Newsletter: California Inc.: Brace yourself, Hogwarts is opening at Universal Studios
Welcome to California Inc., the weekly newsletter of the L.A. Times Business section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
Last week ended on a high note after the government reported Friday that job growth kept up a solid pace in March and workers’ wages rose. The unemployment rate edged higher, to 5%, from 4.9% in the prior two months, but it was for a good reason: With job and pay prospects improving, more people are rejoining the labor force.
LOOKING AHEAD
Delta review: The state Water Resources Control Board, which oversees how much water goes to farms and cities in much of the state, will meet Tuesday in Sacramento. The board will hear the latest on the health of smelt, salmon and other aquatic life in the Sacramento-San Joaquin delta, the choke point for transporting water to Southern California. Two surveys this year have netted only seven smelt, increasing speculation that the species is moving closer toward extinction.
Trade gap: The latest look at the U.S. trade deficit will come Tuesday as the Commerce Department releases the numbers for February. The gap in the value of foreign-made goods we purchase here compared with American-made stuff sold overseas widened more than expected in January. A strong dollar and weak global demand helped push exports to a more-than-5½-year low. This suggests trade will continue to weigh on economic growth in the first quarter.
Fed watch: The U.S. Federal Reserve releases the minutes from its March 15-16 Open Market Committee meeting on Wednesday. Investors will be looking for clues about which way the economic winds might be blowing — and what that could mean for interest rates. On Thursday, Fed Chief Janet Yellen joins a discussion with former Fed heads Ben S. Bernanke, Alan Greenspan and Paul Volcker in New York. It will be the first time the four living Fed chairs have appeared together onstage in conversation.
Harry Potter: The Wizarding World of Harry Potter opens Thursday at Universal Studios Hollywood, part of a $500-million expansion of the theme park. In anticipation of sky-high popularity for the attraction, Universal already has boosted the prices of daily tickets to $115 from $95. It also has adopted a “demand pricing” policy that offers a discount for visitors who buy tickets online for off-peak days. But even the discount price has been increased, to $90 from $75.
Mission to space: SpaceX is scheduled to launch its Dragon spacecraft on Friday for a cargo-delivery mission to the International Space Station. Last month, SpaceX successfully blasted a commercial communications satellite into orbit, but its rocket experienced a “hard landing” on a drone ship in the ocean. The satellite is providing services such as broadcasting and video capabilities, maritime connectivity and high-speed broadband to more than 20 countries in the Asia-Pacific region. It’s owned by Luxembourg-based satellite operator SES.
THE AGENDA
Monday’s Business section checks out the so-called gig economy, in which more and more U.S. workers are acting as independent contractors rather than full-time employees. Nearly 3 million Americans became freelancers from 2005 to 2015. But even as the gig economy draws an ever-growing share of American workers, it remains largely unregulated. People who work independently do not enjoy a raft of worker protections that apply to almost everyone else.
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow.
Minimum wage: A law proposed by Gov. Jerry Brown would gradually lift California’s statewide minimum wage to $15 an hour from its current $10 by 2023. About 800,000 workers were already promised raises to $15 in several cities that passed their own minimum wage hikes, including Los Angeles, San Francisco and Santa Monica. More than a third of the state’s workers will benefit from the wage hikes, according to an analysis by UC Berkeley’s Center for Labor Research and Education. The people who stand to benefit the most are low-income adults, most of them household breadwinners, the study concludes.
New Tesla: Tesla Chief Executive Elon Musk pronounced the Model 3 a success upon its birth last week in Hawthorne. And by the reaction in person and online, Tesla fans overwhelmingly agreed. Pulling the covers off the fourth vehicle in the company’s short history, Musk declared that more than 115,000 Model 3’s had been preordered in the first 24 hours. The next day that number had climbed to 180,000. Analysts said the number of preorders for the Model 3 exceeded their expectations.
Dodgers channel: Time Warner Cable has surrendered the ball. The New York company conceded that it has failed in its efforts to win broad distribution for SportsNet LA, the TV channel owned by the Dodgers. Time Warner made several pitches this month to other pay-TV providers — including AT&T’s DirecTV and Cox Communications — hoping to entice them to sign up for the Dodgers channel in time for the baseball season, which begins today. The company proposed cutting the carriage fee for the channel, entering into binding arbitration or signing a six-year deal — but struck out with cable companies attempting to keep costs low amid growth in cord-cutting.
Airbnb taxes: If property owners who rent out homes and apartments on the popular home-sharing site Airbnb were to pay taxes as hotels do, the city of Los Angeles would collect an extra $41 million each year. That is one of the conclusions of a study commissioned by the American Hotel and Lodging Assn., the trade group for the country’s hotel industry. In Los Angeles, the latest study said, about 22% of Airbnb operators rent their properties for at least 180 days a year, while 4% offer their homes for at least 360 days. The areas with the highest number of Airbnb operators were Venice, West Hollywood, Hollywood and neighborhoods around Silver Lake and Echo Park. Airbnb called the study “inaccurate.”
Woeful waffles: Roscoe’s House of Chicken and Waffles is an L.A. culinary institution, dishing up its soul food to the likes of Snoop Dogg and Magic Johnson. But now the chain is in trouble — its parent company, East Coast Foods Inc., filed for Chapter 11 protection. The bankruptcy filing came mere months after the company was ordered to pay $3.2 million to a former employee who won a wrongful termination and discrimination lawsuit, claiming the chain gave preferential treatment to Latino employees over black workers. In Bankruptcy Court filings, East Coast Foods estimated that it has debts between $10 million and $50 million, while assets totaled less than $50,000.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Hidden cash: The Wall Street Journal looks at an unintended effect of U.S. terror rules — the way they can drive money underground, beyond the scope of regulators and law enforcement. As banks close questionable accounts, officials lose sight of transactions they most want to keep an eye on.
Fallen king: The New York Times Magazine takes a close look at Xu Xiang, China’s hedge-fund king. He was a towering figure in the country’s booming stock market, “until the bubble he helped to create took him down with it.”
Smooth, soft, unsafe?: Think Johnson & Johnson and you probably think baby powder. But that’s a problem for the company. As Bloomberg tells it, more than 1,000 women are suing J&J for allegedly covering up a cancer risk.
Super-sized: The Atlantic delves into what it calls the commodification of higher education. “Colleges and universities have become a marketplace that treats student applicants like consumers,” it notes. “Why?”
Dubious costs: The management consulting firm Robert Half blogs about a study on expense reports filed by U.S. workers. That flat-screen TV? OK, maybe there’s a business case to be made. That doggie day spa? Probably not so much.
SPARE CHANGE
All this talk of expense reports brings to mind TPS reports. What are TPS reports, you ask? Clearly you need to rewatch this scene from “Office Space.”
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
