Morning Brew Daily - Government Avoids a Shutdown & The Largest Healthcare Worker Strike in History

Episode Date: October 2, 2023

Episode 160: Neal and Toby explain how the government avoided a shut down over the weekend. Plus, a round up of the latest strike news and why we could see the largest healthcare strike in history begin this week. The guys share their winners of the weekend, including a sea lion at the central park zoo and the impact BTS has on the South Korean economy. Finally, the Las Vegas sphere has officially opened and what we are watching this week. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

Many employees can't afford a hefty medical bill that pops up out of the blue, but it happens. And employees who are financially stressed are, understandably, more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, AFLAQ plans help with out-of-pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more at aflac.com slash morningbruedaily. That's aflack.com slash morning brewdaily. Good morning, Brew Daily show. I'm Neil Fryman.

And I'm Toby Howell. On today's pod, the U.S. avoided a government shutdown with a last-minute compromise, but the economy isn't totally out of the woods. Then we have a triple strike update. Actors and autoworkers are on the docket, but so is a mystery third industry. Stay tuned to find out who's eyeing the picket line next. It's Monday, October 2nd. Let's ride.

Neil, we have a special holiday show coming up next Monday, and we will. want to get you guys the listeners involved. We're calling it the bullish or bearish show, where Neil and I will go through various news stories, trends, et cetera, and determine whether we're bullish or bearish on them. So where do you guys come in? Neil, tell them. Sure. Well, we'd love for you to submit some topics you'd like to hear us weigh in on. It can be a major business story or better yet, just something you've been arguing about with your friends, like the future of pickleball, whether the metaverse will actually happen or pineapple on pizza. Just kidding. Please don't ask us to talk about that.

So if you have a good debate topic for this bullish or bearish show, you can send it to our email address, Morningbrewdaily at Morningbrew.com. Thank you, Neil. Before we jump into the news, we have a quick little word from our sponsor, Yahoo Finance. Yahoo Finance is the perfect approachable platform for all investor levels. So whether you're officially not a financial advisor like us, or you think you can pull a roaring kitty and take on Wall Street, Yahoo! Yahoo Finance gives investors of all levels the tools to succeed. Yeah, there is so much content out there. And what I like about Yahoo Finance, for me,

as someone who's doing so much research on finance and markets, every single day as they curate it all into one single place, you have breaking news, you have analysis, charts, analyst research, everything that you need that is just so overwhelming is right in one place. Perfect example. Lou Lemon and Peloton announced their partnership last week. I immediately jumped on Yahoo Finance to see how the market was reacting. Morningbrew Daily plus Yahoo Finance. Some are saying it's a better duo than hair and makeup. If you want to make sense to the markets, check out finance.jahoo.com. That's finance.

com. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179 like the next grill three burner gas grill. Or get $50 off a select Weber Spirit grill and bring big flavor to your backyard. Then set the scene with Hampton Bay string lights that bring it all together. Shop spring backyard days for seven days at the Home Depot. Now through May 6th. Exclusion supplies to homedipo.com slash price match for details. Let's head to our first story, which is about something that didn't happen rather than something

that did. What didn't happen was a government shutdown. In a surprise twist, lawmakers came together Saturday night to pass a short-term funding bill that keeps the government open and avoids a disastrous shutdown. As a reminder, that shutdown would have led to millions of federal workers not collecting paychecks, government facilities like national parks being closed, and potentially really annoying travel disruptions. The deal came about when Republican House Speaker Kevin McCarthy put his job on the line by deciding to court Democrat votes rather than appease the right flank of his party, which wanted deep spending cuts. Those conservatives are now outraged with McCarthy for working with Democrats and said they want to remove him from his position this week.

McCarthy said, bring it on. But while the funding bill does keep the government open, it's just punting the ball downfield. The bill lasts just 45 days until mid-November. So there's another major deadline to pass a longer-term spending package right before Thanksgiving. Toby, this was a total surprise. Pretty much everyone expected us to be in a government shutdown right now. I know. I'm honestly sad because we did all these previews and everything, and suddenly they came to an 11th-hour deal.

