University of California employees walk out

Transcript

NIALA: Good morning! Welcome to Axios Today!

It’s Tuesday, November 15th.

I’m Niala Boodhoo.

Here’s what we’re covering today: is the crypto dream dead? Plus, the world population’s new milestone. But first: California university employees walk out. That’s today’s One Big Thing.

PROTESTERS AT UC IRVINE: When I say power you say union. Power…union…power…union.

NIALA: 48,000 workers across the University of California school system are on strike. It's the country's biggest in the past few years. The university system has ten campuses with nearly 300,000 students, and academic workers are asking for higher salaries saying they don't earn enough to live in California. Shawn Hubler has been covering the strike for the New York Times and joins us from Sacramento. Hi Shawn.

SHAWN HUBLER: Hello. How are you?

NIALA: Can you start by telling us who the workers that are making up this strike are?

SHAWN: They are sort of the frontline core workforce of the University of California. They're graduate assistants, teaching assistants, lab researchers, post-doctoral students. They're the folks who, when your big lecture class breaks down into smaller groups, they're the ones that lead the group discussions. When the it's finals happen and it's time for papers to be graded they're the ones who grade the papers.

NIALA: So I know the University of California system has said it's open, but what effect is that having on all of these different campuses?

SHAWN: It's only day two. Right. But yesterday, day one, was quite disruptive. There are 10 campuses in the UCsystem and all of them are touched by this strike. And students were sort of wandering around at UC Berkeley, for example, it was almost deserted yesterday. Students were getting alerts from their professors and emails saying that at the last minute that classes had been canceled in many cases.

NIALA: What is the union asking the University of California system for?

SHAWN: So technically this strike has been triggered by what they say are unlawful bargaining practices on the part of the university. They say the university is unilaterally sort of changing working conditions for some workers that they've dealt directly with other groups of workers without going through collective bargaining. Overall, the larger issue and the real issue here is about working conditions and benefits and pay, and in particular it's about housing.

California is a state with already high housing costs up and down the state. So a lot of what they get paid, while it sounds on the face of it, like it might be okay money for a grad student, in fact actually is almost subsistence level wages. Because, in almost all cases, at least a third of their pay is eaten up by rent for about 40% of the student workers, about half of their pay is eaten up by rent. When the market rent in your area, as in San Francisco, for example, is $3,000 a month for a one bedroom apartment, that's the end of your paycheck if you're only making $24,000 a year, $2,000 a month.

NIALA: California of course, is not just a very expensive state, it's also a very pro-labor state. So how are we seeing other people stand with these graduate students?

SHAWN: Yesterday, as the strike began, something like three dozen legislators signed a letter to the university administration, asking them to deal more fairly with the unions. And there's a great deal of sympathy. Now, whether that will be tested as time goes on and it gets closer to finals week and the stakes become higher that could change.

NIALA: Joining us from Sacramento, The New York Times’ Shawn Hubler. Thank you, Shawn.

SHAWN: Thank you.

NIALA: In a moment, how the end of FTX could signal the end of an era for crypto.

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Is the crypto dream dead

NIALA: Welcome back to Axios Today. I’m Niala Boodhoo.

There’s been a big shake up in the world of cryptocurrency. Sam Bankman-Fried, also known as SBF, is the founder of the Bahamian cryptocurrency exchange called FTX, which filed for bankruptcy just days ago. Once considered the most trusted man in crypto, he stepped down as CEO. So what does the fall of FTX mean for crypto investors — and the cryptocurrency industry as a whole — going forward?

Axios’ Chief Financial Correspondent Felix Salmon is here with that. Hey Felix!

FELIX SALMON: Hi Niala.

NIALA: I think we should probably start with what the promise of crypto is?

FELIX: The big promise of crypto was to replace money that was just at the mercy of fickle governments with something much more solid and certain and based in purest mathematics. And that would replace the dollars and the pounds and the rubles and the yen. And that would be how we would interact with each other and pay each other and trade with each other.

NIALA: So Felix, what happened with FTX and with Sam Bankman-Fried?

FELIX: Basically what SBF did when he set up FTX was he created a currency exchange where people could bet on the movements of cryptocurrencies. This one's going up, that one's going down. It's not entirely obvious we don't have all of the details, but the short version is the SBF had two different organizations, FDX is this exchange which people would put money into in trade crypto, that was one of them. And the other one was a hedge fund called Alameda Research. And what it looks like, what happened is that Alameda just lost billions and billions of dollars. It filled that hole with customer money from FTX so that when FTX's customers wanted their money back, it wasn't there because it had all been handed over to Alameda Research.

NIALA: So that sounds like a Ponzi scheme?

FELIX: For me a Ponzi, is where you promise people high returns and then you pay off people new money flowing in. SBF wasn't promising high returns to anyone and he wasn't paying off old investors with new investors, but he was taking people's money and doing the various things with it or at least that's what it looks like right now.

NIALA: We've seen banks fail, like numerous times we've had instances in history of massive banking failures, or it seems like the entire economy is wiped out and the banking system prevails. Why shouldn't it be different for cryptocurrency?

FELIX: This is exactly the point, right? Let's take the biggest bank failure that I can remember in the United States, which was Washington Mutual in 2008. $16 billion got pulled out of Washington Mutual, and wound up failing and being effectively taken over by the FDIC and all of its assets got moved over to JP Morgan and its customers were fine because you had that whole infrastructure of the FDIC and US regulators and the government making sure that everything was okay. And that's exactly what you don't have in cryptocurrency.

NIALA: Is this the beginning of the end of crypto? Is that dream dead?

FELIX: I think it's the end of the dream that crypto can replace normal currency. I think people realize that all of the regulation we have in the real world with our dollars, the central banks, the ability to bail institutions out the ability to ensure deposits to make sure you don't lose money you have at a bank is very useful and can't easily be replicated in crypto and therefore and that dream is over.

NIALA: Thanks Felix.

FELIX: Thank you.

The world population’s new milestone

NIALA: The world’s population is expected to reach 8 billion people today, according to the United Nations. Humans are generally living longer – and overall have better access to health care, food, clean water and sanitation. But population growth has also slowed.

Here’s the story by the numbers…

Earth's population has doubled since 1974.

Half of that population lives in just seven countries: China, India, the U.S., Indonesia, Pakistan, Nigeria and Brazil.

The median age globally has increased to 30.2 years old compared to 20.6 about 50 years ago.

And, the global population is expected to reach 9 billion in about 15 years. That’s more than the 12 years it took to go from 7 to 8 billion, according to the UN.

NIALA: One last thing before we go today: you may have noticed that the interest rate on your savings account has gotten a bump lately – that’s thanks in part to the Fed’s latest hike. Well we want to know how much of a difference you’re seeing, and if that’s changing how you save. Are you moving money into CDs, or saving accounts?

Please let me know - you can email the team at podcasts at axios dot com or you can also text me at (202) 918-4893. All that information is also in our show notes.

I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.

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