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.
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.
Elsewhere in markets
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.
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.
As a manufacturer of asphalt paving equipment, Weiler is exactly the type of company poised to benefit if the federal government increases spending on roads and bridges. But when Patrick Weiler talks about infrastructure, the issue he brings up first has next to nothing to do with his company’s core business.
It’s broadband internet service.
Weiler is based in Marion County, Iowa, a rural area southeast of Des Moines. Internet speeds are fine at the company’s 400,000-square-foot factory, because Weiler paid to have a fiber-optic cable run from the nearby highway. But that doesn’t help the surrounding community, where broadband access can be spotty at best. That is a problem for recruitment — already one of the biggest challenges for Weiler and many other rural employers.
“How do you get young people to want to move back into these rural areas when they feel like they’re moving back into a time frame of 20 years ago?” asked Mr. Weiler, the company’s founder and chief executive.
Rural areas have complained for years that slow, unreliable or simply unavailable internet access is restricting their economic growth. But the pandemic has given new urgency to those concerns, at the same time that President Biden’s infrastructure plan — which includes $100 billion to improve broadband access — has raised hope that the problem might finally be addressed.
address to Congress last month. “This is going to help our kids and our businesses succeed in the 21st-century economy.”
Mr. Biden has received both criticism and praise for pushing to expand the scope of infrastructure to include investments in child care, health care and other priorities beyond the concrete-and-steel projects that the word normally calls to mind. But ensuring internet access is broadly popular. In a recent survey conducted for The New York Times by the online research platform SurveyMonkey, 78 percent of adults said they supported broadband investment, including 62 percent of Republicans.
Businesses, too, have consistently supported broadband investment. Major industry groups such as the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers have all released policy recommendations in the last year calling for federal spending to help close the “digital divide.”
Quantifying that divide, and its economic cost, is difficult, in part because there is no agreed-upon definition of broadband. The Federal Communications Commission in 2015 updated its standards to a minimum download speed of 25 megabits per second. The Department of Agriculture sets its standard lower, at 10 m.p.s. A bipartisan group of rural-state senators asked both agencies this year to raise their standards to 100 m.p.s. And speed-based definitions don’t take into account other issues, like reliability and latency, a measure of how long a signal takes to travel between a computer and a remote server.
recent study by Broadband Now, an independent research group whose data is widely cited, found that 42 million Americans live in places where they cannot buy broadband internet service, most of them in rural areas.
According to the F.C.C.’s definition, most of Marion County has high-speed access to the internet. But residents report that service is slow and unreliable. And with only one provider serving much of the county, customers have little leverage to demand better service.
Marion County, with 33,000 people, has economic challenges common to rural areas: an aging work force, anemic population growth and a limited set of employers concentrated in a few industries. But it also has assets, including its proximity to Des Moines and a group of employers willing to train workers.
Local leaders have plans to attract new businesses and a younger generation of workers — but those plans won’t work without better internet service, said Mark Raymie, chairman of the county Board of Supervisors.
“Our ability to diversify our economic base is dependent on modern infrastructure, and that includes broadband,” he said. “We can say, ‘Come and work here.’ But if we don’t have modern amenities, modern infrastructure, that sales pitch falls flat.”
Mr. Weiler’s daughter Megan Green grew up in Marion County, then left to go to college and start her career. When she moved home in 2017 to work for her father’s company, it was like returning to an earlier technological era.
“Our cellular service is more spotty, our wireless is more temperamental, and we definitely only have one choice,” Ms. Green, 35, said. “It’s a bit of a generational thing. We rely on internet access.”
Ms. Green moved home for family reasons. But finding others willing to do the same has been difficult. Broadband isn’t the only factor — shortages of housing and child care also rank high — but it is a major one. Recruiting is Weiler’s “No. 1 challenge,” Ms. Green said, despite wages that start around $20 an hour, before overtime.
The experience of the past year has accentuated the problem. When the pandemic hit last year, Weiler sent home any workers who didn’t have to be on the factory floor. But they quickly encountered a problem.
“I was shocked to know how many of our employees could not work from home because they did not have reliable internet access,” Ms. Green said. “We’re talking ‘seven minutes to download an email’ type internet access.”
Other local companies had a similar experience. In June, the Greater Des Moines Partnership, a regional business group, commissioned a study on how to improve the area’s digital infrastructure. With the state and federal governments considering significant investments, the group hopes its study will give it priority for funding, said Brian Crowe, the group’s head of economic development.
