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Coax, bribe or mandate? Companies wrestle with employee vaccinations.

13 min read

Daily Business Briefing

June 16, 2021, 7:21 a.m. ET

June 16, 2021, 7:21 a.m. ET

Goldman Sachs is among the few firms to require their employees to disclose their vaccination status.
Credit…Emon Hassan for The New York Times

The message from many companies to their office workers is clear. It will soon be time to shed the slippers for hard shoes and return to your desk. But many companies are still puzzling over a single quandary: What to do about vaccines. Should they require employees to get them? Encourage or cajole or bribe them?

“We’re all kind of, you know, flying by the seat of our pants,” said Wayne Wager, the chief executive of Remote Medical International, a consulting firm in Seattle that is helping companies that are reopening offices.

Most companies are hoping to avoid requiring vaccines, reports Lauren Hirsch of The New York Times. The federal agency that enforces workplace discrimination laws says they can, but chief executives fear vaccine mandates would lead to lawsuits, invite political upheaval and be hard to enforce. But they’re worried about safety. An outbreak could force a company to retrench on masking and social distancing policies, making it even harder to get back to normal. So they are trying everything short of a mandate, without yet ruling one out.

One blue-chip company that welcomed back many workers on Monday, Goldman Sachs, prepared for their return by sending an email last week telling employees to report their vaccination status within two days. In May, the bank had notified employees that they should “make plans to be in a position to return to the office” by June 14 in the United States and June 21 in Britain.

Nearly a third of companies have yet to develop any vaccine policy, according to a survey of 770 companies conducted by the human resources software company Tinypulse.

Some companies are effectively paying employees to share their status:

  • Walmart is offering $75 to any worker who shows proof of vaccination.

  • In a deal that United Airlines struck with the Air Line Pilots Association, which represents more than 59,000 pilots, airlines are paying fully vaccinated pilots a bonus equivalent to as much as 13 hours of pay.

Consumers expect higher inflation in the near term and over the course of several years, a Federal Reserve Bank of New York survey found, a small but potentially important signal at a time when economic policymakers are betting that expectations will remain in check as demand and prices rebound from depressed pandemic levels.

Expectations for inflation a year from now jumped by 0.6 percentage points in May, hitting a new series high of 4 percent, the Fed branch said on Monday. The Survey of Consumer Expectations has been running since 2013, so it tracks a period during which price gains have been relatively tame.

Consumers also expected faster price increases in three years, anticipating gains of 3.6 percent, up from 3.1 percent in the April survey.

Fed officials have worried for years that inflation expectations might be drifting too low, so they could see the survey’s findings as a positive development. The 3-year-ahead number is back at levels seen in 2013, before years of tepid price gains weighed down the outlook.

At the same time, the rebound has happened abruptly, and if it continues it could push expectations too high for comfort. When consumers expect higher prices, businesses may have an easier time charging more, creating a self-fulfilling situation that sends inflation higher.

Investors wil
l have a timely opportunity to see how the Fed is interpreting the latest data, given that the central bank meets this week and is scheduled to release its latest monetary policy statement on Wednesday alongside fresh economic projections. Jerome H. Powell, the Fed chair, will hold a news conference following that announcement.

The move higher in inflation expectations comes at a time when people are showing increased confidence in the job market: Those surveyed put the probability that they will lose their job in the next year at the lowest on record in the series, and the probability of finding a job rose sharply.

The labor market is gradually healing from pandemic-inflicted damage and job openings are plentiful. As the economy reopens and demand surges, supply is racing to catch up — sending inflation higher. The Fed and the White House are trying to sift through temporary, pandemic-spurred jerks in the data to gauge how much help the economy needs as it heals from more than a year of social distancing and rolling business lockdowns.

Diners at the South Bank section of London earlier this month. Analysts said a one-month delay in the final lifting of pandemic restrictions would have only a small economic impact.
Credit…Henry Nicholls/Reuters

After 15 months of pandemic restrictions on businesses and socializing, England is bracing for the news that it must endure another month of restrictions beyond June 21, the date that had been set for the final lifting of Covid rules.

But many analysts say a delay, put in place to get more people vaccinated as the delta variant of the virus continues to force hospitalizations to rise, would only have a minor economic impact.

Prime Minister Boris Johnson is expected to announce a four-week delay on Monday evening to the third phase of reopening, which would have allowed businesses to operate without capacity restrictions, nightclubs to reopen and sports events to fill their stadiums.

“Unless serious restrictions had to be reimposed, the damage to the U.K. economy would likely be minor,” Holger Schmieding, an economist at Berenberg, a private bank, wrote in a note.

“If a delay materializes as reported, we think the economic significance should be minimal,” analysts at UBS wrote. “Especially with vaccine efficacy against the delta strain now proven after two jabs for Pfizer and AstraZeneca.”

The country’s reopening began in April when nonessential retail resumed and outdoor dining was permitted. That month, the economy grew 2.3 percent from the previous month, and was just 3.7 percent smaller than it was before the pandemic. In May, indoor dining opened, events such as weddings could have more guests, and theaters could open with limited capacity, lifting the economic recovery further.

