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Thursday, December 3, 2020
Rich Americans have drastically slashed their personal spending during the coronavirus crisis — and poor workers have suffered as a result, researchers say. The top 25 percent of income earners are responsible for more than half of the nation’s drastic plunge in consumer spending since the start of the pandemic, according to a new study from Opportunity Insights, a Harvard-based research group. Big spenders cut back most when it came to high-touch goods and services with a bigger risk for catching COVID-19, such as restaurants, hotels and transportation, the researchers found. That had a big trickle-down effect on the businesses and workers that rely on their money. Small merchants in the most affluent zip codes lost more than 70 percent of their revenue when the virus struck, while those in the poorest areas lost just 30 percent, the study says. The layoffs that accompanied those losses followed a similar pattern — over 70 percent of low-wage workers at small businesses in rich areas lost their jobs within two weeks of the start of the crisis, compared with less than 30 percent in the lowest-rent ZIP codes. “Businesses in more affluent areas not only laid off more low-wage workers but are also posting fewer jobs to hire new workers, suggesting that the recovery may take longer in such areas,” the Opportunity Insights researchers wrote. But rich people weren’t spending less because they needed to pinch pennies, according to the study. Spending on landscaping and other luxury items that don’t require physical contact did not drop, and professional services firms saw much smaller losses, suggesting the broader reduction “was driven primarily by health concerns rather than a reduction in income or wealth,” the researchers said. The data reveal new dimensions of the worst economic downturn since the Great Depression, sparked by a pandemic that forced restaurants, retailers and other businesses to scale back operations or close altogether. The crisis led to record unemployment and the biggest economic contraction since the Great Recession before many states began to ease their lockdowns. The study is based on a real-time database Opportunity Insights built to track the economic fallout from the coronavirus using data from credit card processors, payroll companies and other private sector sources. The federal government regularly reports economic data — such as the record 13.6 percent plunge in consumer spending in April — but they are released on a lag and aren’t detailed enough for granular analyses, according to the researchers.
As part of the “COVID recovery plan”, NSW Treasurer Dominic Perrottet this week announced tax concessions to big property developers and super funds to start building so-called build-to-rent properties. The sector is dominated by individual mums and dads because they can take advantage of tax concessions on stamp duty, land tax and negative gearing which are denied to large investors. But with confidence low among these traditional investors, NSW is offering developers of properties with at least 50 residential units a 50 per cent reduction in land tax and some other benefits providing they promise to rent out the apartments for at least 20 years. In the long-term, the proposal should help even up the playing field for investment and meet Sydney’s housing shortage but its value as a stimulus measure will depend on whether developers have the stomach for risk-taking in the current environment. The Consumer Price Index this week revealed Sydney rents had fallen by 3 per cent in the past year, because of an oversupply of new apartments and a reduction in demand from international visitors. That is great news for tenants but it raises questions about whether private investors will step up. A
The group's insurance profit was down by 39.5 per cent to $741 million, impacted by higher reinsurance costs and greater claims payouts after the summer bushfires and hail storms across NSW, Victoria and Canberra. IAG reported it paid $904 million in natural perils claims, exceeding its revised guidance of $850 million and original allowance of $641 million, and chief executive Peter Harmer called for greater action on climate change, saying there was no doubt severe weather was negatively impacting the business. Loading "The high level of natural peril activity over the year underscores the importance of climate action, and the mitigation of its effects, to help make our communities safer, and we continue to advocate for businesses, government and communities to work together on this important issue," Mr Harmer said. The insurer's sliding profits were made worse by a "relatively severe hit" to investment income as a result of volatile market conditions brought on by the coronavirus pandemic, compounded by the historically low interest rate environment. The sale of IAG's Indian business for $326 million meant it was able to claw back some profits but these gains were largely set back by a higher than expected customer remediation
DISNEY PROMISED investors in spring 2019 that a new video-streaming service would win between 60m and 90m subscribers by 2024. Disney+ has outperformed that forecast spectacularly, hitting its five-year subscriber target in just eight months. In doing so it is fulfilling the digital-transformation plan set in motion three years ago by Bob Iger, Disney’s longtime boss, now its executive chairman. Marketing muscle, crucial to success, has been backed up by “The Mandalorian”, a space western inspired by “Star Wars”. Such is its popularity that Disney was late meeting demand for a plush-toy of its baby Yoda character. The pandemic added a turbocharge, dashing fears that Disney+ and other new streaming services, like HBO Max and Apple TV+, might struggle to attract time-starved consumers. Lockdowns mean extra hours to while away, notes Tim Mulligan of MIDiA Research. Amid school closures Disney+ has been as trusty a baby-sitter as baby Yoda’s nurse droid. Of all the new streaming services Disney+, which launched in western Europe in March, just as lockdowns began, is the clear winner. Even so it has not touched the leader, Netflix, which has 195m subscribers worldwide and over 70m in America alone (see
