Business
September 11, 2019

The California state Senate on Tuesday passed a major bill that would require companies like Uber and Lyft give contract workers employee status.

The vote was 29-11, and the bill now heads to the state Assembly. Gov. Gavin Newsom (D) has expressed his support for the measure, and is expected to sign it. The law would go into effect on Jan. 1, with at least one million contract workers converted into employees, The New York Times reports. "Today, the so-called gig companies present themselves as the innovative future of tomorrow, a future where companies don't pay Social Security or Medicare," state Sen. Maria Elena Durazo (D) said. "Let's be clear: There is nothing innovative about underpaying someone for their labor."

Several labor groups have been calling for such a measure nationwide, saying contract workers are missing out on benefits and minimum pay that employees receive, and similar bills may soon be introduced in other states. Uber and Lyft say they have hundreds of thousands of drivers in California, and argue that as contract workers, they have flexibility not available to employees. Both companies have said that if they are forced to turn contract workers into employees, the added costs will cause their businesses to collapse, the Times reports. Catherine Garcia

September 5, 2019

The Treasury Department released a plan Thursday aimed at overhauling the U.S. housing market. A key component of the plan has the government relinquishing control over Fannie Mae and Freddie Mac in order to privatize the mortgage buyers.

Fannie Mae and Freddie Mac, which back half of the country's mortgages, have been under government conservatorship since the 2008 financial crisis. Under the Trump administration plan, Freddie Mac and Fannie Mae would be privatized again and required to pay a fee for government protection. This approach does not require any approval from Congress, and the plan doesn't detail what will happen to the government's stakes in the firms or how they will build their capital up enough so they can go private again, The Washington Post reports.

Housing prices continue to rise across the country, and Treasury Secretary Steven Mnuchin said the proposal "will protect taxpayers and help Americans who want to buy a home." Sen. Sherrod Brown (D-Ohio) disagrees, telling the Post that the plan "will make mortgages more expensive and harder to get. I'm urging the president: Make it easier for working people to buy or rent their homes, not harder." Catherine Garcia

February 25, 2017

Billionaire Warren Buffett published his annual letter to Berkshire Hathaway shareholders on Saturday, predicting investors "will almost certainly do well" if they stick with a "collection of large, conservatively financed American businesses." The American economy "is virtually certain to be worth far more in the years ahead," he wrote, enthusing about American "economic dynamism":

One word sums up our country’s achievements: miraculous. From a standing start 240 years ago — a span of time less than triple my days on Earth — Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers. You need not be an economist to understand how well our system has worked. Just look around you. [Berkshire Hathaway]

Buffett devoted a large portion of his letter to decrying Wall Street fees that aren't worth it for investors:

The bottom line: When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds. ... My calculation, admittedly very rough, is that the search by the elite for superior investment advice has caused it, in aggregate, to waste more than $100 billion over the past decade. Figure it out: Even a 1 percent fee on a few trillion dollars adds up. Of course, not every investor who put money in hedge funds ten years ago lagged S&P returns. But I believe my calculation of the aggregate shortfall is conservative. [Berkshire Hathaway]

Read Buffett's full letter here, or see Forbes' selection of its seven best quotes if you just want the highlights. Bonnie Kristian

December 21, 2016

Two weeks after demanding the cancelation of Boeing's contract to build the next Air Force One, Donald Trump met with the company's CEO in Florida, who promised to get the cost of the plane down.

The Air Force has budgeted $2.7 million for the Air Force One program, but analysts believe that by the time the plane is finished in the mid-2020s, the cost will swell to $4 billion, The Washington Post reports. After Trump tweeted about the potential $4 billion price tag, Boeing CEO Dennis Muilenburg called him to smooth things over, and they met face to face Wednesday. "We're all focused on the same thing here, we're going to make sure that we give our war fighters the best capability in the world and that we do it in a way that is affordable for our taxpayers," Muilenburg told reporters. "And his business head set around that is excellent. It was a terrific conversation. Got a lot of respect for him. He's a good man. And he's doing the right thing."

Muilenburg didn't say if the cost would be $4 billion, but promised Boeing would "get it done for less than that, and we're committed to working together to make sure that happens. And I was able to give the president-elect my personal commitment on behalf of the Boeing Company." Catherine Garcia

December 1, 2016

Howard Schultz, the chairman and CEO of Starbucks, is stepping down from the role, effective April 3, 2017.

