The chief executive of Costco waded into the political debate over the federal minimum wage, testifying at a Senate hearing on Thursday that the retailer was raising its starting pay to $16 an hour.
W. Craig Jelinek, the chief executive, said Costco, which already pays an hourly minimum of $15, had some of the highest employee retention rates of any retailer.
“This isn’t altruism,” Mr. Jelinek told the Senate Budget Committee. “At Costco, we know that paying employees good wages and providing affordable benefits makes sense for our business and constitutes a significant competitive advantage for us.”
Mr. Jelinek was invited to testify by the committee’s chairman, Bernie Sanders, a Vermont independent who supports raising the federal minimum wage to $15 an hour over the next four years. Mr. Jelinek said he was not there to endorse the proposed federal minimum wage increase, but rather to discuss how his company’s higher-than-average wages had affected his business.
Republicans on the committee, including Lindsey Graham of South Carolina, asked whether Costco, which generated $150 billion in revenue last year, was able to absorb the higher wages because of its size and whether a $15-an-hour mandate was likely to cause smaller retailers to close.
“In my past experience, wages don’t usually put you out of business,” Mr. Jelinek said. “It is how you run your business.”
Mr. Jelinek said the average wage at Costco, which employs 180,000 people in the United States, is $24 an hour.
Costco’s pay contrasts with that of Walmart, whose chief executive, Doug McMillon, was invited to testify by Mr. Sander’s, but declined. Walmart’s average wage is above $15 an hour, but the company’s minimum wage is $11 an hour.
Mr. Sanders pointed out research by the Government Accountability Office showing that many Walmart employees must depend on food stamps and Medicaid to get by on such low wages, which amount to a subsidy for the giant corporation.
Last week, Walmart said that it was raising the wages of 425,000 workers and that about half of its work force in the United States would earn at least $15 an hour. But Mr. McMillon stopped short of saying whether the company would eventually extend a $15 minimum to all employees.
McDonald’s chief executive, Christopher Kempczinski, also declined an invitation to testify Thursday. The fast food chain’s average wages are about $12 an hour.
Terrence Wise, a McDonald’s worker in Kansas City, told the committee that he relied on food stamps to raise his three children and had to live out of a minivan after his family was evicted from their home.
“I work for McDonald’s, one of the richest companies in America,” Mr. Wise said. “This is what generational poverty looks like. This is what I am fighting to end.”
Shares of GameStop surged as much as 76 percent in early trading on Thursday, in a second day of volatile trading for the video game retailer that was at the center of a retail trading frenzy last month.
On Wednesday, GameStop’s shares doubled to $91.71 and the volume of trading was more than 10 times the level of the previous day. After spiking early in the day Thursday, the shares were up about 30 percent.
GameStop and a handful of other stocks grabbed Wall Street’s attention in January as they surged, making millionaires (on paper at least) out of small investors who had bet on the gains and leading to big losses at some notable hedge funds that had bet against the stocks. The frenzy of trading prompted several trading platforms, most notably the trading app Robinhood, to limit their customers ability to buy the shares, which in turn led to an outcry among small investors.
But that January rally of GameStop shares ended just as quickly as it had begun, and many investors were left with substantial losses after they had been caught up in the buying hype.
Some of the popular posts on Reddit’s Wallstreetbets forum, where users have been hyping up certain stocks in memes, read “ROUND 2!” and “THE COMEBACK!!!!!” Other meme stocks also rose: AMC shares gained as much as 18 percent and BlackBerry, Nokia and Koss were also higher.
Earlier this week, GameStop announced its chief financial officer would leave the company next month. The company is under pressure from a large shareholder to shift from a brick-and-mortar business to a digital and e-commerce firm.
Other market news
The S&P 500 was 0.4 percent lower in early trading, a dip led by technology stocks.
Bond yields continued to jump. The yield on 10-year U.S. Treasury notes rose 5 basis points, or 0.05 percentage point, to 1.43 percent. This month, the yield has climbed 37 basis points.
Analysts at Bank of America raised their forecast for bond yields, expecting the 10-year yield to be at 1.75 percent at the end of the year because of stronger economic growth. Last month, they forecast 1.5 percent for year-end.
