DES MOINES, Iowa (AP) — A structural engineer’s report issued last week indicated a wall of a century-old apartment building in Iowa was at imminent risk of crumbling, yet neither the owner nor city officials warned residents of the danger days before the building partially collapsed, leaving three people missing and dozens displaced.
The revelation is the latest flashpoint after Sunday’s partial collapse of the building in Davenport, where residents have lashed out at city leaders over what they see as an inept response.
“Do I have regrets about this tragedy and about people potentially losing their lives? Hell yeah. Do I think about this every moment? Hell yeah.” Mayor Mike Matson said Thursday. “I have regrets about a lot of things. Believe me, we’re going to look at that.”
City officials said Thursday that they did not order an evacuation because they relied on the engineer’s assurances that the building remained safe. Crews were using drones to scan the building and were consulting with experts about how to safely bring down the structure, which remains extremely unstable, while being respectful of bodies that could be buried in a debris pile, Matson said.
The six-story building partially collapsed shortly before 5 p.m. Sunday. Rescue crews pulled seven people from the building in their initial response and escorted out 12 others who could walk on their own. Later, two more people were rescued, including one woman who was removed from the fourth floor hours after authorities said they were going to begin setting up for demolition.
Earlier this week, authorities said five people were missing, but Davenport Police Chief Jeff Bladel said during a media briefing Thursday morning that two of them have since been accounted for and are safe. One moved out of the building a month ago and was found in Texas, and the other was found locally.
City officials on Thursday named those unaccounted for as Brandon Colvin, Ryan Hitchcock and Daniel Prien. The city said all three “have high probability of being home at the time of the collapse and their apartments were located in the collapse zone.”
Bladel said transient people also often enter the building but there is no indication anyone else was inside and missing.
The city on Wednesday night released documents, including structural engineering reports, that show city officials and the building’s owner were warned that the parts of the building were unstable.
A report dated May 24, just four days before the collapse, suggested patches in the west side of the building’s brick façade “appear ready to fall imminently” and could be a safety hazard to cars or passersby.
The report also detailed that window openings, some filled and some unfilled, were insecure. In one case, the openings were “bulging outward” and looked “poised to fall.” Inside the first floor, unsupported window openings help “explain why the façade is currently about to topple outward.”
“The brick façade is unlikely to be preserved in place, but it can be brought down in a safe, controlled manner,” the report stated.
Despite the warnings, city officials did not order that about 50 tenants leave the building.
Rich Oswald, the city’s director of development and neighborhood services, said officials relied on assurances from the structural engineer hired by the building owner. The engineer said the building wasn’t in imminent danger of collapsing on residents.
Andrew Wold, the building’s owner, released a statement dated Tuesday saying “our thoughts and prayers are with our tenants” and that his company, Davenport Hotel, L.L.C., is working with agencies to help them.
County records show Davenport Hotel, L.L.C. acquired the building in 2021 in a deal worth $4.2 million.
Records show that several bricks had fallen from the building’s facade in 2020 after a severe wind storm.
As their building deteriorated, tenants repeatedly complained in recent years to the city about a host of other problems they say were ignored by property managers. Some said they did not have heat or hot water for weeks or even months at a time. They complained of water leaking through their ceilings and toilets, damaged windows, and mold. City officials gave orders to vacate some individual apartments and tried to address other complaints, but a broader building evacuation was never ordered even as safety concerns mounted, records show.
City officials ordered repairs after they found seven fire code violations on Feb. 6, including trash and other items stored in stairwells, a lack of lighting in hallways and a failure to test fire alarms as required. They were told three weeks later by building maintenance officials that “none of the work was completed,” records show.
Assistant City Attorney Brian Heyer said he’s unaware whether the city had considered earlier civil enforcement action to protect residents in the crumbling structure. Only after the collapse did the city file a civil infraction seeking a $300 fine against Wold for failing to maintain the structure in a safe manner. He will be required to pay for the cost of demolition, Heyer said.
Heyer said an enforcement action the city filed that resulted in a $4,500 fine in March for repeated trash overflows came in response to complaints from downtown residents and businesses about the debris.
Emails sent to an attorney believed to be representing Wold have not been returned.
MidAmerican Energy, an electric and gas utility, complained to the city in early February about an unsafe and deteriorating brick wall at the west corner of the building. The utility told city officials that its employees would not work in the area until improvements were made, including the installation of scaffolding.
A city notice dated Feb. 2 said the wall was gradually failing and cited “visible crumbling of this exterior load bearing wall under the support beam.” The notice also said the exterior brick veneer had separated and allowed rain and ice to cause damage, and that the electrical and gas equipment on the outer wall had to be protected from the failure.
The notice ordered Davenport Hotel to provide an engineer’s letter “stating this is not an imminent danger” and to take immediate steps to repair the problems, including installing scaffolding for protection so utility workers would be protected.