But Americans definitely dods a bit of a bullet on this one. was all this talk of the triple whammy hitting people this weekend as two COVID-era spending bills also our programs end of this month in addition to what we thought was going to be a very economically damaging government shutdown. But we still have a double whammy. And the first whammy is that $24 billion in child care funding dried up. So now child care is a lot more expensive. And some women and families in the workforce are potentially staring at what they're calling the child care cliff. And then also student loan payments, dun, dun, dun, the three-year moratorium on the federal student loan repayments.

Ended as well over the weekend. So now 43 million borrowers are staring down those payments again. So didn't get the triple whammy, but still have a double whammy to worry about it. Yeah, let's talk about the child care cliff for a second because child care is just extremely unaffordable in the United States. And this was the biggest funding into child care in U.S. history. And now that it's gone, now it's gone. In 41 states, the average annual cost of care for two children was higher than the average annual

mortgage payment. So if you talk to any parents with young kids, they're saying this is an absolute crisis, not just on the demand side, but on the supply side, because there's just not enough child care to go around. That's because wages are really low, and it's just not a really good business to be in at all without government subsidies and things like that. There's not been a lot of government support for these programs. Biden is trying a couple different things. We talked about the Chips Act and some of his bigger industrial policies where he's tying incentives and subsidies for manufacturers to come in and build factories to child care. So you see all these chipmakers coming into places like Ohio. And there's a lot of wrangling going on because Biden is making them provide guaranteed child care for the workers. But it just kind of shows you the state of this industry right now. And they say this is going to be a cliff, but it's more of like a gradual rolling downhill where there's a bunch of child care providers that won't necessarily close right now, but what's going to happen is they're going to have to reduce wages.

They were able to raise wages for employees thanks to this funding, and now they're going to have to probably bring them back to normal levels, which could see an exodus of workers. There's already a huge exodus of workers from this industry in general, as we'll talk about in the next story. And then also, let's talk about the student loan repayments. That's just been waiting in the wings for so long now. As a result, up to $100 billion in consumer spending could be wiped out of the economy over the next year. That's, I mean, again, we've talked a lot about how consumer spending, consumer spending has

been a thing kind of powering the economy through this kind of wishy-washy period. And suddenly, you're having this thing that's really going to eat into the bank accounts of millions of Americans. So, again, I mean, we've talked about whammies, but, like, even though we did dodge the bullet on the government shutdown, like, these are the two big stories that are going to determine what the kind of economic fate of the U.S. is going for. Well, that's not really, really dramatic, but It is dramatic. I was, Molly, one of Morning Brew's writers, talked to a couple of people who have tens of thousands of student loans coming due and really ask them, like, so what is your, how is your spending going to change? And I thought the answers were really insightful.

They were spending on things like concerts and dining out and travel and part of this experience economy that we saw such a massive boom over the summer. Taylor Swift shows sold out, Beyonce shows sold out, movies, Barbohimer, things like that. Seems like that's what people were spending their excess cash on. And now that that's going away, it seems like from these interviews, they said, well, I'm probably not going to go out to dinner anymore. And I'll cook at home. And I'll probably won't go to that concert that I had to pay $300 for. So that seems like if I were like a retailer or, you know, a concert organizer,

I'd be looking at these interviews and say, well, maybe the boom days are over. We need another heiress tour. Or we just need the heirs tour to continue forever. It's going to, don't worry. Seriously. All right. Now, let's move on. we are officially done with hot strike summer, but only because fall has started. There are still many

that are afoot. So for our second start of the day, I want to give an update about the strikes from around the business world. First up, let's check in on Hollywood, where the Actors Guild is once again back at the negotiation table. Studio execs and strike leaders are meeting today to try to hammer out a deal, but there is finally some optimism because now they have a template of sorts to follow after the rider's strike officially ended last week. And while it certainly isn't easy as copy and pace, SAG Afterra do want a lot of the same things that the writers were fighting for.

