The monthly jobs report came out on Friday, and things are pretty good overall.
The big headline numbers were great: The economy added 242,000 jobs in February, much higher than the 195,000 that economists estimated, and the unemployment rate remained at 4.9 percent, which is nice and low.
But if you drill down into the data, the picture is a little murkier.
Here are four things we know about the economy from the details in this report:
1) Wages aren't growing much, and it's hard to say why.
Average hourly earnings were down by 3 cents in February, to $25.35. Year-over-year, wages are up about 2.2 percent. That's not great -- although, thanks to very low oil prices and low inflation, it's not terrible either. But it's worth asking why wage growth since 2010 hasn't been as robust as growth in previous recoveries.
Shane Ferro/Huffington Post
2) Nonetheless, people are coming back into the labor force.
As we said earlier, the economy added 242,000 jobs this month. But perhaps more importantly, details in the household survey show that more than 500,000 entered the labor force by starting to look for work again. In order to be officially unemployed, a person must not have a job and must be looking for work. Discouraged workers, who have given up looking for jobs, aren't counted as part of the labor force. It's a sign of a healthy economy when those people start looking for jobs again, even if they don't find work immediately.
3) But the unemployment rate for blacks is twice the unemployment rate for whites.
The unemployment rate for whites in the United States is 4.3 percent. For blacks, it's 8.8 percent. This is an economic dynamic that has been persistent since the Labor Department started tracking unemployment by race back in the 1970s. The chart below is not really America's best look:
Shane Ferro/Huffington PostThere's a huge racial disparity in the unemployment rate in this country.
4) There is a lot of growth in low-wage industries.
The retail industry added 55,000 jobs last month, and food service added 40,000. These have been some of the strongest growth industries over the last few years, which means the economy is adding a lot of low wage, service sector jobs. That said, the economy also added a lot of health care (38,000) and construction (19,000) jobs in February, which tend to pay quite well.
You might be contributing to the decimation of endangered animal species without even realizing it.
When illegal ivory, tiger pelts or rhino tusks make their way to markets and e-commerce sites, traffickers may try to conceal how the products were obtained. They'll use terms like "bone" or "walrus tusk" to describe ivory, duping retailers and customers alike. What's more, uninformed shoppers or tourists might not know that tortoiseshell and certain types of coral or wood are also part of this illicit trade network, which is estimated to be worth between $50 and $150 billion per year.
Major companies across the e-commerce, retail and travel industries are now banding together to raise awareness and reduce the amount of illegal wildlife products Americans buy.
Google, eBay, Etsy, JetBlue and Tiffany & Co are among the 16 firms committing to eliminating these products from their supply chains, the U.S. Wildlife Trafficking Alliance and the Obama administration announced Thursday.
“A lot of Americans are just not aware that they could be buying illegal products and adding to this global problem,” David J. Hayes, chair of the alliance and former chief operating officer at the Department of Interior, told The Huffington Post.
Each company will take action within its own sphere of commerce. Some will warn customers about the impacts of illegal wildlife products, while others will flag items on sale that potentially violate wildlife policies or provide educational videos on sustainability for travelers.
ChinaFotoPress via Getty ImagesIllegal ivory and ivory products confiscated in China.
Several online retailers have already taken steps to block harmful items from their sites. eBay and the online bidding platform LiveAuctioneers.com have banned illegal ivory sales. Etsy has banned all ivory and prohibited sellers to list goods made from threatened or endangered animal parts.
"It's hard for the consumer to know what's legal and what's illegal, and it can be hard for the retailer to know," said Beth Allgood, U.S. campaigns director for the International Fund for Animal Welfare, a conservation nonprofit that has worked with eBay, Etsy and LiveAuctioneers to remove illegal ivory listings. "We can be partners to retailers who don't know all the regulations."
For JetBlue, the awareness campaign will primarily inform passengers traveling to and from the Caribbean and Latin America, said Sophia Mendelsohn, JetBlue’s head of sustainability. In videos to be shown on JetBlue’s flights, residents and small business owners from the region will speak about how sustainable tourism practices can support wildlife diversity.
