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​FED HIKE SEEN NEXT MONTH

​THE US ECONOMY

Retirees can benefit from health reimbursement arrangement. HRAs They can put the value of unused sick leave into an IRA tax free at retirement if their employer permits it, the Service says in a private ruling. Then the retirees can tap funds in the HRA for medical insurance premiums and expenses. The key to tax free treatment is that the conversion of the sick leave to the HRA is mandatory. Income tax would be due if the retirees could opt to take cash for the leave instead

​Our mission is to keep you informed of issues which affect your economics and everyday life to enable you to sail through rough waters as smooth as possible. We are here to serve you and your business if you have one.

​INVESTING IN CUBA

​HUMAN RESOURCES

OUTLOOK PUMMELS MENS WAREHOUSE

​NOVEMBER NEWSLETTER

​CHINA TO ALLOW CONVERSION BETWEEN YUAN & SWISS FRANC

​GRADUATE ASSISTANTS

​PRESSURE GROWS ON VOLKSWAGEN

​IRA

Jeb Bush's support among Republicans nationally has plummeted to the low single digits in the latest Quinniac University survey released Wednesday, as the former Florida governor's campaign seeks to hit refresh with its "Jeb Can Fix It" tour. Donald Trump and Ben Carson continued to lead the field, with Carson outperforming Hillary Clinton in a hypothetical general election. In the latest poll, conducted after last week's third GOP debate in which Bush delivered a mediocre performance, just 4% of Republican and independent Republican - leaning voters said they would support Bush in their state's primary. In the September survey, Bush earned 10%, trailing Trump, Carson and Carly Florina. In terms of favorability, no polled lower than Bush, at a net-negative of 33 points. Just 25 percent of all registered voters surveyed said they had a positive opinion of him, while 58% said they had a negative one.


The Bush campaign has tried to mange expectations among the media. "FYI political press corps, Jeb's going to have a few weeks of bad polls" campaign communications director Tim Miller tweeted monday. " Comebacks take time, we recognize and are prepared for it.


Trump earned 24 percent from Republican voters this time, while Carson moved int a virtual tie at 23%. Florida Sen Marco Rubio jumped into third place with 14 percent, followed by Texas Sen Ted Cruz with 13%. Other candidates took in 3% or less support, with 9% undecided. Among Decocratic and Democratic leaning independent voters, Clinton bested vermont Sen. Bernie Sanders to the tune of 53% to 35% , a 10 point jump from the same poll in September.

Many key dollar limits on retirement plans are a little higher this year. The maximum 401k contribution rises to $18,000, up $500 from 2014. Individuals who were born before 1966 are allowed t0 put in as much as $24,000. these payin limits apply to 403b and 457 plans as well. The ceiling on Simple's increases to $12,500 for individuals who are age 50 or older this year.  Retirement plan contribution s can be based n up to $265,000 of salary. The payin limitation for defined contrbtution plans increases to $53,000. Anyone making over $120,000 is highly paid for plan discrimination testing.


The income ceilings on Roth IRA payins tick upward. Contributions phase out at AGIs of $183,000 to $193,000 for couples and $116,000 to $131,000 for singles. Deduction phaseouts for regular IRAs start at higher levels as well, ranging from $98,000 to $118,000 of AGI for couples and from $61,000 to $71,000 for singles. If only one spouse is covered by a plan, the phaseout zone for deduction a contribution for the spouse who is not covered begins at $183,000 of AGI and finishes at $193,000. The IRA and Roth payin caps remain at $5,500 to $6,500 for those 50 and up.

​JEB BUSH DROPS TO 4%

Even a brief government shutdown would ding some local economies that depend on federal spending. Government contractors would stay home, and tourism related businesses located near national parks would lose customers. ALA,Alaska, Hawaii, Ky, Maine, Md, Miss, N.M. and Va. all rely on federal money for between 10% and 19% of their state GDP and thus stand to feel the most pain. We avoided a shutdown for now but we will see what happens in Dec


A bigger worry for the economy and financial markets: The Federal Reserve. I still look for the Fed to hike rates in Dec ending the near zero rated that have prevailed since 2008 and starting the process of taking interest rates back to prerecession levels now that the economy is growing and unemployment is down. The central bank has a dilemma. The Fed's decision not to hike in Sept because of fears about the global economy adds a new dimension to monetary policy. Before Fed Chair Janet Yellen and her colleagues  could point to high unemployment as  a reason to keep rates low, and did not focus much on issues outside of the US. The fed does not want to be the world's central bank, but it risks becoming just that. Failure to raise rates this year would undermine the Fed's credibility After Yellen and other officials hinted strongly that they planned to act by year end, a reversal in the face of volatile global markets would cast uncertainty on rate policy


Financial markets would stay jumpy until interest rates rise. Every bit of data about the economy will be scrutinized for hints of when the Fed will proceed on rates, since unemployment has now fallen to the central bank's desired target of about 5%. Investors will be particularly focused on inflation, which has not yet reached the level that Yellen and most of her colleagues see as sufficient to require an interest rate hike. In fact, the Fed's preferred inflation gauge is running below the headline inflation rate.


