States With The Fastest Growing Economies

This article was originally published on 24/7 Wall St. 

The U.S. economy grew 2.4% in 2015. This is the most the economy has grown in more than five years, and is a slight improvement on 2014’s 2.2% growth.

The economies of all but two states grew in 2015, some substantially more than others, and for a variety of reasons. California and Oregon each grew by 4.1%, more than any other state. Alaska and North Dakota contracted, while several states saw increases of less than 0.5%.

The professional and business services industry, the information industry, and the real estate, rental and leasing industry contributed most prominently to the nation’s growth last year.

Click here to see the states with the fastest growing economies.

Click here to see the states with the slowest growing economies.

In an interview with 24/7 Wall St., Clifford Woodruff, an economist with the Bureau of Economic Analysis, explained that the biggest drain on state economies last year was the mining sector. Indeed, the mining sectors of 34 states declined last year, including declines of at least 10% in 20 of these. He went on to say that the national decline in oil prices has likely contributed to this drop in the sector.

The impact of a suddenly weak energy industry was most apparent in North Dakota. The state had been one of the fastest growing in the country, both in terms of population and GDP over the past few years, as the development of the Bakken shale oil formation led to a substantial boom. The state had the largest economic growth of any state in four of the five years through 2014, including a 21.7% increase in 2012. In 2015, the state economy contracted by 2.1%, more than any other state.

On the whole, populations grew substantially more in the states with the fastest-growing economies, and stagnated or declined in the worst performers. Population growth exceeded 0.4% in only one of the 10 states with the weakest economies in 2015. All of the 10 states with the strongest economies surpassed the national population growth rate of 0.8%.

Woodruff explained that population growth does not necessarily lead to GDP growth, as states can import goods from other states or countries without producing more goods locally. He added, however, that it makes sense that the two figures usually move in step. “Obviously, the more people that there are, the more products, the more food, the more houses they’re going to need.”

Based on figures published by the Bureau of Economic Analysis, 24/7 Wall St. reviewed 2015 real GDP growth rates in all 50 states. The real gross domestic product measurement accounts for the effects of inflation on growth. GDP figures published by the BEA for 2015 are preliminary and subject to annual revision. Real GDP figures for past years have already been revised. Population data are from the U.S. Census Bureau and reflect estimated growth between 2014 and 2015. We also used data on poverty from the U.S. Census Bureau’s American Community Survey (ACS). Both 2014 and 2015 unemployment rates are annual averages and are from the Bureau of Labor Statistics (BLS).

These are the states with the fastest (and slowest) growing economies.

10. North Carolina
>2015 GDP growth: 2.7%
> 2015 GDP: $442.5 billion (9th largest)
> 1-yr. population change: 1.0% (14th highest)
> 2015 unemployment: 5.7% (17th highest)

North Carolina’s economy grew at a 2.7% pace in 2015, the 10th fastest growing state economy. This was an improvement from 2014, when the state’s economy grew by 2.1%, which was 21st in the country that year. This economic growth pushed the state from the 10th largest economy in the country to the ninth, replacing Georgia. The finance, insurance, and real estate as well as the professional and business services industries contributed significantly to the state’s economic growth — expanding by 3.5% and 6.3%, respectively, in 2015. The state’s professional industry has recorded a 4% or higher growth rate in five of the past six years.

9. Nevada
>2015 GDP growth: 2.8%
> 2015 GDP: $126.2 billion (18th smallest)
> 1-yr. population change: 1.9% (3rd highest)
> 2015 unemployment: 6.7% (2nd highest)

Nevada’s economy grew at a 2.8% pace in 2015, slightly faster than the national 2.4% growth rate. Growth was largely driven by the 7.4% expansion of the finance, insurance and real estate industry, the largest in the state by economic output. The mining industry, which contracted by 13.8%, was one of the biggest drags on the state’s economy. Like all states with rapid economic growth, the number of people who call Nevada home is going up. The state’s population increased by 53,000 in 2015, a 1.9% increase.

Despite relatively rapid economic expansion, Nevada’s economy remains relatively weak. The state’s 6.7% 2015 unemployment rate is the highest in the country and far higher than the 5.3% nationwide rate.

 

8. Washington
>2015 GDP growth: 2.9%
> 2015 GDP: $397.3 billion (14th largest)
> 1-yr. population change: 1.5% (7th largest increase)
> 2015 unemployment: 5.7% (17th highest)

Washington’s economy grew at a 2.9% pace last year, surpassing the 2.4% national growth rate. One of the biggest contributions to the state’s economy came from its retail sector, which expanded by 9.4%. According to the National Retail Federation, a retail trade association, the retail industry is Washington’s largest private sector employer, directly supporting about one in every five jobs in the state. Other major contributions to Washington’s economic growth came from its information sector and its finance, insurance, real estate, rental, and leasing industries.

7. Florida
>2015 GDP growth: 3.1%
> 2015 GDP: $789.8 billion (4th largest)
> 1-yr. population change: 1.8% (4th largest increase)
> 2015 unemployment: 5.4% (22nd highest)

Florida is one of just seven states where GDP grew by at least 3% in 2015. The Sunshine State’s GDP, which remains the fourth largest in the country, increased to approximately $790 billion. Population tends to increase more rapidly in states with more robust economic growth, and Florida is no exception. The state’s population increased by 1.8% in 2015, the fourth largest growth in the country.

