TIME energy

Oil Surplus Grows Even as Prices Plummet

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All the major oil producers may increase output this year

When the world gives you too much oil, drill for more.

That seems to be the motto of some of the most prolific oil producers today. Iraq, Russia, Latin America, West Africa, the United States, Canada – all may increase production this year, and by more than just balancing out the reduced production in war-torn Libya. On top of this, expect even more oil on the market if Iran comes to terms with the West over its nuclear program and is freed of the constraints of sanctions.

That’s the conclusion of Adam Longson, an oil analyst at Morgan Stanley writing in an e-mailed report on Jan. 5.

All this new oil is flooding a market already awash because OPEC has refused to cut its production cap below 30 million barrels a day – and is even exceeding that level – and the United States is pumping oil, mostly from shale, faster than it has in 30 years. This has caused the average price of oil to plunge more than 50 percent, from about $115 in June 2014 to just over $50 today.

This is creating an unmitigated bear market for oil, according to Morgan Stanley. “With the global oil market just passing peak runs and Libyan supply already at low levels, it’s hard to see much improvement in oil fundamentals near term,” its report said. “A number of worrying signs have already emerged, lifting the probability of our ‘bear’ case.”

One more sign is that Iraq’s production is at its highest level in more than three decades, now that Baghdad has finally reached agreement with Kurdistan to allow it to export oil through Turkey. And just before the New Year there were reports that Russian oil output has hit post-Soviet records without any sign of abating.

“We already have an ample supply of oil, and on top of that we see this increase from Iraq and Russia,” Michael Hewson, analyst at CMC Markets, a British financial derivatives dealer, told The Wall Street Journal. “The momentum clearly continues to be bearish for oil.”

But wait, there’s more, according to the Morgan Stanley analysis. It says to expect increased production at several oil fields in Brazil, Canada, the United States and in West Africa. And, according to Hewson, there’s no sign of increased demand, according to reports of anemic economies in China and Europe.

And then there’s the environment. The governments of many countries – including the world’s two hungriest fossil fuel consumers, China and the United States – are striving to meet various targets for lower greenhouse gas emissions. This new green approach is responsible for “anemic global growth” in demand for oil and an “upsurge in competing supply,” said David Hufton, the CEO of the broker PVM.

“[It] is very plain for all to see that oil supply growth exceeds oil demand growth and from a producer point of view, this imbalance has to be rectified,” Hufton told the Financial Times.

Carsten Fritsch, a senior oil and commodities analyst at Commerzbank in Frankfurt, agreed. “The easiest path for oil is down,” he told Reuters. “Almost all market news and the fundamental backdrop are negative, and it is difficult to see much upside at the moment.”

This post originally appeared on OilPrice.com.

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TIME energy

Here’s How Much Money Oil Companies Have Lost Due to Falling Prices

Exxon Mobil Corp. Gas Stations Ahead Of Earnings Figures
Bloomberg—Getty Images A Mobil gas station in Peoria, Illinois, on Oct. 29, 2014.

Together, Exxon Mobil and Chevron has shaved more than $95 billion from their combined market value since last summer

It has been a pretty rough six-month stretch for the energy industry. Crude oil prices have fallen about 55% since the middle of last summer, resulting in some of the world’s largest energy companies losing hundreds of billions of dollars in market value.

The price of crude oil has been relatively flat over the past two days, but it still sits below $50 per barrel — the lowest point in about 5 and 1/2 years — thanks to a global supply glut exacerbated by the ongoing U.S. shale boom as well as decreased oil consumption in Asia and Europe.

As oil prices have steadily declined, so too have the share prices of many large energy companies. Out of 24 oil, gas and coal producers in the Fortune 500, 22 saw their stock price decline between the beginning of July 2014 and Wednesday’s close. In total, the 24 companies lost more than $263 billion in market value combined, according to data from FactSet Research Systems. (A company’s market value is found by multiplying its share price by the number of its shares outstanding.)

