[music]

Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning, everyone, and let's jump right in on these new unemployment numbers that just came out this morning for July and the bigger picture of what the Delta variant and the expiration of extended unemployment benefits mean for people's ability to get decent work, company's ability to find enough workers, and how much remote workers can or are being forced to go back to work in person and discriminated against even if they're working from home.

A few headlines to kick this off. The US added nearly a million jobs last month and the unemployment rate fell below 5.5%. New York Times economy reporter Jeanna Smialek, who will join us in a minute, tweets that those are solid headline numbers. However, they are mostly pre-Delta. Target and Walmart this week announced that they will pay for college education costs for their employees, a sign that they are having trouble recruiting or retaining enough people. Amazon yesterday announced that it is delaying its return-to-office date until 2022.

Many other companies are doing similar things or grappling with what to do. Just to throw another headline in, out of left field, the Federal Reserve Board is deciding whether to issue its first-ever digital dollar to compete with cryptocurrencies like Bitcoin. With us now are Jeanna Smialek, New York Times correspondent who covers the economy and the Fed. Yes, she wrote that digital dollar story. Lauren Hirsch, Times correspondent for business, policy, and mergers and acquisitions for the main New York Times and their DealBook features.

Among Lauren's recent articles are ones on the rise of vaccine mandates to go back in-person and one asking if remote workers are beginning to face anti-work-from-home bias by their bosses, harming among other things, broader efforts to diversify. Hi, Lauren. Hi, Jeanna. Thanks so much for coming on WNYC today.

Jeanna Smialek: Thanks for having us.

Lauren Hirsch: Thanks for having us.

Brian: Lauren, let me start with you. You're reporting on more kinds of companies beginning to mandate vaccines for their employees and also for their customers. Is this concentrating in certain sectors of the economy?

Lauren: It's a great question. So far is that we've seen a little bit of change even in the past couple of days. One of the most notable mandates we saw earlier on was Walmart. Walmart mandated for its corporate headquarters but not for its store workforce, which is obviously interesting because that's the workforce, A, that is most exposed, their frontline, and, B, from a numbers perspective, least likely to be vaccinated.

Walmart has said that they're hoping that their corporate headquarters getting vaccinated first is serving as good modeling, but, of course, there is a huge labor shortage right now. Very likely, that is playing a role in all of it. That being said, even in the past couple of days, we thought Tyson and now, it's a mandate for its entire workforce. That includes frontline workers.

That's fascinating because they were really at the forefront of a lot of the issues earlier on with workers getting sick. Now, there's a big caveat to that, which is they are still negotiating it with their union, which has expressed a little bit of concern. We will see how that plays out. Then just this morning, United Airlines announced it was mandating vaccines for its entire workforce.

[crosstalk]

Lauren: Sorry, go ahead.

Brian: Tell me more about this split for a lot of companies between office workers who are being mandated to get the vaccine and frontline workers who are not. You mentioned Walmart. You also, in your article, mentioned Uber and Lyft. How does that make sense, letting the drivers who sit in little cars with their passengers or the Walmart cashiers and other frontline workers who go face-to-face with people remain unvaxxed?

Lauren: It depends how you're thinking about it. If you're thinking about it from a health point of view, it probably doesn't make sense. As I mentioned, these retail workers are frontline, so they are most exposed. If your only focus is getting the most vulnerable workers vaccinated, it doesn't make sense. Of course, CEOs are focused on the bottom line and running their business. From their perspective, they're very focused on getting workers back in the office. Yes, these mandates, to an extent, serve a public good.

They also, because CEOs are sick of remote work, want their employees back in the office and they think that mandates are the way to do that. You're seeing this dichotomy where the companies that are issuing mandates for certain workforces that are already are a high level of vaccination because white-collar workers from a numbers perspective have been more vaccinated. They're rounding it out at the headquarters to get people back there, and then the workforce that is less vaccinated and they're more worried about losing, they're not mandating even though that's the workforce that's the most exposed.

Brian: Does this intersect with Walmart's and Target's announcements this week that they will pay college education expenses?

