Business

Child Care Disruptions Expected as Record Funding Nears an End

Published

2 years ago

June 22, 2023

Child Care Disruptions Expected as Record Funding Nears an End

For two years, the United States has been effectively running an experiment in federally funding child care providers. The $24 billion disbursed in pandemic relief has been the largest investment in child care in U.S. history. Child care providers have used the money to raise teachers’ pay, buy supplies and pay mortgages.

In September, those funds expire, one of the last of the pandemic-era safety net benefits to end. It is a looming crisis for the industry, and could lead to tuition hikes, layoffs and closures. In all, child care could be disrupted for three million children, close to a third of those in child care, according to a report released Wednesday by the Century Foundation.

The National Association for the Education of Young Children regularly surveys child care owners and workers. In its most recent survey on the grants, in October 2022, four in 10 directors and owners nationwide said they would have to raise tuition when grants ended this fall.

More than a quarter said they would have to cut wages — from a median hourly wage of about $12. Nearly a third of providers, including 44 percent at those owned by minorities, said they might consider leaving their job or, in the case of home-based child care, closing altogether.

“Federal funding made a huge difference,” said Julie Kashen, a senior fellow at the Century Foundation and an author of the new report. “There are going to be huge and dire consequences for child care employees, for families, for employers.”

Children’s Corner, which cares for 80 children in Millcreek, Utah, has been receiving $26,000 a month in grants, said its director, Jen Whyte-Frederickson. Without the grants, she said, the center, which her parents started 40 years ago, would have closed during the pandemic.

She used the money to raise hourly pay to $15 “because they all deserve it,” she said. When the grants end, she said, “the plan is raising tuition.” She already increased it to $985 from $900 monthly for a 2-year-old, and will probably raise it above $1,000.

For Lorna Adkins, who runs Growing Places from her home in Huntington, W.Va., that’s not an option for her families: “Raise tuition? Not in West Virginia, not in this economy, not here.”

She has been receiving $3,200 a month. She has spent it on wages, cleaning supplies, utilities and to offset rising food prices. After expenses, she said her take-home pay without the grants was about $2.50 an hour. With the grants ending, combined with rising costs and new regulations on providers, she said, she plans to retire early.

“There are a lot of people in child care that are going to close down because of this,” she said. “It’s just a fact.”

The federal relief funds saved the industry, analysts and providers say. One in three child care providers — 70,000 — receiving the grants might have closed. Unlike public schools, child care is almost entirely financed by private tuition. When it dried up during lockdowns, providers could not stay afloat.

But the sector was precarious even before the pandemic. Treasury Secretary Janet Yellen has called child care a textbook example of a broken market. Workers are paid less than in 98 percent of other professions, but many providers cannot raise prices because parents often can’t afford it. Already, half of parents spend more than 20 percent of their household income on child care.

“The grants were really designed to prop up a system that had already been failing before the pandemic,” said Caitlin McLean of the Center for the Study of Child Care Employment at the University of California, Berkeley.

The pandemic also reshaped the business. In some places, parents are not using regular child care as often as they had been, with many working from home. Hiring has also become much harder, as other jobs, in many cases less demanding, have begun paying more.

In the National Association for the Education of Young Children survey, two-thirds of providers said they were experiencing a staffing shortage, and of those, nearly half said they were caring for fewer children than they would like because of it.

Three-quarters of child care providers who received grants have used funds to pay teachers. Now they face cutting pay — while in a hiring bind.

“We are backed into a corner now, because we can’t decrease their wages because then we will definitely not have teachers, and we can’t increase our rates for parents because parents cannot pay any more than they are,” said Brooke Skidmore, who owns the Growing Tree in New Glarus, Wis., with her brother.

The $24 billion to stabilize the industry came in the American Rescue Plan, and the grants were distributed by states according to varying rules. More than 80 percent of providers received them. Previously, federal support for child care came mainly through block grants that states use to subsidize care for low-income parents. Congress also increased these grants by $29 billion during the pandemic, set to expire in September 2024.

