Bloomberg Daybreak: June 30, 2021 - Hour 1 (Radio)

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Inflation is Not Transitory: Johan Van Overtveldt

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Salaries are on the rise in police departments across the US, despite protests and calls to defund the police

NYPD officers stand guard on April 4, 2021 in New York City.

Jeenah Moon/Getty Images

• The 2020 median salary for a police officer in the US was $67,290 - the median for all jobs was $48,769.
• Despite ongoing calls to defund police departments, officer salaries are only getting higher.
• Police forces are growing, too, with incentives to join such tuition reimbursement and signing bonuses.
• See more stories on Insider's business page.

Police work can be one of the best-paid professions in the United States.

According to the US Bureau of Labor Statistics, the 2020 median salary for a police officer was US$67,290 - more than one-third higher than the national median of $48,769 for all occupations. Many officers probably earn much more, because the bureau's analysis is based on hourly wages for a typical work year of 2,080 hours and does not include overtime - one of the factors that can drive an officer's yearly income even higher.

Although there is a great deal of variation across the nation's roughly 18,000 police departments, the agency also reports that salaries for police have largely climbed in the past five years - from an 8.8% increase in Mississippi, the state that overall pays its police the least, to a 21% increase in Hawaii, one of the best-paying states.

While efforts to control police budgets have succeeded in Austin, Denver, and Oakland, among others, the Biden administration recently announced that COVID-19 relief funds can be used to hire police officers to combat the rise in gun violence.

As a former police officer who studies policing in America, I think it is unlikely that police salaries can go anywhere but up.

Read more: 3 IT professionals who didn't get a college degree and are now making 6 figures reveal how to succeed in their field

Police salaries are inching up

Just look at the trends across the US.

The Bureau of Labor Statistics published the mean salaries for police officers in all states plus the District of Columbia for the year 2018.

Somewhat predictably due to cost of living, California topped the list at $101,380, followed by Alaska at $88,030, where the cost of living also drives salaries higher. New Jersey, Washington state, and Hawaii round out the top five.

All of the 10 departments with the lowest-paid officers are located in the South, where Mississippi police officers earn slightly more than one-third of their California counterparts.

Large cities clearly offer higher wages to their police officers, as do some cities surrounding large metropolitan areas. The Los Angeles Police Department currently advertises a starting salary of $70,804 a year. That's up from the 2015 starting annual salary of $59,717 - an 18.5% increase over just six years.

Starting salary for police officers in Baltimore is $55,117, with a seasoned officer earning $95,325, base salary alone. Seattle officers earn $83,600 once they've completed their basic academy training and top out at $109,512 after 54 months, not including overtime. Seattle even agreed to pay its officers an extra 2% for wearing body cameras.

Larger, better-paying police departments attract officers from smaller departments by offering more pay and better training for experienced officers. This often leaves a void that small agencies struggle to fill with qualified candidates.

There are three main drivers of police take-home pay: overtime, education, and competition.

1. Overtime

In his recent trial for the murder of George Floyd, Minneapolis police officer Derek Chauvin was represented by an attorney paid for by his union, the Minneapolis Police Federation. This benefit is only a small part of the union's 128-page labor agreement with the city, which details salaries, vacation, sick leave, medical insurance, grievance procedures and, in particular, overtime pay.

Reportedly, Derek Chauvin's 2018 salary was $90,612, more than twice the average Minneapolis per capita income of $38,808 in 2019. But it's overtime rather than base salaries that drives up officers' total compensation.

Across the country, police officers typically receive "time and a half" for every hour worked beyond the standard 40-hour week, meaning a pay rate that combines their regular hourly rate plus an additional 50%.

Most union agreements also stipulate higher pay for other work deemed "overtime," such as off-duty court appearances. They also stipulate other after-hours pay boosts, such as a minimum of four hours' pay for officers called back to duty for any reason.

In practice, these extra pay arrangements have a huge effect on driving up the size of police budgets. A few examples:

• In Los Angeles, where the second-largest police force in the US boasts salaries of $83,144 after two years of employment plus an annual 1.5% cost-of-living increase, the union recently negotiated $245 million in overtime pay for its officers.
• Boston's complex agreement with its police department results in many opportunities for overtime as well as extra payment for special assignments.

