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Why American Mask Makers Are Going Out of Business

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Why American Mask Makers Are Going Out of Business

Mike Bowen has spent a lot of the pandemic saying, “I informed you so,” and you’ll hardly blame him. Again in 2005, simply as low-cost Chinese language producers have been taking on the non-public protecting tools business, Bowen joined a good friend who had began a small surgical masks firm referred to as Status Ameritech. The plan was to market his firm’s masks to American hospitals and distributors as a means to supply resilience — a way of guaranteeing home provide if the availability chain ever broke down.

“Each firm had left America,” he recalled not too long ago. “All the U.S. masks provide was beneath overseas management.” He remembers warning clients, “If there’s a pandemic, we’re going to be in bother.”

At first, Bowen’s gross sales pitch wasn’t very profitable. However in 2009, the swine flu virus triggered a masks scarcity in the US. Out of the blue, Status Ameritech had loads of clients. “We went from 80 workers to 250,” Mr. Bowen says. “The telephones have been ringing off the hook. We thought, ‘Individuals lastly get it. We’re going to repair this drawback.’”

He was incorrect. As quickly because the swine flu pandemic ended, the corporate’s new clients went proper again to purchasing cheap masks from China; Chinese language producers quickly managed 90 % of the American market. “The price financial savings was like crack cocaine for American hospitals,” Mr. Bowen mentioned.

Even so, Mr. Bowen by no means stopped telling anybody who would pay attention that the offshoring of non-public protecting tools — which incorporates nitrile gloves, hospital robes and respirators, in addition to surgical masks — would create huge issues for the U.S. the following time it confronted a pandemic.

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Which, in fact, is strictly what occurred. Simply weeks into the Covid-19 pandemic in 2020, the availability chain for protecting tools had damaged down, creating extreme shortages that value lives. A black market emerged, stuffed with con males and get-rich-quick schemers.

A handful of U.S. entrepreneurs determined they might do their half by manufacturing masks.

In Miami, a family-owned surgical machine firm, DemeTech, spent a number of million {dollars} to broaden its amenities, construct machines and rent lots of of workers; by the autumn of 2020, it was able to churning out 5 million masks a day, based on Luis Arguello Jr., vice chairman of the corporate. “We took a threat as a household,” he mentioned.

In Houston, Diego Olmos, a producing professional who had not too long ago left a multinational firm, used his severance to assist begin a mask-making firm referred to as Texas Medplast. “My enterprise companion and I mentioned, ‘That is the correct factor to do,’” he mentioned.

In Lindon, Utah, an entrepreneur named Paul Hickey helped discovered PuraVita Medical to make KN95 respirators.

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It’s arduous to know exactly what number of of those corporations have been born throughout the pandemic; 36 of them are members of the American Masks Producer’s Affiliation, which they shaped to foyer Washington. Nearly all skilled the identical growth and bust phenomenon that Mr. Bowen had in 2009. At first, clients who might not receive masks by their regular provide channels have been beating down their doorways. The identical was true throughout the Delta and Omicron waves, when masks have been additionally scarce.

However as quickly because the waves crested, and Chinese language corporations, decided to regain their market share, started exporting masks under value, the shoppers disappeared.

“All of the hospitals and authorities businesses and retailers that had been begging for American merchandise immediately mentioned, ‘We’re good,’” mentioned Mr. Hickey.

At the moment, these small U.S. masks producers are in dire straits — in the event that they haven’t gone out of enterprise already. DemeTech has laid off practically all the staff it employed to make masks, and it has shut most of its masks manufacturing heart. Mr. Olmos, his severance lengthy gone, expects Texas MedPlast to be out of enterprise quickly barring a miracle. And PuraVita Medical? “We’re on the verge of shedding all of it,” Mr. Hickey informed me.

The federal government’s reply to this sample is its personal shopping for energy. Throughout his State of the Union handle on Tuesday night time, President Biden promised that the federal government would start to carefully implement provisions within the legislation that decision for the federal businesses to purchase American-made items every time doable.

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“All the pieces from the deck of an plane service to the metal on freeway guardrails” could be made in America, he vowed.

The plight of those small masks corporations, nonetheless, means that reviving American manufacturing — even when the underlying rationale is nationwide safety — received’t be straightforward.

