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"The Fed must continue to cut rates aggressively in the coming months to prevent a slowing labor market and provide much-needed relief to people who are bearing the brunt of high interest rates," said one economist.
Economists and working-class people across the United States on Wednesday welcomed the Federal Reserve's decision to cut its benchmark interest rate by half a percentage point as an incredibly overdue and necessary move.
In line with signals from Fed Chair Jerome Powell's speech last month, the Federal Open Market Committee lowered the federal funds rate by half a percentage point to 4.74-5%, the first cut "since March 2020 when Covid-19 was hammering the economy," as The Associated Press noted. Additional cuts are expected over the next two years.
"Finally," wrote Kenny Stancil, a senior researcher at the Revolving Door Project and former Common Dreams staff writer, in a blog post. "The Fed should have provided interest rate relief months ago. While this overdue move is welcome, we must reiterate that Powell's deferral of interest rate cuts has hurt the clean energy transition and inflicted other economic harms."
Lawmakers and experts, including Groundwork Collaborative chief economist Rakeen Mabud, have long called for rate cuts and highlighted the harms of refusing to pursue them.
"Today's rate cut is a step in the right direction, but only a first step," said Mabud in a statement Wednesday. "The Fed must continue to cut rates aggressively in the coming months to prevent a slowing labor market and provide much-needed relief to people who are bearing the brunt of high interest rates."
Center for Economic and Policy Research senior economist Dean Baker also welcomed that the Fed is changing course, saying: "This is a belated recognition that the battle against inflation has been won. Contrary to the predictions of almost all economists, including those at the Fed, this victory was won without a major uptick in unemployment."
"Unfortunately, the Fed waited too long to make this turn," Baker continued. "As a result, the unemployment rate has drifted higher. While there is little basis for concerns about a recession, if the unemployment rate is 0.5 percentage points higher than it needs to be, that translates into 800,000 people out of work who want jobs."
"It is good that the Fed has now recognized the weakening of the labor market and responded with an aggressive cut," he added. "Given there is almost no risk of rekindling inflation, the greater boost to the labor market is largely costless. Also, it will help to spur the housing market where millions of people have put off selling homes because of high mortgage rates."
Liz Zelnick of Accountable.US similarly stressed the benefits, saying that "while it should have come sooner, the Fed's interest rate cut will ease some burden for many Americans that found it simply too expensive to buy new homes or cars."
"Fortunately, the Fed's aggressive interest rate strategy defied odds and did not spur a recession as the economy continues to grow hundreds of thousands of jobs every month while wages are rising," she said. "Persistently high interest rates were never going to get at the root of the corporate price gouging epidemic that has needlessly kept prices high on many necessities—a problem that is on Congress to fix."
Some members of Congress who have been pushing for rate cuts also applauded the belated action—including Sen. Martin Heinrich (D-N.M.), chair of the Joint Economic Committee.
"Let's be clear: Today's decision is a big win for families across the country," he declared. "Lower rates mean that more families will be able to buy a home or a car without high interest payments looming over them, and their credit card bills will go down."
"But there is still work to be done," he said. "I will continue to work with my colleagues to fight for policies that raise wages, strengthen our economy, create new jobs, and lower prices for families in New Mexico and across the country."
Congressman Brendan Boyle (D-Pa.), ranking member of the House Budget Committee, has also criticized the central bank's refusal to cut rates and praised the Wednesday reversal.
"We've made significant progress on inflation, but House Democrats know there is more to be done to bring down the cost of everyday goods and take on corporate price gouging," Boyle said, nodding to the November election in which former Republican President Donald Trump is facing Democratic Vice President Kamala Harris.
"While House Republicans continue trying to inflict higher costs and higher taxes on the middle class with Trump's Project 2025 agenda," he added, "House Democrats will never stop fighting to deliver an economy that works for working families."
Harris similarly applauded the "welcome news for Americans who have borne the brunt of high prices" while acknowledging that more must be done and vowing that "my focus is on the work ahead to keep bringing prices down."
