Tag Archives: Housing

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US, China sign partial trade pact, but economic danger remains

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The nearly two-year trade war between the U.S. and China has cooled down since President Donald Trump and Chinese President Xi Jinping signed a “phase one” pact to reduce hostilities. What does this mean for American firms and workers?

On one hand, the pact calls for China to buy an additional $200 billion in U.S. goods over the next 24 months. That total includes $40 billion of American agriculture.

For the short-term, there is long-awaited relief for soybean farmers in the Midwest. They have watched in dismay as their revenue dropped when China stopped buying American agricultural imports. In response, Brazilian soybean producers increased their imports of this commodity to China. American soybean farmers lost sales and market share, a nightmare scenario.

Is it time to pop the champagne corks? Derek Scissors is a resident scholar at the American Enterprise Institute in Washington, D.C. He takes a rather dim view of the phase-one accord between the China and the U.S.

“China generally wants American farm products,” according to Scissors. “When it doesn’t, it will create new barriers. There is no way to prevent this with language in a formal agreement — Beijing’s control of the economy is much too extensive to anticipate and prohibit every possible intervention.”

Turning to the American labor force, bilateral trade with China has been a negative factor. The U.S. economy has shed 3.7 million manufacturing jobs since 2001, when China entered the World Trade Organization, according to Robert Scott, a senior economist at the Economic Policy Institute in Washington, D.C.

“Growing imports eliminate existing jobs and prevent new job creation — as imports displace goods that otherwise would have been made in the United States by domestic workers,” according to Scott. In other words, low-cost imports assembled in China that are on store shelves throughout the U.S. have a high price in terms of weakening hiring among domestic goods-producing firms.

Historically, goods-producing jobs have paid high wages due to labor union agreements with companies. Thus, the trend of declining manufacturing job losses is a drag on the living standards of American workers.

Why? Union-free service employment tends to pay lower wages versus goods-producing jobs with collective bargaining agreements that include employee benefits such as guaranteed cost-of-living pay hikes and employer-paid health and pension benefits.

In addition, a reduction in factory employment subtracts from buyer demand in the U.S. economy. Weakened purchasing power negatively affects businesses, from small to midsize and large. Small firms are most at-risk of weakened buyer demand, as they lack the cash flow to weather downturns as larger firms can and do.

Placing tariffs, or import taxes on goods arriving stateside from China, has not delivered employment growth.

“Despite all of the tariffs and other restrictions imposed on China trade by the Trump administration,” according to EPI’s Scott, “the bilateral trade deficit continued to grow between 2016 and 2018, resulting in the loss of more than 700,000 U.S. job opportunities.”

Will the phase-one trade deal with China open the doors to improved prospects for American firms and workers? After that two-year agreement period ends, the future of trade between the world’s two biggest economies is unclear, generating no small amount of uncertainty.

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Creeping prices keep lid on home sales

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Low mortgage rates helped drive home sales in December. At the same time, shrinking inventories combined with increased demand to push home prices higher.

That left some buyers, especially those at entry level, with fewer or no options, holding down the number of potential sales. Nevertheless, analysts are optimistic that market conditions will remain positive in 2020.

Sales of existing homes rebounded from a 1.7% drop in November, climbing 3.6% month-over-month in December. Much of that gain came from condo and co-op sales, which soared 10.7% for the month. Single-family sales rose 2.7%. Total sales were up 10.8% from December 2018. However, the number of existing homes sold during the year, 5.34 million, matched that of 2018, resulting in zero growth.

New home sales slid for the third month in a row, with the U.S. Census Bureau adjusting its original estimated sales for November downward. Annual sales dipped 0.4% month-over-month in December. Still, in total number of units, December’s figure was 23% higher year-over-year, and on an annual basis, sales ended the year 10.3% above 2018’s mark.

With existing home sales gaining ground and new home sales lagging, online real estate brokerage Redfin reported combined sales in the metro areas it tracks squeaked up just 1% for the month, 6.8% above a year ago. It was the fifth consecutive increase in month-to-month sales recorded by Redfin.