“Resilience is the byword of the day,” mentioned Marc Schessel, a hospital provide chain professional who’s working to develop different provide chains for private protecting tools. And resilience — that’s, creating further manufacturing capability that may get the nation by an emergency — is what the small masks makers say is their worth to the nation. Positive, they argue, a globalized, just-in-time provide chain for low-cost protecting tools is okay in extraordinary occasions. However we’ve realized these previous two years that the nation wants home producers if we hope to keep away from horrible shortages throughout the subsequent pandemic, and the one after that.

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However how do you create that resilience? The federal authorities spent $682 billion shopping for items and providers from contractors in 2020, based on Bloomberg Authorities. That’s the sum the Biden administration needs to make use of to purchase American merchandise. And whereas it’s hardly chump change, it’s solely about 3 % of America’s $21.5 trillion economic system.

The masks producers I interviewed for this text mentioned the Biden administration had expressed curiosity in shopping for their masks, nevertheless it has but to occur. Even when it did, it might be unlikely to place a lot of a dent into Chinese language dominance. As Mr. Bowen put it in a current e mail to the White Home, “Hospitals drive the masks market.” Since their incentives are to cut back prices, he wrote, “Any plan that enables imported masks to value lower than U.S. made masks will lead to a overseas authorities managed U.S. masks provide — as at the moment exists.”

To place it one other means, the trendy crucial of maximizing shareholder worth will all the time put effectivity and price over resilience.

The masks producers are a microcosm of a bigger drawback. At the moment, there are shortages that go properly past private protecting tools. Issues as numerous as semiconductors and storage doorways are briefly provide — all merchandise whose manufacturing was offshored throughout the previous a long time as American corporations embraced just-in-time provide chains and cheap overseas labor. Economists and company executives ignored resilience, and now the nation doesn’t have a transparent concept tips on how to create it, at the same time as its necessity has turn out to be apparent.

Mr. Bowen informed me that the issue for small U.S. masks producers could possibly be solved by both banning imported masks or placing hospitals on discover that they might be legally liable if their purchases of imported masks meant they may not defend their workers or sufferers in a future emergency. He additionally acknowledged that neither scenario was real looking.

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Early within the pandemic, in a transfer supposed to make sure entry to important provides throughout crises, the Japanese authorities earmarked $2.3 billion in subsidies to corporations that moved manufacturing to Japan from China. The U.S. federal authorities might take an analogous tack, which might permit U.S. masks producers to match Chinese language costs. The issue is that if the federal government sponsored each important product that required provide chain resilience, it might get awfully costly.

Regardless of the president’s vow to have the federal government purchase American, the almost definitely state of affairs stays what it has been for months: the small masks producers will exit of enterprise, hospitals will proceed to import Chinese language masks — and the nation will once more be caught brief when the following pandemic arrives.

What do you suppose? Ought to the federal government do extra to guard American producers of important provides? What could be simplest? Tell us: dealbook@nytimes.com.

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Column: GOP targets Medicaid with the return of a terrible idea

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Column: GOP targets Medicaid with the return of a terrible idea

In any contest to name the cruelest and most useless healthcare “reform” favored by Republicans and conservatives, it would be hard to beat the idea of applying work requirements to Medicaid.

Yet, it’s back on the table, teed up by congressional Republicans as a deficit-cutting tool.

In a rational world, this idea would have been consigned to the dumpster long ago, and forever. It’s billed as a way to reduce joblessness, but doesn’t. It’s billed as an answer to the purported complexity of Medicaid, but makes the system more complicated for enrollees and administrators. It’s billed as a money-saving reform, but adds to Medicaid’s costs.

Democrats view Medicaid as a health insurance program that helps people pay for health care…Republicans view Medicaid as a government welfare program.

— Drew Altman, KFF

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So what does it accomplish? It’s very effective at throwing eligible people out of Medicaid.

House Budget Committee Chairman Jodey Arrington (R-Texas) gave the game away last week when he told reporters that a “responsible and reasonable work requirement” for Medicaid would produce about $100 billion in savings over 10 years, or $10 billion a year.

That wouldn’t make much of a dent in the annual cost of Medicaid’s coverage of its 72 million beneficiaries, which came to about $853 billion last year.

Nor would it do much to defray the estimated $4-trillion 10-year cost of extending parts of the 2017 Republican tax cut, which is the ostensible reason for seeking out penny-ante savings in budget categories such as a social safety net, according to the Washington Post.

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Whatever the putative rationale, there are only two ways to extract even $10 billion in savings from Medicaid: Strip benefits from the program, or throw enrollees out.

One other thing about imposing work requirements on Medicaid: It’s illegal. That’s the conclusion of federal judges who reviewed the idea the last time it was implemented, during the first Trump term.

