A Revolt Over Safety and Pay

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On strike

Workers for the grocery delivery service Instacart and an Amazon warehouse in New York City walked off the job yesterday, while some Whole Foods employees have called for a “sick out” today. They want more safety measures and better pay to compensate for risk.

Instacart workers had several demands, including more disinfecting material, bigger tips and shares of delivery fees, and an expansion of sick pay, the NYT reports. It’s not clear how many workers participated — the company contends that it saw “absolutely no impact” to operations — but it was notable that salaried employees joined independent contractors.

The Amazon walkout was led by a worker who was alarmed that the company did not close the center after a colleague fell ill. Organizers say several dozen workers took part, while the company said fewer than 15 did. But the protest highlighted concerns about steps Amazon has taken to protect workers, including its inability to provide enough masks.

• The worker who helped organize the protest, Chris Smalls, was subsequently fired for what Amazon said were repeated violations of distancing guidelines.

Can this sort of organizing succeed? Jake Rosenfeld, a sociologist at Washington University in St. Louis, told the NYT that such actions were unusual in bad economic times. But he added that he was skeptical that these kinds of protests would achieve much without help from legislation or unions.

A corporate borrowing bonanza

A corporate dash for cash is understandable, given that revenues have collapsed for many otherwise creditworthy companies.

Some of it has the whiff of desperation, with companies drawing down some $190 billion from corporate credit lines in the past month, according to Bloomberg. Boeing, Anheuser-Busch InBev and others have maxed out these rainy day funds, so much so that banks are reportedly urging firms to go easy.

• Banks earn margins on this credit, but it isn’t much compared with other types of loans or fee-based transactions. That said, if a bank doesn’t have much else in the pipeline, it can keep earnings ticking over.

• Loans to other lenders, such as credit extended to vehicles managing collateralized loan obligations, look a lot shakier.

Other actions seem more opportunistic, with high-quality borrowers tapping bond markets in a big way. Last week, investment-grade borrowers in the U.S. like Home Depot, Nike, and Procter & Gamble issued a record $73 billion in bonds, according to Dealogic. These companies could also tap bank credit lines — and some have — but are also raising fresh funds just in case (and because they can).

• Although rates are higher than they were before the market turmoil, the Fed has promised to buy billions of dollars’ worth of corporate bonds, guaranteeing demand for the issues. Higher yields have also attracted investors who normally stick to stocks.

• This week is already off to a fast start, with a blockbuster bond issue by Oracle, its first since 2017, raising $20 billion.

• So-called junk issuers like Yum Brands are also back in the market, after nearly a month of no issues.

Companies were already carrying large debt loads before the coronavirus crisis, warned the former Fed chair Janet Yellen. This could hinder an eventual economic recovery, she said in a video discussion hosted by the Brookings Institution:

“Even where a company avoids default, highly indebted firms usually cut back a lot on investment and hiring, and that will make the recovery more difficult.”

‘Some of these policies are undesirable in normal times. But these are not normal times.’

The Berkeley economists Emmanuel Saez and Gabriel Zucman, whose wealth tax idea was promoted by Elizabeth Warren and Bernie Sanders, have some punchy proposals for supporting the economy during the coronavirus shutdown.

America is relying too heavily on unemployment insurance for laid-off workers, they argue in an NYT Op-Ed, rather than government funding for companies to help them keep employees on payrolls, as in Europe. But the academics, who made their name studying inequality and taxes, don’t stop there.

• The tax would ensure that no company could “benefit outrageously from a situation in which the masses suffered,” they write. Others on the left have suggested similar proposals, so it could be a talking point if — or when — more stimulus is discussed.

• In the 1940s, the U.S. government imposed steep, temporary taxes on profits above a certain rate of return, so that companies that benefited from the war effort wouldn’t have a leg up on companies that suffered.

• Who would pay this time around? Tech companies like Amazon and Facebook are obvious candidates, as government-imposed lockdowns push more economic activity online.

How reopening the economy by mid-April fell by the wayside

President Trump said publicly and repeatedly last week that his goal was to restart the U.S. economy and get life back to normal by Easter. Over the weekend, he dropped that aspiration. Here’s why.

Advisers presented Mr. Trump with two sets of numbers, the NYT’s Peter Baker and Maggie Haberman report. One was the enormous casualty count if social distancing guidelines were eased too early. The other was poll numbers showing that “voters overwhelmingly preferred to keep containment measures in place.”

• A new survey by Pew from last week shows widespread support for restrictions like closing nonessential businesses and restaurants, despite the economic impact.

• One former Trump adviser who raised concerns about a prolonged economic shutdown, Gary Cohn, tweeted yesterday in support of the about-face.

The NYT Editorial Board offers its recommendations for how to get businesses up and running again when the time comes. Among them: widespread virus and temperature testing, government directions to private companies for manufacturing safety equipment, and better sharing of outbreak data.

In other coronavirus news

• Macy’s and Gap furloughed many of their workers after sales dried up. (NYT)

• The hurdles to getting a coronavirus vaccine within 18 months. (Bloomberg)

• The Justice Department has reportedly begun looking into stock sales made by Senator Richard Burr and other lawmakers before the markets tanked. (CNN)

The speed read

Deals

• M.&A. activity in the first quarter fell to its lowest level in four years. (Reuters)

• Saudi Aramco is reportedly selling a stake in its pipeline unit to raise cash because of the plunge in oil prices, which has been driven by a price war between Saudi Arabia and Russia. (Bloomberg)

• WeWork is said to have struck a deal to sell the meeting organizer Meetup for a fraction of the $156 million that it paid for the business in 2017. (Fortune)

Politics and policy

• The Trump administration is expected to unveil its final rollback of auto fuel economy and emissions standards today. (NYT)

Tech

• Zoom, the videoconferencing company, is under scrutiny by the New York attorney general’s office for its data privacy and security practices. (NYT)

• Apple has reportedly let some employees take home early prototypes to let them work remotely, a huge change in culture for the secretive tech giant. (Bloomberg)

Best of the rest

• Crews on monthslong missions aboard nuclear submarines will learn about the pandemic only when they return to port. (AP)

• David Geffen learned the hard way about sharing details about self-isolation on a luxury yacht. (Business Insider)

• “They seem determined to protect each other.” (xkcd)

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