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Economics in Brief: Fed Official Criticizes Proposed CRA Reform

And in other economics news this week, New York Gov. Andrew Cuomo vows to address gig economy exploitation and Taco Bell now offers paid sick leave.

Federal Reserve Governor Lael Brainard speaking in an Oct. 31, 2018 file photo.

Federal Reserve Governor Lael Brainard speaking in an Oct. 31, 2018 file photo. (AP Photo/Jacquelyn Martin)

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Fed Official Criticizes Proposed CRA Reform

A Federal Reserve governor had sharp words for the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency’s joint proposal to revamp the Community Reinvestment Act, the 1977 law requiring banks to meet the credit needs of the communities in which they do business.

Next City has previously reported on the proposal as well as community advocates’ initial concerns. So far, it seems that Fed Gov. Lael Brainard shares some of those concerns.

“An approach that combines all activity together [as the FDIC/OCC proposal does] runs the risk of encouraging some institutions to meet expectations primarily through a few large community development loans or investments rather than meeting local needs,” Brainard, speaking at the Urban Institute, said this week, according to American Banker.

The Fed’s lack of consensus with the FDIC/OCC proposal could mean, American Banker added, that banks could be examined differently, under the same underlying law, depending on which federal institution they are chartered under.

NY Gov. Cuomo Changes His Tune on Gig Economy

Gov. Andrew Cuomo says he will work this year to end the “fraud” that gig economy corporations are perpetuating on the working class, Politico reports.

During the State of the State address Wednesday, Cuomo compared some tech firms to the Triangle Shirtwaist Company, the notorious garment manufacturer whose dangerous factory sweatshop conditions during an era of poor labor regulations led to a 1911 fire that trapped workers inside, killing nearly 150 people, most of them women.

“A driver is not an independent contractor simply because she drives her own car on the job,” Cuomo said in the speech. “A newspaper carrier is not an independent contractor because they ride their own bicycle. A domestic worker is not an independent contractor because she brings her own broom and mop to the job. It is exploitive, abusive, it’s a scam, it’s a fraud, it must stop and it has to stop here and now.”

Worker advocates were surprised by Cuomo’s comments; in the past he has been supportive of gig-economy companies such as Uber, saying that government should not “be in the business of trying to restrict job growth.”

“It sounds like,” New York Taxi Workers Alliance Executive Director Bhairavi Desai told Politico, “the governor has [begun] to understand the exploitative nature of the gig economy business model.”

Taco Bell to Offer Paid Sick Leave to All Employees at Company-Owned Stores, Six-Figure Salaries for Some Managers

Taco Bell announced Thursday that all employees at company-owned stores will be eligible for paid sick time, Restaurant Dive reports.

The company will also be “testing” a $100,000 salary for some managers of company-owned restaurants, Taco Bell said in a release. The average manager salary is currently $50,000 to $80,000.

The moves come at a time when the labor market is tightening, especially for manager-level employees, Restaurant Dive said. Many retailers have responded by raising wages, MSN reports, while fast-food chains are adding perks. Shake Shack, for example, is offering managers a four-day workweek and Starbucks is offering employees mental health benefits, including a subscription to a mental-health app (to which Starbucks workers said, “We’d rather have raises, thanks”).

The changes apply only to company-owned stores, not franchise locations. Taco Bell owns 7 percent of its 7,191 stores, according to Restaurant Dive.

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter.

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Tags: taxislaborcommunity reinvestment actgig economy

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