Hotel Profit Implications from Rising Wages and Inflation in the U.S.

Macroeconomic models based on the Phillips Curve predict that as the unemployment rate declines toward the long-run, natural rate, the pace of wage and price growth accelerates and inflation rises.1 In this paper I analyze the profitability prospects for the U.S. hotel industry in today’s relatively volatile economic environment, keeping in mind the Phillips Curve’s general principle that inflation and employment have an inverse, but relatively stable short-term relationship. Although employment and economic growth in the U.S. have been uneven in recent months, the unemployment rate has declined to less than 5 percent, which many economists believe is close to the natural rate. Growth in wages and salaries, as measured by the Employment Cost Index, has concurrently been moving upward between 2.5 and 3.0 percent during the past 12 months. At the same time, general inflation remains below levels that might typically be expected this late in the cycle, although core inflation is bumping up against the Federal Reserve’s 2-percent target. If the inflation rate continues to move upward as predicted by Phillips Curve models (and encouraged by the Federal Reserve), rising labor costs and other expenses will exert downward pressure on U.S. business profits. Backward movement up the Phillips Curve (with greater inflation) coincides with an expanding economy. In that scenario, prices of goods and services also will rise in real terms if their supply cannot keep up with demand, and producers have the ability to raise prices (absent fixed-price contracts such as leases).

Black and Blue: Exploring Racial Bias and Law Enforcement in the Killings of Unarmed Black Male Civilians

In late 2014, a series of highly publicized police killings of unarmed Black male civilians in the United States prompted large-scale social turmoil. In the current review, we dissect the psychological antecedents of these killings and explain how the nature of police work may attract officers with distinct characteristics that may make them especially well-primed for negative interactions with Black male civilians. We use media reports to contextualize the precipitating events of the social unrest as we ground our explanations in theory and empirical research from social psychology and industrial and organizational (I/O) psychology. To isolate some of the key mechanisms at play, we disentangle racial bias (e.g., stereotyping processes) from common characteristics of law enforcement agents (e.g., social dominance orientation), while also addressing the interaction between racial bias and policing. By separating the moving parts of the phenomenon, we provide a more fine-grained analysis of the factors that may have contributed to the killings. In doing so, we endeavor to more effectively identify and develop solutions to eradicate excessive use of force during interactions between “Black” (unarmed Black male civilians) and “Blue” (law enforcement).