Oct 7, 2019

Axios AM

By Mike Allen
Mike Allen

Good morning. It's the first Monday in October: the Supreme Court begins its term.

  • Today's Smart Brevity count: 1,497 words ... 5.5 minutes.
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1 big thing: Automation to hit African Americans disproportionately

Image: H. Armstrong Roberts/ClassicStock/Getty. Illustration: Aïda Amer/Axios

The employment outlook for African Americans will "worsen dramatically" as automation upends the workforce, according to a new report from McKinsey & Co., provided first to Axios' Dion Rabouin.

  • Why it matters: By 2030, African American workers stand to lose hundreds of thousands of jobs as a result of increased automation, widening the racial wealth gap and weighing down overall U.S. growth.
  • The problem will be particularly acute for men, younger workers between 18 and 35, and those without a college degree, according to the report, "The future of work in black America."

The cost: Researchers have projected that closing the racial wealth gap could net the U.S. economy between $1.1 trillion and $1.5 trillion by 2028.

  • The additional loss of jobs and buying power from African Americans could mean further opportunity cost losses.

Details: African American workers are at risk of exceptional job losses for three key reasons.

  1. They are overrepresented in "support roles that are most likely to be affected by automation, such as truck drivers, food service workers, and office clerks."
  2. They have an unemployment rate that is double that of white workers, "even when controlling for education, duration of unemployment, and the cause of unemployment."
  3. They are underrepresented in five of the six parts of the country projected to grow the fastest, and overrepresented in parts of the country that are on pace to see the slowest growth.

Between the lines: Researchers found "more than 200 counties, largely concentrated in the Southeast and Midwest, where a decline in African American net job growth could occur alongside an increase in job growth for white employees."

  • African American women are expected to fare better than men, in part because of their strength in fields projected to grow — home health aides, nursing assistants and personal-care aides.
Data: Adapted from McKinsey & Co., "The future of work in black America." Graphic: Noa Yadidi/Axios

The bottom line, from Kaveh Waddell, co-author of Axios Future: Preparations for the future of work, like job training programs and potential new safety nets, will need to be tailored in part to the groups who will bear the brunt of the changes.

  • Otherwise, this inflection point could widen longstanding pay gaps rather than shrink them.

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2. Sorry, Kurds!

U.S. military vehicles travel down a main road in northeast Syria today. Photo: ANHA via AP

U.S.-backed, Kurdish-led forces said American troops began pulling back today from the border in northeast Syria ahead of an expected Turkish invasion, AP reports.

  • This follows a 10:50 p.m. announcement by the White House that U.S. forces in northeast Syria would move aside.

Why it matters, from Axios White House editor Margaret Talev:

  • Trump's policy change could be deadly news for the Kurdish fighters in northern Syria, who have been U.S. partners in the fight against ISIS.
  • The Kurds have long feared Turkey would cross the border and kill them if U.S. troops left Syria.

Former national security adviser John Bolton insisted months ago that the U.S. drawdown would need an agreement by Turks that protected America's Kurdish partners. But Turkey bristled at that — and Bolton is no longer in his job.

3. The NBA's China problem

Illustration: Aïda Amer/Axios

A single tweet from Houston Rockets GM Daryl Morey escalated into a geopolitical crisis over the weekend, pitting America's democratic ideals and the NBA's progressive brand against the influence of Chinese money, writes Axios Sports editor Kendall Baker.

The backdrop: On Friday night, Morey tweeted an image that read "Fight for Freedom. Stand for Hong Kong" in reference to the pro-democracy protests.

  • He quickly deleted it, followed by an apology from Rockets owner Tilman Fertitta and an eventual apology of his own.

The backlash: The Chinese government, the Chinese Basketball Association (CBA) and multiple Chinese businesses have severed ties with the Rockets.

The bottom line: A high-stakes showdown with a foreign government is far beyond anything the NBA has had to navigate in the past, but there's no running from this — and its response will speak volumes.

🏀 Sign up here for Kendall Baker's daily Axios Sports newsletter.

4. Graphic du jour: "The Rich Really Do Pay Lower Taxes"
Graphic: The New York Times. Used by permission.

"For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group," N.Y. Times op-ed columnist David Leonhardt writes.

  • The overall tax rate for the richest 400 households last year was 23%, down from 70% in 1950 and 47% in 1980.
  • Why it matters: "That’s a sharp change from the 1950s and 1960s, when the wealthy paid vastly higher tax rates than the middle class or poor."

The data is from what Leonhardt calls the most important book on government policy that he's read in a long time — "The Triumph of Injustice," by UC Berkeley economics professors Emmanuel Saez and Gabriel Zucman, out Oct. 15.