A Feb. 8 letter to the city from Select Structural, an engineering firm in Bettendorf, said an engineer conducted an emergency site visit Feb. 2 and determined the crumbling wall “is not an imminent threat to the building or its residents, but structural repairs will be necessary.” It called for replacing a wall and other repairs, but cautioned of risk.
City inspectors monitored progress at the site and learned Feb. 28 that “the west wall has collapsed into the scaffolding” and were informed by workers that “it’s going to be a bigger job that (cq.) what they believed it to be,” a city spreadsheet shows.
By March 3, the contractor, Bi-State Masonry, Inc., walked off the job after the building owner balked at approving a change order with a higher price tag due to “unforeseen work needing performed,” the document states. It’s unclear what happened next, and a person who answered a call to Bi-State declined comment.
DES MOINES, Iowa (AP) — A structural engineer report issued just days before an Iowa apartment building partially collapsed indicated a wall of the century-old structure was in imminent risk of crumbling, yet officials did not order residents to leave and said Thursday they relied on the engineer’s assurances that the building remained safe.
Three residents of the six-story building in the eastern Iowa city of Davenport are still unaccounted for and there are no immediate plans to demolish what remains of the extremely unstable structure, according to local officials. Crews were using drones to scan the building and consulting with experts about how to safely bring down the structure while being respectful of bodies that could be buried in a debris pile, Mayor Mike Matson said.
“It’s dangerous, and it’s shifting,” Matson said.
The six-story building partially collapsed shortly before 5 p.m. Sunday. Rescue crews pulled seven people from the building in their initial response and escorted out 12 others who could walk on their own. Later, two more people were rescued, including one woman who was removed from a fourth-floor unit hours after authorities said they were going to begin setting up for demolition.
Earlier this week, authorities said five people were missing, but Davenport Police Chief Jeff Bladel said during a media briefing Thursday morning that two of them have since been accounted for and are safe. One moved out of the building a month ago and was found in Texas, and the other was found locally.
City officials on Thursday named those unaccounted for as Brandon Colvin, Ryan Hitchcock and Daniel Prien. The city added that “It is believed these three individuals have high probability of being home at the time of the collapse and their apartments were located in the collapse zone.”
Police Chief Jeff Bladel said transient people also often enter the building but there is no indication anyone else was inside and missing.
The city on Wednesday night released documents, including structural engineering reports, that show city officials and the building’s owner were warned that the parts of the building were unstable.
An engineer’s report dated May 24, just four days before the collapse, suggested patches in the west side of the building’s brick façade “appear ready to fall imminently” and could be a safety hazard to cars or passersby.
The engineer’s report also detailed that window openings, some filled and some unfilled, were insecure. In one case, the openings were “bulging outward” and looked “poised to fall.” Inside the first floor, unsupported window openings help “explain why the façade is currently about to topple outward.”
“The brick façade is unlikely to be preserved in place, but it can be brought down in a safe, controlled manner,” the report stated.
Despite the warnings, city officials did not order that about 50 tenants leave the building.
Rich Oswald, the city’s director of development and neighborhood services, said officials relied on assurances from the structural engineer hired by the building owner. The engineer stated the building wasn’t in imminent danger of collapsing on residents.
“A professional engineer is certified, right? They put their stamp on that. That’s their professional career to make those decisions,” Oswald said. “An engineer’s report stamped by that engineer is a qualified report. They have state licensing. That’s their job.”
Andrew Wold, the building’s owner, released a statement dated Tuesday saying “our thoughts and prayers are with our tenants” and that his company, Davenport Hotel, L.L.C., is working with agencies to help them.
County records show Davenport Hotel, L.L.C. acquired the building in 2021 in a deal worth $4.2 million.
Records show that several bricks had fallen off another part of the building’s facade in 2020 after a severe wind storm.
As their building deteriorated, tenants repeatedly complained to the city in recent years about a host of other problems they say were ignored by the property managers. Some said they did not have heat or hot water for weeks or even months at a time. They complained of water leaking through their ceilings and toilets, damaged windows, and mold. City officials gave orders to vacate some individual apartments and tried to address other complaints, but a broader building evacuation was never ordered even as safety concerns mounted, records show.
City officials ordered repairs after they found seven fire code violations on Feb. 6, including trash and other items stored in stairwells, a lack of lighting in hallways, and a failure to test the fire alarm system as required. They were told three weeks later by building maintenance officials that “none of the work was completed,” a record shows.
Assistant City Attorney Brian Heyer said he’s unaware whether the city had considered earlier civil enforcement action to protect residents in the crumbling structure. Only after the collapse did the city file a civil infraction seeking a $300 fine against the building owner for failing to maintain the structure in a safe manner. The owner will be required to pay for the cost of demolition, he said.
Heyer said an enforcement action the city filed that resulted in a $4,500 fine in March against the owner for repeated trash overflows came in response to complaints from downtown residents and businesses about the debris.
Emails sent to an attorney believed to be representing Wold have not been returned.
