Business

(NEW YORK) — Near-historic price increases for basics like food and gas have drawn scrutiny to a question at the heart of the economy: How much money must a worker make to stay afloat?

The price of eggs has risen nearly 50% over the last year; while the cost of milk and bread have each jumped about 15%. Even after falling from a summer peak, gas prices remain 10% higher than a year ago.

While price increases have slowed in recent months, they continue to hover near a 40-year high.

For some, a pay hike has softened the blow. Nearly half of U.S. states raised their minimum wages at the outset of 2023. Meanwhile, some major companies have recently upped their entry-level pay. Target, for instance, hiked its base wage to $24 an hour last year.

As cost increases persist and workers try to keep up, buzzwords like “poverty wage,” “minimum wage” and “living wage” are coming back into the lexicon, shaping conversations about what it means to make enough and who decides where to draw the line.

But the definitions and implications of these terms can get overlooked, muddying a centuries-old issue that affects workers and employees alike.

“Ultimately, this boils down to a philosophical question of what the bare necessities really are,” Steve Allen, an economist at North Carolina State University’s Poole College of Management, told ABC News.

Here are the differences between a poverty wage, a minimum wage and a living wage; and why they matter:

Poverty wage

A poverty wage is a level of pay that would put a full-time worker below the U.S. poverty line, an income threshold set by the federal government each year.

The government began to measure the threshold in the mid-1960s, soon after then-President Lyndon Johnson declared a “war on poverty.” Mollie Orshanksy, an employee at the Social Security Administration, developed the measure by multiplying the cost of food by three, since at the time many economists believed that food costs should make up a third of a household’s budget.

“Lyndon Johnson needed a way to demonstrate what people needed to live on,” Amy Glasmeier, a professor of economic geography at the Massachusetts Institute of Technology and the creator of a living wage calculator, told ABC News.

The method of calculating the poverty line has remained the same over the ensuing decades, but officials have updated the measure each year to adjust it for inflation. The poverty line is a uniform measure for all 48 states in the continental U.S. and Washington D.C., but the federal government has developed separate measures for Hawaii and Alaska.

Many economists regard the poverty line as antiquated since it extrapolates overall financial circumstances from a single category of costs and remains uniform regardless of cost-of-living differences between regions, Glasmeier said.

“National data puts New York together with Tupelo, Mississippi,” she said. “That’s about the difference between Mars and America.”

The poverty line is used to determine whether people qualify for a host of federal benefit programs, including the Supplemental Nutrition Assistance Program, or SNAP, which is commonly referred to as food stamps; as well as assistance for school lunch.

Last year, the poverty line for a one-person household was $13,900, which when spread over the number of hours a full-time employee works in a given year, comes out to about $6.80 per hour.

Health and Human Services, a federal agency, will release the 2023 poverty line later this month.

Minimum wage

The minimum wage is the lowest legal pay rate that a company can offer its employees. Crucially, the minimum wage does not derive from a calculation of the subsistence level for a given region or household size, but rather is set by elected officials within a federal, state or local government.

“When employers are saying, ‘How much do I have to pay?’” Glasmeier said. “That’s the minimum wage.”

The U.S. set its first federal minimum wage at $0.25 in 1938, amid the depression, when jobs were scarce and workers lacked leverage.

The federal minimum wage, which was last raised in 2009, stands at $7.25 an hour. When adjusted for inflation, the federal minimum wage last summer reached its lowest level since 1956, the left-leaning Economic Policy Institute found.

Thirty states have raised their minimum wage above the pay rate guaranteed by the federal government, including 23 states that imposed a price hike at the start of this year. Washington is the state with the highest minimum wage, offering workers $15.74 per hour.

In addition, 27 cities and counties raised their minimum wage at the outset of this year, stretching from San Diego, California, to Portland, Maine. The city with the highest minimum wage, SeaTac, Washington, raised its base pay to $19.06.

The nationwide push for minimum wage hikes intensified a decade ago, when fast food workers launched a campaign, called Fight for $15, aiming to raise wages and unionize the fast food sector.

Living wage

A living wage is a pay rate that would allow a given worker or household to afford its basic needs, such as housing, food, health care and transportation.

Unlike the poverty line, which extrapolates a national baseline subsistence based on food costs, a living wage typically derives from a more complicated calculation that takes into account additional expenses as well as cost-of-living differences across regions.

