Posted by:
Trista Winnie @ 8:10 AM
Many Americans have been eagerly anticipating their economic stimulus checks, the first of which were distributed in early May. But, as teenagers are so often told, money doesn't grow on trees. The money being distributed now has to come from somewhere.
Because the U.S. government does not intend to "alter its spending plans, these tax holidays will be funded by government borrowing, borrowing that must eventually be repaid. That will require taxes to go up in the future or not to fall when they otherwise might," according to Tim Harford of Slate.
The government, Harford pointed out, is handing its "citizens cash that was borrowed—and the citizens themselves are liable for the debt. If my bank manager arranged a surprise loan in my name and handed me the cash, I might feel pampered or put-upon, depending on whether I was planning to take out the loan myself anyway. Either way, doubt I would feel any richer."
Though it is impossible to tell exactly when and how taxes will be raised in the future, Harford predicts that teenagers, "very few of whom pay income tax today but most of whom will pay income tax in the next few years", will take the financial fall.
Labels: Economy, Teens
Posted by:
Trista Winnie @ 10:23 AM
When most people think of their retirement years, they picture themselves traveling, relaxing and enjoying hobbies they had less time for when they worked--or even finding some new hobbies.
But, with the U.S. economy floundering as it is, many people are putting such plans on hold.
"As the economy slows and prices rise, most middle-aged and older respondents report that they are having difficulty paying for food, gas, utilities, and medicine, and are responding to the situation by cutting luxuries and postponing major purchases and travel," according to a recent study by the AARP.
Some people are even postponing retirement itself. 27 percent of American workers aged 45 or older have postponed their plans to retire in response to the economy, according to the study.
Even more troubling is that one in four have trouble paying their mortgage and rent, and that one in three have stopped putting any money into their retirement accounts. And nearly one in four--23 percent--have prematurely withdrawn funds from their 401(k) or IRA.
But, with costs rising as they are, many people simply have fewer dollars to save. Making ends meet is tough for many, with the costs for necessities rising as they are. "Majorities are having trouble paying for essential items such as food, gas and medicine or utilities such as heating, cooling and phone service," according to the study.
Labels: Baby Boomers, Economy, Retirement Planning
Posted by:
Trista Winnie @ 8:34 AM
The civil war in Rwanda resulted in the slaughtering of its Tutsi minority, as well as many moderate members of its majority, the Hutu, in 1994. Around 800,000 are estimated to have died in the genocide.
"In the 14 years since the genocide, when 800,000 people died during three months of violence, this country has become perhaps the world's leading example of how empowering women can fundamentally transform post-conflict economies and fight the cycle of poverty," according to a recent article in the Washington Post. "That is particularly clear here in Maraba, a southern village where a host of women -- largely relegated to backbreaking field work in the days before the genocide -- found unwanted opportunity in the fertile lands they would inherit from slaughtered husbands, fathers and brothers."
Maraba's women "showed more willingness than men, officials here said, to embrace new techniques aimed at improving quality and profit. Now, Maraba's female farmers are outdoing their male counterparts in both, numbering about half of all farmers in the village's coffee cooperative but producing 90 percent of its finest quality beans for export," according to the article.
Many microfinance companies focus on lending to women, because women tend to reinvest profits from their businesses into things such as food, education and their communities.
The march of female entrepreneurialism, playing out here and across Rwanda in industries from agribusiness to tourism, has proved to be a windfall for efforts to rebuild the nation and fight poverty. Women more than men invest profits in the family, renovate homes, improve nutrition, increase savings rates and spend on children's education, officials here said," according to the article. "It speaks to a seismic shift in gender economics in Rwanda's post-genocide society, one that is altering the way younger generations of males view their mothers and sisters while offering a powerful lesson for other developing nations struggling to rebuild from the ashes of conflict."
For more on microfinance, see Microfinance Institution Reviews. For more on women as entrepreneurs, see Women in Business.
Labels: Business, Economy, Women
Posted by:
Trista Winnie @ 10:18 AM
Danielle Brown of Chicago has a one-year-old and a three-year-old. With food prices rising quickly, she is one of many people whose food stamps don't go as far as they used to.
