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      IBM Reopens Its Frozen Pension Plan, Saving the Company Millions

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      The company has stopped making contributions to 401(k) accounts, and instead giving workers cash credits in a new version of its old pension plan.Traditional pension plans haven’t come back. But the news from IBM might lead you to think so.Last month, IBM thawed out a defined benefit pension plan that it had froze more than 15 years ago. The company has also stopped making contributions into employee 401(k) accounts.These moves are startling, because, on the surface, at least, IBM seems to be reversing a decades-long trend of corporations moving away from traditional pension plans. With the old plans, companies promised to pay employees retirement income that rewarded them for long years of service. But these plans were expensive, and IBM and hundreds of other firms instead began to emphasize 401(k)s that moved the primary responsibility for saving and investing to workers. IBM’s new approach is significant because the company has been a leader in employee benefit policymaking. What it is doing now is no simple return to the classic cradle-to-grave benefits system. In fact, IBM’s new pension plan isn’t nearly as generous to long-tenured employees compared with its predecessor.The move has real advantages for some people who work at IBM, particularly those who put little or no money of their own into 401(k)s and who stay at the company for a relatively short while.Crucially, IBM’s maneuver is likely to be wonderful for its shareholders. The company is saving hundreds of millions of dollars a year by stopping contributions to employee 401(k) accounts. And it doesn’t need to put any money into the pension plan this year — and, probably, for the next few years — because it has plenty of money already in it. On a purely financial standpoint, IBM is improving its cash flow and bottom line.For a small but important subset of companies — those with fully funded, closed or frozen pension plans — IBM’s move could be a harbinger of things to come, pension consultants say. IBM is using a surplus in its pension fund to simultaneously change its employee benefits package and help the company’s finances.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Grading Biden’s Big Law

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      The climate-focused Inflation Reduction Act is popular with businesses. But its cost is expected to double over the next decade, and its outlook is uncertain.The Inflation Reduction Act is popular with business, and that’s adding to its cost.Kenny Holston/The New York TimesThe costs, and the benefits, of the I.R.A.In the past 24 hours, President Biden has taken questions (and heat) on his age, memory and mental fitness. But the one economic issue that is most likely to generate scrutiny from the business community and beyond over the next several months is the biggest bill he has passed, the Inflation Reduction Act, which he hailed at his news conference last night.Big questions still hang over the law, which many Americans appear not to know exists. How much will it add to the federal deficit? And can the law survive a potential Trump second term?The I.R.A. is expected to cost more than $800 billion through 2033, the Congressional Budget Office said, up from the $391 billion price tag assessed when it was passed in 2022.One reason: There’s huge demand for the credits and subsidies created by the law for building solar, hydrogen and nuclear energy projects, as well as discounts for buying electric vehicles. (An analysis by Goldman Sachs last fall showed that the law led to about $282 billion in investment and roughly 175,000 jobs in its first year.)The green transition won’t come cheap. The I.R.A., which aims for steep emissions cuts, is expected to add $250 billion more to the deficit than initially forecast, according to the C.B.O., despite cost-saving promises by the White House.That said, the math isn’t set in stone. The Treasury Department forecast this week that additional tax-collection resources provided by the I.R.A. would help the I.R.S. gather up to $851 billion more in tax revenue over the next decade. That raises the question of whether this is actually a deficit-paring law.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      President of Powerful Service Workers Union Will Step Down

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      Mary Kay Henry of the nearly two-million-member Service Employees International Union will not seek re-election when her term ends in May.Mary Kay Henry, the president of the Service Employees International Union, one of the nation’s largest and most politically powerful labor unions, announced Tuesday that she would step down after 14 years in her position.Ms. Henry was the first woman elected to lead the union, which represents nearly two million workers like janitors and home health aides in both the public and private sectors.Under her leadership, it launched a major initiative known as the Fight for $15, which sought to organize fast-food workers and push for a $15 minimum wage. Winning over skeptics in the ranks, Ms. Henry argued that the union could make gains through a broad-based campaign that targeted the industry as a whole rather than individual employers.Labor experts and industry officials cite the campaign as a major force behind significant minimum-wage increases in states including California and New York and cities like Seattle and Chicago. It also pushed a recent California law creating a council to set a minimum wage in the fast-food industry, which will become $20 an hour in April, and to propose new health and safety standards.But the Fight for $15 campaign has not unionized workers on a large scale and enabled them to negotiate collective bargaining agreements with their employers.Ms. Henry’s tenure has coincided with a series of legislative and legal challenges to organized labor, including state laws rolling back collective bargaining rights and allowing workers to opt out of once-mandatory union fees, as well as a landmark Supreme Court ruling allowing government employees to do the same.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      The Jobs Conundrum: Questions About Wages Persist

