Marketplace - For female workers, an ailing feeling about financial health 

Episode Date: May 24, 2024

Per Bank of America’s annual workplace benefits report, more full-time workers are feeling secure in their jobs compared to last year. But there’s a catch: Those upbeat responses came from men, while the percentage of women who feel financially stable dipped slightly. Plus, the Federal Reserve’s inflation frustration, the SEC’s near-approval of spot ether ETFs and the federal tax code’s post-election future. Our fundraiser ends Friday, and we need your help to reach our goal. Give today and help fund public service journalism for all!

This is it everybody. Our May fundraiser ends on Friday and it's your last chance to help us reach our goal this month. Revenue sources for newsrooms like ours are changing and donations from you, our Marketplace community of listeners, are more important than ever. So please help us reach our May goal before Memorial Day weekend and fund public service journalism for all. Give now at marketplace.org slash donate and thanks. Well it's Friday so we'll do that thing we do on Fridays. We'll do a little bit of crypto, we'll do some tax code and we'll do some fun stuff too. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdal. It is Friday today.

This one is the 24th of May. Good as always to have you along, everybody. Without putting too fine a point on it. We have some things to talk about regarding the present and the near-term future of this economy. Courtney Brown from Axios is going to help us do that. David Gurra at Bloomberg is going to help as well. Hey, you two. Hey, Kai. Hey, Kai. David Gurra, let me start with you. We will go back to the Fed minutes that came out this

week from their end of April, beginning of May meeting. The quote of the day is, lack of further progress on inflation. First of all, you can't possibly be surprised, can you? No. I mean, this is an interesting insight into sort of how the Fed was assessing the progress that they've made so far. So just like another chapter in this story we've been reading for a pretty long time, but we did see in those minutes, policymakers kind of coalescing around this idea that maybe interest rates are going to have to be higher for a longer period of time than maybe they

expected and a lot of economists and folks on Wall Street expected as well. I think what stands out to me is like what a stark contrast this is to the kind of messaging that we were getting from the Fed chair on the heels of that that last meeting I think we talked last right after that had happened and you know, he came out there Happier than I think a lot of us thought he would be With how the economy was doing I think the economic backdrop to keep in mind here is they've gotten some pretty lousy inflation prints but you know There was this nod in those minutes to the prospect of there being perhaps further tightening. And what stood out to me at that meeting was Jay Powell saying, not unequivocally, but

pretty close to it, that he didn't have hikes on his card going forward. So I was a bit surprised by that when I saw the minutes this week. I think he literally did say, I don't see hikes as the next move, right? Didn't he say? Yeah. Unlikely, I think. Yeah. Courtney, you wrote about this this week and it. Yeah. Unlikely, I think. Yeah. Courtney, you

wrote about this this week and it was also sort of nodded to in the minutes. It's interesting to see that the Federal Reserve and members of the Board of Governors and the regional Fed presidents are explicitly now coming to realize that low income people in this economy and high income people in this economy are experiencing inflation in very different ways and that's becoming a very big problem. Yeah, it's if you can remember before the pandemic in 2019 there was this concept of the Fed being really concerned that their economic recovery was equitable. That was to mean that the Fed back then wanted to keep interest rates and keep interest rates

on the lower side and keep the economic recovery going for as long as possible. So certain groups of workers who hadn't felt the recovery would start to reap the benefits. And so what we're seeing now in the minutes is kind of the opposite. Obviously, interest rates are the highest they've been in two decades and the Fed is saying, well, wait a second, who's being hurt by those higher interest rates? Who's being hurt by high inflation? Increasingly, it looks like affluent Americans are doing okay. The stock market is up. Housing prices are up. But lower income Americans are not doing so hot. And we see some evidence of that from corporate earnings calls where companies are saying, yeah, our lower income consumer isn't spending the way that they used to.

Credit card delinquencies are up. And so now it's this question of, well, is this going to become enough of a worry for the Federal Reserve for them to cut interest rates? And we'll see, I guess. Yeah. And look, and Target is explicitly lowering prices, right? In the face of all this stuff that's going on. David, I don't know if you heard my chat with Austin Goolsbee last week, president of the Chicago Fed. I give you a little shout out. I

prefaced a question to Goolsbee with you having asked Powell a number of years ago, what he means by transitory. And he told us what he means and we all go in and oh man, that's what he means. And so I asked Gulesby what bumpy means because he uses it, Yellen uses it, Powell uses it, other Fed officials use it. And I guess I don't have a good answer for what bumpy means.