For Marion County and other rural areas, the widespread experiment with working from home during the pandemic could present an economic opportunity if the infrastructure is there to allow it. Many companies have said they will allow employees to continue to work remotely all or part of the time, which could free workers to ditch city life and move to the country — or take jobs at companies like Weiler while their spouses work from home.
“All of a sudden, it’s not going to be the case that in order to work for leading companies, you have to move to the cities where those companies are located,” said Adam Ozimek, chief economist for Upwork, a platform for freelancers. “It’s going to spread opportunity around.”
But broadband experts say there is no way that rural areas will get access to high-speed, reliable internet service without government help. If a place doesn’t have internet access in 2021, there is a reason: generally too few potential customers, too dispersed to serve efficiently.
“The private sector’s just not set up to solve this,” said Adie Tomer, a fellow at the Brookings Institution who has studied the issue. He likened the challenge to rural electrification almost a century ago, when the federal government had to step in to ensure that even remote areas had access to electrical power.
“This is exactly what we saw play out in terms of economic history in the 1910s, ’20s, ’30s,” he said. “It really is about towns being left behind.”
Good morning and happy Sunday. Here’s what you need to know in business and tech news for the week ahead. — Charlotte Cowles
What’s Up? (May 9-15)
Panic at the Pump
A cyberattack on Colonial Pipeline, one of the biggest fuel arteries in the United States, pushed the average price of gas above $3 per gallon for the first time since 2014. Fearing a shortage, panicked buyers lined up at the pump, which, of course, made the problem worse. To appease the hackers, who are believed to be part of a foreign organized crime group, Colonial Pipeline paid nearly $5 million in ransom — a capitulation that could embolden other criminals to take American companies hostage. The pipeline’s operators restored service late last week but said the supply chain would need several days to return to normal.
It’s Not Your Imagination
A new report from the Labor Department confirmed what you may have noticed: Prices for consumer goods like clothes, food and other household goods were up 4 percent in April from a year ago, blowing past forecasts. Economists are attributing the spike to pandemic-related issues like higher shipping and fuel costs, supply disruptions, rising demand and understaffing at factories and distribution centers. The Federal Reserve tried to assuage fears of inflation by insisting that the increase was temporary. But the news spooked the stock market all the same. And retail sales in April fell short of expectations, holding steady but showing a slowdown in growth after a blockbuster March.
address concerns from U.S. officials that it could be used for money laundering and other illegal purposes. The company is also moving the project to the United States from Switzerland after a stalled attempt to gain approval from Swiss regulators. In other crypto news, Tesla’s chief executive, Elon Musk, abruptly reversed his support for Bitcoin, tweeting that his company would no longer accept the cryptocurrency as payment because of the fossil fuels used in its mining and transactions. After his tweet, the price of Bitcoin dropped more than 10 percent.
What’s Next? (May 16-22)
Free Rides for Shots
As part of an effort to get 70 percent of American adults at least partly vaccinated by July 4, federal and state governments are adding extra incentives. (In case keeping yourself and others safe, and the ability to go maskless, wasn’t a good enough reason.) The Biden administration has partnered with the ride-hailing companies Uber and Lyft to provide free transportation to vaccination sites nationwide starting May 24. West Virginia is working on a plan to offer $100 savings bonds to people ages 16 to 35 who get their shots. And those who receive the vaccine in Ohio will be entered into a lottery that awards a $1 million prize each week for five weeks, starting May 26.
Ellen’s Last Dance
Ellen DeGeneres will end her talk show next year after nearly two decades on the air. Her program has seen a steep decline in ratings after employees complained of a toxic workplace and accused producers of sexual harassment. The accusations looked particularly bad in light of Ms. DeGeneres’s tagline, “Be Kind,” which has become a branded juggernaut used to market merchandise to her fans. Although Ms. DeGeneres apologized publicly in September for the incidents, the show has since lost more than a million viewers, a 43 percent decline from about 2.6 million last season. It also saw a 20 percent decline in advertising revenue from September to February compared with the previous year.
