| | | | |  | | By Ben White | With additional reporting from Ari Hawkins
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Commuters walk to work in New York City. | Spencer Platt/Getty Images | NEVER COMING BACK — Never mind, for now, the high inflation, low growth, hot labor market conundrums our weird economy now presents. Here’s one of the great puzzles of our current vexing, Rubik’s Cube economy. Just exactly how are the over 2 million or so workers who left the labor force during the worst of the Covid pandemic but have not returned, surviving? A good chunk took early retirement. A slice built enough savings to last quite a while. Some face lingering “long Covid” and other persistent illnesses. But significant numbers, according to a recent Bank of America study of its customers, are prime working age Gen Xers or Millennials. Exact figures are elusive. But how this group is still somehow paying the bills vexes economists, poses a big problem for the Federal Reserve and could tilt the economy toward or away from recession, thus shaping the contours of the 2024 campaign. Nearly every time he speaks, Fed Chair Jerome Powell complains about how little success the central bank has had in bringing down wage inflation — which contributes to overall inflation — and emphasizes the need for more workers to return to the labor force to soak up millions of job openings and ease pressure on employers to keep paying more. “Looking back, we can see that a significant and persistent labor supply shortfall opened up during the pandemic,” Powell said in a speech late last year. “A shortfall that appears unlikely to fully close anytime soon.” Powell will keep hiking interest rates, no matter how soft the underlying economy may become, if he can’t more forcefully push down wage inflation. Workers who retired early are mostly never coming back. And absent better demographics or immigration liberalization (neither of which are happening), the prime age workers not in the labor force now better start coming back in bigger numbers or the Powell Fed may just smash down inflation by forcing the economy into a significant recession. So where are these vanished workers? The answer, according to Bank of America research and anecdotal Nightly reporting, is not that all GenXers or Millennials have created lucrative, semi-off-the-books OnlyFans accounts. Some have certainly turned to forms of personal content creation and marketing. Many are doing gig economy work like child or pet care that don’t always show up on the books. And many appear to have decided, for the moment at least, that returning to a job that (to use a GenX favorite) sucked — and required long, expensive commutes — is way worse than cutting expenses and perhaps moving someplace cheaper. And many others who worked in lower-end retail and restaurant-type jobs appear to be cobbling things together in other ways, rather than returning to similar employment. While overall savings are dramatically down from their Covid-era highs, especially at the lower end of income earners, the BofA study suggests there is still some cushion. “Even for those with accounts under $50,000, the median bank balance is still up 50 percent from 2019,” Anna Zhou, author of the study, told Nightly. “So there is still some stimulus tailwind.” That won’t last. Which means many low-end workers remain fairly likely to come back into the official labor force. It’s less clear for previously higher-earning GenXers and Millennials, many of whom seem keen to hold onto their lower-stress, lower-cost lifestyles. Ellie Stevenson, a retiree in southern Connecticut, told Nightly she has at least a dozen prime working-age friends — mostly women, including some solo or primary breadwinners — who she does not expect to rejoin the workforce as it currently exists. “Some of them took six-figure pay cuts because it just wasn’t the life they wanted to lead,” Stevenson said. “They had some savings, do some side work maybe, and just realized they don’t need to go out to eat all the time and can probably live some place cheaper.” For the economy’s sake — and possibly Joe Biden’s re-election chances — it would be helpful if a big chunk of these missing workers decided they miss the more bougie lifestyle. Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com. Or contact tonight’s author at bwhite@politico.com or on Twitter at @morningmoneyben.
| | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | — Biden won’t veto GOP effort to repeal D.C. criminal code: Biden told Senate Democrats today that he would not veto a GOP-backed bid to repeal changes to the D.C. criminal code, raising the stakes of an upcoming Senate vote, according to two people in the meeting. Biden’s disinterest in a veto threat leaves Republicans on track to roll back the new D.C. law with the support of at least one Senate Democrat when the chamber takes up the House-passed measure as soon as next week. Sen. Joe Manchin (D-W.Va.) has already said he will support the disapproval measure, and Senate Democrats can’t afford any more defections. — DOJ rejects Trump claim of ‘categorical’ immunity from Jan. 6 lawsuits: The Justice Department urged a federal appeals court today to reject former President Donald Trump’s sweeping claim of immunity from a slew of civil suits stemming from his actions and statements on Jan. 6, 2021. It was a rare nod by the department to the limits of presidential immunity from lawsuits. — FTC reaches deal with online therapy company over data misuse claims: The Federal Trade Commission reached a settlement with online therapy company BetterHelp over allegations it shared customers’ sensitive health data with third parties for advertising purposes, according to documents from the agency’s in-house court filed this morning and reviewed by POLITICO. The Teladoc-owned company has agreed to pay $7.8 million and change a variety of its business practices to resolve allegations that it shared consumer data with third parties despite telling customers it would not, according to the documents. The commission voted 4-0 to approve the settlement this morning.
| | | FOX NEWS IN SPANISH — Americano, a new Spanish-language conservative news and commentary platform, is seeking inroads with Latino voters in Nevada, which figures to be a key swing state in 2024. Its CEO told a Henderson audience that Univision, Telemundo and CNN en EspaƱol, which dominate the Spanish news landscape, are “Marxists” that push “leftist agenda against traditional values” and “brainwash” viewers.
