(NEW YORK) — Popular social media platform TikTok on Wednesday announced plans for a rating system aimed at protecting young users from inappropriate content.
The move comes after sharp criticism from lawmakers and advocates in recent months over the prevalence of harmful posts on the app, especially those that appear in the feeds of young users.
The rating system, called “Content Levels,” will categorize videos based on the age-appropriateness of their material, preventing users under 18 from seeing certain content deemed mature, the company said. The system will be launched in the coming weeks and operate like similar approaches in the film and gaming industries, TikTok added.
“We want to play a positive role in the lives of the people who use our app, and we’re committed to fostering an environment where people can express themselves on a variety of topics, while also protecting against potentially challenging or triggering viewing experiences,” the company said.
In February, Wisconsin Sen. Tammy Baldwin and Minnesota Sen. Amy Klobuchar, both Democrats, sent a letter to TikTok saying its “algorithm of ‘nonstop stream of videos’ increases the likelihood that viewers will encounter harmful content even without seeking it out.”
The letter followed an investigation from The Wall Street Journal in December that found the platform surfaced tens of thousands of weight loss videos to a dozen automated accounts registered as 13 year olds within a few weeks of their joining the app.
Since last year, TikTok has been testing solutions that prevent users from seeing a flood of content focused on sensitive topics like dieting and sadness, the company said in a statement on Wednesday. In addition to the ratings system, the company is readying to launch a feature that will recognize and limit such sensitive topics from appearing in a user’s feed, it said.
In general, scrutiny over the harmful effects of content on social media, especially for young people, has intensified since leaks from whistleblower Frances Haugen last year revealed that an internal Facebook study had shown damaging mental health effects of Instagram for teen girls.
In September, Facebook suspended plans to offer a version of Instagram for kids.
The following month, officials from Snapchat, TikTok and YouTube told lawmakers they would work with them on proposals to help protect young users from harmful content on their platforms.
A bipartisan Senate bill introduced in February aims to tackle the harmful effects of social media for young people through a variety of measures, including mandatory privacy options that would allow users to disable addictive features and a tool for parents to track time spent on apps. So far, eight senators have signed on in support of the legislation.
A separate bipartisan Senate bill would fund a study of the effects of social media. Six senators have formally supported the bill.
(NEW YORK) — A family alleges American Airlines tried to force them to pay roughly $30,000 to change their itinerary after the airline switched the family’s return ticket to leave from an airport in another country, according to a complaint filed by the family with the Department of Transportation and American Airlines.
Sam Taussig also claims his family was forced to charter a plane at their own expense to another island in order to return to the United States on American Airlines.
American involuntarily changed the family’s flights multiple times over the course of several months after the family purchased their tickets in January for their summer vacation, Taussig said. It wasn’t until July 4 when Taussig said he wanted to ensure his family was sitting together for their upcoming trip that he noticed not only was the family not together, but their flight was leaving from St. Lucia instead of Saint Vincent. There are no scheduled flights or ferries between St. Lucia and Saint Vincent.
“I called American Airlines thinking this must be some sort of clerical error and spent nearly three hours with the American Airlines customer service teams learning that I have, in fact, been bumped and seven of the nine family members were bumped to another flight departing from a different country at a different airport because of an oversold situation,” Taussig said in an exclusive interview with ABC News.
Taussig said he did receive an email from the airline that there had been a change to his flight, but he said the airport change notification was in tiny, fine print.
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“American Airlines was not very apologetic at all. They blamed me, the customer, for not catching this sooner,” Taussig said. “American Airlines offered a couple of different, I think, absolutely insane solutions where they said, well, we’ll have to split up part of your family and put most of you on a flight a week later, if not longer. And to do that, we’re going to charge you change fees, reissuing fees, certain other fees, which were not clear to me, and new fares, which totaled about $30,000 to get all of us back. And we’d be stuck on the island for a week with no offer of compensation for hotels or meal vouchers or anything like that.”
The airline ultimately found a flight leaving a day later from Barbados and asked him to pay thousands in fees, he said. Taussig said he refused to pay the fees, but was forced to book a private charter flight to get his family to Barbados.
