Category Archives: Money

Are you a fighter?

Income Inequality, the Gutting of the Middle and Working Classes, and What We Have to Do Next

 

The evisceration of the union-based job security of the United States Postal Service is the quintessential example of an ongoing social experiment: how much of the middle class chunk of the prosperity pie will the American people allow to be shaved off and redistributed upward? Long time readers and twitter followers know that I often call for the repeal of the Postal Accountability and Enhancement Act of 2006. It required the pre-funding of retiree benefits for postal workers who hadn’t even been born yet (which is not required of any other federal agency and without which, the USPS would show a profit every single year) and was designed to bankrupt the Post Office and hand all the Post Office’s business over to UPS and FedEx. USPS jobs are (were) well-paying middle class jobs that never required a college degree; and that is the point. People at the very top of the American wealth pyramid who want our society to transform into a caste system don’t like the idea of people without a college degree earning $50,000 (mail carriers working overtime) or $70,000 (USPS middle management) a year. And other people in the system who are not rich and have seen their jobs shipped to Mexico, India or elsewhere and/or have seen their wages stagnate or decrease over the past 35 years are now working low-level management jobs at $35,000 a year, putting in 60 hours a week and know: this is it. There’s not enough money, not enough time, and I am not going to get ahead. Young people are being offered $11/hour “assistant manager” jobs at 30 hours a week in the same tone one might offer a lottery winnings check and no one is telling them that there was no such thing as an hourly management job that wasn’t full time 20 years ago. It would have been a full time salaried position with benefits — stellar benefits.

 

We could call it a conspiracy. Except it’s being done right out in the open.

 

Now, instead of asking, why is our middle class and our working-class shrinking? And then realizing that both are being deliberately, slowly but surely, eroded through a systematic process of 1) outsourcing, 2) insourcing via H-1B visas that allow our jobs to be taken by people from other countries by moving the people to the job instead of moving the job to the people, 3) turning full time jobs into part time jobs, and 4) turning salaried positions into hourly, we are instead operating in a bubble — the isolation of our own socioeconomic class — and that is what prevents us from seeing that almost everyone else is experiencing a similar or worse situation. But the glue that holds this master plan together? Media reports and corporate mouthpieces that promote a false narrative designed to make the masses feel that someone else is being overpaid. Overpaid because they’re in a union. Overpaid because of affirmative action. Overpaid because they don’t have a degree. Overpaid because they do have a degree but don’t have experience. Overpaid because they work for the government. But it’s happening to everyone. Everyone’s income is declining (except the 1%’s; 95% of all income gains since 2009 went to them — the other 99% saw a net decrease). We just don’t realize it because the strategy — divide & conquer, in order to pit us all against each other — is working.

 

 

 

Think $15/hour is high for a minimum wage? Consider this. It costs what it costs to live. And when people don’t make enough to live (pay for food, shelter and health care), society picks up the difference and its (our) tax dollars subsidize what the poor can’t afford to pay for with their wages.

 

Supporters of the $15/hour minimum wage, you have probably heard the latest complaint, “$15 an hour is really high for an entry level job.” How to respond? “There’s no such thing as an entry level job. The phrase is entry level position. It referred to a now rare opportunity to begin a career in a salaried position with the understanding that one would continue to work one’s way up a corporate ladder, through hard work and promotions, from there. A job is wage based labor. Entry level positions were careers that began with a salaried position of at least $40,000 a year in today’s money, with benefits. At $15/hour, even if a person got scheduled for a full 40 hours a week, 2080 hours per year, today, they would make at most $31,200, and of course wouldn’t, because they would now go into an income tax-paying tax bracket. Even after taxes, that is still enough to disqualify them for food stamps, subsidized housing and subsidized health care. They will not actually have any more disposable income than they do now. They will simply have to spend that additional $15,000 per year on health insurance, rent and food instead of our tax dollars picking up the difference through social welfare programs.”

