Economics

Nurtured by Washington, multinationals and universities, the small Central American country is on its way to becoming a hub for integrated circuits

In April 2014, news agencies reported this piece of breaking news from the multinational technology giant Intel: “Chipmaker Intel is closing its assembly and test operation in Costa Rica and eliminating 1,500 jobs (...) It will move its operations from its site in Heredia, where it has been present since 1997, to existing sites in China, Malaysia and Vietnam.” Intel’s operations in the Central American country would subsequently be confined to global services and research and development. But 10 years later, the situation has gone into reverse mode, something not even Intel itself could have predicted.

All efforts are now focused on making Costa Rica a semiconductor industry ecosystem that will attract investment and train young people in technology. This may help mitigate the U.S. government’s current concerns over its enormous dependency on Asian countries for the production of integrated circuits that are essential to digital devices and connectivity; a reliance that Washington believes threatens its national security.

As trade wars between the U.S. and China got underway, not to mention the effects of the pandemic on digitalization and global logistics chains, Costa Rica saw Intel’s manufacturing plant reopen in 2021, an initial sign that the wind was about to change. Now, the development of semiconductors on Costa Rican soil is nurtured by promises of investment and ambitions that go beyond Intel.

• Express filed for Chapter 11 bankruptcy as an investor group led by brand management firm WHP Global looks to acquire most of its assets.
• The longtime mall retailer has failed to stay on trend and keep up with shifting consumer demand, which has led sales to plummet in recent years.
• Express, whose portfolio includes its namesake banner, UpWest and Bonobos, said operations will continue as normal but 95 Express stores and all UpWest stores will close.

The reclining armchairs and plush leather sofas coming off the production line at Man Wah Furniture's factory in Monterrey are 100% "Made in Mexico".

They're destined for large retailers in the US, like Costco and Walmart. But the company is from China, its Mexican manufacturing plant built with Chinese capital.

The triangular relationship between the US, China and Mexico is behind the buzzword in Mexican business: nearshoring.

Man Wah is one of scores of Chinese companies to relocate to industrial parks in northern Mexico in recent years, to bring production closer to the US market. As well as saving on shipping, their final product is considered completely Mexican - meaning Chinese firms can avoid the US tariffs and sanctions imposed on Chinese goods amid the continuing trade war between the two countries.

As the company's general manager, Yu Ken Wei, shows me around its vast site, he says the move to Mexico has made economic and logistical sense.

This idea has been kicking around in my head for a while, and I'm hoping some Lemmy geniuses can poke holes/ flesh it out with me.

Every person I've ever heard of works for and gets paid by some form of company. So instead of the company paying the workers and then those workers getting taxed, why not just tax it all to the corporations to begin with? Instead of hundreds of millions of individuals to think about, the IRS (in US) could just focus on a few million companies.

We the people democratically decide what we think is needed for a functioning society, and charge it to the corporations.

I'd say each company should be responsible for paying the same percentage of the bill as percentage of total "profits" they made. Like, if Apple makes 10% of all the combined profits of all the companies this quarter, they are responsible for paying 10% of the bill. Highest paid employee can make 10x what the lowest paid employee (including contracted and foreign workers) makes; more than that gets included in the calculation as part of the company's "profits". (So that CEO can still get paid absurd amounts of money, but the company will still pay taxes on most of it)

What if we created some sort of secure opinion/voting app where people go to cast their vote on whatever people think needs to be voted on. Should there be UBI? Should it be a token, living, or thriving wage? (Personally, I'd go with thriving and tie it to inflation) Single payer healthcare? All education paid for? Stop funding genocide? No more polluting the planet, or at least force companies to pay to clean up their own messes? When and where are companies allowed to market to us? Where should the threshold of agreement be to enact changes, 40% 50%+1 60%? Etc etc

Then we elect people who agree to simply enact what the people democratically agree on... And if the people don't agree, they'll stay away from it or leave it to the states. And hopefully someday we could build it out so that state and local governments work this way too.

I think we get bogged down on the 2 or 3 things we disagree on and allow that to mean we never get the things we DO agree on. Let's get the things we agree on first, and then continue debating the things we disagree on.

Also I think this would be a long term plan. 12 years would give us 2 full election cycles here in the US and would give zoomers time to grow up, settle, and start to really vote (hopefully with this new system).