6. Utah
>2015 GDP growth: 3.3%
> 2015 GDP: $131.2 billion (19th smallest)
> 1-yr. population change: 1.7% (6th largest increase)
> 2015 unemployment: 3.5% (5th lowest)

Utah’s economy grew at a 3.3% pace in 2015, faster than all but five other states. One of the largest contributions to the state’s GDP came from its finance, insurance, real estate, rental, and leasing sector, which expanded by 4.5% over the year. Nationwide, the sector expanded by a much slower 1.8%.

Utah’s rapid economic growth may have helped maintain low unemployment in the state. Just 3.5% of Utah’s workforce is unemployed, much less than the 5.3% national 2015 unemployment rate.

5. Montana
>2015 GDP growth: 3.5%
> 2015 GDP: $41.1 billion (4th smallest)
> 1-yr. population change: 0.9% (15th largest increase)
> 2015 unemployment: 4.1% (11th lowest)

Montana’s economy expanded from $39.7 billion in 2014 to $41.1 billion in 2015, a 3.5% growth rate. Over roughly the same time period, the state’s jobless rate dropped from 4.7% to 4.1%. Economic growth was largely spurred by expansion in many of the state’s largest industries, including manufacturing, which grew at a rapid 12.5% pace. The mining industry was the biggest drag on the economy, contracting by 6.1%. 

4. Colorado
>2015 GDP growth: 3.6%
> 2015 GDP: $288.8 billion (18th largest)
> 1-yr. population change: 1.9% (2nd largest increase)
> 2015 unemployment: 3.9% (10th lowest)

Colorado’s economy grew at a robust rate for the second straight year. The state’s GDP growth rate of 4.1% in 2014 was third in the country. In 2015, Colorado’s 3.6% GDP growth rate was fourth largest. While there are exceptions, larger economic expansions tend to coincide with greater population growth. Each new resident will consume more goods and generate more economic output. Not surprisingly, Colorado’s population grew by nearly 2% in 2015, second fastest in the country and well above the national population growth rate of 0.8%.

The state’s finance, insurance, and real estate industry as well as its professional sector contributed substantially to Colorado’s economic growth, expanding by 4.6% and 5.0%, respectively.

 

3. Texas
>2015 GDP growth: 3.8%
> 2015 GDP: $1.48 trillion (2nd largest)
> 1-yr. population change: 1.8% (5th largest increase)
> 2015 unemployment: 4.5% (18th lowest)

The Texas economy grew by 3.8% in 2015, faster than any state other than Oregon and California. Texas has nearly one-third of the nation’s crude oil reserves, and its economy is heavily dependent on the price of oil. As oil prices have fallen in recent years, the economies of many of the most oil-dependent counties in the state also suffered. While the statewide unemployment rate fell from 5.1% in 2014 to 4.5% in 2015, the jobless rate in many of the state’s top oil-producing counties increased. Still, economic growth in the state was led by the mining sector, which grew at a rapid 12.4% pace. By comparison, the U.S. mining sector as a whole grew at a 5.1% pace in the same period and actually declined in most states.

2. California
>2015 GDP growth: 4.1%
> 2015 GDP: $2.21 trillion (the largest)
> 1-yr. population change: 0.9% (16th largest increase)
> 2015 unemployment: 6.2% (7th highest)

California’s $2.2 trillion GDP is the largest in the country. Its 4.1% economic expansion in 2015 was also the fastest in the U.S., tied only with Oregon. Growth was driven primarily by the professional and business services industry as well as the information industry, which grew by 7.0% and 10.3%, respectively.

The size of the state’s economy may not be surprising — with 39.1 million residents, California is also the most populous state in the country. As it is, there are not enough jobs in the state to accommodate the workforce. California’s 2015 unemployment rate of 6.2% is nearly a full percentage point higher than the national jobless rate of 5.3%.

1. Oregon
>2015 GDP growth: 4.1%
> 2015 GDP: $199.4 billion (25th largest)
> 1-yr. population change: 1.5% (9th largest increase)
> 2015 unemployment: 5.7% (17th highest)

Oregon’s GDP expanded by 4.1%, at the same pace as its neighbor to the south. State economic output increased from $191.6 billion in 2014 to $199.4 billion in 2015. Despite rapid economic growth, unemployment in Oregon remains higher than it is nationwide. The state’s 5.7% jobless rate is nearly half a percentage point higher than the national 5.3% unemployment rate.

Manufacturing, Oregon’s largest industry, had among the greatest impacts on the state economic growth in 2015, expanding by 5.7%. Manufacturing is likely to have a continued positive effect on the economy. In May 2016, the state legislature pledged $7.5 million for a manufacturing innovation center to train the next generation of industry workers.

Uber Brings Gridlocked Sao Paulo Commuters Another Option: Helicopter Rides

For commuters who imagine soaring above Sao Paulo's notorious traffic jams, ride-hailing app Uber is offering to make that daydream a reality, starting at around $20.

Brazil's biggest city on Monday became the first in the world where Uber Technologies Inc [UBER.UL] offers on-demand chopper rides between airports, hotels and convention centers.

With more than 400 aircraft and nearly as many helipads, Sao Paulo has a helicopter fleet that rivals those of New York and Tokyo, but commuting by air remains an option mostly for millionaires.

Uber aims to change that with a month-long pilot program.

ASSOCIATED PRESS

A passenger checks Uber on his cell phone as he waits for a helicopter he requested through the application, at a hotel in Sao Paulo, Brazil, Tuesday, June 14, 2016.

