News of the Day

The Labor Department said Thursday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.3% in December from the previous month, more than expected. Prices climbed 3.4% from the same time last year.

Other parts of the report indicated that inflation is continuing to retreat, albeit slowly. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.3%, or 3.9% annually.

Housing costs were the biggest driver of inflation last month. Rent costs rose 0.4% for the month and are up 6.2% from the same time last year.

Other price gains also proved persistent in December. Food prices rose 0.2% over the course of the month. Grocery costs rose 0.1% last month and are up 1.3% compared with the same time last year.

Energy costs, meanwhile, climbed 0.4% in December, including a 0.2% increase in gasoline prices and a 1.3% spike in electricity.

The Federal Reserve has signaled it is closely watching the report for evidence inflation is finally subsiding as policymakers try to cool the economy with a series of interest rate hikes. Officials approved 11 rate increases in a span of just 16 months, lifting the benchmark federal funds rate from nearly zero to the highest level since 2001.

The U.S. Department of Labor today announced a final rule to help employers and workers better understand when a worker qualifies as an employee and when they may be considered an independent contractor under the Fair Labor Standards Act.

The guidance provided by the final rule aligns with longstanding judicial precedent on which employers have previously relied to determine a worker’s status as either an employee or independent contractor. The new rule will preserve essential worker rights and provide consistency for entities covered by the Fair Labor Standards Act.

The new “independent contractor” rule restores the multifactor analysis used by courts for decades, ensuring that all relevant factors are analyzed to determine whether a worker is an employee or an independent contractor. The rule addresses six factors that guide the analysis of a worker’s relationship with an employer, including any opportunity for profit or loss a worker might have; the financial stake and nature of any resources a worker has invested in the work; the degree of permanence of the work relationship; the degree of control an employer has over the person’s work; whether the work the person does is essential to the employer’s business; and a factor regarding the worker’s skill and initiative.

The rule separately rescinds the 2021 Independent Contractor Rule that the department believes is not consistent with the law and longstanding judicial precedent.

In crafting the new rule, the department’s Wage and Hour Division considered feedback provided by stakeholders at forums in the summer of 2022 and during the comment period after the proposal’s announcement in October 2022. The final rule takes effect on March 11, 2024.

Wisconsin would launch a small-scale, state-run medical marijuana program under a GOP proposal that lawmakers say will not lead to recreational usage.

The announcement comes as Wisconsin has become something of an island in the upper Midwest, where several neighboring states have legalized cannabis for full recreational usage. Nationwide, 38 states and the District of Columbia have some type of medical marijuana law, according to the National Conference of State Legislatures.

Under the proposal, the state would operate five medical dispensaries across the state, according to Rep. Jon Plumer, R-Lodi, who co-authored the plan.

Users would be limited to those with certain diagnosed medical conditions, such as cancer, seizure conditions, multiple sclerosis and severe chronic pain and nausea. State-licensed pharmacists would dispense the products, which would include edibles and oils, but not smokable products. Those products would use marijuana grown and processed by independent entities who would receive state licenses.

It’s a far cry from what many Democrats, including Gov. Tony Evers, have called for. Evers has proposed full recreational legalization in his budgets, which Republicans have called a non-starter.

Last year, Assembly Speaker Robin Vos, R-Rochester, hinted at internal divides within the Republican caucus over concerns that medical marijuana would serve as a gateway to recreational usage. In a recent interview with WISN-TV, he said the Wisconsin proposal would “probably be the most restrictive” medical marijuana program in the United States.

Vos said the GOP-held legislature does not want to build a marijuana industry similar to those in Michigan, Illinois and Minnesota, which have fully legalized cannabis, and where private dispensaries function more similarly to bars.

An Evers spokesperson told WPR that the Governor “will be reviewing” the proposal, and that he “looks forward to hearing from Wisconsinites and other stakeholders as the bill moves through the legislative process.” Evers said last week that, while he supports full legalization, he can “get behind” medical proposals if they are not overly restrictive or contain unrelated provisions.