Some 751,000 American workers applied for unemployment benefits last week, continuing a recent decline amid a nationwide spike in coronavirus infections, the feds said Thursday. The latest US Department of Labor figures brought the seasonally adjusted number of initial jobless claims filed during the coronavirus pandemic to roughly 66.7 million — equivalent to nearly 42 percent of the nation’s workforce. New filings dropped from the prior week’s revised total of 758,000 as the nation continued its gradual economic recovery from the COVID-19 crisis. But they remained above the pre-pandemic record of 695,000, indicating the virus still has the job market in a chokehold. “The persistently high level underscores the notion that a full labor-market recovery is a long way off as the pandemic continues to force layoffs,” Bloomberg economist Eliza Winger said in a commentary. The steady decline in jobless claims came as the US grappled with another surge in coronavirus infections, with more than 100,000 new cases reported for the first time on Wednesday. The rising case numbers — which have led to new lockdown measures in Europe and some American cities — poses a threat to the recovery for workers, Winger said, as does the lack of more
A federal judge in California tossed a pair of Apple’s counterclaims against “Fortnite” maker Epic Games in the high-stakes legal battle over Apple’s App Store fees. Apple and Epic have been at odds since August, when the developer’s popular battle royale-style game “Fortnite” was booted from the App Store after introducing an in-app payment system which would have allowed it to dodge the 30-percent cut that Apple takes from in-app purchases. The iPhone maker had asked for “restitution and disgorgement of all earnings, profits, compensation, benefits, and other ill-gotten gains obtained by Epic as a result of its conduct,” a claim that judge Yvonne Gonzalez Rogers viewed as a bridge too far. ”This is a high-stakes breach of contract case and an antitrust case and that’s all in my view,” the judge said, according to Bloomberg, telling Apple’s lawyer that “You can’t just say it’s independently wrongful — You actually have to have facts.” A judge in October had ruled that Apple could bar Epic’s “Fortnite” game from its App Store but must not harm Epic’s developer tools business, including the “Unreal Engine” software, which is used by hundreds of other video games. The closely watched saga could have ripple
Ferrari’s shares are firing on all cylinders — and its cars will be guzzling gas for the foreseeable future. The Italian luxury automaker’s shares surged more than 7 percent Tuesday after it reported strong demand for its highly profitable sports cars such as the Monza. Ferrari expects earnings at the top of its previous guidance range, clocking in at $1.3 billion, with Chief Executive Louis Camilleri telling analysts that orders were more or less back to pre-pandemic levels. Camilleri likewise poured cold water on the idea that Ferrari might eventually switch its entire lineup away from gas-powered engines, saying he doesn’t think the company will ever go 100-percent electric. Indeed, the 65-year-old executive added that he does not believe Ferrari will “see 50 percent within my lifetime.” “There should be cost savings with EVs longer-term, but they won’t be extravagant,” he said. “We will get larger improvements from focusing on other parts of our business, including Formula 1.” Ferrari said shipments were recovering well following a seven-week freeze of production during the first wave of the coronavirus earlier this year. Though shipments were down 6.5 percent year-over-year, customers were buying its 12-cylinder vehicles at a clip 15 percent higher than
Airbnb will prohibit one-night rentals over Halloween weekend as part of its ongoing effort to crack down on party houses. The action, announced Friday, comes nearly a year after a deadly shooting at an Airbnb in Orinda, California. Five people were killed in the shooting, which happened during an unauthorized Halloween party. San Francisco-based Airbnb said it will ban one-night rentals of entire homes in the US and Canada on Oct. 30 or Oct. 31. Previously booked one-night rentals will be canceled and Airbnb will offer refunds. Airbnb said it will also look more closely at two- and three-night reservations during Halloween. A guest may be denied, for example, if they try to book a whole home close to their own home during that period and they don’t have a history of positive reviews on Airbnb. Airbnb has taken a series of steps to crack down on parties since last year’s shooting. Last November, it started manually reviewing US and Canadian reservations to weed out suspicious rentals. The company’s efforts have intensified as it prepares for an initial public stock offering, which could come later this year. In July, the company banned US and Canadian guests under age 25 with fewer than three positive reviews from booking entire homes close to where they live. That policy was later expanded to the United Kingdom, Spain and France. And in August, Airbnb banned parties worldwide and limited occupancy at its rentals to 16 people. Airbnb has also warned guests and hosts that it could take legal action against violators. In August, for the first time, it started legal proceedings against a guest who held an unauthorized house party in Sacramento, California.
