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North American Edition
10th July 2024
California heat waves: Hundreds dead, billions lost in economic impact
A new report from the California Department of Insurance reveals that extreme heat events in the state from 2013 to 2022 resulted in several hundred deaths, thousands of injuries, and a total economic impact of $7.7bn. The report highlights that extreme heat has caused more deaths and economic losses than wildfires over the past decade. The effects of extreme heat are often underestimated, and it is crucial to take swift action to address this silent killer. The report calls for data-driven policies and programs to tackle the impacts of extreme heat, particularly on vulnerable populations. It also emphasizes the need for insurance coverage for the various costs associated with extreme heat. The report's recommendations include expanding investment in disaster planning, implementing strategies to reduce heat-related illnesses for workers, and improving tracking of costs related to extreme heat events. The report underscores the importance of equity in addressing extreme heat and highlights the disproportionate impact on low-income communities, older adults, and outdoor workers.
ACLU report: 95% of deaths in ICE custody could have been prevented
A new report by the American Civil Liberties Union (ACLU), in collaboration with American Oversight and Physicians for Human Rights, reveals that 49 of 52 deaths in ICE detention from 2017 to 2021 could have been prevented with proper medical care. The report, analyzing 95% of the cases, pointed to severe medical neglect and a lack of COVID-19 safety measures, notably contributing to 21 deaths in 2020 alone. The ACLU criticizes ICE's investigation methods, including the omission of critical information and destruction of evidence. It urges the cessation of mass detentions, suggests terminating contracts with facilities linked to fatalities, and calls for Congressional action to redirect funding towards community-based alternatives and legal support for detainees.
President Biden rallies labor leaders, continues campaign amid calls to step aside
U.S. President Joe Biden returns to the campaign trail today, rallying labor leaders amid pressure from fellow Democrats to drop out. Biden will join the AFL-CIO's executive council meeting to discuss their shared commitment to defeating Donald Trump. Labor votes were key to Biden's win in 2020. While some Democrats have called on Biden to step aside due to health concerns, public defections remain a small segment of the party. Biden has surrounded himself with his staunchest supporters and has made his alignment with labor leaders a major pillar of his economic platform. Vice President Kamala Harris will also be speaking at a campaign stop. Biden will continue his campaign in competitive states, Michigan and Nevada. Despite questions about his health, the White House physician has stated that Biden is not being treated for any neurological condition.
California fast food workers struggle with minimum wage increase
When California's minimum wage increase went into effect in April, fast food workers across the state faced challenges as their wages jumped from $16 to $20 an hour. Lawrence Cheng, a Wendy's owner, had to cut back on employees and work extra hours himself to cover the increased labor costs. While it's too early to determine the long-term impact, the industry has shown job growth since the wage hike. However, many fast food chain operators are cutting hours and raising prices to stay in business. Experts predict a divide between corporations with money for automation and smaller chains that may face closures. Despite the challenges, some workers are benefiting from the higher wages, using the extra money for investments and personal expenses. Gov. Gavin Newsom defended the wage increase as necessary to provide a living wage for fast food workers. Overall, the wage hike has brought both benefits and challenges to the fast food industry in California.
Drivers for ride-hailing companies in Massachusetts push for union rights
Drivers for ride-hailing companies in Massachusetts are pushing for union rights through a first-of-its-kind ballot question. The measure, if approved, would grant Uber and Lyft drivers the collective bargaining benefits of unions. This effort comes despite a recent settlement that guarantees a minimum pay standard of $32.50 per hour for drivers in Massachusetts. Supporters of the ballot question, including the president of the Service Employees International Union, believe that gig workers deserve the same rights as other workers. However, some drivers feel that the question does not go far enough in ensuring democratic rights and driver control. Meanwhile, another group is advocating for legislation that would provide full employee rights and a path to unionization for all app workers. The ballot question, if passed, would define "active drivers" and establish a process for union recognition. The settlement between the ride-hailing companies and the state also includes sick day pay and a $175m payment to resolve wage and hour law violations.
CFOs face labor shortages and hybrid work challenges
Steve Gallucci, Deloitte's U.S. National Managing Partner for the CFO Program, highlights the immediate concerns of CFOs regarding ongoing labor shortages, especially in AI skills, and adapting workplace cultures to new work preferences. Deloitte’s 4Q 2023 CFO Signals survey reveals a significant shift towards hybrid work models, with 65% of CFOs planning to offer such options. The survey underscores the necessity for CFOs to adapt management styles to monitor productivity remotely and the importance of continual learning and flexibility within the finance function to stay resilient amidst rapid technological changes. Gallucci emphasizes that flexibility in work arrangements and upskilling employees are critical in retaining talent and ensuring organizational adaptability in an evolving corporate landscape.
Federal watchdog investigates UAW president's alleged demands for personal benefit
A federal watchdog is investigating United Auto Workers (UAW) President Shawn Fain over allegations that he made demands to benefit his domestic partner and her sister. The investigation is being conducted by federal monitor Neil Barofsky, who is examining whether union officials are complying with a 2020 settlement following a corruption investigation. Barofsky is specifically looking into Fain's decision to remove UAW Vice President Rich Boyer from his role as the union's top negotiator with Stellantis. The probe aims to determine if this move was in retaliation for Boyer's refusal to accede to demands that would have benefitted Fain's domestic partner and her sister. The UAW has also been involved in attempts to unionize auto plants in Alabama, with a recent vote at the Mercedes-Benz plant failing to unionize. The UAW has filed a request with the National Labor Relations Board to reject the election and order a new one. The investigation into Fain's alleged misconduct also includes allegations of retaliation and potential embezzlement by other union officials.