Although consumer demand for housing remains high, home sales are facing pressure from constrained inventories and rising prices. Fannie Mae stated that its Home Purchase Sentiment Index (HPSI) in December held steady and has been hovering close to its highest point for some months. The proportion of respondents saying now is a good time to buy a home was 16 points higher than it had been a year ago. Yet, that indicator fell 5 points from November due to concerns about rising home prices, the possibility that mortgage rates will begin to climb and signs of slowing in the economy.

According to Redfin, the supply of homes for sale in December fell 14.9% year-over-year, the biggest decline since March 2013 and the sixth straight month of declines. New listings were down 5.1% from the previous December, the largest drop on record since the company began tracking sales in 2012.

The National Association of Realtors (NAR) also reported a 14.6% monthly drop in inventory of existing homes for sale, leaving only a three months’ supply. And while new home starts have soared in recent months, the pace of new construction is still well below historical levels and is expected to taper off during the winter months.

Low mortgage rates and tight inventories make this a seller’s market in many areas of the country. The NAR relates the median prices of an existing home sold in December was nearly 1.5% higher than in November and 7.8% higher than the previous December.

The median price of a new home was up just 0.5 % from a year ago, but the average price was around $50,000 more. Only about 10% of new home sales were in the desired entry-level price range, and the number of first-time buyers declined.

Amidst the uncertainty, analysts are encouraged that the market will sustain positive growth in 2020. Lawrence Yun, chief NAR economist, commented, “We saw the year come to a close with the economy churning out 2.3 million jobs, mortgage rates below 4% and housing starts ramp up to 1.6 million on an annual basis. If these factors are sustained in 2020, we will see a notable pickup in home sales in 2020.”

Similarly, Doug Duncan, chief economist for Fannie Mae, stated that the organization’s most recent macroeconomic outlook predicts “a healthy housing market in 2020, as well as consumers’ appetite and ability to absorb the expected increase in entry-level inventory.”

In presenting the National Association of Home Builders (NAHB) housing forecast during the recent International Builders’ Show, the association’s chief economist, Robert Dietz, told the audience NAHB projects an increase of 2% in housing starts for the year (including a 3% gain in single-family starts) and 2.5% growth in new home sales.

If the economy remains strong and mortgage rates stay low, sellers are likely to find buyers willing and able to meet their price. But unless prices begin to ease and even to come down a little, many prospective entry-level buyers will spend another year shut out of the market.

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Advocating for the aftermarket at HDAW 2020

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GRAPEVINE, TEXAS — The recent Heavy Duty Aftermarket Week, held for the first time at the Gaylord Texan in Grapevine, Texas, gathered aftermarket professionals nationwide for an impactful event. With a captivating keynote delivered by “Shark Tank’s” Daymond John, multiple informational sessions and a lively showroom, attendees were given plenty of avenues for education and inspiration.

Chasing the Aftermarket

For those eager for industry insight, the Heavy Duty Manufacturers Association hosted “Chasing the Aftermarket” on Jan. 26. The meeting was a TED Talk-style presentation, delivered by four aftermarket thought leaders. Each presenter offered expertise on logistics, training, sales, fleet growth and the OEM invasion.

Joe Figueroa, owner of LASCO, kicked things off with a discussion on the global supply chain and how it affects distributors and end-users. He noted an increase in international partnerships, identified market disruptors and pinpointed customer expectations when it comes to branded versus unbranded parts, like quality, support, delivery and warranty.

“There are more choices and opportunities than ever before. This can cause great confusion and great time consumption and resources at the distributor and end-user level.” Figueroa said, emphasizing the affect an abundance of choices has on decision time and purchasing.

The presentation on an increasing presence of OEMs was also of particular interest. John Adami, principal at NW Heavy Duty, described the current and future landscape, then reiterated how valuable data is for equipment uptime.

Adami said OEMs will use improved uptime as a battle cry, because they have access to real-time data on equipment conditions and can make fleets smarter. Also discussed was the ability for OEMs to identify if an engine has been replaced with nonstandard equipment via the internet of things and how the Right to Repair regulation is heating up.