City governments typically budget for some police officer overtime, since that extra income does not count toward an officer's eventual retirement pay and reduces the need to hire additional employees. However, unanticipated events such as national disasters, public demonstrations, and political rallies all result in overtime pay for cops that cities must pay whether or not they planned for it:

• Palm Beach, Florida, paid $3.26 million in police overtime for former President Donald Trump's visits to his Mar-a-Lago resort over a period of just 27 days from late 2017 into early 2018.
• Demonstrations in the wake of Floyd's murder cost New York City $115 million in overtime during one two-week period, while Seattle paid $6.3 million during the first 12 days of protests.

2. Education

Few local law enforcement agencies require a four-year college degree, but most offer educational incentives that range from a 2% annual salary increase for earning an associate's degree to 10% for a bachelor's degree.

For example, since 1970 in Massachusetts, police receive pay incentives of up to 25% over and above their regular salary for a master's or law degree. The Chicago Police Department, among others, provides tuition reimbursement for college courses, as well as additional incentive pay once a degree is completed.

Such incentives may be a good investment. Research indicates that police officers with college degrees are less likely to use lethal force and are subjects of fewer citizen complaints. Since fewer complaints mean fewer claims to pay and lawsuits to defend, this can ultimately save cities money.

3. Recruitment

More police officers are leaving the profession before retirement age, according to a 2019 study by the Police Executive Research Forum. The group has also found that the number of applicants for police jobs has steadily declined over the past 10 years. So departments trying to attract new recruits often go beyond tempting salaries by offering incentives like assistance with relocation, housing and childcare, education pay, college tuition reimbursement, health club memberships, and employee signing bonuses.

At the New York Police Department, the nation's largest force, the starting salary is a relatively modest $42,000 a year. But the department highlights on its website that starting benefits include "holiday pay, longevity pay, uniform allowance, night differential, and overtime," which together with salary can boost annual compensation to more than $100,000.

Even smaller departments are coming up with incentives to try and remain competitive with larger agencies that can offer higher salaries, more overtime and more attractive benefits. The police department of Bellmead, Texas, a city of around 10,500 about two hours north of Austin, has begun offering experienced officers a $5,000 bonus for signing on to the force.

Another trend to watch: Not only are police salaries rising, but the size of police forces also continues to grow. The Bureau of Labor Statistics forecasts a 5% growth in police jobs from 2019 to 2029, from 813,500 to an estimated 854,200, which is faster on average than other occupations.

Laurie Woods, senior lecturer in sociology, Vanderbilt University

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Top Stories this AM: Phantom calls from the collapsed Florida condo; US rated top in pandemic resilience ratings; an NYC BOE screw up

Good morning and welcome to your weekday morning roundup of the top stories you need to know.

For more daily and weekly briefings, sign up for our newsletters here.

What's going on today:

• A sign of hope? Family members of a couple missing in the Florida condo collapse continue to receive phantom phone calls from their number. Experts don't know why. "This is unusual enough to give me hope that there's someone who's alive...and is trying to signal that they're there," electrical engineer Ted Rappaport said of the strange calls.
• How victims of the Surf side building collapse could survive. Survival experts explain what it would take to survive a building collapse like the one in Surfside, Florida. "Essentially a giant building fell on those people and on the good/bad scale of survivability, that's very bad," Tim Smith of the Jack Mountain Bushcraft School told Insider.
• We're number one! US takes the top spot on Bloomberg's COVID Resilience Ranking as vaccine rollout speeds up return to normal. As "normalization" becomes key in what makes a country the best place to be, the US has overtaken New Zealand on Bloomberg's COVID Resilience Ranking.
• But anything could happen next week. Trump Organization COO Matthew Calamari won't face criminal charges this week, his lawyer says. Matthew Calamari and his son, Matthew Calamari Jr., are under scrutiny in the Manhattan District Attorney's Trump Organization investigation.
• Nearly 1,000 asylum-seeking children are being held at Fort Bliss despite many having family members willing to take them in. In recent court filings, kids held there complained of insomnia, inedible food, and depression. The emergency intake shelter in El Paso, Texas, has been criticized for holding too many children in deplorable conditions.
• NYC, we have a problem. New York City will re-do its first rounds of ranked-choice voting after accidentally including 135,000 test votes in official results. The Board of Elections announced late Tuesday night that it will remove the dummy votes left in the system and completely re-tally the results.
  