Is it teeth rattling or is it just a little turbulence? I appreciate you asking that. And I do remember asking Fincher Powell that back when we were doing the press conference from our home offices. It was a bit of kind of like a stroke my beard question for him, but I gave a great answer. I think that it's getting to this point that the last mile, as these policymakers say, is going to be so difficult. It's going to be bumpy.

It's going to be hard. And you have in Fed Chair Jay Powell, someone who's adamant that we get back to this 2% target for inflation. And that's what most central banks agree should be the target for inflation. But I think that I sense from what he's been saying lately, what we've seen in the minutes, what we've heard from other Fed officials like Austin Gulsby that there's awareness about the data that's coming in. Nobody wants to move too quickly. Nobody wants to do this too hastily. And so I think that that's like what that indicates is, you know, yes, they're still paying attention to each data point that comes in.

It's a data by data point decision. But there's an acknowledgement that they can't pin too much on one data point. And yes, they want to see the best focused trend they can. But at the same time, there's also this acknowledgement that, you know, the longer they wait, if they screw this up, the results could be pretty devastating. Right. Okay. Courtney Brown, we're going to get a little wonky here.

You can let your wonk flag fly if you want to within reasonable layperson limits here. And you got like a minute and a half to do this. What if the Federal Reserve's interest rate policy, or its policy rate actually, is not as restrictive as they think it is. That is to say, what if they're not cranking down on the inflation, on inflation, as much as they think they are? This is a neutral rate conversation. It's an effective rate conversation.

What if they're not doing what they think they're doing? I know this is nerdy, talking about the so-called neutral interest rate. The rate, it does matter, you know, the rate at which interest rates aren't tamping down on the economy and they're not kind of goosing the economy either, so just kind of flatlining. So this, it's nerdy, but it's also kind of sexy. I'm here for this guy.

Oh bless you, oh my goodness, this took a turn. Oh no, I hope I'm here for this guy. Oh, bless you. Oh my goodness. This took a turn. Oh no, I hope I didn't over-sell it. Okay, I think it's sexy because first of all, this is an unobservable thing and we have this group of very smart policy makers and it seems like they all have different ideas of what might happen or what is happening to this neutral interest rate, especially now, when as I said, interest rates are the highest they've been in two decades, but where's the economic slowdown? I guess if you squint, you can see it. But looking at the aggregate data,

the economy's doing well. The unemployment rate is below 4% for like two years now. Things are looking pretty good. So like where is the crushing of demand if this interest rate is supposed to be restrictive? So there was this interesting paragraph in the Fed minutes that said, well, okay, maybe interest rates are restrictive, but some policymakers are like, okay, but we need to think about like the degree of restrictiveness. Like, is it just like a little bit restrictive? Is it a lot of bit restrictive? Could we go more restrictive? And is that what we need in order for inflation to fall back to 2%? See, told you it was sexy. It totally is. We are bringing sexy back to monetary policy on Marketplace today. Courtney

Brown at Axios and David Gura at Bloomberg, thanks you two. Thank you. Thanks, Kai. Have a nice weekend. Wall Street on this Friday near the end of May. Well, you know, not sexy, but better than yesterday, that's for sure. We'll have the details when we do the numbers. The sports headlines this morning had a distinctly marketplace bent to them. The NCAA and the five biggest college sports conferences have come to terms on a set of class action lawsuits that could mean some current and former college athletes could get $2.8 billion in what is,

essentially, back pay and could lead to a revenue sharing plan that would mean college athletes might start getting paid. You'll have noticed the qualifiers in those previous sentences, could, would, might, because there are a whole lot of ifs here. The settlement still does have to be approved by a judge and all the parties, and not to be discounted is how exactly this whole thing might work. Marketplace's Samantha Fields has that story. If this settlement stands and athletes can soon get a share of the revenue they help

generate for their colleges, there are going to be a lot of decisions to make. Kenneth Shropshire at the Wharton School at Penn says the most difficult one is how to make the distributions. And it is a head exploding exercise to think about how you do it. There are just so many different ways to go. Do you strike some deal as the player comes in? so many different ways to go. Do you strike some deal as the player comes in? Do you pay based on the level of performance? Football brings in all the money, so should lacrosse get some number that's equal, or how do you do it?