Delivering Efficient Solutions

Rich Ferguson, managing director of Ferguson Partners LLC, presented “Delivering Efficient Solutions” and dove into key historical and future trends of the aftermarket.

Ferguson said the industry has endured through increasing emissions regulations by implementing exhaust gas recirculation and diesel particulate filters, but only 60% of Class 6-8 vehicles have a DPF. This means drivers and operators still lack the knowledge to clean filters, leaving an opportunity for revenue in cleaning and replacement.

Remanufacturing continues to be a viable option because of its cost effectiveness, ease on the environment and expanded product offering.

Ferguson emphasized efficiency through parts availability. Suppliers can meet customer needs best by having the right part at the right place at the right time. “That customer focus is extremely important,” Ferguson said. “Offer them a diversified product.”

Although customers are largely responsible for business success, equally important is technician job satisfaction. Without them, the product doesn’t make it out the door. Providing education and career advancement is necessary to help narrow the shortage.

What does the future hold for the aftermarket? The industry continues to hear a few common topics, like electric powertrains, automation and advanced driver assistance systems. The independent aftermarket section needs to be prepared for the evolution and incorporation of cameras, sensors, radar units and electronic braking systems.

This year’s HDAW delivered insightful education, motivational takeaways and networking opportunities. By demonstrating adaptability, the aftermarket can expect to maneuver through market changes with confidence and excitement.

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What can facility managers learn from coronavirus?

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A seemingly impossible feat of engineering, construction, and facilities management has been accomplished in the face of a global pandemic based in the People’s Republic of China.

The feat of modern facility creation started in late January when the Chinese government announced it would build a 1,000-bed hospital to house patients battling the Wuhan coronavirus in just six days. The actual construction time was closer to eight days, but the result was the same.

Wuhan is the Chinese city is where the outbreak was initially discovered. The building was created using prefabricated materials to make the process move along quicker.

China is struggling to deal with the virus, which has infected more than 20,000 people and killed more than 400.

The method of building a hospital so quickly follows the game plan of the SARS outbreak that occurred in 2003, Facilities Management reports. The current hospital was built on a 25,000-square-meter site.

The enclosed building is nearly the size of five football fields. Workers were reportedly being paid up to 1,200 yuan ($173) per day, triple their usual wages. At the site, there were at least 35 diggers, 10 bulldozers, and more than 100 people working on the facility.

Huoshenshan Hospital, as it is being called, will provide 700 to 1,000 beds and will be managed by the Chinese military.

The hospital’s construction began after reports of overcrowded hospitals and shortages of beds. It is one of two dedicated facilities being constructed to help tackle the outbreak.

Feb. 2 saw the first confirmed fatality outside China, in the Philippines. As of this writing, there were more than 150 confirmed cases outside of China. Many more are expected.There are currently 11 reported confirmed cases in the U.S.

U.S. officials also have declared a public health emergency, meaning foreign nationals who have traveled to China in the last two weeks and aren’t immediate family members of U.S. citizens or permanent residents will be temporarily banned from entering the U.S.

Back in China, a second hospital at Leishenshan is due to be finished on Feb. 5, reports say. National Health Commission spokesman Jiao Yahui told Reuters that, with the new hospitals, the city would have more than 10,000 beds available, enough to cope with current suspected and confirmed cases.

Despite all of the global concern related to the coronavirus, the flu is still the primary concern for most in the U.S., especially for facility managers. The cost of the illness to the American economy is hundreds of billions of dollars in lost productivity when employees show up to work but are unable to perform at their best.

For that, there are guidelines, including the tried and true: washing hands, staying educated, and remaining diligent. As far as the Wuhan coronavirus, the same is true for now. Diligence, education, calm, and patience.

Additionally, remain continuously committed to emergency preparedness and business continuity planning. For this, companywide, top-down support is needed.

A crisis such as a pandemic or flu can create confusion and even panic. Armed with a business continuity plan, executives can respond in an orderly, rational way. This kind of plan allows decisions to be made along with predetermined guidelines.