A living wage usually exceeds the poverty wage, since it takes a more expansive view of household expenses, including the need for savings in the event of a financial emergency, Allen said.

“It takes into account a broader set of expenditures that they feel are the bare necessities,” he said. “It includes enough that the household can be in a position to save something.”

There is no single, authoritative living wage measure. A popular example is the Living Wage Calculator at Massachusetts Institute of Technology, which Glasmeier created.

The calculator first asks users to input their location, such as a city or metro area, allowing the metric to incorporate specific regional costs. The metric also offers multiple figures that correlate with the number of adults and children within a given household.

In New York City, for instance, the living wage for a household with one adult and no children stands at about $22.70. In Montana, a living wage for the same household stands at about $16.30.

Living-wage metrics help Americans understand how much money it takes to afford basic necessities, Glasmeier said.

“As a nation, we’re only as good as the conditions of our people,” Glasmeier said. “This information should be a reflection of what is needed, because otherwise it’s arbitrary – and there are always losers.”

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(NEW YORK) — Student loan borrowers could soon pay less money back on their loans and be on the hook for a shorter amount of time, should a new Biden administration rule take effect later this year.

The Department of Education on Tuesday began the regulatory process to bring the new loan repayment program into effect — but the exact timing for when student borrowers could take advantage of the new system wasn’t clear.

The process could take any number of months, though it will likely not be finalized before springtime at the earliest, a source familiar with the discussions said.

Under the new plan, the lowest-income borrowers would see their payments fall by about $0.83 per each dollar they owe, the Department of Education estimated. The highest-income borrowers would see their payments per dollar fall by about $0.05.

It would revise a payment program in which roughly eight million Americans are enrolled in, known as the income-driven repayment plan. It ties the amount borrowers owe each month to the amount they make in income.

“Today, we’re making a new promise to today’s borrowers and to generations to come: your student loan payments will be affordable. You won’t be buried under an avalanche of student interest. And you won’t be saddled with a lifetime of debt,” Secretary of Education Miguel Cardona said on a call with reporters.

At their core, the revisions to the program are intended to allow Americans to pay back less in loans over time.

“It means money in the pockets of hard-working Americans,” Cardona said.

It will require smaller minimum payments from borrowers, including $0 in payments from low-income Americans. It will also keep interest accrual more at bay and allow debts to be forgiven sooner — between 10 and 20 years after they were taken out.

Department of Education Undersecretary James Kvaal called it the first “true student loan safety net in this country.”

The new plan was first announced alongside President Joe Biden’s student debt relief policy, which has since been bruised by court challenges. Temporarily halted, its fate will be decided by the Supreme Court by the summer.

But Cardona on Tuesday called the revisions to the loan repayment program the most influential part of the Biden administration’s plan.

Exactly who does this impact, and how?

The new plan would prevent single low-income Americans from having to make any monthly payments if they make less than the annual equivalent of $15 an hour, which is around $30,600 a year. For a married couple with two kids, that would rise to $62,400.

“Workers getting by on $15 an hour often struggle to pay for their housing, food and other basic needs, let alone student loan payments,” Kvaal said.

The new repayment plan would mean they aren’t required to.

It would also cut down the amount that borrowers have to make on their monthly payments by half — from 10% of their discretionary income to 5%, which would protect more of peoples’ incomes from being put toward loan payments.

The new plan also prevents interest accrual, one of the largest issues borrowers face, by forgiving unpaid interest so long as borrowers make their monthly payments on the loan itself.

“As you make your payments, your balance won’t grow. In other words, you won’t go deeper into debt because interest is more than you can afford,” Kvaal said.

The timeline for some debt forgiveness will also be shortened under the new plan, especially for community college students.

After 10 years, the new plan would relieve outstanding debts for people who took out less than $12,000 in loans initially — commonly students who attend less expensive, shorter programs like community college.

The Department of Education estimated that 85% of community college students would be debt-free within 10 years, if they enrolled in the new plan.

And, as is already the rule with the income-driven repayment program, all borrowers with outstanding debt after 20 years of payments would have their debt relieved. (For graduate students, the timeline is slightly longer — 25 years).

How much will the program cost?

The department estimated that the new plan will cost a net total of $137.9 billion over the next 10 years.

That cost increase comes after Congress has already decided to keep the budget flat for the Office of Federal Student Aid during the upcoming year — potentially putting programs on thin ice.