Amazon said it plans to house more than 2,000 employees at Manhattan’s historic Lord & Taylor building under a nationwide expansion of its corporate offices. The Seattle-based e-tailing giant said Tuesday it will hire the workers to fill the landmark tower on Fifth Avenue over the next few years as it grows its Big Apple “tech hub” — a plan that looks like a bold bet on offices, even as the pandemic forces most of its employees to work from home. Still, Amazon said it won’t start moving into the new 630,000-square-foot Midtown office until 2023. The new staffers will join Amazon’s 800 other corporate and tech workers in New York City in supporting its advertising, devices, music, video-streaming, fashion and other businesses. The e-commerce colossus is also expanding its corporate offices in Dallas, Denver, Detroit, Phoenix and San Diego with plans to add about 1,500 jobs across those cities, according to a press release. “As we expand our tech hubs and continue to invest in communities across the country, we’re excited to be creating new jobs and investing in New York with a new office in Manhattan that will allow us to accommodate the organic growth of our business teams in the city,” Ardine Williams, Amazon’s vice president of workforce development, said in a statement. Amazon planned to bring thousands of staffers to the 11-story building at 424 Fifth Ave. when it acquired it for about $1.1 billion, The Post reported in March. WeWork had sought to turn the longtime home of bankrupt retailer Lord & Taylor’s flagship store into its own corporate headquarters, but scrapped the plans amid a slew of scandals that derailed its public offering. Amazon and other tech giants have let employees work from home amid lockdowns aimed at controlling the coronavirus pandemic, which has also driven a surge in demand for online shopping that’s led Amazon’s profits to explode. The company has said employees can work remotely until Jan. 8, but Williams told the Wall Street Journal most of its staffers will eventually return to work in person. Amazon did not answer The Post’s emailed questions about what will happen after January. Amazon unveiled its latest New York expansion about a year and a half after abandoning plans for a sprawling Queens campus that would have created 25,000 jobs in exchange for about $3 billion in tax breaks and grants. The company walked away after local officials and activists criticized the incentive package.
Advertisement "Victorian students deserve high-quality financial literacy, free from commercial interests – that’s why we’re banning financial institutions from delivering school banking programs." "The Victorian curriculum sets our expectations for financial literacy and that must be our focus. It is time to draw a line under this issue." The state government's concerns include complaints from students, teachers and families about the quality of the education and the financial literacy outcomes of the programs. There are also concerns about the tactics some banks have used, including luring children with prizes to build brand loyalty in young children. Another concern is the interest rates offered through the school banking programs are low compared to adult banking products. Consumer group Choice has called upon other state and territory governments to follow the Victorian government’s move to ban the programs. "Programs like the Commonwealth Bank’s Dollarmites are little more than slick marketing programs aimed at primary school aged children," Choice chief executive Alan Kirkland said. "Choice has never been able to find any evidence that programs like the Dollarmites have any impact on long-term savings habits. The only impact they have
JACK MA WAS in a triumphant mood shortly after Ant Group, his Chinese fintech firm, priced its initial public offering—set to be the world’s biggest ever, with almost $40bn worth of shares sold. Speaking at a summit in Shanghai on October 24th, he chided regulators for being too focused on preventing financial risks. Red tape, he said, only held up innovation. Ten days later his words have come back to haunt him. Less than 48 hours before its stock was to begin trading in Shanghai and Hong Kong, Ant was forced by Chinese regulators to halt the flotation. The group said in regulatory notices to the Hong Kong exchange that the IPO, scheduled for November 5th, had been suspended because the company “may not meet listing qualifications or disclosure requirements”, after the regulator conducted an interview with Mr Ma and other executives. The filings also mentioned “recent changes in the fintech regulatory environment”, hinting that newly published rules may have got in the way. The sudden suspension also suggests that some powerful officials may be displeased with Mr Ma, a self-made man who, by the conservative standards of big business in China, has an outspoken streak.
Ever been in an airport bathroom and wondered when it was last disinfected? Now there’s an app for that. General Electric has a new app that lets travelers keep tabs on how often airport surfaces are sanitized in an effort to make people more comfortable flying during the coronavirus pandemic. The first proving ground for the system is Albany International Airport, where it was formally launched Thursday. Travelers can use their smartphones to scan QR codes posted around the airport that link to a webpage showing when the areas were last wiped down, swept and mopped. “We’re trying to be very specific, like when your Uber pulls up and you know who your driver is and their background,” Andrew Coleman, general manager of GE Aviation’s digital group, told The Post. Workers responsible for cleaning those spaces, “from check-in kiosks to bathrooms to Chik-fil-A,” use GE’s “Wellness Trace” app to enter details about how they last tidied up, Coleman said. Travelers can also download the free app or just use their phone camera to perform a spot check. The app’s public rollout comes as the aviation industry grapples with immense pressure from the coronavirus pandemic. US airline passenger volumes are still