As businesses have learned to adapt to restrictions — for example, as more restaurants have begun offering takeout service — the economic impact of each lockdown has been smaller. Last year, the economy suffered its worst recession in 300 years because of the severity of the impact of the first lockdown in spring 2020. At the start of this year, when most businesses had shut their doors because of the second wave of the pandemic, the economy contracted only 1.5 percent in the first quarter.

The third phase of the reopening has a smaller economic impact than the first two, “so even if it is postponed it shouldn’t have a major impact on the outlook,” analysts at RBC Capital Markets wrote.

But some industries are predicting another heartfelt blow. The Night Time Industries Association, a trade group which represents night clubs and concert venues, said many businesses were already on a “financial cliff edge” and would close without more government support. UKHospitality said the prospects for many businesses were “grim” and urged the government not to delay reopening.

In April, the economic output of the hospi
tality industry was 40 percent below its prepandemic level and the arts and recreation sector was down by more than 30 percent, the National Institute of Economic and Social Research said.

“Postponing the last step of reopening may delay the recovery in arts and recreation by a few weeks but, if it helps avoid a third wave of infections, it could contribute to sustained recovery in the second half of the year,” Rory MacQueen, an economist at the London-based think tank, wrote.

Elon Musk proved once more that he can shift the price of digital currencies with just a tweet, as he suggested this weekend that Tesla could resume accepting Bitcoin as payment.

The price of Bitcoin jumped in response, bringing it close to $40,000. Other cryptocurrency prices went up as well.

Tesla, the electric vehicle maker that Mr. Musk runs, said in February it would accept Bitcoin for payment, before reversing itself in May over concerns about how much energy is consumed to create new coins and process transactions. The news dragged the market down. (The company continues to hold more than $1 billion in Bitcoin in its corporate treasury.)

In a tweet on Sunday, Mr. Musk said Tesla would change course, again, “when there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.”

Measuring the environmental impact of Bitcoin processing has always been tricky. Some estimates place the use of renewables in Bitcoin mining at nearly 75 percent, while others put it at closer to 39 percent.

  • An auction winner paid more than $28 million for an 11-minute ride into space alongside Jeff Bezos, on a reusable rocket launched by his space company, Blue Origin. Nearly 7,600 people from 159 countries registered to bid on the flight aboard the New Shepard — its first with passengers — which is expected to launch on July 20 from West Texas. In addition to the winning bidder, who was not identified, and Mr. Bezos, passengers will include Mr. Bezos’ brother, Mark Bezos, and a fourth still-unnamed astronaut. The auction winner’s name will be released in roughly two weeks, according to a video on Blue Origin’s website.

U.S. stocks recovered early losses on Monday to push further into record territory.

This week, investors will be turning their attention to the Federal Reserve, which is holding a policy meeting on Tuesday and Wednesday. Officials have persistently maintained that rising inflation will be temporary and that the U.S. economy still needs plenty of support to recover from the pandemic. But recent data showing larger-than-expected jumps in consumer prices and an abrupt gain in inflation expectations may test policymakers’ resolve.

“Concern that rising inflation will derail the market recovery or lead to sharply higher bond yields is probably misplaced,” analysts at Goldman Sachs wrote in a note. “We think investors should have some confidence that firm inflation over the short-term will not result in a meaningful policy shift,” they added, writing that this would support higher asset prices.

  • The S&P 500 gained 0.2 percent. The Stoxx Europe 600 gained 0.2 percent.

  • The yield on 10-year U.S. Treasury notes was five basis points higher, at 1.5 percent on Monday.

  • Shares in Philips, the Dutch maker of medical equipment, dropped 4 percent on Monday after it recalled some ventilators and other devices to help with breathing, such as those used to treat sleep apnea. The company said that a type of foam used in the machines could have health risks, including causing headaches, respiratory issues and “possible toxic and carcinogenic effects.”

  • Lordstown Motors shares fell 18.8 percent after the electric truck maker said that its chief executive officer and chief financial officer had resigned. Last week, the start-up warned that it did not have enough cash to start commercial production of its electric pickup truck.

Charles P. Rettig, the I.R.S. commissioner, acknowledged in testimony to Congress that his agency wasn’t doing enough to scrutinize partnerships.
Credit…Pool photo by Toni L. Sandys

The private equity industry has perfected sleight-of-hand tax-avoidance strategies so aggressive that at least three private equity officials have alerted the Internal Revenue Service to potentially illegal tactics, according to people with direct knowledge of the claims and documents reviewed by The New York Times. The previously unreported whistle-blower claims involved tax dodges at dozens of private equity firms.

But after its staff was hollowed out by years of budget cuts, the I.R.S. has thrown up its hands when it comes to policing the politically powerful industry, Jesse Drucker and Danny Hakim report for The New York Times.

Intensive examinations of large multinational companies are common, but the I.R.S. rarely conducts detailed audits of private equity firms, according to current and former agency officials.