U.S. District Judge James E. Boasberg and a three-judge panel of the U.S. Court of Appeals for the District of Columbia found that the legal waivers that allowed individual states to experiment with work requirements didn’t meet the key prerequisites for such “reforms” according to Medicaid law — that they serve the program’s objectives, specifically the goal of bringing health coverage to low-income Americans.

The courts invalidated work requirement waivers President Trump granted to three red states. When President Biden arrived at the White House in 2021, he canceled the waivers outright and shut down the work-requirement pipeline.

Despite that legal history, Medicaid work requirements remain a beloved hobby horse of conservatives. The idea is a component of Project 2025, the right-wing road map to federal policy changes in a second Trump administration. So let’s take a closer look at the record.

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The place to start is with conservatives’ historic disdain for Medicaid. This derives, as Drew Altman of the health policy think tank KFF astutely observed, in part from the divergent partisan views of the program: “Democrats view Medicaid as a health insurance program that helps people pay for health care.” By contrast, “Republicans view Medicaid as a government welfare program.”

Thinking of Medicaid as welfare serves another aspect of the conservative program, in that it makes Medicaid politically easier to cut, like all “welfare” programs. Ordinary Americans don’t normally see these programs as serving themselves, unlike Social Security and Medicare, which they think of as entitlements (after all, they pay for them with every paycheck).

From the concept of Medicaid as welfare it’s a short step to loading it with eligibility standards and administrative hoops to jump through; Republicans tend to picture Medicaid recipients as members of the undeserving poor, which aligns with their view of poverty as something of a moral failing. Work requirements, then, become both a punitive element and a goad toward “personal responsibility,” a term that appears in Project 2025’s chapter on Medicaid.

The idea that work requirements for Medicaid can have a measurable effect on joblessness is the product of another misconception, which is that most Medicaid recipients are the employable unemployed. As is often the case with right-wing tropes, this is completely false.

According to census figures, 44% of Medicaid recipients worked full time in 2023 and 20% worked part time. An additional 12% were not working because they were taking care of family at home, 10% were ill or disabled, 6% were students, and 4% were retired. Of the remaining 4%, half couldn’t find work and the remaining 2% didn’t give a reason.

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That might account for why Arkansas, the one state that actually implemented work rules under the Trump administration, experienced no increase in either “employment nor the number of hours worked” among the Medicaid-eligible population, in the words of the Congressional Budget Office.

Official state statistics showed that in the first six months of implementation, 17,000 Arkansans had lost their Medicaid eligibility. That figure was what provoked Boasberg to suspend the Arkansas program and block a similar effort in Kentucky before it could even start.

The Trump administration had approved Medicaid work requirements for 13 states and had approvals pending in nine others — all were under the control of Republican governors or legislatures or both — before the waivers ran into the court blockade and ultimately into the accession of the Biden administration.

The Arkansas rules required Medicaid enrollees to show 80 hours per month of employment, job search, job training or community service. Pregnant women, the disabled, students and a few other categories were exempt. Enrollees who didn’t meet the requirement for three months were summarily excised from Medicaid and couldn’t reenroll until the following year.

Evidence compiled by healthcare advocates suggested that administrative snafus largely prevented even employed enrollees from submitting evidence of employment. The work hour reports had to be made online, even though the reporting website was out of order for long stretches and many enrollees didn’t have adequate internet access.

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The effect of the policy on health coverage in Arkansas was calamitous. Medicaid enrollment fell by a stunning 12 percentage points. The percentage of uninsured respondents in the 30-49 age cohort, which was the first group targeted in a stepwise introduction of the requirement, rose to 14.5% in 2018 from 10.5% in 2016.

None of this reality dissuaded the authors of Project 2025 from resurrecting work requirements for Medicaid. Their discussion is redolent with disdain for the program and its enrollees — especially for beneficiaries of the Affordable Care Act’s Medicaid expansion, which added childless low-income households to a program that had chiefly covered families with children.

Since the 1980s, Project 2025 asserted, Medicaid had “evolved into a cumbersome, complicated, and unaffordable burden on nearly every state.”

The truth is, of course, that in the most significant expansion of the program, under the ACA, 100% of the cost of covering the new enrollees was borne by the federal government from 2016 through 2018, gradually declining to 90% in 2020 and thereafter. That’s significantly higher than the federal share of costs for the original enrollee category.

Project 2025’s Medicaid chapter falsely states that the ACA “mandates that states must expand their Medicaid eligibility standards” to include all individuals with income at or below 138% of the federal poverty level.”

