Spirits are high among the International Brotherhood of the Teamsters as negotiations with shipping giant UPS stay frozen ahead of a July 31 contract negotiation deadline, The Hill found in a range of interviews.

If the Teamsters strike, some 340,000 drivers, warehouse workers and other employees could walk off the job in one of the largest labor actions in U.S. history.

The potential strike is part of surging labor activity in the U.S. and around the world as a result of elevated inflation, which central banks have been attempting to fend off by raising interest rates in an attempt to take the wind out of the labor market.

In the interim, companies have been raking in record profits during the recovery from the pandemic, changing the distribution of value in the economy from labor payments to returns on investment.

Teamsters president Sean O’Brien told The Hill that the economic model must change, and UPS needs to start forking over more of its profits to improve the working conditions of its employees as well as returning them to the people who own the company.

“I want to see them reward their people. I want to see them give them their biggest raises increase they’ve ever had because they’ve made the biggest profits they’ve ever had,” O’Brien told The Hill on Friday at a dry-run for the strike outside of a UPS facility in Brooklyn, N.Y.

UPS training nonunion drivers complicates bargaining efforts

As Teamsters members were making noise in Brooklyn on Friday, UPS said it will start training nonunion workers — or scabs — to prevent a labor disruption.

“Over the coming weeks, many of our U.S. employees will participate in training that would help them safely serve our customers if there is a labor disruption,” the company said in a Friday statement.

In a company filing, UPS has listed “further increased workers’ compensation” among factors that “could materially adversely affect us.”

It has also indicated the sensitivity of labor is part of its business model and suggested a limited capacity to train and hire more people.

“If we are unable to hire, properly train or retain qualified employees, we could experience higher labor costs, reduced revenues, further increased workers’ compensation and automobile liability claims, regulatory noncompliance, customer losses and diminution of our brand value or company culture, which could materially adversely affect us,” the company said.

Teamsters spokespeople said last Friday that the hiring of nonunion workers is an affront to the collective bargaining process and makes negotiations more difficult.

“What an insult this is to the hardworking men and women who do backbreaking work every day to make this company $100 billion a year,” a Teamsters spokesperson told The Hill. “The full-time drivers, and the part-time workers making poverty wages, deserve better from this company.”

UPS drivers make $18.05 an hour in Arkansas, $17.63 in Oklahoma and $21.02 in Connecticut, according to Indeed.

UPS made $11.5 billion in net income in 2022, as profits exceeded fourth-quarter expectations. The company’s 2022 operating profits hit more than $13 billion, for an operating margin of 13 percent.

30 percent of parcels in the US could be affected by a Teamsters UPS strike

Parcel volumes diverted as a result of the strike could be up for grabs, able to be snapped up by competitors.

“UPS handled about 18.6 million parcels in the U.S. per day in the first quarter. Under a contingency plan, it expects to handle 4 million parcels on its own. The balance of about 14.6 million parcels, most of which would be ground deliveries, would be subject to diversion,” logistics publication Freightwaves reported Monday.

About 30 percent of that — or 4 million parcels a day — could be lost, Freightwaves said, citing Satish Jindel, president of consultancy ShipMatrix.

Part-time workers remain a major issue in negotiations

The real impasse now appears to be wages for part-time workers.

“When they moved on to some of the part-timer issues, it was like UPS dug their heels in,” Rocky DiPaolo, an organizer with the Teamsters Local 804, told The Hill in an interview.

O’Brien grabbed the national spotlight after a heated confrontation in the Senate earlier this year with Sen. Markwayne Mullin (R-Okla.), which the senator followed up by challenging O’Brien to a literal cage match.

“The cage match that I’m focused on right now is the cage match against corporate America. You know, when you’ve got a little mind, you know, you say stupid things. He needs to step up,” O’Brien told The Hill.

Mullin told The Hill last week he had not yet received a response from O’Brien to his offer.

Is Amazon next on the Teamsters' agenda?

The dynamics playing out in the potential strike are in part a result of the ascendancy of e-commerce and various types of online businesses that, along with inflation, have disrupted labor relations and gotten people riled up.

“UPS was being foolish because they’re trying to organize Amazon — yes, begging us to organize Amazon and level the playing field a little bit,” Rocky DiPaolo of Teamsters told The Hill.

The unions are preparing for the strike by informing members of their strike-associated benefits, which range from $200 to $520 per week, depending upon how the employees are classified.

Teamsters tell White House not to get involved

Sean O’Brien has asked the White House repeatedly not to get involved in the negotiations.

"We have taken a strong position with the White House that — you know, in my neighborhood where I grew up in Boston, if two people were having a disagreement and you had nothing to do with it, you just kept walking. We echoed that to the White House on numerous occasions," O'Brien said on a call with his union on Sunday.

Despite the request, the White House has been in touch with both sides, according to spokesperson Karine Jean-Pierre.

The White House also got involved in negotiations between railroad workers and bosses last year, effectively ending their bargaining process at Christmas.

“The labor market’s cooling without there being any real distress associated with it,” Yellen told Bloomberg News in an interview Tuesday.