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Workplace fatalities are at their highest levels since 2008. What’s going on?

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In December 2019, the U.S. Department of Labor’s Bureau of Labor Statistics released workplace injury data from 2018. There were 5,250 fatal workplace injuries, which represents a 2% increase over 2017. This is also the highest amount since 2008, and it should be noted that from 2009-15, workplace fatalities were in the 4,500 to 4,600 range.

Two particular causes of workplace fatalities increased significantly. Deaths from unintentional overdoses as a result of nonmedical consumption of drugs or alcohol while at work increased 12%. Work-related suicides increased by 11%.

In addition, there was a 13% increase in fatal incidents as a result of contact with objects and equipment.

Transportation incidents continue to account for 40% of fatal incidents, and heavy and tractor-trailer truck drivers account for the most fatalities among occupational groups.

Death as a result of violence and injuries by humans or animals increased by 3%.

Fortunately, there was a 13% decrease in fatalities related to slips, falls, and trips.

“The raw number is increasing, in part because the economy is reaching its full employment,” says John Dony, director of the Campbell Institute at the National Safety Council (NSC). Although the rate of death hasn’t changed from 2017 (3.5 per 100,000 full-time workers), the 5,250 deaths represent the highest total number of worker fatalities reported since 2008.

Dony also notes that work-related motor vehicle deaths have declined, but they remain one of the leading causes (along with falls) of preventable workplace fatalities. “Drug and alcohol overdoses are growing as a workplace threat, and drug overdoses are the top cause of preventable death outside the workplace.”

Aside from full employment, he says the number of workplace fatalities is increasing because we’re not doing enough to protect workers.

For example, workers are told to follow regulatory guidelines and anything enacted by employers. “But procedures and policies don’t take into account that human beings are fallible, and we will make mistakes.”

Dony says employers must move toward a more holistic point of view. “They need to look at real sources and reasons for these events — being proactive, instead of chasing after the problem.” For example, in addition to policies, companies should implement training and risk assessment techniques that can address the causes of these fatal injuries.

“There are tools and resources to move from compliance to thinking more about risk, doing a better job of looking at your data, looking at cultural factors, and how we treat workers — i.e., health and well-being — which can all have a huge impact,” he says. “How we address contract workers and others who are not a part of the organization also plays a role in solving this problem.”

For example, in construction, he says over half of the work is done by contractors, and since 2011, there has been a 50% increase in fatal work injuries among contract workers. “Research by the Campbell Institute reveals that it’s a best practice for employers to have a formal contractor management program.”

The NSC provides resources to assist employers in their efforts to improve workplace safety. Examples include workplace training, consulting services, employee perception surveys, and the Work to Zero initiative.

The council also offers a number of free resources, including:

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How Greece is improving its airports for the future

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In Greece, a sweeping range of airport improvements and upgrades has just been approved by way of two major projects that will see a huge investment in the country’s largest and busiest airport, and a brand-new airport for one of the country’s main tourist destinations.

Athens Eleftherios Venizelos International will celebrate its 20th anniversary next year, having opened in March 2001 to replace the older, crowded Ellinikon Airport. 2019 was a landmark year for the facility, with 25.5 million passengers handled and over 225,000 aircraft movements — the highest ever in its history.

Now, in work estimated to cost around €700 million, the airport will be given space to grow and handle the expected future numbers of passengers and movements.

Work to be completed includes a new parking apron for aircraft, various new taxiways for both airline and general aviation traffic, and new ground support services building.

The main focus of the work will be a new terminal building with associated jetways and parking areas, VIP lounges, plus shopping and dining facilities. This will allow Athens to up to 50 million passengers per year by 2040, once all expansion has taken place.

At present, Athens Airport is 55% owned by the Greece government but, in a bid to raise funds from privatization, a 30% stake is currently being sold, with nine investors shortlisted to purchase shares.

Work on Athens Airport will not commence until renovation is complete at the 14 regional airports across the country operated by Fraport Greece. These include major tourist airports at Corfu, Rhodes, Kos and Zakynthos.