Asked if the Department of Education could still afford the reforms to the IDR plan, a senior administration official said they were still working through the “full impact” but that it was their goal.

“It’s true that we were very disappointed with the level of funding we received from Congress for Federal Student Aid, and that’s going to make it a challenge for us to carry out a number of our policy initiatives,” the senior administration official said.

“We’re currently working through the full impact of the funding level that we received from Congress. And again, our goal is to implement this IDR plan in 2023,” the official said.

Critics of the new plan argue that it could cost even more if it incentivizes more people to take out student loans by changing the rules in borrowers’ favor.

“The changes mean that most undergraduate borrowers will expect to only repay a fraction of the amount they borrow, turning student loans partially into grants,” Adam Looney, a senior fellow at the Brookings Institute, wrote in September, when the plan was first announced.

“It’s a plan to reduce the cost of college, not by reducing tuition paid, but by offering students loans and then allowing them not to pay them back,” he said.

But a senior administration official pushed back on that criticism.

“Almost every time there is a change in student loans to make the terms more generous for students, people talk about moral hazards and potential abuse of the program and there’s just, you know, there’s just no evidence that those predictions have ever come to pass,” the official said.

The department was attempting to change the repayment system because Americans are taking on higher debts than ever before, the official said.

“And the result has been that student debt makes it difficult, even for college graduates, to climb into the middle class, buy a home, start a family, and that many students are left worse off because of their student debt than if they had never gone to college at all,” the official said.

“So our goals are to address those challenges, which are very real,” the official added.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — The U.S. Consumer Product Safety Commission is once again warning parents and caregivers not to use any models of Fisher-Price’s Rock ‘n Play sleepers, a type of chair used to soothe and rock infants to sleep.

The safety agency released the repeat announcement Monday, nearly three years after the Rock ‘n Play sleepers were first recalled in April 2019.

The recall applies to approximately 4.7 million sleeper products, many of which were sold between 2009 and 2019 at major retailers such as Target and Walmart and online on e-commerce sites like Amazon.

The sleepers were recalled in 2019 after 30 children were reported to have died after they were placed in a Rock ‘n Play sleeper and “rolled from their back to their stomach or side while unrestrained, or under other circumstances.” Since the initial announcement, there have been reports of at least 70 more children who have died in connection to the sleeper, according to the CPSC.

Both recall announcements add, “Fisher-Price notes that in some of the reports, it has been unable to confirm the circumstances of the incidents or that the product was a Rock ‘n Play Sleeper.”

Fisher-Price immediately stopped sales of the sleeper following the recall, and worked to remove the product from the market.

A congressional investigation was launched following the initial recall, and in June 2021, the House Oversight Committee released its findings, alleging that Fisher-Price “ignored multiple warnings that the Rock ‘n Play was not safe for infant sleep, including reports of infant injuries and deaths,” according to former Rep. Carolyn Maloney, the committee chair at the time.

When reached for comment, Fisher-Price told ABC News’ Good Morning America it had no new statement on the matter, but the company told ABC News back in June 2021 that there “is nothing more important” to the company than the safety of its products and that its “hearts go out to every family who has suffered a loss.”

“The Rock ‘n Play Sleeper was designed and developed following extensive research, medical advice, safety analysis, and more than a year of testing and review,” a Fisher-Price spokesperson said at the time. “It met or exceeded all applicable regulatory standards. As recently as 2017, the U.S. Consumer Product Safety Commission (CPSC) proposed to adopt the ASTM voluntary standard for a 30-degree angled inclined sleeper as federal law.”

Fisher-Price has had to issue consumer alerts about other rocker models before and issued a notice to consumers to stop using their Infant-to-Toddler and Newborn-to-Toddler rockers for sleep in June 2022.

In addition to Fisher-Price’s rocker recall, Kids2 also re-announced a recall Monday for its rocking sleepers, which were also initially recalled in April 2019.

CPSC recommends parents stop using the Rock ‘n Play at once and said consumers can contact Fisher-Price for a refund or a voucher.

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(NEW YORK) — More than 7,000 nurses at two hospitals in New York City went on strike early Monday morning demanding better pay, better working conditions and more staffing.

The strike began at 6 a.m. after nurses at Montefiore Medical Center in the Bronx and Mount Sinai Hospital in Harlem failed to reach an agreement with hospital administration during a bargaining session Sunday night, according to the New York State Nurses’ Association.

