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North American Edition
14th October 2024
 
THE HOT STORY
New jobless claims surged as Hurricane Helene tore through southwest
The number of Americans who applied for unemployment benefits surged by 33,000 to 258,000 in the week that ended October 5th, according to the Labor Department—the highest level of initial claims since early August 2023. Economists polled by the Wall Street Journal had estimated new claims would rise by just 5,000 to 230,000. The sharp rise has been attributed to manufacturing and management layoffs in Michigan and a strike at Boeing, as well as in states impacted by Hurricane Helene. The labor market's short-term outlook is also likely to be distorted by Hurricane Milton, which made landfall in Florida on Thursday. The four-week moving average of new applications rose to 231,000, while continuing claims, reported with a one-week lag, rose to 1.86m. “Claims will likely continue to be elevated in states affected by Helene and Hurricane Milton as well as the Boeing strike until it is resolved,” said Nancy Vanden Houten, lead U.S. economist of Oxford Economics. “We think, though, that the Fed will view these impacts as temporary and still expect it to lower rates by (25 basis points) at the November meeting.”
LEGAL
Boeing's billion-dollar satellite collapse scandal
The recent collapse of a satellite valued at over $1bn has raised serious safety concerns at Boeing, as highlighted by a whistleblower lawsuit filed by technician Garriott. He alleges retaliation for reporting safety violations. The lawsuit, now in federal court, reveals a culture of neglect regarding employee safety and whistleblower protection. Garriott's spouse, Kathy Moonitz, has also filed a separate lawsuit claiming she faced repercussions due to her husband's complaints about nepotism within the company. Both lawsuits have been transferred to U.S. District Court, with the plaintiffs seeking a return to state court. Boeing's ongoing challenges include a recent contract with the U.S. Space Force and the fallout from previous incidents involving its 737 Max aircraft.
Party City faces class action lawsuit
Former employees of Party City have initiated a class action lawsuit against the company, alleging violations of worker protection laws during mass layoffs that occurred on September 17th 2024. The lawsuit, Sonia Agostino, on behalf of herself and all others similarly situate vs. Party City Holdings, claims that the corporation failed to provide the required advance notice under the WARN Act and the NJ WARN Act. The plaintiffs assert they were informed of their termination on the same day they were laid off, without the mandated 60 or 90 days' notice. They are seeking damages equivalent to 90 days' pay and liquidated damages of 200% of their owed wages under the New Jersey Wage Payment Law.
Iowa Supreme Court tackles wage bias
The Iowa Supreme Court recently deliberated on a significant wage discrimination lawsuit involving Silvia Cianzio, an emeritus professor at Iowa State University (ISU). Ann Brown, representing Cianzio, argued that the law must effectively deter wage discrimination, emphasizing that “wage discrimination is very specific, in that it's a form of discrimination in which the employer actually financially benefits if they discriminate against women.” Cianzio discovered substantial pay disparities between male and female professors during her tenure, leading her to file a lawsuit seeking damages dating back to 2009, claiming she was underpaid by $530,000. The lower court had limited her recovery period, prompting the Supreme Court to consider whether the law's interpretation should allow for broader compensation. Justice Edward M. Mansfield remarked, “That doesn't sound like any human being I'm familiar with,” highlighting the urgency for fair compensation.
REMUNERATION
Mexico passes minimum-wage reform
Mexico's Senate has passed a constitutional reform which guarantees that the country's minimum wage will be revised annually to at least match inflation. The minimum wage in Mexico is currently 248.93 pesos ($12.80) a day. "Mexicans' wages will no longer fall victim to inflation," ruling party Senator Oscar Canton said. "We urgently need a Mexico where the minimum wage no longer sentences someone to a life of poverty."
Salaries soar in accounting for 2025
Robert Half's latest salary guide projects an average increase of 8.9% in starting salaries for public accounting roles in 2025. Tax services are expected to see an average rise of 8.4%, while audit and assurance roles may increase by 9.5%. According to Robert Half, “Starting salaries are rising primarily for high-demand roles in areas such as accounting operations, financial analysis, and general accounting.” The guide highlights that 65% of managers are willing to boost salaries for new hires who work in the office, with 55% offering up to 20% more for those who come in four to five days a week. The guide also details starting salary ranges based on experience, with significant increases noted for senior managers in both tax and audit services.
TAX
Trump pledges to lower taxes on Americans living abroad
Republican presidential candidate Donald Trump has pledged to eliminate U.S. income taxes for Americans living abroad, aiming to simplify their tax obligations. Currently, U.S. citizens must file tax information with the IRS and may face double taxation, paying both U.S. taxes and local levies. "I support ending the double taxation of overseas Americans," Trump said in a statement from his campaign, which offered no other specific details about the proposal. About 4.4m U.S. citizens lived abroad as of 2022, according to data from the Federal Voting Assistance Program. About 2.8m of those were eligible to vote in their former states.