Some Democrats in Congress want subsidies for child care to be extended or made permanent. Some Republicans have also proposed increased federal funding for child care.

Senator Bernie Sanders, who recently released a report on the subject with Senator Patty Murray, said, “If we allow this cliff to take place and lose the billions of dollars that we put into stabilizing child care, it will make a disastrous situation even worse.”

Yet Democrats’ large social safety net bill, which included subsidized child care and universal pre-K, failed to pass. Republicans, along with a Democratic senator, Joe Manchin, said the investments were too expensive, among other concerns. Senior Biden administration officials said billions in additional funding for child care providers appeared unlikely, especially given the recent push from Republicans to limit government spending.

Some states and localities have found ways to continue to subsidize child care, and others are considering it. Minnesota made an investment of $750 million. Policymakers in Maine have proposed continuing pandemic-era investments. In November, New Mexico passed a constitutional amendment to guarantee a right to early childhood education.

Adaeze Ngoddy, owner of the Rex Childcare and Early Learning Center in Rex, Ga., said she hoped there was a way to keep financial help coming. Even with $51,000 in monthly grants, her business has not fully recovered from the pandemic, she said, and has been unable to hire for six open teaching positions.

“I’m hoping they continue until things actually do normalize,” she said.

Business

On TikTok, Users Thumb Their Noses at Looming Ban

Published

6 hours ago

January 16, 2025

Press Room

On TikTok, Users Thumb Their Noses at Looming Ban

Over the last week, the videos started appearing on TikTok from users across the United States.

They all made fun of the same thing: how the app’s ties to China made it a national security threat. Many implied that their TikTok accounts had each been assigned an agent of the Chinese government to spy on them through the app — and that the users would miss their personal spies.

“May we meet again in another life,” one user wrote in a video goodbye set to Whitney Houston’s cover of Dolly Parton’s “I Will Always Love You.” The video included an A.I.-generated image of a Chinese military officer.

The videos were just one way that some of TikTok’s 170 million monthly U.S. users were reacting as they prepared for the app to disappear from the country as soon as Sunday.

The Supreme Court is set to rule on a federal law that required TikTok’s Chinese owner, ByteDance, to sell the app by Jan. 19 or face a ban in the United States. U.S. officials have said China could use TikTok to harvest Americans’ private data and spread covert disinformation. TikTok, which has said a sale is impossible and challenged the law, is now awaiting the Supreme Court’s response.

The possibility that the justices will uphold the law has set off a palpable sense of grief and dark humor across the app. Some users have posted videos suggesting ways to circumvent a ban with technological workarounds. Others have downloaded another Chinese app, Xiaohongshu, also known as “Red Note,” to thumb their noses at the U.S. government’s concerns about TikTok’s ties to China.

The videos highlight the collision taking place online between the law, which Congress passed with wide support last year, and everyday users of TikTok, who are dismayed that the app may soon disappear.

“Much of my TikTok feed now is TikTokers ridiculing the U.S. government, TikTokers thanking their Chinese spy as a form of ridicule,” said Anupam Chander, a professor of law and technology at Georgetown University and an expert on the global regulation of new technologies. “TikTokers recognize that they are not likely to be manipulated by anyone. They are actually quite sophisticated about the information they’re receiving.”

TikTok declined to comment on the users’ references to its ties to China.

Some users are not willing to give up the app — or their supposed spies — so easily.

Hundreds of TikTok videos over the last week have cataloged how teenagers could keep using the app in the United States, according to a review by The New York Times. One of the most popular methods described is the use of a VPN, or a virtual private network, which can mask a user’s location and make it appear that the person is elsewhere.

“They can’t actually ban TikTok in the U.S. because VPNs are not banned,” Sasha Casey, a TikTok user, said in a recent video that was liked over 60,000 times. “Use a VPN. And send a picture to Congress while you do it, because that’s what I’ll be doing.”

While VPNs can make it appear that a phone, a laptop or another electronic device is in a remote location, it is not clear if the technology can circumvent the ban. A device’s real location is stored in many places, including in the app store that was used to download TikTok.