MidAmerican Energy, an electric and gas utility, complained to the city in early February about an unsafe and deteriorating brick wall at the west corner of the building. The utility told city officials that its employees would not work in the area until improvements were made, including the installation of scaffolding.
A city notice dated Feb. 2 said the wall was gradually failing and cited “visible crumbling of this exterior load bearing wall under the support beam.” The notice also said the exterior brick veneer had separated and allowed rain and ice to cause damage, and that the electrical and gas equipment on the outer wall had to be protected from the failure.
The notice ordered Davenport Hotel to provide an engineer’s letter “stating this is not an imminent danger” and to take immediate steps to repair the problems, including installing scaffolding for protection so utility workers would be protected.
A Feb. 8 letter to the city from Select Structural, an engineering firm in Bettendorf, said an engineer conducted an emergency site visit Feb. 2 and determined the crumbling wall “is not an imminent threat to the building or its residents, but structural repairs will be necessary.” It called for replacing a wall and other repairs, but cautioned of risk.
City inspectors monitored progress at the site and learned Feb. 28 that “the west wall has collapsed into the scaffolding” and were informed by workers that “it’s going to be a bigger job that (cq.) what they believed it to be,” a city spreadsheet shows.
By March 3, the contractor, Bi-State Masonry, Inc., walked off the job after the building owner balked at approving a change order with a higher price tag due to “unforeseen work needing performed,” the document states. It’s unclear what happened next, and a person who answered a call to Bi-State declined comment.
WASHINGTON (AP) — A member of the far-right Oath Keepers extremist group who was part of a security detail for former President Donald Trump ‘s longtime adviser Roger Stone before storming the U.S. Capitol was sentenced on Thursday to more than four years in prison.
Roberto Minuta, who was seen on video guarding Stone hours before the riot on Jan. 6, 2021, was among six Oath Keeper members convicted by jurors of seditious conspiracy for what prosecutors said was a violent plot to stop the transfer of power from Trump to President Joe Biden after the 2020 election.
Minuta is the third Oath Keeper to receive his punishment for seditious conspiracy — the most serious charge the Justice Department has brought in the Capitol attack.
Oath Keepers founder Stewart Rhodes was sentenced last week to 18 years behind bars — the longest sentence that has been handed down so far in hundreds of Capitol riot cases. Kelly Meggs, who led the group’s Florida chapter, was sentenced to 12 years.
Minuta told U.S. District Judge Amit Mehta that he is ashamed of his actions, disavows the Oath Keepers and was “repulsed” by the lack of remorse Rhodes showed at his own sentencing.
“My emotions got the best of me, and I’m deeply apologetic, your honor,” he told Mehta. “I was misled and naïve.”
Before handing down the sentence of four years and six months, the judge told Minuta that the law doesn’t permit anybody to “gather up arms to battle your government.”
“This is not about politics. This is not about your beliefs. It’s about your conduct,” Mehta said.
Minuta, who owned a New York tattoo shop, was in communication on Jan. 6 with Rhodes, who described Minuta in a message as one of his “most trusted men,” according to federal prosecutors. Minuta purchased 5,500 rounds of ammunition as Jan. 6 approached, prosecutors said.
Prosecutors said he hasn’t shown true remorse, noting that Minuta took to social media after his arrest to slam the investigation as politically motivated and referred to Jan. 6 defendants as “POLITICAL PRISONERS.” A fundraiser page that was linked to his Twitter page said the government “has been weaponized to destroy dissidents.”
“That’s his worldview,” Justice Department prosecutor Troy Edwards said. “Mr. Minuta is a danger to himself and to his republic because of his worldview.”
Lawyers for the Oath Keepers say there was never any plot to storm the Capitol or stop the transfer of power.
Minuta’s attorney, William Shipley, said his client came to Washington to serve in the Oath Keepers’ personal security detail for Stone and “had no intention or plan to engage in any other activity.”
Shipley said Minuta’s fears of government “tyranny” were not sparked by the baseless claims that the 2020 election was stolen from Trump, but grew out of his tattoo shop being shut down by lockdown measures during the coronavirus pandemic. Shipley said Minuta’s actions on Jan. 6 were “regrettable” and “idiotic.”
“But worthy of a multi-year prison sentence? I don’t think so,” he added.
Minuta was among several people in Oath Keepers gear seen flanking Stone on Jan. 5 and Jan. 6.
Stone, an informal Trump adviser, has denied having any knowledge of or involvement in anything illegal on Jan. 6.
The judge agreed with the Justice Department that Rhodes and the other Oath Keepers’ actions could be punished as “terrorism,” increasing the recommended sentence under federal guidelines. But the judge has consistently issued sentences shorter than those prosecutors have sought for Oath Keeper members. The Justice Department had sought 17 years for Minuta and 25 years for Rhodes.
Edward Vallejo, who was also convicted of seditious conspiracy, is expected to be sentenced later Thursday. Prosecutors said he was a leader of a “Quick Reaction Force” that stashed guns at a Virginia hotel and was prepared to bring them to Washington if called. The weapons were never deployed.