Each is currently undertaking improvements in passenger facilities, aircraft handling facilities and infrastructure such as runways and taxiways. Some will also see new terminal buildings. It is bringing modernization to the ageing Greek airport system which are being put under increasing pressure.

A rendering of the new Kasteli Airport in Crete.

Another major announcement this week confirmed that a brand-new airport has also been commissioned for the city of Heraklion on the island of Crete.

The present airport is overcrowded and shares facilities with the military air base. Now, owing to growing passenger numbers and a lack of space for expansion, a new €517 million international airport will be constructed.

The announcement comes as the final €180 million to complete the funding has been sourced from the European Investment Bank (EIB) allowing work on the site, which is 30km from the city, to begin. EIB vice president Andrew McDowell said: “The €180m EIB loan will enable construction of the new Heraklion airport to finally start after many years of planning and delay. The EIB recognises the commitment to redevelop the existing Heraklion Airport area to unlock economic, environmental and social benefits. This redevelopment is an integral part of our loan conditions.”

Greece recently emerged from a period of bailouts from eurozone members to cover its economic crisis. The country is now looking to take advantage of its huge tourism potential through investing in its airports and infrastructure.

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Single women homebuyers are a growing market niche

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Women have long been the primary client — or in the case of couples, the primary decision-maker — for residential interior design services. Due to some recent demographic trends, a new subgroup of potential women clients is emerging — the single homebuyer. As might be expected, these homeowners have different priorities for what they want in a home and how they want it to function.

Although overall women still earn substantially less than men, as a group they are making inroads into higher-paying, traditionally male-dominated fields. For the past decade, more women have graduated with college degrees than have men.

Last year, for the first time, college-educated women outnumbered college-educated men in the workforce. As a consequence, more women now hold professional positions, increasingly in leadership roles and in STEM (science, technology, engineering and mathematics) fields. Most of these women are age 25 or older, with varying levels of responsibility and experience and higher-than-average incomes.

At the same time, for a variety of reasons, more of these women are choosing to remain single. A study released last fall by investment firm Morgan Stanley projects that 45 percent of working-age women between 25 and 44 in the U.S. will be single women in 10 years, giving rise to the “SHEconomy,” reported BizWomen.

This group is a mix of young women who have never married, single mothers, and somewhat older women who have married but later divorced. The study also found that among these single women, some with the means outspend the average household in certain categories, including apparel and footwear, personal care and fitness, and luxury vehicles.

Over the past several years, more of these single women have opted to purchase a home. One in five consumers buying a home today is a single woman. A recent analysis conducted by LendingTree found single women in the United States currently own more homes than do single men — about 1.5 million. Single women made up 17% of all homebuyers in 2019, compared to 9% of single men.

An annual study by Yahoo! Finance discovered that the number of women buying homes relative to men has increased and in some metro areas in the country women are buying more homes than are men. In addition, The Wall Street Journal relates that unmarried women over age 55 are one of the largest and fastest growing demographics of homebuyers — 1 in 4, according to one study.

When asked in a recent nationwide home shopper survey of women homebuyers conducted by Builder magazine and Meyers Research why they chose to buy rather than rent, nearly 9 in 10 (87%) said a primary reason was to be able to customize their home. Questioned about what they were looking for most in a home’s design, more than 9 in 10 (93%) said interior style (including interior finishes and design), while 8 in 10 (81%) mentioned improved function. Half (52%) were seeking more interior space and/or more private outdoor space (48%).

In general, the survey found, these women are more focused on wellness, activities and social interaction. They want a home that is well designed for entertaining and socializing, but also is well-organized and easy to maintain, with lots of storage, conveniences, and a refuge space where they can de-stress.

Understandably, living alone or with young children, safety is a major concern. A smart home, with remote everything and a high-tech security system is a must. Accommodations for pets also ranks high on their wish list.

Many, although not all, of the respondents would prefer a move-in ready home with all the features they seek. However, they will still want some customization, while others will need to remodel an existing home they have purchased. With their numbers growing and their affinity for good design, these affluent, single women homeowners have the potential to become an important niche market for designers in the years ahead.