Anyway, like I said, let's poke holes and figure out solutions. Thanks

A key member of the Federal Reserve, the US central bank, has told the BBC that inflation is only coming down "very, very slowly" and "let's not be in a hurry" on interest rate cuts.

Raphael Bostic, the President of the Atlanta Federal Reserve, told BBC News that US interest rates will have to be kept at a "restrictive level" and might only ease "at the end of 2024".

Expectations of a delay to US interest rate cuts has sent reverberations around the world economy in recent weeks, impacting government borrowing costs, including in the UK.

At the beginning of the year, markets expected a series of rate cuts in the US and across Europe.

A competitive, green Europe will require trillions in investments. No one has a good answer on where that money will come from.

EU leaders are on a grandiloquent streak, even by their standards.

The EU can stay relevant in a world of resurgent big power politics. Europe won’t drown in the sea of public cash the U.S. and China are throwing at futuristic industries. We can muster military might and prevent climate catastrophe. We can grow a green economy.

One pledge you don’t hear? We’ll break the piggy bank to get there. That’s because EU leaders all know: The piggy bank’s already in smithereens.

On Thursday, the EU’s 27 leaders will build on these lofty goals in Brussels, proclaiming a new “deal” to keep Europe economically relevant, fight climate change and build clean energy and digital industries to rival China, the U.S. and India.

Lynsi Snyder is expanding the family-run California chain as far east as Tennessee. But as for the East Coast? “I’m probably saying never.”

In-N-Out isn’t your typical burger joint, and it insists expanding its footprint won’t change that.

For nearly eight decades, the West Coast restaurant chain has remained a private, family-owned company that has cultivated fiercely loyal customers and a quirky identity despite being located in just a handful of states. But recently it’s been on a growing spree that will soon extend as far east as Tennessee.

Since Lynsi Snyder took over as the California-based company’s president in 2010, its size has nearly doubled, from 230 stores in four states to 402 in eight. In-N-Out Burger is opening in Washington, its ninth state, with New Mexico and Tennessee to follow.

Snyder said she’s still cautious about expanding too far or too fast and remains focused on keeping prices lower than competitors’. Even before taking the reins, she said she “felt such an obligation to look out for our customer. When everyone else was taking these jumps, we weren’t.”

Asian shares skidded Tuesday following a slump on Wall Street after higher yields in the U.S. bond market cranked up pressure on stocks. 

The Shanghai Composite index lost 1.4% to 3,013.84 even though the Chinese government reported that the economy grew at a faster-than-forecast annual rate of 5.3% in the first quarter of the year. In quarterly terms it expanded at a 1.6% pace. 

The Hang Seng in Hong Kong lost 1.9% to 16,279.66. 

Tokyo’s Nikkei 225 fell 2.1% to 38,402.59 as the dollar continued to gain against the Japanese yen, hitting fresh 34-year highs. By midday the dollar was trading at 154.33 yen, up from 154.27 yen.

The euro slipped to $1.0613 from $1.0626.

On a scale not seen in decades, many Americans are stuck in homes they would rather leave.

Something deeply unusual has happened in the American housing market over the last two years, as mortgage rates have risen to around 7 percent.

Rates that high are not, by themselves, historically remarkable. The trouble is that the average American household with a mortgage is sitting on a fixed rate that’s a whopping three points lower.

The gap that has jumped open between these two lines has created a nationwide lock-in effect — paralyzing people in homes they may wish to leave — on a scale not seen in decades. For homeowners not looking to move anytime soon, the low rates they secured during the pandemic will benefit them for years to come. But for many others, those rates have become a complication, disrupting both household decisions and the housing market as a whole.

Indeed, according to new research from economists at the Federal Housing Finance Agency, this lock-in effect is responsible for about 1.3 million fewer home sales in America during the run-up in rates from the spring of 2022 through the end of 2023. That’s a startling number in a nation where around five million homes sell annually in more normal times — most of those to people who already own.

Non-paywall link

New quarterly figures from research IDC suggest a drop in iPhone shipments for the first three months of 2024.

Samsung has regained its position as the top mobile phone-maker globally, having been beaten by Apple late last year, according to new figures.

