Topic: Wages
News
July 17, 2017

Wage gains have fallen far behind skyrocketing costs for housing, a gap that’s emerged despite a robust job market in recent years, according to an unsettling report released Monday. The housing-wage gap highlighted by the report from the Silicon Valley Institute for Regional Studies suggests that it is becoming increasingly difficult for residents in the Bay Area to keep up with the cost of owning or renting a home. Over the five years that ended in 2016, wages in the Santa Clara County, San Mateo County and San Francisco areas have risen by an average of 2.8 percent a year. Over the same stretch, the cost of rental housing has jumped by an average of roughly 9 percent annually, the report by the Silicon Valley Institute stated. In aggregate, from 2011 to 2016, the median wage in the three counties rose 14 percent, while the median apartment rent rose by a cumulative 45.2 percent, reported the regional institute, a unit of Joint Venture Silicon Valley.

News
July 14, 2017

The California Public Employees’ Retirement System rode a strong year in the stock market and private equity investments to earn a return rate of 11.2 percent for the fiscal year that ended June 30, the pension fund announced Friday morning. That’s about double what CalPERS had expected to earn this year. It’s also a marked improvement over the previous year, when CalPERS’ investment return rate was .61 percent. In the budget year that ended in June 2015, CalPERS’ investment return rate was 2.4 percent.

News
July 12, 2017

When we split obligations into how much California owes to those who have already retired and current employees, a startling fact emerges. The assets California governments have now aren’t even enough to cover what it owes to current retirees. For all employees combined, retirees are owed $134.5 billion as compared to $112.6 billion in total assets. California governments do not have enough money to pay what they owe retirees, and they have nothing at all set aside for current employees. Every year, employees have funds deducted from their paychecks to go into the pension funds. Those funds will go to retirees. By the time it’s their turn, there will be no money left for current employees. Current employees are forced to pay into a retirement system that may be bankrupt when they retire.

News
July 10, 2017

CalPERS may soon report investment earnings for the fiscal year ending June 30 that are near or even above its long-term target of 7 percent, up from a return of 0.61 percent the previous year. But the nation’s largest public pension system will still be seriously underfunded. . . . Despite a lengthy bull market that followed a stock market crash in 2008, CalPERS recently was only 65 percent funded. Now CalPERS is worried about a downturn that might drop funding below 50 percent, a red line actuaries think makes recovery very difficult.

News
July 10, 2017

The board that oversees the Los Angeles City Employees’ Retirement System will meet Tuesday to consider cutting its “assumed rate of return,” the yearly expected earnings for its investment portfolio, from 7.5% to 7.25%. The move is expected to shift about $38 million in retirement costs onto the city’s general fund, which pays for police patrols, firefighter staffing and other basic services, in mid-2018. The pension board also has the option to pursue a more dramatic step: taking the investment assumption to 7%, which would add $93 million to the city’s yearly pension burden, officials said.

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