"The consumer price index for food rose 5 percent last year, the highest gain in nearly two decades. It is especially grim news for the poor," according to the Associated Press.
"'Ain't got no food left, the kids are probably hungry,' said Brown, a 23-year-old single mother who relies heavily on her $312 monthly allotment of food stamps — a ration adjusted just once a year, in October," according to the AP.
26.1 million people received food stamps as of February 2007; by February of this year, that number had increased to 27.7 million. The Agriculture Department predicts that the number will reach 28 million by next year.
"For Lynda Wheeler, who receives $281 in food stamps each month, the rhythm of life has been one of shopping for food, running out of food and then turning to churches, food pantries and friends for help. And all the while, she is doing things like cutting milk with water to make it last a bit longer," according to the AP. Wheeler has a two-year-old daughter and a 14-year-old son.
But food banks such as the one Wheeler visits are feeling squeeze by increased costs, too, and many have had to give less food out to individual families. "Higher fuel costs and commodity prices have sliced into private donations" to food banks, according to the AP. For more on how the increasing cost of food has been affecting food banks, see Rising Food Costs Lead More People To Food Banks.
"Between March 2007 and this year, a gallon of milk jumped from just over $3 a gallon to nearly $3.80, according to the Bureau of Labor Statistics. During the same period, eggs climbed from about $1.60 a dozen to $2.20. Bread, chicken and tomatoes are all more expensive than last year," according to the AP.
Many food stamp recipients are purchasing "soda pop, bags of cookies and chips—much of it cheaper than healthier food," according to the AP. They "are doing what they can to stretch their shrinking buying power."
For more on rising food costs, see Global Food Prices Up 40 Percent Since Mid-2007.
Labels: Economy, Food
Posted by:
Trista Winnie @ 1:06 PM
Planned layoffs by U.S. companies in April increased 68 percent compared to planned layoffs in March, hitting the highest levels seen since September 2006, according to a report released today by employment consulting firm Challenger, Gray & Christmas Inc.
U.S. companies planned 90,015 layoffs last month, compared to 53,579 in March. April's layoffs were a 27 percent increase from a year earlier. Planned layoffs haven't been this high since September 2006, when 100,315 jobs were cut, according to the report.
The financial sector was hit hardest by the spate of layoffs, because of "the housing slump and about $300 billion in write-downs on bad mortgages and investments, the firm said," according to Reuters. "The financial services industry announced 23,106 cuts in April with almost half of them occurring in a two-day period that saw hefty planned layoffs from Citigroup and Merrill Lynch, it said."
The telecommunications and transportation sectors also suffered heavy job losses, with 8,007 and 7,954 planned layoffs in April, respectively.
"Employers have announced 290,671 jobs to be eliminated in the first four months of 2008, up 9 percent from the 266,658 cuts recorded during the same span in 2007, the firm said," according to Reuters.
Labels: Economy, Job Market
Posted by:
Trista Winnie @ 8:02 AM
As belts tighten and families trim the fat from their budgets, it is poignantly ironic that one of the first things to be chopped from the list of luxuries in certain families is getting their own bodies chopped up. I mean, of course, that great American pastime: cosmetic surgery.
“‘We're seeing fewer consultations,’ said Dr. Robert Singer of La Jolla. ‘During a time of downturn in the economy, practices see fewer shoppers.’”
“Shoppers” meaning people who want pieces sucked/chopped/frappéd out of them. At this point, the doctors speculate that the reason is simply that the money isn’t there. Mom and Dad aren’t willing to shell-out for little Helvetica’s new nose when they are wondering how they’ll even
pay for her college. Before long, however, our problems may just correct themselves. I.e. food prices will have us all slimming down the old-fashioned way by natural starvation.
While this is good news for people like me with a hideously twisted body image (So...hungry...), it comes as little comfort to doctors and medical suppliers. One example:
“Mentor Corp. of Santa Barbara reduced the upper range of its sales estimates for 2008 by $15 million in part because of declining sales of its breast implants in the United States.”