The latest quarterly data from research firm IDC said overall global smartphone shipments increased 7.8% on this time last year, but Apple shipments dropped by nearly 10%.

As a result, Samsung has regained the top phone-maker spot, with a market share of 20.8%, ahead of iPhone maker Apple, which is second on 17.3% – after the two firms had switched places in the final three months of 2023.

• More federal regulators are probing Morgan Stanley to find out how it vets wealthy clients, per The Wall Street Journal.
• The SEC sent the bank a list of clients with questions about how they were screened, per the report.
• One client includes a Russian-linked billionaire who was sanctioned by the UK, the Journal reported.

These are tough times for two big US dollar store chains. In the past month, Family Dollar said it will close nearly 1,000 stores and 99 Cents Only said it will go out of business.

Both companies said inflation and shoplifting have contributed to their troubles. While inflation has pressured the companies’ low-income customer base and shoplifting has squeezed their profits, those factors alone can’t explain their difficulties.

Years of strategic mistakes and underinvestment have plagued Family Dollar and 99 Cents Only, retail analysts say. Both brands were acquired by other companies and faltered under their new owners.

Tariff Man could be back in the White House next year – and he’s promising the sequel will be even bigger than the original.

Former President Donald Trump, who labeled himself “Tariff Man” in 2018, has made clear he wants to pursue a more aggressive trade strategy if he’s elected in November. Trump has floated a 10% across-the-board tariff on imports, a 60% tariff on imports from China and a 100% tariff on foreign cars – including from Mexico.

Trump’s proposals, if enacted, could easily set off a new trade war with China and potentially other nations, too.

Some economists are warning Trump’s trade agenda and the ensuing retaliation from trading partners would hurt the US economy by worsening inflation, killing jobs, depressing growth and spooking investors.

In a worst-case scenario, economists fear these policies could set the stage for a recession.

The central bank is expected to cut interest rates in June, but a rise in workers’ salaries could impact the pace and rate of cuts.

The European Central Bank is set to leave its key interest rate at a record-high 4 percent on Thursday, as concerns over wage growth temper the urge to give more support to the economy. 

At the Governing Council's last meeting in March, ECB President Christine Lagarde had indicated that the bank could start easing policy in June, and analysts say nothing material has happened to change that in the interim.

Headline inflation continued its downward drift in March, equaling a two-and-a-half** **year low of 2.4 percent, thanks largely to food and energy prices, but services price inflation — heavily influenced by local wage developments — remained stubbornly high at 4 percent. With survey data suggesting the economy has bottomed out in the near term, and with unemployment still near a record low, that all signals another month of wait-and-see.

Boeing has achieved the unthinkable this week: It managed to fall even deeper into crisis.

Adding to an already miserable start to 2024, Boeing stood accused Tuesday of routinely ignoring a whistleblower’s complaints about the allegedly critically flawed manufacturing process for its 787 Dreamliner planes. The whistleblower claimed Boeing retaliated against him and put him on the 777 unit as punishment. That’s when, he says, he found even more production problems.

Boeing strongly denies the claims and says it is confident in the safety of its aircraft. Still, the US Federal Aviation Administration (FAA) said it would investigate — adding to a growing list of federal probes into the beleaguered company, including a criminal investigation. And next week, a Senate subcommittee will hear testimony about the whistleblower’s case and will presumably air more of Boeing’s dirty laundry in public.

The NLRB general counsel has accused US’s largest corporations of creating distractions to cover their law-breaking

The US’s top labor lawyer has said her agency will not “succumb” to Amazon, Starbucks and SpaceX’s attempts to legally challenge the National Labor Relations Board and its ability to enforce federal labor law.

Jennifer Abruzzo, the NLRB general counsel, accused some of the US’s largest corporations of “jumping on the bandwagon” in mounting legal challenges to the labor watchdog, which has found itself at the center of the ongoing battle between the companies and a wave of unionizing efforts by workers.

Attorneys representing Elon Musk’s SpaceX, Amazon, Trader Joe’s and Starbucks have all argued in recent months that the NLRB is “unconstitutional” and has overstepped its authority.

Tesla has settled a lawsuit brought by the family of a Silicon Valley engineer who died in a crash while relying on the company’s semi-autonomous driving software.