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Coronavirus: A reminder for employers to have contingency plans for health crises

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The recent outbreak of coronavirus in China reminds us that employers need to take certain actions to be prepared for public health crises in general. This article outlines some of the basic steps that employers can take now to get ready for a rapid spread of flu, coronavirus or some other pandemic threat.

Safety Policies and Practices

You should strive to keep your safety policies and practices up to date. Consider what policies or practices you can adopt now that may come into play if there is a pandemic or major outbreak. Employee education is an important part of every safety program. A few basic tips are included in the next section.

Employee Education

The www.pandemicflu.gov website provides information which may be used to educate employees. Most experts recommend that employers educate employees about misconceptions, as well as the signs of the flu and other contagious diseases, how to avoid them, and what to do if they become sick.

One of the key instructions is that individual employees stay home when they are sick, at least for a reasonable period after they cease to have a fever or other symptoms. The length of that period may vary with the employee’s specific illness.

At a minimum, employers should also instruct workers to follow established safety practices, including but not limited to:

  • Washing their hands often with soap and water for at least 20 seconds. If soap and water are not available, use an alcohol-based hand sanitizer.
  • Avoiding touching their eyes, nose and mouth with unwashed hands.
  • Avoiding close contact with people who are sick.
  • Covering their cough or sneeze with a tissue, then throw the tissue in the trash.
  • Cleaning and disinfecting frequently touched objects and surfaces.

Surgical masks have not been proven to definitively protect against every contagion. However, masks prevent a person from unconsciously touching their eyes, nose and mouth, so they may offer a measure of protection.

Workplace Spread Prevention

In addition to the basic precautions outlined previously, you should consider “social distancing,” which is a fancy term for making arrangements to separate employees as much as possible during day-to-day business. Social distancing may include moving away from carrels and combined workrooms and to also encourage some degree of remote work.

Travel

You should track the CDC and other updates on safe travel and, if a disease begins to aggressively spread and worsen, you should actively seek to limit travel, as well as provide guidance as how to travel in a safe fashion.

For example, the current advice with respect to coronavirus is that individuals returning from China should be “self-quarantined” for 14 days after their return. That means that they should not be allowed to return to the workplace for that period as well.

Survey Employees

The Americans with Disabilities Act (ADA) limits what medical inquiries an employer can lawfully make of its employees. However, the EEOC encourages employers to survey their employees to determine who would be affected by school closings and by an absence of public transportation (or an unwillingness to send kids to school or to use public transportation). The EEOC has proposed a form for this purpose on its website that complies with the ADA’s restrictions.

Dealing with Employee Inquiries

When there is a threat of a pandemic or if an employee contracts a contagious disease, you should provide your managers with guidelines and a basic script or form letter to use to make sure they lawfully communicate with both the affected employee(s) and their co-workers.

Remote Work/Telecommuting

In the event of an outbreak, try to rely more on remote work. Now is a good time to make sure that you have rules and procedures in place to ensure that hourly workers maintain accurate time records while working from home. You also need to carefully scrutinize any additional procedures required to strictly limit the amount of material on the web, and otherwise protect confidentiality and attorney-client privilege.

You need to devote special attention to the security of laptops and memory sticks or portable hard drives, which may contain an enormous amount of confidential and client information. In addition to the wage/hour and security concerns, you need to investigate what additional company or employee hardware and software might be required to utilize staff members working in their homes.

A comprehensive written telecommuting policy or individual agreement is helpful to confirm all of the legal parameters and logistics of a telecommuting arrangement.

Telephone/Electronic Communications

You need to determine how you would maintain your network and phone systems if it were difficult or impossible to reach the office.

Wellness

Healthy people are less likely to succumb to certain disease — or at least the consequences of contracting them can be reduced by being in good health. Therefore, you should emphasize to employees (and their families) that it is essential to maintain good health through your normal wellness programs.

Review the extent to which your insurance carrier will pay for vaccines that are developed to prevent or limit the spread of the flu or other contagious diseases and encourage employees to take advantage of the vaccines that are offered. To the extent possible, relay educational information to employees about good health practices and available preventive strategies.

