The Numbers Behind Walmart’s Pay Raise: DealBook Briefing

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The Numbers Behind Walmart’s Pay Raise: DealBook Briefing


2018-01-11 14:57:51

Who benefits: Walmart said in its most recent annual report that it had nearly 1.5 million associates in the U.S. That’s much bigger than any other company that has announced tax-related worker benefits to date. (AT&T, for instance, has roughly 200,000 employees who will likely benefit from that company’s $1,000-per-worker bonus.)

From C.E.O. Doug McMillon:

“We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders. However, some guiding themes are clear and consistent with how we’ve been investing — lower prices for customers, better wages and training for associates and investments in the future of our company, including in technology. Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”

Who benefits: Walmart said in its most recent annual report that it had nearly 1.5 million associates in the U.S. That’s much bigger than any other company that has announced tax-related worker benefits to date. (AT&T, for instance, has roughly 200,000 employees who will likely benefit from that company’s $1,000-per-worker bonus.)

What else is behind the move? The retailer’s efforts to keep workers amid a tightening labor market, which has led companies to fight to keep workers. (The current unemployment rate is at just 4.7 percent.)

More from Matthew Boyle of Bloomberg:

With the wage increase and bonus payment, the world’s biggest retailer seeks to even its pay gap with resurgent rival Target Corp., while simultaneously sending a high-profile thank you to the U.S. government for slashing the corporate tax rate.

Critics’ corner

What virtual currencies give, South Korea takes away

As of this morning, Bitcoin was down 4.5 percent, Ethereum was down 9 percent and Ripple was down 13 percent, according to CoinMarketCap.

Thank the South Korean government, which may ban virtual currency trading in what has been the third-largest market.

Behind the potential move

Officials have been concerned about tax evasion and rampant speculation.

More from Song Jung-a and Bryan Harris of the FT:

“There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” said Park Sang-ki, South Korea’s justice minister.

A spokesman for President Moon Jae-in played down the comments, saying nothing was finalized. But investors remained spooked.

Bitcoin fever shows no other signs of stopping, however. Binance.com, a big virtual currency exchange, said that it had signed up 240,000 users in an hour yesterday. And strategists at Goldman Sachs wrote that virtual currencies may work as real money someday, particularly in developing countries.

The virtual currency flyaround

• Matt Levine writes that a pump-and-dump mentality that has taken hold of some Bitcoin trading. (Bloomberg View)

• The answer to Bitcoin’s energy-use problem could be a 23-million-digit prime number. (Bloomberg)

• The North American Bitcoin Conference no longer takes Bitcoin for ticket payments. (CNBC)

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A blip, or the start of a slide?

The S. & P. 500 closed down slightly yesterday at 2,748.23. The Dow did the same, at 25,369.13. As Barron’s writes, “Stocks slid on Wednesday, because sometimes they do that.”

But is there cause for fear? Bond investors appear to think so.

What happened: The yield for 10-year Treasuries hit a nine-month intraday high of almost 2.6 percent yesterday.

Why?

• Central banks’ continuing withdrawal from crisis-era bond purchases

• Investor worry that inflation will edge up

• That Bloomberg report about China hesitating over Treasury purchases (although a Chinese government agency has cast doubt on it)

The even bigger worry

That China will use its central bank to throw a brushback pitch at the U.S. Here’s what Brad Setser of the Council on Foreign Relations told the NYT:

“It is possible too that China wants to signal to its people that it will not keep financing the U.S. when the U.S. is not treating China with respect.”

Analysts at the Eurasia Group found that scenario unlikely in a recent note.

Critics’ corner

• Bill Gross declared that we’re now in a bond bear market. (Bloomberg)

• Richard Barley asks, “Is the great bond blowout finally happening?” (WSJ)

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Gov. Rick Scott of Florida, left, and Interior Secretary Ryan Zinke at the Tallahassee airport on Tuesday.

Credit
Scott Keeler/Tampa Bay Times, via Associated Press

Who else gets an offshore drilling exemption?

Interior Secretary Ryan Zinke has already removed Florida from his department’s plan to reopen oil drilling off U.S. coastlines — which pleased the state’s governor, Rick Scott, but angered nearly everyone else.

Here’s who else wants out:

• South Carolina, New Jersey and Maryland, all led by Republicans

• New York, North Carolina, Delaware and California, all led by Democrats

More on the stakes, from Timothy Puko of the WSJ:

“If its final decisions on what is or is not open to leasing ignores environmental impact and appears to be driven by nothing but politics, the courts could set it aside,” said John Leshy, an emeritus professor at University of California, Hastings College of the Law in San Francisco who was the Interior’s solicitor during the Clinton administration.

The environmental long read: “The Rockefellers vs. the Company that Made Them Rockefellers,” in New York magazine.

The Buffett succession flyaround

• The naming of Ajit Jain and Greg Abel as vice chairmen of Berkshire Hathaway, as part of a dispersal of Warren Buffett’s responsibilities, “might sound like a fudge — but it’s also a sensible division of labor,” John Foley writes. (Breakingviews)

• Tara Lachapelle appears to be in the “Greg Abel is the next Berkshire C.E.O.” camp. (Gadfly)

• The Oracle of Omaha himself said that his health was fine and he was staying as C.E.O. He added of the two men: “They both have Berkshire in their blood. They love the company.” (NYT)

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Representative Steny H. Hoyer, Democrat of Maryland, held a news conference on Wednesday with “Dreamers” outside the Capitol.

Credit
Eric Thayer for The New York Times

Business leaders keep pressure up on DACA

As President Trump negotiates with lawmakers over a deal to protect the undocumented immigrants known as Dreamers, corporate leaders aren’t letting up.