 

Know why Walmart especially hates the $15/hour movement? Because the way it works now, they get to double dip: pay their employees wages so low that they employees HAVE to go on SNAP, then those same workers use the SNAP to buy food at Walmart! That’s the whole reason the Waltons entered the grocery market by creating Super Walmarts in the first place. And it’s actually even more brilliantly horrific than that: Walmart does whatever it takes to keep their workers part time, in other words, working 20 hours a week at the most to avoid having to offer any kind of benefits whatsoever (especially health insurance). So if one worker works 20 hours a week at $7.25/hour, that’s about $7,540 per year or about $628/month. Now, let’s say this worker is a married woman, and has two children. She could — and probably does — receive the maximum SNAP benefit for a household of 4: $649 (the difference is $138 less if she isn’t married and has 2 kids). She’s going to spend every dime of that at Walmart. Now, Walmart has actually paid her more than $628 per month. They’ve paid approximately $39 on top of that $628 into Social Security, so they’ve paid about $667 to have her work in their store. But they recouped $649 of it from her SNAP. Now, I can’t say what Walmart paid to stock that food — the profit margin on eggs, sugar, and milk is very low, so for the sake of argument, let’s round up and pretend that $649 worth of food actually cost Walmart 60% of the retail price (it didn’t, but let’s make this example as horrifying as we can within the context of knowing that the truth is probably even more horrifying), about $390. The $649 (SNAP amount) – 390 (W’s cost) = $259. So ok, they really only recouped $259. So $667 they paid to have her work part time that month minus the $259 they recouped through SNAP (keeping in mind it was probably more — a lot more) is $408. $408 x 12 months = $4,896. At 20 hours a week, that’s 1040 hours in a year. $4,896 for the year divided by about 1040 hours and they paid her a whopping $4.71 an hour. That’s how much it cost them (and we are rounding UP, way up) to have a woman — systemically impoverished because many many people benefit from the perpetuation of poverty — work in their store. Oh, and you, person who makes $50k/year at your crap job that keeps raising your health insurance premium and as of January 1, raised your deductible to something so high you’re actually praying to God daily that no one in your family gets sick, you paid for her food — and her family’s food. You paid for her health care. Not her health insurance, her health care. Impoverished Walmart worker has no health insurance premium because medicaid doesn’t work that way. The tax dollars just go straight to the provider with no mark up for an insurance company middle man. And Walmart got away with paying slave wages. Because we are being divided and conquered and don’t want someone who stands on her feet all day, carrying and lifting objects to restock shelves and perform other physical labor, to make enough to buy her own food, pay her own rent and afford her own health care.

 

And that, my friends, is the sordid scent of Walmart’s victory.

 

 

This is what it will take to turn things around: demanding a living wage for the poor. This WILL force all employers to increase their wages through upward pressure. The way to demand it is through reminding our elected officials that they work for us and that if they do not do what we want — in this case, increase the federal minimum wage to $15/hour — then we will vote for their opponent on election day. Sign every petition that crosses your path. Vote. Vote again. Call your Congressperson. When you hear your family and friends say things like, “that’s a lot of money for a teenager,” remind them that that teenager should be the very lowest on the totem pole of workers and that a living wage will force employers to show preference to workers who are not in high school when hiring, and pay them more than $15/hour. Ask them, when was the last time $31k/year was enough for a person with kids anyway? $15 an hour for a high school student who’s going to work for a maximum of three months a year at more than 20 hours a week (and is poor themselves if they’re working that much, and is probably doing it to save for college) will at the *worst* provide more of an incentive for employers to hire adults. Everyone benefits when everyone has enough money to live and spend and buy cars and houses and save. Yeah, savings accounts!

 

Bottom line: you can make a difference in people’s understanding of what’s happening with income inequality with just a few talking points. Especially in the mind of your congressperson.

Trading in trust for calculated risk

What if I told you that you can’t trust other people — and not because there aren’t awesome, wonderful, reliable, true-to-their word individuals in the world — but because trust is not a concept anchored in reality?

 

 

Let’s define risk: the possibility or probability of danger or loss. This is why lenders will call the history of your borrowing and repayment patterns a “credit report” but have their in-house Risk Management department evaluate it when you come knocking for a mortgage or line of credit or car loan, etc. Your consumer credit score is, in all its statistical error (because it is calculated by human beings who are not omniscient), a pretty good predictor of your future behavior, but let’s acknowledge here that no lender “trusts” any of their borrowers. Instead, they assess the risk that they may not be repaid and if the risk (the statistical probability) is low enough, they choose to lend the money anyway. The use of the word “credit” makes it sound like the lender believes in you or has faith in you. Rest assured, they see your repayment history in the light of wholeness and have chosen to take the financial risk (which is the definition of a gamble) because of your “good” past behavior and despite the slew of unknowns that may affect your behavior in the future. Imagine for a moment what the credit/risk report of every relationship in your life might look like. Who always comes through and does what they say they will do? Whose credit/risk scores would be low?