A day after the riot, Vallejo traveled into Washington to “conduct surveillance” and “probe the defense line” of police and National Guard troopers protecting the Capitol, according to prosecutors. He later tried to meet up with Rhodes in Texas.
Vallejo, a U.S. Army veteran, is a longtime resident of the Phoenix area. Defense attorney Matthew Peed said Vallejo wasn’t part of any Oath Keepers calls or discussions before he arrived in the Washington area a day before the riot. In court papers, his attorney called prosecutors’ argument that the Oath Keepers should be sentenced as terrorists “borderline offensive.”
“The tragedy of January 6 is that hundreds of lifelong law-abiding people like Edward Vallejo were lied to by the sitting President and told that the certification was an orchestrated assault on our democracy,” the defense attorney wrote wrote.
Last Friday, the judge handed down punishments for two other Oath Keepers who were acquitted of seditious conspiracy but convicted of other serious charges. Mehta sentenced Jessica Watkins, of Woodstock, Ohio, to eight years and six months behind bars and sentenced Kenneth Harrelson, of Titusville, Florida, to four years in prison.
The Oath Keepers sentencings come weeks after leaders of another far-right group — the Proud Boys — were also convicted in the Jan. 6 attack. Former Proud Boys national chairman Enrique Tarrio and three other group leaders were found guilty in May of seditious conspiracy for what prosecutors said was a separate plot to keep Trump in the White House. They’re scheduled to be sentenced in August.
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Richer reported from Boston.
COLUMBIA, S.C. (AP) — A store owner in South Carolina charged with murder this week after shooting a teen he wrongly thought stole water has shot at suspected shoplifters two other times in the past eight years and not faced charges, authorities said.
In 2018, Rick Chow confronted a shoplifter at his Xpress Mart Shell station in Columbia and the man attacked him, Richland County deputies said. Chow fired two shots and wounded the man, who pleaded guilty to charges in the case, in the leg. investigators said.
In 2015, Chow fired several shots at a vehicle after he tried to stop someone he suspected of shoplifting, and the suspect got into the vehicle and threatened to shoot Chow, deputies said. No one was hurt.
In both cases, authorities said Chow’s actions were not criminal. Self-defense law in South Carolina requires the shooter doesn’t instigate the incident, believes he is in imminent danger and has no way to avoid that danger.
Deputies decided that was not the case Sunday, when they said Chow and his son chased a 14-year-old from his store and killed him with one shot to the back. Chow is charged with murder and investigators are talking to prosecutors about possible additional charges against Chow or his son, the Richland County Sheriff’s Department said in a statement.
Chow thought the boy had shoplifted four bottles of water. But Cyrus Carmack-Belton, who was Black, put the bottles back in the cooler. After an argument, Carmack-Belton ran off the store property and was still running away when he was killed, Sheriff Leon Lott said.
A gun was found near the teen’s body and Chow’s son told his father that Carmack-Belton was armed after the youth fell as he ran, Lott said. But the sheriff said there was no evidence the boy ever pointed the weapon at Chow or his son.
The sheriff’s department didn’t release additional information about the two other shooting incidents. They said deputies have been called to Chow’s store in suburban northeast Richland County hundreds of times over the past five years for assaults, shoplifting, personal theft, motor vehicle theft, vandalism, robbery and burglary.
A number of media outlets have made open records requests for police reports from those incidents, and authorities say they are working to gather them.
Chow, 58, is awaiting a bond hearing at the Richland County jail. His lawyer has said he is not talking about the case at this time. Chow faces 30 years to life in prison if convicted of murder.
Chow owned the gun legally, but witnesses and surveillance video provided no evidence that he was in fear of his life, Lott said.
“You don’t shoot somebody in the back that is not a threat to you,” the sheriff said.
Anguish and grief spread after the shooting through the African American community in Richland County, where nearly half the population is Black.
The state’s only Black congressman, Democratic Rep. Jim Clyburn, said Carmack-Belton’s family should be celebrating his completion of the eighth grade and heading to high school instead of mourning him at his funeral Saturday.
“The criminalization of Black men and boys and the historic trend of painting them as aggressors have time and again led to deadly and heartbreaking circumstances,” Clyburn said in a statement. “Carmack-Belton has since been declared innocent, but his supposed crime of shoplifting a bottle of water should not have cost him his life. I pray justice is swift.”
Chow’s race in court records is listed as Asian.
Several dozen people gathered at the store Monday for a peaceful vigil that included pouring water on the ground, spelling out “Cyrus” with the empty bottles and a sign taped to the locked door reading “Water or Life? Which means more?”
But after dark, deputies said a different group spray-painted the store with “Cyrus” and “14,” broke windows and started stealing beer, cigarettes and other merchandise. Lott said when they find the people he called looters, they will be charged.
The entire gas station is now behind yellow crime scene tape and deputies are watching over it.
