Here are three of the top financial news stories of the week, gathered from around the web:
A compulsory four-day week?
California lawmakers have proposed a bill to establish a four-day workweek standard for large corporations, Jennifer Kingson said in Axios. Under a new law making its way through the state legislature, companies with more than 500 employees would be required to pay time-and-a-half pay to workers whose hours exceed 32 hours per week. “The legislation is long,” but it comes as more companies, including Kickstarter, Shopify, Toshiba and Shake Shack, “have attempted the four-day workweek.” Proponents point to experiences in countries like Iceland and Japan that have found that cutting hours “increases worker productivity, work-life balance, and mental and physical health.” However, Nicholas Bloom, a Stanford economist, called the proposal “terrifying”, saying businesses would significantly reduce employment if implemented.
A big COLA for Social Security
Social Security recipients could see the amount of their monthly checks increase by nearly 9% next year due to inflation, Lorie Konish told CNBC. Many seniors applauded Social Security’s 5.9% cost-of-living adjustment, or COLA, for this year, “the biggest increase in about 40 years.” But with inflation at 8.5% last month, pensioners are “still feeling the pinch”. Analysis by the Senior Citizens League, a non-partisan advocacy group, found that even with benefits increased by $92 a month this year, retirees will be $55 short of what they need to keep up with rising pensions. prices, which means that inflation has already cost the beneficiaries. $162 this year. The group expects the 2023 COLA to approach 8.9%.
Inflation-linked savings bonds
There is an investment available to individuals that clearly benefits from inflation, said Dion Rabouin in The Wall Street Journal: “The interest rate on US inflation-adjusted savings bonds will approach 10% in May.” These Series “I” U.S. Treasury bonds accrue interest every six months, paying a fixed rate set by the government and an inflation-adjusted rate determined by the change in the home price index. consumption. With the surge in prices, “I bonds have become a high-yielding asset, even though they carry virtually no risk of loss of principal.” The downside: The fixed interest rate has been zero percent since May 2020, so I Bond investors are making a big bet that inflation will stay high.
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