 

 

When our hearts are open, we take risks anyway. Why? Because we know that even if those risks don’t pay off, and we end up experiencing loss, delay, sadness, and/or danger, we will have all the strength, perseverance, inspiration and drive to keep going and succeed the next time. And before we risk the possibility of having an unsuccessful love relationship, we acknowledge that probability, whether low or high, and reflect on whether or not we want to spend our time on this person, time (in the currency of hours and minutes) that no repo agent can get back for us. When the heart is open, we are filled with faith in ourselves and know that no matter the risk, we will make it through any pain caused by a financial or emotional risk that ends up going sour.

 

 

The next time someone asks you to trust them or asks why you don’t trust them, you’ll know how to explain that trust is not a true concept in reality. It is an illusion that allows us to deny the risk of loss — of time, money, love, or life. Now imagine if your parents and any other authority figures on whom you were dependent for guidance, food, shelter, and survival while a minor (or if you are a minor, are still dependent on) had never said, “just trust me,” and instead had consistently provided you with a logical reason to follow their directions. Imagine how you might view life and chance and luck and autonomy if they had separated their desire for your happiness from their desire for your compliance. Instead of hearing, “because I said so” or “just trust me on this one — someday you’ll understand,” you’d gotten guidance along the lines of, “I love you and desire your happiness. That’s why I’ve measured the risk in this situation and want you to take precaution to reduce it (by driving carefully, not hanging out with criminals, not flying a kite during a storm, not playing hide and go seek in a meth lab, etc.). This has nothing to do with trust and everything to do with risk. I wouldn’t be telling you to (wear a life jacket/helmet/mittens, save 10% of every dollar you earn, look both ways before crossing the street, etc.) if I didn’t think it would increase the quantity and quality of your life. I love you, I desire your happiness and that’s why I’m telling you these things: in order to take action to ensure that your happiness is the most probable outcome.”

 

 

Going back to repossession, there’s no telling when we could lose someone we love. One day they’re gone from our life and eventually we realize they were never truly ours to begin with. And any time we bring new life into the world, we are taking a risk. The probability is low, but remains nonetheless, that a child’s life could end before ours. When our heart is filled with faith, we know that even if we end up experiencing loss, delay, sadness, and/or danger, we will have all the strength, perseverance, inspiration, and drive to keep going. Whenever we give love, we’re taking a risk that it won’t be returned or reciprocated, just as when we give time or money. When the heart is open, we give love freely rather than lend it which is why forgiveness is the most generous gift of love we can present to another person. While the heart is closed, you may feel the need to “be able to trust” someone. When the heart is open, not only will your risk detector (your survival instinct via physical reactions in your gut, stomach, heart, or via the hairs on the back of your neck) be more accurate, sometimes you may choose to take the risk anyway, with full faith in yourself and the knowledge that you will confidently handle any outcome (even a default or total loss).

 

 

I use the word faith a lot and aren’t faith and trust the same? I would say no. Trust is the denial of the possibility of disappointment. Faith acknowledges the possibility and indeed its probability.

 

Faith says, Yeah, and I’ll take the chance anyway. Bring it on.

Bring Back Glass-Steagall and End Too Big To Fail

I just signed the petition to end “too big to fail” banks who had gotten so big in 2008 that when their risky investments went bust, their ruin threatened our entire economy. And instead of demanding a return to the commonsense and time-tested Glass-Steagall Act (which was passed in 1933 in the midst of the Great Depression because of the banks’ role in causing it), President Bush and Congress handed the banks big bailouts, paid for with our tax dollars and inflation of the money supply by the Federal Reserve.

 

Now, the consummate Wall Street insider, Sandy Weill, who successfully lobbied Congress to tear down the walls between Main Street banks and Wall Street by repealing the Glass-Steagall Act in 1999 (after which he proceeded to build Citibank into the financial behemoth Citigroup), has come out on national television against the very changes he had advocated, the changes which helped create the “too big to fail” financial giants, saying:

 

What we should probably do is go and split up investment banking from banking…Have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail.. That means we need to press our solution hard enough for them to hear us on the rest of Wall Street — and in Washington.

 

Let’s NEVER let these behemoth banks hold our economy hostage again. Let’s end “too big to fail.” Please join me in protesting the tragic injustice of the repeal of Glass-Steagall in ’99 and objecting to the abuse of power by authority that Congress and President Clinton perpetrated against an entire nation by not doing everything in their power to stop it.