(Slightly) More Golden Arches
In the battle to recruit workers in a tight job market, McDonald’s has become the latest fast-food company to raise hourly wages, following in the recent footsteps of chain restaurants including Chipotle and Olive Garden. But the McDonald’s pay increase applies only to its company-owned restaurants, which make up a small fraction of its business. About 95 percent of its U.S. restaurants are independently owned and set their own wages.
apply for a $50 monthly discount on high-speed internet services. Hearst Magazines sold the American edition of Marie Claire to a British publisher. And after more than a year of trying to figure out what to do with the embattled retailer Victoria’s Secret, the brand’s parent company has decided to split itself into two independent, publicly listed entities: Victoria’s Secret and Bath & Body Works.
Join Andrew Ross Sorkin of The Times in conversation with Dame Ellen MacArthur and other economic experts to explore what it will take to transform the economy in the battle against climate change. May 20 at 1:30 p.m. E.T. RSVP here.
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C.D.C. surprised health experts, political leaders and others yesterday when it announced that vaccinated people could go maskless in most places, including indoors. The agency’s advice doesn’t override local and state rules, though at least seven states adopted its mask guidelines. Others, like New York, said they would study the new guidance before deciding whether to adopt it. That puts businesses in a tricky spot.
Companies with frontline workers aren’t sure what to do. Retailers likeMacy’s and the Gap said they were reviewing the new guidance, while Home Depot has not changed its rules requiring customers and workers to wear masks in its stores. Airlines and other transportation companies didn’t need to react, because federal guidelines still require masks for their industry.
sharp turnabout, Douglas Brayley, an employment lawyer at Ropes & Gray, told DealBook. Companies need to abide by local guidelines, but the change in federal guidance raises questions. How do large companies establish a common policy when local public health agencies may not agree? How to handle employees who are still uncertain about safety when protocols shift? How will companies find out whether employees are vaccinated, and thus determine if they need to wear a mask?
And what about the Yankees? Eight fully vaccinated members of the baseball team tested positive for the virus. Some may interpret it as a lesson for businesses when workplaces loosen their protocols for things like masking, even if a majority of employees are vaccinated. “For a little bit there, we were getting pretty comfortable, because that’s what the rules called for. Now, we’ll tighten it back up and hopefully everyone stays safe,” the Yankees pitcher Jameson Taillon told The Times. Others argue that the Yankees’ frequent testing makes asymptomatic cases more likely to be caught, and given that only one of the eight has shown symptoms, it’s a sign that the vaccines are effective.
What are the rules where you are? See reopening plans and mask mandates for all 50 states.
HERE’S WHAT’S HAPPENING
Colonial Pipeline paid a $5 million ransom to hackers. The payment, made in Bitcoin, came shortly after the company shut down its network — and, as a result, the pipeline that supplies almost half of the East Coast’s fuel — in response to a ransomware attack. In other hacking news, Ireland’s health system operator shut down today because of a ransomware attack, and a unit of Toshiba said that it had been targeted by DarkSide, the group blamed for the Colonial infiltration.
increase pay at its 650 company-owned restaurants to an average of $13 per hour. But about 95 percent of McDonald’s restaurants in the U.S. are independently owned and will not be affected by the move.
A major teachers’ union called for schools to reopen. Randi Weingarten, president of the American Federation of Teachers, which has 1.7 million members, said of the next academic year, “There is no doubt: Schools must be open. In person. Five days a week.” Teachers’ unions have sought strict virus mitigation measures that some say have slowed reopening timelines.
Delta will require new hires to be vaccinated, making it one of the first major corporations to enact such a provision. The airline’s C.E.O., Ed Bastian, told CNN that the requirement wouldn’t extend to current employees, but he said that he expected up to 80 percent to get shots.
DoorDash tripled its revenue in the first quarter. Demand for food delivery does not seem to be dropping as restaurants reopen dining rooms. “The negative impact that we were expecting in consumer behavior was smaller than we were anticipating,” the company’s C.F.O., Prabir Adarkar, told The Wall Street Journal.
Crypto’s first earnings call
The crypto exchange Coinbase yesterday held its first earnings call since going public. Its bumper profit for the first quarter largely matched expectations set in its filings ahead of its I.P.O. last month, so the numbers didn’t raise many pressing questions from investors, who were able to submit queries online and vote for their favorites to put to management.
based on a meme, was, inevitably, the most popular and so it was asked first. “We plan to list Doge in six to eight weeks,” said Coinbase’s C.E.O., Brian Armstrong, noting that the company was looking to expand its assets and aimed to list new products faster.
met with regulators in Washington, Armstrong said, providing no specifics.