What have we become when young women can’t afford to take that first step towards becoming a silicon-based life form? Is this the same world in which Norman Rockwell limned his immortal painting, "Freedom from Flatness?" But wait...There may be another explanation for all of this: Americans may still be leaving cartilage and fat on the OR floor, but far, far away from home.
The international medical tourism trade is booming. For the same price or less, medical tourism firms and affiliated hospitals are offering the same procedures you find at your local Mom n’ Pop Lipo Stop, but in destinations like Brazil, India and Thailand, allowing people to recover in a more clement, relaxing climate. NuWire discussed the
medical tourism industry and how investors might take advantage of it as it grows, including a list of the
top 5 places to invest. Thailand didn’t make the cut because military coups don’t do much for one’s convalescence.
Having been hospitalized a number of times throughout Asia, I can vouch for the fact that the staff in those countries is equally if not more capable than the staff in American hospitals. And having also lived and been hospitalized in Atlanta, I’d say that the Thai doctors spoke better English, too, so you needn’t worry about communication issues.
So while the Nip/Tuck set may be facing thinner times, the news isn’t quite so dismal for the rest of us. On the next family trip to Costa Rica, mom can regain the full, supple lips she’s chewed away with nervous tension, dad can come back missing half of his intestinal tract, and little Helvetica can go to prom with a brand new schnoz. Best of all, investors who give people a place to rest while they recuperate and face the uncertainty and agony of their mutilation might walk away with a severe case of obesity...of the wallet.
This was a guest post by Trenton Flock, Web Editor at NuWire.
Labels: Economy
Posted by:
Trista Winnie @ 2:26 PM
In a previous post, I talked about how the tightening job market would bode poorly for teens--there will be
more competition for fewer summer jobs.
A recent Associated Press article documented another way in which the slowing economy is affecting life for teenagers: the recession has made frugality cool.
"Teen hiring has slumped by 5 percent since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1 percent during the same period," according to the article.
Because of the recession, "jobs for teens are less plentiful, and parents who supply the allowances are feeling the economic pinch themselves," according to the article. "The stalwart retailers of teen apparel, such as Abercrombie and American Eagle Outfitters Inc., are reporting sluggish sales, defying the myth that teen spending is recession-proof: It holds up longer, but can eventually fold."
Teenagers always want to be trendy, but now they have less money to spend on trends. So, "Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch," according to the article.
For those who aren't crafty (such as myself), thrift shops, consignment stores and second-hand stores are all great options for saving money on close. An added bonus is that buying used clothes allows people to reduce their carbon footprints.
"Kerstin Block, president and co-founder of Buffalo Exchange, a Tucson, Ariz.-based chain that sells second-hand clothing, said Gap jeans there run $9 to $20. A new pair runs $50 to $60. Block noted that buying second-hand is also appealing to a growing eco-friendly sentiment among teenagers," according to the article.
"Economists say this teen spending slump could be the worst in 17 years, when teen frugality led to the demise of once-hot Merry-Go-Round Enterprises Inc. and ushered in an era of flannel shirts and torn jeans," according to the article.
I grew up in Seattle, and had no idea that flannel and ripped jeans were popular because they were cheap. I just thought everyone was into grunge. And while we're on the subject, the 14th anniversary of Kurt Cobain's tragic death was this month. May the voice of his generation rest in peace.
Labels: Economy, Job Market, Teens, Young Workers
Posted by:
Trista Winnie @ 5:22 PM
In my
previous post on rising food prices, I noted that more and more people were using food banks as a result of the skyrocketing costs.
Food prices have increased 40 percent globally since mid-2007, according to the Associated Press.
But the crisis of rising food prices is so dire in Haiti that it has led to riots. "Haitian lawmakers fired Prime Minister Jacques Edouard Alexis over the rioting," according to the AP.
In response, the United Nations will distribute 8,000 tons of food, along with other help, to Haiti. "Food provided by the World Food Program will focus on children, pregnant women and nursing mothers in the north, west and central regions of Haiti, the poorest nation in the Western Hemisphere," according to the AP.