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President Joe Biden and Vice President Kamala Harris. | Anna Moneymaker/Getty Images | THREE QUESTIONS WITH… Nightly spoke with Simon Rosenberg, a veteran of two Democratic presidential campaigns and a political strategist with NDN, also known as New Democrat Network, a soon-to-shut-down liberal advocacy and research group that he has led since the 1990s. You were among the few political strategists who continuously expressed skepticism about the idea of a “red wave” in 2022. Are there any similar forces that you see shaping the 2024 election cycle that will affect Biden’s reelection campaign? Part of the reason that so many people got the election wrong in 2022, is that they overly discounted the ugliness of MAGA. In the 2018 and 2020 elections, there was an overwhelming vote against MAGA in those two elections, and the Republicans ran towards those politics in 2021, which I felt was a huge error. Usually when a party fails politically they run towards a new politics and not a politics that didn’t work. Where Republicans have to be worried in 2024 is that the presidential battleground has now voted against MAGA in three consecutive elections. There’s muscle memory in now understanding the dangers of MAGA and the two leading Republican candidates right now, look and feel very MAGA. For DeSantis and Trump, whoever of the two win the nomination, are going to be entering far more hostile terrain than DeSantis has faced in Florida for example, or Trump did in 2016, because there’s now been three elections in the battleground where Democrats have done well and Republicans haven’t. Which Republican candidate would be easiest — and most difficult — for Biden to run against in the 2024 race? I don’t think we have any way of knowing that right now. I think it depends on how the candidates in the Republican primary perform. Certainly, I think there’s still a lot of big questions about DeSantis and his ability at the national level. I think he’s run too far right in a way that it would be difficult to present himself as anything other than a MAGA candidate, which won’t be helpful in the battleground. We’re favored to win the presidential race in 2024, because the basic dynamic in 2022, which is that basically, we’ve done a good enough job and they’re still a little but too crazy — could still be the basic dynamic in 2024. There will be a sense that, ‘hey, the Democrats, Joe Biden, did a good job. You know, why get rid of them?’ And then you look at the Republicans and they still feel a little bit too crazy. That’s the likely scenario today, but of course, that could change. If Biden doesn’t run for a second term, will the party immediately coalesce around Vice President Kamala Harris or will there be a contested nomination? If Joe Biden doesn’t run, Vice President Harris will be the front runner for the Democratic nomination, but there will be a contested and vigorous primary.
| | | | DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID. | | | | | | | | IRAN POISONINGS — Iranian authorities announced this week they are investigating the poisoning of hundreds of schoolgirls in cities across the country, incidents that have underscored concerns that Islamic extremists are escalating their long-standing campaign against female education, Ari Hawkins reports for Nightly. Earlier this week, dozens of students located in Pardis, on the outskirts of Tehran, were hospitalized after facing “mild poisoning,” according to a report from the semiofficial Tasnim news agency. The incident is the latest in a spate of attacks reported in up to 15 cities across Iran since November, a member of Iran’s parliament, Abu Abdulali Rahimi Mozafari, was quotted saying. On Wednesday, the Islamic regime’s semi-official Mehr News reported that “nearly 900 students” from across the country have been poisoned so far. Zahra Sheikhi, a spokeswoman for Iran’s Health Commission, said 800 students experienced poisoning in the holy city of Qom, Iran, over the last few months. While Iranian security officials have not announced a suspected motive, Younes Panahi, Iran’s deputy education minister, told reporters on Wednesday that “After the poisoning of several students in [the city of] Qom … it was found that some people wanted all schools, especially girls’ schools, to be closed.” The investigation of poisonings represents an about-face from the regime, which for months downplayed reports. Mohammad Habibi, spokesman for the Iranian Teachers Trade Association, linked the poisonings to ongoing protests against the Islamic regime’s treatment of women. “The poisoning of students at girls’ schools, which have been confirmed as deliberate acts, was neither arbitrary nor accidental,” Habibi tweeted. He said the incidents were part of a governmental campaign “to increase public fear” in the wake of ongoing protests. The targeting of schoolgirls comes after more than five months of protests that erupted in September over the death of 22-year-old Mahsa Amini, who was allegedly killed in police custody for not adhering to the country’s strict Islamic dress code. “Women are now the majority of people earning bachelor’s degrees and universities in Iran, including in science and technology fields,” said Kelly J. Shannon, executive director for the Center for Peace, Justice and Human Rights at Florida Atlantic University. “So to attack school children, especially mostly girls, right now, is pretty unprecedented.”
| | | | | 8.5 percent The measure of annual inflation in the eurozone in February, a higher number than economists expected and only a small dip from January’s 8.6 percent annual inflation number. The figures from Europe reinforce a belief from European and American economists that persistent inflation could cause further rate hikes and raise the likelihood of recession. | | | | | LIAR, LIAR — In an excerpt of his new book “Tremors in the Blood: Murder, Obsession, and the Birth of the Lie Detector,” Amit Katwala explores the history of the polygraph test for WIRED. Katwala takes us through the lie detector’s first case: a burglary in a women’s dorm in Berkeley in 1921. A rookie detective named John Larson, who had figured out how to employ the lie detector after reading about similar devices, was excited to try it out. How it was used, though, immediately exposed its flaws; flaws that would continue to be apparent as the lie detector was used more widely. Read the story of burglary, abuse, romance and more.
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On this date in 1962: Wilt Chamberlain of the Philadelphia Warriors after scoring an NBA-record 100 points as the Warriors defeated the New York Knicks 169-147. The record has yet to be broken; Kobe Bryant came closest with 81 in 2006. | Paul Vathis/AP Photo | Did someone forward this email to you? Sign up here. | | | | Follow us on Twitter | | | | Follow us | | | | |
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