“We want to stop this issue at its root cause,” Mendelsohn told HuffPost. “We’re going to cut out unwitting demand so there’s less profit in drawing out these natural resources, whether it’s for tech, necklaces or special meals” at local restaurants.
Lam Yik Fei via Getty ImagesLeopard skins seized by Hong Kong customs officials.
Other corporate partners that have pledged to work with the alliance include Ralph Lauren and Royal Caribbean Cruises. The Association of Zoos and Aquariums will exhibit seized illegal wildlife products in its parks to highlight the threats posed to various species. Discovery Communications will produce virtual reality content focusing on trafficking and conservation.
The household brands committed to this new effort will work to establish best practices for smaller names in the travel, e-commerce and retail industries.
“These companies are accepting industry leadership and making sure smaller ones aren’t involved in wildlife trafficking,” Hayes said. “These are true industry-wide efforts.”
Stockbyte via Getty ImagesAn illegal haul of rhino horn.
Awareness of wildlife conservation has been growing for some time. President Barack Obama issued an executive order to implement a wildlife taskforce in 2013. The corporate alliance announced this week is a result of that effort.
Public interest in the issue spiked last year following the killing of Cecil the Lion. The backlash against the Minnesota dentist who shot down the lion in Zimbabwe heightened scrutiny of trophy killings and spurred action from the travel industry.
American Airlines, United Airlines and Delta Airlines announced last summer that they would ban transport from Africa of the “big five” game animals -- lion, elephant, rhino, leopard and buffalo.
ASSOCIATED PRESSA lion in an enclosure of the Lion Park, in Johannesburg, South Africa.
The price of oil has crashed over the last year and a half. In the middle of 2014, a barrel of crude cost over $100. Now it's worth just over $30.
Normally, such a collapse would lead OPEC to pump less oil. The idea is that less oil on the market helps keep prices up. But despite a historic fall in oil prices, the Saudi Arabian-led international oil cartel hasn't budged: The biggest step it has taken so far is offer to freeze production at its current record levels. Production cuts are not on the table.
The big question is, why? One theory is that OPEC simply has less control over the oil market than it used to, thanks to the shale gas revolution. Another possibility is that OPEC wants oil prices to be low precisely in order to drive shale oil producers, which have higher costs, out of business.
Here's a simpler hypothesis: Maybe the Saudis aren't cutting production in the face of low prices because huge portions of their oil reserves might eventually become worthless. That's what James Rowe, an environmental studies professor at the University of Victoria, thinks.
If that happens, today's oil prices won't look low -- not when there's an overabundance of an asset that can't be sold. But oil prices are the lowest they've been in 12 years, you say. How could they ever be considered high?
This explanation relies on two related ideas: a carbon bubble and stranded assets. The carbon bubble refers to the fact that energy companies around the world are sitting on five times more fossil fuels than can be burned, the research nonprofit Carbon Tracker estimates. Those assets, worth about $2 trillion, are referred to as "stranded assets."
So what does that mean for an oil company that controls a state? It might as well sell as much oil as possible while still can.
Saudis can't sell oil for $100 a barrel, obviously, but Rowe said they "appear to be positioning themselves for the next best option: gobbling up as much of the earth’s remaining carbon budget for themselves before the bubble bursts. Isn’t it better to sell at a lower price than to receive nothing at all from vast unburnable reserves?"
By the time the world has moved on from oil, Rowe said, Saudi Arabia "will have sold what it could while its reserves were still burnable."
And the country will have moved on as well. Its oil minister, Ali Al-Naimi, has said Saudi Arabia will be a solar exporter by the middle of this century.
Warren Buffett doesn't want you to know how his empire is preparing to deal with the disastrous effects of climate change. In fact, he said in a letter released Saturday, he isn't exactly sure this whole "climate change" thing is real, anyway.