The amount Tesla paid to settle the case was not disclosed in court documents filed Monday, just a day before the trial stemming from the 2018 crash on a San Francisco Bay Area highway was scheduled to begin. In a court filing requesting to keep the sum private, Tesla said it agreed to settle the case in order to “end years of litigation.”

Shares of Tesla Inc., down 30% this year, slipped 1% before the market opened Tuesday. 

The family of Walter Huang filed a negligence and wrongful death lawsuit in 2019 seeking to hold Tesla — and, by extension, its CEO Elon Musk — liable for repeatedly exaggerating the capabilities of Tesla’s self-driving car technology. They claimed the technology, dubbed Autopilot, was promoted in egregious ways that caused vehicle owners to believe they didn’t have to remain vigilant while they were behind the wheel.

Handing in your proverbial badge as a sexagenarian has been the goal for many workers around the world: turning 65 would open a golden portal to retirement. Yet increasingly, the idea of stepping away from the workforce in your 60s doesn't seem realistic – or even sensible – for many people, especially now. Some major financial figureheads agree.

In March, investment-management firm BlackRock released its annual letter to the company's investors. Its CEO Larry Fink sounded a warning for workers hoping to retire – comfortably and financially secure – in their 60s. As global life expectancy grows, social safety nets fray and cost of living spikes, Fink warned that retirement at age 65 won't be possible for many, even most, people.

"[Retirement] is a much harder proposition than it was 30 years ago," wrote Fink. "And it'll be a much harder proposition 30 years from now."

From 2000 to 2019, global life expectancy increased from 67 years to 73. By 2050, the UN expects one in six peopleworldwide will be aged 65 or older. And as the population ages, many countries will soon reach a point where more people are leaving the workforce than are entering it: in the UK, that point may be reached by 2029; in Brazil, by 2035; in India, by 2048; and in the US, by 2053.

"Life expectancy has been continuing to go up since the mid-1850s in the UK," says Rebecca Sear, professor of population and health at the London School of Hygiene and Tropical Medicine. "But the retirement age hasn't changed that much."

As both the health and economic landscape has changed dramatically, is retirement at 65 an entirely unrealistic goal in a modern world?

The Biden administration has pledged to provide up to $6.6 billion so that a Taiwanese semiconductor giant can expand the facilities it is already building in Arizona and better ensure that the most-advanced microchips are produced domestically for the first time

The Biden administration pledged on Monday to provide up to $6.6 billion so that a Taiwanese semiconductor giant can expand the facilities it is already building in Arizona and better ensure that the most-advanced microchips are produced domestically for the first time. 

Commerce Secretary Gina Raimondo said the funding for Taiwan Semiconductor Manufacturing Co. means the company can expand on its existing plans for two facilities in Phoenix and add a third, newly announced production hub. 

“These are the chips that underpin all artificial intelligence, and they are the chips that are the necessary components for the technologies that we need to underpin our economy," Raimondo said on a call with reporters, adding that they were vital to the "21st century military and national security apparatus.”

Throughout the U.S., workers earn a median annual wage of about $48,080, according to the latest available data from the Bureau of Labor Statistics.

But in the three states where workers earn the least, the median annual wage sits below $40,000 a year. And notably, all but two of the 10 lowest-earning states are in the South.

Mississippi has the lowest-earning population in the U.S. with a median annual wage of just $37,500, according to the BLS. 

That’s due, in part, to the fact that Mississippi has one of the least-educated populations in the country, with just 1 in 4 adults in the state holding a bachelor’s degree or higher, according to St. Louis Fed data.

More education typically correlates with higher earnings, which helps explain why Massachusetts — the most-educated state, with nearly 47% of its population holding a bachelor’s degree or higher — is also the highest-paid, according to the St. Louis Fed.

Boeing CEO Dave Calhoun was awarded a giant stock bonus on top of his more-than-a-million-dollar salary last year, despite overseeing a company that has been plagued by chronic losses and safety problems.

Calhoun’s total compensation in 2023 was $32.8 million, a 45% increase from the $22.6 million he received for 2022. And it could have been a lot more: He declined to accept his annual incentive bonus of $2,800,000 – a request the board said he made after part of a Boeing 737 Max plane blew off the side of an Alaska Airlines flight in January, kicking off a series of federal investigations, a temporary grounding, executive ousters and another embarrassing public relations blunder for the company.