Costco to pay former employee $2m for wrongful termination
A jury has ordered Costco to pay a long-time former employee more than $2m for illegally terminating his employment due to his age. Stuart Nover, 77, sued the membership-only warehouse club two years ago, claiming he was wrongly terminated from the Bridgewater store following 22 years of employment after taking a company-approved COVID-leave program.
Judge dismisses lawsuit challenging Amazon's 'Buy Box' listings
A U.S. judge has dismissed a proposed class action against Amazon accusing it of obscuring product listings for lower-priced items with better delivery times, duping millions of consumers and causing them to pay more for purchases. The lawsuit focused on Amazon’s “Buy Box,” which is the version of a product featured in a "Buy Now" or "Add to Cart" box on product pages. Other offers are listed further below from "Other Sellers on Amazon". U.S. District Judge Marsha Pechman in Seattle federal court said the plaintiffs had not been able to demonstrate how they were allegedly harmed. Amazon had argued that "there is nothing unfair or deceptive about a retailer deciding which product offerings it believes will be most appealing to its customers, and then letting customers accept or decline those offers based on their own evaluation".
Disneyland Resort faces strike authorization vote by union workers
A coalition of four major unions representing 13,000 Disney workers is planning a strike authorization vote after filing labor charges against the Disneyland Resort. The unions claim that Disney has committed unfair labor practices, including intimidation and disciplinary threats against workers wearing union buttons. The National Labor Relations Board is currently investigating these allegations. The key issues in the negotiations include higher wages, a fair attendance policy, raises based on seniority, and park safety. The company's pay proposal, which it claims represents a 40% increase, is disputed by the unions. The current minimum wage under Anaheim's living-wage law is $19.90 an hour. Seniority-based raises are also a point of contention. If the strike authorization vote is successful, the union coalition will have the authority to organize a walkout if necessary. Contract talks between Disney and the unions are scheduled after the vote.
Veteran reporter files disability discrimination lawsuit against WSJ
A disability discrimination lawsuit has been filed against the Wall Street Journal by veteran reporter Stephanie Armour. The lawsuit accuses the paper of using "trumped up performance issues" to shed staffers with high healthcare costs. Armour, who left the Journal in May, alleges that the paper falsely assessed her performance as a means to fire her. The suit claims that the Journal's layoffs have targeted employees with high salaries and medical costs. Armour had been allowed to work from home as an accommodation for her disabilities, but the suit alleges that her editor retaliated against her. The suit also mentions other veteran journalists who were allegedly targeted by the paper. The Journal's lead union says that disciplinary reviews have been increasing.
Fifth Third to pay $20m in penalties and reimburse customers
The Consumer Financial Protection Bureau has imposed a $20m penalty on Fifth Third Bank for engaging in deceptive practices, including selling unnecessary auto insurance and creating unauthorized accounts. The misconduct, which occurred between July 2011 and December 2020, led to approximately 1,000 vehicle repossessions and over $12.7m in unwarranted fees charged to 35,000 customers. In addition to the penalties, Fifth Third faces a proposed court order to eliminate sales quotas that encouraged such fraudulent activities. The bank, which operates 1,100 branches across multiple states and holds $214bn in assets, has yet to respond publicly to these charges.
Albertsons, Kroger release list of stores to be sold in merger
Kroger and Albertsons have released a list of 579 stores the companies plan to sell, should regulators approve their proposed $25.6bn merger. The outlets will be transferred from the merging companies to C&S Wholesale Grocers, along with six distribution centres and one dairy plant. The list includes 124 stores in Washington state, 101 in Arizona, 91 in Colorado and 63 in California, among others. In February, the Federal Trade Commission announced it was suing to block the merger, arguing the joining of the two businesses would obliterate competition, leading to higher prices and lower-quality products for millions of Americans.
Athletic Brewing raises $50m in fresh financing round
Athletic Brewing, the biggest non-athletic beer brand in the US, has closed a new financing round led by General Atlantic that values it at around $800m, double its valuation from two years ago. The brewer plans to use the latest investment to increase production capacity and expand its offerings at global retailers to meet rising consumer demand for non-alcoholic beer. Athletic Brewing launched its nonalcoholic craft brewing facilities in 2018 and has since grown to become the 10th largest U.S. craft brewery and 20th largest overall U.S. brewing company, according the Brewers Association.
Nike rehires former exec to boost sales through third-party retailers
Nike has announced the return of Tom Peddie, a former executive, to serve as its vice president of marketplace partners and rebuild the company's sales through third-party retailers. Nike has been losing market share to smaller rivals and is now focusing on selling through wholesale partners. Mr Peddie's previous roles at Nike include overseeing global sales and heading North America. The company's turnaround plans include a bigger focus on wholesale, with its wholesale business increasing 1% to $27.8bn in the fiscal year ended May 31st. Peddie will succeed Jim Reynolds, who is retiring after 18 years at the company.
Powell ups focus on precise timing of rate cuts
Federal Reserve Chair Jerome Powell suggested to the Senate Banking Committee on Tuesday that he is focusing greater attention on when to cut interest rates now that the trade-offs the central bank is facing between bringing inflation down and maintaining a solid labor market may be shifting. “Elevated inflation is not the only risk we face,” he said in his semiannual monetary policy report. “The most recent labor market data do send…a pretty clear signal that labor market conditions have cooled considerably compared to where they were two years ago.” “The timing of the first Fed rate cut remains a difficult question to answer,” Seema Shah, chief global strategist at Principal Asset Management, said in a note. “Even with a slight downshift in economic activity and with the soft May inflation print, it is not obvious that the economy requires policy easing, and it is no wonder policymakers have been steadfast in communicating their patience with their current policy stance.” Mr. Powell heads to the House Financial Services Committee today to address the same report on the state of the U.S. economy.

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