Findings published by Bankrate on Monday indicate that nearly half of credit card holders – about 49% – are carrying credit card debt from month to month. That marks a sharp increase from just two years ago, when about 39% of Americans with credit cards carried debt from month to month.

More than half of Americans carrying credit card debt have done so for over a year.

Even more concerning is that of those holding credit card debt, 10% do not think they will ever be able to pay off their bills. Another 25% expect they will pay off their debt at some point – but that it will be at least five years in the future.

The Bankrate survey comes shortly after the New York Federal Reserve reported that total credit card debt surged to $1.08 trillion in the three-month period from July to September, an increase of $48 billion, or 4.6% from the previous quarter. It marks the highest level on record in Fed data dating back to 2003 and the eighth consecutive annual increase.

The rise in credit card usage and debt is particularly concerning because interest rates are astronomically high right now. The average credit card annual percentage rate, or APR, hit a new record of 20.72% last week, according to a Bankrate database that goes back to 1985. The previous record was 19% in July 1991.

Return fraud is a major concern for retailers as organized retail crime continues to run rampant throughout the industry, according to Mark Mathews, executive director of research for the National Retail Federation (NRF).

This type of fraud occurs when a person abuses a merchant’s return policy, which can be done through a variety of means. It’s already caused over $100 billion in overall losses for retailers last year, according to recent NRF data.

However, this type of scam isn’t just carried out by organized crime groups, which have grown in scale and complexity. It’s also an issue with everyday customers.

“There are different motivations,” Mathews said. Criminals seek out this type of fraud to generate cash. For instance, in some cases, criminals will look for receipts that were thrown away and use them to return the same item to collect cash, or they will try and replicate receipts for stolen products.

In other cases, customers may seek out this type of scam because they want to use a product before returning it. This type of return fraud is called “wardrobing,” and is one of the most common, according to Mathews.

In 2023, the total return rate was 14.5%. Of those, the NRF expects 13.7% to be fraudulent, according to Mathews.

The issue is that returning items in general is a costly process for retailers. When items are returned, they will be sent to a return center to be inspected, repacked and shipped back to the store if it’s not defective. But “in many cases, it actually has to be thrown away because it wasn’t handled properly,” Mathews said.

To try and mitigate the process of returns, companies have been making it easier for consumers to understand whether an item is right for them before purchasing.

This includes adding more information about products online and enhancing technology so that customers can virtually try on fashion products or see what a piece of furniture would look like in their home, for instance.

As Wisconsin lawmakers spar over the possibility of further tax cuts in 2024, a report released today found that the state’s tax burden remains near its all-time low.

The tax burden, or amount of money that state and local governments collect in taxes divided by the total earnings of its residents, is a way of measuring how onerous Wisconsin’s tax environment is for its people.

In 2022, the ratio dropped to its lowest on record, according to findings from the Wisconsin Policy Forum, and the think tank’s new report shows the burden largely remained at that low water mark in 2023.

There was a modest increase in state and local tax collections in 2023, with governments collecting a combined $36.23 billion, a 2.5% rise from the year prior. Wisconsinites actually paid less in taxes to the federal government last year.

Residents also experienced only a small increase in incomes last year, ticking up by 2%. That means they didn’t gain much wiggle room in being able to meet their tax bills.

Overall, 10% of Wisconsin residents’ incomes went toward taxes in 2023, with the tax burden consistently falling in recent years. The Wisconsin Policy Forum found the burden has been less than 11% of personal income each of the last nine years, something which had not occurred since at least the 1970s.

Nationally, data from the Tax Foundation found Wisconsin had a higher than average tax burden in 2022, though it fell well short of New York, which has the highest in the country at just shy of 16%.

The national debt – which measures what the U.S. owes its creditors — hit $34 trillion as of Friday afternoon, according to new data published by the Treasury Department.

