texas to New Jersey. West Texas Intermediate, the U.S. benchmark, dropped more than 2 percent to $64.65 a barrel.

Other commodity prices have also fallen from recent highs. Iron ore futures were down 3.6 percent after climbing to a record this week. Aluminum prices fell 1.6 percent and silver prices were down 1.4 percent.

Bitcoin prices fell more than 10 percent to below $50,000, according to CoinDesk, after Elon Musk said Tesla would stop accepting the cryptocurrency as payment for its electric cars. Mr. Musk citing concerns about the energy consumption used in mining for Bitcoin, a longstanding issue. Tesla’s share price fell 1.5 percent in premarket trading, but recovered when markets opened.

Most other cryptocurrencies fell on Thursday with CoinMarketCap valuing the global market at $2.2 trillion, down 11 percent from the day before.

Shares in Coinbase, an exchange for people and companies to buy and sell various digital currencies, dropped nearly 2 percent.

Alibaba recorded an operating loss of $1.2 billion for the first three months of the year.
Credit…Thomas Peter/Reuters

China’s landmark $2.8 billion antitrust penalty against Alibaba caused the e-commerce giant to report a loss in the latest quarter, its first since going public seven years ago. But sales continued to grow despite the regulatory scrutiny, helped by China’s strong economic expansion.

Alibaba recorded an operating loss of $1.2 billion for the first three months of the year, the company said on Thursday. Without the antitrust fine, operating profits would have been $1.6 billion, a 48 percent increase from a year earlier, the company said.

Revenue for the quarter grew by nearly two-thirds from a year before, to $28.6 billion. That figure got a boost because Alibaba began including the sales of Sun Art, a supermarket operator in which the company took a controlling stake last October.

China is on a regulatory blitz to curtail what officials describe as unfair and monopolistic business practices by the country’s internet heavyweights. The fine last month against Alibaba was followed swiftly by the opening of an antitrust investigation into Meituan, a food-delivery platform that is among China’s most valuable internet companies.

Two days after China’s market regulator announced the fine against Alibaba, which the agency said was for illegally restricting the vendors on its shopping sites, the company said it would lower the fees it charges those merchants and invest in new services for them.

Speaking to analysts on Thursday, Alibaba’s chief executive, Daniel Zhang, pledged to put “all of our incremental profits this year” toward helping merchants lower their operating costs, expanding in new business areas such as brick-and-mortar grocery and improving technology. But Mr. Zhang also stressed that these investments would be “highly targeted and disciplined.”

For the 12 months that ended in March, Alibaba recorded $109.5 billion in revenue, an increase of 41 percent over the year before. The company’s Chinese retail platforms attracted 811 million active consumers during that period.

The operator of Colonial Pipeline said on Wednesday that it had started to resume pipeline operations but noted that “it will take several days for the product delivery supply chain to return to normal.”

The pipeline, which stretches from Texas to New Jersey, had been shut down since Friday after a ransomware attack.

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