A new residual model that factors in streaming, better pay, and protections against AI are all chief among them. Oh, also, Neil, I know you've been holding your breath, but late night shows return today because they have the writers back. Thank goodness for that. What do you make? Wow, that sounded a little sarcastic, Toby. Yes, we have Jimmy Kimmel Live coming back,

Jimmy Fallon, Seth Myers, Stephen Colbert, John Oliver, Bill Maher came back last week. It seems like you're a huge fan of those shows. But I will say it's big for these broadcast networks because the viewership for that slot, that 1130 p.m. slot was down 40% to 50% over the strike. This has been going on for almost five months. So it's a big deal for these networks to get these big names back who have been holding out. Yeah, there will be a guest shortage, though, which is, interesting because a lot of the actors won't be appearing on these television shows. So that's

kind of an angle to look at. And then also SNL might come back as well. Technically they can because their actors work under a different contract. But a lot of people are saying they probably won't just to stay in solidarity with the union. So Hollywood is slowly coming back, but I heard from a source that no one works after Thanksgiving anyway. So the production might not really start revving up, even if all these strikes come into an end until 2024. Next up, the worker strike is expanding in scope and now includes all of Stalantis and GM parts distribution centers along with one SUV plant from GM and one from Ford. That brings the total number of auto workers on strike up to 25,300 out of a possible 146,000. And even though Ford has been claiming publicly that a deal

is close, the UAW doesn't see it the same way. Neil, we knew from the beginning that Sean Fain wanted to expand this strike and cause maximum chaos. Looks like we're slowly but surely, seeing his vision take shape. I feel like I'm watching the fourth dark night movie. I mean, this guy is like the Joker, you know, he's going on every single week. You don't know what he's going to say in which factories he's going to expand the strike to. I'm sure we're like on pins and needles. Imagine these car companies that have no idea what's going on. This guy is serious Batman villain energy. They are not, doesn't seem like they're quite close in terms of negotiations. So this is going to continue. Yeah. There is some back and forth

over the past week where a VP at Ford said, we are making significant progress on the pay and benefit side. Then Fane said, yeah, not really. And then Ford CEO, Jim Farley said on Friday that Fane has been on television more than Jake from State Farm while Ford was working hard to reach a deal. Then Fane said, like a good neighbor, were available 24-7. Name the time and place you want to settle a fair contract for members. We'll be there.

So you're seeing this tit-for-tack going back and forth. Okay. And then finally, we have a strike brewing in the medical, world where eight unions representing 75,000 employees of Kaiser Permanente said over the weekend that they had not reached a labor agreement with the company, which means we could be getting the largest health care strike in U.S. history sometime this week. The health care workers are looking for across-the-board pay raises improvements to their pension plans, as well as protections against outsourcing. Now, emergency rooms and hospitals will stay open while doctors and registered nurses

will not be taking part in the strike, but other Kaiser staff like nursing assistants, pharmacists, lack technicians, and others are all threatening to strike if a deal isn't reached. Neil, thoughts on the latest almost strike? That is Berkeley? It seems like it may happen for three days later this week. This is mainly about staffing shortages, which is a little bit different than the other strikes we've been seeing. But there is a crazy burnout crisis in the healthcare industry during 2021 and 2022, more than 5 million people left the industry up to two-thirds of health care staff, say they're burnt out and more than 20% are quitting. So this is about, you know, say people not go, you know,

people taking a PTO and they're not being enough staff to cover. So everyone just has to work 33% more. So there is just a deep crisis going on in this industry. So the unions are asking Kaiser Permanente to ramp up their hiring to protect current staff. Yeah. And just to look at the big picture for a second, it looks like Americans are getting more on board with unions in general. So Gallup, poll release in August shows that 43% of those surveys indicated that they want unions to gain more power up from a record low of 25% in 2009. And 61% believe that unions help rather than hurt the U.S. economy. That's the highest level it's been since the 90s. So overall, people are getting on board and supporting, for the most part, these unions. But this could change

when something like a health care worker strike happens and it impacts people's daily lives and their ability to get the meds that they need. Something like a Hollywood writer strike or a auto worker strike, which is important to those particular industries, isn't necessarily going to affect people's daily lives, which may reflect in those popularity numbers for unions. This could change things.