Exxon Mobil and Chevron, the two largest U.S. energy companies, accounted for more than $95 billion of that figure as the two have seen their respective market values decrease by 11.7% and 17.9% in just over six months.

In terms of total lost market value, ConocoPhillips and Occidental Petroleum finished behind Exxon and Chevron, with more than $20 billion shaved off each of their respective market caps during the period — a 26% decline.

Only two of the qualifying companies on the Fortune 500 list actually improved over the past six months: Marathon Petroleum and Tesoro, both of which are oil refiners who benefit from lower crude prices.

Meanwhile, even coal producers have not been immune to the energy sell-off, as both Peabody Energy and Cliffs Natural Resources have seen their market values drop by more than half since July. And, Halliburton’s 44% stock dip since last summer is one example of how ancillary companies in the energy industry have been hit hard as well.

What’s more, the energy industry’s woes are likely far from over. While the broader stock market has rebounded sharply over the past two days, oil prices have yet to show significant improvement. In fact, some analysts see prices hitting $40 per barrel at some point in 2015 as oversupply in the global oil market shows little sign of abating.

This article originally appeared on Fortune.com.

TIME Economy

Unemployment Rate Drops to 5.6% as Employers Add 252,000 Jobs

Pedestrians walk by a now hiring sign posted in the window of a business on Nov. 7, 2014 in San Rafael, Calif.
Justin Sullivan—Getty Images Pedestrians walk by a now hiring sign posted in the window of a business on Nov. 7, 2014 in San Rafael, Calif.

December marked the 11th straight month of payroll increases above 200,000

U.S. job growth remained brisk in December, with employers adding 252,000 jobs to their payrolls after November’s outsized increase. The nation’s unemployment rate fell to 5.6% from November’s 5.8%.

December marked the 11th straight month of payroll increases above 200,000, the longest stretch since 1994. With a revised 353,000 jump in November, and October’s count also revised higher, the economy created 50,000 more jobs than previously reported in the prior two months.

“The U.S. is sort of an island of relative strength in a pretty choppy global sea. People are worried the problems abroad could afflict the U.S., but our domestic fundamentals are pretty sound and should outweigh that,” said Josh Feinman, chief global economist at Deutsche Asset & Wealth Management in New York.

December’s gains capped a strong year for hiring. With another job creation number over 200,000, employment gains for 2014 at around 3 million — the largest since 1999.

A five cent drop in average hourly earnings after rising six cents in November, took some shine off the report.

Wage growth has been frustratingly tepid and economists believe the Federal Reserve will be hesitant to pull the trigger on raising interest rates without a significant increase in labor costs.

The U.S. central bank has kept its short-term interest rate near zero since December 2008. It has not raised interest rates since 2006, but recently signaled it was moving closer to hiking, even if inflation remains below the Fed’s 2.0 percent target. Most economists expect the first rate increase in June.

But an acceleration in wage gains is in the cards as the labor market continues to tighten.

That, together with lower gasoline prices are expected to provide a tail wind to consumer spending this year.

“As the labor market moves closer to full employment … we are likely to see firms increase wages. We have already started to see some of that,” said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.

Most of the measures tracked by Fed Chair Janet Yellen to gauge the amount of slack in the labor market have pointed to tightening conditions and would be again under scrutiny.

A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment is at six-year lows, the labor force appears to have stabilized, while the ranks of the long-term unemployed are also shrinking.

—Reuters contributed to this report

This article originally appeared on Fortune.com

TIME Economy

U.S. Employers Laid Off the Fewest People in 17 Years in 2014

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Data are the latest indicator that the U.S. labor market is performing well

Job cuts announced by U.S.-based employers last year were 5% fewer than in 2013 and the lowest annual total since 1997, the latest indicator that the U.S. labor market is performing well.