The company’s C.F.O., Alesia Haas, said that Coinbase was “bullish on the global market” and eager to expand internationally but that it needed licenses and bank partnerships, which take time.
Armstrong loves an internet reference. The company’s co-founder referred to this period in the crypto industry as similar to the internet’s infancy at least three times and at one point likened Coinbase to Google. The exchange welcomes competition, he said, just as “in the early days of the internet, Google wanted more websites out there.” But Coinbase isn’t looking to compete with rivals on fees, so if users had dreams of trading for free, as on the Robinhood app, they were dashed. “We do not believe in fee-less crypto trading,” Haas said.
digs into the Gates family fortune, estimated to be worth at least $124 billion, which includes a stake in the Four Seasons hotel chain, huge tracts of farmland, a beachfront mansion in Southern California and one of Leonardo da Vinci’s notebooks.
In the papers
Some of the academic research that caught our eye this week, summarized in one sentence:
poison pills, shareholder primacy and the purpose of companies, are now available in a digital archive.
The back story: Leo Strine, former chief justice of the Delaware Supreme Court and now at Wachtell, Lipton, Rosen & Katz, helped create the archive. “It has taken several years to do the coding of the memos, to draft a narrative that situates ML’s work in historical context, and that also, critically, provides links to the key cases, regulatory developments and scholars and advocates involved in the policy debates in which ML participated,” Strine said in an email. He worked on it with teams at Wachtell and Penn Law, where he teaches. An in-depth essay that serves as a guide to the archive, “Lipton and His Impact,” is the place to start.
Here are two of our favorite letters. One comes from the 1980s takeover era, when junk bonds drove Wall Street and the poison pill was invented by Lipton in response, and the other from more recently, 2018, in which Lipton frames his early thinking on anti-takeover measures in the context of focusing on all stakeholders, not just shareholders:
“Our Nation is blindly rushing to the precipice.” In his Oct. 28, 1988, memo, “Is This the End of Takeovers,” Lipton warned that “abusive takeover tactics” were saddling American companies with too much debt and forcing them to focus on short-term market results. “As with tulip bulbs, South Sea bubbles, pyramid investment trusts, Florida land, REITs, LDC loans, Texas banks and all the other financial market frenzies of the past, the denouement will be a crash,” he wrote, urging rules to rein in investors who “show no restraint and no regard for the public good.”
“It promotes inequality and strikes at the very heart of our society.” In his April 10, 2018, memo, “The Purpose of the Corporation,” Lipton took aim at Milton Friedman’s mantra that companies should serve shareholders above all, which he said led to the damaging short-termism that he had fought against in takeover battles throughout his career. Noting “important new support for counterbalancing shareholder primacy and promoting long-term sustainable investment” at firms like BlackRock (and later the Business Roundtable, among others) he lent his voice to a burgeoning movement.
THE SPEED READ
The rail operator Kansas City Southern said it had accepted Canadian National’s $33.6 billion takeover bid, upending a previous deal agreed with Canadian Pacific. (Reuters)
The activist short-seller Carson Block sent the insurer Lemonade a salty letter about alleged security flaws in its site, dropping the F-bomb in the opening sentence. (TechCrunch)
The “SPAC King” Chamath Palihapitiya isn’t worried about the blank-check boom turning to bust. (Bloomberg Businessweek)
Politics and policy
Amazon, Apple, Google and other tech companies filed an amicus brief in a court case in support of spouses of H-1B visa holders’ right to work legally in the U.S. And in an op-ed, the Bridgewater C.E.O., David McCormick, calls for the U.S. to raise the cap on visas for highly skilled foreign workers. (Google, National Review)
“Beneath Joe Biden’s Folksy Demeanor, a Short Fuse and an Obsession With Details” (NYT)
Alibaba reported its first quarterly loss since going public, after paying a big antitrust penalty that China levied on the e-commerce giant. (NYT)
The I.R.S. and Justice Department have reportedly sought information about illicit activity on Binance, the world’s largest crypto exchange. (Bloomberg)
An IBM executive said that the computer chip shortage could last another two years. (BBC)
Best of the rest
Tom Montag, Bank of America’s No. 2 executive, runs its markets and corporate banking division with favoritism and an iron fist, employees say. (NYT)
“How the superrich soaked up Covid cash.” (FT)
A conversation with a Dogecoin millionaire. (NYT)
We’d like your feedback! Please email thoughts and suggestions to firstname.lastname@example.org.