“We researched a private charter to get us to a third country, Barbados, where American Airlines might be able to get us out the next day from our original departure day, where they then told us that it would be $3,000 in change fees to make that happen. And [American told us] we should be so lucky because this whole situation was putting the company out $3,000, even though they originally bumped us for an overbooking situation. So all in all, where we are today is out a couple of thousand dollars. On our dime, we’re flying to yet a different country to meet American Airlines to get back to the U.S.,” Taussig said.
In a statement to ABC News, American Airlines said: “We are concerned by the experience our customer is reporting. A member of our team has reached out to discuss their travel.”
“In this situation, there was obviously a significant change by the airline and the person could get an involuntary refund. And if they could construe it as being bumped, which is a little unclear, then they would also be entitled to bump in compensation. Now, in the United States, that means if it’s one to four hours, you get 200% of the one-way fare up to $775. If it’s all or four hours difference in delay from the original flight, you can get 400% of the one-way fare up to a maximum of $1,550,” Paul Hudson, president of Flyers Rights, a nonprofit dedicated to advocating for airline customers, told ABC News.
Taussig says he’s grateful he discovered this error before the family plans to leave for their vacation later this week, and says American Airlines still has not provided any compensation.
Taussig said he hopes his story fosters change at the airline and serves as a warning to other travelers.
“I hope American Airlines uses this as an opportunity to learn about the inefficiencies and arbitrary decisions that are just crazy for passengers and how their customer service agents either can’t or are unwilling to solve this situation. I hope American learns from this,” Taussig said. “I tell fellow passengers, fellow travelers, really pay attention to those schedule changes. Try to invoke your rights for travel waivers. Call the airline to make sure that you are flying out of the correct place at the correct time, that you’ll make your connections and get to where you’re going or where you’re coming home to on time and all together.”
The Department of Transportation says consumer complaints against airlines are soaring, up more than 300% compared to pre-pandemic levels. DOT regulations say passengers are entitled to a full cash refund if an airline cancels or makes a significant change to a ticket.
(NEW YORK) — As U.S. policymakers walk a tightrope in an attempt to dial back sky-high prices while averting an economic recession, new inflation data on Wednesday showed a significant acceleration of price hikes.
Prices rose even faster in June, jumping at the highest rate in four decades and prolonging a bout of inflation that has strained household budgets nationwide, according to data released by the federal government.
The consumer price index, or CPI, stood at 9.1% in June, a significant increase from 8.6% in May, according to the Bureau of Labor Statistics. That is the largest 12-month increase since December 1981.
On a monthly basis, the consumer price index rose 1.3% in June, far outpacing the 1% rise seen in April, according to the bureau.
The new data arrives as the Federal Reserve pursues a series of rate hikes that aim to tackle inflation by slowing down the economy and slashing demand. The moves, however, risk tipping the economy into a recession.
The high inflation figure could spur the Fed to seek a more aggressive approach to raising interest rates. The new inflation data comes days after employment data showed stronger than expected hiring last month, suggesting that employers remain undeterred by borrowing cost increases from the Fed.
“The million dollar question is how hard the Fed has to apply the brakes,” Hernan Moscoso Boedo, an economist at the University of Cincinnati, told ABC News.
Inflation data that shows continued acceleration of inflation “will put more pressure on the Fed to increase the interest rate more than expected, and that increases the possibility that the U.S. is going to enter a recession,” Moscoso Boedo added.
President Joe Biden, in a statement on Wednesday, called the new inflation data “unacceptably high” but downplayed the report as “out of date.” Gas prices, which made up almost half of the monthly increase in inflation, have declined since last month, Biden said. “Those savings are providing important breathing room for American families,” he added.
Over the past month, the national average gas price has decreased about 35 cents, reaching $4.65 a gallon, according to data from AAA.
But more needs to be done to bring down inflation, which remains “the most pressing economic challenge,” Biden said.
“Tackling inflation is my top priority,” he added. “We need to make more progress, more quickly, in getting price increases under control.”
At a Fed meeting last month, just days after the release of inflation data for May, the central bank raised its benchmark interest rate 0.75%, its largest rate hike since 1994. The increase brought the interest rate to a range of 1.5% to 1.75%
At a meeting later this month, the Fed is expected to raise the interest rate again. Fed officials are considering a 0.50% or 0.75% hike at the next meeting, according to minutes from the past meeting that were released July 6.