HEALTH & WELLBEING
American Eagle champions mental health
American Eagle Outfitters has launched the AE Foundation to address the mental health crisis among young people, partnering with Glenn Close's Bring Change to Mind (BC2M). Jennifer Foyle, president and executive creative director of AE & Aerie, stated: "Now more than ever, it's crucial for us to help our customer and associate community prioritise their well-being". The foundation's first initiative includes a $100,000 Signature Grant to BC2M, aimed at expanding its high school programme. Chase Stokes, known for his role in "Outer Banks", played a key role in this partnership, embodying the brand's ethos of self-expression and mental health advocacy. The AE Foundation also plans to issue Community Grants and support local organizations, ensuring resources reach those in need.
HEALTH & SAFETY
Rizo Lopez Foods faces shutdown
Central California food company Rizo Lopez Foods has been ordered to stop manufacturing and distributing several products due to a listeria outbreak linked to two deaths and multiple hospitalizations. The civil complaint filed on September 27th alleges violations of the Federal Food, Drug and Cosmetic Act at the Modesto facility, where insanitary conditions were found. The contaminated products, including cotija cheese and yogurt, were sold under various brand names such as Tio Francisco and Whole Foods Market. The Centers for Disease Control and Prevention identified 26 listeria cases across 11 states, with 23 hospitalizations. Principal Deputy Assistant Attorney General Brian M. Boynton stated, “Food manufacturers have an important responsibility to ensure the safety of their products”. Rizo Lopez Foods must notify the FDA before resuming operations and allow inspections of its facility.
FLEXIBLE WORKING
Amazon vs. Microsoft: Office wars heat up
Last month, Amazon announced a return-to-office mandate requiring employees to work in person five days a week starting January. In contrast, Microsoft is maintaining its remote work-friendly policy, with Scott Guthrie, executive vice president of Microsoft's cloud and AI division, stating: “There is no one-size fits-all solution given the variety of roles, work requirements, and business needs we have at Microsoft.” Microsoft reported a record $245bn in revenue for June 2024, indicating strong productivity. The company is adapting its office spaces to accommodate hybrid work, allowing employees to earn permanent desks by coming in at least three days a week. Despite these adjustments, Microsoft is also reducing its office footprint, vacating about 1.9m sq ft in downtown Bellevue, which has contributed to rising vacancy rates in the area.
CORPORATE
Citi establishes banking executive team
Citigroup has announced the formation of a new banking executive team comprising senior leaders from various sectors within the bank. This initiative also includes the establishment of an investment banking operating team, which will incorporate all members of the banking executive team alongside global heads for investment banking sectors. Vis Raghavan, Citi's head of banking, said: "These changes will ensure that we have the right structure and leadership in place to better serve our clients and drive substantial growth across banking." 
Executives embrace social media
Chief executives in the U.K. and U.S. are increasingly using social media, particularly LinkedIn, to present a more authentic image to investors and customers. Research from the PR agency Brunswick, which polled 3,600 employees of firms employing more than 1,000 people, found that 86% of financial readers believe it is crucial for business leaders to use social media for communication. The report notes that Deloitte earlier this year hired Lara Sophie Bothur as its first corporate influencer.
Starbucks pulls back on discounts as new CEO Brian Niccol resets strategy
Starbucks is reducing its promotional offers under the leadership of new chief executive Brian Niccol, who aims to refocus the brand on its premium coffee experience. After a year of heavy discounting to attract customers, Starbucks is scaling back on promotions like buy-one-get-one deals and loyalty point bonuses, opting instead to promote seasonal drinks without broad offers. Niccol, who joined in August following a rocky year for the company, is implementing changes to improve the in-store experience and boost sales, focusing on customer service and quality coffee.
CORPORATE GOVERNANCE
Nike names new head of North America
Nike has named Tom Peddie as its new general manager of North America, succeeding Scott Uzzell with effect from October 21st. Mr. Peddie retired from Nike in 2020, but came back to the company just months ago as its vice president of marketplace partners. 
INTERNATIONAL
Survey sees challenges ahead for European employers
The Littler European Employer Survey Report indicates significant challenges for employers in 2024, with 86% facing difficulties managing workplace politics amid a major election year. Concerns extend to potential employment law changes, with 83% worried about the impact of upcoming elections. Stephan C. Swinkels, a partner at Littler, observed: “Political changes in major economies like the US are having a local impact on organizations across Europe.” Additionally, artificial intelligence (AI) adoption in HR processes has surged, with 72% of organizations using AI, yet 53% express concerns over compliance with data protection laws. ESG issues remain a priority, with 79% of executives increasing their focus on these initiatives. The report highlights an evolving landscape of workplace management, driven by political, technological, and social pressures.
 


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