Business news in brief

Ex-Sam's Club CEO takes Starbucks post

Rosalind Brewer, the former chief executive officer at Sam's Club, has been named chief operating officer at Starbucks Corp.

She begins her new role at the Seattle-based company on Oct. 2 after retiring as Sam's Club CEO earlier this year. She led the warehouse division of Wal-Mart Stores Inc. for five years.

Brewer now holds the second-highest position at Starbucks after being elected to its board of directors in March, becoming a "trusted strategic counselor" to Starbucks CEO Kevin Johnson.

Brewer will retain her board role in addition to leading Starbucks' operating businesses across the U.S., Canada and Latin America as chief operating officer. She'll also be responsible for the the company's supply chain operations, product innovation and store development organizations, according to a news release.

She is the first woman and black executive to be named chief operating officer at Starbucks. Brewer also was the first woman and black executive to lead Sam's Club.

Brewer will receive an annual base salary of $1 million, a $7 million equity bonus and a $1 million signing bonus, according to a regulatory filing.

-- Robbie Neiswanger

30-year mortgage rate falls for 6th week

WASHINGTON -- Long-term U.S. mortgage rates fell this week, led by the benchmark 30-year rate, which declined for the sixth straight week.

Mortgage buyer Freddie Mac -- the Federal Home Loan Mortgage Corp. -- said the average 30-year fixed mortgage rate fell to 3.78 percent, from 3.82 percent in the previous week. That is down sharply from this year's peak of 4.3 percent, reached in March, though it remains slightly above last year's average of 3.65 percent.

Long-term mortgage rates typically follow the yield on the 10-year Treasury note, which has fallen to 2.05 percent, the lowest level this year. Bond yields have fallen as investors, rattled by everything from North Korean nuclear tests to hurricanes in the U.S., have flocked to the safety of Treasurys.

The 15-year mortgage averaged 3.08 percent, down from 3.12 percent last week.

-- The Associated Press

Closings, 3,500 job cuts in Lilly's plans

Eli Lilly plans to cut 8.5 percent of its workforce and close some facilities as the drugmaker deals with pressure on the price of some of its biggest products.

Some of the 3,500 job cuts will come from early retirements. Lilly also plans to close a research facility in Bridgewater, N.J., and consolidate some manufacturing operations at its animal health unit. The company had about 41,000 employees as of June.

Diabetes drugs make up three of Lilly's 10 biggest products, and the company has increasingly focused on the disease as other big drugs have lost patent protection. Yet diabetes treatments have faced increasing price pressure, thanks to heated competition.

"That was on the mind as they made these changes," spokesman Mark Taylor said in an interview. The cuts will save about $500 million annually starting in 2018, and the company will take charges of $1.2 billion, or 80 cents a share, in the second half of this year.

About 2,000 of the job cuts will be in the U.S., and the reductions will let Lilly focus on newer drugs in its pipeline, Chief Executive Officer David Ricks said in a statement.

-- The Associated Press

U.S. panel sues over pizza eatery pay

KANSAS CITY, Kan. -- The federal Equal Employment Opportunity Commission is suing the former operator of a Kansas pizza restaurant that it says offered a higher wage to a 17-year-old boy than to a female applicant of the same age.

The Kansas City Star reported that the commission filed the lawsuit Tuesday against PS Holding LLC, which used to own the Pizza Studio restaurant in Kansas City.

Jensen Walcott raised questions after learning in 2016 that her friend, Jake Reed, was told he would be paid 25 cents an hour more. The Pizza Studio manager then withdrew both job offers, telling the friends from suburban Bonner Springs it was against company policy to discuss wages.

The pizza chain later said the female manager was wrong and had been dismissed. The teens were offered their jobs back, with equal pay, but they had found other jobs.

The commission's suit alleges that the company violated the Equal Pay Act of 1963, which makes it illegal to pay men and woman unequally for doing the same job. The federal law also makes it illegal to retaliate for contesting such action.

-- The Associated Press

Opiods tied to drop by men in labor force

Opioid use by American men accounts for a portion of the decline in their participation in the U.S. labor force, according to a study by Princeton University economist Alan Krueger.

"The opioid crisis and depressed labor-force participation are now intertwined in many parts of the U.S.," Krueger, who was chief economist at the Treasury Department in the Obama administration, wrote in the study released Thursday at a Brookings Institution conference in Washington.

Krueger's study linked county prescription rates to labor-force data from the past 15 years, concluding that regional differences in prescription rates were because of variations in medical practices, not health conditions. In previous research, he found that nearly half of men in their prime worker ages not in the labor force take prescription painkillers daily.

Krueger's study echoes previous research that attributes most of the decline in labor-force participation since the early 2000s to an aging population and young people choosing school over work. The opioid crisis is exacerbating the problem, Krueger wrote.

"Addressing the decades-long slide in labor force participation by prime-age men should be a national priority," he wrote.

Economists have begun to pay more attention to the spread of prescription painkillers and their link to the historically low portion of prime-age people working.

-- Bloomberg News

Business on 09/08/2017

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