News & Commentary

December 5, 2013

Fast-food workers in 100 cities around the country are participating in a one-day strike today for a $15-an-hour wage — up from a $9-an-hour industry average. The New York Times, Wall Street Journal, USA Today, the Washington Post, and the LA Times all have coverage. While some economists criticize the idea of such a high wage as invariably leading to increased fast food prices and unemployment levels, others suggest that higher wages for low-paid fast food and Walmart employees would stimulate the economy by increasing spending. Union officials, for their part, have responded that wage increases, in practice, do not put workers out of business.

In the wake of yesterday’s bankruptcy ruling in Detroit, which held that public pensions are not entitled to heightened protection in the city’s bankruptcy proceedings, other cities are weighing options in trimming or eliminating pension costs. The New York Times reports that Mayor Rahm Emanuel of Chicago is looking to the Detroit ruling in outlining an agenda to reduce the city’s obligation to contribute to its workers’ pension funds. As Chicago is not bankrupt like Detroit is, however, city officials have for now sought a compromise with public workers to avoid a future credit crisis over its underfunded pension plans.

In Los Angeles, the LA Times reports that labor leaders supported county social workers at a downtown rally this morning as the social workers continue their strike due to stalled contract negotiations with the county. The 3,600 social workers are seeking a salary increase and an increase in the number of workers hired to reduce their average caseload, although the Times reports that many of the workers crossed picket lines today.

In Washington, the New York Times reports that Defense Secretary Chuck Hagel has unveiled a plan to save $1 billion in personnel costs over five years by cutting the number of staff members in the Office of the Secretary of Defense by twenty percent. The cuts would come in the form of civilian layoffs, contractor reductions, and eliminating various offices such as the deputy under secretary of defense for plans and forces.

The White House issued a report this morning concluding that if Congress allows federal jobless aid benefits to expire this month, 3.6 million people will lose access to the benefits by the end of 2014, the Washington Post reports. Democrats support and House Republicans oppose legislation that would continue program begun in 2008 that gives benefits to jobless people after their 26 weeks of state benefits run out.

In economic news, private employers added 215,000 new jobs to their payrolls in November — the highest number in a year and greater than most economists’ predictions, the New York Times reports. The news was among a number of positive economic signs. In a separate article the Times also noted that the United States’ GDP grew at a 3.6 annual rate in the third quarter, up from previous estimates of 2.8 percent. The Wall Street Journal and USA Today, meanwhile, report that initial claims for jobless benefits decreased by 23,000 last week to a seasonally adjusted 298,000 — lower than the 320,000 new claims forecast by economists. The LA Times notes that the numbers are close to a six-year low, leading some analysts to be skeptical of the data.

Not all the economic news from today is positive, however. The Wall Street Journal profiles two U.S. cities — Yuma, Ariz. and El Centro, Calif. — which have both reported unemployment rates higher than 25 percent. The Washington Post reports that the unemployment rate in D.C. climbed to 5.6 percent from 5.4 percent in October, in part due to the 16-day government shutdown.

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