Treasury Secretary Janet L. Yellen called on members of the Group of 20 nations to coordinate on a global vaccination campaign, arguing in a letter on Thursday that containing the coronavirus pandemic is the best way to aid the world economy.
Ms. Yellen emphasized the importance of working through multilateral institutions and underscored the responsibility of rich countries to help poor nations weather the public health crisis.
“A rapid and truly global vaccination program is the strongest stimulus we can provide to the global economy,” she wrote.
The outreach was the latest example of the new tone being set by the Biden administration and represented a return to America’s leadership role in the G20, a group of finance leaders from some of the world’s largest industrial and emerging economies, after four years in which the U.S. was often an outlier on international policy matters.
“This is a moment made for action and for multilateralism,” Ms. Yellen said in the letter.
Ms. Yellen also warned G20 countries not to withdraw fiscal support for their economies too soon and to take measure to ensure that workers and consumers are benefiting from international trade.
“If there was ever a time to go big, this is the moment,” Ms. Yellen said, echoing the sentiment she has expressed to lawmakers in the United States as the Biden administration pushes a $1.9 trillion economic relief package.
In a notable shift from her predecessor at the Treasury Department, Steven Mnuchin, Ms. Yellen threw her support behind the idea of providing additional emergency liquidity through the International Monetary Fund’s Special Drawing Rights to help emerging markets stabilize their financial reserves. Mr. Mnuchin believed that this would provide little help to poor countries and would risk turning the I.M.F. into something akin to a central bank.
Ms. Yellen said on Thursday that the tool could “enhance liquidity for low-income countries,” but said the G20 would need to work together to ensure it was deployed effectively and with transparency.
She acknowledged that more work needs to be done on fraught international disputes such as the negotiations between the United States and Europe on digital services taxes, but she made clear that the United States was no longer taking an “America First” approach to its relationship with the G20. She said that the United States would work to overcome such disagreements by seeking “workable solutions in a fair and judicious manner.”
Katherine Tai, President Biden’s pick for U. S. trade representative, promised members of the Senate Finance Committee on Thursday morning that she would work with Congress to help reinvigorate the economy from the pandemic and aggressively enforce American trade rules against China, Mexico and other trading partners.
“Working with Congress, the entire Biden-Harris administration, and other countries and trusted partners, U.S.T.R. will help to build out strong supply chains that will get our economy back on track,” Ms. Tai said in her confirmation hearing.
“In the longer term, we must pursue trade policies that advance the interests of all Americans — policies that recognize that people are workers and wage earners, not just consumers; policies that promote broad, equitable growth here at home; policies that support American innovation and enhance our competitive edge,” she added.
If confirmed as trade representative, Ms. Tai would play a key role in carrying out several of the Biden administration’s goals, including helping to restore American alliances abroad, challenging China’s unfair trade practices and enforcing American trade rules to help alleviate inequality and mitigate climate change.
She would also help decide whether to keep former President Donald J. Trump’s tariffs on Chinese products, how to address new digital services taxes that other countries have imposed on American technology companies and whether to aggressively pursue new trade deals.
Asked about the tariffs that Mr. Trump had placed on foreign metals, Ms. Tai said that tariffs were “a legitimate tool in the trade toolbox,” but that the global steel and aluminum industries faced larger problems with overcapacity that might require other policy solutions. She said she would review trade negotiations with Britain, saying that the country’s departure from the European Union, the pandemic and other developments since negotiations started in 2018 demanded review.
Ms. Tai also promised to aggressively enforce American trade rules, including new measures included in the revised North American trade deal, the United States-Mexico-Canada Agreement. On China, she said her background as “America’s chief enforcer against China’s unfair trade practices” had given her knowledge of “the opportunities and limitations in our existing toolbox.”
Ms. Tai most recently worked as the chief trade counsel of the House Ways and Means Committee, where she helped to hammer out reforms that brought Democrats on board with U.S.M.C.A., which was negotiated by Mr. Trump. Before that, she served in U.S.T.R.’s general counsel office, where she brought several successful cases against China’s trade practices at the World Trade Organization.
If confirmed, Ms. Tai would be the first woman of color and first Asian-American to serve in the position.
New claims for unemployment fell last week, the government reported on Thursday, the latest sign that the labor market’s recovery, however slow and unsteady, is continuing.
