Global Glance: Puerto Rico, Tesla crash, income gap

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Here are today’s top business headlines from across the nation and world:

Puerto Rico faces historic default as rescue bill approved

SAN JUAN, Puerto Rico (AP) — Puerto Rico faced a historic default Friday as the U.S. territory prepared to enter unchartered waters under the guidance of a newly enacted federal control board to oversee the island’s finances amid a dire economic crisis.

The anticipated missed payment of $2 billion in debt obligations would be the biggest ever for Puerto Rico and includes $1 billion worth of general obligation bonds that are given top priority by the island’s constitution. But Gov. Alejandro Garcia Padilla said the government is short on cash as he signed an executive order Thursday declaring a moratorium on that debt and others.

While the market already anticipated the default, it affects the credibility of a territory grappling with $70 billion in public debt, economist Jose Villamil warned. “This has enormous consequences,” he said. “The default is very significant, and it likely means that Puerto Rico will not be able to re-enter the market for many, many years.” Read more


Tesla crash could hurt sentiment on driverless cars

DETROIT (AP) —The death of a driver who was using Tesla Motors’ semi-autonomous mode could add to the public’s apprehension of driverless cars even before they reach the road in big numbers. Most major automakers and technology companies, including Google and Uber, are working on fully autonomous cars, and have worried that a highly publicized crash could hurt those efforts.

Automakers and analysts have said they need to be careful as they introduce more and more semi-autonomous features, from automatic braking to adaptive cruise control. People can quickly learn to rely on them, or assume they work better than they actually do. The possibility of a fatal accident was always a concern.

The accident could increase public skepticism about semi-autonomous and autonomous driving. In a survey released last month by the University of Michigan, two-thirds of drivers said they are moderately or very concerned about riding in a self-driving vehicle. Just 16 percent of the 618 drivers surveyed said they would rather ride in a self-driving car. Read more


US income gap widened last year as top 1 percent gained most

WASHINGTON (AP) — Financial inequality became even wider in the United States last year, with average income for the top 1 percent of households surging 7.7 percent to $1.36 million.

Income for the richest sliver rose twice as fast as it did for the remaining 99 percent of households, according to an updated analysis of tax data by Emmanuel Saez, an economics professor at the University of California, Berkeley.

Still, the incomes of households outside the top 1 percent appear finally to be recovering from the Great Recession, which officially ended seven years ago. After accounting for inflation, their average income rose 3.9 percent last year to $48,768 — the strongest annual gain since 1998. Contrast that with the period from 2008 to 2011, when the economy remained in a rut and inflation-adjusted income for the bottom 99 percent of households was falling. Read more


Union goes on strike against Trump Taj Mahal casino

ATLANTIC CITY, N.J. (AP) — Striking union members chanted, banged drums and blew whistles as part of a raucous picket line on Atlantic City’s Boardwalk outside the Trump Taj Mahal casino early Friday amid a contract dispute with owner and billionaire investor Carl Icahn at the start of the busiest weekend of the year for the casino industry.

Local 54 of the Unite-HERE union was unable to reach a new contract with the Taj Mahal, which terminated workers’ health insurance and pension benefits nearly two years ago. The Taj Mahal — which remained open for business — was the only one of the five casinos targeted by the union that was unable to reach a new deal on Thursday. Contract talks broke off early Friday morning.

About 1,000 members began walking off the job at 6 a.m., joining fellow union members in protest on the Boardwalk. The striking workers include those who serve drinks, cook food, carry luggage and clean hotel rooms. Dealers and security personnel are not included in the walkout. Read more


In Brexit, London startups see risk — and some opportunities

Britain’s decision to break away from the EU has created huge uncertainties for businesses, and there is no more vulnerable a period for a company than its infancy. Survival depends on getting the timing right in attracting investment, hiring workers, and spending on office space and equipment. London’s tech companies will scramble to cope — though true to the startup community’s culture of adaptability, many are looking to the tumult also as a source of opportunity for new business and to gain ground on the less nimble established companies.

Among the top concerns for startups in London is hiring. Being part of the EU guarantees free movement of workers, without the hassle and costs of visas or work permits. The tech sector is particularly dependent on accessing talent easily. A 2015-survey by Wayra, a startup incubator, found that one third of employees in tech startups in Britain are from outside the country, and one in five comes from another EU nation.

The concerns about the potential effect of a British EU exit, or Brexit, come as the U.K. tech industry is already experiencing a talent shortage. To help with that, the government allows firms to speed up recruitment of nationals from outside EU. Job search engine Adzuna shows there are around 35,000 open software positions in London. Read more


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