Stockpiling

Depending on your industry, location or other factors, you may want to consider stockpiling certain items, such as Tamiflu or similar medicines, protective masks, disposable respirators, and other PPE.

Absenteeism, Leave, Loans, Short-term Disability and Other Policies.

You will need to review all company policies and procedures that may govern in a pandemic situation.

For example, what do your policies say about absenteeism, short-term disability or wage or salary continuation, pay advances and loans in the event that work is disrupted? How would application of these policies affect your business in the event that you experience high levels of absenteeism?

Home Preparation

You should also advise employees to learn about home emergency preparation, including stockpiling appropriate amounts of food, water, medicine, cash, and necessary supplies. Much information is available on the Internet about such emergency preparation from government agencies and civil defense groups.

Conclusion

Employers should anticipate the effects of possible outbreaks of flu, coronavirus or other public health threats on their workplaces. By taking some or all of the steps outlined in this article, employers can minimize the disruption of their workplaces and the effect on employees of such public health situations.

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US employers add 225,000 jobs; unemployment ticks up to 3.6%

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In January, U.S. nonfarm payrolls grew by a total of 225,000 after December’s gain of 145,000, while the rate of unemployment rose to 3.6% from 3.5% the previous month, according to the Bureau of Labor Statistics.

In 2019, the average monthly gain of jobs was 175,000. The total number of unemployed persons rose to 5.9 million in January from 5.8 million in December.

January’s data showed that unemployment among major worker groups experienced little or no change versus December’s numbers. The average workweek for all employees on private nonfarm payrolls remained at 34.4 hours in January, matching December’s metric, according to the BLS.

January’s total of long-term unemployed (those without a job for 27 weeks or more) was 1.2 million, unchanged from December’s figure. Average hourly and weekly earnings of production and nonsupervisory employees on private nonfarm pay, seasonally adjusted, was $23.87 an hour in January versus $23.84 in December.

Wage growth has been a bit of mixed bag, as January marked the 23rd straight month of an unemployment rate at 4% or lower. A falling number of job seekers can drive up hourly pay as employers bid up wages to attract new hires.

“Nominal wages rose 3.1% year-over-year in January, likely reflecting the increases in state and local minimum wages that took effect in January,” said Elise Gould, an economist with the Economic Policy Institute in Washington, D.C., in a statement.

“Overall, wage growth is still slower than expected in an economy that has had historically low unemployment and remains the most important indicator to watch in 2020.”

In January, medium-sized business of 50-499 employees had the most new hires with 128,000 versus 88,000 in December, according to the Automatic Data Processing National Employment Report, produced from ADP payroll data in conjunction with Moody’s Analytics. Small firms of 20-49 employees had 94,000 new workers in January compared with December’s 69,000. Large firms of 500 or more employees hired 69,000 new employees versus 45,000 in December.

“Job creation was strong among midsized companies, though small companies enjoyed the strongest performance in the last 18 months,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

According to the ADP/Moody’s report, the service-providing sector had 237,000 new hires in January compared with 173,000 in December. Meanwhile, the goods-producing sector gained 54,000 new hires in January from 29,000 jobs in December. In January, construction firms gained 47,000 new employees after adding 37,000 in December. Manufacturing gained 10,000 jobs in January after losing 7,000 in December.

Earlier this week, Commerce Secretary Wilbur Ross said that the lethal coronavirus that began in China and has spread to nearly two dozen countries could “help to accelerate the return of jobs to North America.” How that scenario could play out is unclear.

The impacts of the coronavirus on U.S. businesses and their customers are unknown at best. China is a large market for some American employers, and a major exporter of goods to stateside firms and consumers.

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‘Opportunity zone’ tax breaks shown as duplicitous development schemes across the country

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Opportunity zones are a new real estate tax scheme that government officials, city planners, and investment firms are using to convert low-income real estate or already developed areas into large tax break incentives.