Overall, employers announced job cuts totaling 483,171 in 2014, down from 509,051 cuts announced the prior year, according to a report by global outplacement firm Challenger, Gray & Christmas.

“Layoffs aren’t simply at pre-recession levels; they are at pre-2001-recession levels,” said John A. Challenger, CEO of the firm. “This bodes well for job seekers, who will not only find more employment opportunities in 2015, but will enjoy increased job security once they are in those new positions.”

Challenger’s report pointed out that while the economy and employment has grown in 2014, no job is ever truly secure as the nation still averaged about 40,000 planned job cuts per month. That’s because companies restructure their operations, announce cost-cutting moves or cut jobs when mergers and acquisitions are completed.

Notably, the tech sector, a relatively strong performer in the economy, saw the heaviest downsizing last year. That sector announced 59,528 planned layoffs. Challenger said that was a 69% increase from a year ago. Much of that downsizing was due to plans announced by Hewlett-Packard and Microsoft to each cut thousands of jobs. With both of their traditional businesses heavily tied to the PC world, the companies are pivoting to compete as the tech market moves to mobile devices where other rivals are stronger.

Job cuts in the retail sector declined by 11% in 2014 but the industry still ranked second. The third-ranked health care sector also posted fewer layoffs in 2014, Challenger said. Meanwhile, the largest increases in job cuts occurred among employers in the entertainment industry and electronics, where job cuts in 2014 more than doubled for both.

“We expect downsizing to remain subdued in 2015, as a growing number of employers turn their attention toward job creation,” Challenger said.

The biggest potential threat? Falling oil prices, which could result in higher job cuts in one of 2014’s star performers: the energy sector. Energy related layoffs only totaled 14,262 last year. In a nod to that possible soft spot, Challenger pointed to an announcement earlier this week that U.S. Steel would be laying off 756 employees due to soft demand related to weak oil prices.

“Lower prices mean less money for research, exploration and new drilling operations,” Challenger said. “However, the slowdown in oil-related industries may be more than offset by the extra dollars in consumers’ pockets as they shell out less money for gas and heating oil. The money not spent at the pump can be used for consumer goods, travel, home improvement, and dining out. Furthermore, continued low gas prices could spur an increase in SUV sales. All of these are going to have an immediate and positive impact on the job market and hiring.”

This article originally appeared on Fortune.com

TIME Companies

The Biggest Problem American Business Is Facing in 2015

TIME.com stock photos Money Dollar Bills
Elizabeth Renstrom for TIME

In order to remain competitive on the world stage, America’s top companies need to take the lead in addressing economic inequality

As 2015 progresses, an improving U.S. economy should buoy markets and provide hope for the business sector. However, before we pop the champagne, it is worth remembering that the past year has also been a turbulent one. Economic inequality continues to widen and worker strikes, once rare, are now increasing in frequency.

The reality is that despite gains in profitability and shareholder value, American businesses could experience a serious labor problem in the near future, and the sooner it is addressed it, the better.

Broadly speaking, there are three factors working against the U.S. right now. The first is an aging population, which not only threatens to burden the system with greater costs in terms of social benefits and pensions, but also a shortage of younger people to fill jobs. Exacerbating this is the fact that the working age population in the future, composed of millennials (and their successors) will require better work benefits, including flexible schedules, higher pay, and room for creativity, in order to feel motivated – a phenomenon that will make it more difficult for companies to secure and retain talent.

By contrast, China and India have vast untapped labor pools, and 65% of India’s population is currently 35 or under, ensuring a young and dynamic labor force for decades to come. This has historically benefited the U.S. through cheap labor, but that could change as these economies become stronger and wage levels rise in response. In addition, Chinese and Indian companies have themselves begun to compete aggressively in the global arena with the workforce behind them to support it, which could put their American counterparts at a disadvantage.