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The truth is that this was originally part of the ACA, but it was invalidated by the Supreme Court, which ruled that the federal government must give states the choice of whether to accept the expansion. That’s the state of affairs to this day. The Supreme Court decision came down in 2012, so the Project 2025 authors don’t have much of an excuse for their ignorance of the facts. Anyway, 10 states, most of them deep red, still haven’t accepted the expansion.

Project 2025’s approach to Medicaid validates Altman’s perception that conservatives see the the program chiefly as welfare. Its goal is chiefly to find ways to cut costs, including through block grants (which deprive states of the flexibility they might need to fight disease outbreaks such as the pandemic), benefit caps and lifetime caps.

It proposes reducing or eliminating the 90% federal match rate, which would do nothing for enrollees and strain state budgets while preserving a few dollars for the feds. It calls for reducing Medicaid payments to hospitals, which keep some institutions, especially rural hospitals, fiscally afloat.

It calls for rooting out “waste, fraud, and abuse,” that all-purpose chimera evoked by budget-cutters as a painless way of reducing costs, but which no one ever seems to accomplish. And it calls for eliminating the “cumbersome” process of getting waivers improved — in other words, open the door for conservative political leaders to strip away the healthcare guarantees and standards that make Medicaid an effective deliverer of healthcare.

Don’t be fooled. The Project 2025 folks and their adherents in the coming Trump White House don’t want to make Medicaid more efficient, as they claim. They want to make it less relevant and less effective — and cheaper, the better to preserve those tax cuts. Those 72 million enrollees? They’ll just be collateral damage.

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L.A. City Council postpones vote on wage hike for hotel and airport workers over tourism concerns

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L.A. City Council postpones vote on wage hike for hotel and airport workers over tourism concerns

The Los Angeles City Council on Wednesday postponed a vote on a major boost to wages for hotel and airport workers, voicing concerns that the pay hike could damage the city’s tourism industry.

The council’s decision to put off the vote until Dec. 11 came as hotel owners were threatening to pull out of a deal to provide tens of thousands of rooms during the 2028 Olympic Games if the pay increase is approved, saying it would decimate their bottom line.

The council had been scheduled to vote Wednesday on whether to finalize changes to an existing city ordinance that would raise the minimum hourly wage for workers at large hotels and Los Angeles International Airport from the current $20.32 to $25 on Feb. 1. The minimum pay would then climb incrementally each year to reach $30 an hour by July 1, 2028, as the Olympics are set to open.

During a heated discussion of the proposed wage boosts, several council members questioned whether an analysis of the economic impact of the wage hike that was commissioned by the city had been thorough enough.

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“People are going to lose their job if we do this as currently proposed,” Councilmember Traci Park said during the meeting.

Doane Liu, executive director of the City Tourism Department, warned the council that the report understated the effect the proposed minimum wage increases would have on the prices of hotel room rates. Higher wages, he said, would lead to “unintended consequences” as hotels would have to increase rates or cut back on staff and services, which would hurt the luxury and convention business.

As Wednesday’s meeting went on, council members introduced several amendments that, if adopted, would narrow the scope of the proposal and slow down its implementation. One amendment suggested by Councilmember John Lee would delay the jump to a $25 hourly minimum wage until six months after occupancy rates at hotels and LAX passenger traffic had returned to pre-pandemic levels. Lee also proposed slowing down the annual increases to $1 each year — a pace that probably would mean not reaching the $30 hourly wage until after the Olympics.

Marqueece Harris-Dawson, the council’s president, directed the city’s chief legislative analyst to answer questions raised by council members in advance of the council’s Dec. 11 meeting. If the council votes at that meeting to have city lawyers rewrite the ordinance, it would still need to vote at a later date on whether to formally approve and implement the wage increases.

After the council moved to table the discussion, dozens of hotel and airport workers represented by unions that backed the wage boosts filed out of council chambers, chanting, “We’ll be back” and waving red and purple signs that read, “Stands with tourism workers” and “Olympic wage now.”

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In City Hall’s cavernous lobby, Kurt Petersen, co-president of a union that represents hotel workers, told workers the council had been swayed by pressure from the tourism industry.

“Today some of our council members unfortunately listened to the CEOs,” Petersen said.

Nelly Hernandez, 57, an employee at airline catering company Flying Food Group, said she currently makes $20 per hour, and a wage increase would help her achieve economic stability.

She sends money back home to her sister in El Salvador and wants to be able to save for retirement. “Everything is so expensive right now,” she said.