There's also the question of how much of the revenue athletes should get. This settlement says about 22%, but Ellen Starowski at Ithaca College says she thinks that should be an open question too. All of these things are being discussed in the absence of collective bargaining. And this is problematic because it raises the questions around, well, how do you get to 20 percent rather than 50 percent?

She says the athletes should get to weigh in. There's also the issue of gender equity. Title IX requires equal treatment of men and women. Andrew Zimbalist at Smith College says that raises the question of whether the law would require equal pay for male and female college athletes. If athletes get some or all of their remuneration based upon their market value, that threatens to violate the basic principle of Title IX. Because historically, men's sports have brought in more money than women's. Zimbalist says paying athletes through revenue sharing would be a massive overhaul of the whole college

sports system. And so there's just so many economic and political and legal questions that we don't know the answers to. And likely won't for a while. I'm Samantha Fields for Marketplace. You might have heard in your perusal of the news this week that cryptocurrency is having a moment. Bitcoin was above $71,000 a piece for a day or so, and Ether is significant but not as big a deal as Bitcoin cryptocurrency.

Got a big bump midweek when the Securities and Exchange Commission all but fully approved the trading of securities based on Ether, which will lead very soon to Ether ETFs, exchange traded funds. Marketplace Spreemanishaw has the primer. The security would be in something called an Ether spot ETF. That means that instead of you going and buying the cryptocurrency called Ether, you'd have someone else do it for you, specifically an asset manager. It really takes some of the friction and buying the cryptocurrency called Ether, you'd have someone else do it for you. Specifically, an asset manager. It really takes some of the friction out of the process.

Ari Redboard is head of policy for TRM Labs. Normally, you have to create a crypto wallet, use an exchange. Here you're doing it through traditional investment mechanisms. Like a brokerage account or financial advisor who might already be managing your savings. Redboard investigates money laundering done with cryptocurrency, and he says having people invest through an ETF could cut down on that kind of activity. That space is highly regulated already? Ether works as a cryptocurrency a little different than Bitcoin does.

Coin transactions are verified by a subset of the people who hold them. That may have made the SEC uncomfortable, says Jack Graves, teaching professor at Syracuse University College of Law. I think there have been concerns of potential control and or manipulation. Could the value of the coin be manipulated by a small group of people in charge of verifying the coins? Tools had to be developed to watch out for that. Catherine Dowling is chief compliance officer at Bitwise Asset Management,

which provided research to the SEC on how any fraud could be detected. That ended up being the hook wherein the SEC was able to get to a place of more comfort. There are a few more steps that have to happen before people can actually buy spot ETFs for Ether, but when it happens, Dowling says it'll mean a lot more people will be able to get access. According to data firm FactSet, since Ether's crypto cousin, Bitcoin, became available as a spot ETF in January, people have invested $15 billion into it. In New York, I'm Sabri Benishor for Marketplace. Coming up. I had a funny thing happen. I learned that I'm an American.

You kind of can't change where you come from, but first let's do the numbers. Dow Industrial is up four points today, less than a tenth percent, 39,069. The NASDAQ up 184, one in a tenth percent. 16,920. The S&P 500 added 36.7 percent, 53.4. For the five days going by, the Dow lifted less than a tenth percent. Nasdaq up one in a tenth percent. The S&P 500 rose seven tenths of one percent. Ahead of the holiday weekend, let's take a look at some stocks that follow that theme, shall we? Newell Brands, the parent company of Coleman, which makes grills and camping gear, fired up one-tenth of one percent. Today, Kraft Heinz, which makes many of your cookout supplies, picked up about a tenth

of one percent. Bonds Up, yields down 4.46. On the 10-year, you're listening to Marketplace. This is it everybody, our May fundraiser ends on Friday and it's your last chance to help us reach our goal this month. Revenue sources for newsrooms like ours are changing and donations from you, our Marketplace community of listeners, are more important than ever. So please help us reach our May goal before Memorial Day weekend and fund public service journalism for all. Give now at marketplace.org slash donate and thanks.