"I know prices are still too high for many middle-class and working families, and my top priority as president will be to lower the costs of everyday needs like healthcare, housing, and groceries. That is why I am proposing plans to cut taxes for more than 100 million working and middle-class Americans, pass the first-ever federal ban on corporate price gouging on food and groceries, and make housing more affordable by building 3 million new homes and giving more Americans down payment assistance," she said.
The Democrat also took aim at Trump's intentions, warning that "while proposing more tax cuts for billionaires and big corporations, his plan would increase costs on families by nearly $4,000 a year by slapping a Trump Tax on goods families rely on, like gas, food, and clothing. He wants to repeal the law I cast the tie-breaking vote to pass that caps the costs of prescription drugs for seniors, including insulin at $35. He would end the Affordable Care Act and erase the progress we have made to lower premiums for millions of Americans by hundreds of dollars a year."
"Sixteen Nobel Prize-winning economists say his plan would increase inflation, and a Moody's report found it would cause a recession by the middle of next year," she noted. "This election is about whether we are going to finally build an opportunity economy that gives every American a shot not just to get by, but to get ahead. As president, that will be my priority every day."
"Oil companies who are delaying climate action and pouring more fuel on the fire of global heating are using Big Tobacco's old playbook and trying to pass themselves off as patrons of sport."
Aramco, the state-owned Saudi firm, has the most sports sponsorships of any fossil fuel company in the world, with $1.3 billion in active deals, followed by Ineos, TotalEnergies, and Shell, according to a Wednesday report that compares the industry's methods to those once used by Big Tobacco.
The 23-page report, Dirty Money: How Fossil Fuel Sponsors Are Polluting Sport, details one of the ways in which countries and corporations "sportswash" their reputations: sponsorships of popular athletes, teams, events, or leagues. Other means of sportswashing, such as Saudi Arabia's development of a new golf tour and purchase of major soccer clubs, aren't included in the analysis, which was produced by the New Weather Institute (NWI), a climate think tank.
Aramco, which is about 98% owned by the Saudi Arabian government, is the most profitable company in the world and is responsible for over 4% of global carbon emissions since 1965, the most of any firm. It pays out more than $300 million per year in sports sponsorships in motorsports, soccer, golf, and cricket, with active deals worth about $1.3 billion over their lifespans, the report says.
Overall, the report authors found 205 sponsorship deals by the fossil fuel industry worth a total of $5.6 billion.
"Oil companies who are delaying climate action and pouring more fuel on the fire of global heating are using Big Tobacco's old playbook and trying to pass themselves off as patrons of sport," Andrew Simms, NWI's co-director, said in a statement.
The report emphasizes the negative impact fossil fuel companies have not just on the climate but also, more immediately, on public health—and the ability to play sports—citing research that shows the burning of their products leads to millions of excess deaths per year.
"Air pollution from fossil fuels and the extreme weather of a warming world threaten the very future of athletes, fans, and events ranging from the Winter Olympics to World Cups," Simms said. "If sport is to have a future it needs to clean itself of dirty money from big polluters and stop promoting its own destruction."
The dirty money polluting sport - our new report on how oil and gas companies are exploiting sport even as they destroy the climate conditions for it 👇👇👇 https://t.co/d4AItJnglv
— Andrew Simms (@AndrewSimms_uk) September 18, 2024
The term sportswashing, related to whitewashing and greenwashing, has gained use in the last decade as a way of describing efforts to distract attention from wrongdoing through affiliation with popular sports. Critics often levy the charge at Saudi Arabia and other Gulf states.
Saudi Arabia's sovereign wealth fund, which draws financing from Aramco, has reportedly spent more than $2 billion on its LIV Golf tour in the last three years. Saudi Arabia is expected host the World Cup in 2034, and neighboring Qatar did so in 2022, spending over $200 billion.
