North America Update: August 4
Keep an eye out for the next weekly update on Tuesday, August 11. Thanks for your readership!
- The U.S. Department of Labor will release the July unemployment data on Friday morning. The unemployment rate was 11.1 percent in June. While the rate decreased in May and June as the U.S. economy reopened, economists have noted a recent decline in economic activity in July as the pandemic forced some state and local governments to roll back some openings in an effort to contain the virus.
- Across the United States, daily new cases have declined in recent days, driving the seven-day average of new cases down more than 5 percent compared to a week ago, according to Johns Hopkins University. Most notably, outbreaks in Sun Belt states such as California, Florida, Texas and Arizona have started to decline. However, while cases appear to be descending, deaths from the pandemic have been on the rise since early July. Dr. Deborah Birx, White House coronavirus task force coordinator, said on Sunday the U.S. is “in a new phase” of battling the coronavirus, which is “extraordinarily widespread” in both urban and rural communities and across the South and Midwest.
- Canadians can now download a voluntary smartphone app that will alert users if they’ve been near someone who has tested positive for COVID-19. The free app tracks the location of phones relative to each other without collecting personal data, and notifies users if their phones have recently been near the phone of a person who has tested positive for COVID-19. The app is currently linked to the Ontario health system, but anyone in Canada can download and use the app. More provinces will be joining it soon.
- The $80-billion Canada Emergency Response Benefit, which provides $2,000 a month to those out of work due to COVID-19, will wind down over the coming weeks. Prime Minister Justin Trudeau announced Friday that the government plans to move out-of-work Canadians into the employment-insurance system and provide a “transitional parallel benefit” for millions who don’t qualify for unemployment benefits, such as contract and gig workers.
- The European Commission signed a €63 million contract with Gilead for supplies of the company’s antiviral drug, remdesivir to combat COVID-19. The deal will ensure the treatment of around 30,000 patients with “severe” symptoms. The medicine will be available for EU member states and the UK in August. These supplies are expected to last until around October.
- The Eurozone economy contracted by 12.1 percent in the second quarter of 2020, while the EU’s overall GDP shrank by 11.9 percent. Eurostat released a statement saying the contractions were “by far the sharpest declines observed since time series started in 1995.” Among EU member states, Spain faced the steepest decline compared to the last quarter (-18.5 percent), followed by Portugal (-14.1 percent) and France (-13.8 percent).
- COVID-19 solidified how critical gig work is and that the gig economy model is here to stay. Economic uncertainty has led to more gig workers. Grab’s – a Singapore-based technology company offering ride-hailing transport services regional operations saw an additional 115,000 people sign up to become drivers- or delivery-partners during the pandemic. During the lockdown period in Thailand, food delivery providers Line and GoJek hired 30,000 and 40,000 new drivers respectively. In Japan, Uber has launched a ride-hailing mobile app in partnership with three domestic taxi companies spurred by demand for ride-hailing services amid the pandemic. The company also seeks to capitalize on the demand for food delivery as Uber Eats has experienced an 89% year-over-year increase in revenues in Q2. Meanwhile, India’s gig economy will witness a massive rise post-pandemic generating between four and five million jobs over the next three to four years, according to livemint.
- Deemed “essential workers” amid the ongoing pandemic, the gig economy has failed to live up to its promise of empowering workers and protecting their interests. Frequently touted as “the biggest losers” of the pandemic, gig workers are faced with the decision either risking their safety to deliver and provide rides, or put their physical health ahead of their financial health and not work. Most governments across the region have been unable to provide assistance to gig workers because they are not classified as workers but independent contractors. They also bear the brunt if governments respond to the huge increases in fiscal deficits by cutting back on future public spending.
- As case counts soar, Uber Eats Hong Kong recently launched an app tipping feature in which the restaurants or delivery partners can receive the entirety of the tip. They also introduced a verification process whereby delivery partners will be asked to take a selfie to confirm that their faces are covered. Food order apps in other countries have adopted similar features. The crisis has intensified the call for gig economy workers to be provided with the same or equivalent safeguards and protections afforded to employees and other workers, including those relating to health and safety, as well as basic employment rights such as sick leave.
- Mexico’s GDP fell by 17.3 percent, the sharpest drop on record, data from the National Institute of Economic Statistics (INEGI) showed.
- Mexico now has the third-highest death toll from the coronavirus, with only the United States and Brazil reporting greater numbers. The country has had roughly 46,688 deaths during the pandemic and 424,637 infections.
- The Mexican government has delayed actions to open the doors to foreign investment in the energy sector. However, it maintains the intent to finance the state-owned oil company, PEMEX, which in its latest report to the Mexican Stock Exchange reported a $2 billion loss in the second quarter.
