The Beige Book reveals bright spots in a coronavirus economy. : The Indicator from Planet Money The Federal Reserve's Beige Book focuses on stories from the economy. The latest edition shows some hopeful points of light in an otherwise gloomy economic landscape. | Support The Indicator here.
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The Beigies: Some Economic Bright Spots

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The Beigies: Some Economic Bright Spots

The Beigies: Some Economic Bright Spots

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UNIDENTIFIED PERSON, BYLINE: NPR.

CARDIFF GARCIA, HOST:

Hey, everyone. Just before we start our show, we have something to ask you. In order to continue providing coverage of the U.S. economy and other events throughout the country in this extraordinary year and to continue keeping up with how workers and other regular folks are doing, we would so appreciate it if you would donate to your local NPR member station at npr.org/indicator. It would go a long way towards continuing to be able to provide the kind of journalism that you expect from us. Thank you so much. And happy holidays.

(SOUNDBITE OF DROP ELECTRIC'S "WAKING UP TO THE FIRE")

STACEY VANEK SMITH, HOST:

Hey, everyone. It's Stacey. And today I am joined by the great Robert Smith of Planet Money.

ROBERT SMITH, HOST:

Thank you.

VANEK SMITH: And, Robert, I have lured you to THE INDICATOR today with some pretty irresistible bait - the Beige Book (laughter).

SMITH: Ah, the Beige Book. We need to explain this to people.

VANEK SMITH: Yeah.

SMITH: So eight times a year, the Federal Reserve publishes a report about the economy called "The Summary Of Commentary On Current Economic Conditions," which insiders like us know as the Beige Book due to its cover, which is beige.

VANEK SMITH: And, also, its regular name is terrible. But the wonderful thing, the thing that we love about the Beige Book, is that unlike most economic reports - which are, you know, full of graphs and charts and data - the Beige Book has no numbers. Instead, it has these little anecdotes, stories from around the country, from small businesses, from big businesses.

SMITH: For instance, here's a classic line from the Beige Book - a contact in Southern California noted a recent spike in demand for bicycles.

VANEK SMITH: We love this report. We really do (laughter).

SMITH: We do.

VANEK SMITH: In fact, we love it so much, Robert, that a couple of years ago, we created a little award show for our favorite entries in the Beige Book. We called it the Beigies.

SMITH: And since the Beige Book came out this week, we thought we would do it again.

VANEK SMITH: Yes.

SMITH: Now, as you can imagine, this particular Beige Book is somewhat painful. There's a lot of unemployment, struggling businesses.

VANEK SMITH: But there are these bright spots in the Beige Book, these little bits of good news, these signs that the economy is starting to ramp up again. And so we thought it's time for another Beigie Awards, this time for our favorite bright spots.

SMITH: Beige spots.

VANEK SMITH: Our favorite - (laughter) our favorite beige spots from the economy right now, yes, lighter shades of beige. So, Robert, why don't you do the honors?

(SOUNDBITE OF MUSIC)

SMITH: Welcome to the Beigie Awards, brought to you by THE INDICATOR FROM PLANET MONEY. I'm Robert Smith.

VANEK SMITH: (Laughter) And I'm Stacey Vanek Smith. And today on the show, the Beigie Awards - our favorite moments from the Beige Book.

(SOUNDBITE OF MUSIC)

VANEK SMITH: So here's how the Beige Book works. So we often talk about the Federal Reserve, the central bank of the United States, as this sort of big monolithic thing.

SMITH: But that is not true. The Federal Reserve is broken up into 12 distinct districts. There's the Federal Reserve Bank of San Francisco, which represents most of the West. There's the Federal Reserve Bank of New York, Federal Reserve Bank of Kansas City.

VANEK SMITH: And eight times a year, each of these districts contributes a chapter to the Beige Book. And they put out the best stories from their districts.

SMITH: So they can all see what's going on in each other's districts. And literally, each district has a team, even just one person, who calls up a bunch of businesses on their cellphones and asks them literally, so what's up? What's happening in your world?

VANEK SMITH: Some of them find these amazing stories that reveal really interesting things about the economy. And the latest Beige Book, the last one of 2020, came out yesterday.

SMITH: There were lots of interesting tidbits. For instance, laboratory spaces in Boston are hot right now. That's vaccine-nomics (ph), baby.

VANEK SMITH: Oh, yes. Also, veterinary supplies selling like hotcakes. There is a line in the Beige Book about the hot market for pet care. All those pandemic puppies, you know, they need stuff.

SMITH: But the big theme from most of the regions of the country was a boom in warehouse jobs. People need stuff. People order stuff on the Internet. Someone needs to box that up and get it to us. It is now sort of officially our national pastime.