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      The latest data on jobs and wages are positive on the surface, but a large group of voters are still downbeat about the state of the economy. Jobs seem plentiful, but a large group of voters are feeling downbeat about inflation and the economy.Spencer Platt/Getty Images‘The job’s not quite done’ The U.S. economy is a paradox. Official figures show that growth is solid, jobs are plentiful and wages are climbing, and yet voters are mostly feeling down and giving President Biden little credit.Friday’s jobs data is adding to that split-screen view, with economists pointing out red flags in an otherwise sterling report.The labor market seems to be performing strongly. Employers added 353,000 jobs last month, almost double economists’ forecasts, and an additional 100,000 via revisions in previous months. Average hourly wages rose, too.But that doesn’t necessarily mean workers are more prosperous. For a start, wintry weather shrank the average workweek to 34.1 hours in January. In particular, nonsalaried employees, especially those in retail, construction and the hospitality sectors, worked fewer hours, which probably ate into their pay, Bill Adams, an economist at Comerica Bank, said in a research note.And Goldman Sachs’s wage tracker for U.S. workers fell after Friday’s report on a quarterly annualized basis.Workers are increasingly anxious about changing jobs. Quit rates have fallen to a four-year low, suggesting employees are feeling less confident that they’ll find a better position elsewhere. If this trend persists, it could also put the chill on wage gains that soared during the so-called Great Resignation.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Blockbuster Jobs Report Backs Up Fed’s Patience as It Waits to Cut Rates

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      Federal Reserve officials left interest rates unchanged this week and signaled that their next move is likely to be a cut — but they also signaled that they are in no hurry to make that change. Friday’s jobs data is likely to support their cautious stance.Employers hired much more rapidly than expected in January, and average hourly earnings climbed 4.5 percent over the year, the fastest pace since September and a reversal after months of cooling.While Jerome H. Powell, the Fed chair, made it clear during his news conference on Wednesday that the central bank is not bent on keeping interest rates high just to slow down the labor market, the report suggested that the economy may not be cooling quite as much as policymakers had expected.And given that continued strength, the Fed is unlikely to feel pressure to cut interest rates at its next meeting in March. While policymakers do not want to hold borrowing costs too high for too long and risk a painful recession, the data suggest that a possible downturn remains very much at bay. Instead of faltering, the job market is booming.The central bank’s policy rate is now set to 5.25 to 5.5 percent, a level high enough that economists think it will cool the economy as it trickles through financial markets and weighs on mortgage, credit card and business borrowing.The Fed’s goal in trying to cool the economy is to rein in inflation, and price increases have been receding: Over the past six months, inflation data have been close to normal.But that has come without much of a broader economic slowdown. While job openings have come down and the housing market slowed in reaction to higher rates, both hiring and consumer spending have remained surprisingly resilient.Mr. Powell suggested this week that the Fed would like to see more evidence that inflation is coming under control before it begins to cut interest rates, and that it was unlikely to have enough data to feel confident in that before March.Markets sharply dialed back the chances of a rate cut at that gathering following Friday’s jobs data.But notably, Mr. Powell said that the Fed is willing to be patient — rather than wary and reactive — as it waits for wage growth to slow to normal levels. Some economists think that today’s relatively quick pace of wage gains could prevent inflation from stabilizing at 2 percent over time, were they to prevail.“I think the labor market by many measures is at or near normal, but not totally back to normal,” Mr. Powell said. “Job openings are not quite back to where they were,” and wage increases “are not quite back to where they were.”He added that wage increases “probably will take a couple of years to get all the way back, and that’s OK.” More

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      Economists Expected a Hiring Slowdown. So Much for That.

