Your New Woke 401(k)

Link:https://www.wsj.com/articles/your-new-woke-401-k-retirement-savings-esg-erisa-biden-administration-department-of-labor-proposal-11634753095

Excerpt:

While Democrats in Congress negotiate over trillions of dollars in new spending, the Biden Administration is quietly advancing its agenda through regulation. Witness a little-noticed proposed rule last week by the Labor Department that will add new political directives to your retirement savings.

The Administration says the rule will make it easier for retirement plans to offer 401(k) funds focused on ESG (environmental, social and governance) objectives. In fact, the rule will coerce workers and businesses into supporting progressive policies.

An important Trump Labor rule last fall reinforced that the Employee Retirement Income Security Act (Erisa) requires retirement plan fiduciaries to act “solely in the interest” of participants. The rule prevented pension plans and asset managers from considering ESG factors like climate, workforce diversity and political donations unless they had a “material effect on the return and risk of an investment.”

The Biden DOL plans to scrap the Trump rule while putting retirement sponsors and asset managers on notice that they have a fiduciary duty to include ESG in investment decisions. The proposed rule “makes clear that climate change and other ESG factors are often material” and thus in many instances should be considered “in the assessment of investment risks and returns.”

Author(s): WSJ editorial board

Publication Date: 20 Oct 2021

Publication Site: WSJ

States Have $95 Billion to Restore their Unemployment Trust Funds—Why Aren’t They Using It?

Link:https://taxfoundation.org/state-unemployment-trust-funds-2021/

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Excerpt:

States are permitted to replenish their unemployment compensation (UC) trust funds using the $195.3 billion they received in Fiscal Recovery Funds under the American Rescue Plan Act (ARPA)—and they need the help, having paid out $175 billion in state-funded benefits since the start of the pandemic, in addition to the $661 billion shelled out by the federal government in extended and expanded benefits, for a total of about $836 billion between January 27, 2020 and September 11, 2021.[1]

…..

Pre-pandemic trust fund balances stood at $72.5 billion. Today, aggregate trust fund balances are negative, at -$11.1 billion, reflecting $44.8 billion in indebtedness currently incurred by 10 states and the U.S. Virgin Islands. By federal standards, 34 state accounts are currently insolvent, with $114.6 billion needed to bring them all up to what the federal government regards as minimum adequate levels.

Author(s): Savanna Funkhouser, Jared Walczak

Publication Date: 22 Sept 2021

Publication Site: Tax Foundation

ILLINOIS MISSES DEADLINE TO REPAY $4.2 BILLION FEDERAL UNEMPLOYMENT INSURANCE LOAN

Link: https://www.illinoispolicy.org/illinois-misses-deadline-to-repay-4-2-billion-federal-unemployment-insurance-loan/

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Excerpt:

Illinois missed the September deadline to repay a $4.2 billion federal unemployment loan. Employers warn inaction by state lawmakers could ‘cripple’ businesses and the COVID-19 economic recovery.

Illinois state leaders missed the Sept. 6 deadline to repay a $4.2 billion federal loan to the state’s unemployment insurance fund, which leaves Illinois taxpayers on the hook to pay $60 million in annual interest on that loan.

The unemployment fund has been depleted during the COVID-19 economic downturn. Between the loan and failure of state leaders to replenish the fund, potentially by using federal COVID-19 bailout funds, the deficit stands at $5.8 billion.

Business leaders warn a failure to repay the debt would result in automatic tax hikes on Illinois’ employers starting at $500 million, further waylaying the state’s stagnant job recovery. There would also be automatic benefit cuts of the same amount. Employers could be subjected to further, discretionary tax hikes by the state legislature if those automatic solvency measures fail to fill the hole.

Author(s): Adam Schuster, Patrick Andriesen, Perry Zhao

Publication Date: 17 Sept 2021

Publication Site: Illinois Policy Institute

CalPERS’ Long-Term Care Fiasco: Private Burial to Hide Malfeasance, Failure to Implement Legislation

Excerpt:

The ongoing CalPERS long-term care insurance program crisis continues to unravel. It is also  revealing overarching behavior which is both unethical and contrary to law.

