A Big Number.

Working capital for the modern middle class.

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1. MIT News:

You’ve heard of gig workers, freelancers, and temporary employees. But do you know about marginal workers?

Accounting for about one in six U.S. jobs, it’s a huge category of people, who are going nowhere fast in the workplace — and don’t really have much say about that.

“Marginal workers are employees who have no career prospects at their organizations,” says MIT Professor Emeritus Paul Osterman, author of a new book on the subject. “They are employees of the organization for whom they work, but the organization does not intend to keep them, and these workers are much less attached to any career ladder.”

As such, marginal workers are part of a larger trend in U.S. employment. According to Osterman’s analysis, 35 percent of U.S. workers are either marginal employees, freelancers, contractors, or gig employees finding work on online platforms like ridesharing services.

“That’s a big number,” says Osterman, who is the Nanyang Technological University Professor Emeritus at the MIT Sloan School of Management, where he is also a professor emeritus of work and organization studies. “That’s over 55 million people in the American work force.” (Source: news.mit.edu)

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2. “Buy now, pay later” loans took off during the pandemic as a way for online shoppers to go on retail splurges without using a credit card. Now, lenders are offering the loans as a means for people to finance basic households needs. The lending apps Flex and Zip allow customers to take out loans to pay for their broadband, electricity, health insurance, mobile phone service, mortgage and water bills. Affirm, one of the most popular pay-later apps, has started providing some tenants loans to extend their monthly rent payment for a few weeks. Many dentists, veterinarians and medical clinics now often offer instant pay-later financing, and Intuit this year started promoting “File Now, Pay Later” loans to TurboTax users who owe money in their tax return. Pay-later loans are becoming the “working capital for the modern middle class,” said Karen Webster, the chief executive of Pymnts, a news and market research company for the payments industry. (Sources: nytimes.com, pymnts.com)

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3. Long-term borrowing costs across major economies hit multi-decade highs earlier today as inflation concerns, deficit fears and surging AI bond issuance put pressure on government debt around the world. The yield on 30-year US Treasuries rose 0.02 percentage points to 5.33 per cent, its highest since 2007, taking its rise this week to 0.06 percentage points. At the start of last month it was below 5 per cent. European long-dated yields also rose. The 30-year German Bund yield rose 0.04 percentage points on Tuesday to 3.78 per cent, its highest since the Eurozone crisis in 2011. French yields of the same maturity rose 0.03 percentage points to 4.9 per cent, the highest since 2008. (Source: ft.com)

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4. John Authers:

Generally, rising long bond yields signal concern that growth will drive inflation and require higher interest rates further down the line. Some recent strong regional manufacturing surveys in the US might just support such a narrative. It’s hard to attribute all of this move to inflation anxiety, however, as bond market inflation forecasts have remained low and stable.