  That's all for now. See you tomorrow.

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Southwest will pay flight attendants double overtime as it struggles with a staffing hole over the July 4 week

A Southwest Airlines agent in Los Angeles.

Lucy Nicholson/Reuters

• Southwest is paying some staff double for overtime shifts in the first week of July, CNBC reported.
• The airline said the extra pay would boost staff levels and reduce the number of flight disruptions.
• Demand for travel is rebounding fast but the aviation industry faces a staffing shortage.
• See more stories on Insider's business page.

Southwest Airlines is doubling overtime pay for some staff over the July 4 week as it eyes a huge bump in travel, CNBC reported.

Flight attendants, ground-operations agents, and cargo agents will earn double for picking up extra shifts in a bid to avoid disruptions over the Independence Day weekend, per CNBC.

Demand for travel is rebounding fast as the US economy reopens but the aviation industry faces a staffing shortage after letting too many pilots and flight attendants go during the pandemic.

Meanwhile, Southwest has been hit by a series of flight disruptions caused by technical problems and bad weather. It delayed nearly 4,000 flights and canceled hundreds more over a three-day period in mid-June because of a glitch in weather data and a computer-system outage. It also canceled hundreds of flights over the weekend and Monday after airports were hit by severe thunderstorms.

Read more: Forget flying commutes - these aviation startups are taking off by moving cargo by air

In a memo to staff Monday, reported by CNBC, Alan Kasher, executive vice president of daily operations at Southwest, said: "We have heard from many of you who are frustrated with our network reliability and irregular operations created by summer storms across many parts of the country.

"To address the situation for the short term, we will be incentivizing our Ops Employees during this busy holiday travel week by increasing overtime pay from July 1 through July 7."

Flight attendants will get double pay for picking up open shifts over that week, Sonya Lacore, vice president of inflight operations at Southwest, wrote in a separate staff memo Monday, per CNBC. A spokesperson told the publication that ground and cargo operations staff would also get double pay for overtime shifts.

Southwest did not immediately respond to Insider's request for comment.

The Transportation Security Administration screened 2,066,964 passengers on Monday - 84% of the number it screened on the same day in 2019.

But Southwest is struggling to find enough staff as demand for flights returns. As well as doubling overtime pay, the airline is bumping up its minimum wage to $15 later this year, which it said would boost paychecks for around 7,000 staff.

Still, some pilots who were on leave during the pandemic have yet to be retrained before they can return to work.

"We have about 900 pilots who are coming back from extended time off that are being trained in June and July and we'll probably slip into August," Casey Murray, president of the Southwest Airlines Pilots Association (SWAPA), told WFAA.

"We have the pilots," he said. "We just don't have the pilots trained currently."

SWAPA told members Monday that Southwest had also offered double pay for pilots during the July 4 week, which it called "inadequate". The union said that it had not come to an agreement with the airline on pay, CNBC reported.

"It has been clear (since spring!) that our operation was on track for a brutal summer caused by overselling a schedule that they absolutely cannot fill," SWAPA told members.

"This [July 4] weekend coming up is going to be a true test for the entire breadth of Southwest Airlines," Murray told WFAA.

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Elon Musk says Starlink will need up to $30 billion to survive. 'If we succeed in not going bankrupt, then that'll be great.'

Elon Musk speaking at the Satellite Conference and Exhibition in Washington, Monday, March 9, 2020.

AP Photo/Susan Walsh

• Elon Musk said Starlink would likely need between $20 billion and $30 billion in investment.
• Starlink is SpaceX's internet satellite project, which aims to beam broadband to remote areas.
• "If we succeed in not going bankrupt, then that'll be great, and we can move on from there," Musk said.
• See more stories on Insider's business page.

Elon Musk's constellation of internet satellites, Starlink, will need up to $30 billion in funding to survive, the billionaire said on Tuesday.

Speaking at the Barcelona Mobile World Congress tech conference via video link, the SpaceX CEO said the projections for Starlink's business costs were estimated between $20 billion and $30 billion, Reuters reported.

During the same conference, Musk said the company was losing money on its Starlink terminals, which allow users to receive the broadband that the satellites already in orbit are beaming down.

According to Musk, the terminals cost $1,000 to make and the company sells them for $500 - plus a $99 monthly subscription. The company will soon release a new model of its terminal which will be cheaper to make, he said.

