🤝 Inside a union deal

Plus: Chill, baby, chill | Wednesday, August 03, 2022

Open in app View in browser     Axios Markets By Emily Peck and Matt Phillips · Aug 03, 2022 🐪 Good morning! It's Wednesday. And this is your Markets update. Let's go. Today's newsletter, edited by The Kate Marino, is 1,150 words, 4.5 minutes.     1 big thing: It's a good year to negotiate your pay Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals "It's a good year for workers to be bargaining," says Pat Telesco, who helped negotiate a union contract — ratified late last week — for AT&T workers in 36 states that guarantees annual inflation-adjusted raises over the next three years, Emily writes. Why it matters: The tight labor market and rising inflation are putting increased pressure on employers to raise pay, and sparking a return of cost-of-living adjustments in union agreements (COLAs) that largely fell out of favor in recent decades. Union workers have some catching up to do: Pay for unionized workers in the private sector is up 4% from last year; but nonunion private sector workers saw wages increase even more, according to data from the BLS (h/t Bloomberg Law). That's partly because the private sector can react more quickly to market shifts — good news in boom times when workers can get better raises. But less great in downturns, when the private sector can move faster to fire people (just look at the chart above to see what happened during the financial crisis). Despite some signs of softening in the labor market, companies are still raising pay — or planning to — as the competition for workers is fierce. Forty-four percent of employers said they plan on or are considering, boosting salary budgets, and 23% already have, according to a survey out Wednesday morning from WTW. Worth noting: In addition to the COLA adjustments, the new AT&T contract guarantees some workers raises of up to 15%. The contract also provides call-center employees who work from home with a $55 monthly WFH stipend, as well as provisions that limit the company's ability to surveil those workers. And, for the first time, these workers have paid parental leave. The contract also offers health care coverage from an employee's first day — whereas previously they had to wait 90 days. "Used to be they didn't have to do that," but the union members had "good leverage," says Telesco, an area director at the Communications Workers of America and a former call center worker herself. "There's money sprinkled all over the place in here; people are going to be in much better shape." The bottom line: This is good for business. In a statement, AT&T said the contract "positions the company for growth." "While other companies in our industry have spent years and millions of dollars fighting unionization, we continue to work to provide wages and benefits that are among the best in the nation."      2. Catch up quick 🎤 St. Louis Fed president says a "relatively soft landing" is still possible. (Bloomberg) 🌯 Just Eat Takeaway writes down value of Grubhub by €3 billion. (FT) 🔐 Thousands of Solana wallets hacked this morning. (Bloomberg)     3. 😎 Drillers: Chill, baby, chill Illustration: Aïda Amer/Axios   With energy prices high, producers still seem in no rush to jack up their output, Matt writes. Why it matters: Increased production would help lower energy prices and ease inflation. Driving the news: Fresh earnings reports from oil and gas explorers show production levels remain subdued despite gargantuan profits. Devon Energy posted its best profit in almost 14 years Monday, as net income grew by more than 650% to $1.9 billion. (It boosted production by about 9%.) Diamondback Energy's profits grew roughly 350% to a cool $1.4 billion. (Production was roughly flat.) Last week U.S. energy giants Exxon and Chevron also reported explosive profits and modest upticks in production, as the WSJ wrote. These updates are consistent with an Energy Information Administration report last month that scanned the financials of over 53 publicly traded energy companies. The EIA found cash from operations was up nearly 90% for these companies, while production was up about 10%.     A message from Axios Win the race for (remote) talent     Reach over 1 million smart professionals in the fastest growing cities in America. Axios has job boards to get your openings in front of qualified candidates. Use code AUGUST50 for $50 off.     4. How abortion restrictions cost women Illustration: Aïda Amer/Axios   Women's average wages fall after abortion restrictions are enacted in their home state, as some either stop working or take lower-paying jobs, finds a comprehensive new analysis, set to be published next year in the Indiana Law Journal, Emily writes. Why it matters: The study expands on other research, looking at decades of data across the U.S., and points toward a grim economic future for women, now that states are moving forward with abortion bans in the wake of the Supreme Court's Dobbs decision. The authors found that after states pass these restrictions, called TRAP laws for targeted regulation of abortion providers, women of childbearing age were more likely to take lower-quality jobs. What they found: The researchers looked at the time period between the 1973 Roe v. Wade decision and 2016, comparing states with TRAP laws in effect to those without. Their sample included Americans aged 20-62. Each new restriction was associated with a 5% drop in the average salary of a woman of childbearing age. After a TRAP law is enacted, the likelihood that women will stay at home due to housework increases 11%, they found. What they're saying: "Every time you become more restrictive you basically push women down the food chain," says co-author Jonathan Zandberg of Wharton. Read the full story. Go deeper: Kansas voters reject anti-abortion constitutional amendment (Axios)   Share Axios and earn rewards If you like this newsletter, your friends may, too! Refer your friends and get free Axios swag when they sign up. Be a good friend and share   5. Alex Jones' latest bankruptcy game plan Photo illustration: Sarah Grillo/Axios. Photo: Elijah Nouvelage/Getty Images   Infowars' Alex Jones is back in bankruptcy court ... again, Axios' Kate Marino writes. Why it matters: For the second time this year, the right-wing provocateur is testing the boundaries of how the U.S. bankruptcy code can be used by companies — and their owners — to limit the cost of litigation damages. Catch up fast: Jones and his Infowars empire are in the midst of a damages trial — they've already been found liable in defamation cases brought by families of the victims of the Sandy Hook school shooting. Jones has repeatedly referred to the shooting as a hoax. Companies utilize Chapter 11 bankruptcy when they owe creditors more money than they actually have, and need to work out a settlement and payment plan. What's new: Infowars' parent, Free Speech Systems (FSS), on Friday filed for Chapter 11. The rub: The filing seeks to use a special designation meant for small businesses, called subchapter V, that would make it harder for creditors (like the Sandy Hook claimants) to collect on what they're owed. The intrigue: In order to be eligible for subchapter V, a business can have no more than $7.5 million in "qualifying debts." But, but, but: FSS owes a lot more than that — $54 million to an affiliate controlled by Jones and his family, on top of the likely tens of millions it owes the Sandy Hook claimants. So, what gives? There are a few technicalities ... for one, debt to insiders (like the $54 million) isn't considered "qualifying debt." And the Sandy Hook damages may not count either. In other words: FSS filed for debtor-friendly subchapter V bankruptcy in order to deal with litigation damages, but the amount of those damages would almost certainly render the company ineligible to actually use subchapter V. 💭 Our thought bubble: Timing is everything. FSS (conveniently) filed in the middle of the damages trial that could imminently put a number on the Sandy Hook liabilities. Read the full story.     A message from Axios Win the race for (remote) talent     Reach over 1 million smart professionals in the fastest growing cities in America. Axios has job boards to get your openings in front of qualified candidates. Use code AUGUST50 for $50 off.   🤑 1 thing Emily is still thinking about: college financial aid. A Slate article from last week examines how private universities adjust tuition prices based on how much they think you'll pay, not financial need: College admissions "is an elaborate stage play meant to flatter privileged families and the reputations of colleges themselves," the author writes. Read the whole thing yourself: "The Single Most Important Thing to Know About Financial Aid: It's a Sham" Yikes! I'm grateful that I went to a public university, but nervously anticipate my children's future tuition bills. (And weird college essay questions.) ✨ Thanks to Mickey Meece for copy editing today's newsletter. Why stop here? Let's go Pro. 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