The combination of these factors and a growing perception amongst low and middle income workers of economic unfairness could lead to a crisis of worker availability and competitiveness for U.S. companies within the next few decades unless employers can reach a balance between profitability and compensation that will motivate workers. This is particularly important in the arenas of fast food and retail, which require a large labor force but where wage levels are typically low and a source of escalating friction between companies and their employees, but could effect other sectors as well.

Unfortunately, we keep looking towards the government for a solution, which is a mistake. In today’s hyper-partisan environment of Capitol Hill, compromise on a politically charged issue like wages on which Democrats and Republicans fundamentally disagree is nearly impossible. Moreover, the idea of taxing our way to economic equality, advanced by economists like Thomas Piketty and even Microsoft founder Bill Gates, is unrealistic. Even if it was politically feasible, additional taxation would do little to bridge the gap between employers and workers.

That can only be accomplished by a concerted effort to understand and address the needs of workers by companies themselves, and requires the participation of our most influential business leaders.

For too long, the debate over fair wages has remained stuck in the quagmire of ideology (on both sides), but what is really required is the recognition by the CEOs who run our major corporations of the direct link between worker compensation and the future profitability of their businesses. The reason this is so critical is that our biggest companies set wage levels in their sectors and so only through their participation can a true market-driven solution be found to this pressing problem.

Sanjay Sanghoee is a business commentator. He has worked at investment banks Lazard Freres and Dresdner Kleinwort Wasserstein, at hedge fund Ramius Capital, and has an MBA from Columbia Business School. Follow him on Twitter @sanghoee

TIME food and drink

American Consumption of Cookies in Severe Decline

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Consumers are passing on processed baked goods in favor of healthier options

Much of America’s health news over the past decade or so has revolved around the obesity epidemic. We’ve identified many possible culprits such as fast food and a more sedentary lifestyle, but sugar has taken a lot of the brunt of the criticism.

So maybe we shouldn’t be surprised how much cookie consumption has declined over that same period. A study published in the Journal of the Academy of Nutrition and Dietetics looked at products known as “ready-to-eat grain-based desserts” – also known as RTE GBDs – that include pre-packaged baked goods like cookies, cakes, pies, donuts and other pastries. What they found was that, between 2005 and 2012, sales of these products declined by a massive 24%.

Health experts consider this the good news. The bad news, according to EurekaAlert!, is that “there has been little change in the nutritional content of RTE GBDs manufactured or purchased” during that same period. This could mean that companies could sell more of their sweet products if they’d just make them a bit healthier. If this severe decline in cookie consumption bothers you there is still a few more days left in the year to eat a lot of Christmas cookies. Enjoy!

[h/t Grub Street]

This article originally appeared on FWx.

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TIME Economy

Private Sector Adds More Than 2.5 Million Jobs in 2014

At the current pace of job growth the economy could return to full employment by this time next year

The U.S. private sector has added more than 2.5 million jobs last year, and some economists say that if the pace of hiring continues, the nation could return to full employment by this time next year.

The rosy view can be attributed to the latest employment figures reported by payroll processor Automatic Data Processing and analysis provider Moody’s Analytics. Their report shows private-sector payrolls in the U.S. jumped by 241,000 in December, surpassing the 235,000 increase projected by economists. The U.S. private sector has now added more than 200,000 jobs for four consecutive months.

“At the current pace of job growth, the economy will be back to full employment by this time next year,” said Mark Zandi, chief economist of Moody’s Analytics. Full employment is when all, or nearly all, people who are willing and able to work are able to do so.

The gain in December was fueled by small businesses, which added 106,000 jobs last month. ADP defines small businesses as those that employ fewer than 49 people. Medium-sized businesses added 70,000 jobs last month, while large businesses (which employ 500 or more people) added 66,000.

By sector, the professional/business services and the trade/transportation/utilities industries added the most jobs in December, the report showed. Construction, manufacturing and financial activities employers also added to their payrolls.

