Puerto Rico's governor said the island cannot pay its $72 billion debt. Add high unemployment to the equation, and that's a bleak economic picture+ READ ARTICLE
Things aren’t looking good for the Isle of Enchantment. Puerto Rico is in 3½ times as much debt as Detroit was in when it filed Chapter 9 bankruptcy in 2013. The island’s $72 billion debt is larger per capita than any state, but the island’s government can’t file bankruptcy like Detroit did because only cities are allowed to file Chapter 9. Puerto Rico’s governor, Alejandro Garcia Padilla, said the island’s debts are not payable, and that he needs to pull it out of a “death spiral.” This is bad news for mainland consumers as 70% of American mutual funds have Puerto Rico bonds.
An Iranian nuclear deal could bring an influx of oil, but when and how sanctions are lifted could also affect prices.+ READ ARTICLE
The deadline for a nuclear deal is June 30, which could lead to the lifting of sanctions on Iran. Oil is believed to make up 80% of Iran’s exports, and current sanctions have chopped those exports in half. Iran could potentially add another 800,000 barrels of oil a day to the market within six to nine months, according to Robin Mills, an energy strategist for Manaar Energy. Even though the potential for pumping oil in Iran is strong, deal makers are pushing for sanctions to be lifted gradually instead of immediately.
Read next: Gas Prices Have Probably Peaked for the Year
The fast-growing ridesharing service could be on the hook for plenty of new expenses.+ READ ARTICLE
A former Uber driver in a labor dispute with the company was not an independent contractor, the California Labor Commissioner has ruled. That means the fast-growing ridesharing service could be on the hook for minimum wage payments, unemployment insurance, and other job-related expenses.
The California Labor Commissioner’s ruling stated, in its analysis,
Defendants [Uber] hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation. The reality, however, is that Defendants are involved in every aspect of the operation….
Defendants control the tools the drivers use….
The passengers pay Defendants a set price for the trip, and Defendants, in turn, pay their drivers a non-negotiable service fee….Defendants alone have the discretion to negotiate [a cancellation fee] with the passenger. Defendants discourage drivers from accepting tips because it would be counterproductive to Defendants’ advertising and marketing strategy.
…Aside from her car, Plaintiff [Barbara Ann Berwick, the driver in the case] had no investment in the business….But for Defendants’ intellectual property, Plaintiff would not have been able to perform the work.
In light of the above, Plaintiff was Defendants’ employee….
Correction: A previous version of this post, including a video, stated that the California ruling applied to “Uber drivers.” In fact, it applied to a single driver, Barbara Ann Berwick.
Are markets efficient? Yes and no, says Robert Shiller.+ READ ARTICLE
The stock market goes through big swings, commonly known as bubbles. Nobel economist Robert Shiller says these swings are the normal cycle of the market, but they don’t necessarily mean the market is inefficient. If a $10 bill is lying on the sidewalk, you’re going to pick it up, but when is the last time you actually saw a $10 on the sidewalk? Which leads to the classic joke about the economist who’s walking down the street.
A new report from the Federal Reserve reveals how much U.S. households' wealth has risen.+ READ ARTICLE
The report showed net worth went up by $1.6 trillion between January and March 2015, which brings our collective net worth to $84.9 trillion. A sizable portion of the increase came from real estate, estimated at $503 billion. Household-owned stocks and mutual funds accounted for $487 billion. The takeaway from these numbers is that Americans, as a whole, are doing well. But although the report may look good, we don’t know who exactly is doing well. Job growth has, overall, come from low-wage jobs while the middle class stagnates.
What's inflation? How is it calculated? And how does it affect your life? Money's Pat Regnier has the answers.+ READ ARTICLE
In this Money 101 Explainer, editor Pat Regnier walks through how inflation, the rate of change in the prices you pay for everything in your life, is calculated. He also explains why you might feel that inflation is worse than the government tells you it is, and why a big jump in housing prices might not be a sign of inflation. Also covered are how taxes and Social Security benefits can be linked to inflation, and why the Federal Reserve pays close attention to it.
A look at the monthly employment reports and what they mean.+ READ ARTICLE
The unemployment rate can often be used as a measure of how tough or easy it may be to get a job at a certain time. That one number, however, paints a picture that’s a little too simplistic. The unemployment rate fails to include people who have given up looking for work and those who consider themselves underemployed. To get a clearer picture, look at the employment growth number and the unemployment rate together.
Why do a mashup of cellphone service and satellite TV?+ READ ARTICLE
The merger news comes on the heels of the failed Time Warner Cable/Comcast merger. Though the deal is technically in the formative stages, the two companies have already determined who would lead the new company: T-Mobile’s offbeat CEO John Legere will remain CEO, while Dish Network’s Charlie Ergen would become chairman. Dish has billions of dollars of wireless licenses, and T-Mobile has the cell network to put those licenses to use. Re/code’s Ina Fried, however, says this merger is like two people who hook up because they are the last ones left in the bar at closing time.