A total of 710,000 workers filed first-time claims for state benefits during the week that ended Feb. 20, a decrease of 132,000, the Labor Department said. In addition, 451,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, a decline of 61,000.
Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 730,000, a decline of 111,000.
Although initial jobless claims are nowhere near the eye-popping levels seen last spring, they are still extraordinarily high by historical standards. There are roughly 10 million fewer jobs than there were last year at this time.
Analysts also cautioned against reading too much into a single week’s changes. The combined average of new state and federal unemployment insurance claims over the first eight weeks of this year is actually slightly higher than it was over the last eight weeks of 2020.
“The numbers look encouraging on the face of it,” said Gregory Daco, chief U.S. economist at Oxford Economics. But when you take step back and look at the broader picture, he said, “it does reflect an environment in which the labor market remains quite fragile.”
Much of last week’s decline in applications for state benefits can be traced to big drops in two states, California and Ohio, where there had been reports of increased fraud.
Coronavirus caseloads have been dropping amid efforts to get vaccines to people who are most vulnerable. But until employers and consumers feel that the pandemic is under control, economists say, the labor market won’t fully recover.
Allison Schrager, an economist at the Manhattan Institute, said: “Until people feel this is sustained and that there’s not another huge wave coming, I can’t imagine we’re going to see big changes in jobless claims for a while.”
Coinbase, the most valuable cryptocurrency company in the United States, filed to go public on Thursday amid a surge in prices in digital money.
It is the latest milestone for Coinbase, which was founded in 2012 as a site for buying and selling cryptocurrencies like Bitcoin and has now become a giant in the industry, with 43 million retail traders and 7,000 institutions as customers. Its fortunes have soared along with the price of Bitcoin, which was trading at more than $51,000 apiece as of Thursday.
Coinbase pulled back the curtains on its finances in a filing with the Securities and Exchange Commission, revealing that it earned $322.3 million last year, on top of $1.3 billion in revenue. That compares with a $30.4 million loss atop $533.7 million in revenue for 2019.
The company makes money from fees charged for customer trades. In a letter to prospective investors, its co-founder and chief executive, Brian Armstrong, warned that the company’s financials may be volatile, because they are tied to the sometimes whipsawing prices of cryptocurrencies.
The company drew controversy last fall when Mr. Armstrong told employees to leave their social activism out of the workplace. Current and former employees have also complained about the company’s management of Black workers.
The company is planning a direct listing, where it simply puts its privately traded shares onto a public stock market — the Nasdaq, in this case — as opposed to a traditional initial public offering.
Such deals have gained popularity among technology companies in recent years for being a simpler way to going public, especially if they do not need to raise money. Last month, Coinbase said it was pursuing a direct listing.
Michael Saylor, the chief executive of the business intelligence software firm MicroStrategy, believes deeply in Bitcoin and has urged other companies to shift their corporate cash into the cryptocurrency. That’s what MicroStrategy has been doing, in a bigger way than the others that have put Bitcoin on their balance sheets, the DealBook newsletter reports.
On Wednesday, MicroStrategy announced a $1 billion Bitcoin purchase, bringing its total spending on the cryptocurrency to more than $2 billion since the summer. MicroStrategy “remains focused on two corporate strategies,” Mr. Saylor said in a statement: expanding its software business and “acquiring and holding Bitcoin.” The company’s finance chief, Phong Le, said Bitcoin investments complemented the software business “by enhancing awareness of our brand and providing opportunities to secure new customers.”
Bitcoin’s price is currently double the average cost that MicroStrategy paid for them, implying a gain of nearly $2.5 billion. Before it started buying Bitcoin in August, MicroStrategy’s market capitalization was just over $1 billion. It is now nearly $8 billion, with its Bitcoin holdings overshadowing its software business.
“It’s amazing that a board of directors allowed this,” said Marc Lichtenfeld, a financial adviser, citing Bitcoin’s extreme volatility and its tenuous link to the company’s software business. Buying crypto in enormous amounts as a marketing tool will not affect the fundamental prospects of MicroStrategy’s business by adding to its earnings and cash flow, he noted.