Promotional prices through Thursday start at 66 reais ($19) per seat for a lift from Helicentro Morumbi, in one of Sao Paulo's richest neighborhoods, to the Blue Tree hotel across the river. The distance is nearly four miles (6 km), as the chopper flies.

A ride from the Blue Tree Faria Lima onward to Guarulhos International Airport costs 271 reais during the promotion. A car can take one to three hours to make that trip, depending on traffic.

Uber media representatives declined to say how much prices would rise after Thursday or how many helicopters would be made available by the three companies operating the flights. Uber aims to get as much as five times the flight time out of each helicopter compared to standard use, according to a spokeswoman.

ASSOCIATED PRESS

A helicopter carrying a passenger who booked his trip using Uber flies over Sao Paulo, Brazil, Tuesday, June 14, 2016.

The Sao Paulo pilot program, connecting four airports and five other helipads, is Uber's biggest step yet in a partnership with Airbus Group, announced in January.

Uber experimented in recent years with helicopter rides to the Coachella and Bonnaroo music festivals from nearby U.S. airports that cost as much as $3,000 to book a full helicopter and door-to-door SUV rides.

Spanish rival Cabify, which launched its Sao Paulo car service on Monday, is also in talks with three flight providers and plans to offer helicopter rides in the city by the end of the year, as it already does in Mexico City.

Walgreens Is Walking Out On Scandal-Struck Theranos

Things just got much worse for Theranos.

On Sunday, pharmacy giant Walgreens abandoned the embattled blood-testing startup accused of failing to deliver accurate results with its tests. The move came roughly nine months after The Wall Street Journal exposed major problems with the company's technology, which claimed to be able to run more than 240 blood tests using just a drop of blood. 

"We have carefully considered our relationship with Theranos and believe it is in our customers' best interests to terminate our partnership," Brad Fluegel, Walgreens' senior vice president and chief health care commercial market development officer, said in a statement. 

The announcement strikes yet another major blow against Theranos, the 13-year-old startup that once boasted former Secretaries of State Henry Kissinger and George P. Schultz as board members.

Nearly two weeks after the Journal published its exposé, the U.S. Food and Drug Administration said tiny vials Theranos used to collect patients' blood were not approved medical devices. In January, Walgreens suspended sending tests through Theranos' California laboratory, sparking a standoff between the two companies. According to a February report in the Financial Times, lawyers for Theranos believed there was "little legal basis for terminating the partnership." But the damage was already done. 

“They’ve been unhappy with the relationship and it’s really a question of working through the contractual and legal arrangements,” an unnamed person familiar with the matter told the FT of Walgreens' position. “They’re not interested in the Theranos deal.”

In March, federal regulators proposed banning Theranos founder and CEO Elizabeth Holmes from the blood testing industry for two years. 

"Quality and safety are our top priorities and we are working closely with government officials to ensure that we not only comply with all federal regulations but exceed them," Brooke Buchanan, a Theranos spokeswoman, wrote in a statement on Sunday. "We are disappointed that Walgreens has chosen to terminate our relationship and remain fully committed to our mission to provide patients access to affordable health information and look forward to continuing to serve customers in Arizona and California through our independent retail locations."

It's unclear how much the deal was worth.

By backing out of the partnership, Walgreens puts Theranos' finances in further jeopardy. Two weeks ago, Forbes downgraded the company's value from $9 billion to $800 million. In doing so, the magazine -- whose lists evaluating the world's richest people and companies are considered the most definitive measure of wealth -- valued Holmes' net worth at about nothing. 

"At such a low valuation, Holmes' stake is essentially worth nothing," reporter Matthew Herper wrote in a report announcing the reassessment. "Theranos investors own preferred shares, which meanes they get paid back before Holmes, who owns common stock." 

Holmes was previously valued at about $4.5 billion. 

Microsoft Agrees To Acquire LinkedIn For $26.2 Billion

(Reuters) - Microsoft Corp <MSFT.O> agreed to buy LinkedIn Corp <LNKD.N> for $26.2 billion in cash, the companies said in a statement on Monday.

The offer of $196 per share represents a premium of 49.5 percent to LinkedIn's Friday closing price.

"Today is a re-founding moment for LinkedIn," Reid Hoffman, chairman of LinkedIn's board, said in a statement.

Jeff Weiner will remain chief executive of LinkedIn, reporting to Microsoft CEO Satya Nadella.

The deal is expected to close in 2016.

 

(Reporting by Supantha Mukherjee in Bengaluru; Editing by Saumyadeb Chakrabarty)

Who Is Trump Hotels' Perfect Customer?

Donald Trump's name is on many, many hotels. 

Unlike some other Trump-branded real estate where the name is simply licensed, the Trump family has "intimate involvement" with the hotels, and guarantees "full implementation of the Trump brand standard," according to the Trump Hotels website.

What exactly is this Trump brand standard, and who is it appealing to?

The basic theory of luxury hotel website branding is that it should be aspirational. Most hotels have very few people in their photos, so that you can imagine yourself sprawled out on the plump pillows, or relaxing calmly by the empty pool.

At the Ace Hotel in New York City, popular with the young creative set, the camera focuses on a guitar sitting in an empty room, just begging you to imagine yourself rocking out on your stay. At the Ritz Carlton Waikiki, lavish rooms with floor-to-ceiling windows overlook the green Hawaiian ocean. Hilton's Paris La Defense hotel portrays a lone businessman checking in, surrounded by an empty lobby.