In his annual letter to investors in his conglomerate Berkshire Hathaway, the billionaire investor fought back against a proposed shareholder resolution demanding his insurance subsidiaries measure and disclose the risks that climate change poses to their business and how the company is responding to the threat. Buffett compared fears over climate change to the brouhaha around apocalyptic Y2K predictions.
“It seems highly likely to me that climate change poses a major problem for the planet,” the 85-year-old wrote in the letter, released Saturday morning. “I say ‘highly likely’ rather than ‘certain’ because I have no scientific aptitude and remember well the dire predictions of most ‘experts’ about Y2K.”
Insurance companies take on losses after major weather disasters (think droughts, Hurricane Katrina and other big storms), so it makes sense they'd be concerned about climate change. If that's true, why would Buffett say he's not so sure this is real? Because skepticism is better business.
Buffett isn’t denying climate change, but rather using language climate deniers feel comfortable with and will likely cite in future attempts to derail environmental policy. Climate change affects Buffett's business: He owns a Nevada utility that has fought and won against solar development in that state, and his railroad, Burlington Northern, in large part depends on the demand for coal and oil.
Buffett argues in favor of seeing climate change as a likely risk to the world, but against the need for more oversight, transparency or regulation of his companies. It’s a position he’s taken before -- Buffett argued against designating reinsurers, of which he owns the world’s fifth-largest, as too-big-to-fail institutions. Though he said he never spoke directly to regulators about the issue, he made his views public. Regulators, thus far, have agreed.
Why Buffett's Words Matter
Markets, governments and companies aren’t properly pricing the risk of climate change. For instance, are beachfront homes in low-lying areas as valuable as their owners believe? Experts reckon that only once markets and others attach a price to the threat of climate change will the rest of the world finally move to limit the potential consequences. If insurers -- which must grow their assets in order to make good on their guarantees -- measure the potential losses they could incur as a result of climate change, they can then price that risk. Then everyone else could follow.
Buffett's views against disclosure put him in sharp disagreement with Bank of England Governor Mark Carney, who has said that financial markets can help limit the effects of climate change, but only if companies -- such as insurers -- supply the kind of information that Buffett doesn't want to disclose.
In September remarks to the insurance industry, the chief overseer of the world’s third-largest insurance sector warned about the numerous economic and financial risks posed by climate change. Carney urged companies, particularly insurers, to start taking seriously their responsibility to measure their potential losses. Their own solvency could be at stake, Carney warned.
Insurance companies invest their money in places like the stock market. But “stranded" oil, gas and coal reserves, left in the ground due to the world’s commitment to halt rising temperatures, could render related financial assets worthless. Or the disruption of trade resulting from an extreme weather event could affect related investments.
Cynthia McHale, director of the insurance program for Ceres, a nonprofit group that pushes investors to pay attention to the financial risks of climate change, said in an interview earlier this month that neither insurers nor their government overseers have a good handle on the risks that climate change poses to insurers’ various financial assets.
McHale compared the situation to the one faced by big banks in 2008, when few sufficiently realized the magnitude of potential losses from the U.S. property bust.
Weathering Heights
Buffett's case against the resolution boils down to this: “Thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.”
First, he said, his company can handle any possible losses thanks to rising premiums. Because insurance policies are typically written for one year and repriced annually, Buffett's company can hike premiums to better account for the heightened risk of climate change-driven losses.
Second, Buffett asserts that climate change has produced neither “more frequent nor more costly hurricanes nor other weather-related events covered by insurance.”
But eight of the 10 costliest hurricanes in U.S. history, in terms of insured losses, have occurred since 2000, according to the Insurance Information Institute. Nine of the 10 costliest floods in U.S. history, when measured by payouts from the federal government’s National Flood Insurance Program, also have occurred since 2000, according to the insurance group.
NOAAThe U.S. experienced five different types of extreme weather last year.