“These nurses are dedicated professionals who provide quality patient care under unimaginable conditions day in and day out that were exacerbated by the pandemic,” Mario Cilento, president of the New York State AFL-CIO, a labor union, said in a statement Monday. “Now they are faced with the added challenge of short staffing that has reached critical levels and could compromise their ability to provide the best quality care to their patients.”

“It is time for the hospitals to treat these nurses fairly, with the dignity and respect they deserve, and to negotiate in good faith, quickly, to ensure nurses can get back to serving their communities by providing superior care to their patients,” the statement continued.

Strikes are occurring at three locations in the Bronx and one location in Manhattan and will occur until 7 p.m.

In a statement, Montefiore Medical Center said it offered a 19.1% compounded wage increase and promised to create more than 170 new nursing positions ahead of the strike.

“We remain committed to seamless and compassionate care, recognizing that the union leadership’s decision will spark fear and uncertainty across our community,” the statement read.

Separately, Philip Ozuah, president of Montefiore Hospital, wrote a memo to staff members claiming the strike was unnecessary because all parties are allegedly near a final agreement. He added that the nurses turned down an offer that “exceeded the terms already agreed to at the wealthiest of our peer institutions”.

Mount Sinai told ABC News in a statement it also offered a 19.1% increased wage proposal but that nurses rejected the offer.

“Our first priority is the safety of our patients. We’re prepared to minimize disruption, and we encourage Mount Sinai nurses to continue providing the world-class care they’re known for, in spite of NYSNA’s strike,” Mount Sinai officials said.

During a press conference Monday afternoon, Nancy Hagans, president of the NYSNA said the current contract does not address nurse/patient ratios — which they are calling for and has led to stalled negotiations. She also claimed hospitals did not want to be held “accountable.”

Mount Sinai said it was preparing for the strike by “diverting a majority of ambulances,” starting “to cancel some elective surgeries … perform emergency surgery only,” “starting to transfer patients” to other hospitals and medical centers, and “working to safely discharge as many patients as appropriate,” according to an internal memo obtained by New York ABC station WABC-TV.

Gov. Kathy Hochul called for binding arbitration Sunday night to avert a strike, but union officials did not accept the proposal.

“Gov. Hochul should listen to frontline Covid nurse heroes and respect our federally protected labor and collective bargaining rights,” NYSNA said in a statement. “Nurses don’t want to strike. Bosses have pushed us to strike by refusing to seriously consider our proposals to address the desperate crisis of unsafe staffing that harms our patients.”

The NYSNA also urged New Yorkers to not be fearful or concerned about seeking medical care due to the shrike.

“To all of our patients, to all New Yorkers, we want to be absolutely clear: If you are sick, please do not delay getting medical care, regardless of whether we are on strike,” the organization tweeted. “In fact, we invite you to come join us on the strike line after you’ve gotten the care you need.”

The New York State Department of Health said it’s “working closely with affected hospitals to ensure the health and safety of patients as the New York State Nurses Association (NYSNA) strikes proceed at Mount Sinai and Montefiore Hospitals.” The department said it was continuing to monitor the safety and staffing of patients.

ABC News’ Sasha Pezenik and Eric Strauss contributed to this report.

 

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — More than 7,000 nurses at two hospitals in New York City went on strike early Monday morning demanding better pay, better working conditions and more staffing.

The strike began at 6 a.m. after nurses at Montefiore Medical Center in the Bronx and Mount Sinai Hospital in Harlem failed to reach an agreement with hospital administration during a bargaining session Sunday night, according to the New York State Nurses’ Association.

“These nurses are dedicated professionals who provide quality patient care under unimaginable conditions day in and day out that were exacerbated by the pandemic,” Mario Cilento, president of the New York State AFL-CIO, a labor union, said in a statement Monday. “Now they are faced with the added challenge of short staffing that has reached critical levels and could compromise their ability to provide the best quality care to their patients.”

“It is time for the hospitals to treat these nurses fairly, with the dignity and respect they deserve, and to negotiate in good faith, quickly, to ensure nurses can get back to serving their communities by providing superior care to their patients,” the statement continued.

Strikes are occurring at three locations in the Bronx and one location in Manhattan and will occur until 7 p.m.

In a statement, Montefiore Medical Center said it offered a 19.1% compounded wage increase and promised to create more than 170 new nursing positions ahead of the strike.