Trump hotels, though, they have people. The landing pages for Trump Hotel websites portray a rotating selection of images of people using the hotel facilities in some capacity. The photos often feature older men. They are white and very tan. It's not uncommon for those older men to be accompanied by thin young women, who are mostly also white. Everyone is having a great time and don't at all look dead inside. 

The Huffington Post contacted Trump Hotels for comment, but has yet to hear back.

Here are some examples of people enjoying Trump Hotels, courtesy of the Trump Hotels website:

 

"I love to explain things to you."

Trump Hotels

"Really, I love it."

Trump Hotels

"Are you sure that guy isn't following us?"

Trump Hotels

At the end of this story, one of them turns out to be a ghost.

Trump Hotels

Either she doesn't have internal organs or they were a little overzealous with the photoshop.

Trump Hotels

"Your ear is so much nicer than my first wife's."

Trump Hotels

"Have you ever read King Lear?"

Trump Hotels

What man doesn't want to watch a woman (his daughter, probably) think about the food she isn't eating?

Trump Hotels

Literally, this black person is bathing a white person.

Trump Hotels

"Paint me like one of your flamingos."

Trump Hotels

Editor’s note: Donald Trump regularly incites political violence and is a serial liar, rampant xenophobe, racist, misogynist and birther who has repeatedly pledged to ban all Muslims — 1.6 billion members of an entire religion — from entering the U.S.

Exxon Supports A Carbon Tax Except When There Is A Vote On A Carbon Tax

ExxonMobil has long maintained that it supports a carbon tax in the United States. 

For instance, here's Suzanne McCarron, ExxonMobil vice president of public and government affairs, in the Los Angeles Times on Mar. 14: "When governments are considering policy options, ExxonMobil believes a revenue-neutral carbon tax is the most effective way to manage carbon emissions."

Here's Exxon's CEO Rex Tillerson at last month's shareholder meeting: "Our valuation of those [policy] alternatives suggests that a carbon tax is the most efficient way to implement policy design to influence behavior."

These are not new or isolated comments. Tillerson has publicly said Exxon supports a carbon tax -- which helps combat global warming by putting a price on the greenhouse gases in fuels -- since 2009. He said back then that "a carbon tax strikes me as a more direct, a more transparent and a more effective approach," compared to more cap-and-trade regulation, which creates a complex market for the right to emit greenhouse gases.

So where does the company stand now that the House of Representatives is set to vote on a non-binding resolution that rails against a carbon tax?

"We’re not commenting on the resolution," Exxon spokesman Alan Jeffers told The Huffington Post in an email. He went on to detail the company's long-standing support of a carbon tax and many of the policies benefits that the resolution denies exists.

In 2015, David Hasemyer and Bob Simison of Inside Climate News detailed how Exxon's public support of a carbon tax has never been matched by a practical commitment to backing a carbon tax politically. Exxon's reluctance to comment on the carbon tax vote in the House Friday is, at least, a continuation of that consistent strategy.

Parents Say Panera Gave Allergic Girl Peanut Butter In Her Grilled Cheese

A Boston-area family is suing Panera Bread, claiming their highly allergic 5-year-old daughter was given two dollops of peanut butter in her grilled cheese sandwich despite repeated warnings to the restaurant of her allergy.

In a lawsuit filed against the chain last week, John and Elyssa Russo of Natick, Massachusetts, claim their daughter had to be hospitalized overnight after the family ordered a meal online on Jan. 28, The Boston Globe reports.

The Russos say they specifically noted their daughter's peanut allergy on the online order form, and so were mystified as to why the extra ingredient had been added to her meal.

“Is this somebody doing this on purpose?" John Russo later asked a manager at the Natick Panera, in his own telling. "Because it’s two freakin’ tablespoons of peanut butter on this sandwich and it’s a grilled cheese."

The Russos didn't realize there was peanut butter in the sandwich until the girl had already bitten into it. She vomited and broke out in hives later that evening, the family says.

Scott Olson/Getty Images

A restaurant manager reportedly apologized for the mistake and blamed it on a "language" issue.

Russo said the manager apologized for the mistake and blamed it on a “language” issue.

A Panera spokesman declined to comment directly on the suit when reached by The Huffington Post Monday.

"Panera takes the issue of food allergens, including the reported incident at our franchise bakery-cafe, very seriously,” the spokesman said in an email. “We have procedures in place across the company to minimize exposure and risk for our guests and associates. We do not comment on pending litigation."

The suit was filed in Massachusetts' Middlesex County Superior Court on Thursday.

This Enlightened CEO Takes Every Friday Off And You Should, Too

Just in time for summer comes more evidence that the four-day workweek is good for your work and personal life.

The boss of a Vancouver-based company describes in The Wall Street Journal how he was close to total burnout five years ago. Then he made a decision that changed everything: He would take Friday as a "free day" and not work.

Brian Scudamore, who is chief executive and founder of home services company O2E Brands, also decided to designate Mondays as "think days," when he works from home and takes no meetings. 

But taking off on Friday was the most important thing he did, Scudamore writes in the article. "[Fridays are] days where I do what I love -- skiing with my children, cooking, learning languages and biking," the 40-year-old says. "When I’m away from the office, things have time to marinate. Connections bubble up and often turn into big, business-changing ideas."