(NEW YORK) — When Jarvis Claiborne and his wife Renada were pre-approved for a mortgage in February, they were excited to start shopping for their first home in Houston, Texas. But that excitement quickly turned to shock and frustration as they realized they couldn’t compete with all-cash offers that were often tens of thousands of dollars above a home’s listing price.
“We really just weren’t willing to pay the prices that people were asking and that people were paying,” Jarvis Claiborne told ABC News. “Most of the houses, we didn’t even have a chance to bid on. As soon as they were coming on the market, they would just get snatched up.”
Jarvis Claiborne, who works in the oil and gas industry and Renada, a private investigator, decided to walk away from their home search in June, as mortgage rates climbed above 6%.
After two years of housing-hunting and getting outbid, often by all-cash offers, Tinesha Feiton, a single mom from Brooklyn, New York, is in contract to buy a three bedroom home in West Orange, New Jersey.
“It feels a little surreal,” Feiton told ABC News about finally having a seller accept her offer. An information technology consultant, Feiton is paying $46,000 above the asking price of $479,000.
“I still feel kind of worried because I’m just thinking to myself, well, is the house going to appraise for that value. You know, I don’t want my first home to actually be a lemon,” she said.
Feiton said it was important that she be settled in a home in time for her 5-year-old son Mason to start kindergarten in his new school this fall.
Record home prices and higher mortgage rates made May the most expensive month to buy a home since 2006, according to the National Association of Realtors’ Housing-Affordability Index. The index incorporates median existing-home prices, median family incomes and average mortgage rates. The median price of a home in the U.S. reached a record $407,600 in May, according to the NAR, as mortgage rates more than doubled since January to the highest level in 13 years.
That pushed the typical monthly mortgage payment to $1,842 in May, up from $1,297 in January, according to the NAR, assuming a 30-year fixed-rate mortgage and a 20% down payment. Despite the rising cost to finance a home, there are fresh signs that the housing market is slowly becoming more buyer-friendly.
Sales of previously owned homes fell in May for the fourth straight month as more buyers give up, pressuring sellers to cut asking prices. More than one in five homeowners dropped their asking price in May, according to the real estate brokerage Redfin, and for the first time in three years, Realtor.com said the number of homes for sale is on the rise, up 21% in June compared to a year ago.
The real estate firm’s Chief Economist, Danielle Hale, told ABC News there are two reasons for the rise in inventory.
“One, we’ve got more homeowners deciding that now is the time to sell their home, and the other reason is that buyers are getting a little bit choosier as the cost of housing goes up,” she said.
According to Redfin, bidding wars are slowing down and searches for “homes for sale” on Google are down nearly 14% from a year ago.
“A couple of months ago, it wasn’t unusual for a home to get 10 to 20 offers,” said Sarah Drennan, executive vice president at Terrie O’Connor Realtors in Northern New Jersey. “Now, they’re still getting a number of offers, but it’s less than 10.”
Mortgage applications sank 16% in June and are now less than half what they were a year ago, according to the Mortgage Bankers Association.
Drennan said a growing number of sellers now recognize new limits to their pricing power, as the days of sellers asking — and getting — their “make me move price” begin to fade.
“We’re not seeing a price reduction, we’re seeing just a deceleration of price increases,” said Drennan. “So prices are still increasing, just not at double digit rates like we were seeing just a few months ago.”
While home prices are still trending higher nationally, Realtor.com found that prices have begun falling in many smaller Rust Belt cities. In Toledo, Ohio, home prices plunged 18.7% in May. They sank 15.4% in Detroit and fell 13.4% in Pittsburgh, Pennsylvania.
Demand for second-homes is also showing signs of softening. Patty Magie has been selling homes in Pennsylvania’s lake region of the Pocono Mountains for 30 years. She told ABC News she never saw demand for housing like she did at the height of the pandemic.
“People were buying site unseen, waiving appraisals and home inspections,” she said.
Eager for more space to work and school remotely, Magie remembers giving buyers home tours via FaceTime as they chased a small number of available homes. That scenario is changing.
“The current inventory has doubled from what it was in March and April; however, it is still about a third of what it was three to four months ago. There have been more price reductions and fewer bidding wars,” she added.
Potential buyers who have given up their search in favor of renting aren’t finding much, if any, relief. In fact, in some markets, rental prices are outstripping the monthly cost of financing a home, according to Miller Samuel, Inc. The real estate appraiser reported the average rental price in Manhattan cracked a record $4,000 per month in June.