CalPERS announced insurance premium increases of 52%-90% that become effective very shortly, at the same time that CalPERS has agreed to a class action lawsuit settlement over its last 85% rate increase.  (In my next article I will discuss why I suspect the settlement is another con job by CalPERS.)  But here I first must address a shocking revelation previously unreported about CalPERS long-term care insurance program (LTC) which needs to be recognized before moving on to the issues of the proposed settlement.

There is new and truly disturbing information about the CalPERS long-term care insurance program from a recent review of the enabling legislation prepared by a former California Deputy Attorney General and Court of Appeal Attorney, Linda J. Vogel.

According to Vogel’s analysis, the CalPERS long-term care insurance program  since inception in 1991 has operated contrary to law.

Author(s): Lawrence Grossman

Publication Date: 15 Sept 2021

Publication Site: naked capitalism

10 States Didn’t Pay Off Unemployment Loans Ahead of Interest Deadline

Link: https://www.route-fifty.com/finance/2021/09/10-states-didnt-pay-unemployment-loans-ahead-interest-deadline/185172/

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Excerpt:

At least four states paid back money in the last week they borrowed from the federal government to cover unemployment benefits—narrowly avoiding additional interest on the loans.

Hawaii, Nevada, Ohio and West Virginia announced the loan repayments within the last week. A remaining 10 states have a combined outstanding balance of more than $45 billion that they will now begin to accrue interest on, according to the Treasury Department.

When states exhaust their unemployment trust funds, they are allowed to borrow money from the federal government to ensure benefits continue to be paid. Twenty-two states took out what are referred to as Title XII advances during 2020. The loans were initially interest free, but starting Monday, states with outstanding loans began to accrue 2.3% interest on the borrowed sums.

Author(s): Andrea Noble

Publication Date: 7 September 2021

Publication Site: Route Fifty

Gig Workers In This State – Not California – Benefited Most From Federal Unemployment Benefit Expansion

Link: https://www.forbes.com/sites/lizfarmer/2021/09/09/gig-workers-in-this-statenot-californiabenefited-most-from-federal-unemployment-benefits/

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Federal unemployment benefits ended this month for millions of Americans and data show that workers in Virginia might feel it the most.

The federal government’s enhanced unemployment benefit added $300 to weekly unemployment checks issued by states and also expanded coverage to the self-employed and freelancers, such as rideshare drivers and musicians. That expansion, called pandemic unemployment assistance (PUA) was a lifeline for these gig workers who previously weren’t eligible for any unemployment help.

An analysis I did for the Rockefeller Institute of Government on unemployment benefits given to non-traditional workers shows that the PUA program had the biggest financial impact in Virginia, where those payments accounted for nearly 26% of all unemployment benefits paid in 2020.

Author(s): Liz Farmer

Publication Date: 9 September 2021

Publication Site: Forbes

Wage Stagnation and Its Discontents: Rethinking the Safety Net to Encourage a More Dynamic Economy

Link: https://www.manhattan-institute.org/schrager-wage-stagnation-rethinking-safety-net

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Excerpt:

Guaranteed jobs or UBI are poorly targeted and do not match the needs of new workers and may even hold them back by offering the sort of guarantees that perpetuate wage stagnation. Instead, the new safety net should offer various programs to smooth out dips in income and offer benefits that are not tied to a single employer, including:

Wage insurance—benefits that account for a drop in income, not just a loss of employment

Income averaging—tax rates based on income over three or five years, not just a single year, which will make income more stable for workers in variable work arrangements

Providing contingent workers the opportunity to receive benefits, such as health care and sick leave, that are not tied to traditional employment

To protect themselves against income risk, Americans have resorted to stagnation. We can provide downside protection in alternate ways—so that Americans can feel more free to switch jobs, try alternative forms of work, or start new companies. The above-mentioned programs are a more cost-effective and efficient way to address the needs of the new labor force than the guarantee-oriented policies that receive more attention. These programs provide options that would provide more robust insurance that can help spur a more dynamic economy. The options are merely a starting point to think more creatively about how to support a changing economy and break the cycle of stagnation.