 

This image came from the website of economic journalist Barry Ritholtz.

Time is money … or is money really time?

People say that time is money but in truth, money is time. Money is the human attempt to contain and assign a value to time.

 

Money: the human attempt to contain and assign a value to time.

 

We think in terms of how much money an object or service costs, but we really pay for everything we buy with the amount of time it took to earn that amount of money. If you don’t receive a paycheck from an employer for a specific amount (number of hours) of time, for example, if you receive money from family or work on salary, ask yourself how many hours did you actually put in last week or last month or last year? Then ask yourself, how much money did you receive in that same period of time? If you didn’t receive payment only in cash, for example, if you were given a paid vacation, what was the total dollar amount of anything received, including gifts and paid holidays? Then divide that figure by the number of hours you spent providing service to others, whether those others were children, clients, employers, patients, a spouse, teachers, etc. Now, hang on to that amount because we’re about to peel back the next layer of this time=money dynamic.

 

 

Because we buy food and shelter to last for all 24 hours of the day, the amount of money you made in the given time period must actually be divided by all the hours you were surviving during that time period. So whether you worked 40 hours last week or 140 hours last week, the total amount of money must be divided by the total number of hours in that
week, which is 168. (7 days x 24 hours = 168.) So whether you received $1,000 in straight cash for working 40 hours or received $1,000 worth of food and shelter and spending money for 140 hours of miscellaneous services provided, you would still divide the total dollar amount by 168. Why? Because we don’t pay rent or mortgage based only on the hours we spend under the roof of that shelter and we don’t pay for food based only on the hours we spend consuming it. Both the food and the shelter sustain us for all 24 hours of the day. To put this in perspective, you would never tell the bank that holds your mortgage or the landlord you send your rent check to, “Hey, I think it would be more fair if I just paid you for the hours I spend in this building.” They might reply, “This isn’t a hotel. You’re paying for the permission to store your belongings here even when you’re not and the ability to provide this address to the Post Office, etc.”

 

 

Also, because we are forced to give between six and nine hours back to God each night as sleep (talk about a survival tax!), we couldn’t work all 24 hours a day even if we wanted to. So your hourly wage is not really per hour and your salary pay is literally per annum. Per annum means per year, so be sure to divide the total dollar amount of the value of everything you receive from anyone: If you are in school, include the value of all education that is being paid for by your parents if it’s being paid for by them and/or the dollar amount of any scholarships you are receiving and/or grants from the Government (all of which you are receiving in exchange for the amount of time you spend in class and studying) by the total number of hours in a year: 8,760.

 

This figure is the true monetary value of one hour of your time.

 

Neither Time nor Money has value if we do not also value our Autonomy. This is why, as children, we do not usually learn the value of time until we reach an age where we have some influence over where that time will be spent and on whom. Until then, time simply passes; this is why Freedom and the value of Time (and thus Money) are inextricably linked. God deposits 24 hours into everyone’s Time account as midnight. Some people trade 8 of them for cash, some people trade 10, some work all 24 hours, on-call even while they sleep (for example, some parents, especially the primary care-giver). Some choose to live off the grid, choosing a lower quality of life in order to have a higher quantity of time to be autonomous, such as homeless people.

 

 

Question: now that you know that time is the real international currency, how many hours per day are yours to spend however you desire? Take today, for example: how many hours did you spend doing what you wanted to do (being autonomous)?”

 

Time: the real international currency

 

A very high quality of life is often centered in having enough: enough time left over at the end of the month to spend being autonomous, and enough money to spend on doing awesome things and enjoying awesome people during that number of “free” hours. So rich might be great fun for some people and for others, it might amount to slightly better than slavery because they don’t have any time left over at the end of the day/month/year/lifetime to spend enjoying that money! And the homeless person who answers to no one may value their freedom so much, that having no permanent address feels like a fair price to pay. For most people, the ratio lies somewhere in between and the things that really make free time enjoyable, like our soulmate, good friends, a secure feeling of belonging to our unique niche in the community (like hanging out with other social justice activists or other knitters or other Magic: the gathering players, etc.) are what make life feel good and satisfying.

 

 

What would be the ideal ratio of unallocated hours (“free time”) and unallocated funds (“disposable income”) for you? What do you think it might be ten years from today? How about twenty years from day? And now, how about fifty years from today?