“We remain committed to seamless and compassionate care, recognizing that the union leadership’s decision will spark fear and uncertainty across our community,” the statement read.

Mount Sinai told ABC News in a statement it also offered a 19.1% increased wage proposal but that nurses rejected the offer.

“Our first priority is the safety of our patients. We’re prepared to minimize disruption, and we encourage Mount Sinai nurses to continue providing the world-class care they’re known for, in spite of NYSNA’s strike,” Mount Sinai officials said.

Mount Sinai said it was preparing for the strike by “diverting a majority of ambulances,” starting “to cancel some elective surgeries … perform emergency surgery only,” “starting to transfer patients” to other hospitals and medical centers, and “working to safely discharge as many patients as appropriate,” according to an internal memo obtained by New York ABC station WABC-TV.

Gov. Kathy Hochul called for binding arbitration Sunday night to avert a strike, but union officials did not accept the proposal.

“Gov. Hochul should listen to frontline Covid nurse heroes and respect our federally protected labor and collective bargaining rights,” NYSNA said in a statement. “Nurses don’t want to strike. Bosses have pushed us to strike by refusing to seriously consider our proposals to address the desperate crisis of unsafe staffing that harms our patients.”

The NYSNA also urged New Yorkers to not be fearful or concerned about seeking medical care due to the shrike.

“To all of our patients, to all New Yorkers, we want to be absolutely clear: If you are sick, please do not delay getting medical care, regardless of whether we are on strike,” the organization tweeted. “In fact, we invite you to come join us on the strike line after you’ve gotten the care you need.”

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — For nearly a century, people have flocked every holiday season to Radio City Music Hall to watch the famous Rockettes perform in the Radio City Christmas Spectacular show. The latest show, however, is stirring up controversy among customers and privacy advocates. That controversy is over technology — specifically, facial recognition software.

When Kelly Conlon, a lawyer, tried to join her daughter’s Girl Scout troop at a Rockettes performance the weekend after Thanksgiving, the venue scanned her face and barred her entry.

Conlon reportedly appeared on an “attorney exclusion list” created by Radio City Music Hall’s parent company, MSG Entertainment, which bans employees at law firms engaged in litigation with the company, even if a given individual isn’t involved directly. In this case, Conlon wasn’t involved directly, but her firm was engaged in litigation against one of the company’s restaurants, the New York Times reported.

Roughly a month later, news of the incident went viral, inciting concern over the use of facial recognition by private corporations and rekindling a public debate over whether to limit the technology.

The incident at Radio City Music Hall was first reported by a New York affiliate of NBC.

Facial recognition software use by U.S. businesses has grown sharply in recent years, analysts and privacy advocates told ABC News.

The uses range from tech companies securing personal devices to retailers scanning for potential shoplifters to e-commerce giants tracking delivery drivers.

Companies contend that the technology helps them achieve a safe and efficient operation, benefiting consumers and employees alike; while critics say the powerful tool encroaches on the privacy of everyday people, risking undue punishment or discrimination, the experts said.

Meg Foster, a Justice Fellow at Georgetown University’s Center on Privacy and Technology, described the incident at Radio City Music Hall as “the tip of the iceberg.”

“Over the last few years there has been a quiet surge in the use of facial recognition by private companies,” Foster told ABC News. “We’ve seen a huge rise in this technology.”

Consumers are perhaps best acquainted with facial recognition software as means for unlocking their smartphones. Google added the face unlock feature to its Android operating system more than a decade ago, and Apple followed suit with its Face ID for iPhones starting in 2017.

The following year, Madison Square Garden added facial recognition to its security protocol, while thousands of retailers nationwide were poised to add the software for theft-prevention, BuzzFeed reported.

As uses of the technology have grown, so has the industry behind it. In 2020, the facial recognition industry was valued at $3.8 billion. By 2030, it is expected to reach $16.7 billion, according to data firm Allied Market Research.

“In the private sector, facial recognition is providing enormous benefits both to businesses and consumers, providing individuals an option to verify their identity securely and conveniently against an enrolled photo,” Jake Park, senior director of government relations at the Security Industry Association, a trade group for security providers, told ABC News.

The incident at Radio City Music Hall in November marked “a giant leap forward in what companies are doing with face recognition,” said Adam Schwartz, a senior staff attorney at the Electronic Frontier Foundation, who supports stronger regulation of the technology.