Once again, I am encouraging readers to make a donation, large or small, to a food bank near them. I purchased staples such as cereal, peanut butter, beans, soups, pasta, rice and macaroni and cheese (okay, okay, macaroni and cheese is not a staple--nor is it particularly healthy--but it is easy, quick and delicious) and took them to a public drop-off point for Northwest Harvest, Washington State's hunger relief agency, which provides 18 million pounds of food to more than 300 food banks annually. It didn't cost me a lot of time or a lot of money, and my small donation will help free someone from deciding whether to buy groceries or their prescription medication.
Labels: Economy, Food
Posted by:
Trista Winnie @ 10:21 AM
With the economy hurtling downwards, a seemingly endless string of polls measures the public's perception of the recession. A recent poll shows the pessimism Americans are feeling about the real estate market. One finding of the Associated Press-AOL Money & Finance poll was that, "Sixty percent said they definitely won't buy a home in the next two years, up from 53 percent who said so in an AP-AOL poll in September 2006," according to an AP article.
Additionally, the poll found that "more than a quarter of homeowners worry their home will lose value over the next two years. Fully one in seven mortgage holders fear they won't be able to make their monthly payments on time over the next six months," according to the AP. Fear of foreclosure, heightened by the
rising number of foreclosure filings, has many afraid of losing their homes.
Investors looking to sell properties these days will likely not be heartened to hear that, according to the poll, only 11 percent are certain or very likely to purchase a home soon. In 2006, that percentage was at 15.
"The number envisioning falling prices in their area has grown to one in four, while four in 10 think prices will rise, a decrease from two years ago. Expectations for rising prices are highest in the South, with Westerners likeliest to predict they will drop," according to the AP.
There are many markets on the West Coast that have bucked the trend of falling property prices thus far, but residents of those areas clearly expect that trend to come to an end.
In 2006, when the poll was last conducted, the subprime lending crisis was just beginning to appear on many people's radar screens. At that time, about 20 percent of those polled had adjustable rate mortgages (ARMs), compared to about 10 percent of those recently polled. Lending practices have changed as the fallout of the subprime lending crisis has become more apparent and widespread.
Labels: Economy, Real Estate
Posted by:
Trista Winnie @ 5:29 PM
Food prices are rising across the board these days. Over in InvestorCentric, Eric wrote earlier about the rising price of corn, which recently surpassed $6 per bushel--a record. But it's not just the price of corn that's going up: Food prices are rising across the board and around the globe.
"Cost increases are affecting most countries around the globe, with prices for dairy products up 80 percent, cooking oils up 50 percent, and grains up 42 percent from 2006 to 2007," according to Slate.
"At $1.32, the average price of a loaf of bread has increased 32 percent since January 2005. In the last year alone, the average price of carton of eggs has increased almost 50 percent," according to a recent MSNBC article.
"Ground beef, milk, chicken, apples, tomatoes, lettuce, coffee and orange juice are among the staples that cost more these days, according to the federal Bureau of Labor Statistics," the MSNBC article said.
"A 12-ounce can of frozen, concentrated orange juice now averages $2.53 — a 67-cent increase in just two years," according to the article. "And a carton of grade A, large eggs will set you back $2.17. That's an increase of nearly $1 since February 2006."
What's behind the huge food price increases?
The rising energy costs taking bigger chunks out of consumers' wallets are one culprit. Rising energy costs are contributing to a secondary cause of the price increases: Increased interest in biofuels, such as corn-based ethanol.
"In 2006, 14 percent of the total corn crop in the United States was converted into ethanol; by 2010, that figure will rise to 30 percent. When the production of corn intended for human or animal consumption decreases, prices go up," according to Slate.
Finally, weather is an issue. Inclement weather has negatively affected the Corn Belt and Australia has experienced a draught while Argentina has experienced flooding. These weather conditions have all decreased harvests and exports.
The rising prices are leading to another increase: An increase in the number of people going to food banks.
"Nationwide, a family of four on a moderate-cost shopping plan now spends an average of $904 each month for groceries, an $80 increase from two years ago, according to the USDA," according to the MSNBC article.
"America's Harvest, which distributes nearly 2 billion pounds of food and grocery products each year to more than 200 food banks across the country, estimates that its overall client load increased by 20 percent in the fourth quarter of 2007," according to the article.