DETROIT (AP) — Prosecutors dropped murder charges Thursday against a man who spent nearly 21 years in prison for the fatal shooting of two Michigan hunters.
Jeff Titus was released from prison in February when authorities acknowledged that critical information about another suspect — an Ohio serial killer — was never shared with his trial lawyer in 2002.
After reviewing the case for three months, Kalamazoo County prosecutor Jeff Getting said Titus will not face a new trial.
“This is the right thing to do,” Getting told reporters.
At the same news conference, Titus, 71, said he’s “truly innocent.”
“You can put me on the rack, the truth serum, whatever. I did not do it. … I did not shoot those people,” Titus said.
Doug Estes and Jim Bennett were fatally shot near Titus’ rural property in 1990. Titus was cleared as a suspect — he had been hunting deer 27 miles (43 kilometers) away — but murder charges were filed against him 12 years later, after a new team of investigators had reopened the case.
There was no physical evidence against Titus. Prosecutors portrayed him as a hothead who didn’t like trespassers.
The Innocence Clinic at University of Michigan law school was working to get Titus’ convictions overturned when a dusty 30-page file from the original investigation was discovered at the sheriff’s office. It was a blockbuster: It referred to an alternate suspect, Thomas Dillon of Magnolia, Ohio.
That information was never shared with Titus’ trial lawyer, a fundamental violation.
Jacinda Davis, at the TV network Investigation Discovery, and Susan Simpson, through the p odcast “Undisclosed,” had raised doubts about Titus’ guilt and aired questions about Dillon’s possible role.
Simpson saw the Dillon file at the sheriff’s office and informed the Innocence Clinic.
Getting, who was not the prosecutor when Titus was charged, said the trial was deeply flawed and key people who testified in 2002 now are deceased.
“I don’t know who ultimately murdered Mr. Estes and Mr. Bennett,” Getting said. “But I can say with 100% absolute certainty that moving forward with a trial now against Mr. Titus would be absolutely lacking the fundamental fairness that our constitution requires.”
Dillon died in prison in 2011. He was arrested in 1993 and ultimately pleaded guilty to killing five people in Ohio who had been hunting, fishing or jogging, from 1989 to 1992.
(CNN) — Prince Harry’s US immigration records should be unsealed in the light of revelations about drug-taking in his recent book, a conservative think tank will argue in a federal court next week.
The Heritage Foundation is suing the US government to find out if it acted according to procedure when it granted the Duke of Sussex a US visa. Under US immigration law, evidence of past drug use can be grounds to reject an application.
The case will be held in front of a federal judge on June 6 at the US District Court for the District of Columbia.
The Heritage Foundation filed a complaint under the Freedom of Information Act, attempting to compel the government to release Harry’s immigration file. “The requested information is of immense public interest,” reads an amended complaint filed on May 5.
“Widespread and continuous media coverage has surfaced the question of whether DHS [Department of Homeland Security] properly admitted the Duke of Sussex in light of the fact that he has publicly admitted to the essential elements of a number of drug offenses in both the United States and abroad,” it continues.
The Heritage Foundation has long been one of the most influential conservative think tanks in Washington. Nile Gardiner, director of the foundation’s Margaret Thatcher Center for Freedom, tweeted on Thursday that there was a public interest in disclosing Harry’s records.
“Given his extensive drug use admissions, normally disqualifying for entry into the United States, the American people deserve answers to the serious questions raised by the evidence,” he wrote in a Twitter post. “Did DHS in fact look the other way, play favorites, or fail to appropriately respond to any potential false statements by Prince Harry?”
CNN has asked a representative for Prince Harry for comment.
Harry most recently confessed to taking various recreational party drugs in his explosive memoir “Spare,” which was published in January.
The Duke of Sussex admitted to having taken cocaine, smoked marijuana and tried magic mushrooms. Harry, who moved to California with Meghan in 2020, has opened up about his experiences with cocaine as a teenager.
“Of course. I had been doing cocaine around this time. At someone’s country house, during a shooting weekend, I’d been offered a line, and I’d done a few more since,” Harry revealed.
“It wasn’t much fun, and it didn’t make me particularly happy, as it seemed to make everyone around me, but it did make me feel different, and that was the main goal.”
Harry described himself as a “deeply unhappy seventeen-year-old boy willing to try almost anything that would alter the status quo.”
Elsewhere in the autobiography, the fifth in line to the throne discussed graduating from smoking tobacco to weed during his days at Eton College, as well as revealing that he tried magic mushrooms during a trip to the United States.
Harry said he briefly stayed at actor Courteney Cox’s house where “we spotted a huge box of black diamond mushroom chocolates” and he and a friend ate several and “washed them down with tequila.”
Prince Harry’s autobiography was not the first time the royal had touched upon his recreational drug use when he was younger.
He previously spoke with Oprah Winfrey of how he abused drugs and alcohol in his late 20s and early 30s as a coping mechanism for the pressures of royal life.
“I was willing to drink, I was willing to take drugs,” he said. “I was willing to try and do the things that made me feel less like I was feeling.”