Lauren: I don't know that it's exactly all in the same effort, except the labor shortage being the overriding theme, right? That's why we're seeing so many companies raise minimum wage, offer other benefits. They're under pressure now because it's so hard for them to retain workers. On the one hand, good news, which is what you mentioned with college tuition. On the other hand, it makes them wary to do things like vaccine mandates, which many health experts have argued, could be necessary to help the country get to herd immunity.

Brian: All right, listeners, help us report these stories. If you are an employer or an employee, how is the Delta variant changing your company's back-to-the-office plans or its mandatory versus voluntary vaccine policies? Are they getting either one right in your opinion? 646-435-7280. On the jobs numbers, which we'll get to in a minute, employers or employees, are you finding it easier to get work right now? Are you finding it easier to find workers right now? If not, what incentives are you offering? Free college tuition? Anyone?

Is anyone working remotely beginning to feel you're being discriminated against by your in-person boss? Oh, should the Fed issue a digital dollar? We'll get to that too, 646-435-7280. On any of these things, 646-435-7280. For New York Times business and economy correspondents Jeanna Smialek and Lauren Hirsch, 646-435-7280, or tweet your question, comment, or 280-character story @BrianLehrer. Jeanna, this morning's monthly jobs report, plus 943,000 jobs in the US in July. The unemployment rate, down to 5.4%. What does it mean?

Jeanna: It means that the labor market is healing at a pretty solid click. These were good numbers. I think that this is very much what the Federal Reserve and what the White House and what economic policymakers across the government have been hoping to see, in that there were some seasonal adjustment issues that made these numbers look a little bit higher.

Even if you dig down underneath those data quirks, what we see here is a story of solid, across-the-board hiring, some really nice progress in the unemployment rate across a bunch of different demographics, including various racial demographics, various age groups. I think just a generally positive situation for workers in America. We see solid wage gains in these data. We see that people are coming back off the sidelines and into the job search. I think, in general, this is a pretty good news report. It does show that the labor market is finally making the progress that I think folks have been hoping to see.

Brian: Any sign yet from the later part of the month if the Delta variant is causing a new wave of unemployment?

Jeanna: It's a little bit tough to see in these data just because the survey week comes right in the middle of the month. When the data are collected, corresponded with an uptick in the Delta variant, but not in a really dramatic one that we've seen in the last couple of weeks. I think that what we can say from these data is that the early surge in the Delta variant was not discouraging the return to work, the move away from work from home. All of those trends that had been in train for a couple of months seem to be continuing as of this report, which, again, was caught in the middle of July.

We saw a decrease in teleworking because of the pandemic and a move back toward offices along with this solid hiring. This was a good reopening report. I think the more recent up-to-date data that we have from things like OpenTable data or mobility data from cell phones suggests that we're not really seeing that pullback yet. I think when we get to the fall and schools have to make a decision about whether to reopen or not, that's when we're going to see a really big labor market, potential market impacts from Delta.

Brian: Now, your article from yesterday, Jeanna, called Will cutting off federal unemployment benefits shake up the job market? They've already been cut off in some states. As you know, mostly, states with Republican governors. Any sign from these July jobs numbers that the cutoffs are shaking up the job market?

Jeanna: It's very hard to tell from this report because we don't get state-by-state data until the middle of this month, but I think a couple of things that we can say. One is that based on jobless claims, it appears to have had maybe some effects, but not some huge, decisive shift in how much labor supply is available in the states where they did end the supplemental $300 per week early.

I think that it is clearly the case that this is not the only thing. A supplemental $300 has not been the only thing keeping workers on the sidelines. It seemed to come alongside other constraints like fear of the virus or childcare issues and those seem to be the dominant concerns. I think this is the first report where we should be able to tell whether there's been any labor supply impact, but we're not going to really know that decisively until we can compare state-by-state data sometime around the middle of the month.

Brian: Here is Steven, an Uber driver in Brooklyn, calling in. Steven, you're on WNYC. Thanks so much for calling.