My name is Lee Hawkins. I've been a journalist for over 25 years. On my new podcast, What Happened in Alabama, I get answers to some of the hardest questions about how things came to be for many black Americans and the truth that must come before any reconciliation can happen. I investigate my family history, my upbringing in Minnesota, and my father's painful nightmares

about growing up in Alabama. What Happened in Alabama is a new series confronting the cycles of trauma for myself, my family, and for many black Americans. Listen now. This is Marketplace. I'm Kai Rizdahl. Consumer sentiment has been in the news of late. It is maybe not great right now. But there are more measures of how we're feeling than just those done by the University of Michigan and the Conference Board. In its annual Workplace Benefits report out this week, Bank of America says more people with full-time jobs are feeling more confident about their financial well-being than they were at this time last year.

There is, of course, a catch. All those more positive responses came from men. The percentage of women who are feeling financially well actually went down slightly. Marketplace's Kelly Wells has that part of the economic gender gap. When Ann York read through the report, she was already expecting one major factor. Women overall earn less than men do. York teaches economics at Meredith College and studies the labor market gender gap. She says if your income is more limited, But what you pay for is the same, then it's going to be harder to manage a budget and meet your financial goals.

But this report shows another reason for worry, says Yana Rogers, who directs the Center for Women and Work at Rutgers University. I think that has to do with the stigma associated with being a caregiver. But, you know, as I'm experiencing personally, I think more people now are caring for elders. Often as well as children. She says it is typically women who take on that work. Women especially are nervous about long-term care for their parents and for themselves. The study also says the vast majority of caregivers

don't feel comfortable telling their employers that they are caregivers. That is a cultural problem that companies need to be focused on. Kelly McElnaney is the founder of UC Berkeley's Center for Equity, Gender, and Leadership. She says changing gender norms means tackling the expectations at home. Men need to step up as caregivers and women need to make space for other people in their life if they have them. And she says in the workplace, managers should be more transparent about their caregiving

duties to show they're normal and worth prioritizing. I'm Kayley Wells for Marketplace. There are a whole lot of issues in the subtext of this year's presidential election. Most of them are pretty obvious. Some of them are not. On the perhaps not side of the ledger is the federal tax code. Whoever's in the White House next and whichever party is in control of Congress next, will be in charge when part of the 2017 Tax Cuts and Jobs Act, the Trump tax cuts, expire at the end of 2025. And that has tax code types in Washington, of which there are many thinking ahead, especially

in light of the growing and growing attention being paid to national debt. Marketplace's Kimberly Adams reports. The government gets most of its money from taxes paid by people and companies. And sometimes when it wants people or companies to behave in certain ways, it offers them incentives in the form of tax breaks. They are intended typically to encourage certain behavior that perhaps policymakers have decided is worth subsidizing. Samantha Jacoby is deputy director of federal tax policy at the Center on Budget and Policy Priorities.

She says, think having kids, saving for retirement, buying a home, and... They're overall tilted towards people who have a lot of income. Many of them are in the form of tax deductions. This is especially true, says Jacoby, since the passage of the 2017 tax law, which increased the standard deduction and reduced the number of households that itemized to just 11%. From a government accountant's point of view,

those tax breaks look an awful lot like spending, which is why they're known as tax expenditures. And if you add them all up, CBPP says it's more than $1.3 trillion a year. The ones that would make big dents in the national debt problem are more politically popular. Gerald Pranti is a professor of economics at the University of Lynchburg and says that's because the most expensive tax breaks are for things

lots of voters really like. It's the exclusion of employer-provided health insurance, it's the child tax credits, the earned income tax credit, it's the mortgage interest deduction, it's those types of tax breaks. And eliminating or even reducing those breaks is very much a third rail of American politics. People often will frame it oh you're gonna're going to raise my taxes. And nobody ever wants to hear about raising taxes. No politician, very few politicians ever get elected on the running on the promise of raising taxes. Classic example, George H.W. Bush's famous 1988 campaign promise.