The Fed is also worry about the housing market as it mulls higher rates. I see a brighter outlook as housing continues its long slow recovery from the Great Recession. More first time home buyers are coming into the market, which bodes well for future demand and permits for new construction are on the rise, recently hitting a seven year rise. Building still has a way to go before it catches up with the normal pace of the late 1990's and early 2000s before the bubble formed. Sales of existing home which make up most of the market look healthy again. 

Look for graduate assistants to win the right to unionize within the year. The National Labor Relations Board is poised to overturn a 2004 decision that denied collective bargaining rights to graduate assistants at private universities. At that time, the board held that grad assistants were students, not employees, and therefore not covered under the National Labor Relations Act. Today's board is dominated by Democrats who have overturned a number of previous rulings. The likely vehicle for the decision is a case involving the New School in New York City, where the United Auto Workers wants to organize research and teaching assistant. Another possibility also involving the UAW, is a case at Columbia University. A pro-labor decision is sure to spark organizing efforts at more universities. Pay and Benefits, especially the high cost of health insurance, are a sore point, and unions have been aggressively organizing nontenured faculty members. 

 Millennials dominate the US labor force. Employers must refocus workplace policies to recruit, mange and keep young, tech- savy workers. Being seen as an employer of choice is vital as the battle for skilled, educated workers heats up. By 2025, millennials will account  for 40% of the workforce, up from 1/3 this year, the first time ther are more of the 18 to 34 year - olds in the American workforce than any other age group. Generally speaking they are different from previous generations in how they view work life, less  as a daily task, more as engaging experience. 


Among fringe benefits they value the most: Consumer - directed health plans, namely ones that include an employer's cash contributions to a health savings account. Because they are light users of medical services, given their age and youthful vigor, millennials prefer these portable high-deductible plans with lower premiums to traditional HMOs and PPOs.


Wellness benefits. Not so much free flu shots, but on site yoga, Cross-Fit and other fitness classes, helpoing them stay health and fit and also socially interactive with peers. Telemedicine services are also popular, since they take less time than visiting a doctor and involve using technology, which millennials are more than comfortable with.


Generous parental leave. Netflix, for example offers fully paid leave for new mother and fathers for up to a year after a baby's birth. Subsidized child care is a hit with young parents. Facebook provides $4,000 a year in child care benefits.


Help with college debt. PricewaterhouseCoopers gives entry -level workers as much as $1,200 a year for up to six years, paid directly to the loan service officer. The average millennial carries four loans and is $34,000 in debt, so help is welcome.  


Flexible work schedules. Combining vacation and sick leave is favored by millennials, who also like having control over when and how they use the leave. Sabbaticals are catching on, too in recognition of millennials penchant for travel as well as social work, something many did in college and wish to continue.


Regular feedback. Young workers appreciate weekly  even daily reviews by supervisors instead of more formal annual performance evaluations, so look for more firms to ditch annual reviews for real- time feed back and rewards.


Employer - paid professional development and training. In a recent survey,  milenniasl randed them as more important than cash bonuses. Having come of age in the Great Recession and having seen parents lose jobs, millennials are determined to keep  their skills up to date. To try to disuade them from jumping ship quickly, millennial friendly firms are creating rotational programs in which employees can switch departments and jobs for new challenges and know how.





China took another step to boost the yuan's global usage, saying it will start direct trading with the Swiss franc, as the nation pushes its case for reserve-currency status at the at the International Monetary Fund. The link will start on Tuesday, the China Foreign Exchange Trade System said in a statement, making the franc the seventh that can bypass a conversion into the US dollar and be directly exchanged for the yuan. The rate will be allowed to fluctuate a maximum 5% on either side of a daily fixing. This is an important step in strengthening bilateral economic and trade connections between China and Switzerland. The link will help lower conversion costs and faciliate the use of both currencies in bilateral trade.


The announcement, which is confirmed an earlier report, comes as the IMF prepares to meet this month to review its Special Drawing Rights. The executive board of the Washington based institution will gauge whether the Chinese currency has fulfilled the criterion of being freely  usable after rejecting its bid in 2010. the other major currencies that can be directly converted into yuan  are the US, Australian and New Zealand dollars, the British pound, the Japanese yen and the eoro.

​HUMAN RESOURCES

As the largest economy in the Caribbean, Cuba offers tantalizing possibilities for US companies and investors if and when Havana liberalizes its economy. Still it is likely to take years for an investment in the island nation to bear fruit. Among stocks that could eventually get a lift from Cuba related business


Carnival, the Florida based company could become the first major cruise line to drop anchor in Havana. Carnival plans to start cultural exchange cruises under its Fathom brand in the spring of 2016, pending approval by Cuban authorities. 