Scudamore's company encourages employees to set their own schedule, too, O2E brand publicist Sarah Gray told The Huffington Post. "We can pick our own schedule -- come in when we want and leave when we want. It's not a culture of 'clock watchers,' " Gray said in an email. "We're more about setting/achieving our goals than we are about hammering home a 9-5 workweek."

O2E

CEO Scudamore out biking and not working.

There's loads of research out there that demonstrates that working longer hours is bad for your health. Working more means that there's less time to exercise, de-stress and sleep, among other things. And that causes real, physical damage. Those who work more than 55 hours per week have an increased risk of stroke compared to those who work less than 40 hours, according to a major analysis of studies that NYMag.com's Science of Us blog cites.

"Overwork and the resulting stress can lead to all sorts of health problems, including impaired sleep, depression, heavy drinking, diabetes, impaired memory, and heart disease," said Sarah Green Carmichael in Harvard Business Review last year.

Long hours are particularly hard on the health of lower-income workers, research shows. They already have more stress just coping with the anxiety of making ends meet and are even more vulnerable to the health risks that overwork brings on.

Overworked, unhealthy employees also cost companies more to insure, are absent more often and their work isn't that hot either.

Though your boss may think that working longer hours is a sign you're working super-hard and productively, the truth is managers don't often haven't a clue about who is really productive. You can't judge someone's performance by how frequently they're spotted at their desk.

The higher-ups at one consulting firm had no idea that some of their best workers were only pretending to put in 80-hour workweeks, according to a widely cited study from Erin Reid, a professor at Boston University's business school.

Scudamore says that taking Fridays off has helped him think more creatively. Anyone who's ever had an amazing idea while in the shower or just taking a walk can surely relate to this. 

And it's not just knowledge workers who see benefits from working less. A century ago, Henry Ford cut worker shifts in his automobile plant to eight hours from nine (and doubled their pay) -- and business boomed. 

Some companies are already on board with the  notion of a shorter week. Basecamp, a Chicago-based software company, does four-day work weeks in the summer. A design firm in Indiana is only open Monday through Thursday because its founder believes his workers are more motivated, according to a piece in CNN Money. The article says that about 14 percent of small companies offer employees a chance to work a compressed four-day week.

If you're at a company who hasn't yet seen the light, feel free to send a link to this piece to your boss. Good luck. (Yes, I wrote this on a Friday, but I do plan to leave early. Baby steps.)

The Obama Administration Cracks Down On Payday Lenders

For the first time, there will soon be broad rules protecting U.S. borrowers from being stuck in a spiral of debt from loans that typically have rates of 390 percent and often higher.

The Consumer Financial Protection Bureau, the agency that Sen. Elizabeth Warren (D-Mass.) conceived, announced a proposed rule covering payday loans, as well as other high-interest lending products like auto and installment loans. Previously, these high-cost loans were mostly regulated at the state level.

The rule takes direct aim at the core business of payday lenders: giving people loans that they can’t afford to pay back without refinancing.

Turning a short-term lack of cash into a chain of unaffordable loans “is the core of the payday loan business model,” payday loan expert Nick Bourke at Pew Charitable Trusts told The Huffington Post in November. “To any objective, fair-minded reviewer, that’s not in question.” CFPB research has found that more than half of payday loans are made to people as part of a string of 10 or more loans.

It's a bit "like getting into a taxi just to ride across town and finding yourself stuck in a ruinously expensive cross-country journey," CFPB director Richard Cordray said in prepared remarks, to be delivered in Kansas City on Thursday.

The CFPB’s proposal contains two key measures aimed at ensuring that borrowing once does not throw consumers into a spiral of unpayable debt. The first measure requires lenders to assess if the borrower has the income to fully repay the loan when it is due without reborrowing. This idea, known as “ability to repay,” targets at the cycle of debt that unaffordable payday loans can trap people in.

The proposed rule also prohibits lenders from making more than two unsuccessful attempts to withdraw money from borrowers bank accounts. Repeated debit attempts cause consumers to be hit with overdraft fees from their banks. Such fees hit half of all online borrowers, costing an average of $185.

In private, the payday lending industry admits unaffordable lending products that force borrowers to take out new loans to pay off old ones are core to the industry's profits. “In practice, consumers mostly either roll over or default; very few actually repay their loans in cash on the due date,” wrote Hilary Miller, a key figure in the industry’s fight against regulation, in an email obtained by open records requests in November.

A 2009 Center for Responsible Lending study found that people taking out new loans to repay old ones make up 76 percent of the payday market. And studies from the Deloitte Financial Advisory Services and Charles River Associates estimated that the CFPB’s proposed rule could reduce the volume of industry loans made by 60 to 74 percent, an indication that the rule would cut significantly into this.

However, Bourke said it doesn't go far enough and doesn't encourage banks to provide low cost loans to needy Americans. “The CFPB has an historic opportunity to encourage safe, affordable lending—and they’re missing it. Its proposal makes it too easy for payday lenders to complete additional paperwork and issue a $500 loan with $600 in fees, while making it difficult for a bank to offer the same loan for $80.”

The National Consumer Law Center said that while the proposed rule is promising, it is concerning that “lenders could make up to three back-to-back payday loans and could start the sequence again after only 31 days.”

The payday lending industry immediately attacked the rule. It "presents a staggering blow to consumers as it will cut off access to credit for millions of Americans who use small-dollar loans to manage a budget shortfall or unexpected expense," chief executive of the Community Financial Services Association Dennis Shaul said in a statement.