WASHINGTON (AP) — Kwasi Bandoh, a senior recruiter for an airline, stood before a group of aviation mechanic students at their graduation ceremony last month and congratulated them for all having jobs.
As some of the students began nudging each other, Bandoh realized that perhaps not every one of them had already been hired.
“Who doesn’t have a job?” Bandoh demanded, surveying the 15 graduates before him at the Pittsburgh Institute of Aeronautics’ training facility in Hagerstown, Maryland. “Who doesn’t? Because I have a job for you.”
The crowd of about 70 friends and relatives, gathered in a hangar where the students had been trained, laughed appreciatively. Fourteen of the 15 graduates did have jobs, and the only one who didn’t had an interview lined up for the next day.
As happy as the moment was for the graduates, it epitomized the struggles of recruiters like Bandoh, who are desperately seeking mechanics for the airlines, plane manufacturers and repair shops that need them. Most of their existing mechanics are aging, and demand for travel is growing.
Across the U.S. economy, other industries, too, face the same formidable challenge: Replenishing a workforce diminished by a surge of retirements that began during the pandemic and has continued since. It’s a growing problem in such fields as construction, manufacturing, nursing and some professional industries like accounting.
Since 2019, the proportion of retirees in the U.S. population has risen from 18% to nearly 20%, according to research by the Federal Reserve Bank of New York — equivalent to about 3.5 million fewer workers. And the trend seems sure to accelerate: The percentage of workers who are 55 or older is nearly 24%, up from only about 15% two decades ago.
The surge of retirements, along with a slowdown in immigration that began during the pandemic, are the primary factors behind the labor shortages that continue to bedevil some employers.
The aging workforce also helps explain the confounding nature of the economy right now. Even as the Federal Reserve has relentlessly pumped up interest rates to fight high inflation, hiring has remained surprisingly robust. Regardless of where interest rates are, many employers simply need to replace people who have left.
Job growth has been stronger, in fact, than economic growth would suggest. The economy expanded at a mediocre 1.3% annual rate in the first three months of 2023. Yet hiring was robust, averaging nearly 300,000 jobs a month. In April, the unemployment rate reached a half-century low of 3.4%. On Friday, the government will issue the May employment report, which economists predict will show another solid gain of about 190,000 jobs.
Companies that must fill jobs tend to raise pay to attract and keep workers — a trend that can fuel inflation as those same employers typically raise their prices to cover their higher labor costs. That dynamic is complicating the Fed’s efforts to tame inflation.
In the airline industry, more than one-third of mechanics are between 55 and 64, according to government data. Fewer than one in 10 are under 30.
“Everybody’s getting ready to retire, and not enough people are coming in to take the jobs,” said Mike Myers, a maintenance manager for Piedmont Airlines, in Hagerstown, a regional feeder for American Airlines.
The new graduates of the Pittsburgh Institute of Aeronautics have been awed by how much they’re in demand. One of them, Will Gower, said he weighed multiple job offers at nearly twice the $15-an-hour wage he had earned at the retail job he held while in school.
“It was almost overwhelming how many companies were throwing jobs at you,” said Gower, 21. “Anywhere there’s an airport you can go work.”
Next month, Gower will join Commute Air, Bandoh’s company, along with three of his classmates, and will receive further training in Houston.
In the past year, the air travel industry has hired roughly 45,000 people, enlarging its workforce by 9%, to more than a half-million. That’s triple the pace of the U.S. economy’s overall hiring.
United Airlines has said it plans to hire 15,000 workers this year and more in coming years. It expects to add 2,300 pilots, in part to offset about 500 retirements. Kate Gebo, United’s executive vice president of human resources, said she foresees a shortage of airplane mechanics, with up to half of United’s mechanics already eligible to retire.
In the construction industry, the proportion of workers ages 55 and older doubled from 2003 to 2020, to nearly one-quarter, according to the government.
Anirban Basu, chief economist for the Associated Builders and Contractors trade group, said that in addition to aging, industries like aviation maintenance and construction share another challenge: Fewer young people want to take jobs in what are often perceived as less-secure, blue-collar work.
When the now-retiring baby boomers began working, Basu said, “there was the notion that being a blue-collar tradesperson was a solid and secure path to prosperity.” But as factories shut down across the country, “the notion increasingly became that for one to become part of the American middle class, one would likely need to have more formal education, namely, a bachelor’s degree.”
The result, he said, is an economy short of factory workers, backhoe operators, welders, electricians and other skilled trade workers.
If there’s one trend that might ease, if not solve, the problem it’s that Americans below retirement age have been re-entering the job market, likely drawn by steady hiring and higher pay levels. The proportion of these adults who either have a job or are looking for one now exceeds pre-pandemic levels.
Yet for now, an aging workforce remains a problem even for some white-collar jobs, particularly accounting. About three-quarters of accountants are “nearing 60” and approaching retirement, according to the Association of International Certified Professional Accountants.