He will become executive chairman of the company, with current COO Kevin Johnson slated to be the next CEO. Schultz has seen Starbucks grow exponentially — when he joined the company in 1982 as its director of operations and marketing, Starbucks had just four stores. Johnson joined the Starbucks board of directors in 2009, and became COO in 2015; previously, he was CEO of Juniper Networks and president of the platforms division at Microsoft. When the news came out on Thursday, Starbucks shares dropped about 4 percent in after hours trading, CNBC reports. Catherine Garcia

December 1, 2016

Since few details have been released about the deal Carrier reached with President-elect Donald Trump and Indiana Gov. Mike Pence, the vice president-elect, to keep nearly 1,000 jobs in Indianapolis, some employees say they are waiting before they get their hopes up.

"There's excitement with most people, but there's a lot of skepticism and worry because we don't know the details," T.J. Bray, a Carrier employee for 14 years, told The Associated Press. "There's a few that are worried. And there's still a few that don't even believe this is real. They think it's a play, a set-up, or a scam." Carrier made the announcement on Tuesday that jobs that were set to go to Mexico will instead remain in Indianapolis. Federal officials briefed by Carrier told AP that by keeping the plant open, 800 union workers will keep their jobs; there will likely still be many pink slips passed out, as there were 1,400 workers slated to be laid off. Engineering staff and employees at Carrier's headquarters are included in the 1,000 jobs saved, but those positions were likely going to stay in the state already. United Technologies, Carrier's parent company, also plans to cut some 700 jobs at a pant in Huntington, Indiana, that is still moving to Mexico, AP reports.

Union leaders who represent the Carrier workers say they were not involved in any negotiations, and no one has said yet what the Carrier employees may have to give up or what incentives are being used to keep the jobs in Indianapolis. Indiana Sen. Joe Donnelly (D) is questioning who is going to be retained, the structure for the retention, and if the employees will keep their wages, telling AP, "I would sure like to know as soon as I can." While campaigning, Trump said he would set high tariffs on companies that moved operations to Mexico. Trump and Pence are scheduled to appear with Carrier officials Thursday in Indiana. Catherine Garcia

November 29, 2016

The air conditioning and heating company Carrier announced Tuesday that it will keep close to 1,000 jobs slated to go to Mexico in Indianapolis.

On Twitter, Carrier said it was "pleased to have reached a deal" with Donald Trump and Mike Pence, the vice president-elect and governor of Indiana. A transition official told The Associated Press that Carrier officials, Trump, and Pence will announce the agreement in an event on Thursday. The company has 1,400 workers at its plant, meaning layoffs are still possible. "If they're saying they're going to retain 1,000 jobs, that would mean 400 are going away," Chuck Jones, president of United Steelworkers Local 1999, which represents Carrier workers, told The Indianapolis Star. The union has not yet been briefed on the deal, he said, and while they've been "trying to find out what that consists of, we haven't had any luck."

Earlier this year, the company said its furnace plant's operations would be moved to Mexico, following in the footsteps of its competitors. While campaigning, Trump said he would enact a substantial tax on any Carrier products made in Mexico. Carrier's parent company, United Technologies Corp, is a major defense contractor that supplies engines for U.S. fighter jets, and Sen. Bernie Sanders (I-Vt.), another outspoken critic of the move to Mexico, said last week that Trump should use the company's defense contracts as leverage to convince executives to keep the Indiana factory open. Catherine Garcia

October 25, 2016

On Tuesday, Apple announced that annual sales fell to $216 billion in the 2016 fiscal year ending Sept. 30, the company's first annual sales decline since 2001, the year the iPod was introduced.

Apple had a record $234 billion in sales in 2015. The company's largest source of revenue is the iPhone, CNN Money reports, and only 45.5 million were sold in the September quarter, down from 48 million during the same time in 2015. Analysts say because the newest iPhone is very similar to the previous two models, customers are not clamoring to upgrade. The company says it is projecting it will have sales of $76 to $78 billion in the upcoming quarter, up from $74.8 billion last year. Catherine Garcia

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