The U.S. labor market added 209,000 jobs in June, according to data from the latest jobs report, slightly lower than the average of 278,000 jobs added per month over the first six months of the year. That's also well below the average of 399,000 jobs per month in 2022.

The cooling labor market suggests possible relief from sky-high inflation consumers have weathered for the past two years. Inflation ticked down to 3 percent annually in June, well below last year's 9 percent peak.

Aside from sectors like tech that have experienced massive layoffs, Yellen said the Treasury is not seeing employers lay off more workers. "It’s just the intensity with which they’re trying to add to their workforce seems like it’s reduced somewhat,” she said.

In addition to shifts in the job market, Yellen said housing costs and vehicle prices are likely to play a role in keeping costs down.

The Treasury secretary called the falling price of used cars a “significant contributor” to slowing inflation. Used car prices dropped by 4.2 percent in June, according to the Manheim Used Vehicle Value Index, the largest monthly drop since the start of the coronavirus pandemic.

“Inventories are being rebuilt. The whole supply chain in autos is improving. So there’s reason to believe that we could get some continued benefit from that,” Yellen said.

She also alluded to the potential need to reduce corporate profit margins rather than wages to rein in rising prices.

“Profit margins are also quite high, and they have some cyclical dimension,” she said. “So, I don’t want to go so far as to say you couldn’t see inflation come down without further moderation in wages.”

Yet Yellen cautioned against undue optimism based on just “one month’s numbers.” 

In response to worse than forecasted economic data from China, Yellen said Monday that she does not expect a U.S. recession but acknowledged China’s slow growth could spill over into the global economy.

But the Treasury secretary identified other points for optimism in the consumer price data.

“Housing had a reduced contribution, and there’s every reason to believe that that will continue and come down further,” she said. “That’s an important thing that influences core inflation.”

The Executive Leadership Council (ELC), a global organization of more than 800 global Black executives, told American CEOs that the Supreme Court’s decision should not affect their efforts to implement DEI practices. 

“From your employees, to your supply chain and the customers and communities you impact, it is critical that you continue to use DEI as it was intended, as a mechanism for creating an inclusive culture,” the ELC said. “Initiatives can include providing economic opportunity by expanding your recruiting efforts, connecting all leaders to your culture through employee resource groups, and providing interview training to reduce biases. In doing so, you can serve and contribute to the success of your organization.”

Though it is illegal for corporations to make any hiring and firing decisions based on race, advocates have expressed concern that the court’s ruling to ban race-conscious admissions in higher education could negatively impact DEI programs in the workforce. 

Even before the Supreme Court’s ruling, DEI initiatives have come under fire in many Republican-led states. This year, Florida Gov. Ron DeSantis, who is also campaigning for president, signed a bill into law banning his state's public colleges and universities from allocating money on DEI programs.

Texas Gov. Gregg Abbott followed DeSantis’s lead soon after, signing a bill banning DEI offices at public colleges and universities. The bill also banned mandatory diversity training for students and employees.

In all, 22 states this year have introduced anti-DEI legislation, though not all have passed, according to the Chronicle of Higher Education.

Meanwhile, one provision in the recently passed National Defense Authorization Act eliminates DEI programs and staff in the Defense Department. 

But the ELC is urging business leaders to continue diversity, equity and inclusion initiatives.

“While the recent SCOTUS ruling overturned affirmative action in higher education, it does not impede you from continuing to exert successful practices that serve and advance your efforts today,” the group wrote.

“The common thread that we can all build on is that we are all Americans who want to create the best future for our country,” the letter continues. “The research clearly shows that when we establish more inclusive and diverse environments, our corporate structures and communities thrive and are more economically sound.”

Inclusive companies are more likely to hit financial targets by up to 120 percent, according to Forbes. Companies can also reach a more diverse audience with a more diverse workforce, and studies also show that diverse organizations innovate at a faster rate.

“We must seek to abolish these negative narratives that are intended to set us back and instead embrace the diversity of our country so that everyone wins,” ELC said. “Now is not the time to retreat, but to boldly stand as we advance equitable opportunities for all and continue to build a strong and flourishing economy.”

“While these technologies have enormous potential, they also carry risks of violating fair lending laws and perpetuating the very disparities that they have the potential to address,” the Fed’s vice chair of supervision, Michael Barr, said at the National Fair Housing Alliance (NFHA) 2023 national conference.

While new artificial intelligence tools could relatively cheaply expand credit to more people, machine learning and AI may also exacerbate bias or inaccuracies inherent in data used to train the systems or make inaccurate predictions, Barr added.

The Fed recently announced two policy initiatives to address appraisal discrimination in mortgage transactions.

On June 1, the Fed and several agencies requested public comment on a proposed rule to implement quality control standards in automated valuation models. Under the proposed rule, institutions that engage in certain credit decisions would be required to adopt policies, practices and control systems that ensure a "high level of confidence" in automated estimates and protect against manipulation of data.

A week later, the same agencies invited public comment on guidance to help financial institutions incorporate “reconsiderations of value” into their home appraisal process. Valuations may contain errors, omissions or discrimination that could affect the value of the appraisal, the agencies argued, and a reconsideration of value could help mitigate the risk of improperly valuing real estate.

