Tag: Economy

Will Italy’s Push For A Cashless Society Change Its Economy Forever?

The coronavirus pandemic has left Italy’s economy in a bad state, with the latest predictions foreseeing a -9% in GDP in 2020. At the same time, the online economy has limited the fall, leading to a +15% in the use of contactless payments and +80% of mobile payments compared to 2019. For the first time, Italy’s historic resistance to electronic transactions might be at a turning point. This is one of the reasons behind the country’s government decision to draft a plan in the direction of a ‘cashless society’, which is also meant to counter undeclared economic activity and tax evasion – a phenomenon that in Italy is worth 12% of the country’s GDP.

Even before the pandemic, Italy was not in good shape: it is at the 24th place out of 27 countries in the EU for number of digital payments, while about 80% of all transactions are still made in cash. Now, COVID-19 has provided a big push in the direction of an enhanced use of electronic money, also because it allows no contact with objects (currently for payments up to €25 ($29) there is no need to insert a pin code) and is therefore perceived as safer. 

While consumptions levels in the country have generally decreased in the first semester of 2020 (-27% in April, now recovering by 0.8% increase in August), at the same time the number of digital payments has boomed, reaching €31.4 billion ($37 billion) with contactless cards and €1.3 billion ($1.5 billion) with smartphone payments, according to the Innovative Payments Observatory at Milan’s technical university Politecnico. In total, the volume of all card transactions in the country is worth €118.3 billion ($139 billion). 

In order to capitalize on these results and push more towards electronic payments, the Italian government is about to implement a series of measures: the first novelty, called ‘cashback’ will allow customers to be refunded of 10% of all payment card transactions, up to a maximum of €1,500 ($1,700) per person every semester and €3,000 ($3,500) a year, until 2022. There is also a ‘supercashback’ prize of €3,000 ($3,500) for 100,000 citizens who will have used e-payments the most. Moreover, starting from January 2021, customers and retailers using electronic money in physical stores will be allowed to participate in a lottery with prizes between €5,000 ($5,900) and €5 million ($5.9 million), for a total of €300 million ($354 million). 

“Sanctions alone cannot lead to a change in behavior, while now the effort is to try to find measures that allow both consumers and retailers to pay with a card”, said Ivano Asaro, director of the Innovative Payments Observatory.

According to a study by the Bank of Italy, the public cost to sustain the use of cash in the country is worth €15 billion ($17 billion), about 1% of GDP. This is why reducing use of paper money is essential in the government’s mind. Part of the strategy is also to

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Big Law Firms Prosper Despite Covid-Impaired Economy

Lawyers at large law firms aren’t worried, as many Americans are, about job security while the coronavirus pandemic continues to upend everyday life. Some of them are even collecting extra bonuses.

Many large law firms have excelled financially this year, even as some clients in sectors ranging from hospitality to retail have suffered. The most elite firms say they are on track for a record year, thanks to hot practice areas like restructuring and public-offerings work, and many are doling out extra money to lawyers this fall.

Firm leaders and consultants attribute the stability to lawyers’ ability to easily work from home, business that comes from a range of industries and practice areas, and a major reduction in travel expenses.

“It’s like building bridges in wartime—you prefer a different environment,” said Robert Hays, the Atlanta-based chairman of King & Spalding LLP. “But we’ve built the bridge. So in terms of the business of the firm, we’re doing quite well.”

Robert Hays, the chairman of King & Spalding LLP.



Photo:

King & Spalding LLP

At 125 firms surveyed by Wells Fargo Private Bank’s legal specialty group, revenue rose an average of 6.4% in the first half of the year, compared with a year earlier. With demand roughly the same from last year, according to Wells Fargo, the boost stemmed from annual hourly-rate increases and momentum from a lucrative 2019. Net income, measured as the difference between revenue and expenses, rose 25.6% from a year ago.

The legal industry braced for the worst when the spread of the novel coronavirus sent much of the country into a shutdown this spring. Dozens of large firms cut salaries or furloughed staff while hoarding cash. Firm leaders say they wanted to avoid the deep cuts to lawyers and staff that were made following the 2008 financial crisis, moves that led to problems years later when law firms didn’t have enough lawyers at certain experience levels to work on assignments.

As spring turned to summer this year, firms realized their lawyers were still busy. One by one, firms that implemented austerity measures have reversed them in recent weeks.

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New York’s Cadwalader, Wickersham & Taft LLP took several measures in late March, completely halting distributions to partners and cutting other lawyer and staff pay by between 10% and 25%. By August, everyone’s pay was restored. “People understood,” said managing partner Patrick Quinn. “And the firm really pulled together.” Other firms also asked partners to make the biggest financial sacrifice.

Not all law firm jobs have been safe. Some furloughs have turned into layoffs, particularly for staff roles sidelined while everyone is working remotely. Legal blog Above the Law has tracked cuts at a few dozen firms, including Skadden, Arps, Slate, Meagher & Flom LLP, Baker McKenzie and Cleary Gottlieb Steen & Hamilton LLP.

Cleary said the decision reflected a review of staff functions that predates

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Economy Adds 661,000 Jobs, Strengthening Case for Safely Reopening Society

The Bureau of Labor Statistics reported Friday that the unemployment rate fell to 7.9% as the economy gained 661,000 jobs in September, continuing to show signs of recovery and make the case that policymakers must continue to allow more parts of society to safely reopen.  