When Amazon announced plans to move to Long Island City, the controversial opportunity zone tax break, created from the 2017 Tax Cuts and Jobs Act, was cited as a possible incentive for that location. This caused a flurry of controversy, whereby so-called community improvements, like job creation and affordable housing, would presumably usher in with the HQ2 plan. Amazon would then receive tax breaks for reinvesting in the surrounding community.

Amazon gave up the idea, which includes paying zero taxes on gains from assets held for a decade, because it’s bad public relations.

The proposed HQ2 surroundings would have suffered, too: “Extra traffic that brings Amazon commuters into Long Island City will also bring more pollution and crowded streets. Rent and home prices would skyrocket in a gentrifying climate catering to the new Amazon employee class. Schools would have to carry the extra weight of new students under existing budget constraints.”

People protested and Amazon even cancelled New York plans, with expansion going forward in Crystal City, Virginia — a locale surrounded by opportunity zones. Amazon’s proximity to these tax cuts revealed the need for clarification on who can qualify — or should qualify — for breaks.

Good luck understanding it. Interpretations are some help here.

Can anyone just go into a so-called opportunity zone and buy up real estate or undeveloped land for repurposing while avoiding taxes if capital gains are reinvested? There are stipulations. You have to put properties to new or improved use, and 90% of fund assets must be held in its related property. There are other qualifying stipulations and time restraints for investments, but there are never enough restraints when it comes to community investment.

By November 2019, Rep. Rashida Tlaib, D-Mich., introduced a bill to repeal the law since it included selection corruption, using 56% of census-tracked low-income and adjacent neighborhoods. The zones, which were selected at the state level and approved by the Department of Treasury, strangely included the selection of wealthier adjacent neighborhoods: already developed Indianapolis and Detroit downtowns serve as an example.

Santa Fe resident and Cloud Cliff Bakery owner Willem Malten protests at Santa Fe City Hall. (Photo credit: Michelle R. Matisons)

Santa Fe, New Mexico, faces similar opportunity zone housing and neighborhood exploitation. The city is now considering proposals to develop a large Midtown campus earmarked as an opportunity zone. Potential developers include the highly controversial National Nuclear Security Administration/Los Alamos National Laboratories (LANL), among other developers, to the ire of community members and organizations opposing LANL plutonium pit production and facility expansion.

The Los Alamos Study Group held a press conference on Jan. 15 in front of city hall to protest LANL’s ominous presence in Santa Fe’s Midtown.

In locales where zone development has commenced, what could have been an ensured investment in affordable housing and job creation has grown into a massive wealth creator instead. Finalized tax code language may render some zone projects less lucrative as communities protest projects that may even violate tax code regulations.

The spirit of the law is in stark violation with its quick applications in early cases before code language was finalized.

Los Alamos Study Group Executive Director Greg Mello and Operations Director Trish Williams-Mello in the shadow of Santa Fe City Hall’s St. Francis statue. (Photo credit: Michelle R. Matisons)

This spirit “must improve the lives of those living in the opportunity zone, either by 1) bringing a new business into the zone that creates jobs or expands the options available to the zone’s residents, or 2) improving the availability, aesthetics and value of the zone’s housing options by engaging in development projects.” This is vague enough not to mandate affordable housing or other needed neighborhood improvements. How convenient.

One important thing to consider is the beloved notion of zone reinvestment — the basis of the tax break — may permit investors to choose other Zones for capital infusions into other funds. Zone-hopping for profit is not community investment.

Language interpretations will matter, and the code’s fine print is beyond the scope of this short article.

More information about zone selection corruption, like Treasury Secretary Steven Mnuchin pulling strings to help Michael Milken’s Nevada development project receive tax breaks, may facilitate legal battles to redirect capital to real job development and affordable housing.

Communities, like Santa Fe, can challenge this class bludgeoning tax tool, or even one tied to nuclear weapons profiteering, which facilitates careless development projects: built environment banes for decades to come.

The current political era defined by President Trump leaves a trail of new sports arenas, industrial parks, swanky hotels, and high-end condos built simply because the wealthy need new real estate — again.

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