“Homeownership is an important way for families to build wealth, and we should give them every opportunity to share in those benefits,” Barr said, noting he was “fully supportive” of both policy initiatives.

A quartet of federal agencies, including the Federal Trade Commission and the civil rights division at the Department of Justice, announced in April their commitment to cracking down on automated systems that cause harmful business practices.

“Fair lending is safe and sound lending,” Barr said, soliciting applause from the audience.

“When have you ever heard a vice chair of the board of governors speak against algorithmic bias?” NFHA President and CEO Lisa Rice asked. “I’m telling you, I’m excited.”

Members of Generation X don’t have much stored in savings, according to a new report from the National Institute on Retirement Security (NIRS).

The report found that the “forgotten generation” faces a “dismal” retirement future. The typical Gen X household — with those born between 1965 and 1980 — has around $40,000 saved for retirement, while the bottom half of savers only have a few thousands banked.

“Generation X grew up in the shadow of the postwar economic boom that so greatly benefitted their generation predecessors, the Baby Boomers," the report says. "Many in Generation X spent their formative years as the United States grappled with the oil crisis, ‘stagflation,’ and a growing sense of disillusionment following the Watergate crisis."

Slightly over half of Gen-Xers have employer-sponsored retirement plans, the report found. Most members — regardless of race, gender or income — are also failing to meet retirement savings targets.

Researchers blame an increase in college debt and bad luck in wider economic conditions for the lapse. They also note the rapid decline of pension plans, putting the burden of retirement planning more onto the retiree instead of an employer.

About 18 percent of Gen Xers have no retirement savings, the report states.

The NIRS advocates for additional structured retirement plans to make up for the decrease in pensions over time. 

"Accruing savings takes time, and Social Security alone won't provide enough retirement income," NIRS research director Tyler Bond said in a statement. "So it's critically important that we change course quickly. The status quo means we are looking at elder poverty for many Gen-Xers and pressure on their families for support."

Gen X isn’t the only generation that could face retirement trouble. U.S. Census data found that nearly half of Baby Boomers and more than half of all workers don't have any retirement savings. 

Opinion polling released in May also found that less than half of Americans expect to live a comfortable retirement, a decrease from previous marks.

Shawn Fain, the union's president, said the auto workers will have a chance to attain larger concessions from the companies — General Motors (GM), Stellantis and Ford — in their new contracts “only if our members get organized and ready to strike.”

The auto union is seeking to secure its members’ place in the emerging electric vehicle (EV) market — specifically joint-venture plants often operated by both the auto manufacturers and companies that make the batteries needed for EVs.

“A new industry is being born,” Fain said in a video message to the union members. “This is our defining moment. Our communities and our country deserve good, safe, living-wage union jobs.”

According to analysts studying the auto industry, EV sales could jump from 7 percent to 40 percent of new vehicle sales in the U.S. by 2040. However, because of the manufacturing ease of EVs, it could take nearly 40 percent fewer workers to produce them.

Negotiations between the UAW and Ford and Stellantis are set to start this week and with GM next week. The four-year contracts between the union and the three auto giants ends Sept. 14.

"Stellantis and the UAW have a long history of working together, and our intent is to continue this partnership," Jodi Tinson, the senior manager for North America media relations and content at the company, said in a statement.

"Our focus will be on negotiating a contract that will ensure our future competitiveness in today’s rapidly changing global market and preserve good wages and benefits that recognize the contributions of our represented workforce."

The Hill has reached out to Ford and GM.

The Associated Press contributed to this report.

Bill Dudley, who served in his position at the New York Fed for about 10 years, told Bloomberg Wednesday that the Fed should be cheering the Labor Department report that inflation fell from an annual rate of 4 percent in May to 3 percent last month. 

But he said he does not believe the report will stop the Fed from raising interest rates because it has signaled that it will review the “totality” of the data on prices for the past three months when deciding what to do at its July meeting. 

Dudley said the “reality” is that the economy is “doing quite well.” Gross domestic product grew 2 percent in the first quarter.

“So the economy really hasn’t slowed down enough to make the Fed confident that they’re going to see that slack in the labor market that they want,” he said. 

The Fed’s committee that sets interest rates decided to keep the rate steady at 5 percent to 5.25 percent last month, which marked the first time it did not raise rates since January 2022. The committee said at the time that the pause would allow it to assess additional information and the implications of its policies. 

Inflation, which had been spurred on by the recovery from the COVID-19 pandemic and continuing supply chain issues, has consistently fallen over the past year from its high of a 9.1 percent annual rate last June. 

Dudley said the most recent inflation report raises the possibility of July being the last rate hike, which he said is “certainly possible.” 

He said the Fed will take a break from raising rates in the meeting after the one in July, which is scheduled for September, and the next meeting in November is a “long time” away from now. 

“I can imagine by that point that it’s possible they’ll see enough news that makes them confident that they’ve done enough,” Dudley said.

Consumer prices rose 3 percent annually in June and 0.2 percent last month alone, according to inflation data released Wednesday by the Labor Department.

The consumer price index (CPI) posted its smallest annual increase since March 2021, as inflation fell from a 4 percent annual rate in May. Without food and energy, prices rose 4.8 percent on the year and 0.2 percent in June, the smallest one-month increase since August 2021.