“It’s expensive and getting more expensive in the city,” Jonathan Miller, CEO of Miller Samuel, Inc., told ABC News. “It’s interesting because office towers are two-thirds empty in the city, but yet you’re still seeing record leasing activity for the residential rental market.”
Still, experts say for some buyers, timing the housing market for that “perfect price” could backfire.
“If you have more flexibility in your timeline, you may be able to wait it out and negotiate with sellers,” said Hale, “but keep in mind that mortgage rates are also still climbing so you may end up with a higher mortgage rate if it takes you longer to find a home.”
The battery to a Tesla Model s Plaid on display. – Munro Live, Munro & Associates
(NEW YORK) — The intense heat hitting most of the nation is already invoking warnings about power outages and health impacts.
But there is also another danger posed to drivers, as record temperatures lead to a greater risk of battery failure and degradation, according to engineers.
“Batteries are like humans, they don’t like high heat or low heat,” Anna Stefanopoulou, the William Clay Ford professor of technology at the University of Michigan, told ABC News. “The best temperature is the one humans are comfortable with.”
While there is little drivers can do to contain their cars’ temperatures during heat waves, Stefanopoulou and other experts who have been studying the advances in car technology told ABC News that manufacturers are hard at work finding new ways to beat the rising heat.
Stefanopoulou said that manufacturers constantly put their batteries to the limit during the testing phase since their vehicles are sold all over the world. Even though the batteries can withstand extreme benchmarks, she said there is only so much reliability within the laws of chemistry and engineering.
For example, if a car’s internal temperature reaches above 45 degrees Celsius, or 115 degrees Fahrenheit, the battery is prone to more wear and decreases the life of the cell, she said. Driving in those conditions will also test the limits of the battery, according to Stefanopoulou.
“High-temperature conditions are problematic because it affects the range. Some of the battery will go to keeping the AC … and that drains the battery,” she said.
This week, some parts of the country, including Palm Springs, Las Vegas and Phoenix, will see high temperatures above 110 degrees, according to the forecast.
Heat is a bigger issue when it comes to electric vehicles, which rely entirely on the power of the battery. EV batteries and systems have measures in place to prevent them from puckering under extreme temperatures, according to experts.
Cory Steuben, the president of the Michigan-based engineering consulting firm Munro & Associates, told ABC News that many EV manufacturers are using new types of batteries with thermal management.
The new batteries, such as ones with cylindrical, prismatic and pouch form factors, are engineered to keep the heat within the cell from rising too much.
“These are expensive, complex, very well-controlled machines,” Steuben, whose firm has acquired, taken apart and analyzed parts of several EVs, told ABC News.
He noted that EVs also have additional technologies to keep the car cool, particularly Teslas. The company’s models are equipped with data tracking that keeps an eye on the battery’s temperature, the ambient temperature and the temperatures of its charging stations, according to Steuben.
The car’s alert system has the option to tell a driver when and where to stop to recharge the car to prevent overheating while they’re on the road, Steuben said.
“Imagine if you had a 1980 Ford Bronco with a regular car battery. No one knows what is going on in your car and where it goes. Now we have the technology to constantly monitor the battery and make changes as you drive,” he said.
At the same time, Steuben said that some manufacturers have implemented new tech to keep batteries cool. BMW, for example, has opted to place the battery in the trunk instead of the engine to reduce the heat, he said.
“It requires an expensive cable, but it is a better climate-controlled environment,” Steuben said of the trunk. “It’s essentially the same temperature as the cabin.”
Other methods include cooling systems that pump liquid coolant throughout the engine to keep it from overheating, he said.
Stefanopoulou said the best solution for motorists is to park their vehicle in the shade or, if possible, in a location with a controlled climate — like an indoor garage.
For EVs, she recommended owners charge the car during hot days because those chargers and batteries have safeguards to prevent overheating.
Stefanopoulou acknowledged that the method can lead to bigger problems as it will tax power grids during a high heat event.
“It’s a self-propagating problem,” she said. “The higher the temperatures, the more energy we need to use to cool our vehicles. And that energy is lost and that will heat the environment.”
“That’s why it’s crucial that we continue to improve the battery technology and the power grid,” she added.