With costs of necessities rapidly increasing, times are tough for a lot of people. So I encourage everyone who can spare a little--investors, I'm talking to you--to make a donation to their local food bank.
Next week, I will set aside the money I usually spend on my daily Grande soy blueberry misto, no water, poured over lots of ice (yes, I have seen When Harry Met Sally, and no, I am not quite as picky as Sally) and instead, buy food to donate to a local food bank.
If you make a donation, large or small, I'd love to hear about it!
Labels: Economy, Food
Posted by:
Trista Winnie @ 3:12 PM
In what has become a fairly common practice, many college graduates move back in with their parents temporarily after graduation. I did this (thanks, Mom and Dad!); so did most of my friends. Living at home for a time generally allows new college grads to find a job and save up some money before heading out to live on their own.
"But now the slumping economy and the credit crunch are forcing some children to do so later in life—even in middle age," according to a recent Associated Press article.
The slumping economy, dwindling jobs and rising costs for housing, food, gas and medical care are all combining to make it harder for many people to make ends meet. So even some adults are moving back home with their parents to decrease the strain on their finances.
"Kim Foss Erickson, a financial planner in Roseville, Calif., north of Sacramento, said she has never seen older children, even those in their 50s, depending so much on their parents as in the last six months," according to the AP.
Parents, still being parents, are used to taking care of their children. "Parents feel guilty if they don’t offer help, but [Erickson] warns them to be careful with their savings," according to the AP. "Some of Erickson’s clients are giving as much as $50,000 at a time to their kids, many of whom have overextended themselves with big houses or lavish lifestyles," according to the AP.
But the parents of middle-aged adults are typically retired, semi-retired or nearing retirement and have to think about major expenses such as extensive medical care.
"Plenty of well-meaning parents must delay retirement or scale back their dreams because they have to help their children," Karen Maloney Stifler, a financial planner in Hudson, Ohio, said, according to the AP.
Adults who are considering moving back home with their parents for financial reasons should make sure that such a move makes sense for their parents, too.
Labels: Baby Boomers, Economy, Retirees
Posted by:
Trista Winnie @ 10:41 AM
When I was a student, I spent four summers working at a small Greek restaurant in my hometown (
Kafe Neo in Edmonds, for those of you in the Seattle area. Try the Grecian Special gyro--pronounced "YEAR-oh"--and definitely get a side of skordalia and pita!). The money wasn't great, but it was something; I got delicious free Greek food while I worked, and whenever I went in while I wasn't working; I liked my coworkers; it wasn't too stressful. In short, it was a typical summer job.
Unfortunately for today's high school and college students--prime candidates for seasonal work--summer jobs are likely to be hard to come by this year.
"Oil prices skyrocketing. Home sales plummeting. Retail sales falling. Because of all these factors, there is likely to be a dearth of 'help wanted' signs up this summer. And many teens may be extra motivated to want work as parents, seeing discretionary dollars dwindle, start asking kids to pick up more of the tab," according to a recent MSNBC article.
Two recent studies show that the summer job market is going to be a competitive one.
"Nearly half of hiring managers say they have no plans to hire any seasonal workers this year, according to a study of 1,100 companies released today by SnagAJob.com, a job site for hourly positions. When asked why they wouldn’t be hiring, 31 percent of those polled said they didn’t have the budget," according to the article.
Further, "a report put out this month by the Center for Labor Market Studies at Northeastern University states that 'the summer 2008 job outlook for teens looks particularly bleak,'" according to the article.
Part of the squeeze will come from "the growing number of older workers going after traditional teen jobs in retail and food services, and also the increase in illegal and legal immigrants vying for those jobs," according to the article.
With the economy in a slowdown or a recession--depending on your point of view--more people are looking for work and there are fewer jobs to go around. I know one woman, well established in her job, who recently got a second job working weekends at Starbucks to help cover her rising gas and food costs.
Teenagers and adults alike who are looking for part-time, seasonal work should start looking soon. According to the SnagAJob.com study, 76 percent of companies that will be hiring summer and seasonal workers expect to fill those positions by May.
Labels: Economy, Generation Y, Job Market, Young Workers