Cruising along: US economy grew much faster in first quarter than previously believed

Inflation came in slightly lower than economists had expected, after declines in used auto prices, airline fares and household furnishings helped bring down overall price growth.

Housing costs were the biggest driver of inflation, according to the Labor Department, fueling more than 70 percent of price growth in June.

Inflation falling steadily

The June slowdown in price growth is another sign that the U.S. is finally past the burst of inflation set off by the recovery from the COVID-19 pandemic and years of supply chain issues.

After peaking at an annual rate of 9.1 percent in June 2022, inflation has fallen rapidly back toward pre-pandemic levels.

Looking up: Economic optimism best since early 2022, Gallup finds

Energy prices are down 16.7 percent from last year, when Russia's invasion of Ukraine and the sanctions imposed in response caused oil and natural gas prices to spike. Food prices are up 5.7 percent from a year ago, but grocery store prices have either fallen or stayed flat in each month since March.

"Prices for everything from eggs to used cars dropped in June, causing a big deflation in inflation. By one measure, inflation is just one-third of what it was a year ago, said Robert Frick, corporate economist with Navy Federal Credit Union, in a Wednesday analysis.

"However, this is not yet a turning point," Frick continued. "Core inflation will prove tougher to beat."

Where prices are still rising quickly

The overall decline in inflation should be somewhat reassuring to the Federal Reserve as the central bank battles price growth; the Fed is trying to bring inflation back down to an annual rate of 2 percent with a string of rapid interest rate hikes, which tend to slow the economy.

The overall inflation rate is within striking distance of the Fed's goal. But "core" inflation — which strips out food and energy prices — is at an annual rate of 4.8 percent, still well above the bank's target.

Higher and higher: Powell expects more rate hikes with inflation pressures still running ‘high’

The Fed focuses on core inflation, because food and energy prices are driven by factors far outside the bank's control. The steady climb in housing, transportation, vehicle insurance and recreation prices will likely keep the Fed on track to raise rates later this month, after briefly pausing in June.

"One month of encouraging CPI data isn’t enough for the Fed to make a dovish pivot, particularly as it seeks to maintain credibility with financial markets," said Morning Consult chief economist John Leer.

Updated at 9:35 a.m. ET.

The money saved not paying on loans during this period helped some borrowers build savings or handle the rising costs of household goods and other necessities, including rent. 

Some analysts predict that the added costs of loan repayments could slash savings and force borrowers into difficult housing situations. 

“While the income needed for monthly rent payments remains the same with the resumption of loan payments, renters especially from the lower- and middle-income group will be forced to make difficult housing decisions and sacrifice some aspects to the quality of life,” Moody’s Analytics senior economist Lu Chen and economist Mary Le told The Hill. 

Borrowers who immediately resume payments in October will owe roughly $275 per month, Moody’s projected in a recent report. That could lead those in debt, especially low income borrowers, to look for alternatives, such as moving in with friends or family or finding a less expensive home.

Payments could also take a toll on younger borrowers, whose student loans make up a larger share of their individual debt compared to older generations. Student loans make up about 30 percent of the total debt for borrowers between the ages of 18 and 29, Moody's found.

Separately, polling conducted by The College Investor found that most debt holders are concerned about payments resuming, while more than half do not feel financially ready.

About 57 percent of 1,200 borrowers polled reported using the money saved by not making student loan payments to supplement essential costs, such as food and housing.  

Homeowning dreams delayed by payments

The extra monthly costs — along with rising mortgage rates — may also put the dream of homeownership out of reach. 

“The pause along with other pandemic incentives have driven up the savings for many, but higher cost of living caused by inflation and elevated interest rates made saving for future mortgage payments more financially challenging,” Moody’s Chen and Le said. 

“For first time buyers, this resumption of student loan payments serves as a disadvantage as it can make home ownership less accessible or even delay their ability to purchase a home,” they added. 

'A pipe dream at best'

Jeffrey Eden, a graduate student who originally graduated into a recession with a bachelor's degree in 2011, told The Hill that student loans over the years have limited his options and even served as an incentive to pursue more education. 

Now in the second year of his second master’s program, Eden, originally from Rhode Island, will enter the initial phase of repayment in forbearance. But he knows once he graduates again, the burden of debt will drastically impact where he lives. 

“The cost of living in my home state is simply too much. Of course, like so many others, homeownership would be great, but I’m a pragmatist and have made my peace with the fact that such a thing is a pipe dream at best,” Eden said. 

“We were saving for many years to move to NYC, but one car repair, two clinic visits, and of course, student loans, depleted those savings years ago. We’re essentially stuck and trying to survive; that is my generation’s way, after all,” he added. 

How housing costs spiked

Housing costs have risen substantially throughout the pandemic for both renters and homebuyers. A lack of supply on the rental side met significant demand and was compounded by the reentry of potential homebuyers, who were driven back toward rentals by high mortgage rates. 

Although rent prices are cooling in parts of the country, they remain stubbornly high while evictions are rising in several cities. Full-time workers across the country need to earn $23 per hour to afford a modest one-bedroom apartment at a fair market price, according to a report from the National Low Income Housing Coalition (NLIHC).