(NEW YORK) — As economists continue to predict the coming of a recession, many are left wondering what they can do to secure and potentially grow their wallets amid the chaos. For some, however, a recession may just be the perfect time to develop generational wealth that could last for years come.
Generational wealth refers to the financial assets that are passed down from one generation to the next. That could be in the form of property, investments, cash money, or other things of monetary value.
This kind of wealth can help ensure that one’s future children or relatives will have some kind of financial support.
However, building wealth isn’t and hasn’t been easy for everyone.
Because of systemic barriers — including racial discrimination in housing, employment and banking — the typical white family has eight times the wealth of the typical Black family and five times the wealth of the typical Hispanic family, according to the Federal Reserve.
Those living paycheck to paycheck make up 54% of the country, according to lending company LendingClub. A 2021 report from the Federal Reserve showed that roughly 36% of Americans likely don’t have enough money to cover a $400 emergency.
Having expendable wealth or generational wealth to build upon is a privilege, according to Jully-Alma Taveras, personal finance writer and founder of Investing Latina. It can be difficult for people with limited income to even begin taking steps toward accumulating wealth.
Catherine Collinson, CEO and president of the nonprofit financial wellness organization Transamerica Institute, says there are still ways for people to implement wealth-building practices into their routine.
“Living paycheck to paycheck can be daunting, especially now amid skyrocketing inflation and the lingering effects of the pandemic,” said Collinson. “Although it’s much easier said than done, it’s important to stay positive and avoid getting discouraged or overwhelmed — because that can be counter-productive.”
There are different routes that can be taken toward building wealth, and the path won’t look the same for everyone, financial experts say.
This journey can begin with small steps as easy as educating your children and family on financial planning, to steps as big as owning property that is likely to accumulate value.
Educate your children and family on financial literacy
Collinson recommends engaging children in family financial budgeting decisions. For example, she says planning for a vacation should include creating a budget, identifying costs, and making the necessary trade-offs to avoid overspending but maximize the amount of fun.
The same could be said for other family activities such as birthday celebrations, taking care of a pet, or grocery shopping.
Collinson said her own relationship with building wealth was influenced by her grandparents.
“Having lived through the Great Depression, they were adamant about living within one’s means and saving for the future whenever possible,” Collinson said. “They taught me that how you manage your money is just as important, perhaps even more important, than the size of your paycheck when it comes to building wealth.”
Taveras also leaned on the influence her business-owning family members had on her to put her on the right path for proper spending.
“I wanted to kind of represent myself and my family who happen to be business owners and have always been very, in many ways, financially strong,” she said.
A S&P Global FINLIT Survey found that only 57% of adults in the U.S. are financially literate.
Invest in the stock market
Investing in the stock market is another way that people can dip their toes into growing wealth.
Taveras says that investing in stocks can become a passive source of income, where an investment as little as a few bucks each month can slowly grow over time. Mobile apps have also made entering the stock market more accessible to the average user.
Taveras started investing when prices were low and said her growing stock have become “a really big part of building wealth.”
“We were in the middle of a recession — this was in the 2008 recession — and as you can imagine, since then, the market has grown exponentially,” said Taveras. “It just goes to show you that you really don’t need a lot to get started.”
As Wall Street predicts a recession in the coming year, now may be the time to start preparing to put money into the stock market.
Not only are some stock prices likely to fall, but so are the prices of some homes.
Owning property and real estate
Owning your home can also be a way of ensuring that future generations can have access to a cheaper place to live that’s already owned by the family.
Though the value of homes can shift up and down depending on a variety of factors, the Federal Housing Finance Agency found that housing markets have experienced positive annual appreciation since the start of 2012.
Not only would a house be worth more than it was when it was bought, but also if the house is passed down to a child or family member, it could save or earn future family members a big chunk of cash.
However, experts acknowledge that this is a harder goal to obtain.
As for some common mistakes to be wary of: financial experts remind employees to take advantage of 401(k) plans and other benefits that workplaces offer that they may be missing out on.
They also stress that putting off a necessary expense — such as home or car repairs — can often balloon problems into worse problems that cost a lot more than they may have originally cost.
(WASHINGTON) — A favorite picnic staple is being recalled, right on the heels of Fourth of July celebrations.