The labor market had a stellar 2014, with gains in hiring across a range of sectors as U.S. economic growth encouraged many employers to add jobs. 2014 has been the best year for job gains this millennium, as Fortune previously reported.

The ADP report is issued two days before the federal government’s monthly jobs report, which includes the unemployment rate. Economists predict that Friday’s December jobs report will show U.S. hiring swelled by 245,000, while the nation’s unemployment rate is expected to dip to 5.7% from 5.8%.

This article originally appeared on Fortune.com

MONEY Economy

Why Your Paycheck May Not Grow With the Economy

500lb weight on top of money
Kiyoshi Togashi—Alamy

Though the job market is improving, workers might have to wait a while longer to see those big raises they've been waiting for.

You may have heard that the U.S. economy is back. The nation’s gross domestic product grew by 4.6% and 5% in the last two quarters—the strongest increase since 2003; Americans are more confident about the economy than at any time since the recession; and gasoline prices are as low as they’ve been in more than five years, amounting to a huge tax break for consumers and businesses.

No wonder employers felt strong enough to add 321,000 jobs to the economy in November, while the unemployment rate was at a post-recession low of 5.8%.

Still, many workers have not seen a pick-up in pay even as the employment climate has improved. In fact private sector wages declined by 5 cents (or by 0.2%) in December, despite the economy adding 252,000 jobs.

Total compensation, which includes benefits like medical insurance, rose 2.1% from the same period a year ago. That’s actually a slight uptick from the post-recession norm, but well below pre-2008 levels.

Which is weird. As demand for workers improves, and the unemployment rate declines, you’d expect inflation to rise and wages to increase.

One reason why wages have grown so slowly is that for much of the recovery there’s simply been a lack of demand for goods from consumers as many Americans worked to get out from the terrible effects of the housing crisis.

Since my spending is your income, more dollars saved and fewer spent mean less economic activity resulting in a weaker labor market. And since the Federal Reserve already dropped short-term interest rates to practically zero, and Washington lawmakers are reluctant or disinterested in further fiscal stimulus, marginal relief is coming from D.C.

Another explanation might have to do with the nature of compensation.

In a recent report, the Federal Reserve Bank of San Francisco highlighted the notion of “sticky” wages.

The argument goes: Since businesses were unable to reduce wages as much as they wanted when the economy got really bad five years ago (short of firing people), they are now not inclined to raise salaries as the economy lifts off.

If wages are rigid against a terrible economy, they’re stagnant (at least for a while) when the tide turns. “Businesses hold back wage increases and wait for inflation and productivity growth to bring wages closer to their desired levels,” says the report authors’s Mary Daly and Bart Hobijn. “Since it takes some time to fully exhaust the pool of wage cuts, growth remains low even as the economy expands and the unemployment rate declines.”

While there’s a bit of rigidity to all wages, the authors found “industries with the most downwardly rigid wage structures before the recession have seen the slowest growth during the recovery.” This means that businesses that were able to lower pay when revenues dried up have been more likely to increase wages as the good times returned.

So people in the wholesale trade business (truck drivers to sales reps) saw wages increase relative to pre-recession levels, while those in construction have to make due on less income.

What does this mean for workers?

“The rigidity of wages in a number of sectors has shaped the dynamics of unemployment and wage growth and is likely to do so until labor markets have fully returned to normal,” per Daly and Hobijn. And with still elevated levels of the long-term unemployed, high numbers of workers in part-time positions that want full-time ones, and fewer people quitting their jobs than before the recession, we’re still in not normal labor market territory.

Investors, especially older ones with larger holdings in fixed-income, should take note, too. Without higher inflation, and especially wage growth, the Federal Reserve is likely to delay raising rates.

While recent Fed meetings minutes have been interpreted as having a more hawkish tone, rates aren’t likely to rise (or rise quickly) while workers still struggle to make up lost ground.

Updated to reflect on Jan. 9 jobs report.