“The next step could be similar treatment for a customer who picketed in front of a store or a customer who gave a negative review on Yelp,” he added. “I go on the bad-guy list.”

In a separate incident at Madison Square Garden last month, an attorney was removed from a basketball game with the use of facial recognition software for the same reason as Conlon, the New York Post reported.

In a statement, a spokesperson for MSG Entertainment defended the company’s use of facial recognition software.

“Facial recognition technology is a useful tool widely used throughout the country, including the sports and entertainment industry, retail locations, casinos and airports to protect the safety of the people that visit and work at those locations,” the spokesperson said.

“Our venues are worldwide destinations and several sit on major transit hubs in the heart of New York,” the spokesperson added. “We have always made it clear to our guests and to the public that we use facial recognition as one of our tools to provide a safe and secure environment for our customers and ourselves.”

The incident at Radio City Music Hall exemplifies facial recognition software’s capacity to enable corporate policy that prohibits entry to people who do not pose a security threat to the public, said Foster, of the Center on Privacy and Technology.

“This surveillance can be used punitively against anyone that a company determines is an enemy, whether that’s a lawyer involved in litigation against a company or an employee who quit,” she said.

Critics of facial recognition software in the private sector also fear two other abuses of the technology: discrimination and privacy violation, Foster added.

A federal study released in 2019 found that facial recognition systems misidentified people of color more often than white people. The American Civil Liberties Union, an advocacy group, has called the technology “racist.”

Meanwhile, privacy concerns center on the collection of intimate personal data that cannot be altered after a potential data leak, Foster said.

“Your face can’t be changed if a database holding photos is hacked or sold to somebody with poor security infrastructure, and your face is out there,” she said.

The Security Industry Association touts the benefits of facial recognition but says companies deploying the technology must avoid illegal or discriminatory applications.

“Facial recognition technology makes our country safer and brings value to our everyday lives when used effectively and responsibly,” the group said on its website. “SIA believes all technology products, including biometric technologies, must only be used for purposes that are lawful, ethical and nondiscriminatory.”

As facial recognition technology has become more commonplace, regulation has remained limited, analysts and advocates told ABC News.

Laws governing the collection of personal data, such as facial recognition, primarily operate at the state level, David J. Oberly, a Cincinnati-based attorney at Squire Patton Boggs LLP, who focuses on data and cybersecurity.

So far, three states have enacted laws pertaining to data collected with facial recognition software: Texas, Washington and Illinois, Oberly said. The strongest law, in Illinois, requires that companies obtain written consent from individuals before collecting such data, and afterward firms are prohibited from selling or profiting off of the information.

At a Chicago theater owned by MSG Entertainment, for instance, the company cannot collect data in the manner it does at the Radio City Music Hall, since it does not obtain written consent. There is no such law in New York City or New York state that requires written consent.

In 2019, Sen. Brian Schatz, Democrat-Hi., and Roy Blunt, Republican-Mo., proposed a bipartisan bill similar to the Illinois law, but the measure did not reach the floor for a vote.

Despite some agreement across the aisle, the incoming Congress is unlikely to pass a bill on the issue, Oberly said. “There’s some consensus there, but I think the new Congress makes it much less likely that there will be an agreement on a federal privacy bill,” he said.

Meanwhile, the public’s interest in the issue will likely grow as the technology becomes more prevalent and directly affects more people, Foster said. The incident at Radio City Music Hall shows that anyone can be targeted by the technology, she added.

“It’s not just folks investigated for crimes who are at risk,” she said. “It really is anyone and everyone.”

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — The holiday meltdown at Southwest Airlines last month cost the company as much as $825 million in lost revenue and added expenses, the company said in a government filing on Friday.

Southwest Airlines, the largest domestic airline in the U.S., canceled more than 16,000 flights over an 11-day period at the end of December, the filing said.

The disarray amid a massive snowstorm stranded droves of customers during a peak travel season, prompting the company to apologize and offer reimbursement for inconvenienced travelers.

“The cost is definitely a significant amount,” Ross Feinstein, industry veteran and former director of operations communications at American Airlines, told ABC News.

“I’m not surprised that this is the hit they will ultimately take, in terms of the sheer number of passengers affected and the number of flights canceled,” added Feinstein.

Roughly half of the cost stemmed from lost sales, the company said.

