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Angry and Underpaid U.S. Steelworkers to Strike for Higher Pay

Over 30,000 angry unionized steelworkers at the United States’ two largest steel makers will likely go on strike in October following repeated stonewalling by management of their demands for higher pay and profit sharing amid a renaissance in the steel industry.

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Arthur J. Villasanta – Fourth Estate Contributor

Pittsburgh, PA, United States (4E) – Over 30,000 angry unionized steelworkers at the United States’ two largest steel makers will likely go on strike in October following repeated stonewalling by management of their demands for higher pay and profit sharing amid a renaissance in the steel industry.

Leaders of United Steelworkers (USW), the union representing workers at both ArcelorMittal (the world’s largest steel producer) and the United States Steel Corporation (U.S. Steel), the second largest domestic producer, in the contract talks said a strike is very likely. Together, ArcelorMittal and U.S. Steel account for nearly 25 percent of U.S. steel production.

“If I had to put a number on it, there is a 90 percent chance” of a strike, said Thomas Conway, the union’s international vice president. “Our people are (angry). They understand the risk of this and what it means for their families.”

Workers at ArcelorMittal and U.S. Steel want a bigger portion of the windfall these firms have accumulated in recent years. Steelworkers at the two firms say they haven’t benefited in any way from these corporate gains.

Union officials pointed out the U.S. steel industry was enjoying strong growth even before Trump’s protectionist tariffs. ArcelorMittal and U.S. Steel reported massive profits after Trump’s protectionist tariffs went into effect while other American firms hard hit by Trump’s trade war were struggling to survive.

Lasr week, the USW union at U.S. Steel returned to the bargaining table at Pittsburgh after both sides failed to do so on Sept. 1.

“Members sent the management at U.S. Steel a clear message: that the workforce recognizes the greed management has displayed in lining their own pockets,” said USW in an update to members. “We also know that workers have sacrificed to help the company over the past several years, and that the U.S. Steel bosses need to come to their senses, bargain in good faith and drop their ridiculous concessionary demands. Solidarity works, and this union knows that.”

After three years with no pay increases, USW seeks raises at a time when the steel industry is booming. USW, however, said U.S. Steel management wants concessions, including more out-of-pocket health care costs, reduced retiree benefits and no raises in the last half of a six-year contract. The 16,000 U.S.

USW claim top company officials at U.S. Steel have given themselves more than $50 million in pay and bonuses since 2015 while the hourly workforce has not received a wage increase over the same period. Steel workers then unanimously voted for a strike authorization.

This week, 15,000 members of the USW at ArcelorMittal unanimously voted to authorize a nationwide strike at plants operated by the company if negotiations over new contracts flounder. ArcelorMittal also wants concessions from workers despite recently reporting its highest quarterly profit in seven years.

A strike by workers at either or both companies be a major blow to the industry, which the Trump administration sought to strengthen by imposing tariffs on steel and aluminum imports.

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Finance

European Central Bank Finally Ends Massive QE Program

On December 31, the European Central Bank (ECB) will formally end its almost four-year old quantitative easing (QE) program that prevented the euro zone economy from succumbing to its own version of the U.S. Great Recession of 2008.

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Arthur J. Villasanta – Fourth Estate Contributor

Frankfurt, Germany (4E) – On December 31, the European Central Bank (ECB) will formally end its almost four-year old quantitative easing (QE) program that prevented the euro zone economy from succumbing to its own version of the U.S. Great Recession of 2008.

ECB will stop expanding the multi-trillion Euro asset purchasing program, and will instead switch to reinvesting cash from maturing bonds to purchase additional debt. These purchases should keep borrowing costs on the low-end until 2021.

The ECB Governing Council confirmed that bond purchases will plunge from €15 billion a month to zero by the end of the year. It also left benchmark interest rates unchanged.

Introduced in March 2015, ECB’s QE program saw the bank buy more than €2.6 trillion ($2.9 trillion) in a successful bid to prevent the bloc’s banking system from unraveling. The QE measures are widely credited with helping revive the 19-member currency bloc after a double-dip recession and the holdover effects of the European debt crisis.