Yeah, that's the asterisk for sure. All right, Neil, let's take a quick break, but stick around because we're talking about the Las Vegas sphere next. We all have that dream trip. We've been wishing we could go on, but too often life, or usually price, gets in the way. That's why Priceline is here to help you turn your dream trip into reality.

With up to 60% off hotels and up to 50% off flights, you can book everything you need for your next adventure. Don't just dream about that next trip. Book it with Priceline. Download the Priceline app or visit Priceline.com and book your next trip today. You said this place was steps from the water. We just haven't found the steps yet. How much did we save?

Enough. Enough to get lost. Or you could book a stay with Hilton. Welcome to your oceanfront room. Just steps from the water. The Hilton sale is on now. Book on Hilton.com or the Hilton app and save up to 20% to get the stay you expected.

When you want savings, not surprises. It matters where you stay. Hilton for the stay. Let's head to our winners of the weekend where we each pick one person or thing that's enjoying life more than Donna Kelsey right now. Toby, you won the pre-show dance off so you can go first. My winner of the weekend is a sea lion named Sally,

who used the crazy rainstorms in New York City to escape her enclosure at Central Park Zoo. Severe flooding hit the city on Friday, and it led to the water levels in Sally's enclosure to rise so high that she could just swim out. So swim out, she did, but apparently didn't like what she saw and quickly returned home to more familiar surroundings.

But Neil, I want to use Sally to talk about those rainstorms and some of the flooding videos we saw because it turns out we're probably going to see a lot more sea lines in the future because New York is low-key sinking. A NASA study completed last week found the city sinks an average of 1.6 millimeters each year under its own weight, while over the past 20 years, sea levels have risen by 4.4 millimeters per year in Manhattan. So not a great duo for humans, but not a bad combo for Sally, the sight seam. sea lion. Well, I think she got out of her cage, went down Fifth Avenue, saw all the tourists, and we're just like, I'm getting back. But no, it was crazy last Friday. We ended this show taping and then looked outside, and there was an absolute deluge out there. And a lot of places

in New York City were underwater. It was a historic rainstorm. JFK got it, had its wettest day since 1960, and it was definitely the wettest day since Hurricane Ida two years ago. And, you know, just to me a lot of people were saying that it shows the lack of infrastructure preparedness that New York City and other large cities have as climate change creates more extreme weather events. Yeah. So this, I want to talk about this NASA study a little bit. They found that several key locations in New York, like LaGuardia Airport, like Tony Island

and Arthur Ashe Stadium, are sinking faster than the rest of the city. So LaGuardia and Arthur Ash in particular both saw the most rapid sinking from 2016 to 2023, falling 3.7 and 4.6 millimeters per year respectively. Again, we're talking in millimeters here, but over time, these things happen. It's kind of an alarming thing, especially as the water levels are rising in conjunction. So we're seeing these events become even more impactful because the flooding and the sea levels rising. So, yeah, even though, I mean, my winner is Sally, though, because I love that she took

her opportunity to escape her enclosure, but it is kind of a broader picture that maybe not as wintery. All right, let's go to my winners, which are South Korean golfers, Sung J. M, and Siwu Kim. You might be thinking, hey, Neil, the big golf news from this weekend was Europe beating the U.S. at the Ryder Cup, which, yes, was a big deal. Don't worry. I watched way too much of that tournament. But actually, these South Korean golfers won just as much, if not more, than Team Europe. Here's why.

Sung J.M. and Siwu Kim led the South Korean team to a gold medal at the Asian Games in China, which allows them to be exempt from having to serve in the South Korean military. So in South Korea, all able-bodied men are obligated to enlist in the army for 21 months once they turn 19 years old, as the country is technically still at war with North Korea. But you can get out of military service if you win an Olympic medal or a gold medal at the Asian Games for being a boss in sports and showcasing your country on the world stage. Toby, can you imagine the nerves as you're standing over a putt, knowing that it's not just a golf tournament, but 20 months of your life? I can't imagine. I can't even stand over a five-foot puck. with nothing on the line and not feel nervous.