TIME energy

Saudi Arabia Facing Largest Deficit in Its History

map-flag-saudi-arabia
Getty Images

Oil prices have been dropping since June because of a market glut

The nearly 50 percent plunge in the price of oil during the past six months is expected to leave oil-rich Saudi Arabia with its first budget deficit since 2011 and the largest in its history.

The budget, announced on Dec. 25, will include spending during fiscal 2015 of $229.3 billion, higher than in 2014, despite revenues estimated at only $190.7 billion, lower than in the current fiscal year. That would leave a deficit of $38.6 billion.

Oil prices have been dropping since June because of a market glut, caused in part because of prodigious oil extraction in the United States from shale formations.

As a result of this glut, OPEC was urged to cut production levels at its Nov. 27 meeting in Vienna in an effort to shore up prices, but wealthy members of the cartel, led by Saudi Arabia, decided to keep production at its nearly two-year-old level of 30 million barrels a day.

Saudi Oil Minister Ali al-Naimi has since explained that the OPEC strategy was to reclaim market share. Fracking has made the United States, once the cartel’s largest customer, nearly self-sufficient in oil. But fracking is expensive, and many believe it can’t be profitable if the price of oil falls much below its current level of around $60 per barrel.

Oil is the principal, if not the only, resource in Saudi Arabia, so it’s clear that the price of oil has a strong influence on how the country’s annual budget is drawn up. Different analyses, however, provide different answers to how Riyadh has forecast the commodity’s value. Four of these reports say the Saudi budget is predicated on oil averaging $55 to $63 per barrel in 2015.

One, from the Saudi investment bank Jadwa Investment, said the budget shows that the kingdom expects its oil exports to average $56 per barrel in 2015. Monica Malik, the chief economist at Abu Dhabi Commercial Bank, agrees, putting Saudi oil expectations at $55 per barrel.

The National Commercial Bank, the largest financial institution in Saudi Arabia, said the Finance Ministry expects a price of $61 per barrel. And Emad Mostaque, an oil strategist at Ecstrat, which consults for emerging markets, said the kingdom expected a price of $63 per barrel.

One particularly knowledgeable analyst is John Sfakianakis, the former chief economic adviser to the Saudi Finance Ministry. He told the London-based Arabic-language newspaper Asharq Al-Awsat that the budget is predicated on oil prices that are appreciably higher, averaging about $75 per barrel in 2015 while keeping production steady at 7 million barrels per day.

“What happened is a surprise to some extent, for amid this huge decline in the price of oil, the majority of people believed that the Saudi budget would base its projected revenues on $60 per barrel,” Sfakianakis said.

“When Saudi Arabia bases its projected oil revenues for next year on $75 per barrel, it is sending a strong message to the market that it expects oil prices to rebound next year,” Sfakianakis said.

This post originally appeared on OilPrice.com.

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TIME Economy

The Left’s Opening Gambit for 2016 Is All About Your Paycheck

Elizabeth Warren
Cliff Owen—AP Elizabeth Warren Sen. Elizabeth Warren ponders the nation's problems at a Senate Banking Committee hearing on anti-money laundering on March 7, 2013.

The unifying value for progressives in 2016? Wages, if leaders like Elizabeth Warren and Richard Trumka have anything to say about it

See correction below.

If unemployment and slow growth were the central economic issues of the last presidential election cycle, wage stagnation and inequality are shaping up to be the focal point of 2016. The U.S. is now solidly in recovery, posting 5 % GDP growth in the third quarter of last year. But growth isn’t necessarily the same as shared prosperity. Inflation-adjusted middle class incomes have actually gone down for the last decade, something even the most rabid free market advocates won’t quarrel with statistically. And working class wages have been stagnant for much longer than that. (On balance, men with only high school degrees haven’t gotten a raise since 1968.) In an economy made up of 70 % consumer spending, that’s obviously an economic problem: no spending equals no business investment equals no jobs equals no spending…you get the picture. But inequality is increasingly taking on social and cultural dimensions, evident in everything from the debate over immigration to the killings that have rocked Ferguson and New York.