TikTok fans also seem to be behind the sudden surge in popularity for Xiaohongshu, the most downloaded free app on Tuesday and Wednesday in the U.S. Apple Store. Hundreds of millions of people in China use the app, which, like TikTok, features short videos and text-based posts. Xiaohongshu means “little red book” in Mandarin.

Mr. Chander anticipates that the Supreme Court will uphold the ban law this week, though he believes that TikTok has the winning case. He said the downloads of Red Note and the Chinese spy memes showed that many Americans did not agree with their government’s security concerns, particularly at the expense of free speech.

“When the United States shutters a massive free expression service, which our democratic allies have not shuttered, it will make us the censor and put us in the unusual position of silencing expression,” Mr. Chander said. “It will make Americans who use TikTok really distrustful of the U.S. government as carrying their best interests.”

Business

Edison stock turns volatile as growing blame for wildfires lands on the power company

Published

7 hours ago

January 16, 2025

Press Room

Edison stock turns volatile as growing blame for wildfires lands on the power company

Southern California’s catastrophic fires have rocked the stock of Edison International, the parent company of Southern California Edison, as accusations and lawsuits about the utility’s potential role in starting the fires mount.

Shares of Edison International closed up 5% at $61.30 on Wednesday after plunging 23% this month, making it one of the worst performers on the Standard & Poor’s 500. The rebound came after Ladenburg Thalmann analysts upgraded their rating of the stock to neutral from sell, saying that their target price of $56.50 a share reflected worst-case outcomes associated with the current wildfires.

“At this time, it is too early to discern what the outcomes will be with respect to the impact of the fires on the California Wildfire Insurance Fund solvency and/or the future earnings of Edison International,” the analysts wrote, according to Barron’s. “An initial assessment of SCE’s role in the start of the fires will likely not occur until the summer of 2025 at the earliest.”

State lawmakers established the wildfire fund in the wake of wildfires several years ago after Wall Street investors lost confidence and ratings agencies threatened to downgrade California’s investor-owned utilities.

Market analyst Zacks downgraded Edison International stock from outperform to neutral after the fires started last week. Zacks predicted Edison’s operating revenue would increase during 2025 and 2026, while acknowledging that “the company has been incurring significant wildfire-related costs” and that “higher-than-expected decommissioning costs could materially impact the company’s operating results.”

RBC Capital Markets, another analyst, had a loftier view of Edison as recently as October when it called the utility “a high quality operator, with investor confidence around wildfire risk improving from best in class mitigation efforts.”

The fallout from the fires is an abrupt disruption for a company that had been surging in recent months. In its most recent quarterly report, the company posted a profit of $516 million, or $1.33 per share, compared with $155 million, or 40 cent per share, in the third quarter of last year.

“Our team has achieved remarkable success over the last several years managing unprecedented climate challenges, making our operations more resilient and positioning us strongly for the growth ahead,” President Pedro J. Pizarro said in the report.

Fire agencies are investigating whether downed Southern California Edison utility equipment played a role in igniting the 800-acre Hurst fire near Sylmar, company officials have acknowledged.

The company issued a report Friday saying that a downed conductor was discovered at a tower in the vicinity of the Hurst fire, but that it “does not know whether the damage observed occurred before or after the start of the fire.” The fire is nearly fully contained, according to the California Department of Forestry and Fire Protection.

SCE is also under scrutiny for possibly being involved in sparking the Eaton fire that has burned 14,000 acres and destroyed thousands of structures, wiping out whole swaths of Altadena, where at least 16 people died in the blaze.

On Tuesday the Newport Beach law firm of Bridgford, Gleason & Artinian filed a mass action complaint in Los Angeles Superior Court against SCE regarding the Eaton fire on behalf of victims including Jeremy Gursey, whose Altadena property was destroyed in the fire.

“Based upon our investigation, our discussions with various consultants, the public statements of SCE, and the video evidence of the fire’s origin, we believe that the Eaton Fire was ignited because of SCE’s failure to de-energize its overhead wires which traverse Eaton Canyon—despite a red flag PDS wind warning issued by the national weather service the day before the ignition of the fire,” lawyer Richard Bridgford said in a statement.