American Airlines Group, with a major hub in Miami, the airline offers more charter flights to Cuba than any other US carrier. Also on tap, charter flights from Los Angeles, plus regular commercial flights, once they are allowed.


Copa Holdings, the Panamanian firm is the largest foreign airline in Cuba with six flights to and from there daily and stands to profit from any pickup in flights. 


Vulcan Materials, the largest US producer of construction materials such as crushed stone, gravel, asphalt and concrete also operated a large quarry and marine terminal on Mexico's Yucatan Peninsula, a prime spot for exports to Cuba



The fallout from Volkswagen's emissions cheating scandal intensified Wednesday as investors bailed out and European regulators pressured VW to quickly disclose he findings of an internal investigation. In the US, the company halted sales of seven models that allegedly were part of the cheating. On Tuesday, VW admitted that it had understated the carbon dioxide emissions for 800,000 cars, widening the scope of a scandal that has forced the ouster of a CEO and prompted investigations and lawsuits on several continents


The company has been unable halt the flow of bad news since mid-September, when the US Enviromental Protection Agency said Volkswagen had installed software pm 482,000 cars that enabled them to cheat on emissions tests for nitrogen oxide, a pollutant that contributes to smog and respiratory problems. The software reduced emissions when the car was on a test stand. Volkswagen acknowledged that 11 million vehicles with small diesel engines worldwide have the software - but only after denying its use for more than a year.


On Monday, the EPA charged that Volkswagen also used cheating software in some cars with larger diesel engines, including Volkswagen's elite Porsche brand. Volkswagen has denied that claim, but over the past two days halted sales in the US and Canada of the models involved: Volkswagen Toureg, Porsche Cayenne and Audi A6. A7, A8, Q5 and Q7 Late Tuesday, VW said it had also found "unexplained inconsisencies in emissions from some of its vehicles of carbon dioxide. The cars were sold under the Volkswagen, Audi, Seat, and Skoda brands most of them in Europe and none in the United States.


The Company said the carbon dioxide problem could cost it $2 billon. Germany's transport minister indicated that VW will be on the hook for the costs of higher car taxes following the revelation that carbon dioxide emissons were understated. The German car tax is calculated on the basis of engine size and carbon dioxide emissions, and so if these vehicles emit more co2 over and above the respective limit, that makes a new calculation necessary. The minister also said VW is responsible for finding a solution where the customers face neither extra costs nor effort.


The widening scandal also prompted Moody's Investors Service to cut the rating on the Volkswagen debt, which would make borrowing money more expensive for the company

​BENEFIT PLANS

The clouds hanging over economists' outlook for the year ahead have cleared. A handful of immediate economic risks fared in recent weeks: Congress lifted the debt ceiling, the stock market rallied out of a slump and after weak months of employment  growth, October marked the best month for job growth so far this year. In this month's Wall Street Journal survey of 63 economists, not all of whom answer every question, fewer than half see downside risks to their economic forecasts and estimates of recession risk for the US fell.  This shift in economist sentiment underscores why key Federal Reserve policy makers have expressed confidence the economy will be strong enough by next month to allow the first interest rate increase in nearly a decade 92% of the economist said they expected the Fed to raise its benchmark federal funds rate at its December 16-16 policy meeting




OUR

 GOAL IS                                                  SMOOTH  

​     SAILING

With technological fluency a hallmark of the millennial generation, employers, more than ever, must make use of social media for recruiting and communicating with millennials. a strong company presence on LinkedIn, Facebook, Twitter, and other sites that outlines benefits and a  company's philosophy is critical to attracting candidates. Also key: allowing job applicant to apply online. Firms that use cutting edge technology do well in attracting mellennials, who stay connected via various devices 24/7. social interaction is paramont. ditto, companies steeped in social responsibility Respected guardians of the environment, for example, or ones that help living conditions among the poor 

Men's Wearhouse Inc is learning a painful lesson on how hard it is to change shopper behavior once they get hooked on discounts. The Fremont Calif company which acquired rival Jos A Bank in 2014 in a $1.8 billion deal, cut its earnings forecast Thursday by as much as 40% in part because the removal of by one get three free promotional events.  had hurt sales at the Jos A Bank business. The news sliced Men's Warehouse valuationcut nearly in half on Friday.


Chief Executiive Doug Ewert said the Jos A Bank promotions were toxic to the business and out of step with how consumers want to shop. He said the retailer held its final buy one get three event in October and was moving ahead with new marketing and promotional offers that did not require quantity purchases. As a result, he predicted Jos A Bank comparable same store sales will fall between 20% and 25% in the fourth quarter.