In a last-ditch effort to sway the council, the board of directors of the Hotel Assn. of Los Angeles sent a letter this month to the city’s Olympic organizing committee arguing the proposed ordinance would jeopardize contracts requiring the hotels to provide the committee with about 40,000 rooms during the Games at prices that were negotiated in 2020 with a lower minimum wage in mind. The higher wages, it said, would balloon hotels’ labor costs so much that sticking to the terms of the deal would be untenable.

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“Renting rooms under these circumstances would result in devastating financial losses that could not be recouped under any reasonable scenario,” the letter said. “To put it plainly, this staggering increase in costs makes it unfeasible for most if not all signatory hotels to participate in LA28’s hotel room block.”

If the wage hike goes through, the letter said, “many if not all” the hotels represented by the group would use a clause in the contracts to back out of the deal. The rooms were to be used to house thousands of people associated with the International Olympic Committee, the U.S. Olympic Committee, corporate sponsors, journalists and others during the Olympics and Paralympics, the letter said.

Even if the council doesn’t abandon the pay hike altogether, the hotel association said it hoped to be able to persuade the council to amend its terms in order to lessen the financial impact on hotels. Particularly worrisome was a provision in the proposed ordinance that would require hotels to cover an hourly $8.35 “health payment” for workers on top of the wage hikes.

The ordinance was first proposed last year by Councilmembers Curren Price and Katy Yaroslavsky, with Hugo Soto-Martínez and several other council members supporting the measure. Movement forward on the law was stalled for more than a year as contract negotiations between scores of local hotels and Unite Here Local 11, the politically powerful union that represents their workers, were underway.

The push for the increased wages for hotel workers is the latest demonstration of Unite Here Local 11‘s political muscle. A decade ago, the union successfully got elected officials to approve a minimum wage for hotel workers that is higher than the one that covers most other workers in the city, which currently is $17.28.

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While the council’s support for the wage hike aligns with the progressive tack elected officials in the city have typically taken, the wage increase proposal comes at a time when voters across the state have been somewhat more ambivalent, rejecting a statewide measure to boost the minimum wage and booting out progressive Los Angeles County Dist. Atty. George Gascón in the November election.

Workers in the city’s tourism industry have for years raised alarms about the cost of living in Los Angeles, and amid concerns the Olympics will drive up housing costs even more, unions backing the proposed pay hike have said increased pay is necessary to keep workers from being priced out of the city.

An estimated 23,000 workers would be covered by the proposed increases, and about two-thirds of them live in the city of L.A., according to the report released in September, which was commissioned by the city’s chief legislative analyst. Although the majority of those affected by the pay raises would be airport workers, hotel workers’ wages tend to be lower and those employees would therefore receive a bigger boost, according to the report. Airport workers would see average hourly increases of $3.87 and pay for hotel workers would climb on average $6.24, the report finds.

Petersen said the wage proposal is a fair way to improve workers’ lives as hotels and other businesses stand to reap the benefits of the city hosting the Olympics.

“Right now the way it’s set up is a corporate giveaway,” Petersen said of the Olympics. “L.A. should be loud and proud about doing this.”

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Times staff writer David Zahniser contributed to this report.

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UC service and hospital workers launch two-day strike over contract talks

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UC service and hospital workers launch two-day strike over contract talks

A union representing nearly 40,000 University of California workers began a two-day strike Wednesday to protest what it claims is bad faith bargaining by university negotiators as the two sides try to hammer out new labor agreements.

The work stoppage, which affects service and patient care workers at all UC campuses and medical facilities, will continue until 11:59 p.m. on Thursday. AFSCME Local 3299 and the university system have been in talks over new contracts for nearly a year.

“Instead of being a constructive and transparent partner seeking to bring us closer to agreement, UC has sought to drive us farther apart,” said AFSCME Local 3299 President Michael Avant in a statement. “By failing to meet its most basic legal responsibilities to the dedicated professionals who clean its facilities, serve students food, and treat its patients, UC has left workers with no choice but to exercise their legal right to strike,” he said.

University officials disputed the union’s allegations, saying in a statement that “we fundamentally disagree with AFSCME’s claims of bad faith bargaining and characterization of unacceptable bargaining proposals.” Negotiators for the two sides, the university said, had met more than 20 times between January and May and the university system had proposed salary increases for union members that would hike pay by an average of 26% over a five-year contract.

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Union members authorized the strike with 99% of members voting in support just weeks after filing formal charges with the state’s Public Employment Relations Board alleging bad faith bargaining.

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