Wildfires Blaze through Western U.S. and Canada

Following a wet spring, at least six western states are now fighting wildfires, which have been intensified by extremely high temperatures, wind gusts and lightning.

In northern California, about 4,000 people evacuated and more than 7,000 were told to prepare to leave as fires burned in the Sierra Nevada foothills, about 60 miles north of Sacramento, according to the California Department of Forestry and Fire Protection.

The fire has burned nearly four square miles, injured four firefighters and destroyed at least 10 structures so far, fire spokeswoman Mary Ann Aldrich told The Oregonian. The area burning was southeast of Oroville, where recently spillways in the nation’s tallest dam began crumbling from heavy rains, leading to evacuation of 200,000 residents downstream.

More than 14 fires are burning in Nevada and a state of emergency was declared in Arizona. While a 15-square-mile fire is partially under control in Montana, hot, dry weather and thunderstorms are threatening.

Other states including Oregon, Washington, Idaho and New Mexico are either battling fires or monitoring conditions in order to prevent them.
Western Canada is also seeing its share of wildfires. Evacuations are in effect for up to 10,000 residents in British Columbia, as 17 fires burn.

Kevin Skrepnek, chief information officer for the British Columbia Wildfire Service, told the Vancouver Sun that gusty winds and hot, dry conditions are expected to continue for days.

“Unfortunately, in terms of the weather forecast, we’re not really seeing any reprieve in the immediate future,” he said. Skrepnek noted that 572 fires have started and that 98,842 acres have burned since April 1. About 1,000 firefighters are currently on the front lines.
Residents of Fort McMurray, Canada, who saw major losses after a fire last year burned for months, are still rebuilding. Risk Management Magazine reported in September that the fire became the largest and most expensive natural disaster in Canada’s history, surpassing floods in Alberta in 2013. The Fort McMurray wildfire charred more than 1.43 million acres of land and destroyed at least 10% of the city, including more than 2,400 homes, businesses and other structures.

Commercial and personal damages from the wildfire are estimated at $6 billion, according to the Insurance Bureau of Canada. Thomas Johansmeyer, assistant vice president of property claim services strategy and development at Verisk Insurance Solutions, said the preliminary estimate for insured losses has come in at $3.5 billion (CAN $4.6 billion). Oil sands losses are included in the commercial component of the estimate.

To help people who are currently displaced in British Columbia, residents of Fort McMurray are rallying to collect and deliver much needed supplies. They are filling trailers with item requested, including water, bandages, eye drops, energy drinks, department store and gas station gift cards, sunscreen and toilet paper, and delivering them to British Columbia residents in need.

California and New York Agree to $15 Minimum Wage

Yesterday, the governors of California and New York reached agreements with state lawmakers to become the highest-paid minimum wage states in the country with an increase to $15 an hour. A minimum wage bill passed the California legislature on Thursday, and Gov. Jerry Brown said he will sign the measure on Monday. Late that night across the country, Gov. Andrew Cuomo reached a tentative agreement with New York’s top legislators to do the same with the state’s base wage.

According to the AP, President Barack Obama, who first proposed an increase to the $7.25 federal minimum wage in 2013, applauded the states’ actions and called on the Republican-controlled Congress to “keep up with the rest of the country.”

Currently, California and Massachusetts are tied for the highest state minimum wages at $10 an hour, while New York’s current rate is $9. Only Washington, D.C., at $10.50 per hour, is higher.

From the Department of Labor, here’s a look at how your state measures up:state minimum wage laws

Both California and New York plan to phase in the new rates, which will impact about 2 million employees in each state. In California, the increases would start with a boost from $10 to $10.50 on Jan. 1, and businesses with 25 or fewer employees would have an extra year to comply. Increases of $1 an hour would come every January until 2022, although the governor could delay these increases in the event of significant budgetary or economic downturns.

Cuomo originally proposed a simpler adjustment in New York: three years in New York City and six years in the rest of the state. Negotiations with local lawmakers who expressed concern the sharp increases would “devastate” business owners produced a more gradual approach. The AP reported, “In New York City, the wage would increase to $15 by the end of 2018, although businesses with fewer than 10 employees would get an extra year. In the suburbs of Long Island and Westchester County, the wage would rise to $15 by the end of 2022. The increases are even more drawn out upstate, where the wage would hit $12.50 in 2021, then increase to $15 based on an undetermined schedule.”

