The daily business briefing: February 26, 2021
Senate official says COVID-19 relief package can't include wage hike, Costco raises its minimum wage to $16 an hour, and more
Senate official says COVID-19 relief package can't include minimum wage hike
Senate parliamentarian Elizabeth MacDonough ruled Thursday that Democrats cannot include raising the federal minimum wage to $15 per hour in their $1.9 trillion coronavirus relief package. MacDonough said the proposal did not meet the requirements to be included in the package under the budget reconciliation process, which Democrats are using to approve the stimulus with a simple majority. That means they won't have to win over any Republicans, who want a smaller relief package. Democratic Sens. Joe Manchin (W.V.) and Kyrsten Sinema (Ariz.) opposed raising the minimum wage, which has been set at $7.25 per hour since 2009. Manchin said he supported $11 an hour instead. The ruling only applies to the Senate, and the House is moving toward a Friday vote on a package that includes the wage hike.
Costco CEO says company will raise its minimum hourly wage to $16
Costco CEO Craig Jelinek announced Thursday that the company would raise its minimum wage to $16 an hour next week. The plan came as Democrats push for raising the federal minimum wage, which has been set at $7.25 an hour since 2009, to $15 an hour. Target and Best Buy raised their minimum hourly pay to $15 last year, and Amazon did so in 2018. Jelinek said Costco, which has 558 discount warehouse clubs nationwide, has always offered "very competitive retail wages" and benefits. Its average hourly wage already is $24 an hour. "We try to take care of our employees because they play such a significant role in our success," Jelinek said at a U.S. Senate Budget Committee hearing on worker wages at large companies.
Stock futures mixed after tech selloff
U.S. stock index futures were mixed early Friday after Thursday's plunge. Futures for the Dow Jones Industrial Average were up slightly several hours before the opening bell, while those of the S&P 500 and the tech-heavy Nasdaq edged down. The Nasdaq dropped by 3.5 percent on Thursday, the index's worst single-day loss since October. The Dow and the S&P 500 fell by 1.8 percent and 2.5 percent, respectively. Thursday's selloff came as U.S. Treasury yields rose, signaling that investors were betting on a quick economic rebound. Economists said the rising Treasury bond returns were a logical reaction to expectations of economic improvement thanks to coronavirus vaccinations and improving GDP forecasts, but they also led some investors to conclude that tech-stock valuations were too high.
Best Buy to close more stores in response to increased online shopping
Best Buy CEO Corie Barry said Thursday that the electronics retailer could step up store closures this year as it contends with accelerating online shopping trends as people avoid going out during the coronavirus pandemic. Best Buy has about 450 store leases due for renewal over the next three years. "As part of the review process, we have closed approximately 20 large-format locations each of the past two years and expect to close a higher number this year," Barry said. "We have also been reducing the length of our average lease term, which will continue to provide us flexibility." Barry said the "sudden and lasting shift" in shopping behaviors had forced the company to "look at how we get our work done." Best Buy also has cut its workforce by about 17 percent to 100,000.
Beyond Meat unveils deals with McDonald's, Yum Brands
Beyond Meat announced Thursday that it had signed deals to supply its plant-based imitation meat to McDonald's, and Yum Brands restaurants. California-based Beyond said it would supply McDonald's a plant-based burger. The company will work with Yum Brands' KFC, Pizza Hut, and Taco Bell chains to develop new plant-based menu items. The deal puts Beyond Meat in position to benefit as coronavirus infection rates ease and more restaurants resume in-person dining. Beyond's business has suffered from restaurant closures, forcing it to increase its focus on supermarket sales. The company on Thursday reported a $25.1 million loss for the last quarter of 2020.