So, yeah, the fact that they're playing for their livelihoods here, their entire careers, because other South Korean golfers and other South Korean athletes have not had the opportunity to win that gold medal, and they've had to do the military service. And when you take 18 months off, 20 months off, from playing the sport, you lose a lot, and sometimes you lose your whole career and never come back the same.

So, yeah, this is a really big deal. And then also, I mean, we've seen it in the entertainment world as well with BTS. Yeah, so BTS is from South Korea. contribute trillions of dollars to the economy. They are, they bring one in every 13 tourists to come to South Korea. So huge economic juggernaut. But they are all men, able-bodied men, who have to serve in the military. So the big cloud over them was, is BTS going to have to serve in the military? Like, they serve South Korea in so many other culturally important ways, obviously in economically important ways. But the sugar, I think, is that how is it's pronounced,

is the third BTS member to enlist in the military. So they are doing their service, and they're kind of on hiatus right now as the members go and do their compulsory service in the military. Oh, it's wild. Imagine T. Swift joining the American... Well, there is a history of it, especially in U.S. athletes.

I mean, the most famous American athlete to go serve in the military is Ted Williams. He hit 406 in 1941 and then went off to World War II the next year. That's insane. All right, Neil, let's move on. Remember when we talked about the Las Vegas sphere, opening back in July. Well, technically, that was only half the story because even though seeing

the 1.2 million LED bulbs on the outside of the sphere light up was cool, it was nothing compared to what we saw this Friday. You two hosted the first ever concert inside the venue, and it was, in a word, unfreaking believable. The 16K wrap around LED screen inside the arena absolutely stole the show, and everywhere I looked on social media this weekend, I saw videos of the sphere. At one point, the screen turned into this scene high above the clouds as if the band were performing on a mountaintop. Another made it seem like a cascade of digital numbers and letters. We're slowly lowering down on the heads of those in attendance. And honestly, Neil, I'm a little mad at us for picking this story to cover because here I am

describing visual effects that are pretty much indescribable. You truly just got to see them to believe them. Neil, what a debut for the sphere. I'm all in on this thing now. Yeah, it does seem like this is heralding the future of entertainment, whereby technology is as much a part of the show as anything. I thought it was interesting that they chose you two as the, to open the sphere as the, quote unquote,

the future of entertainment because you two, I mean, they're a great band and they're legendary, but they've been around for a bunch of decades. So it was kind of an interesting choice because I don't know how relevant they are or how cutting edge they are, but I was doing some research actually on the tour for Acting Baby, which is the original tour in 1991,

which was the album that, this particular tourist center round, they pioneered the use of video technology behind them, which is now an absolute staple of concerts everywhere. So I don't know if, you know, being in a huge sphere with LEDs going on all around, even 160,000 speakers blasting your music is, you know, replicable everywhere. But it does seem like you too has always been on the forefront there. Yeah, let's just do some stats for this thing again. I know we've talked about it, but it's 366 feet tall.

It's got 580,000 feet of screen on the outside. The LEDs outside can display up to 256 million different colors. The inside has 160,000 speakers spread around the bowl. And it also offers this 4D experiences. So it reminds, I don't know if anyone's been to the Disney World and gone to the Bugs Life show. This could be a very forward to thing. But your seat kind of vibrates. They blast, like, air at you and stuff like that.

So that's the 4D experience. So imagine you're out of YouTube concert. you're also, you're on a mountaintop, but you're also getting cool mountain air blasted at you. I don't know, this is definitely the future of entertainment. Although there were some reports, I heard videos of people going, oh my gosh,

I'm about to throw up looking at this because it's so big, it's so immersive, and it's really trippy in a lot of ways. It's built for social media. Yeah, oh, man. It was everywhere. It was all over social media.

So everything that happens here, every concert, there are discussions that Harry Styles might be next. There's also going to be a movie, there starring Friday, which is kind of like a planet earth kind of deal. That is going to be unbelievable. And the tickets for that are $49. So this is a very premium experience.