Tom Hood, an executive vice president of the association, said the industry is finding it hard to attract young college graduates. Many of them prefer data science or finance, while accounting struggles with a stuffier, more old-fashioned image.
“We’re getting squeezed from the older part and the younger part as well,” Hood said.
Nela Richardson, chief economist at the payroll provider ADP, said research shows that countries that have many retirees who spend money and consume and have fewer people working typically face higher inflation. In those countries, demand for goods and services tends to exceed the supply.
“This is the missing piece in terms of our dialogue about, can the Fed drive inflation back down to” its 2% target? Richardson said.
Some economists have said they worry that the job market’s resilience, and the resulting fear that inflation will remain high, will lead the Fed to send its benchmark rate even higher, which could derail the economy and cause a recession.
Gower, who is from Covington, Louisiana, near New Orleans, isn’t exactly worried about a recession. His new job as a line mechanic at Commute Air will pay $30 an hour to start, plus higher wages for night shifts.
“We’ve all got great futures ahead of us,” he said.
Brian Prentice, a partner at the OliverWyman consulting firm, estimates that the aviation industry will endure a shortage of up to 18,000 mechanics this year — about 12% of current staffing levels. It will likely boost pay levels across the industry.
Mindy Pavlonis, associate director of career services for the aeronautics institute, noted that entry-level pay has jumped from about $18 an hour in 2018 to the upper-$20s an hour now.
More financial aid for young people to receive training can help address the worker shortfall, Prentice said, a benefit that some airlines are starting to provide. Myers, the manager at Piedmont, said his company now offers scholarships that pay full tuition to schools like the Pittsburgh Institute of Aeronautics. In return, the student must work at Piedmont for two years.
They will even set up new students with a $6,500 tool box, he added.
Erik Hansen, a lobbyist for the U.S. Travel Association, says his group is pushing for more funding for a federal development program that would subsidize aviation maintenance training schools and support more outreach to high schools to promote the industry as a career.
Without more workers, he said, further flight delays will inevitably result.
“You have an airplane that has a mechanical issue, and it needs to be fixed before it’s turned around,” Hansen said. “It takes longer for the mechanics to get to it. There’s going to be a flight delay. So it’s absolutely something we need to address.”
New York (CNN) — Macy’s, Costco and other big chains say shoppers are pulling back at their stores and changing what they buy. That could be a red flag for the US economy.
Macy’s (M) on Thursday cut its annual profit and sales forecast after customer demand slowed in March.
“We planned the year assuming that the economic health of the consumer would be challenged, but starting in late March, demand trends weakened further in our discretionary categories,” Macy’s CEO Jeff Gennette said in a statement.
Same-store sales at the Macy’s sank 8.7% last quarter, while the higher-end department store Bloomingdale’s dropped 3.9%.
Macy’s stock dropped around 6% during pre-market trading Thursday.
The company was the latest retailer to note shifts in customer demand.
Costco (COST) finance chief Richard Galanti said last week that that some customers were switching from pricier steaks and beef for cheaper meats like pork and chicken. This is a trend that has been common in previous recessions, he said.
Macy’s and Costco appeal to middle and higher-income shoppers, and their results show a pullback among that demographic.
Also on Thursday, Dollar General (DG) said its core lower-income customers were passing up discretionary products like home goods and clothing. The company slashed its outlook on weak customer demand, sending its stock falling 10% during pre-market trading.
“The macroeconomic environment is more challenging than the [company] had previously anticipated,” Dollar General said in a statement. It’s “having a significant impact on customers’ spending levels and behaviors.”
New York (CNN) — Hurricane season officially starts Thursday. But no matter how many storms hit Florida this year, the state’s residents are already struggling as they try to get homeowners’ insurance.
National insurers have very little presence in Florida. Big insurance companies dominate more than half the market in the rest of the country. But in Florida, State Farm has about 7% of the market, according to the Insurance Information Institute, an industry trade group. No other major insurer has as much as 2%.
Meanwhile, the regional and local insurers left to provide coverage are in bad shape. Just more than half of insurers based in Florida are on the state insurance regulator’s watch list due to their financial health. Six were forced to liquidate last year, another one earlier this year. And to try to stay solvent, the remaining insurers are charging rates nearly four times as high as the national average. Homeowners in the state pay private insurers about $6,000 a year, compared to a national average of $1,700.
The insurance industry insists that the state’s risk from hurricanes is only part of the problem, and points to a legal system it says promoted litigation abuse and excess claims.
“This is a man-made crisis,” said Mark Friedlander, spokesperson for the Insurance Information Institute, who is based in Florida. The insurance industry pushed for and won a number of reforms meant to curb what it saw as abuse, but so far it hasn’t changed the outlook for insurers, partly because of a flood of nearly 300,000 lawsuits the III said was filed just before the law took effect.
“That will muddy the marketplace for years to come,” said Friedlander. “That volume of lawsuits will drive more of these regional companies out of business. The laws have changed. The market conditions have not changed. It’s still a mess.”