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.
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.”
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 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.
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?
Tesla only started accepting Bitcoin for car purchases in the United States in March. Just over two weeks ago, Zach Kirkhorn, Tesla’s chief financial officer, told investors that “it is our intent to hold what we have long term and continue to accumulate Bitcoin from transactions from our customers as they purchase vehicles.” He described the rationale for buying and accepting Bitcoin as “Elon and I were looking for a place to store cash that wasn’t being immediately used, trying to get some level of return.”
An entry-level Tesla is worth about one Bitcoin, so the company’s $1.5 billion Bitcoin purchase in February far surpasses the amount of crypto it would collect from car sales for a very long time. That raises questions about the vetting and approval process for that investment, which may worry E.S.G. investors, who otherwise look favorably at an electric vehicle company. Did Mr. Musk not know about Bitcoin’s environmental impact until now? Who advised him on it? Did climate factor into the board’s approval process?
SpaceX’s rockets are massive carbon emitters. The Boring Company, his tunnel drilling endeavor, has also faced criticism about its environmental impact.
Mr. Musk’s statement said that “Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.” We’ll see whether it made any recent trades when it reports second-quarter results in July. Given the impact that Mr. Musk’s tweet had on Bitcoin’s price, any action just before or after will be scrutinized.
The return policy for cars bought with Bitcoin worked in Tesla’s favor, stipulating that buyers get back Bitcoin if it’s worth less than the equivalent dollar value at purchase but get back dollars if Bitcoin is worth more. That raises many issues, including accounting risks and worries about warranties and other consumer protection laws.
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.”
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.
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.
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.
“There will be lag time between Colonial Pipeline reopening and increases in fuel availability for general public,” warned an internal assessment of potential impact drawn up by the Departments of Energy and Homeland Security. It noted that the fuel “travels through the pipeline at 5 miles per hour” and would take “approximately two weeks to travel from the Gulf Coast to New York.”
The company has refused to say whether it had paid a ransom or was considering doing so. On Wednesday, administration officials said they believed the company was avoiding paying the ransom, at least for now. Instead, they said, the company was trying to reconstruct its systems with a patchwork of backed-up data.
Gasoline prices in Georgia and a few other states rose 8 to 10 cents a gallon on Wednesday alone, a jump not usually seen without a major hurricane shutting down refineries. At some stations, people were filling up gasoline cans, forcing others to wait longer and causing shouting matches. Lines of 20 to 25 cars waited at the few stations operating in Chapel Hill, N.C., where almost all the gas stations lacked fuel.
The central fact of the American economy in mid-2021 is that demand for all sorts of goods and services has surged. But supplies are coming back slowly, with the economy acting like a creaky machine that was turned off for a year and has some rusty parts.
The result, as underlined in new government data this week, is shortages and price inflation across many parts of the economy. That is putting the Biden administration and the Federal Reserve in a jam that is only partly of their own making.
Higher prices and the other problems that result from an economy that reboots itself are frustrating, but should be temporary. Still, the longer that the surges in prices continue and the more parts of the economy that they encompass, the greater the chances that Americans’ psychology about prices and inflation could shift in ways that become self-sustaining.
For the last few decades, companies have resisted raising prices or paying higher wages because they felt that doing so would cost them too much business. That put a damper on inflation across the economy. The question is whether current circumstances are evolving in a way that could change that.
shortage of limes, their prices spike and people use more lemons.
after a cyberattack shut down a major pipeline, are truly random events that tell us virtually nothing about underlying supply and demand or future inflation.
Some other sectors seem poised to experience price rises. Restaurants, for example, are complaining of severe labor shortages that are forcing them to curtail service or sharply raise pay for line cooks and dishwashers. If they try to reflect those higher costs in their prices, it will cause the price of food away from home to start rising faster than the (already fairly high) 3.8 percent figure over the last year.
Professional inflation-watchers are on close watch for signs that these forces might be unleashing a form of thinking about price dynamics unseen since the early 1980s, when prices rose in part because everyone expected them to.
The Fed is betting that won’t happen — that even if there are several months of surging prices, it will be at worst a one-time adjustment, and potentially something that reverses as old spending patterns return and workers return to their jobs.