Read my lips. No new taxes. It helped him win that election, but when concerns about the blooming national debt led Bush to break that promise, it helped him lose the next election. Which means we have lots of tax breaks, but not a lot of political will to claw them back. And so, says Pranti, The IRS has basically been turned into not just a revenue collection agency, but also basically a welfare agency, having to give people goodies and tax breaks for all sorts of different things that they do. We probably won't hear much about clawing back tax breaks as a strategy to address the

debt from politicians on the campaign trail. But Samantha Jacoby at CBPP says they will likely have to be on the table in the longer-term discussion of the national debt and deficit. Each individual tax expenditure, you know, it may not be a huge driver of the deficit and debt, but all these things combined together add up to some pretty real dollars. She says it may be easier for politicians to go after more visible spending every year at budget time, but the hidden spending buried in the tax code matters too. In Washington, I'm Kimberly Adams for Marketplace. Even though affording one house is still a dream for a whole lot of people in this economy, owning a second home is not all that uncommon. According to the National Association of Home Builders, as of 2020, more than 5% of our total housing stock,

that's more than 7 million second homes, existed in the United States. Sometimes that means a cabin up north or a summer getaway out of the city, and sometimes it's a little farther afield. Here's today's installment of our series, Adventures in Housing. My name is Aileen Smith. I'm a resident of Wauwatosa, Wisconsin in the United States

and Tremor, County Waterford, Ireland. I was anticipating retirement and I was trying to figure out how I was going to spend my time. I didn't think that I wanted a part-time job, but I didn't want to just have unlimited amounts of free time. So one of the things I enjoy is hosting people. I set up a Facebook group where I just invited random people over to my house for dinner

and enjoyed having dinner parties. And then I thought, well, what if I paired it with this place that I love, which is Ireland? I have the bonus of my brother living in County Waterford. He's lived there since 2001. Over the years, people have said to me, next time you go to Ireland, will you bring me with you? Because I've never been, and I'd love to go with somebody that knows their way around. And I thought I could never bring all those people who have asked me this, but if I had my own place there,

I could just say, here's when I'm gonna be there. I have a couple of extra bedrooms. Let me know, look at your calendar. And that was the start of the idea. I have two adult children. I said to both of them, what do you think about this? And my daughter said, maybe you should rent first, which I thought was a smart thing to say that felt more like what a mom would say to a daughter.

And I said, you know, I'm pretty sure that this is what I want to do and that I don't think I need to test it. So I was there for the weekend and a house popped up that was in the town I was looking in. It was up at the top of the hill right in the city center and it was down a little lane. I offered what they were asking, which was 295,000 euro. I made the offer in April and closed at the end of June, 2022. I invite people to stay there with me when I'm there. I never get tired of having guests. It's fun every single time. I own this place on my own and I'm in my 60s. I'm perfectly healthy and energetic and have no problem getting up to the third floor

where my bedroom is at all. But if the day comes that I physically can't live in this place or if I get tired of it, I will sell it. But I had a funny thing happen. I learned that I'm an American, which may sound like a funny thing to realize because I am an American, but I don't have a desire to live there full-time. My life that I have in the United States is a very rich and satisfying one,

but it is really enhanced by having this special place to go to a couple of times a year. Aileen Smith splitting her time between Wabatosa, Wisconsin and Tremor, Ireland. We cannot do this without you this year, you so whether you are firmly planted here or making a home anywhere else, tell us about it, marketplace.org slash Adventures in House.

This final note on the way out today, a footnote to Sabri's story on Ether. We will likely never see a Dogecoin ETF, but even those not steeped in crypto might have seen its avatar, a Shiba Inu dog, kind of given the side eye You could properly call Dogecoin a meme coin, but the dog It's a whole long story how it got from dog coin to doge coin

Anyway, the dog was real a Shiba Inu named Kabuso which died today at the age of 18 for a dog one Dogecoin today by the by worth 17 cents. Our theme music was composed by BJ Liederman, Marketplace's executive producer is Nancy Fargoli. Donna Tam is the executive editor. Neal Scarborough is vice president and general manager. And I'm Kai Rizdahl.

Have yourselves a great weekend everybody. We are back on Monday. If you're working Monday by the way, thank you. This is 8PM. My name is Lee Hawkins. I've been a journalist for over 25 years. On my new podcast, What Happened in Alabama, I get answers to some of the hardest questions about how things came to be for many black Americans and get answers to some of the hardest questions about how things came to be for many black Americans

and the truth that must come before any reconciliation can happen. I investigate my family history, my upbringing in Minnesota, and my father's painful nightmares about growing up in Alabama. What Happened in Alabama? Is a new series confronting the cycles of trauma for myself, my family, and for many Black Americans. Listen now.