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Fast-food workers, cashiers, cooks, delivery people and their supporters held a rally outside New York City Hall in 2017. Photo: Erik McGregor/Pacific Press/LightRocket via Getty Images
Having largely been left out of the U.S. recovery over the past decade, low-wage workers are starting to see their incomes rise meaningfully and are pushing for more.
Why it matters: With a tight labor market wherein the number of job openings exceeded the number of unemployed by the largest margin on record, businesses are having to make more concessions to keep low-wage workers and find new ones.
What's happening: Even though Amazon raised its minimum pay for all workers to $15 an hour last year, employees at its Shakopee, Minn., fulfillment center are planning a Prime Day work stoppage to protest productivity quotas and poor working conditions, according to CBS News.
By the numbers: After trailing higher-paid workers for years after the financial crisis, earnings for the bottom 25% of workers have been growing at a rate over 4% since July 2018, while the national average has been stuck near 3%, data from the Atlanta Fed shows.
What they're saying: Research analysts at Goldman Sachs see a "lack of investor concern" about rising wages, they said in a Tuesday morning note to clients. However, the bank's survey data indicates "a record level of corporate concern regarding labor costs."
Reality check: Only the top 10% of U.S. households have fully recovered the wealth they lost in the financial crisis, and company earnings growth has been rising much faster than wages.
The intrigue: Interested parties, including Walmart and Amazon, are lobbying the government to raise the federal minimum wage to $15 an hour, which the CBO said in a report Monday would increase wages for 27 million Americans, but also cost 1.3 million jobs and "reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent."
S&P 500 companies are expected to show earnings declines of -2.6% in the second quarter, data from FactSet shows. So far, 9 sectors show expected lower growth rates today compared to the end of the first quarter, due to downward revisions to their earnings per share estimates.
What to watch: If earnings match expectations for a 2.6% fall, it will mark the first time the index has reported 2 straight quarters of year-over-year declines in earnings since Q1 2016 and Q2 2016, FactSet notes.
U.S. GDP growth in the second quarter is expected to come in significantly below first quarter growth, as the impact of the Tax Cut and Jobs Act fades. It would be the weakest quarter of U.S. growth since Q4 2015.
The TED spread, a measure of the perceived credit risk in the U.S. economy, matched its lowest level in at least 40 years last week.
The breakdown: As Ken Faulkenberry at Arbor Investment Planner explains it:
"Comparing the risk free rate [of 3-month U.S. Treasuries] to LIBOR provides an indication of the risk the global markets perceive in the global banking system."
The People's Bank of China added nearly 16 tons of gold to its reserves in May, the sixth straight month China's central bank has added to its gold reserves.
Why it matters: The Chinese have been working to move away from the dollar as the world's international funding currency for years. They've increased these efforts since Donald Trump became U.S. president.
What it means: The gold buying binge is part of the Chinese government's "determined diversification" away from dollar assets, Argonaut Securities (Asia) Ltd. analyst Helen Lau told Bloomberg, adding that retail demand has also increased. China could buy 150 tons in 2019 at this rate of accumulation, Lau said.
The big picture: Gold is gaining popularity among the world's central banks, particularly the Chinese, the world's top gold consumer. Last year 15% of the world’s gold demand came from came from central banks, which collectively bought 651.5 tons, according to World Gold Council data.
The last word: Bloomberg notes that prices of gold bullion have risen for the past 3 weeks, "hitting the highest level since April 2018, as investors seek out havens and traders increase bets that the Federal Reserve will cut interest rates following signs of weakness. Spot gold was at $1,329.60 on Monday, after climbing 1.7% in May."
Go deeper: The world's slow drift away from the dollar
Virgin Galactic is going public, joining with former Facebook senior executive Chamath Palihapitiya's Social Capital Hedosophia in a special-purpose acquisition company (SPAC) that will see SCH invest $800 million for a 49% stake in the company.
Details: The company is expected to finish the merger by the second half of the year, according to a press release sent this morning, making Richard Branson's space-tourism venture into the first publicly traded human spaceflight company.
Our thought bubbles from Axios Space newsletter writer Miriam Kramer: Taking the company public is a bold move for a private spaceflight company that has yet to fly its first tourists. Spaceflight is hard, and Virgin Galactic's program has been marked by delays and a tragic accident in 2014 that killed one pilot and injured another.
And Axios' Felix Salmon: If this deal values Virgin Galactic at $1.5 billion, that's less than 5% of the valuation of SpaceX.