Steven: Thank you, Brian. First-time, longtime listener. As an Uber driver, I don't think we should be mandated by the company. I understand why they want the corporate offices because they technically do work for the company versus us. We're our own business owners. For us to be mandated even though we're in a tight space with a passenger and all that, it's not right for us as a business owner to be vaccinated. FYI, I personally am vaccinated.

Brian: It cuts both ways, right? The big conversation about Uber and Uber drivers is Uber drivers have been looking to be treated like employees to have benefits and be covered by wage and hour laws and things like that. Now, in this case, it cuts the other way where you say, "Hey, we're not employees, so don't make us do stuff you make employees do."

Steven: Personally, I'm on the other side of that where I liked being my own business and being able to work my own hours and time versus having a company to tell me and being from New York before the pandemic, de Blasio putting some of these rules that we were subjected to certain time ranges because of congestion pricing. Now that the pandemic is weighing down and there's less Uber drivers on the road, no work has been plentiful. I'm still on the thing where, "Just let us do our thing and let us live our lives because that's what we chose."

Brian: I hear you and I'm glad to hear business is picking up. I know it was so tough for drivers for so long during the pandemic and, certainly, in many ways in the Manhattan business districts. It still is. Steven, thanks for calling. Don't make it your last time. Lily in Queens, you're on WNYC. Hi, Lily.

Lily: Wow. Hi, Brian. A longtime listener. I've been listening since I was born actually. [chuckles]

Brian: [laughs]

Lily: I'm a college student and I'm doing a summer internship. I was actually surprised to find out they were doing in-person in the office. Then recently in the last couple of weeks, they decided to go back to a work-from-home thing for the month of August.

Brian: What are they telling you about how they'll figure out when to start calling people back in if they're saying anything yet?

Lily: Well, they haven't really been saying anything. It's like if you have work you need to do in the office, you can come in. They haven't been doing a mask protocol, so I personally don't feel comfortable going in. Nobody's been wearing masks because they're all vaccinated. It's mandated.

Brian: Lily, thanks so much. Keep listening. Call us again. Let's take one more in this set and then talk about these three calls with our guests. Carl in Brooklyn, you're on WNYC. Hi, Carl.

Carl: Hello. I'm a city employee and we've been doing return-to-office for the last month, half and half. The experience has been dreadful. Everybody seems to hate it because I'm an office worker and we got good enough at the telecommuting stuff in government that we just come into the office and we telecommute from our desk to our own desks. We just spent an hour or two hours commuting to work to then telecommute again. It feels awful and disrespectful. It feels like the mayor doesn't want us to do our jobs. He just wants us to be belts in seats.

Brian: We got a lot of calls as you may have heard at the time for Ask the Mayor segments. People like you, city workers calling the mayor and saying, "What are you doing? If we're doing our jobs effectively from home, why are you making us do this?"

Carl: We're doing even better.

Brian: That started already. Now, a lot of companies are delaying returning to office in the private sector. Has the mayor rescinded it at all for people like you?

Carl: If he has, it hasn't gotten to me. When I talk to people in the office, most of the people who are under 40 are talking about going to federal or private sector because this is just so miserable and disrespectful.

Brian: Really interesting. Carl, thank you for checking in. By the way, Ask the Mayor fans, Ask the Mayor critics, people who feel dragged along and you have to listen to Ask the Mayor, whoever you are, there's no Ask the Mayor today. Even though it's Friday, that's when we usually do it, the mayor, I think he's just taking a little vacation and we have to give him credit. He has been so regularly, he never cancels Ask the Mayor, but we'll give him one Friday in August if he wants it. No Ask the Mayor today, just letting you know.

Hold your Ask the Mayor calls till next time. We continue with Lauren Hirsch, New York Times correspondent for business, policy, and mergers and acquisitions; and Jeanna Smialek, New York Times correspondent who covers the economy and the Fed. Lauren, on that last caller and for that matter, the previous caller, Lily, the college student who was called back to the office now back to remote, it's kind of all over the place, isn't it, as to what companies are doing with respect to mandatory, voluntary, or, "No, let's wait until 2022 after all for return-to-work in the office"?