Put simply, chronically flat wages are no longer just about the lifestyle divide between the 1 % and everyone else. They’ve become an issue of social justice, democracy, and stability.

The question is, who has an answer to the problem? Liberals will be taking a first crack at it this Wednesday (Jan. 7) at the AFL-CIO-sponsored summit on Raising Wages. As Massachusetts senator Elizabeth Warren, who’ll be giving the keynote address, told me in an exclusive interview in advance of the summit, “Things are getting better, yes, but only for some. Families are working harder, but not doing better. And they feel the game is rigged against them–and guess what–it is!”

In her speech, Warren will be talking through numbers from a database compiled by French academic Thomas Piketty (author of the best-selling Capital in the 21st Century) showing that while 90 % of the workers in the US shared 70 % of all new income between the 1930s and 1970s, things started to change in the 1980s, with the 90 % capturing essentially zero percent of all new income since then.

Funny enough, that’s around that time that the laissez faire economic policies advocated by President Reagan, and later, President Clinton’s administration, took off. Former Treasury Secretary Bob Rubin was the one who lobbied Clinton to roll back the Depression-era Glass-Steagall banking regulation that many (like Warren) believe was a key factor in the financial crisis (which, in and of itself, greatly exacerbated inequality, particularly for African American and Latino families). He and other Clinton advisors like Larry Summers also crafted changes in tax policy that allowed for the growth of stock options as the main form of corporate compensation, a trend that Piketty, Nobel laureate and former Clinton advisor Joseph Stiglitz and many other economists believe has been a reason for growing inequality. I asked Warren if she blamed such Rubinesque policies for our current wage stagnation problem. “I’d lay it right at the feet of trickle down economics, yes. We’ve tried that experiment for 35 years and it hasn’t worked.”

Which will be an interesting challenge for Hillary Clinton, the presumed Democratic front-runner for 2016, and those in her orbit to overcome. Neera Tanden, the policy director for Clinton’s 2008 presidential campaign, now head of the left wing think tank Center for American Progress, will also be speaking at the AFL-CIO summit and, next week, CAP will be debuting a brand new report on what can be done about wage stagnation. The report was spearheaded by none other than Larry Summers. When I mention to Tanden that many people might not associate Summers with “inclusive growth,” she insists that the document is “quite progressive” and that “he’s been right there with it.” This echoes what I’ve heard from other economic insiders about Summers shift away from his historic (some might say infamous) work in financial alchemy and toward more populist concerns like worker wages.

If this conversion has in fact taken place it could be described as either Biblical, or, given current public sentiment around Wall Street, opportunistic. CAP’s report will focus on what the US can learn from other developed countries like Australia, Canada, and Sweden, which have managed to keep worker wages relatively high in the face of globalization and technological disruption. It’s worth noting that they also have much more sensibly managed financial systems than the US.

One thing that all the VIP summit participants, including AFL-CIO president Richard Trumka, seem to agree on: the US is the outlier in developed economies in viewing workers as “costs” rather than “assets to be invested,” as Trumka puts it. It’s a philosophy that underscores America’s focus on the rights and profits of investors to the exclusion of everyone and everything else. It’s a mythology that will be under fire in 2016, as workers, business people, and politicians alike are beginning to question the viability of a system that encourages inequality-bolstering share buybacks rather than real economy investment, and a chase for quarterly profits over what’s best for the economy–and society—at large. On that note, Trumka will be announcing some big policy steps to put the wage issue front and center in the 2016 election conversation. “We want to establish raising wages as the key, unifying progressive value,” he says. “We want wages to be what ties all the pieces of economic and social justice together.” Sounds like a rallying cry to me.

Correction: A previous version of this story incorrectly stated the date of Hillary Clinton’s presidential campaign.

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