5. Impeachment in 4 paragraphs
Screenshot via CNN

Why you need to read Sneak Peek, the Sunday evening newsletter from Axios' Jonathan Swan and Alayna Treene:

  • In a phone call with House Republicans on Friday, President Trump said impeachment is a "bad thing to have on your résumé," according to a source on the call. Another source recalled Trump phrasing it as "you don't want it [impeachment] on your résumé."
  • Trump added, "But it's going to make Kevin speaker," the sources said, a reference to House Minority Leader Kevin McCarthy's path if Republicans took back the majority. Keep reading.
  • In numerous recent conversations with colleagues, including a senior staff meeting, White House acting chief of staff Mick Mulvaney has said he thinks Trump could win 45 states after the impeachment process. Keep reading.
  • The "joker" defense: Some Trump defenders (Sens. Marco Rubio and Roy Blunt, and Rep. Jim Jordan) are testing a new line: that the president was just joking when he said China should investigate Joe Biden and his son.

Get Sneak Peek.

6. First person: How Amy Harder is going greener
Illustration: Aïda Amer/Axios

Instead of writing about carbon-footprint reduction from afar, Axios' Amy Harder is experiencing it firsthand for a series of "Harder Line" columns:

She signed up with Arcadia Power, a D.C.-based startup founded in 2014.

  • The big picture: Out of America’s 127 million households, about 3.7%, or roughly 4.7 million, buy green electricity.

Arcadia Power’s main green offer is 50% wind energy (via renewable energy certificates) for free by signing up, which she chose.

  • Arcadia also offers 100% wind energy at an extra cost, which ends up being about $10 a month.
  • Another feature is a promise that one's electricity bill won’t be higher than what it was before, and could be lower. (This assumes similar usage!)
  • The company makes this promise by looking for better electricity rates than your default utility.

Keep reading.

7. New overnight: Economists see growth slowing

The nation's business economists think President Trump's trade war with China will contribute to a sharp slowdown in economic growth this year and next, AP's Marty Crutsinger reports.

  • Why it matters: This raises the chance of a recession starting late next year. That timing would be fortuitous for Trump, since most people wouldn't be feeling the effects when they vote on Nov. 3, 2020.
  • The U.S. economy is in its 11th year of expansion, the longest on record.

51 economists surveyed by the National Association for Business Economics found they expect growth slow to 2.3% this year from 2.9% in 2018.

  • The new forecast marks a downgrade from June, when the economists estimated growth at 2.6%.
  • For 2020, the forecasters expect GDP growth to fall to 1.8%.

The bottom line: The forecasters estimate just a 7% likelihood of a recession starting this year, a 24% likelihood by mid-2020 and 47% by the end of 2020.

8. Ronan Farrow sneak peek
Cover: Little, Brown

The New Yorker posts the first of three excerpts from Ronan Farrow's "Catch and Kill: Lies, Spies, and a Conspiracy to Protect Predators," out Oct. 15:

  • "The Black Cube Chronicles ... How two operatives tasked with surveilling reporters became embroiled in an international plot to suppress sexual-assault allegations against Harvey Weinstein."
In October of 2016, as reporters circled allegations of sexual assault and harassment against the film producer Harvey Weinstein, Weinstein and his lawyers hired Black Cube, an Israeli private-intelligence agency. ...
During the time that I was reporting [on Weinstein, Black Cube operatives Roman] Khaykin and [Igor] Ostrovskiy staked out my apartment building and tailed me to the offices of NBC, where I worked as a correspondent, and later to the offices of The New Yorker. At one point, Khaykin claimed to have successfully used my cell phone to track my location. ...
The two men also performed counter-surveillance, making sure that Black Cube operatives weren’t followed to meetings, which often took place in hotel lobbies or upscale restaurants in Manhattan. At those meetings, Ostrovskiy would order meals — a perk of the job — while discreetly eavesdropping and recording the encounters.

Keep reading.

9. Data du jour

Go deeper: "Supreme Court set to weigh in on 2020's most polarizing issues," by Axios' Sam Baker.

10. 🎥 1 film thing: "Joker" laughs its way to record
Joaquin Phoenix in "Joker." Photo: Niko Tavernise/Warner Bros. Pictures via AP

Despite ramped up theater security and anxiety about violent themes, audiences flocked to the R-rated "Joker" this weekend, resulting in a record October opening, AP reports.

  • Warner Bros. said "Joker" grossed $94 million from 4,374 screens in North America. The previous October record-holder was the Spider-Man spinoff "Venom," which opened to $80 million last year.

Why it matters: Viewers weren't deterred by fears the film might inspire violence.

  • Multiple theater chains banned costumes or reaffirmed policies about masks.
  • Numerous cities stepped up police patrols around theaters.
Mike Allen

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