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      Job gains remain rapid, unemployment is near a historic low and wage gains are robust nearly two years into the Federal Reserve’s campaign to cool the economy with higher interest rates — an outcome that has surprised policymakers and economic forecasters alike.At this time last year, Fed officials were predicting that unemployment would have spiked to 4.6 percent by now. Instead, it stands at 3.7 percent.Central bankers have for months said that they were hearing anecdotal evidence that the job market had begun to slow down: The Fed’s recent Beige Book summaries of anecdotal reports from around the country have suggested that hiring was slight or even flat in parts of the country. But while hiring cooled somewhat last year, no big fissures have shown through to the actual data.In fact, there are signs that the labor market is still very solid — something Jerome H. Powell, the Fed chair, acknowledged this week.“We’ve had a very strong labor market, and we’ve had inflation coming down,” Mr. Powell said. “So I think whereas a year ago, we were thinking that we needed to see some softening in the economy, that hasn’t been the case. We look at stronger growth — we don’t look at it as a problem.”Mr. Powell and his colleagues have suggested that the labor market has come back into balance as the supply of workers has recovered, something that has been helped along by a rebound in immigration and a recent jump in labor force participation. The number of job openings in the economy has slowly nudged down.But few if any economists expected job gains to remain this robust at a time when higher interest rates were expected to meaningfully weigh down the economy. In fact, many forecasters were predicting an outright recession early last year.The question for the Fed is what it means if the job market not only fails to slow down as anticipated, but actually accelerates again. While one month of data does not make a trend, officials are likely to keep an eye on strong hiring and wage growth.Mr. Powell said this week that robust growth in and of itself would not worry the Fed — or necessarily prevent them from lowering interest rates this year — so long as inflation continued to come down. But central bankers could become more wary if solid wage gains and a booming economy help to keep consumers spending so much that it gives companies the wherewithal to keep raising prices.“If there was a real concern that we were getting a re-acceleration, it might get them to pause a little bit,” said Kathy Bostjancic, the chief economist at Nationwide. But for now, “they’re more apt now to respond to a weakening in the labor market than to continued strength.” More

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      Trump Rages at U.A.W. President After Biden Endorsement

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      A few days after the United Auto Workers endorsed President Biden for re-election, former President Donald J. Trump raged at the union’s leader, Shawn Fain, on Sunday night.Mr. Trump wrote on his social media platform that Mr. Fain “is selling the Automobile Industry right into the big, powerful, hands of China.”He claimed that Mr. Biden’s support for electric vehicles would destroy the American auto industry and send jobs overseas. “Shawn Fain doesn’t understand this or have a clue,” he wrote. “Get rid of this dope & vote for DJT. I will bring the Automobile Industry back to our Country.”The provocation for Mr. Trump’s comments appeared to be a CBS News interview on Sunday in which Mr. Fain said that Mr. Biden had “a history of serving others and serving the working class,” while Mr. Trump had “a history of serving himself and standing for the billionaire class.”Mr. Fain also emphasized Mr. Biden’s decision to meet with striking U.A.W. workers in September, which made him the first sitting president to join a picket line. Mr. Trump has sought to position himself as a champion of the workers’ interests, and he tried to court blue-collar workers with a speech the same week — but at a nonunion factory.Michael Tyler, a spokesman for Mr. Biden’s campaign, said in a statement, “Apparently losing the U.A.W. endorsement to Joe Biden has left Donald Trump’s wounded ego with quite the SCAB.” He argued that the corporate tax changes Mr. Trump signed as president had themselves encouraged companies to move jobs overseas. More

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      Walmart Offers Store Managers Company Stock to Make Them Feel Like ‘Owners’

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      The retailer has been raising wages for store associates. It’s now turning its attention to improving salaries and benefits for their bosses.Walmart, the nation’s largest private employer, is raising salaries and benefits for store managers as it looks for ways to retain them.Walmart said on Monday that managers of its U.S. stores would be eligible for grants of up to $20,000 in company stock every year. The stock will vest over a three-year period, with a percentage vested each quarter.The announcement came a few weeks after Walmart said it would increase the average salary for store managers to $128,000, up from $117,000. The big-box retailer also said bonuses for store managers could reach up to 200 percent of base salary, with a store’s profitability becoming a bigger factor in the calculation.Store managers are crucial in driving sales and profitability within their stores and keeping morale high in a dynamic business. The managers are also seen as an important pipeline for leadership at the company.A store manager at a Walmart Supercenter oversees hundreds of associates who work across a variety of departments, including food, apparel, pharmacies and auto centers. These stores often attract scores of shoppers and bring in millions of dollars in sales each year. At the start of the Covid pandemic, store managers were given even more responsibilities as the company adapted to changing consumer behavior, including managing e-commerce capabilities like in-store pickup for online orders and navigating goods that are out of stock as well as excess inventory.“It’s fair to say that we’re asking them to act like owners and to think like owners,” John Furner, the chief executive of Walmart U.S. who was previously a manager at a company store, said in a briefing with reporters. We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More