Democratic presidential candidate Hillary Clinton applauded the proposed rule and assailed presumptive GOP nominee Donald Trump for wanting to repeal the entire bank regulation law that, among many other things, created the CFPB. "Working families deserve a president who will look out for them -- not payday lenders and special interests on Wall Street," she said.

The agency will accept comments on the proposed rule until Sept. 14, 2016. Those comments will then be examined and considered before the final rule is released.

This Woman’s $4.5 Billion Wealth Just Evaporated Into Nothing

Elizabeth Holmes has had a rough year so far. 

Once a media darling, the chief executive of the embattled blood-testing startup Theranos suffered a stupendous fall after the Wall Street Journal last October revealed major problems with the accuracy of company's tests. On Wednesday, her woes hit her finances. 

In a report that will appear in the magazine's June 21 issue, Forbes reassessed Holmes' net worth, previously pegged at $4.5 billion, and lowered it down to zero. 

Reporter Matthew Herper wrote:

Our estimate of Holmes’ wealth is based entirely on her 50% stake in Theranos, the blood-testing company she founded in 2003 with plans of revolutionizing the diagnostic test market. Theranos shares are not traded on any stock market; private investors purchased stakes in 2014 at a price that implied a $9 billion valuation for the company.

Since then, Theranos has been hit with allegations that its tests are inaccurate and is being investigated by an alphabet soup of federal agencies. That, plus new information indicating Theranos’ annual revenues are less than $100 million, has led FORBES to come up with a new, lower estimate of Theranos’ value.

Now, Forbes -- whose lists evaluating the world's richest people and companies are considered the most definitive measure of wealth -- values Theranos at about $800 million, far lower than the $9 billion valuation that launched it into "unicorn" status in 2014.

"At such a low valuation, Holmes’ stake is essentially worth nothing," Herper wrote. "Theranos investors own preferred shares, which means they get paid back before Holmes, who owns common stock."

Theranos could still raise a new round of funding at a higher valuation than $800 million. But little is known about the company's future, Forbes noted, and so far the firm seems at best badly managed and at worst a calamitous ruse. In March, federal health regulators proposed banning Holmes from the blood-testing industry for two years. 

Theranos spokeswoman Brooke Buchanan told The Huffington Post in an email that people shouldn't put too much stock in the Forbes report. "As a privately held company, we declined to share confidential financial information with Forbes. As a result, the article was based exclusively on speculation and press reports," she wrote.

The whole affair underscores the problems that come from valuing the net worths of startup executives whose assets are not easily converted into cash, as Fortune's Dan Primack noted in his morning newsletter. 

"[P]erhaps a future rule of thumb could be to avoid assigning net worth to entrepreneurs based on illiquid securities," Primack wrote, before hinting that such a change may bode ill for the chief executives of firms like Uber, which is valued at $62.5 billion. "Yes, that would include Travis Kalanick, et al."

Forbes estimates the Uber CEO to be worth $6.2 billion. 

Note: The Huffington Post’s Editor-in-Chief Arianna Huffington is a member of Uber’s board of directors, and has recused herself from any involvement in the site’s coverage of the company.

Labor Groups Are Taking On Walmart And McDonald's. But Who Will Fund Their Fight?

In 2013, Janet Sparks and five co-workers went on strike at a Walmart store in Baker, Louisiana. The group rode in a caravan to Bentonville, Arkansas, taking their grievances to the company's shareholder meeting. The experience of walking off the job in protest was exhilarating, but also unnerving.

"It's always a scary thing for a worker to go up against the largest employer in the U.S.," Sparks, 55, said. "There are co-workers around you who are afraid. But we believed in what we were doing."

Three years later, Sparks still believes in what she's doing, even if her path to victory remains unclear. The labor group that orchestrated her strike, OUR Walmart, lost its benefactor last year, when the United Food and Commercial Workers union decided to stop funding the effort. OUR Walmart now faces the same predicament as other non-union groups in the labor movement: How to pay the bills without any dues-paying members.

OUR Walmart is trying to rebuild. This week, it's sending a delegation of workers to Bentonville for Walmart's shareholder meeting. It has a staff of 12 scattered around the country, including several former Walmart employees. Such work requires money, and the group hasn't figured out where it will find that that funding over the long term.

The Fight for $15 campaign in fast food may confront the same dilemma some day, should its main patron, the Service Employees International Union, decide it can no longer afford the investment.

 

Adrees Latif / Reuters

"We're in this place that's challenging, but also really exciting," said Dan Schlademan, a longtime organizer who co-founded OUR Walmart. "[We're] now a completely free organization, not connected to any single institution. I think we have the freedom now to take what we've learned over the last four years and build on that in ways that might have been harder under the old structure."

OUR Walmart launched in 2011 with the backing of the 1.3 million-member UFCW, a union that's battled Walmart for decades. Walmart is the largest retailer and private-sector employer in the world, with 1.5 million U.S. employees and more than 4,500 U.S. stores. The company is also famously anti-union. The UFCW has never succeeded in unionizing any of Walmart's U.S. workforce.

So the union turned to organizing workers in a less traditional way. Even if it couldn't unionize Walmart workers, the thinking went, the union still had an interest in pressuring Walmart to hike wages, since Walmart sets the tone for the entire brick-and-mortar retail sector. Rather than try to secure a standard union contract, OUR Walmart would pressure the company publicly into raising pay and offering employees better hours and benefits. The model is sometimes called a worker center or "alt labor" -- as in, an alternative to traditional unionism.