An open letter to Congressional leaders from 141 signatories — including Ginni Rometty of IBM, Jeff Bezos of Amazon, Sheryl Sandberg of Facebook, Dara Khosrowshahi of Uber and Steve Schwarzman of Blackstone — demanded a “permanent bipartisan solution.”

More from the letter:

In addition to causing a tremendous upheaval in the lives of DACA employees, failure to act in time will lead to businesses losing valuable talent, cause disruptions in the work force, and will result in significant costs.

A roadblock: Several House Republicans have put forth an immigration proposal that clashes with Mr. Trump’s parameters for a bipartisan deal. One of them, Representative Raúl Labrador of Idaho, warned, “This is the only bill that’s going to unify the conference, and it’s going to get us to a majority of the conference.”

The Washington flyaround

• Mr. Trump declined to commit to being interviewed by Robert Mueller, backing away from a statement last year. And Mr. Mueller has hired Ryan Dickey, a veteran cybercrimes prosecutor. (NYT)

• Mr. Trump’s companies sold more than $35 million worth of real estate last year, 70 percent of it to shell companies that obscured the buyers’ identities. (USA Today)

• During a meeting about immigration, Mr. Trump suggested bringing back earmarks, the practice of stuffing funding for pet projects into legislation. (NYT)

• Lawmakers in at least six states have introduced bills to forbid internet providers from blocking or slowing down sites or online services, a response to the F.C.C.’s repeal of net neutrality rules. (NYT)

• The Trump administration plans to unveil a revision to banking rules that mandate lending to poor borrowers. (WSJ)

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A breakfast for junior economists at an annual economic meeting in Philadelphia last week.

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Ricky Haldis/Wise Owl Multimedia

Confronting bias against women in economics

The showstopper at the American Economic Association’s conference was a panel stocked with women, presenting research that showed the systemic forces arrayed against them in the field — and prompting pledges from leaders to do better.

More from Jim Tankersley and Noam Scheiber of the NYT:

Paper after paper presented at the American Economic Association panel showed a pattern of gender discrimination, beginning with barriers women face in choosing to study economics and extending through the life cycle of their careers, including securing job opportunities, writing research papers, gaining access to top publications and earning proper credit for published work.

Over in Hollywood: Controversy has erupted over reshoots of the movie “All the Money in the World,” for which Michelle Williams was paid scale and Mark Wahlberg an additional $1.2 million.

The misconduct flyaround

• The creator of the anonymous “Shitty Media Men” spreadsheet revealed herself amid controversy over whether Harper’s Magazine would do so. (NYT)

• James Rosen, a former correspondent for Fox News, and Joel Achenbach, a reporter at the WaPo, face allegations of workplace misconduct. (NPR, WaPo)

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Credit
Sasha Rudensky for The New York Times

A closer look at the Chinese billionaire whistle-blower

Meet Guo Wengui, who’s living in exile in a penthouse in Central Park after lobbing hard-to-verify accusations at China’s elite.

Here’s what he said of the anti-corruption czar Wang Qishan, according to Lauren Hilgers of the NYT Magazine:

Wang Qishan, Guo has claimed, is hiding the money he secretly earned in the Hainan-based conglomerate HNA Group, a company with an estimated $35 billion worth of investments in the United States. (HNA Group denies any ties to Wang and is suing Guo.) He accused Wang of carrying on an affair with the actress Fan Bingbing. (Fan is reportedly suing Guo for defamation.)

Revolving door

• Lazard has hired Andrea Bozzi, most recently the co-head of French investment banking at Credit Suisse, as a managing director in Paris, Reuters reports.

• HSBC has hired Michael Parry, Liu Kang and Jimmy He for its Asia-Pacific equities team, Bloomberg reports.

The speed read

• Uber had a system called Ripley to remotely shut down computers and lock up data when police raided its overseas offices, according to three people with knowledge of the system. (Bloomberg)

• Ferrero of Italy is close to formalizing a $2.8 billion deal for Nestlé’s U.S. candy business. (FT)

• Blackstone agreed to pay about $1.1 billion for a luxury resort on the Hawaiian island of Maui, according to a person with knowledge of the deal. (Bloomberg)

• Google bought Redux, a British start-up whose technology lets phone displays double as speakers. (Bloomberg)

• Bain Capital, Blackstone Group and Silver Lake have expressed interest in Li Tong Group, an iPhone recycling business that could be worth as much as $1 billion, according to people familiar with the matter. (Bloomberg)

• SS & C Technology Holdings, which provides tech infrastructure for finance, is in advanced talks to buy DST Systems, a rival also active in the health care market, for more than $5 billion, according to people familiar with the matter. (Reuters)

• Intel released test results showing that its chip security fixes would slow personal computers by no more than 10 percent. Initial reports suggested a larger impact. (Bloomberg)

• The Federal Reserve’s economic stimulus campaign turned a big profit again in 2017, but the windfall is showing signs of slowing. (NYT)

• Chinese-born, U.S.-trained tech talent is increasingly returning to China, drawn by plentiful venture capital and government incentives for research. (Bloomberg)

• How (and why) the former Disney chairman Michael Eisner won over the fan-owners of a fourth-tier English soccer club. (NYT)

• Private debt collectors brought the Internal Revenue Service $6.7 million in the last fiscal year — at a cost of $20 million. (NYT)

• Canada has filed a sweeping World Trade Organization case against U.S. tariffs. (NYT)

• Advisers at some of the biggest discount brokerage firms make more money if they steer clients toward more expensive products, according to disclosures from the firms and former employees. (WSJ)

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