Munich Re, the world’s biggest reinsurer, estimated that extreme weather events led to $510 billion in insured losses from 1980 to 2011.
Carney said that according to Lloyd’s of London, the world’s oldest insurance market, the roughly 8-inch rise in sea level at the tip of Manhattan since the 1950s increased the insured losses from Hurricane Sandy by 30 percent in New York alone.
PAUL J. RICHARDS via Getty ImagesA house in Staten Island, New York, hit in Hurricane Sandy. Scientists say we should prepare for more weather events like the massive storm.
Insurance companies should care about climate change from a selfish perspective if they want to stay in business. Carney has warned that insurers that jack up premiums or exit markets after realizing the potential losses associated with climate change could unwittingly cause the value of their own assets to shrink.
He also warned about potential losses from claims on policies written by insurers. For example, insurance companies could be forced to make massive payouts if victims of climate change successfully hold accountable companies that contributed to it. He likened the situation to the one faced by U.S. insurers stung by tens of billions of dollars in losses from asbestos claims.
In fact, Carney said that as a result of recent weather trends, some now estimate that insurers are undervaluing their potential losses by as much as 50 percent.
Insurance companies caught unprepared for the effects of climate change could cause problems for government officials and put taxpayers at risk.
For example, governments may have to cover markets that insurers dump as a direct result of climate change, the Bank of England chief said, putting taxpayers on the hook.
Bloomberg via Getty ImagesMark Carney, the U.K.'s top central banker, says insurers may be undervaluing their potential risks by 50 percent.
What Could Change If Insurers Opened Up About This Risk
Disclosing climate change information would improve policymaking, Carney said. It could make climate policy more like monetary policy, where officials who set interest rates often tinker with their stance based on markets’ reactions.
The Financial Stability Board, a global group of the world’s financial regulators, wants financial companies to disclose their risks, too.
Some state insurance regulators in the U.S. are demanding insurers take the threat posed by climate change into account when investing their customers’ money and underwriting insurance policies. Washington state’s insurance regulator, Mike Kreidler, has criticized some insurers for failing to take climate change risks seriously, arguing their own solvency was at risk.
Buffett sounded more alarmed by the prospect of climate change in 2007, when scientific evidence of the impacts of climate change was less well-understood. In his annual letter that year, Buffett wondered aloud whether the deadly and expensive hurricanes of 2004 and 2005 marked the first warning of a new type of climate.
“It would be a huge mistake to bet that evolving atmospheric changes are benign in their implications for insurers,” Buffett wrote in his letter.
He warned that it was “naïve” to think of Hurricane Katrina -- the costliest hurricane in U.S. history -- “as anything close to a worst-case event.”
“These could rock the insurance industry,” Buffett added.
Electric vehicles could make up half of all new car sales by 2040, as long as oil prices eventually increase, according to a study released Thursday by Bloomberg New Energy Finance.
The cost of the lithium-ion batteries that power electric vehicles is quickly decreasing, but sales suffered last year as oil slid below $30 per barrel, making gas-guzzling vehicles more affordable in the United States. If oil remains at rock-bottom prices, it could delay electric vehicles from becoming mainstream for at least the next four years.
“In a scenario where they become widespread in fleets and ride sharing scheme, new EV sales could reach 50% of new car sales by 2040,” Salim Morsy, senior analyst at BNEF, wrote in the study. “However, persistently low crude oil prices could also keep adoption as low as 25% by 2040.”
Electric vehicles currently make up about 1 percent of global annual car sales. Four major factors will determine whether they'll make up half of the market by 2040.
First, battery prices must continue to fall. This is likely to happen for a few reasons. Demand continues to be high, as more automakers release electric vehicles and the energy storage industry begins to pick up pace. To fill those orders, manufacturers are upping their production. Tesla, for example, is building a $5 billion factory in Nevada that will, at its peak, produce more lithium-ion packs per year than were created in the entire world in 2013.