But honestly, yeah, it's cheaper than anything else you would go to in Vegas like Cirque to Soleil. So we'll see what happens with the sphere. It's a rare win for James Dolan, who's the MSG executive chairman, who also owns the Knicks and the Rangers. We hate to say it, but we got to hand them this one. Okay. Finally, let's preview what to look out for this week.

it's going to be a busy one. The biggest business event of the week will likely be the criminal trial of Sam Bankman-Fried, which begins tomorrow in New York and is set to last six weeks. The former FTCS CEO is accused of orchestrating

one of the largest business frauds in history, while building is now collapsed $32 billion crypto empire. If convicted, SBF could serve the rest of his life in prison. And wow, what timing.

Also tomorrow, author Michael Lewis will release his new book, Going Infinite, about SBF. I caught a little of Michael Lewis on 60 minutes last night and he looked like a dude who knew he was about to sell a lot of books. He looked like a dude who was about to sell a lot of books, but he's also been getting a fair amount of heat on social media. He keeps portraying SBF in kind of this sympathetic light.

Everyone's like, why are you sympathizing with this guy? He's not the victim here. So very curious to see what the entire book looks like because the excerpts have been a little too lenient a lot of people are saying for SBF. Okay. Yeah, very similar criticism to what happened with Walter Isaacson with his biography on Elon Musk as well. So this trial is going to be, we'll talk about a lot more tomorrow and preview it. The Supreme Court is also back in session today

and the nine justices will hear a range of cases on things like gun rights, regulatory power, race, and free speech. Some of the biggest business cases involve a First Amendment dispute over social media content moderation and one about whether Purdue Pharma's $6 billion settlement of opioid lawsuits can move

forward after SCOTUS blocked it in August. Yeah, definitely looking at that First Amendment case, it determines whether you can remove content based on users' viewpoints or if you can ban politicians like Donald Trump. So that's definitely going to be a hot topic one. Yep. Speaking of Trump, the trial over former President Trump's businesses also starts today in New York. Trump could be on the hook for $250 million in penalties as part of a civil lawsuit brought by the state's attorney general. As we talked about last week, the judge presiding over the trial ruled that Trump was liable for fraud by inflating his net worth to secure favorable

loan deals and insurance rates, which could hamstring his ability to make money in New York and dealt a major blow to his real estate empire. Last night, Trump said he was going to court today in an unexpected move. Big business fraud case. There always is. And a few other tidbits you should know about. Powerball jackpot is now more than $1 billion ahead of tonight's drawing. Toby Juba.

I'm going to. I keep seeing these headlines. I have to buy one at some point. I feel like a billion dollar jackpot is not even a big deal these days because of inflation. They also change the lottery system, so fewer people win. MLB playoffs begin this week with wild card

series games. So if you haven't been paying attention to baseball, now might be a good time to tune in. Drake is releasing a new album for all the dogs on Friday. Are you hyped for that, Toby? I think I'm more hype for that than the MLB playoffs, I hate to say. Sorry, I should have put that before. And then finally, mean girls' day

is tomorrow October 3rd. You know what we're wearing. I'm going to wear it. You got to wear some pink. I'm wearing pink. All right. Fine. That is all the time we have for today. I hope the pod eased you back into the week. As a reminder, you can submit topics on what you want to hear us debate about, bullish or bearish.

Morning Brew Daily at MorningBrew.com. Let's roll the credits. Emily Milliron is our editor and producer. Jonathan Wu and Raymond Lou are associate producers. Euchenawa Ogu is our technical director. Billy Minino is on audio. Hair and makeup took off today expecting a government shutdown. Get him to work.

Devin Emery is our chief content officer and our show is a production. of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th, the powerful vocals of Demi Lovato on May 17th and the signature Southern Country Rock of Eric Church on July 19th. Tickets on sale now at Yamavatheater.com. Only at Yamava Resort and Casino, celebrating its 40th anniversary. You in? Must be 21 to enter.