Lauren: It's all over the place and it's partially industry-specific, and partially because a lot of companies genuinely believe that better work is done and better training is done in the office. I will say I've been an intern in my life. I can't imagine having to learn-- having had that experience remote, right? There is particular learning and trading and camaraderie that does genuinely only happen in the office.

That being said, we are not where many CEOs and many people thought we would be right now as it pertains to the variant, which is why we have seen so many companies now delay, push back opening, send people home. Bringing people back to the office was going to be this grand return. CEOs' method was very much-- at least a couple of months ago, when you come back, we will have overcome the hump. Everything will be safe. You'll be vaccinated and mask-free. It will be more or less like it was.

That reality is just not where it is as much as CEOs and much of America wants it to be. That's why you're seeing a lot of these U-turns, delaying, sending home. Because if we're going to bring you back to the office and make you wear a mask or there's news every day that things are getting worse, that's just not the environment that they want to set, which is why it's so hard frankly right now for companies and for employees.

Brian: Tell us about your article on anti-remote worker bias.

Lauren: My colleague, Sarah Kessler, she works with me on DealBook and she wrote that. Her really interesting thesis was that she spoke to a bunch of professors who said there's this idea if you allow remote work, you are allowing different kinds of workers to thrive and it opens up the environment more. The flip side of that is if they're not in the office, you don't see them and opportunities just miss you by. Just to be personal about it, I started in The New York Times as a remote worker.

I started this year and my company has been wonderful and a lot of opportunity to meet people virtually, but, of course, it's different when you're not in person. As now, as companies need to, once again, rethink this idea of, "Will remote work actually be the reality?" because this grand return is not looking like we thought it would. They absolutely need to take it into consideration. If you do that, definitely be aware that you could be leaving workers behind.

Brian: Kind of an out-of-sight, out-of-mind thing even if it's unintentional, I think I hear you saying. You also write that this could hamper the larger effort to diversify by race and gender. How so if remote workers have been disproportionately white and more elite if I've got that right?

Lauren: The issue again is that if you're technically employed by someone but you're not the one in the office, you're not the one meeting the boss, you're not the one in the meeting, there can just be an inadvertent or unintentional bias towards those that you're seeing. When you talk about diversifying, there's always this contrast between hiring and then making sure situations are in place for people to thrive. If you're only doing one part of the equation, which is hiring but not ensuring that you're putting all the systems in place for people to grow and develop and thrive, that doesn't really solve the problem.

Brian: Mary in Huntington, you're on WNYC. Hi, Mary.

Mary: Hi there. Long-time listener. Thanks for taking my call.

Brian: Sure.

Mary: I'm taking the opposite position as a lot of the people. My office, I'm not long in Long Island. I work in a law firm. I won't say which one. We've got 35 people. We've got a couple of people who aren't vaccinated. We all went back to work with masks last fall and we got to take our masks off when everybody got vaccinated, when all of the age groups could have been vaccinated. We've got a few people who aren't vaccinated.

Because of the variant, they've now announced that we have to wear masks again. I'm not mad at my co-workers in my office. It's not that. I'm mad at all the people who were not getting vaccinated. They're just holding us all back. We're all being held back to the lowest common denominator. There's no reason not to get a vaccination and it's really irritating that we're having to do this again.

Brian: Are people being open about it? At your office, are people disclosing their vaccination status? Somehow you know that some people aren't vaccinated, and then are you having exchanges with them about it?

Mary: We knew who wasn't vaccinated because when we could all take our masks off for the last several months, they had to wear their mask. If they weren't vaccinated, they had to wear their mask, so we knew who they were. At a law firm, you want to look responsible. A few of them actually got vaccinated because they had to walk around with a mask on and kind of look like an idiot. There's a few of them that are diehards.

I talked to one of them and you got to be careful because you dig into-- I'm a higher ranking person, so you can't discriminate against people for their healthcare decisions. I was told by one woman that she's still of childbearing age. She's convinced the vaccine is going to make her not be able to have kids. I can't argue with her about that. I don't think it's true, but I'm not a doctor. I try to be nice and open-minded, but I'm not mad at my co-workers. Don't get me wrong. It's not my co-workers that have caused this. It's the 50% of the country that didn't bother to get vaccinated. That's why this variant has spread like wildfire.