“Out of an abundance of caution, Hy-Vee, Inc. is voluntarily withdrawing all varieties and all sizes of its Hy-Vee Potato Salad and Mealtime Potato Salad due to a presumptive positive microbial result on the line that the potatoes were processed on,” the U.S. Food and Drug Administration announced July 1. “While final test results are not expected for approximately 7-10 days, due to the holiday weekend Hy-Vee elected to withdraw all product today from its shelves and service cases pending final test results.”
The voluntary recall, according to the FDA, includes all 10 product varieties and sizes of Hy-Vee Potato Salad and Mealtime Potato Salad. (Click here for a full product list and more recall information from the FDA.)
The products were sold in the company’s eight-state region and available in grab-and-go refrigerated cases and/or deli service cases in all Hy-Vee, Hy-Vee Drugstore and Dollar Fresh Market locations, as well as Hy-Vee Fast and Fresh convenience stores.
Customers in Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin who may have purchased the products are encouraged to check the expiration dates. The affected products are marked with dates between July 31, 2022, and Aug. 4, 2022, according to the FDA.
No other Hy-Vee or Mealtime branded salads are impacted and as of time of publication, there have been no reports of illness or complaints involving the products from the recall.
“Customers who have purchased any of these products are urged not to consume the product and dispose of it or return it to their local Hy-Vee for a full refund,” the FDA stated.
The company encouraged any questions be directed to Hy-Vee Customer Care at customercare@hy-vee.com.
(WASHINGTON) — Following a stronger-than-expected jobs report released on Friday, the Biden administration is continuing to push back on fears of looming economic downtown while working to tame historic inflation.
“I don’t see any reason to think that we will have a serious recession,” Commerce Secretary Gina Raimondo told ABC “This Week” anchor George Stephanopoulos on Sunday when asked about the trajectory of future growth as the Federal Reserve signals further interest rate hikes to slow spending and demand.
Raimondo said the “fundamentals” of the U.S. economy are “very strong” and tackling inflation is “our top priority.”
“We’ve recovered all the jobs since the pandemic. People’s household balance sheets are strong,” she said. “Companies are doing well. Companies are hiring, companies are growing.”
She acknowledged the strain of inflation on daily life and said she expected the economy to “transition to a more traditional growth level,” but said that the public should not “be talking ourselves into a recession.”
The Bureau of Labor Statistics last week announced that 372,000 jobs were added in June — nearly 100,000 more than economists had forecast — and the unemployment rate remained steady at 3.6%.
Asked on Sunday by Stephanopoulos to explain divide between “the strong economic fundamentals” and the “lowest consumer confidence” in the economy in years, Raimondo said it points back to “one word.”
“Inflation. … And people talk about it in different ways. But if you ask folks what they’re worried about, they’ll either say, ‘Grocery store prices are high, food prices are high, energy prices, gas prices,’ that’s in people’s daily lives.”
“Until we do get a handle on inflation, I think it’s natural for a family to be feeling that pinch,” she added.
But the administration will “get a handle” on the rising cost of goods and services, she said.
Amid calls from within the Democratic party to do more to combat inflation, Raimondo was pressed on what further actions President Joe Biden could be doing right now. But she turned some of the responsibility over to the Senate.
“Congress needs to pass the CHIPS Act,” she said, referring to one of two bills that would help accelerate U.S. manufacturing of semiconductor chips. “That has to pass. Has to pass now. Not in six months from now. Now. It’s bipartisan. [Senate Minority Leader] Mitch McConnell just threw a wrench in that about a week ago saying that he wasn’t going to allow Republicans to move on that unless we move down reconciliation. That’s a perfect example, George, of increasing supply. We have inflation now because of lack of supply.”
“Doesn’t that mean the CHIPS bill is dead?” Stephanopoulos asked Raimondo, echoing her point that McConnell has said he will block the legislation as long as Biden continues to push for a reconciliation spending bill over GOP objections.
“It shouldn’t be dead. Why can’t we do both?” Raimondo said. “It’s a false choice. He’s playing politics with our national security, and it’s time for Congress to do its job on both of those dimensions.”
Raimondo was also asked if she was confident in the effectiveness of the global price cap on Russian oil that Biden proposed, with Stephanopoulos pointing to “a lot of economists” who “are skeptical about whether that can really work.”
“I think it can [work],” she said of a price cap. “Yes, I think it can.”