Alt-labor groups operate outside the normal parameters of collective bargaining, without recognition by the company or the federal government. They don't have the same power as a union like the UFCW, though they enjoy certain freedoms. (Unlike unions, they don't have to disclose the details of their spending to the government.) But as organized labor's clout has waned -- a mere 6.7 percent of private-sector workers now belong to a union -- alt-labor groups have been effective at making employers squirm and notching victories for workers, particularly in low-wage industries like food and retail. One Florida-based group, the Coalition of Immokalee Workers, shamed major grocers and fast-food companies into signing agreements that improved pay and working conditions for immigrant farm workers in Florida.

OUR Walmart spearheaded strikes and protests that made national headlines around the retailer's Black Friday shopping frenzy. Organizers said hundreds of employees participated in these strikes each year; Walmart insisted the actual figure was much lower. (Schlademan declined to disclose OUR Walmart's membership numbers.) Regardless of who's counting, the strikers comprised a tiny minority of Walmart's massive workforce. But through their courage to walk out publicly, even for just a day, the workers dented Walmart's public image, helping to fuel a growing national debate over income inequality.

"People just took tremendous risks," said Andrea Dehlendorf, another co-founder of the group. "For a long time, nobody really imagined that there would be this kind of movement from within Walmart."

The group apparently succeeded in getting under Walmart's skin. The retailer went so far as to retain the snooping services of Lockheed Martin to deal with the protests, Bloomberg BusinessWeek reported last year. UFCW lawyers filed a slew of charges against Walmart with the the National Labor Relations Board, saying the company illegally retaliated against strikers. Earlier this year, a judge ruled that Walmart broke the law in firing 16 workers and ordered the company to reinstate them. Walmart has appealed.

 

Without UFCW this could not have been possible. They came and they undergirded us and helped us and taught us. But this was always a separate organization.Janet Sparks, Walmart worker

 

Walmart implemented some major changes since the strikes began. In 2015, the company announced it would phase in a wage floor of $10 per hour -- nearly $3 per hour more than the federal minimum wage -- in all of its U.S. stores, boosting pay for a half-million workers. After workers said they weren't getting enough hours, the company implemented a program aimed at helping part-time workers convert to full time. It also overhauled its policies for pregnant workers.

Though OUR Walmart and UFCW claim those changes as the result of activism, Walmart said it merely listened to employees and made a strategic investment.

"Remember, this is a $2.7-billion investment in education, training and higher wages to make Walmart a better place to work and shop," Kory Lundberg, a company spokesman, said of the pay hikes. "We’re doing this because we live in a rapidly changing world, and retail today requires new skills to meet the demands of customers who have everything at their fingertips. Walmart will lead by empowering our associates and creating opportunity. As they grow and succeed, so do our customers and so does Walmart."

Lundberg said the company had no comment on OUR Walmart or the UFCW.

Whatever successes the campaign may have had, the latest incarnation of OUR Walmart still needs to figure out how to keep the lights on. A non-union group may help win raises for workers, but it doesn't make dues-paying union members out of them.

It isn't clear how much money UFCW poured into the OUR Walmart campaign. According to the Center for Union Facts, an anti-union group that tracks union spending, the sum can't be determined because the union did not break out spending specifically to OUR Walmart in its disclosure forms. But the financing would have been considerable.

"You see on the one hand they have had an impact, and they have moved the policy agenda," Kent Wong, director of the UCLA Labor Center, said of non-union worker centers generally. "And on the other hand, the issue of their long-term sustainability has not yet been solved."

For some union members and officers, it's hard to justify spending millions of dollars on an endeavor that doesn't directly benefit the union's membership and expand its base. That was apparently the thinking of UFCW's new leadership. After electing a new president last year, the union pulled its funding from OUR Walmart, sending Schlademan and his team packing. The divorce was messy at first, including a dispute over who had the rights to the name OUR Walmart. 

Workers affiliated with OUR Walmart said they hope the union and OUR Walmart will reunite their efforts at some point.

"I'm not going to lie and say I'm not saddened by it," said Denise Barlage, an OUR Walmart member who worked at the company's Pico Rivera, California, store for nine years. "They [UFCW] consider us an ally; we consider them one. I believe years down the road, we will get back together. But I feel in retrospect, it might be better for us to be independent."

 

"The old model has failed several generations ... We should encourage these experiments, but we shouldn't romanticize it. We still haven't figured this out."David Rolf, president of SEIU local 775 and author of "The Fight for Fifteen: The Right Wage for a Working America"

"Without UFCW this could not have been possible," said Sparks. "They came and they undergirded us and helped us and taught us. But this was always a separate organization. I never felt crippled by them pulling out their funding."

UFCW continues its own Walmart campaign, under the name Making Change at Walmart. Jessica Levin, a spokeswoman for the campaign, said the group is currently working with members of OUR Walmart.

"We will always work with those who are truly focused on changing Walmart," Levin said in an email. "We are aggressively reaching out to Walmart workers, as we always have. We always welcome any Walmart worker who wants be part of our national campaign to change Walmart for the better."

The union describes Making Change at Walmart as an effort to keep heat on the company and make it "a more responsible employer." The campaign appears focused less on in-store organizing than on trying to shape Walmart's image through advertising and PR -- a more affordable strategy, for sure, but a less militant one as well.