Workers earning minimum wage must work 86 hours per week to afford the same rental, according to the report.

Andrew Aurand, vice president of research at NLIHC told The Hill that low-income renters are already making sacrifices to make ends meet and spending far less on other necessities to pay for housing. 

“If they are forced to move because of an eviction or even if they decide on their own that they have to move, it can be very difficult for them to find a home they can afford and, instead, sometimes move-in with family or friends, which is often not sustainable, or into housing that is inadequate for them either in size or quality.” 

What borrowers can do as payments resume

As borrowers brace for impact, student loan experts are offering advice on how to prepare. Borrowers could consider signing up for automatic payments — which could save them about 0.25 percentage points on interest — make a budget and update information with their loan servicers, student loan expert Mark Kantrowitz told The Hill. 

Meanwhile, the Biden administration is implementing new programs that could cover some interest and lower monthly payments. 

The administration said eligible borrowers can enroll in the REPAYE plan, which will be converted to the SAVE plan this fall. 

The new plan will cut monthly payments from 10 percent of discretionary income to 5 percent and ensure unpaid monthly interest won’t cause a borrower’s debt to grow if they’ve been making their monthly payments. 

Still, student loan repayment notices are going out, setting in motion what Eden called an existential dread.  

“I started tallying up the monthly cost on top of all our other expenses and sure, it’s doable, especially if I skip a meal here and there and just ignore when I’m sick or something. It’s why I’m eager to either land a professorship or look into PhD study,” he said.

Updated at 9:30 a.m.

In a Monday letter to Powell, Comer and Rep. Lisa McClain (R-Mich.), chair of the subcommittee on Health Care and Financial Services, said the committee had received some publicly available and nonpublic confidential supervisory information they requested from the Federal Reserve Bank of San Francisco in late April.

But Comer and McClain said they had not received adequate responses to requests for examination and audit reports, meeting minutes, communications and other information.

The committee is investigating the role the San Francisco Fed, which was tasked with supervising SVB, and other state and federal regulators played in the bank’s April 27 failure.

Regulators raised concerns about risks within SVB and Signature Bank, which collapsed after customers withdrew billions following the failure of Silicon Valley Bank, but a Government Accountability Office report found they did not take steps to address serious mismanagement at the banks.

Former SVB CEO Gregory Becker was a member of the San Francisco Fed board, raising additional questions about regulatory oversight ahead of the collapse.

The San Francisco Fed responded to the initial request with publicly available documents, Comer and McClain wrote, including an overview of the Federal Reserve System and a copy of the Board’s postmortem review of the Fed’s supervision of SVB.

San Francisco Fed officials later informed committee staffers “the Fed Board was asserting privilege over a majority of the requested materials.”

“We have received the letter and plan to respond," a Fed spokesperson said in an email.

The San Francisco Fed did not immediately return a request for comment.

Committee staffers discussed concerns about the assertion with the Fed board staff on June 1 and secured an agreement to receive nonpublic materials and other documents, according to the letter.

Comer and McClain said they had received some nonpublic confidential supervisory materials but that they "have not received any communications responsive to our requests."

They requested additional information that could provide new insights into the failure to respond to the initial request.

“We look forward to continuing working with you and your staff so that the Committee can receive a fully responsive production,” Comer and McClain wrote.

The index, which is a measurement of wholesale prices of used vehicles, also saw a drop of 10.3 percent from a year ago.

“The 4.2 percent drop is among the largest declines in MUVVI history and the largest decline since the start of the pandemic in April 2020 when the index plunged 11.4 percent,” Chris Frey, senior manager of economic and industry insights for Cox Automotive, said in a statement.

“The year-over-year decline was also large, another 2.7% drop from May’s annualized 7.6% decline, but as mentioned last month, auction prices were lower in the fall last year, and we expect these increasing year-over-year moves to shrink in the months ahead as the market normalizes,” Frey added.

The report noted that June’s decrease in price was a record for the month and had been “slightly impacted” by the seasonal adjustment. Compared to June 2022, prices for pickups and vans lost less than the industry as a whole, at 6.6 percent and 8.5 percent, respectively.

Sports cars were the worst off, dropping 14.8 percent in prices compared to last year, while compact cars and midsize cars each dropped by more than 12 percent from June 2022.

“Buyers at auction look to have taken an early summer break, and while used retail inventory has been improving over the last several weeks, we are expecting less volatility in wholesale price movements through year-end,” Frey said.

The report also found that used vehicle retail sales in June decreased 4 percent compared to May but are estimated to be down by 6 percent compared to last June.

Used car prices surged since the pandemic hit in 2020; prices jumped up 40 percent to an average of nearly $29,000 between early 2020 and May of this year, the Associated Press reported.

The workers, including nannies, house cleaners and home care workers, have launched campaigns in places including Miami, where two organizations led a mid-June march calling for a "Domestic Workers' Bill of Rights."

That same week, workers rallied in Philadelphia's Rittenhouse Square — a tony area with well-staffed homes — as legislators from California to Rhode Island considered bills strengthening the labor rights of domestic workers.

The idea of the Domestic Workers Bill of Rights has been a centerpiece of the push for better working conditions for nearly two decades, ever since activist Ai-jen Poo envisioned the National Domestic Workers Alliance (NDWA) around the concept.