Although the unemployment rate beat experts’ predictions of 8.2%, the number of new jobs fell below predictions, largely due to closures of public schools and a decline in temporary workers for the 2020 census.

However, positive revisions to the July and August jobs reports added 145,000 more jobs than previously reported.        

The new jobs report shows that temporary layoffs decreased by 1.5 million, down from the high of 18.1 million in April but still 3.8 million higher than in February.  

In addition, the number of Americans who permanently lost their job increased by 345,000 to 3.8 million; this number has risen by 2.5 million since February.  

>>> What’s the best way for America to reopen and return to business? The National Coronavirus Recovery Commission, a project of The Heritage Foundation, assembled America’s top thinkers to figure that out. So far, it has made more than 260 recommendations. Learn more here.

Unemployment rates declined in September for adult men (7.4%), adult women (7.7%), whites (7.0%), and Asians (8.9%), while the jobless rates for teenagers (15.9%), African Americans (12.1%), and Hispanics (10.3%) showed little change over the month.

The labor force participation rate, at 61.4%, fell by 0.3%, following increases in August and September. However, the U-6 unemployment rate—which measures both the unemployed who are looking actively for a job and those who are unemployed but not actively seeking work—fell from 14.2% in August to 12.8% in September.

The Bureau of Labor Statistics continued to conduct a supplemental survey to illustrate some of the changes we have seen since COVID-19 struck. The survey showed that in September, 22.7% of those employed teleworked, down from 24.3% in August.

In addition, 19.4 million Americans said they were unable to work, either in whole or part, because their employer closed or lost business due to the pandemic. This measure is down from 24.2 million. 

>>> Related: As Unemployment Dips to 7.9%, Differences Across States Show More Federal Stimulus Not Solution

About 4.5 million not in the labor force in September were prevented from looking for work due to the pandemic, down from 5.2 million. 

Here are some of the largest gains and losses by sector:

Leisure and hospitality: +318,000 jobs (food services and drinking places accounted for +200,000 of those gains)

Health care and social assistance: +108,000 jobs

Professional and business services: +89,000 jobs

Transportation and warehousing: +74,000 jobs 

Manufacturing: +66,000 jobs

Financial activities: +37,000 jobs

Construction: +26,000 jobs

Government: -216,000 jobs (mostly from losses in local government education, state government education, and temporary census workers)

Although for the most part this jobs report shows the economy headed in the right direction, it also presents tremendous opportunity. 

Some 10.7 million fewer Americans are employed than in February. 

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Economy Adds 661,000 Jobs, Strengthening Case for Safely Reopening

The Bureau of Labor Statistics reported Friday that the unemployment rate fell to 7.9% as the economy gained 661,000 jobs in September, continuing to show signs of recovery and make the case that policymakers must continue to allow more parts of society to safely reopen.  

Although the unemployment rate beat experts’ predictions of 8.2%, the number of new jobs fell below predictions, largely due to closures of public schools and a decline in temporary workers for the 2020 census 2020.

However, positive revisions to the July and August jobs reports added 145,000 more jobs than previously reported.        

The new jobs report shows that temporary layoffs decreased by 1.5 million, down from the high of 18.1 million in April but still 3.8 million higher than in February.  

In addition, the number of Americans who permanently lost their job increased by 345,000 to 3.8 million; this number has risen by 2.5 million since February.  

>>> What’s the best way for America to reopen and return to business? The National Coronavirus Recovery Commission, a project of The Heritage Foundation, assembled America’s top thinkers to figure that out. So far, it has made more than 260 recommendations. Learn more here.

Unemployment rates declined in September for adult men (7.4%), adult women (7.7%), whites (7.0%), and Asians (8.9%), while the jobless rates for teenagers (15.9%), African Americans (12.1%), and Hispanics (10.3%) showed little change over the month.

The labor force participation rate, at 61.4%, fell by 0.3%, following increases in August and September. However, the U-6 unemployment rate—which measures both the unemployed who are looking actively for a job and those who are unemployed but not actively seeking work—fell from 14.2% in August to 12.8% in September.

The Bureau of Labor Statistics continued to conduct a supplemental survey to illustrate some of the changes we have seen since COVID-19 struck. The survey showed that in September, 22.7% of those employed teleworked, down from 24.3% in August.

In addition, 19.4 million Americans said they were unable to work, either in whole or part, because their employer closed or lost business due to the pandemic.  This measure is down from 24.2 million. 

>>> Related: As Unemployment Dips to 7.9%, Differences Across States Show More Federal Stimulus Not Solution

About 4.5 million not in the labor force in September were prevented from looking for work due to the pandemic, down from 5.2 million. 

Here are some of the largest gains and losses by sector:

Leisure and hospitality: +318,000 jobs (food services and drinking places accounted for +200,000 of those gains)

Health care and social assistance: +108,000 jobs

Professional and business services: +89,000 jobs

Transportation and warehousing: +74,000 jobs 

Manufacturing: +66,000 jobs

Financial activities: +37,000 jobs

Construction: +26,000 jobs

Government: -216,000 jobs (mostly from losses in local government education, state government education, and temporary census workers)

Although for the most part this jobs report shows the economy headed in the right direction, it also presents tremendous opportunity. 

Some 10.7 million fewer Americans are employed than in

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