Levin said the union wouldn't discuss campaign tactics, but was focused on giving workers a voice to "tell their stories, whether that is to groups of Walmart workers, in television or multimedia campaigns, or in front of hundreds of thousands of people at the annual shareholders meeting."

OUR Walmart is searching for funding in its new incarnation. According to Schlademan, the support will be a mix of foundation grants, online donations and contributions from workers themselves. He said the group has secured some foundation money, but declined to name any donors or provide specific numbers.

"Our ability to build a sustainable organization is there," Schlademan said. "We believe this model has the ability to be successful. That is our grand experiment. It's the question we hope to answer."

Other labor groups should hope so, too. The union-backed Fight for $15 came on the heels of OUR Walmart and is funded by the 2 million-member SEIU, which, according to the Center for Union Facts, has devoted tens of millions of dollars to the cause over four years. By most measures, the campaign has been a huge success, spurring minimum wage hikes around the country, including $15 measures in both California and New York.

Yet the Fight for $15 has not yet translated into more dues-paying union members. It's possible that, through public pressure and regulatory channels, SEIU could broker a deal with McDonald's, or other fast-food giants, that paves the way for union contracts. And there's an argument to be made that the Fight for $15 has benefited union workers as well, by helping to raise the baseline pay in the service sector more broadly. But for now, the campaign's most concrete victories are clearly legislative ones. (Fight for $15 members may soon vote to formally affiliate with SEIU, but dues are not yet in the picture.)

Such experiments require investment and patience, said David Rolf, president of SEIU local 775 and the author of a new book about the Fight for $15. Rolf noted that some of the biggest achievements of the U.S. labor movement were years, if not decades, in the making, like the Treaty of Detroit, the groundbreaking contract won by auto workers in 1950. Rolf said unions are more or less doomed within their traditional structure, and must find a new framework for workers to bargain collectively, even if it isn't clear yet how it becomes self-sustaining.

"The old model has failed several generations. It's too inaccessible -- people can't get unions," Rolf said. "We should encourage these experiments, but we shouldn't romanticize it. We still haven't figured this out."

 

Rick Wilking / Reuters

Master of ceremonies for the 2015 Walmart annual meeting, actress Reese Witherspoon, speaks on stage in Fayetteville, Arkansas.

Walmart hosts its annual shareholder meeting on Friday. OUR Walmart has had a presence outside the celebrity-studded confab for several years, and this year is no different. The group plans to deliver a petition calling for a minimum wage of $15, and full, stable work schedules for all employees who want them. UFCW is also in Bentonville this week, hosting a roundtable with workers on Wednesday night.

Sparks earns $13.25 an hour after 10 years at Walmart. She said she'll keep rounding up signatures for the petition, regardless of how much funding OUR Walmart has, or where it comes from.

"It's all looking forward for me. It's about change for Walmart workers and all American workers," Sparks said. "I'm not going to stop because of a few dollars being taken away."

Sheryl Sandberg’s Shoes Perfectly Illustrate The Hypocrisy Of Tech's 'Casual' Dress Code

The rules for dressing for the office are completely different for men and women. 

Perhaps no two people better exemplify the double standard than the most well-known executives working at Facebook: cofounder and Chief Executive Mark Zuckerberg, known for wearing the same grey T-shirt and jeans every day, and Chief Operating Officer Sheryl Sandberg, who is typically seen perched atop towering high heels.

Sandberg is arguably the most influential female executive in Corporate America, inspiring (or pissing off) many women with her book Lean In. Her frank openness about dealing with the sudden death of her husband last year was both heartbreaking and admirable. She's incredibly successful by every measure.

Yet on Wednesday, while watching her talk to Recode's Kara Swisher and Facebook Chief Technology Officer Michael Schroepfer, I caught myself staring at her shoes. Just look at them:

Here's a closer look:

Facebook/Recode

I couldn't help but marvel at the fact that while Zuckerberg slomps around in super-casual clothes every day, Sandberg is smartly decked out in full corporate power garb: towering, patent leather, red peep-toe heels.

Here's a pair of shoes Sandberg wore to the World Economic Forum in Davos in January.

Ruben Sprich / Reuters

And another from the power confab:

Ruben Sprich / Reuters

Here's a photo of Mark Zuckerberg's closet:

Here he is speaking at a recent conference in San Francisco:

Stephen Lam / Reuters

You get it.

To be sure, these two are an extreme example. Sandberg, who holds an MBA from Harvard, is a seasoned executive and considered to be the "adult" in the room who brings balance to Zuckerberg's more introverted personality. And of course, nobody is forcing Sandberg to wear her (extremely stylish) stilettos.

Still, their case highlights the fact that even in the tech world, where the concept of dressing down was invented, and even at Facebook, a progressive company run by a guy in jeans, women and men don't quite play by the same rules.

Women can't just roll out of bed, toss on yesterday's jeans, brush their teeth and do well at work. If they do, they'll struggle in the professional world. One woman I spoke with recently, who works at a private equity firm, told me that she wasn't taken seriously at work until she started wearing stilettos.

In fact, women who spend more time grooming -- including efforts like putting on makeup -- are promoted more often and make more money than their bare-faced colleagues, according to one recent study.

“Although appearance and grooming have become increasingly important to men, beauty work continues to be more salient for women because of cultural double standards with very strict prescriptions for women,” the paper says.

So if you're looking to be the next Sheryl Sandberg, better bust out that lipstick and heels. You'll be be spinning your wheels without them.

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