Founded in 2007, it has grown into a national advocacy organization. In April, it co-hosted the Care Workers Can’t Wait Summit in Washington, D.C., along with major labor and political organizations SEIU; AFL-CIO; the American Federation of Teachers; the American Federation of State, County and Municipal Employees; Community Change; MomsRising; Care in Action; and Care Can’t Wait.

"It's really the first time that you have domestic workers, home care, child care, early educators, nursing home workers all together to say, 'Our jobs are the jobs of the future. Our work is here to stay,'" Poo told The Hill in a recent interview.

Though specific legislative proposals vary from state to state and city to city, the main thrust of the Domestic Workers Bill of Rights is to remove labor law exclusions implemented for domestic workers starting in the New Deal era.

The coalition with care workers outside the home is a strategic move for domestic workers; implementing the bill of rights has been a challenge even in jurisdictions that have enshrined it into law.

Philadelphia, for instance, passed the Domestic Workers Bill of Rights in 2020, but according to a report by The Philadelphia Inquirer, 44 percent of workers surveyed by NDWA said their employers had violated provisions of the bill.

A national bill, first introduced by Rep. Pramila Jayapal (D-Wash.) in 2019, would guarantee sick leave, require written contracts, implement meal and rest breaks, establish protections against workplace harassment and protect workers from losing pay due to last-minute cancellations.

"We have to pass legislation. We need to be able to invest in this workforce. We need to be able to train, add to and provide rights on the job," Jayapal said.

"I have the Domestic Workers Bill of Rights, which also for the first time would provide the same protections to domestic workers that other workers get."

With Republican control of the House, it's unlikely the bill will get a vote. But Jayapal lauded President Biden for an April executive order that expanded access to grants to make care services more affordable and directed the Department of Labor to publish a sample employment agreement.

"The idea that the Department of Labor and the federal government will say, 'Actually, this is a job that should have a contract and an agreement, the work agreement should be clear like any other job in America,' is a game changer," Poo said. 

"Because if you are a domestic worker, and you are in a one-to-one relationship with your employer, you really don't have negotiating power."

Millions of workers face pay gap

According to a 2022 study by the Economic Policy Institute (EPI), domestic workers face a 25 percent pay gap: "The average domestic worker is paid 75 cents for every dollar that a similar worker would make in another occupation."

The study identified 2.2 million domestic workers in 2021, though researchers wrote it is “highly likely” that figure is a significant undercount, since many workers are paid “under the table,” and a significant number are undocumented immigrants, who are generally underrepresented in surveys.

In that population, the EPI identified 304,557 house cleaners, 211,675 nannies, 239,942 child care workers who tend to children in their own home, 148,897 nonagency home care aides, and 1,253,899 agency-based home care aides.

The poverty rate among domestic workers generally is 8.5 percentage points higher than the poverty rate among similar workers in other industries, and the twice-poverty rate — workers whose family income is below twice the official poverty line — is 17.8 percentage points higher, according to the EPI.

The twice-poverty rate is often used by researchers as a cutoff to gauge whether a family has enough income to realistically make ends meet.

The economic portion of the study, which used data compiled between 2016 and 2018, also found large gaps in benefits compared to workers in other economic sectors.

While 49 percent of workers analyzed in the study had employer-paid health insurance coverage, only 19 percent of domestic workers had coverage. Similarly, 33 percent of workers overall had some sort of employee provided retirement plan, compared to only 9 percent of domestic workers.

Coverage rates were higher for agency-based home care aides — 25 percent had health coverage and 13 percent retirement benefits — but still significantly lower than the national average.

Labor law exclusions for domestic workers

Those working directly for domestic employers are often left to their own devices to negotiate their working conditions.

That unique relationship was at the heart of creating labor law exclusions for domestic workers in the first place, but workers and advocates say those exclusions have led to abuses from wage theft to workdays with no set start or end time and no formal breaks.

Those abuses often go unreported or unpunished for a variety of reasons, including fear of reprisals, and in many cases undocumented workers' fear of approaching authorities.

Employers of domestic workers are also AWOL in public discussions of the topic. At a Rhode Island House Labor Committee hearing on the Domestic Workers Bill of Rights earlier this year, no employers or employees in the field showed up to testify, reported the Providence Journal.

Yet, at a California Senate floor debate on the state's version of the bill, California state Sen. María Elena Durazo (D), the lead sponsor of the bill, said employers largely support the proposal because it's been molded to the unique needs of the industry.

"That's what the domestic workers are looking for. It's, 'Fix the problem,' it's not a, 'Hey I gotcha,'" Durazo said.

"The proof is in the pudding that they've spent several years coming up with what are rational types of guidelines, and that's why employers are so supportive — household employers are so supportive because they see that it makes sense. When you have safer homes, it's safer for everybody."

Opposition to the legislation, however muted, rests on the challenges of policing labor laws in private domiciles.

California state Sen. Brian Dahle (R), who in 2022 mounted a shoestring campaign to unseat Gov. Gavin Newsom (D), compared the bill's provisions to Occupational Safety and Health Administration regulations applicable in a commercial or industrial worksite.