(NEW YORK) — The digital currencies have crashed as interest rates rise and investors seek less risky investments.
Can cryptocurrency become an alternative financial system for people of color who have historically faced discriminatory banking practices? Some crypto enthusiasts of color who spoke with ABC News say they believe so, even despite the crash in the price of digital currencies.
Worries about the volatile cryptocurrency market also leave some wondering whether turning to digital currency could financially hurt people of color, who generally have less net worth and generational wealth than white people, rather than help them.
Prejudice in banking
Black and brown people have a history of being “underbanked” and discriminated against by traditional financial institutions.
Many low-income Hispanic and Black households have little-to-no bank access, according to research from the Federal Deposit Insurance Corporation.
At least 40% of Black Americans are under or unbanked – 13% are without a bank account and 27% rely primarily on other financial services that do not fully meet their financial needs, according to the Federal Reserve.
An analysis of Home Mortgage Disclosure Act data also found that of all mortgage applications, Black borrowers had the highest denial rate of 27%, followed by Hispanics at almost 22%.
And several investigations about discrimination by several banks, have shown that people of color have been charged more for banking fees or higher interest rates than their white counterparts.
Teri Williams, the president, COO and owner of OneUnited Bank, one of the nation’s largest Black-owned banks, told ABC News that “banking while Black” is a phrase used to describe discriminatory banking practices.
“There are many reasons for the large percentage of unbanked or underbanked Black Americans, including lower median income and education, less access to banking services due to a lower concentration of bank branches and a higher concentration of check cashers in Black communities, and systemic racism,” she said.
She says many Black Americans simply feel unwelcome when they walk into most national bank branches.
Even Black-owned banks have struggled for adequate investment funding and don’t have access to the same resources as large banks.
Cryptocurrency became a space, she says, where communities of color could support and connect with one another without having the red tape of financial systems, according to Olayinka Odeniran, the founder of the Black Women Blockchain Council.
“Everybody always felt that we don’t really care about investing or budgeting,” said Odeniran, who is also a cybersecurity expert. “But in essence, we do. It’s just that historically, we have not had resources that allow us to tap in beyond risk, gaining some monetary freedom that’s beyond paycheck to paycheck.”
Crypto pitfalls
However, the recent crash of a popular stablecoin and the dramatic fall of Bitcoin from nearly $69,000 to below $22,000 in just about two years (at the time of publishing), highlights some of the hazards and risks that come from decentralized financial systems.
The cryptocurrency market crash erased billions of dollars and sent investors into a tailspin.
Even cryptocurrency’s most enthusiastic cheerleaders acknowledge the potential risks and instability that cryptocurrency can have. Its volatile marketplace and the prices of coins can change quickly and regularly, putting one’s money at stake. The market is also rife with scammers eager to take advantage of users.
Still, some say it’s not much different than the ebbs and flows of the stock market.
“Even though we’re experiencing a bear market right now, historically, Bitcoin is still on the up and up,” said Mesidor. “This is a currency that no one paid attention to and now it’s sitting at around $20,000.”
The volatility of the market is one of its major risks. When the market crashes, people of color are likely to be included in the wreckage.
Crypto is so volatile because it isn’t backed by anything intrinsically valuable besides the public interest in it, according to Forbes, whereas the U.S. dollar is backed by the government.
This means that different currencies can drop their value or soar in a day. People can lose money, or potentially owe more on their crypto-based loans, in an instant.
Another risk for those operating in the crypto space is falling prey to scammers, who have taken advantage of a decentralized market rife with a growing number of potentially uneducated newcomers.
Reported losses to crypto fraud in 2021 were up nearly sixty times the losses in 2018, according to the Federal Trade Commission. Without a third party to flag fraud or suspicious activity, or reverse payments, more than 46,000 people have lost money since the start of 2021 to crypto scammers.
An ‘alternative financial system’
A report from the Pew Research Center found that Black, Asian and Hispanic people are more likely to say they have invested in, traded or used a cryptocurrency like Bitcoin or Ether.
“People of color sometimes have difficulty going to get a bank loan or going to get some sort of assistance from the government or a way to start their business and they’re turned down,” said cryptocurrency enthusiast Steven Bumbera. “Crypto doesn’t care.”
Cleve Mesidor, the executive director of the Blockchain Foundation, said that people of color are using crypto as “an alternative financial system to operate” without discrimination.