Florida’s location and low elevation makes It particularly susceptible to hurricane damage. The Atlantic hurricane season is projected to be about normal this year, according to the National Oceanic and Atmospheric Administration, with a 30% chance of an above normal season, and a 30% chance of fewer hurricanes than normal.
Last year was a bad year. Hurricane Ian last fall caused $114 billion in inflation adjusted damage, according to NOAA, making it the most expensive storm to ever hit the state, and the third most expensive in US history after 2005’s Katrina and 2017’s Harvey.
But for the most part Florida has gotten off fairly easy in recent years, with no hurricanes making landfall in the state from 2019 through 2021.
Much of the damage caused by hurricanes comes in the form of flood damage, which is covered not by private insurers but by the National Flood Insurance Program, a federal agency. But wind damage to homes and roofs are covered under homeowners’ insurance policies.
Trial lawyers push back
Trial lawyers dispute that frivolous or fraudulent lawsuits are the cause of the problem, blaming lack of proper regulation on the insurance industry by the state.
“We’ve seen reform after reform. Insurance companies have been allowed to plunder profits from the state in the form of excessive payouts to executives and sister companies and by shortchanging policyholders,” said Stephen Cain, president elect of the trade group representing Florida trial lawyers. “The homeowner’s insurance crisis is a regulatory failure. Had the market been properly regulated through the good years, when there were no hurricanes, the abusive and undercapitalized companies would not have been let loose on the homeowners of Florida while their executives plundered the profits.”
Even Friedlander said it is possible that the new limits on lawsuits will leave some homeowners unable to collect on legitimate claims. But he said to the extent that happens, “it’s because of the abuse that has gone on for so many years.”
Citizens Property Insurance Corp.
The state does provide an alternative to the private sector — the Citizens Property Insurance Corp., which was set up in 2002 as an insurer of last resort for those who couldn’t find coverage in the private market.
The only way someone qualifies for insurance from Citizens is if the lowest quote they get from a private insurer is more than 20% greater than the Citizens’ quote. Its average policy is far below the private market — about $3,700. But that’s a statewide average.
In areas with high hurricane risks, such as the Atlantic coast in South Florida, the countywide averages for a Citizens’ policy range from $5,100 to $6,800. Still, in those counties it has a dominant share of the market: about 42% in Miami-Dade and 30% in Broward just to the north, along with 36% in Monroe County, which includes the Florida Keys.
And with affordable insurance from private insurers becoming tougher and tougher to find, more and more Florida homeowners are turning to Citizens. It now has 1.3 million policies, about 16% of the market, and it’s growing at a rate of about 3,000 policies a month. The number of policies is up nearly 50% from this time last year. And that itself poses a huge risk for the market.
The board of Citizens admits that the premiums it charges are not sufficient to cover the risk it has assumed. If one or more major hurricanes come ashore in South Florida’s Atlantic Coast, it could quickly wipe out Citizens’ reserves and force it to impose emergency assessments on not only its policyholders, but other insurance customers across the state. That could mean an additional 45% for current Citizens policyholders, according to III. Even those who don’t have Citizens policies could be hit by a 2% assessment on all their insurance premiums, both home and car, if the financial setback is great enough.
Even without those assessments, Citizens is asking for a 14% rate increase to take effect later this year, which will be considered by Florida’ insurance regulator next week. And other insurers are seeking steep increases as well.
A major reason is that reinsurance companies, the companies that insurance firms turn to in order to cover some of their risks, are hiking their premiums by 30% to 40%, according to Matthew Carletti, an insurance industry analyst for JMP Securities.
“If you are a reinsurer, you have lost money for the last five years,” said Carletti. “They’ve had enough.”
Carletti said that while Florida’s recent legislation should help the market, it won’t be enough to roll back premiums, especially with the concerns about rising risk caused by climate change and more powerful hurricanes to come. There’s also the inflation driving up the cost to repair or rebuild homes, both from increased labor costs to higher prices for materials.
“The reforms at a minimum should result in less increases than would otherwise be the case in Florida,” he said. “But prices and premium are going up across the country.”
The U.S. Coast Guard has suspended the search for a 35-year-old man who was reported missing from a Carnival cruise ship off of Florida’s Atlantic Coast.
The agency said the man fell from the Carnival Magic about 185 miles (300 kilometers) east of Jacksonville early Monday.
The man’s companion reported him missing, and the ship’s crew notified the Coast Guard. Security footage on the ship shows that the man “leaned over the railing of his stateroom balcony and dropped into the water” around 4 a.m., a statement said.
The Coast Guard searched for 60 hours, covering some 5,171 square miles (13,392 square kilometers) through Wednesday evening. The search included air crews and the Coast Guard Cutter Escanaba, along with U.S. Navy ships and aircraft in the area.
Carnival said the ship returned to port in Norfolk, Virginia. The ship can hold nearly 4,000 guests and is about 1,000 feet (300 meters) long.