Saudi Arabia and Aramco have long been accused of greenwashing. Yet poor environmental credentials aren't their only public relations issue. The country, in addition to sourcing its wealth from planet-destroying fossil fuels, is led by an authoritarian regime that has a terrible human rights record, one under more scrutiny since the 2018 killing of Saudi journalist Jamal Khashoggi, who worked for The Washington Post.
In response to the sportswashing critique, Saudi leaders have been blunt and defiant.
"If sportswashing is going to increase my GDP by 1%, then we'll continue sportswashing," Crown Prince Mohammed bin Salman, the country's de facto leader, told Fox News last year.
In addition to Aramco, the NWI report focuses on three Western fossil fuel companies. Shell and Ineos, two U.K.-based multinationals, each spend more than $100 million per year on sponsorships in a wide variety of sports. TotalEnergies, a French multinational, spends more than $60 million.
The NWI report recommends that sports organizations institute tobacco-style bans on fossil fuel sponsorships and improve due diligence on donors and sponsors.
"Today shows that Amazon workers are united and stronger than ever in our demands for higher pay," said one warehouse worker and organizer.
As Amazon workers across the United States launched a campaign demanding at least $25 an hour, the e-commerce giant announced Wednesday that it is raising hourly pay for its warehouse workers and drivers.
In what Amazon vice president of worldwide operations Udit Madan called the company's "biggest-ever investment in pay and benefits," the average starting pay for U.S. fulfillment and transportation workers will rise starting this month.
"Members of our front-line team will be getting at least an additional $1.50/hour starting this month, which will bring their average base wage to more than $22/hour and average total compensation to more than $29/hour when you include the value of their elected benefits," such as healthcare, said Madan, who added that the workers will also receive free Amazon Prime subscriptions.
While the Amazon workers who launched the drive for $25 welcomed the announcement, they say they deserve more.
"I've lost out on thousands of dollars of income. I haven't gotten a paycheck since my short-term disability—which only covered 60% of my regular pay—ended in January," said Christine, a worker at Amazon's STL8 fulfillment center in Missouri and longtime member of the STL8 Organizing Committee.
"I'm awaiting approval for long-term disability, which I applied for back in January," explained Christine, who was injured on the job. "I've maxed out my credit cards and drained my 401(k). I'm on food stamps. I just got approved for Medicaid. At one point I started a GoFundMe just to make rent. I've never been in the position of having to ask for money, but the alternative was homelessness. When you're forced into that position, you do what it takes to survive."
"Today shows that Amazon workers are united and stronger than ever in our demands for higher pay," she added. "With over 800 worker signatures on our petition and new workers joining us from across the region, together we will win the $25 an hour that we all deserve."
According to the campaign:
Research suggests working families need at least $25 to make it by. In Missouri, for example, a livable wage for a family of four is at least $25; in New York, the livable wage is even higher, at $39. However, a majority of Amazon warehouse workers reported earning wages between $16 and $20—before Amazon increased starting pay to $17 in September 2023. Amazon itself reports an average pay of $20.50.
"The $1 raise that Amazon gave workers last year was shameful. After accounting for inflation, it wasn't even a raise," lamented Irene Tung, senior researcher and policy analyst at the National Employment Law Project. "Our research has shown that Amazon tends to locate its warehouses in high earnings counties around the country, but lags behind other warehouse employers in pay—even though it can afford to pay workers much more."
Advocates point to Amazon's $30.4 billion 2023 profits as proof that the company can afford to pay its workers more.
"Raising pay by 25% would bring Amazon workers much closer to a middle-income standard of earnings," Tung said. "Given Amazon's size and the enormity of its wealth, it is not far-fetched to ask why this company has thus far failed at creating middle-income jobs for the hundreds of thousands of U.S. workers that power its operations."
Beth Gutelius—the author of Handling Hardship: Data on Economic Insecurity Among Amazon Warehouse Workers—said in a statement that "if warehouse wages had kept pace with inflation, workers would be earning $25.66 an hour—so workers are simply asking Amazon to bring wages in line with the cost of living, which as we know has risen sharply."
"Doing so would help ensure that workers are able to meet their basic needs without relying on public assistance," she added.