Read more: I tried Starlink, Elon Musk's satellite-internet project, for 3 weeks after moving to rural Vermont. It's a game changer.

Musk also said Starlink had signed partnerships with two "major country telcos," but did not disclose their names. Musk tweeted last week that Starlink had 69,420 active users.

"If we succeed in not going bankrupt, then that'll be great, and we can move on from there," Musk said, per Reuters. Musk has said in the past that avoiding bankruptcy was the biggest challenge facing any high-speed internet satellite company.

Starlink is part of Musk's space exploration company SpaceX. Its aim is to provide high-speed broadband to remote parts of the world using a fleet of satellites. As of May 2021, there were almost 1,500 satellites in orbit, per Space News. Musk has said he wants to launch a total of 42,000 satellites.

SpaceX's president Gwynne Shotwell said earlier this month Starlink could provide global coverage by September 2021 - though Musk said during Tuesday's conference that this could be achieved a month earlier, in August.

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10 things you need to know before the opening bell

Warren Buffett, CEO of Berkshire Hathaway, and vice chairman Charlie Munger.

JOHANNES EISELE/AFP via Getty Images

Welcome to 10 Things Before the Opening Bell. Sign up here to get the day's top stock and crypto news in your inbox every morning.

Sign up for Insider Investing for your weekly markets analysis.

1. The global shares rally slows down as investors await US private-sector jobs data. See what markets are doing today.

2. Coinbase reveals plans for a crypto App Store that offers third-party apps. Apple has had an influence on the crypto exchange's thinking, CEO Brian Armstrong suggested.

3. Warren Buffett and Charlie Munger reflected on their iconic friendship in a CNBC interview. They also discussed remote working, how they approach business, and the lessons they took from the pandemic. Here are the highlights.

4. Elon Musk is the most influential figure in financial markets, new survey shows. Some investors surveyed said they sold bitcoin after Musk tweeted negatively about its energy use.

5. The SEC slapped a JPMorgan subsidiary with a $2.8 million fine. Neovest, an electronic trading platform, was operating as an unregistered broker-dealer after being acquired by the bank.

6. Earnings expected. Micron and Shaw Communications are highlights.

7. On the data docket. Chicago PMI, MBA mortgage applications, ADP employment change, and the EIA crude-oil stocks change data are due.

8. A celebrity SPAC is stealing the meme-stock spotlight from AMC and GameStop. Fintel says it's one of these 5 stocks that have definite potential for a near-term short squeeze.

9. Riot Blockchain's CEO and 2 top crypto experts break down the impact of China's bitcoin mining ban on investors and miners. They also detail 3 reasons why they remain bullish on the digital asset.

10. Kirsty Gibson's fund beat 99% of its peers last year. The Baillie Gifford portfolio manager breaks down how she identifies companies that will enable 'structural change' and shares 3 such under-the-radar stocks.

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China threatened historians, telling them to ignore sources that highlight its botched early COVID-19 response

Firefighters disinfect the Wuhan Tianhe International Airport on April 3, 2020 in Wuhan, Hubei Province, China.

Getty Images

• Chinese historians were warned off studying the country's early COVID-19 response, the FT reported.
• The "Wuhan Diary," a critical account of China's first lockdown, was off-limits, an official said.
• It comes ahead of the Chinese Communist Party's intensely managed 100-year anniversary.
• See more stories on Insider's business page.

A senior Chinese official made a threat to historians aiming to study the country's early COVID-19 response, advising them not to take "the wrong side," the Financial Times reported.

According to the paper, the comments came at a closed-door event at which education official Wang Binglin went through topics that were likely to be marked classified and banned from study.

More than 100 government figures and scholars were there, the FT said.

Wang firstly warned historians against "playing up" the country's historical Land Reform Movement, during which millions of landlords were killed and property redistributed under Mao Zedong's rule, the FT reported.

"Making such information public is of little help for you historians and will also be bad for the party," the FT reported him as saying. "By studying or writing about this [period], you will be taking the wrong side. That's why we ban the study and publication of such material."

He then said the same applies to "Wuhan Diary," an online diary from the city when it was ground zero for the emerging coronavirus between January and March 2020, the FT reported.

Its author Wang Fang, who uses the pen name Fang Fang, drew a huge audience in the early stages of the pandemic despite intermittent censorship.