The remaining cost went to reimbursements for affected passengers, as well as frequent-flier points offered as a “gesture of goodwill” and extra compensation for workers, the company said.

Southwest Airlines this week announced that it would provide each affected passenger with 25,000 frequent flier points, which the company equated to about a $300 value.

If an airline cancels a flight, meanwhile, a customer is entitled to a full refund by law, according to the Department of Transportation.

In addition, Southwest Airlines vowed to “honor reasonable requests for reimbursement for meals, hotel, and alternate transportation,” the company said.

Last week, in an exclusive interview with ABC News’ Good Morning America, Southwest Airlines CEO Bob Jordan apologized for the debacle.

“There’s just no way almost to apologize enough because we love our customers, we love our people and really impacted their plans,” Jordan said. “There will be a lot of lessons learned that come out of this.”

In October, Southwest Airlines predicted strong financial performance over the final three months of 2022, estimating an increase in operating revenue of as much as 17% compared with the same period in 2019.

The holiday meltdown appears to have scuttled those aspirations. Compared with the same period two years prior, the company now estimates a 6% decline in carrying capacity, which measures the total number of passengers transported over a combined number of miles, the filing said.

Despite the news of the company’s financial blow, the price of Southwest Airlines shares inched upward in early trading on Friday.

Since the beginning of the debacle, on Dec. 21, Southwest Airlines stock has fallen about 6%.

All in all, the company will likely overcome the blow to its reputation, said Feinstein.

“If Southwest fixes this issue so that it doesn’t happen again, future passengers will forget and move on,” he said. “When they’re buying a flight, passengers typically book on price and schedule.”

The historic scale of cancellations at Southwest sprang from the company’s uniquely complex flight coordination model and its antiquated internal scheduling systems, flight experts, Southwest Airlines officials and union leaders previously told ABC News.

The announced cost of the meltdown does not include potential remedies for such issues, Feinstein said. The company will likely take on the added cost of updating its internal programming system to avoid another possible wave of cancellations, he added.

“There will be additional money spent and programmed for IT infrastructure,” he said. “That’s important before any other project – to make sure this doesn’t happen again.”

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(NEW YORK) — Peloton has agreed to pay a $19 million fine as part of a settlement over its treadmill recall, the U.S. Consumer Product Safety Commission announced Thursday.

The fitness company recalled its Tread+ and Tread treadmills in May 2021 following reports of more than a dozen injuries and the death of a child.

The settlement with the federal regulatory agency resolves the charge that “Peloton knowingly failed to immediately report to CPSC, as required by law, that its Tread+ treadmill contained a defect that could create a substantial product hazard and created an unreasonable risk of serious injury to consumers,” CPSC said in a statement.

CPSC said Peloton started receiving reports of incidents and injuries with the treadmills, including entrapment in the rear, as early as December 2018 though did not immediately report to the commission.

By the time the company did file a report with CPSC, there were more than 150 reports of people, pets and objects being pulled under the rear of the Tread+ treadmill, as well as 13 injuries ranging from broken bones to friction burns, according to CPSC. A 6-year-old child also died on March 3, 2021, after being pulled under the rear of the Tread+ treadmill, CPSC said.

The penalty also settles the charge that Peloton “knowingly distributed” 38 recalled Tread+ treadmills through Peloton personnel and third-party delivery firms from May to August of 2021, in violation of the Consumer Product Safety Act, CPSC said.

CPSC accepted the $19,065,000 settlement agreement by a 4-0 vote late last month, subject to public comment, marking one of the largest civil penalties in its history, commissioners said.

“By acting with one voice, the CPSC sends a loud and clear warning to companies who continue to sell dangerous products that they know can cause serious injury or death,” Commission Chair Alexander Hoehn-Saric said in a statement. “By failing to report these incidents to the Commission immediately, Peloton not only violated the Consumer Product Safety Act, but also consumers’ trust.”

Peloton said it was “pleased” to have reached the settlement agreement.

“Peloton remains deeply committed to the safety and well-being of our Members and to the continuous improvement of our products,” the company said in a statement, adding that it looks forward to “working cooperatively with the CPSC to further enhance Member safety.”

Peloton is currently pursuing the commission’s approval of a Tread+ rear guard that would “further augment its safety features,” the company said.

As part of the settlement agreement, Peloton must also maintain an “enhanced compliance program” regarding the Consumer Product Safety Act and filed annual reports regarding this program for five years, CPSC said.