“It’s very important, insofar as being a first move for establishing large-scale manufacturing assets globally,” Morsy told The Huffington Post on Wednesday. “But, relative to the install demand needed in the future to supply what we project to be demand, it is certainly not as important.”
Second, self-driving technology must become commercially viable. At the Consumer Electronics Show in Las Vegas last month, nearly every major automaker unveiled some kind of autonomous driving technology. And with good reason: Google is testing driverless, electric cars. Tesla just released a limited autonomous feature that allows its cars to steer themselves. Uber last year raided Carnegie Mellon University's robotics department, hiring away its top scientists to develop self-driving technology that will eventually replace its drivers.
Analysts expect Tesla, Uber and other car companies to eventually own and operate fleets of autonomous vehicles. If they're advanced enough to drive themselves, they'll ideally be advanced enough not to use oil.
Third, oil prices need to bounce back. Unless the price of crude returns to $50 and $70, as some predict it will by 2020, electric vehicles are unlikely to exceed 5 percent of new sales in most markets for the next four years, Morsy said. Low price projections actually halve electric vehicles’ market share forecast. If current oil prices continue into the next decade, electric vehicles may only make up 25 percent of new car sales by 2040.
Fourth, the electric auto industry must overcome the fact that it’s navigating a combustion engine’s world. By 2030, BNEF expects charging ports to become standardized, much in the same way any vehicle on the road now can connect to a petrol pump at any gas station. Improved infrastructure -- and the normalization of plugging your car in nightly at home or at the office during the day -- will help the industry clear the range issue that has long dogged it. Just as no one likes having a dead smartphone, no one wants to be left with a car that runs out of battery.
“By and large, by 2030, we think the infrastructure issues around charging EVs will be addressed,” Morsy said. “That means standardization around charging for vehicles -- at the moment, it’s not a standardized market -- as well as availability of charging points.”
Yet one of the biggest challenges to electric vehicle adoption may not be an economic headwind, but political sabotage. Last week, HuffPost reported that billionaire brothers Charles and David Koch are planning to launch a $10 million campaign aimed at once again killing the electric car. Still, at this point, the industry may be too far along.
Tesla Motors CEO Elon Musk, one of the most famous business leaders fighting to wean humanity off fossil fuels, summed it up nicely:
The White House is worried that robots are coming to take your job.
In a report to Congress this week, White House economists forecast an 83 percent chance that workers earning less than $20 per hour will lose their jobs to robots.
Wage earners who receive up to $40 in hourly pay face a 31 percent chance they'll be replaced by robots, while workers who are paid more than $40 an hour face much lower odds -- about 4 percent -- of losing their jobs to automation.
The estimates underscore the myriad threats facing low-wage workers in America, who in recent years have been buffeted by stagnant wages, decreasing employment prospects and higher education costs if they wish to obtain additional credentials in pursuit of better-paying jobs.
In an economy increasingly defined by the yawning gap between rich and poor, White House economists worry that increased automation could exacerbate inequality as the well-paid enjoy the fruits of robot-fueled gains in productivity while everyone else is left to fight for scraps.
One study cited by the White House found that automation has particularly hurt middle-skilled Americans, such as bookkeepers, clerks and some assembly-line workers. A lack of additional training and education opportunities led these workers to settle for lower-skilled positions, and likely lower wages.
Already, the White House noted in its report, most economists reckon that changes in technology are "partially responsible for rising inequality in recent decades."
Robots and other advances in technology are forecast to displace a significant number of blue- and white-collar workers, according to 48 percent of experts surveyed by the Pew Research Center in 2014. They also said that robots and so-called digital agents will displace more jobs than they create by 2025.
Many experts surveyed by Pew said they are concerned that the rise of robots and other technological advances "will lead to vast increases in income inequality, masses of people who are effectively unemployable, and breakdowns in the social order."
It's not a new worry. The famed economist John Maynard Keynes wrote in 1930 about "technological unemployment," or the theory that workers could be displaced due to society's ability to improve labor efficiency at a faster rate than finding new uses for labor.