As well as writing about daily life under lockdown, she chronicled the catastrophic strain the virus was placing on the medical system, and the death of whistleblower doctor Li Wengliang.

The diary attracted international attention and was published in English translation by HarperCollins, but caused an intense nationalist backlash against Fang lasting months, as the South China Morning Post reported.

Security personnel outside the Wuhan Institute of Virology in Wuhan on February 3, 2021.

Hector Retamal/AFP via Getty Images

The warning from Wang, the education official, came during a discussion of the Chinese Communist Party (CCP)'s centenary on July 1. The occasion is being intensely managed to project Chinese strength and avoid any sore spots.

China has been reluctant to accept scrutiny of the emergence of the virus and its own response. Although the World Health Organization initially praised the country's response, it later became clear that it was an intentional strategy of flattery to coax crucial data that China was withholding.

A year and a half on from the beginning of the COVID-19 outbreak, the country is facing a new reckoning on its response, as Insider's Alexandra Ma reported, with the EU and the US in talks to call for a re-opening of the question of the origins of the virus.

An earlier WHO investigation had concluded that it was "extremely unlikely" that the virus leaked from the Wuhan Institute of Virology.

In May however, following reports that three scientists there got sick a month before the first COVID-19 cases were reported, President Joe Biden authorized a new investigation into the origins of the virus.

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Global shares rally slows down as investors await US private-sector jobs data; gold tumbles while oil regains strength

JOHANNES EISELE/AFP via Getty Images

• The global shares rally slowed down ahead of the release of US private-sector jobs data expected on Wednesday.
• Gold tumbled further as investor jitters around rising Covid cases and a hawkish Fed continued.
• Oil regained strength and prices rose ahead of an OPEC+ meeting on Thursday.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Global shares stalled on Wednesday, hovering near record-highs, as caution set in ahead of a key read of US private-sector employment and as a surge in cases of Covid-19 in Asia in particular dented some investor confidence.

US stock futures eased, after the benchmark indices hit all-time highs the previous day. Dow Jones futures declined by 0.28%, S&P 500 futures were down 0.15% and Nasdaq futures dipped 0.4% at 4:24 am E.T..

Economists widely expect the private-sector ADP jobs report to show 600,000 workers were added to payrolls in June, versus May's 978,000.

US private-sector jobs data is often used as an indication for how weak or strong the broader US non-farms payroll data - due to be released on Friday - will be. Jobs data has been a key measure of economic recovery, and strong readings may entice the Federal Reserve to turn to hawkish policies in place on economic growth stimulating ones.

The yield on the 10 year US Treasury note was largely steady around 1.476%.

Gold fell for a third straight day, losing 1.17% to trade at $1,757.47 per ounce. The prospect of the Fed allowing interest rates to rise, which in turn lifts the appeal of the US dollar, and resurgence of Covid-19 cases globally cause investor jitters, Dhwani Mehta, senior analyst at FXStreet said.

"Despite a slight improvement in the market mood, investors still remain cautious, keeping the dollar's demand underpinned. Meanwhile, stabilizing US Treasury yields also remain a weight on the gold price," she said.

In Europe, markets had a muted start to the trading day, as eurozone inflation data was released. While headline inflation declined, goods inflation soared from 0.4% in May to 1.2% in June.

"For now, most of the evidence points to this being largely temporary, but upside risks to the inflation outlook haven't been this substantial in years and should keep the ECB on the edge of its seat." ING analysts said.

The Euro Stoxx 50 was last down 1.3%, Frankfurt's DAX dipped 1.35% and London's FTSE 100 lost 0.82%.

Oil prices rose. Brent crude was last up 0.23% and trading at $74.45 per barrel, while WTI crude gained 0.51% and was last around $73.35 per barrel. The OPEC+ exporter group meet on Thursday to discuss the outlook for crude output. Analysts do not expect any change in the group's current supply policy.

Asian markets had a mixed session on Wednesday. The Shanghai Composite rose by 0.5% despite manufacturing and non-manufacturing activity slowing down in June, Hong Kong's Hang Seng index dropped by 0.37% and Tokyo's Nikkei 225 fell slightly by 0.07%. Concerns about the spread of the delta Covid-19 variant and its implications for economic recovery continue to put pressure on markets and have led to investor caution.

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