Brian: Mary, thank you very much. Maybe tell your co-worker who was of childbearing age to ask her doctor because her doctor will probably tell her there is no impact on her ability to get pregnant, according to the science, from the vaccine. Jeanna Smialek, New York Times correspondent who covers the economy, on the unemployment numbers for July that came out today showing very healthy job growth, the kind of dynamics that Mary was just talking about there, uncertainty about going back because you don't know who's vaccinated or discord over wearing masks, do you think that's effecting employment one way or another in any way?

Jeanna: It doesn't seem to obviously be affecting employment in one way or another at this stage. I think what we're seeing in the data we have in hand is that people are generally continuing to come back into jobs, whether those are remote or in office. The folks who are getting sent back home from the office aren't necessarily losing their jobs. They're just getting sent home to telework.

I think the real question though is, what comes next? Because it could be the case that some of these concerns around variants and some of these discourse results in schools not being able to return to in-person education in the fall, which would hold both teachers back, it would mean less education and less staff hiring at the schools. It could also potentially hold parents back.

We've seen a lot of parents be incapable of taking new jobs because they have so many childcare duties right now. If we see that perpetuated into the fall, it's really going to end up being an exacerbator when it comes to some of the labor shortage stories we're hearing about, because folks are just not going to be able to come back into the workforce in the way that you might otherwise hope.

Brian: You tweeted that the workforce participation rate for the so-called prime ages of 25 to 54 nudged up a little bit in July toward 82% of that age group working 25 to 54. What's the significance of that?

Jeanna: That is good news because that is a figure that has been stubbornly stuck in the mud for quite a while now. It's something that we're all watching and waiting and hoping recovers because there's no real reason that 25 to 54 participation rates shouldn't recover to its pre-pandemic levels. It is, however, still well below where it was back in February 2020.

I think everybody who is in any way in touch with this policy space is going to be watching that number with bated breath as we get into the fall and into the start of next year, hoping that it can recover to where it used to be because that's really an important heartbeat on the economy's strength and the potential to produce growth month after month and year after year. I think it will be really good news if we saw that number recover a little bit more.

Brian: Ardis in Brooklyn, you're on WNYC. Hi, Ardis.

Ardis: Hi, Brian, thanks for taking my call. I'm a city employee and I am actually pro going back to work because I'm not sure people realize that New York City employees are paid by New York City taxes. When the pandemic happened and everybody went home to work remotely, the city's taxes dramatically fell. We are in a better position today because of federal stimulus, not because the city economy has come back.

I think it's shortsighted of my fellow city employees to not acknowledge this and understand that, although the mayor probably hasn't specifically said, that's why he's looking for folks to come back to work. Our salary depends on city taxes. If nobody's going out there and being in the streets and being in Manhattan and buying food from vendors and so on and so forth, our salaries are at risk.

Brian: Ardis, I hear you, and, yes, the mayor does. I've asked him that exact question and he dances around it. I think you're right that that really is on his mind, so thank you for raising that. Lauren Hirsch, let me throw that to you because from a political standpoint, in New York City, at least, and I realized that your angle is national, but what we've seen here in New York City is the big commercial real estate companies that are losing tenants and losing rents are pushing the political sector to mandate back to the office and to set the example for mandatory back to the office by doing it at the city level.

There's widespread belief, even if he won't say it directly out of his own mouth, that that's one of the main reasons that Mayor de Blasio and Governor Cuomo, until he watched so much of his power this week and doesn't seem to be saying anything about anything, were really trying to push private sector companies to mandate back to the office. Because, ultimately, it does, the economists think, hurt the city's economy if people are living in the suburbs that are not within the city.

They're not patronizing New York City businesses and things like that and so the tax base would decline and, therefore, potentially hurt city workers like Ardis, who called in, if the city then has to lay people off. It's a little bit complicated, but it comes down to, is mandatory back-to-the-office mandatory for New York City's economy to remain on an even keel?