But White House economists said they don't have enough information to judge whether increased automation will help or hurt the U.S. economy. For example, new jobs could emerge to develop and maintain robots or other new forms of technology.
"While industrial robots have the potential to drive productivity growth in the United States, it is less clear how this growth will affect workers," the White House said in its report.
There are two important questions, according to White House economists. First, if robots replace existing workers, will workers have enough bargaining power to share in their employers' newfound gains? Second, will the economy create new jobs fast enough to replace the lost ones?
Falling union membership -- some 11 percent of U.S. workers belonged to a union last year, down from about 20 percent in 1983 -- suggests that workers may not have much power to demand higher wages from employers who are automating them out of a job.
The economy could create enough new, good-paying jobs to help those displaced by robots, but the plight of manufacturing workers who have lost their jobs in recent decades as manufacturers moved abroad suggests that this, too, could be a challenge.
Instead, according to the White House, the key is to maintain a "robust training and education agenda to ensure that displaced workers are able to quickly and smoothly move into new jobs." With most Americans now financing higher education through debt -- about 1 in 8 Americans collectively owe $1.3 trillion on their student loans -- amid an era of sluggish wages, it's unclear whether higher debt burdens will lead to a better economic future.
MasterCard is rolling out a new strategy in the fight against credit card fraud: It wants you to pay for things with your face.
At the Mobile World Congress tech show in Barcelona this week, the credit card company unveiled its new “selfie pay” feature, which will allow cardholders to use an image of their face or a fingerprint to verify their identity when making payments online.
.@MasterCard is launching selfie payments https://t.co/jd71s9e4vp pic.twitter.com/LhCv6h3B0q
— CNNMoney (@CNNMoney) February 23, 2016
To use selfie pay, cardholders will have to download MasterCard’s app to their mobile device or tablet. Customers will still need to provide their credit card details to make purchases, but if further authentication is required, they can hold their device up to their face and take a photograph or use the device’s fingerprint sensor.
To prevent fraudsters from abusing the service, MasterCard said users will have to blink to prove they’re not holding a photograph up to the camera. The company said it also has algorithms in place that can detect if someone is using a previously-filmed video.
MasterCard plans on rolling out the feature in the coming months in several countries, including the U.S., Canada, the U.K. and parts of Europe.
The move came after a series of successful pilot tests last year. MasterCard told the BBC that 92 percent of its test subjects “preferred the new system to passwords.”
“I think the whole biometric space is a great way of protecting yourself when you are doing payments,” Ann Cairns, head of international markets for MasterCard, told CNBC. “There are a whole range of biometrics that say ‘I’m me, I'm making a payment’ and it just makes the whole thing more secure.”
According to The Verge, MasterCard is currently looking into other biometric security options beyond facial recognition and fingerprint scans. Specifically, the company is considering using sensors to read a person’s electrocardiogram -- the unique electrical signal produced by his or her heart.
“While even fingerprint or facial recognition requires input from the user, heartbeat recognition can take place seamlessly in the background,” The Verge explained. “You just wear a bracelet and it sends a signal to devices you're near to prove you're you.”
To prevent identity theft and fraud, many banks and companies are turning to biometrics to amp up security mechanisms. The Chinese e-commerce firm Alibaba recently introduced its own “selfie pay” feature while British bank HSBC announced new security measures this week that allow customers to authenticate their identity with a fingerprint or voice command.
“The problem with online payments has always been that the card doesn't need to be present, hence the credit card companies have charged more for the transactions to cover the costs of fraud,” Windsor Holden, head of forecasting at the U.K. tech consultancy Juniper Research, told the BBC. “If they can introduce a mechanism that makes the system more secure than merely asking for a password, then the hope would be that fraud levels decrease and the savings can be passed back onto merchants, and perhaps consumers too.”
Still, experts have warned that even biometric authentication measures like facial and fingerprint scans aren't foolproof. Privacy is also a concern.
