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U.S. Workers Brace as Coronavirus Ripples Through Economy

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Outplacement firm Challenger, Gray & Christmas last week attributed more than 600 job cuts so far to the pandemic, including 145 drivers at the Port of Los Angeles and 18 at a toy company, both of which it traced back to the virus bringing Chinese suppliers to a temporary halt, the Financial Times reported. But the greater toll may be in industries that have nothing to do with global supply chains, economists believe. Ioana Marinescu, a labor economist at the University of Pennsylvania, predicted a collapse in what she called “human contact industries” such as restaurants, bars and theaters. The food services industries alone employ 12 million people in the U.S., up 30 per cent in the past decade. Concern about the human cost is growing with economic fears. A group of large New York landlords has agreed to go easy on eviction notices, while the Salvation Army warned that it was preparing for “a significant increase” in the need for emergency assistance from low-wage employees facing lay-offs. Travel and hospitality workers were among those most at risk, it noted, and these are industries that have driven much of the job growth in the U.S. since the last recession.

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Creditors Group Joins Pension Agency in Questioning Transactions in McClatchy Bankruptcy

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A group of McClatchy Co.’s least-protected creditors yesterday joined the federal pension agency in questioning transactions involving the local news company’s largest lender, which would take ownership under the chapter 11 reorganization plan submitted last month, McClatchy.com reported. In a brief filed in federal bankruptcy court in New York, lawyers for the “unsecured” creditors took issue with McClatchy’s request to speed the proceedings and sought time to examine what they called “suspect” financial dealings. “The Suspect Transactions … (can’t) go without independent scrutiny based on specious assertions that the Debtors are a proverbial melting ice cube that cannot afford any delay,” the filing states. In the initial hearing on Feb. 14, lawyers for McClatchy and Chatham Asset Management urged the judge to move swiftly to lift the cloud of bankruptcy and allow the media company to return to normal operations. The allegations are similar to arguments made by the government’s Pension Benefit Guaranty Corporation during the opening bankruptcy hearing.

Trump Administration Increases Oversight of Coal Industry Black Lung Insurance

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The Trump administration is requiring coal-mining companies to provide more financial information about their ability to cover employees if they are diagnosed with black-lung disease after a federal oversight report determined bankrupt coal operators have shifted an estimated $865 million in liabilities to a federal fund covering workers’ medical expenses, WSJ Pro Bankruptcy reported. The Labor Department announced new reporting requirements the same week the Government Accountability Office released a report finding the department has failed to ensure coal companies it authorized to self-insure their potential black-lung liabilities have set aside adequate collateral to cover miners’ medical costs in the event they are diagnosed with the respiratory disease. The Labor Department, which allows some coal companies to self-insure rather than secure commercial insurance, told House lawmakers Wednesday that it finalized an overhaul of its approval process last July. At that time, the department required all self-insured coal producers to apply for reauthorization under the new reporting requirements, Julie K. Hearthway, director of the Office of Workers’ Compensation Programs, told lawmakers. An excise tax paid by coal producers is the primary source of funding for the trust, though the tax was scaled back at the end of 2018 and is scheduled to decrease further at the end of 2021, according to the GAO report, and the trust fund likely will need to borrow more public funds to continue providing benefits. The average cost of medical care for black lung was about $8,225 in fiscal year 2019, the report said.

Bed Bath & Beyond to Cut 500 Jobs

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Bed Bath & Beyond announced yesterday that it is cutting about 500 jobs, or 10 percent of its corporate workforce, as part of a larger restructuring plan in a bid to trim expenses, CNBC.com reported. The company said that it is making a “significant reduction” in management positions across its business, as it pivots to outsourcing some tasks. Bed Bath & Beyond said it expects to reduce expenses by roughly $85 million annually, as a result of this plan. It says it plans to trim several hundred million dollars in costs over the longer term. Bed Bath & Beyond said it is removing duplicate jobs and cutting certain middle layers of store management. The retailer employees roughly 55,000 to 60,000 people overall, depending on the season. It has roughly 3,000 people working at its corporate headquarters, in New Jersey.

Stage Stores Cuts Staff, Closes Dozens of Stores

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Stage Stores has laid off corporate staffers this week, Retail Dive reported. The exact number of employees let go is unclear, as the company did not announce the total layoffs to staff, but two sources said the number was more than 20, and potentially dozens. Many of those let go were allocators and buyers in the retailer's merchandising operations. This week's layoffs follow others from last week. The department store chain, which is undergoing a rapid transformation to off-price via its Gordmans banner, is also planning to shutter stores. The company sent an email Monday marking 60 existing Gordmans stores for closure as well as 10 department stores that were slated to become Gordmans stores. Those are on top of 40 stores the company marked for closure last fall. Stage Stores has staked its future on Gordmans. In the fall, the company announced accelerated plans to convert its entire store fleet to the Gordmans banner, which would have given it around 700 by the end of the year. (That figure does not account for the recently planned closures, which have not been announced publicly.)

House Passes Bill to Rewrite Labor Laws and Strengthen Unions

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One of the most significant bills to strengthen workers’ abilities to organize in the past 80 years passed the House on Thursday, the Washington Post reported. The Protecting the Right to Organize Act, known as the PRO Act, would amend some of the country’s decades-old labor laws to give workers more power during disputes at work, add penalties for companies that retaliate against workers who organize and grant some hundreds of thousands of workers collective-bargaining rights they don’t currently have. It would also weaken “right-to-work” laws in 27 states that allow employees to forgo participating in and paying dues to unions. The House passed the bill with a vote of 224 to 194, mostly along party lines. The bill is unlikely to be taken up by the GOP-controlled Senate, as Republicans and business groups have argued forcefully against it, saying that it would hurt employers, violate privacy rights and be a major boon for national unions.

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