“Regulators could have concerns,” said Richard Levin, a fintech lawyer at Nelson Mullins. “Any publicly traded company bringing a digital asset onto its balance sheet needs to proceed with caution.” It’s fine to buy an asset because it is appreciating, Mr. Levin said, but companies need to tread carefully to avoid the appearance that they are acquiring it to generate hype.
MicroStrategy isn’t alone in acquiring Bitcoin. The payments company Square announced a $170 million purchase this week and Tesla bought $1.5 billion worth of Bitcoin earlier this month. But money is Square’s business, and Tesla’s purchase was a much smaller share of its corporate cash, around 1 percent.
Companies that previously reoriented their businesses around cryptocurrency — beyond just buying a lot of it, like MicroStrategy — have run into trouble with the financial regulators in the past, like Overstock, the retailer and token purveyor, and Long Blockchain, the rebranded iced-tea maker that was delisted this week.
Nirav Modi, a jeweler whose designs once adorned the necks of A-list celebrities, has lost an extradition case in Britain’s high court. Mr. Modi is wanted by the Indian government to face charges of fraud, involving transactions totaling $1.8 billion with a state-run bank.
On Thursday, Judge Samuel Goozee said in a London court that there was enough evidence for Mr. Modi to face charges in India, The Associated Press reported.
The celebrity jeweler suffered a quick fall from grace a few years ago. He went from running an empire of luxury stores around the world, mingling with royalty and meeting with the Indian prime minister, Narendra Modi, to being a fugitive in early 2018 after authorities said they discovered that he used fraudulent documents to get loans from the Punjab National Bank to import diamonds and other jewels. He then fled.
Mr. Modi was eventually arrested in London in March 2019 and was denied bail. He attended the hearing on Thursday via video from prison, Agence France-Presse reported.
The case has captivated many people in India amid scrutiny of state-run banks. The Indian government has also been trying to extradite Vijay Mallya from London to face charges of fraud and money laundering. Mr. Mallya invested in airlines and alcohol brands and built a reputation as India’s “King of Good Times.” A court ruled in December 2018 that he should be extradited, but Mr. Mallya has delayed his departure through appeals.
Mr. Modi has 14 days to file an appeal the ruling. Next, Britain’s home secretary, Priti Patel, has to decide whether to order the extradition.
A broad promotional effort to combat Covid-19 vaccine skepticism began rolling out on Thursday, backed by the nonprofit advertising group Ad Council and a coalition of experts known as the Covid Collaborative.
The campaign, “It’s Up to You,” encourages Americans to seek out facts about the available vaccines. The Ad Council commissioned research that concluded that 40 percent of the public had yet to decide whether to be vaccinated as soon as possible. In Black and Hispanic communities, which have been disproportionately affected by the pandemic, 60 percent of people do not feel fully informed, according to the study.
Public service announcements will appear in English and Spanish on television, social media and other platforms. More than 300 companies, community groups and public figures — including Facebook, iHeartMedia, the National Association for the Advancement of Colored People and Dr. Sanjay Gupta of CNN — contributed to the $52 million push, as did the Centers for Disease Control and Prevention.
Several spots point viewers toward a landing page, GetVaccineAnswers.org, using messages such as “Getting back to the moments we missed starts with getting informed” and this one: “You’ve got questions. That’s normal.” A punchy video from Google shows animated arms with colorful post-vaccination bandages coalescing into the shape of the United States, while an offering from Verizon juxtaposes scenes of human connection with images of weddings and graduations conducted over video chat.
The Ad Council endeavor is one of several concurrent campaigns aimed at raising awareness and acceptance of the vaccines, including efforts from vaccine producers such as Pfizer and Moderna.
NBCUniversal built a vaccination push around the informational site PlanYourVaccine.com, while the #ThisIsOurShot campaign features health care workers who have been vaccinated. In Britain, an ad debunking myths about the vaccine was broadcast simultaneously across several television channels this month, focusing on ethnic minority communities.
Target said on Thursday that it would roll out Apple shops within its stores, starting with 17 locations with plans for more later this year. The areas will be overseen by Target tech consultants “who will receive specialized training from Apple,” Target said, and the chain will carry more Apple products online. Target has also struck new deals with Levi Strauss & Company and Ulta as malls and department stores continue to struggle.