Author(s): Allison Schrager

Publication Date: 9 September 2021

Publication Site: Manhattan Institute

How the office will be different for workers when they return

Link: https://www.cnbc.com/2021/09/02/how-the-office-will-be-different-for-workers-when-they-return.html

Excerpt:

As companies allow employees to work from home and not commute into an office, the question of where they can live will likely be raised as workers potentially will seek out cheaper options as opposed to big cities.

“It’s good for employees; they’re obviously making a choice and taking advantage of lower cost of living, cheaper housing, lower taxes and shorter commutes, so they’re going to be happier,” Moody’s Analytics chief economist Mark Zandi said.

That, in turn, will make companies address several human resources issues, such as how much they should be paying workers who live in cheaper places, Zandi said.

“For example, say I worked in New York and decided now I want to work in Vero Beach, Florida,” Zandi said. “I don’t want to go back to New York, I can do my job here no problem — but if I’m living in Vero Beach, should I get New York wages or Vero Beach wages?”

Author(s): Ian Thomas

Publication Date: 2 September 2021

Publication Site: CNBC

Americans Should Quit Their Jobs More Often

Link: https://www.bloomberg.com/opinion/articles/2021-07-07/americans-should-quit-their-jobs-more-often

Excerpt:

The pandemic and the work-from-home environment it spawned also led many economists to speculate that workers would become better adapted to technology, more efficient and strike a healthier balance between work and lifeThis, in turn, would leave them more mobile. A Microsoft Corp. workplace trends survey found that 40% of Americans are considering leaving their jobs this year. And many are doing just that, with 2.5% of the employed quitting their jobs in May, according to the Bureau of Labor Statistics’  Job Opening and Labor Turnover Survey. Although that’s down from the record 2.8% in April, it’s still higher than any other point since at least before 2001. Plus, consider that the quit rate was only 2.3% in 2019 when unemployment was just 3.6%, compared with 5.8% this May.

Author(s): Allison Schrager

Publication Date: 7 July 2021

Publication Site: Bloomberg

Pay a Living Wage or ‘Flip Your Own Damn Burgers’: Progressives Blast Right-Wing Narrative on Jobs

Link: https://www.commondreams.org/news/2021/05/07/pay-living-wage-or-flip-your-own-damn-burgers-progressives-blast-right-wing

Excerpt:

Soon after the Labor Department released its April jobs report, the U.S. Chamber of Commerce blamed last month’s weak employment growth on the existence of a $300 weekly supplemental jobless benefit and began urging lawmakers to eliminate the federally enhanced unemployment payments that were extended through early September when congressional Democrats passed President Joe Biden’s American Rescue Plan. 

“No. We don’t need to end [the additional] $300 a week in emergency unemployment benefits that workers desperately need,” Sen. Bernie Sanders (I-Vt.) said in response to the grumbles of the nation’s largest business lobbying group. “We need to end starvation wages in America.”

“If $300 a week is preventing employers from hiring low-wage workers there’s a simple solution,” Sanders added. “Raise your wages. Pay decent benefits.”

Author(s): Kenny Stancil

Publication Date: 7 May 2021

Publication Site: Common Dreams

Uber to give UK drivers minimum wage, pension, holiday pay

Excerpt:

 Uber is giving its U.K. drivers the minimum wage, pensions and holiday pay, following a recent court ruling that said they should be classified as workers and entitled to such benefits.

The ride hailing giant’s announcement Tuesday comes after it lost an appeal last month at the U.K. Supreme Court following a yearslong court battle. The court’s decision holds wider implications for the country’s gig economy.

Uber said it’s extending the benefits immediately to its more than 70,000 drivers in the U.K. Drivers will earn at least the minimum wage, which currently stands at 8.72 pounds ($12.12), after accepting a trip request and expenses, and will still be able to earn more.

Author(s): Kelvin Chan, Associated Press

Publication Date: 16 March 2021

Publication Site: WTMJ