“We are beginning a new year, but our national debt remains on the same damaging and unsustainable path,” said Michael Peterson, CEO of the Peter G. Peterson Foundation, which advocates for fiscal sustainability.

The national debt is expected to nearly double in size over the next three decades, according to the latest findings from the Congressional Budget Office. At the end of 2022, the national debt grew to about 97% of gross domestic product.

Under current law, that figure is expected to skyrocket to 181% at the end of 2053 – a debt burden that will far exceed any previous level.

“Though our level of debt is dangerous for both our economy and for national security, America just cannot stop borrowing,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

Even more worrisome is that the spike in interest rates over the past year and a half has made the cost of servicing the national debt more expensive.

That is because as interest rates rise, the federal government’s borrowing costs on its debt will also increase. In fact, interest payments on the national debt are projected to be the fastest-growing part of the federal budget over the next three decades, according to the CRFB.

Payments are expected to triple from nearly $475 billion in fiscal year 2022 to a stunning $1.4 trillion in 2032. By 2053, the interest payments are projected to surge to $5.4 trillion. To put that into perspective, that will be more than the U.S. spends on Social Security, Medicare, Medicaid and all other mandatory and discretionary spending programs.

The price to ship your letters and packages is going up in the new year.

Starting January 21, 2024, the price for a First-Class Forever U.S. Postage Stamp will increase from 66 cents to 68 cents, according to the U.S. Postal Service. The prices for domestic postcard stamps will also increase by two cents from 51 cents to 53 cents and international postcards will increase from $1.50 to $1.55.

In addition to stamp prices increasing, the price to send priority mail and other postal services will also increase on January 21.

USPS Ground Advantage prices will increase by 5.4 percent, Priority Mail service prices will increase by 5.7 percent, and Priority Mail Express service prices will increase by 5.9 percent.

The price for USPS Connect Local will remain unchanged.

As part of the Wisconsin Department of Workforce Development’s (DWD) continued efforts to modernize its Unemployment Insurance services, the agency is launching a project to upgrade the Unemployment Insurance employer portal while also progressing with work on new tools to calculate benefits for claimants.

“The new employer portal will offer significant efficiencies and streamline processes for employers,” said DWD Secretary Amy Pechacek. “Greater efficiency for employers will also speed processing times for claimants, reflecting our priority to improve service for all DWD customers.”

The new employer portal also will increase security and offer the following:

• Modern design and layout;
• Expanded functionality that incorporates all UI wage submission requirements and allows users to respond to requests for verification related to a claim; and
• Secure messaging and document upload options for more convenient and secure communication

More details about the latest upgrades to the UI benefits system and the employer portal project can be found in this UI Modernization Update video. Previously reported progress on modernization includes:

Wage growth in Wisconsin has been slowing down this year, but inflation-adjusted personal incomes are expected to grow slightly after declining last year.

The state’s year-over-year change in annual pay was 5.6 percent in November, down from 8 percent in the same month of 2022, according to a report from ADP Research Institute.

Liv Wang, lead data scientist at ADP Research Institute, said wage growth has been elevated since the pandemic, but it’s now moving toward a “more sustainable level” as inflation cools. Wang said she anticipates wage growth will continue to slow over the next year or two.

“One of the factors is we are moving away from the pandemic effects, (and) things are cooling in the labor market,” she said. “Also, the financial environment is tightening as the (Federal Reserve) keeps raising interest rates, so employers may be preparing for the tightening situation right now.”

That slowdown has been felt across sectors in 2023, but has been especially pronounced in the leisure and hospitality industry, according to the ADP report.

The ADP report showed median wage gains in leisure and hospitality nationally far outpaced all other industries from late 2021 through 2022, peaking last March when they were 16.9 percent higher than the previous year. The next closest industry that month was trade, transportation and utilities at 8.8 percent wage growth.

This year, wage growth in leisure and hospitality slowed significantly. As of November, median wages in that sector were 6.5 percent higher than the previous year. Most other industries came in between 5 and 6 percent.