Lauren: It's a great question and we're also seeing that with investment banks. JPMorgan, Goldman Sachs, they've been very aggressive about bringing people back to the office. Of course, JPMorgan, they had a lot of investments in real estate, so they also need to worry about real estate value. To your point, it's not just, yes, that real estate value is the immediate impact, but there is the restaurants who rely on worker lunches. There is the hot dog carts. It trickles down to everything, so there is absolutely a genuine concern. I think based on merit that if people do not go back into the office as many were expecting, that will have an impact on the New York City economy.

Brian: There did seem to be a disconnect between Governor Cuomo. I'm talking about before the sexual harassment report came out this week and changed a lot for him. It was just last week or maybe two weeks ago at the most that he said he wants companies to bring back people to the office and force them to if necessary by September, and yet he was saying that just as the Delta variant was beginning to really take hold. Now, we see just the opposite happening in the private sector. I mentioned in the introduction, the example of Amazon delaying its back-to-office date until 2022.

Lauren: Yes. Although at the same time, we've also seen de Blasio push for companies to mandate vaccines, which I've spoken about. A bunch now and they have, so yes, they have been pushing people to go back to the office, but they're, at the same time, pushing people to mandate vaccines. Of course, those two things are very correlated. If the September return is no longer as feasible as many would have hoped, I think for the politicians, for the companies, many seem to be deciding the next best thing is some sort of vaccine mandate. That can potentially bring us closer to an office return than we wouldn't otherwise be.

Brian: Kendell in Newark, you're on WNYC. Hi, Kendell.

Kendell: Hi, Brian. How are you doing?

Brian: Good.

Kendell: A lot of people are talking about, especially in hospitality and service industries, how they're struggling to get people to come back to work. As somebody who's worked these jobs where you're forced to live hand to mouth, $15 an hour really isn't enough to be able to pay for your food, pay for your health care, pay for your apartment, and still be able to save. I think something that's getting overlooked is a lot of people during the pandemic when they lost their jobs realized just how important it is to be able to save and want to try to find jobs where they can do that.

Brian: For a lot of people, the unemployment benefits that they were getting because they were expanded-- unemployment benefits under pandemic rules were actually giving them more income than they had at a lot of these minimum wage jobs. Now, those benefits are--

Kendell: It's not even necessarily--

Brian: Go ahead.

Kendell: Sorry. It's not even necessarily that they were making more. It's just they had an opportunity where they could actually try to find a job where they could stop living hand to mouth, paycheck to paycheck.

Brian: Right, so what do you think is going to happen and what do you think should happen now that these expanded unemployment benefits are starting to expire and the people you're talking about are going to have the choice between being unemployed without that safety net or going back to these low-paying jobs?

Kendell: It's pretty much just going to force people to have to go back to these low-paying jobs and it's going to perpetuate a cycle of poverty.

Brian: There's the biggest story that I think there is in this country. One of the top few stories that there is in this country right now. Thank you for putting it so succinctly, Kendell. Call us again. Jeanna Smialek, this is on your beat with your reporting on the jobs numbers today and the potential impact of the expiration of the unemployment benefits. They're starting to have this conversation in Washington. Biden, to some degree, fashions himself the second coming of FDR and is trying to push for more living wage laws, but is this where politics intersects with the economics of the moment?

Jeanna: I think that this is such an interesting story. I think the politics in this have been really interesting to watch. I think one reason that I think they're interesting is that the White House has not pushed to continue these expanded benefits. They have been inconclusive on whether they're pushing to continue extended benefits, which are almost just as important. Typically, you can only qualify for so many weeks of unemployment insurance. That was waived during the pandemic and that is also expiring.

I think it does seem like a lot of these pandemic-era unemployment support programs are quickly headed for the exit. There isn't a lot of political will to make sure that they continue. I think there's this real open question, whether families and workers are going to be able to continue to be choosy about the kind of jobs they're taking. We do know that American households have built up this big pile of savings.

It's not entirely clear if it's the same families who are out of work, who have those savings, and will be able to continue to be a little bit choosier about their jobs, or whether folks are going to have to go right back into the jobs that they used to have. I think we're running this great experiment in this country right now and we're going to learn a lot about how it's affected the labor market and what the long-term effects are in the months ahead, so it's a really interesting moment both politically and economically, I think.