"I would think this bill would actually deter people from having those people do those services because of the liability in your own home," Dahle said during a short-lived California Senate floor debate.

The bill cleared the Senate 24-8 on a largely party-line vote and is now under consideration by the California Assembly.

The broader legislative push is emboldening some domestic workers to participate in protests like the ones in Philadelphia and Miami, breaking from the traditional silence enveloping their industry.

And the alliance with the broader out-of-home care field is helping domestic workers find a model structure to engage employers and legislators.

"When workers see other workers organizing and they see a powerful movement like this, that has built in size, in depth, in relationship and in power to elected officials, you think about all the states that states and cities that have passed domestic workers bills of rights, that is all a testament to the power of the people who are organizing," Jayapal said.

"Powerful organizing begets more powerful organizing, and it'll continue to grow because other workers will say, 'Wait a second, we deserve this too. We deserve rights on the job, we deserve good pay, we deserve union jobs.'"

The report from B4Ukraine, a coalition of civil society groups working to cut off Russia's ability to continue the war, and the Kyiv School of Economics found American firms paid $712 million in taxes in Russia in 2022, having brought in the largest total revenue of any foreign country. 

The report states that the companies that continue to be present in Russia and thus pay taxes are indirectly financing the war in Ukraine and the “severe breaches” of human rights and humanitarian law that have been happening in the conflict. 

Global corporations, including those that left the country since the full-scale invasion began last February, made more than $213.9 billion in revenue through their local Russian businesses, including $14.1 billion in profits, and paid $3.5 billion in taxes in 2022. The tax projection is likely a significant underestimate of the total amount that has been paid, the report states. 

German firms were the second-largest tax contributors to Russia, paying $402 million in taxes on profits last year. 

The industries that received the largest amount of revenue from their businesses in Russia were alcohol and tobacco, fact-moving consumer goods and automobiles. 

Companies with headquarters in the Group of Seven (G7), a group of the world’s seven largest democratic economies, and the European Union were the highest-profit taxpayers in Russia and made up 16 of its top 20 contributors. 

The report states that companies often argue that their products are essential as a defense for staying in Russia amid the war. But the authors argue that the companies often stretch the definition to include products like shampoo and pastries. 

The report states many companies declined to tell B4Ukraine which products of theirs are considered essential. 

Hundreds of U.S. companies left Russia soon after the war began, but many have also chosen to stay. 

The authors lay out several recommendations for governments and companies to take action to cut the indirect financial support for Russia’s war. 

They said governments of the G7 and its allies should look beyond companies complying with sanctions to create a clearer standard for businesses’ conduct and promote ethical business practices in line with internationally accepted human rights principles. They should also create financial penalties and restrict companies’ access to contracts if they continue to remain in Russia, according to the report. 

The report calls on firms operating in Russia to immediately cut ties to the country, clearly define the criteria for determining that their products are essential for the Russian people and demonstrate public support for Ukraine.

The report came ahead of the 500th day of the war on Saturday.

Labor force participation held steady at 62.6 percent for the fourth month in a row, and the employment-population ratio also remained the same at 60.3 percent, the Labor Department said Friday. The labor force edged up to 166.95 million workers from 166.82 workers in May.

The big picture: Economy adds 209K jobs in June, unemployment at 3.6 percent

While some economists fretted that the 209,000 jobs added to the economy in June were the fewest since December 2020, many were encouraged by the report. The slight slowdown in job gains could be signs of a soft landing from the high inflation and rapid growth seen since the end of the COVID-19 recession.

Here are five things to know about Friday’s jobs numbers from the Labor Department.

Jobs gains in April and May were revised down

While the economy added 209,000 jobs overall, only 149,000 were added in the private sector, amounting to what some economists considered very moderate gains.

The job numbers for April and May were also revised down by 110,000 jobs, revealing that an apparent May hiring boom was less powerful than first reported.

The sectors that added the most workers were private education and health services at 73,000, health care and social services at 65,000 and government at 60,000.

Now hiring: These industries added the most jobs in June

The most dynamic part of the labor force remained in services, which added a total of 120,000 jobs, while goods-producing industries added only 29,000 jobs.

Wage growth accelerates

Average hourly earnings for employees rose by 12 cents, or 0.4 percent, to $33.58, the Labor Department reported.

That’s good news for workers, many of whom have seen their paychecks eroded by high inflation during the recovery. Over the last three months, average hourly earnings rose at a 4.6-percent annual rate and outpaced the annual inflation rate in June of 4 percent.

Labor costs are the largest component of prices, even though the current inflation is caused more by elevated profits and higher markups than by labor costs. This makes some economists view positive wage growth negatively, especially as the Fed attempts to curb inflation.

Faster wage growth could mean more Fed rate hikes

The Fed deals with rapid price growth by boosting interest rates, as it lacks the power to levy windfall profit taxes, enact targeted price caps or impose other measures floated by economists.

Higher borrowing costs tend to reduce lending and investments throughout the economy and makes companies more keen to shed workers or halt hiring.

The state of play: Fed pauses rate hikes, but hints toward future increases

While other countries simply reduce the number of hours that employees work in order to reduce private-sector labor costs, interest rate hikes in the U.S. often translate simply to people losing jobs.