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(NEW YORK) — The former chief executive of the cryptocurrency lending platform Celsius Network defrauded hundreds of thousands of investors out of hundreds of millions of dollars’ worth of cryptocurrency, New York Attorney General Letitia James alleged in a new lawsuit filed Thursday.

Alex Mashinsky lied to investors, concealed Celsius’ dire financial condition and failed to register as required by state law, the lawsuit said.

As Celsius lost some $440 million in risky investments, Mashinsky concealed the platform’s rapidly deteriorating financial condition, according to the lawsuit, which seeks to ban him from doing business in New York and requires him to pay damages, restitution and disgorgement.

“As the former CEO of Celsius, Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin,” James said in a statement accompanying an announcement of the lawsuit.

Celsius is a cryptocurrency lending platform where investors could deposit their cryptocurrency in return for receiving yield on their deposited assets. Throughout Mashinsky’s tenure as CEO he made numerous false and deceptive statements about Celsius’ safety, number of users, and investment strategies to recruit investors, the lawsuit said.

In hundreds of public appearances, videos, interviews, blog posts and livestreams, Mashinsky asserted that Celsius was safer than a bank, though the attorney general’s office noted banks are highly regulated by state and federal agencies and subject to regular and robust examinations. Celsius was not and its customers had no hope of receiving the same protections as banks.

According to the lawsuit, Mashinsky repeatedly claimed that Celsius made safe, low-risk investments and only lent assets to credible and reputable entities. However, investors’ assets were routinely exposed to high-risk counterparties and strategies, many of which resulted in losses which Mashinsky concealed from investors.

The collapse of Celsius has left many individuals in financial ruin. The lawsuit mentioned a New York resident who mortgaged two properties to invest with Celsius. A disabled veteran lost his investment of $36,000, which had taken him nearly a decade to save up. Another disabled citizen, who depended upon government assistance to supplement his $8 per hour income, lost his entire investment.

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(NEW YORK) — Hundreds of Uber drivers in New York City are carrying out a day-long strike on Thursday after a lawsuit from the rideshare company temporarily blocked a pay increase set to take effect last month.

Striking drivers were set to hold a rally at the Manhattan headquarters of Uber, demanding the company drop its legal challenge and allow the pay increase to go forward.

A new rule from the Taxi and Limousine Commission, a city agency, would significantly raise minimum compensation for rideshare drivers, hiking pay by more than 7% per minute and 23% per mile.

The pay bump will yield a typical rideshare driver an additional $1,000 each month, said the New York Taxi Workers Alliance, or NYTWA, a labor group that organized the strike.

Samassa Tidiane, who has driven for Uber since 2014, said he is participating in the strike on Thursday because the need for a pay increase has become especially urgent amid near-historic inflation.

“This week, I was in the supermarket and a packet of a dozen eggs cost $8.49. Before, it was less than $2,” he told ABC News. “If our pay doesn’t go up, how are we supposed to survive?”

Tidiane said he typically works 12 or 13 hours each day, taking home up to $1,000 per week. But expenses like gas and car repair cut significantly into the earnings. He said Uber doesn’t cover such costs.

“Uber doesn’t give us one penny,” Tidiane said. “They treat us like garbage.”

The pay increase was set to take hold last month but a Manhattan judge suspended implementation days before, after a legal bid from Uber.

In its lawsuit, Uber objected to the new rule as “arbitrary and capricious,” saying it departs from the city agency’s previous decisions and relies on a faulty methodology.

In a statement, Uber said it expected few drivers to participate in the protest on Thursday.

“Every time the taxi association calls for a strike, drivers demonstrate they’re more interested in delivering for New Yorkers than social media discourse,” the company said. “We expect this time will be no different.”

The action from Uber drivers marks the second single-day strike carried out in protest of the delayed implementation of the city’s pay raise.

The first strike, on Dec. 19, prompted thousands of rideshare drivers to log off, forcing companies to institute surge pricing, NYTWA said.

Uber downplayed the effect of the first strike, saying that on that day the company recorded 8% more trips and 7% more drivers than an average Monday over the last three months of the previous year.

The next court date in the case over the pay increase is set for Jan. 31.

If the pay raise remains stalled in court, drivers may take part in a future strike lasting as long as two weeks, Tidiane said.

“If they do nothing today, we’re going to prepare a next step,” he said.

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