“If past experience is any guide, production will rise to meet the level of goods demand before too long,” the Fed governor Lael Brainard said in a speech this week. “A limited period of pandemic-related price increases is unlikely to durably change inflation dynamics.”
For now, movements in key financial markets mostly align with the Fed view.
Futures contracts for major commodities like oil and copper, for example, suggest that traders expect prices to fall slightly in the years ahead, not rise further.
And in the bond market, even after a surge in longer-term interest rates following the high inflation reading Wednesday, most signs point to future inflation consistent with the 2 percent the Fed aims for.
Still, the level of future inflation implied by those bond prices has risen significantly in the last few weeks, meaning further moves are likely to increase worries that the inflation issues will be not-so-transitory after all. And the pattern could change abruptly if more evidence starts to arrive that the outlook for inflation is becoming unmoored.
“We aren’t obviously on the way to a very high and persistent inflation outcome,” said Brian Sack, director of global economics at the hedge fund D.E. Shaw and a former senior Federal Reserve official. “But we’re at an inflection point, in that the rise in inflation expectations to date has been a policy success, but a rise from here could become a policy problem.”
The Fed may believe that the evidence emerging in various corners of the economy is a one-time occurrence that will fade into memory before too long. The Biden administration is betting its agenda on the same idea.
Ultimately, what matters more than whatever the bond market does is how ordinary Americans who make everyday economic decisions — demanding raises or not, paying more for a car or not — view things. Can they wait for the complex machinery of the American economy to fully crank into gear?
Consumer prices jumped at the fastest pace in more than a decade in April, surprising economists and intensifying a debate on Wall Street and in Washington over whether inflation might reach levels that would squeeze households and ultimately undermine the recovery.
Investors and politicians are worried that prices will keep climbing — potentially causing the Federal Reserve to lift interest rates sharply. That could slow economic growth and send stock prices plummeting. But some economists and central bank officials said the jump in the Consumer Price Index reflected pandemic-driven trends that would most likely prove temporary.
Stocks slumped more than 2 percent on Wednesday, their biggest decline since late February.
Hanging over the debate is America’s inflationary experience in the 1960s and 1970s, when big government spending, an oil crisis, a slow-moving Fed and the final end of the gold standard converged to send price gains to double-digit heights. The central bank got things under control only by lifting interest rates to punishing levels, at a grave cost to the housing market and ultimately the job market.
Few analysts expect a return to such huge price gains, in part because the Fed has pledged to act to keep inflation under control. But if officials are prodded to withdraw economic support quickly in order to prevent another “Great Inflation,” it could spur a downturn, as sudden Fed changes have done in the past.
showed that job gains slowed sharply in April, vastly disappointing economists’ expectations.
“We have not made substantial further progress toward our labor market objective,” Mr. Clarida said Wednesday, speaking to business economists on a webcast.
Fed last year redefined its 2 percent inflation target to make it clear that it will aim for periods of slightly faster price gains to make up for months of slow ones.
Fed officials have been clear in recent weeks that as inflation pops, they need to focus on both risks: that it might take off, but also that it might sink back down after a 2021 reopening jump.
“TheFed has a fundamentally different framework. I mean, we cannot apply the playbook of the Fed in the previous recovery to what’s happening now,” said Jean Boivin, head of the BlackRock Investment Institute. “I think each time we get a number that surprises in the upside, we get an extrapolation, too much extrapolation, into a Fed tightening coming sooner.”
Matt Phillips, Jim Tankersley and Ella Koeze contributed reporting.
Patricia Fahy, a New York State legislator, celebrated when a new development project for the Port of Albany — the country’s first assembly plant dedicated to building offshore wind towers — was approved in January.
“I was doing cartwheels,” said Ms. Fahy, who represents the area.
Before long, however, she was caught in a political bind.
A powerful union informed her that most of the equipment for New York’s big investment in offshore windmills would not be built by American workers but would come from abroad. Yet when Ms. Fahy proposed legislation to press developers to use locally made parts, she met opposition from environmentalists and wind industry officials. “They were like, ‘Oh, God, don’t cause us any problems,’” she recalled.
Since President Biden’s election, Democratic politicians have extolled the win-win allure of the transition from fossil fuels, saying it can help avert a looming climate crisis while putting millions to work. “For too long we’ve failed to use the most important word when it comes to meeting the climate crisis: jobs, jobs, jobs,” Mr. Biden said in an address to Congress last month.
final approval of the nation’s first large-scale offshore wind project on Tuesday, called it an important step to “create good-paying union jobs while combating climate change.”