Brian: Yes, just as the pandemic has lifted the veil for many Americans who weren't paying attention to the incredible racial disparities in the economy and in the social determinants of health that contributed to racial disparities in COVID itself, many Americans who were not paying attention to that got it more between the effect of the pandemic and who the essential employees were in intersection with a post-death of George Floyd protest.

A lot of people are realizing just how many crappy jobs there are out there that people are forced to try to survive on, especially if they have families. Max in Manhattan is going to be our last caller because lest we forget the other topic that we wanted to get to before we run out of time and Max is calling in on it. Hi, Max, you're on WNYC.

Max: Hey, thanks for taking my call. Yes, a bit of a change of pace. My ears perked up when you mentioned the Federal Reserve digital currency idea. It's something I've been following online. For the life of me, I don't know why this needs to exist. I feel like money's already digital, that the Federal Reserve is already using computers to distribute money between the government and banks. The need for a special, new digital currency so far has eluded me. I was hoping your guests might fill me in.

Brian: Thanks, Max. Here we go, Jeanna. This is your story. The Fed is considering issuing a digital dollar to compete with cryptocurrencies like Bitcoin?

Jeanna: Well, it's a little bit different, but Max definitely would find some sympathy among some Fed officials here because I think there are real questions about what the use case would be. Just to go back to the most basic definitions here, a central bank digital currency would lead the physical cash that you spend, in that it would be a direct liability of the Fed. It would be directly issued by the Fed to you, whereas the digital money you use now is actually private bank money. It's disintermediated by the commercial banking system. It is a liability of commercial banks. It doesn't trace directly back to the Fed. The idea is that this would be something different.

It's not obvious that it would do anything that the kind of cash we're using now, which is insured by the government, isn't doing. The real question is, should we try and make sure we're in the door developing this technology right out front as other major economies like China do this, or should we sit back, watch, and see how it plays out, and recognize that there's not a really super obvious use case yet and take our time? I think that's where these battle lines are shaping up.

It's the desire not to fall behind on the technology versus the desire to not jump into something just because it's a fad. I wouldn't know and my final point is-- I'm kind of rambling here. My final point would be that this is not going to be something that competes with Bitcoin because it's just very different. Bitcoin is not a currency in the sense that it's more of a speculative asset. It doesn't have a stable value. It is not directly backed by the full faith and trust of any government, whereas this would be directly backed by the US government. It would have a very stable value. It would be just like a dollar and so it's a slightly different animal.

Brian: I can hardly remember the last time I paid cash for anything between debit cards, credit cards, PayPal, Venmo, and that's true for so many people these days. What's the difference between a digital dollar and just paying for things digitally?

Jeanna: The difference is that it would be a direct liability of the Fed. There is very little practical difference for you as a consumer, in that you probably didn't even know that the digital cash you were already exchanging wasn't a direct liability of the Fed. It's pretty safe because of FDIC insurance and so most people don't even realize that the commercial banking system is actually backing that money up.

I think the real question though is whether there could be big applications for these central bank digital currencies when it comes to things that can be a little bit more inconvenient about the payment system like real-time payments, so you know how sometimes it takes your payroll a couple of days to process. Maybe cross-border transactions. Sometimes as any listeners who have ever tried to send money abroad probably know, sometimes that can be a very inefficient process.

This could potentially improve it and a lot of business-to-business applications could also come of this. I think it's a technology that is really nascent. You know this is not well-developed. It's not well-tried out. People are trying to figure out how useful it's going to be and how much we need to be out ahead when it comes to developing it.

Brian: Jeanna Smialek, New York Times correspondent who covers the economy and the Fed; and Lauren Hirsch, Times correspondent for business, policy, and mergers and acquisitions in the Times and their DealBook section. Thank you both so much for all the information this morning. We really appreciate it.

Lauren: Thanks for having us.

Jeanna: Yes, thanks for having us.

 

Copyright © 2021 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.