VANEK SMITH: Yes, online shopping (laughter). And as a result - even though unemployment is still really high across the nation overall - in the trucking, warehousing and logistics industries, there is actually a shortage of workers. Wages are going up.

SMITH: Which brings us to the award.

VANEK SMITH: Yes.

SMITH: We pick our favorite anecdote from the Beige Book and bestow the coveted Beigie Award to the Federal Reserve district with the keenest insight. And this year, that goes to a district that captured this hot labor market for warehouse workers.

(SOUNDBITE OF MUSIC)

VANEK SMITH: The camera pans to the faces of the Federal Reserve Bank of Boston, then to the Federal Reserve Bank of Richmond. Everybody's tense. Some are about to cry.

SMITH: And the Beigie goes to the Federal Reserve Bank of St. Louis.

VANEK SMITH: St. Louis, congratulations (laughter).

(APPLAUSE)

SMITH: This is the St. Louis Fed's third nomination, but first time winning the award.

(SOUNDBITE OF MUSIC)

VANEK SMITH: Congratulations (laughter).

SMITH: Congratulations.

CHARLES GASCON: Well, thank you. I think - hopefully that will justify my cellphone bill from all the calls (laughter) I've been making over the last couple of months. So - but that's great to hear.

SMITH: Charles Gascon is an economist with the St. Louis Fed. He is in charge of writing their award-winning entry in the Beige Book.

VANEK SMITH: And Charles really captured what is going on with this labor shortage in the warehouse business.

GASCON: So the two things that come up a lot are child care issues and people managing what's going on at their homes with what they need to do for work. This is particularly a challenge for people who actually have to go on site to do their work.

VANEK SMITH: Right. They just have to take care of family or children instead of - they can't go into a job.

GASCON: Yeah, exactly. For a lot of people, it's just a challenge that they've been, like, basically gutting their way through over the last couple of months.

SMITH: The line from the Beige Book that really captured our hearts was this one - quote, "Expanding firms continue to note labor supply shortfalls, ascribing it to workers' child care and health concerns. One firm sought new employees in neighborhoods without adequate transportation by expanding a bus system to and from its warehouses."

VANEK SMITH: Like, they've created a bus system to get workers. Like, they're like, we will bring you to work if you will just come work for us.

GASCON: And, you know, I think this is a great example of a time where, like, we hear about this over and over and over again. And it's finally like, OK, yeah, this - we finally have, like, a really good story and a good understanding of this, and we're going to - you know, we have to put it in the report.

VANEK SMITH: It's not just free transportation that firms are using to lure workers. Charles' entry in the Beige Book talks about starting wages going up for warehouses and industrial workers. He didn't include a dollar figure, though. So we called a warehouse staffing company in St. Louis. You may have seen their signs along the highway, Robert (laughter).

JOSH BROWELL: It would say now hiring in big letters, and then it would say warehouse manufacturing jobs with a phone number.

SMITH: Josh Browell runs Action Logistix. That's Logistix with an X. It's in St. Louis. And he says the Beige Book nailed it. Workers with sick relatives or kids at home in Zoom school are having trouble showing up for normal shifts. So warehouses have to get creative to find more workers - transportation, flexible shifts, better benefits and, yes, more money. Josh specifically talks about the Amazon effect. Amazon is hiring so many warehouse workers right now at significantly higher wages.

BROWELL: If you're paying $11, $12 an hour to do the same work that someone can do over at Amazon for $15, you're going to struggle. And we've seen that before in the past, and it's forced employers to take a deep look at what their pay structures are for their employees.

VANEK SMITH: The St. Louis entry in the Beige Book says that of the companies they talked with, two-thirds are raising wages. Charles Gascon says for a lot of workers, especially those who deal with the public, their same jobs seem riskier now during the pandemic, and they want to be compensated for that risk. Really, there are just so many great moments to choose from in this Beige Book entry. So well deserved, St. Louis.

SMITH: Well, Charles, now that you've won a Beigie Award, what are you going to do?

GASCON: Oh, man. You're putting me on the spot here. You know, if it was econ questions, I would know - kind of have an answer prepared.

VANEK SMITH: (Laughter).

GASCON: I think I would just - I'll share it with my team. I think, you know, they've been making a lot of phone calls, like I said, and reading a lot of reports and putting things together, and I think they'll be happy to see that it's been recognized. So I think it's - you know, they deserve a lot of credit for all...

(SOUNDBITE OF MUSIC)

SMITH: Oh, the music came up before he could thank his agent.

VANEK SMITH: It's so awkward (laughter).

SMITH: Oh, but, Stacey, it is past midnight on the East Coast. We need to hurry up and end this year's Beigie Awards.

VANEK SMITH: This episode of THE INDICATOR was produced by Nick Fountain and Britney Cronin. Our editor is Paddy Hirsch, and THE INDICATOR's a production of NPR.

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