“With the most prominent crisis-fighting measure of the ECB now almost back in the toolbox, the big question is, what will be next?” asked Carsten Brzeski, chief economist at ING. “It seems as if the ECB wants to keep as many cards as possible close to its chest,” Brzeski said.

The timing of the ECB’s move, however, is contentious. Political developments in the United Kingdom over Brexit; Italy over excessive government spending and France over street violence seems to question the wisdom of ending QE by year-end.

The ECB meeting comes a week ahead of the U.S. Federal Reserve’s December meeting where it is expected to raise interest rates one-quarter point, its last for the year. Slowing growth in the U.S. and worldwide, due partly to Trump’s trade war, has some economists expecting the Fed to forego the next quarter-point rate hike in March.

The U.S. economy is showing clear signs of slowing down while its three equities markets have been wracked by extreme volatility linked to Trump’s trade war for the past two months.

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California’s Housing Crisis Spiraling Out of Control

California’s four decades’ old housing shortage now threatens to strangle the high-tech industries on which it relies for prosperity while hurling more people into poverty and inflating the ranks of the homeless.

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Arthur J. Villasanta – Fourth Estate Contributor

Sacramento, CA, United States (4E) – California’s four decades’ old housing shortage now threatens to strangle the high-tech industries on which it relies for prosperity while hurling more people into poverty and inflating the ranks of the homeless.

The current housing shortage has been estimated at 3 to 4 million housing units, or some 20% to 30% of California’s current housing inventory of 14 million. That’s not enough for the new jobs being created at Silicon Valley.

San Francisco Bay area cities added 400,000 new jobs but only issued 60,000 permits for new housing units from 2012 to 2017. As a result, the housing crisis is damaging the state’s high-growth economy as employers now have to contend with an increasing shortage of skilled workers who can’t find housing.

State officials estimate that California needs to build 180,000 new units of housing every year. Housing has topped 100,000 units in recent years, but that’s far short of the demand

This shortage is especially acute in coastal areas where the housing squeeze is the tightest. This supply dearth is worsened by stiff local resistance to housing construction. Several California counties such as Ventura County and a number of cities have adopted Save Open Space and Agricultural Resources (SOAR) restrictions that make it almost impossible to build housing on agricultural land.

Worse, the wildfires that devastated communities in Ventura County and other regions are adding to the housing squeeze.

One of the dire consequences of this huge imbalance between supply and demand is that California now has the 49th lowest ratio of housing units per resident in the United States. The worst result is sky high real estate prices. Median home prices now stand at $1.3 million in San Francisco and $1 million in San Jose, for example.

Worse, the housing crisis has exacerbated old social ills. Homelessness per capita is now the third highest in the U.S. while less than a third of Californians can afford a median priced home. California’s has the country’s highest level of poverty.

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U.S. CEOs Predict Economic Recession by Year-end

It’s the post-Christmas “gift” no right-minded person wants to receive — but a recession might be in the offing before this tumultuous year ends.

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Arthur J. Villasanta – Fourth Estate Contributor

New York, NY, United States (4E) – It’s the post-Christmas “gift” no right-minded person wants to receive — but a recession might be in the offing before this tumultuous year ends.

A demoralizing new survey shows American CEOs think a recession might strike as early as the year-end only two short weeks away. Economists and investors alike have been sounding the alarm for months about the likelihood of an economic recession, one of whose main triggers is the economic uncertainty caused by Trump’s trade war.

A New York Times survey surprisingly revealed that almost half of the 134 business leaders at the Yale CEO Summit expected a recession to strike by the end of the year. It said this finding was the direst yet, and shows just how worried corporate executives are about an imminent recession.

A full 67 percent of the leaders cited U.S. political instability — especially Trump’s poor performance as president — and Trump’s trade war with the world as the major triggers for the upcoming recesison.

The U.S. has enjoyed a record 10 years of economic growth since the Great Recession of 2008, and by all measures, is due for a recession. Analysts said the gnawing fear about the oncoming recession is reaching fever pitch.

“The end is near for the near-decade-long burst of global economic growth,” predicted John Graham, a finance professor at Duke and overseer of the survey.

The findings from the New York Times survey also coincide with a Duke University Fuqua School of Business survey earlier this month that found nearly half of all U.S. CFOs also believe a recession is near but predicted it will hit by the end of 2019.

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