Paper Chase: Family Leave, Target Date Funds, Lines
Job openings reached 5.8 million in July, the most since 2000. The sharp rise should mean bigger paychecks as demand increases.
While 75% of millennials want flexible pay, only 13% of Americans have access to paid family leave making the U.S. the only developed nation to not have a federally mandated amount of leave time. California and New Jersey instituted state laws of up to 6 weeks of leave in 2004 and 2009 respectively. Rhode Island instituted up to four weeks in 2014.
Tech companies have found that they must offer these benefits to retain the best talent. They are willing to endure the short term costs for it allows others to develop, and the cost of turnover is enormous. Studies have found state supported paid leave enables more women to return to the workforce. This is why the company’s flexibility statement is important in reinforcing how taking leave is not a career killer for both men and women. The best policy is a set amount of time that everybody is encouraged or expected to take.
The U.S. has the most hostile family public policy in the world. On the one hand, nations with paid leave have stronger unions and citizens with a more positive view of government so little should be expected to change here which has neither. On the other hand, there is a push for government involvement concerning paid family leave. The Family Medical and Insurance Act provides up to 12 weeks paid leave to qualifying workers for the birth or adoption of a new child. It’s important to note that it will probably not pass.
Target Date Funds
None of us can tell where the market is headed, and these funds take the guess work out of it particularly as the default option in 401k plans. Only factoring in retirement age and time horizon, the funds gradually decrease in equity, and increase in bond allocation as the target date approaches. Evaluation of performance is dependent upon the fund’s glide path or formula defining asset allocation mix based on the number of years to the target date. The rule of thumb I learned is that your age should match your fixed income asset allocation. If you are 28, you should be 28% fixed income and 72% equity.
The Employment Line
Most of us don’t like lines, but if we want a product or service, we’re willing to wait for it. On average, we spend 37 billion hours in line, wait 32 minutes at the doctor and 28 minutes for “security” purposes. Is it worth the wait? Same Ole Line Dudes charges $25 for the first hour and $10 for each additional hour. Whether it’s Cronuts or Iphones, who says the market can’t fulfill your needs and save you money while doing so?
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