But there is a tension between the goals of industrial workers and those of environmentalists — groups that Democrats count as politically crucial. The greater the emphasis on domestic manufacturing, the more expensive renewable energy will be, at least initially, and the longer it could take to meet renewable-energy targets.
That tension could become apparent as the White House fleshes out its climate agenda.
“It’s a classic trade-off,” said Anne Reynolds, who heads the Alliance for Clean Energy New York, a coalition of environmental and industry groups. “It would be better if we manufactured more solar panels in the U.S. But other countries invested public money for a decade. That’s why it’s cheaper to build them there.”
There is some data to support the contention that climate goals can create jobs. The consulting firm Wood Mackenzie expects tens of thousands of new jobs per year later this decade just in offshore wind, an industry that barely exists in the United States today.
And labor unions — even those whose members are most threatened by the shift to green energy, like mineworkers — increasingly accept this logic. In recent years, many unions have joined forces with supporters of renewable energy to create groups with names like the BlueGreen Alliance that press for ambitious jobs and climate legislation, in the vein of the $2.3 trillion proposal that Mr. Biden is calling the American Jobs Plan.
recent report by the Center for Strategic and International Studies and BloombergNEF, an energy research group.
Batteries for electric vehicles, their most valuable component, follow a similar pattern, the report found. And there is virtually no domestic supply chain specifically for offshore wind, an industry that Mr. Biden hopes to see grow from roughly a half-dozen turbines in the water today to thousands over the next decade. That supply chain is largely in Europe.
Many proponents of a greener economy say that importing equipment is not a problem but a benefit — and that insisting on domestic production could raise the price of renewable energy and slow the transition from fossil fuels.
“It is valuable to have flexible global supply chains that let us move fast,” said Craig Cornelius, who once managed the Energy Department’s solar program and is now chief executive of Clearway Energy Group, which develops solar and wind projects.
Those emphasizing speed over sourcing argue that most of the jobs in renewable energy will be in the construction of solar and wind plants, not making equipment, because the manufacturing is increasingly automated.
But labor groups worry that construction and installation jobs will be low paying and temporary. They say only manufacturing has traditionally offered higher pay and benefits and can sustain a work force for years.
Partisans of manufacturing also point out that it often leads to jobs in new industries. Researchers have shown that the migration of consumer electronics to Asia in the 1960s and ’70s helped those countries become hubs for future technologies, like advanced batteries.
thousands of employees in recent decades.
Around the same time, the state was close to approving bids for two major offshore wind projects. The eventual winner, a Norwegian developer, Equinor, promised to help bring a wind-tower assembly plant to New York and upgrade a port in Brooklyn.
“All of a sudden I focus on the fact that we’re talking about wind manufacturing,” said Bob Master, the communications workers official who contacted Ms. Fahy, the state legislator. “G.E. makes turbines — there could be a New York supply chain. Let’s give it a try.”
more offshore wind turbines than any other country by the start of this year but had manufactured only a small portion of the equipment.
2017 report indicated that the country manufactured well below 30 percent of its offshore wind equipment, and Mr. Roberts said the percentage had probably increased slightly since then. The country currently manufactures blades but no nacelles.
All of which leaves the Biden administration with a difficult choice: If it genuinely wants to shift manufacturing to the United States, doing so could require some aggressive prodding. A senior White House official said the administration was exploring ways of requiring that a portion of wind and solar equipment be American-made when federal money was involved.
But some current and former Democratic economic officials are skeptical of the idea, as are clean-energy advocates.
“I worry about local content requirements for offshore wind from the federal government right now,” said Kathleen Theoharides, the Massachusetts secretary of energy and environmental affairs. “I don’t think adding anything that could potentially raise the cost of clean energy to the ratepayer is necessarily the right strategy.”
Mr. Master said the recent legislation in New York was a victory given the difficulty of enacting stronger domestic content policies at the state level, but acknowledged that it fell short of his union’s goals. Both he and Ms. Fahy vowed to keep pressing to bring more offshore wind manufacturing jobs to New York.
“I could be the queen of lost causes, but we want to get some energy around this,” Ms. Fahy said. “We need this here. I’m not just saying New York. This is a national conversation.”