Even so, the job market has held strong throughout the Fed's rapid hiking cycle. Prices have been coming down even as rates have been going up and employment levels have remained high, thanks largely to pandemic-driven forces behind inflation easing.

The Fed expects to raise rates two more times this year, and the 0.4-percent increase in the June wage level could mean these additional hikes could come sooner rather than later.

"Today's report provides no reason to dissuade the Fed from hiking the federal funds rate in its upcoming July meeting," wrote Preston Caldwell, economist with rating company Morningstar.

"If job growth (and other measures of economic activity) remains at current rates and inflation proves stubbornly high, then another hike in September is possible," he wrote.

Black unemployment spikes upward

Due to the legacy of slavery and systemic inequality, Black workers on the lower end of the earning spectrum can have some of the most precarious employment situations and be the first to lose their jobs during economic slowdowns.

The June jobs reported showed a spike in the level of Black unemployment, rising to 6 percent from 4.7 percent in April. Some market commentators think of this demographic as a “canary in the coal mine” for potential job losses throughout the economy.

Flashback: Black unemployment is at a record low — but ‘horrible’ work conditions still ensnare many

“The St. Louis Fed monitors conditions for vulnerable workers, many of whom are the ‘first fired’ and ‘last hired’ in economic downturns and expansions, respectively. Among these workers, there has been a gradual increase in unemployment rates among Black men and women and young workers over the past four months,” William Rodgers, vice president and director of the St. Louis Fed’s Institute of Economic Equity, wrote in an analysis Friday.

“The increase in unemployment for these vulnerable workers appears to be driven by difficulty finding a job among existing workers, rather than a meaningful entry of previously sidelined workers,” he added.

People who could only find part-time work jumped

Friday’s report also showed a marked rise in people working part-time due to economic conditions, increasing by 452,000 to 4.2 million in June.

This reflects “an increase in the number of persons whose hours were cut due to slack work or business conditions,” the Labor Department said.

People who could only find part-time work increased to 948,000 from 824,000 in May, while people working part time due to generally anemic business conditions increased to 2.9 million from 2.6 million in the previous month.

Government, health care and social assistance saw the biggest gains, while other major industries saw little to no change.

The unemployment rate, which has ranged from 3.4 percent to 3.7 percent since March 2022, dipped slightly to 3.6 percent. But the number of people employed part-time for economic reasons jumped by 452,000 to 4.2 million in June, an early sign the job market could be cooling after a hotter-than-expected start to the year.

“The June Jobs Report was poised to be another blowout. Instead, it showed signs of the labor market cooling—perhaps the result of the Fed’s rate hikes finally biting,” Julia Pollak, chief economist at ZipRecruiter, said in note.

Government hiring leads the way

Government added 60,000 jobs in June, more than any other sector. State and local governments added 27,000 and 32,000 jobs, respectively.

In the first six months of 2023, government has added an average of 63,000 jobs per month, more than twice the average of 23,000 per month in 2022 but still 161,000 below pre-pandemic levels.

Health care, social assistance post big gains

Health care added 41,000 jobs in June, in line with the average of 42,000 per month added so far in 2023 and similar to the average gain of 46,000 per month in 2022. Hospitals added 15,000 jobs, nursing and residential care facilities added 12,000 and home health care services added 9,000, while dental offices lost 7,000 jobs.

Friday’s job report also showed social assistance added 24,000 jobs, including 18,000 in individual and family services, in line with the 2022 monthly average of 19,000.

“The strongest private employment sector was health care and social assistance, which typically does well in a weak economy. Thus, the Fed has to see the writing of a slowing economy on the wall even though, as we normally say, one datapoint doesn’t a trend make,” Raymond James's Chief Economist Eugenio Alemán said in a note.

Construction jobs keep rising

Construction added 23,000 jobs, surpassing the average of 15,000 per month added so far in 2023 and similar to the average of 22,000 per month in 2022.

Higher interest rates tend to hamper construction, as companies feel the pinch of higher borrowing costs and pull back from expansion. But a May surge in new home construction may be powering the sector through headwinds.

Major industries show little or no change

Employment in other major industries showed little or no change from May to June, including manufacturing, wholesale trade, financial activities and mining, quarrying and oil and gas extraction.

Professional and business services saw little change in June, adding 21,000 jobs. The industry has added an average of 40,000 so far in 2023, down from 62,000 in 2022.  

Leisure and hospitality also saw little change in employment for the third month in a row, adding 21,000 jobs in June. Employment in the industry, which was hit hard by the pandemic, lags behind pre-pandemic levels, 369,000 below its February 2020 level.

Retail employment lost 11,000 jobs in June, with little net change over the year. Employment in building material and garden equipment and supplies dealers was down 10,000 jobs and 5,000 in furniture, home furnishings, electronics and appliance retailers, while motor vehicles and part dealers added 6,000 jobs.

“The U.S. labor market moderated in June, as new job creation edged down – a step towards the much sought-after soft landing in the economy,” Dave Gilbertson, labor economist at UKG, noted in an email. “Fundamentally, I’m not seeing any cracks in the foundation of the labor market.”