Jobs: CBO says wage hike could cost jobs
A government agency says raising the minimum wage to $10.10 could cost up to 500,000 jobs, said Annie Lowrey in The New York Times. But according to the nonpartisan Congressional Budget Office this week, the proposed hike “championed by President Obama” would “also lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week.” That “mixed conclusion” instantly added fuel to the fire for both supporters and critics of the Democratic proposal. “Republicans contended the policy would be a job-killer, while Democrats asserted it would help alleviate poverty.”
“The report could blunt the political momentum” for Democrats, said Eric Morath, Damian Paletta, and Carol E. Lee in The Wall Street Journal. Republican leaders quickly seized on the report as proof that a higher minimum wage would destroy jobs by encouraging employers to “hire fewer, higher-skilled workers.” But “that effect would be partially offset by higher earnings among low-wage workers who retained their jobs.” The CBO said that better pay for low-wage workers, who “tend to spend a larger fraction of their earnings” than wealthier ones, could mean that “some firms would see increased demand for their goods and services.”
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Pharma: Generic drugmaker bulks up
Drugmaker Forest Laboratories has a new owner, said Caroline Humer and Esha Dey in Reuters.com. Dublin-based pharmaceutical firm Actavis, the world’s third-largest generic drugmaker, announced plans this week to acquire Forest for $25 billion in cash and stock, a 25 percent premium over Forest’s closing share price last week. The purchase will give Actavis a step up in the market for Alzheimer’s and hypertension treatments, and “means a major payday for activist investor Carl Icahn, the second-largest shareholder at Forest Labs.”
Banks: Fed okays new rules for foreign banks
Overseas banks will have a tougher time in the U.S., said Yalman Onaran in Bloomberg.com. The Federal Reserve this week adopted new rules that will force large foreign banks “to hold more capital in the U.S.” The rule is “designed to protect taxpayers from having to bail them out in a crisis,” but the banks claim it will “increase those companies’ borrowing costs and hurt their profitability.” The new standards, which take effect in July 2016, will apply only to the estimated 15 to 20 foreign banks that have more than $50 billion in assets.
Tech: Candy Crush maker files for IPO
The maker of the video game Candy Crush Saga is going public, said Chris Isidore in CNN.com. King Media Entertainment, the Dublin-based company that developed the “wildly popular” game, this week announced annual revenue of $1.9 billion and plans to list on the New York Stock Exchange. While the company’s filing with the Securities and Exchange Commission “did not disclose the number of shares to be sold or the price range for those shares,” the company estimated that it would raise $500 million in the IPO.
Lending: New rules for Capital One cardholders
“Capital One isn’t shy about getting into customers’ faces,” said David Lazarus in the Los Angeles Times. The company recently rolled out an update to its cardholder contract that gives the bank permission to contact customers “in any manner we choose,” including “calls, emails, texts, faxes, or a ‘personal visit.’” And the “creepy” new contract terms don’t end there: “Cap One says these visits can be ‘at your home and at your place of employment.’” The company said it would only send debt collectors to cardholders’ homes “as a last resort” to repossess big-ticket items such as Jet Skis and snowmobiles.