These changes come as considerable progress for the “Fight for 15” movement to raise minimum wages across the country. As Will Kramer reported in Risk Management magazine, debates over income inequality in the United States and the “Fight for 15” movement have gathered strength over the past five years. Many credit the Occupy Wall Street movement that began in New York City’s Zuccotti Park in September 2011 with spurring the increased focus on wealth and economic inequality, particularly the divide between the 99% and the 1%.

The impacts have been gaining further momentum recently. Kramer explained, “As of mid-2015, Seattle, San Francisco and Los Angeles have begun phasing in a $15 minimum wage. Democratic presidential candidate Sen. Bernie Sanders introduced Congressional legislation to raise the federal minimum wage to $15 per hour. What was once considered inconceivable has become more and more commonly accepted as a necessary and even moral imperative for many American businesses.”

Check out more from Kramer’s article on the growing debate over income inequality and its implications for businesses in Risk Management.


The Best and Worst States for Business, According to CEOs

For CEOs, who naturally favor “pro-growth,” low-tax states, southern states present an undeniable bastion for business, according to Chief Executive magazine’s 2015 “Best and Worst States for Business” survey.

In this year’s survey, Texas remained the best state for business for the 11th year in row, followed by Florida, North Carolina, Tennessee and Georgia. Since the recession began in December 2007, 1.2 million net jobs have been created in Texas, while 700,000 net jobs were created in the other 49 states combined, the magazine reported. This job creation contributed toward unemployment rates 1% lower than the national average, an advantage rounded out by extremely favorable taxation and regulation, strong workforce quality, and very good marks for living environment.

Despite notably low unemployment, two of the greatest hubs for business drew particularly unfavorable marks from CEOs: California ranked last in the survey, preceded by New York. Illinois, New Jersey and Massachusetts completed the bottom five. CEOs gave these states the lowest ratings because of their high tax rates and regulatory environments. One CEO told the magazine, “The good states ask what they can do for you; the bad states ask what they can get from you.”

Compared to the 2014 rankings, Idaho has made the largest improvement, rising 10 spots to number 18, primarily due to high growth rates in GDP, while South Dakota dropped eight places, “even though quality-of-life attractions enhance the state’s low-tax bona fides,” the magazine reported.

Check out the full rankings below:

Best States for Business rankings


Napa Quake Economic Loss Estimates at $1 Billion

A state of emergency was declared in California yesterday by Gov. Edmund G. Brown due to the effects of a 6.1 magnitude earthquake that rocked the Napa Valley area in northern California. The U.S. Geological Survey estimates that economic losses from the quake could top $1 billion and said there is a 54% likelihood of another large quake, magnitude 5 or higher, within the next week.

As of 4:15 p.m. Sunday, six aftershocks had been reported, four centered near Napa, ranging 2.5 to 3.6 magnitude. Two others, a 2.8 and a 2.6 were reported near American Canyon, according to the USGS.

The Napa quake is the largest in the Bay Area since the 1989 Loma Prieta quake, which was magnitude 6.9. That quake resulted in $1.8 billion in insured claims (in 2013 dollars) being paid to policyholders, said Robert Hartwig, Ph.D., president of the Insurance Information Institute.

In the Napa region, widespread damage has been reported to infrastructure, including roads and utilities and public buildings such as the Napa Post Office, the county’s administration building and numerous homes. The City of Napa reported that as of Sunday afternoon 120 patients had been treated or are being treated. Three patients—two adults and one child—suffered critical injuries, Gov. Brown’s office reported., adding that power outages also occurred, affecting 69,000 people across the region.

The costliest earthquake in United States history, was the Northridge Quake, with insured losses totaling $24.1 billion (in 2013 dollars). The U.S. has about 20,000 earthquakes annually, mostly small, and 42 states are at risk of quakes, according to the U.S. Geological Survey.

Despite the known high potential for earthquakes and resulting damages in the state, however, only about 12% of California homeowners purchase earthquake coverage, the I.I.I. said.

Of concern are business interruption (BI) losses, as the Napa region is a popular tourist destination. Many businesses that attract visitors, including wineries and restaurants, have sustained damage, both non-structural and structural, according to EQECAT.

According to the I.I.I.:

Earthquakes in the United States are not covered under standard homeowners or business insurance policies. Coverage is usually available for earthquake damage in the form of an endorsement to a home or business insurance policy. However, insurers that don’t sell earthquake insurance may still be impacted by these catastrophes due to losses from fire following a quake. These losses could involve claims for business interruption and additional living expenses as well. Cars and other vehicles are covered for earthquake damage under the comprehensive part of the auto insurance policy.