- A central bank survey of economists revealed on Monday the average forecast for Brazil’s 2020 GDP is now showing a decline of 5.7 percent, compared with -6.5 percent last month. While the contraction is still the steepest annual downturn to date, it is the most optimistic outlook since May.
- The Economic Commission for Latin America and the Caribbean (ECLAC) and the Pan American Health Organization (PAHO) said that if the transmission curve is not controlled, the economies of countries through the Americas region will not be able to recover. Latin America and the Caribbean have more than 4 million cases of COVID-19 and over 200,000 deaths to date. Brazil leads the number of cases and deaths. The Oswaldo Cruz Foundation signed an agreement with the British laboratory AstraZeneca to produce millions of doses of the vaccine developed by the University of Oxford and could begin manufacturing in December.
- The Brazilian company Latam Airlines will lay off 2,700 crew members. The voluntary resignation program opened on Friday and ends today. After that, layoffs will begin.
INSIGHTS & INTEL:
- Democrats and Republicans in Congress are still far from an agreement on the next pandemic and the economic stimulus package, but will continue to negotiate this week towards a deal. Unemployment aid for jobless Americans, liability protections for businesses and schools, and relief for state and local governments are the major differences in each party’s proposed bills.
- Two major federal benefits – a $600 weekly unemployment payment and a housing eviction moratorium – expired last week. Democrats are unified in their support for continuing the $600 monthly unemployment benefit through the end of 2020, while Senate Republicans have proposed an alternative $200 proposal. The administration has noted that there is more than $1.4 trillion left in unspent funds from previous legislation, including $100 billion each for state and local governments and small business aid, as well as more than $9 billion for testing.
Below are summaries of interesting business responses to COVID-19 in recent days.
- Former Democratic presidential candidate Andrew Yang has pledged to spend up to $1 million as part of a project to give $1,000 each month for three months to American families struggling in the COVID-19 pandemic. The pledge echoes his presidential campaign promise of a $1,000 monthly “freedom dividend” for every U.S. adult. Yangs’s nonprofit, Humanity Forward, is partnering with a network called The $1K Project to deliver the payments. The $1K Project, founded by the tech entrepreneurs Alex Iskold and Minda Brusse, exists to match donors with people who could best use the money. Beneficiaries receive direct $1,000 payments each month for three months, the project says.
- TikTok launched a campaign in South Africa — with intentions to expand across the continent — that seeks to empower the local community with useful digital skills that can help people acquire knowledge for professional and personal use. As social media services surged in popularity during the various stages of lockdown, the video-sharing social media network realized an increase in digital adoption and launched SkillsUP. The campaign will be broadcasted live on TikTok South Africa’s official account, which will be set to provide tips from experts on how to be more creative and engage in positioning brands and businesses within the digital space.
- The press will not be present when the Republican Party votes to renominate Donald Trump for president at its national convention later this month. Citing coronavirus-related health concerns, a convention spokesperson told the Associated Press that media members would be turned away to assure compliance with state and local guidelines regarding the number of people who can attend events.
- New Virtual Programming: Top conveners such as Axios, Politico, Bloomberg and Washington Post announced new virtual events on COVID-19-related topics such as how hospitals are responding to the pandemic and prospects for economic growth, as well as current issues like inequality and exploitation in fashion, and representation of women in politics.
- CES: CES 2021 will proceed as an all-digital experience January 6-9, with participant access to keynotes and conferences, product showcases, and meetings/networking opportunities. Organizers plan to return to Las Vegas for CES 2022, combining elements of a physical and digital show.
- MLB: Following last week’s COVID-19 outbreak among the Miami Marlins, the St. Louis Cardinals have had four positive cases with more expected. To date, 18 games in the 60 game season have been postponed. As a result, the MLB and Players’ Union have agreed to play 7-innings in games that are doubleheaders.
- U.S. Open: Following the original postponement of the 120th edition of the U.S. Open from April to September, USGA officials announced the event will take place without spectators on September 17-20. To date, the Masters (November 12-15), is now the only potential opportunity for fans to attend a tournament during the 2020 season.
- Pac-12: Hundreds of Pac-12 football players have threatened to opt out of the 2020 season. In an open letter posted on The Players Tribune, the athletes wrote that unless an agreement can be met regarding health and safety procedures, the preservation of all existing sports, ending racial injustice in collegiate athletics, and economic freedom and equity, the players will stand united in opting out of the 2020 season.
For more information about how we are helping clients solve in this uncertain time, please contact:
- Micho Spring, Chair, Global Corporate Practice, email@example.com
- Pam Jenkins, President, Global Public Affairs, firstname.lastname@example.org