Enthusiasts contend the benefits of managing money on blockchain technology outweigh the risks for many people of color, and they’re sticking with it.
When using crypto, it can cost almost nothing and takes almost no time to transfer money to anyone in the world at any time, although it depends on the type of crypto.
For crypto-backed loans, borrowers can be given money from an exchange or lending agency without having to worry about racial discrimination.
“If you are on chain, and you have a wallet address, you’re a wallet address — that’s it,” said Bumbera. “Crypto doesn’t care about color, race, sexual orientation.”
Enthusiasts like Bumbera say they like that anyone with a smartphone can access cryptocurrency, without the red tape of banks or government institutions in which it takes days and costs fees or interest rates to do the same.
They also say crypto can be used to fund businesses and organizations directly without donations being penalized by a third-party to transfer the money.
However, for the wave of people of color working within the market, Williams says that this new financial frontier is bound to come with risks and challenges.
“Crypto is not a competitor to traditional banking, but a complement,” Williams said. “There will continue to be a need for traditional banking services, but crypto, in moderation, can provide opportunities for wealth building and opportunities to develop new services – such as remittance services – that can better meet the needs of the Black community.”
(NEW YORK) — The labor group behind the first-ever U.S. union at Amazon has thrown its support behind organizing campaigns at two additional warehouses.
Amazon Labor Union, the worker-led union behind the victory at an Amazon warehouse in New York City in April, reached agreements to provide organizing and financial assistance for workers trying to unionize warehouses in Albany, NY. and Campbellsville, KY., who will affiliate as formal chapters of the union, ALU President Chris Smalls told ABC News.
The development demonstrates the appeal of worker-led union campaigns and raises the possibility that the momentum built by the initial labor victory will foster unionization at other warehouses, experts said.
But they cautioned that the size of Amazon warehouses and well-resourced anti-union efforts from the corporation will continue to make the labor campaigns difficult.
“This shows workers are coming together,” said Jordan Flowers, a co-founder of ALU. “These workers want to see a union now, and they’re choosing ALU.”
The two organizing partnerships with ALU were first reported by More Perfect Union.
Workers organizing at a third facility in Garner, North Carolina are in discussions with ALU about partnering with the union, Ryan Brown, an Amazon warehouse worker involved in the labor campaign at the facility, told ABC News.
“We’re going to assist them 100%,” said Smalls, the ALU president and former Amazon warehouse worker. “Whatever they need: Resources, money, going out there.”
He acknowledged that the labor campaigns in Albany and Campbellsville remain in the “infancy stage.”
In a statement to ABC News, Amazon expressed its general opposition to union campaigns.
“Our employees have the choice of whether or not to join a union. They always have,” Amazon spokesperson Kelly Nantel said. “As a company, we don’t think unions are the best answer for our employees. Our focus remains on working directly with our team to continue making Amazon a great place to work.”
ALU, an independent union initially fueled by fundraising on a GoFundMe page, carried out a monthslong organizing campaign at the 6,000-employee warehouse on Staten Island that proved one of the most significant labor victories in the U.S. in recent decades.
After the union victory, Amazon filed objections with the National Labor Relations Board seeking to overturn the outcome, including allegations that NLRB officials showed a favorable bias toward the workers and that union leaders bribed colleagues in an effort to win their support. The ALU has rejected those claims. The NLRB hearings are ongoing.
In May, ALU lost a second union election at a neighboring warehouse on Staten Island. The partnerships with workers in Albany and Campbellsville mark the first labor campaigns announced by the ALU since the two union drives on Staten Island.
Matt Littrell, a warehouse worker involved in organizing at the warehouse in Campbellsville, told ABC News that employees want the company to address the grueling pace of the work and uncomfortable heat inside the building.
“The same issues come up time and time again, and they have for many years, yet management is very apathetic toward those,” he said.
The workers, who began organizing several months ago, were drawn to the worker-led nature of the ALU, he added.
“We wanted to go with a union made up of workers and people who understand our unique environment,” he said.
The organizing partnerships with ALU highlight the significance of the union’s victory, Rebecca Givan, a labor studies professor at Rutgers University, told ABC News.
“To prove that success is possible is huge,” she said. “The inspiration to stay and organize and fight to improve things is really significant.”