Such audits are “almost nonexistent,” said Michael Desmond, who stepped down this year as the I.R.S.’s chief counsel. The agency “just doesn’t have the resources and expertise.”

Private equity’s ability to vanquish the I.R.S., Treasury and Congress goes a long way toward explaining the deep inequities in the U.S. tax system. When it comes to bankrolling the federal government, the richest of America’s rich — many of them hailing from the private equity industry — play by an entirely different set of rules than everyone else.

One reason they rarely face audits is that private equity firms have deployed vast webs of partnerships to collect their profits. Partnerships do not owe income taxes. Instead, they pass those obligations on to their partners, who can number in the thousands at a large private equity firm. That makes the structures notoriously complicated for auditors to untangle.

Increasingly, the agency doesn’t bother. People earning less than $25,000 are at least three times more likely to be audited than partnerships, whose income flows overwhelmingly to the richest 1 percent of Americans.


A Kitty Hawk Heaviside plane landing after a test flight.CreditCredit…By Jason Henry

Engineers and entrepreneurs have spent more than a decade nurturing electric vehicles that can take off and land without a runway.

They believe these vehicles will be cheaper and safer than helicopters, providing practically anyone with the means of speeding above crowded streets, Cade Metz and Erin Griffith report for The New York Times.

That dream, most experts agree, is a long way from reality. But the idea is gathering steam. Dozens of companies are now building these aircraft, and three recently agreed to go public in deals that value them as high as $6 billion. For years, prototypes have been kept hidden from the rest of the world. But now developers are beginning to lift the curtain.

One company is building a single-person aircraft for use in rural areas — essentially a private flying car for the rich — that could start selling this year. Others are building larger vehicles they hope to deploy as city air taxis as soon as 2024 — an Uber for the skies. Some are designing vehicles that can fly without a pilot.

One of the air taxi companies, Kitty Hawk, is run by a Stanford computer science professor who founded Google’s self-driving car project. He now says that autonomy will be far more powerful in the air than on the ground, and that it will enter our daily lives much sooner. “You can fly in a straight line and you don’t have the massive weight or the stop-and-go of a car” on the ground, he said.

Attorney General Merrick B. Garland is meeting on Monday with leaders from three news organizations that were targeted by the Trump Justice Department.
Credit…Tom Brenner for The New York Times

The Justice Department will tighten its rules for when law enforcement officials may seize information about members of Congress and their aides, Attorney General Merrick B. Garland said on Monday amid a political uproar over a Trump-era subpoena in which investigators collected data on several Democratic lawmakers and staff members.

Mr. Garland said in a statement that he had asked his deputy, Lisa O. Monaco, to review and toughen the department’s existing policies “for obtaining records of the legislative branch,” noting that she “is already working on surfacing potentially problematic matters deserving high-level review.”

He added: “Consistent with our commitment to the rule of law, we must ensure that full weight is accorded to separation-of-powers concerns moving forward.”

The announcement came as John C. Demers, the Trump administration holdover official who leads the Justice Department’s National Security Division, which oversees leak investigations, told his staff that he will step down at the end of next week. The Senate has not yet confirmed President Biden’s nominee for the position, Matthew G. Olsen.

On Sunday, several Democratic lawmakers had called for Mr. Demers to testify about the subpoena, along with the former deputy attorney general, Rod J. Rosenstein and the former attorneys general Jeff Sessions and William P. Barr.

Mr. Garland’s announcement also came as he was preparing to meet Monday afternoon with leaders of three major news organizations — The New York Times, CNN and The Washington Post — following the disclosure that the Trump Justice Department had secretly seized phone records for reporters at each of them.

Mr. Biden has since directed the Justice Department not to seize reporters’ communications records in hunts for their sources in leak investigations, calling that practice “simply, simply wrong,” and Mr. Garland is developing a new policy to carry out that instruction.

The leaders of two of those organizations — The Times and CNN — were also subjected to gag orders in related legal fights for reporters’ email data that spilled over into the Biden administration. Leaders of The Times were told in March about a two-month-old court order to Google, which runs the paper’s email system, for reporter data — but were also forbidden to talk about it.

The news executives at the meeting — which include the publisher of The Times, A.G. Sulzberger, and a Times newsroom lawyer, David McCraw, who were among those gagged in March — are expected to raise concerns about the investigative steps affecting reporters, and to discuss the details of the new policy Mr. Garland is working on.

In testimony last week, Mr. Garland said the new policy will be “the most protective of journalists’ ability to do their jobs in history.” But many details remain unresolved, including how broadly the new protections will apply and whether he will implement it via a method that is easy or difficult for a future administration to roll back.

In a separate announcement, a lawyer for Reality Winner, a former intelligence contractor who in 2017 became the first person to be charged in a leak case under the Trump administration, said that her client had been released from prison.

Ms. Winner had pleaded guilty to sending a document about Russia’s interference in the 2016 election to The Intercept. She was sentenced to five years and three months in prison, but was released early under credit earned for good behavior, her lawyer wrote on Twitter. | Newsphere by AF themes.