The firm said it has represented more than 10,000 California fire victims in past suits against Pacific Gas & Electric Co. and SCE. Bridgford told Yahoo Finance that his inbox is full of Southern California residents seeking to participate in the Eaton fire lawsuit and that he anticipates “there’ll be hundreds joining.”

The most extreme level of a red flag fire warning, a “particularly dangerous situation,” returned to parts of Los Angeles and Ventura counties Wednesday morning, heightening concerns about the potential for new fires.

“The danger has not yet passed,” Los Angeles Fire Department Chief Kristin Crowley said during a news conference Wednesday. “So please prioritize your safety.”

Business

Albania Gives Jared Kushner Hotel Project a Nod as Trump Returns

Published

14 hours ago

January 16, 2025

Press Room

Albania Gives Jared Kushner Hotel Project a Nod as Trump Returns

The government of Albania has given preliminary approval to a plan proposed by Jared Kushner, Donald J. Trump’s son-in-law, to build a $1.4 billion luxury hotel complex on a small abandoned military base off the coast of Albania.

The project is one of several involving Mr. Trump and his extended family that directly involve foreign government entities that will be moving ahead even while Mr. Trump will be in charge of foreign policy related to these same nations.

The approval by Albania’s Strategic Investment Committee — which is led by Prime Minister Edi Rama — gives Mr. Kushner and his business partners the right to move ahead with accelerated negotiations to build the luxury resort on a 111-acre section of the 2.2-square-mile island of Sazan that will be connected by ferry to the mainland.

Mr. Kushner and the Albanian government did not respond Wednesday to requests for comment. But when previously asked about this project, both have said that the evaluation is not being influenced by Mr. Kushner’s ties to Mr. Trump or any effort to try to seek favors from the U.S. government.

“The fact that such a renowned American entrepreneur shows his interest on investing in Albania makes us very proud and happy,” a spokesman for Mr. Rama said last year in a statement to The New York Times when asked about the projects.

Mr. Kushner’s Affinity Partners, a private equity company backed with about $4.6 billion in money mostly from Saudi Arabia and other Middle East sovereign wealth funds, is pursuing the Albania project along with Asher Abehsera, a real-estate executive that Mr. Kushner has previously teamed up with to build projects in Brooklyn, N.Y.

The Albanian government, according to an official document recently posted online, will now work with their American partners to clear the proposed hotel site of any potential buried munitions and to examine any other environmental or legal concerns that need to be resolved before the project can move ahead.

The document, dated Dec. 30, notes that the government “has the right to revoke the decision,” depending on the final project negotiations.

Mr. Kushner’s firm has said the plan is to build a five-star “eco-resort community” on the island by turning a “former military base into a vibrant international destination for hospitality and wellness.”

Ivanka Trump, Mr. Trump’s daughter, has said she is helping with the project as well. “We will execute on it,” she said about the project, during a podcast last year.

This project is just one of two major real-estate deals that Mr. Kushner is pursuing along with Mr. Abehsera that involve foreign governments.

Separately, the partnership received preliminary approval last year to build a luxury hotel complex in Belgrade, Serbia, in the former ministry of defense building, which has sat empty for decades after it was bombed by NATO in 1999 during a war there.

Serbia and Albania have foreign policy matters pending with the United States, as both countries seek continued U.S. support for their long-stalled efforts to join the European Union, and officials in Washington are trying to convince Serbia to tighten ties with the United States, instead of Russia.

Virginia Canter, who served as White House ethics lawyer during the Obama and Clinton administrations and also an ethics adviser to the International Monetary Fund, said even if there was no attempt to gain influence with Mr. Trump, any government deal involving his family creates that impression.

“It all looks like favoritism, like they are providing access to Kushner because they want to be on the good side of Trump,” Ms. Canter said, now with State Democracy Defenders Fund, a group that tracks federal government corruption and ethics issues.