Minimal wage drops for the first time in 70 years in one state while in many others workers are finding themselves doing the same amount of work for half the pay they’re used to.
If you’re working for minimum wage in the state of Colorado you’re probably waking up with an even bigger frown than usual.
The state’s Department of Labor and Employment ordered the wage down from $7.28 to $7.24. That's lower than the federal minimum wage of $7.25, so most minimum wage workers will lose 3 cents an hour.
From the AP:
Colorado is one of 10 states where the minimum wage is tied to inflation. The indexing is thought to protect low-wage workers from having flat wages as the cost of living goes up.
But because Colorado's provision allows wage declines, the minimum wage will drop because of a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938.”
Wouldn’t it be great if they raised their top tax rate, too? Of course, but it's about as probable as a duet between Miley Cyrus and R. Kelly. And sadly, it’s not just those at the bottom of the pay scale taking pay cuts.
In recent decades, layoffs were the standard procedure for shrinking labor costs. Reducing the wages of those who remained on the job was considered demoralizing and risky: the best workers would jump to another employer. But now pay cuts, sometimes the result of downgrades in rank or shortened workweeks, are occurring more frequently than at any time since the Great Depression.
State workers in Georgia are taking home smaller paychecks. So are the tens of thousands of employees in California’s public university system. The steel company Nucor and the technology giant Hewlett-Packard have embraced the practice. So have several airlines and many small businesses.
As you can see, everyone’s suffering together.
Have any of you found yourselves doing your job for less pay than before? If so, how do you cope with the additional stress of an even more restrained budget? Or are you simply happy to still be employed?
Would love to hear from you.
Leave your feedback below and send your recession story to email@example.com.
It’s time to start humming James Brown to yourself and ask, “What am I doing to dig myself out of debt?”
In “The 'Democratization of Credit' Is Over -- Now It's Payback Time,” Wall Street Journal reporter S. Mitra Kalita takes a hard look at how after decades of legislation making it easier for financial institutions to offer credit to even the lowest income earning Americans, these lenders have pulled back on offering services to the riskiest borrowers.
Federal Reserve data shows that the ratio of credit-card debt to income is 50% higher for the lowest two-fifths of Americans by income than for the top two-fifths. In the coming years those who have earned less but turned to credit to live like those in the middle class will no longer be allowed to live off their plastic and a lengthy repayment plan.
In many ways that’s a good thing given the testimony of Treasury Secretary Timothy Geithner gave before Congress in July. Geithner said: "We now know that millions of Americans were...unable to evaluate the risks associated with borrowing to support the purchase of a home, a car or an education."
Actually, he and others knew that at the time, but I digress.
In her piece Kalita chronicled the stories of those who were forced to wean off their credit card usage and repay their debts.
In one debtor’s case:
“Out of college and working at the shoe store, Ms. King kept up a busy social life, eating out several times a week and going to movies -- even as the collectors called. But she lost the shoe-store job in January, and then learned that a prospective new employer had rejected her after running a credit check. Fearing that her credit record would trip her up again and again, she resolved to fix her financial mess.
Gone are dinners at Red Lobster and Olive Garden and purchases like new basketball shoes. She has a part-time job as a tour-bus driver that pays $13 an hour plus tips. She held a second part-time job, in telemarketing, for several months, but it was on suburban Long Island, and getting there, using both the subway and a commuter train, finally became too much. She now is looking for a second part-time job closer by.”
I’m all for the debtor’s revolt, but one form of criticism from the other side is the question of what has happened to personal accountability. These banks charging outrageous interest rates that ultimately feel like financial indentured servitude ought to be fought. Yet, what are we doing to curtail our spending habits?
To those of you marred in debt, what lifestyle changes have you made to tighten your budget and pay what you owe?
Do you shop less? Have you cut your cable? Do you only eat Popeye’s on Tuesday? Have you turned to generic products at the grocery store? Have you traded in the salmon for ground turkey breast? Are you candles the new night light?
I’d love to hear from you.
Leave your comments below and send your recession tales to firstname.lastname@example.org
The Debtors Revolt scores another victory in the fight to get big banks to cut their insanely high interest rates. Is it time for you to take your grips with lenders to the Web?
After making $8,000 in payments on a $30,000 loan and seeing the principal drop by only $1,500, Ben Frasier decided that he had enough and made an offer to Bank of America: He would pay a lump sum of $23,000 and settle the loan.
The offer, made via phone, likely got a cackle from Bank of America. But the Douglas, Oregon native seems to have gotten the last laugh after taking his troubles with BOA to the ‘net. Frasier posted a YouTube clip declaring that he wouldn’t make any more payments on the loan.
I personally, would be petrified to make such a demand. I could see a bank putting a root on my credit report and see to it that I couldn’t get enough credit to buy a free donation from Goodwill for at least 14 years. But maybe the tide is turning in favor of the borrower.
Frasier’s video, which has netted less than 10,000 views, still managed to catch the attention of the press. It didn’t take long for Bank of America to contact him and after negotiations via email Frasier managed to score a deal more to his liking.
The latest winner in the debtor’s revolt told the Huffington Post:
"In terms of YouTube, it was a very effective mode of communicating with them. You have to go someplace unsecure to tell your story where everybody knows pretty much who you are, everybody knows the details.”
It’s obvious there’s a power in speaking out, but why am I only hearing about a certain faction of the population doing so?
Upon surveying the list of those who have posted videos under “debtor’s revolt” I don’t see many naturally tanned faces. What’s the problem? I know white people aren’t the only ones having problems keeping up payments.
You can buy a Web cam for $20. Time to join the complaining, black people.
I'm about to go put a script together for my video about my plight with student loans. Any idea on when I should incorporate tears into the clip? And more importantly, are you ready to take on your lender?
Celebrity-backed fashion lines are taking major hits in the economy. Is the era of the generic fashion label from random celebrities over?
When I think of most celebrity clothing lines I instantly picture the racks of Ross, Marshalls, Nordstrom Rack, and Off Fifth. Now thanks to the recession I can think of Goodwill.
The Wall Street Journal has reported on the downturn in high-end fashion from celebrity-backed brands. According to the trade publication, Licensing Letter, U.S. sales of celebrity-licensed products fell to $2.9 billion last year after peaking in 2006 at $3.5 billion.
As you can imagine this has forced a number of celebrity clothing lines to close up shop. Recession Wire has a nice list of those stars that have passed and failed their test in the fashion industry. Among the notable losers include Jennifer Lopez, Eve, Snoop Dogg, Andre 3000, and Lauren Conrad. Those that have faired better include lines from Mary Kate and Ashley Olsen, Jessica Simpson, and Lindsay Lohan.
I know what you’re wondering: Who actually wants to do anything like Lindsay Lohan in 2009? I asked myself that same question, but as it turns out, her high end leggings line is doing surprisingly well. To be fair to her leggings and coke were quite the 80s staples. So in other words, it’s that decade's fault.
As for those who've failed – namely the reality TV stars who suddenly envisioned themselves as Diane von Furstenberg – I believe Anna Wintour surmises my thoughts perfectly.
The infamous Vogue editor-in-chief told the Journal, “Every D-level celebrity who thought they could make a quick buck by designing a handbag or whatever is going to disappear. And I think that's a good thing."
This means you, Dina Lohan, the latest “star” to sign a deal to start her own shoe line. I’d rather see her throw on shoes to walk her daughter to rehab anyway.
A-listers like Justin Timberlake, who hasn’t yet met expectations for his William Rast line but is determined to persevere, is trying to shift focus on the line away from his celebrity. But is it too late?
A lot of these lines are nothing more than rip-offs of existing designers’ style with higher prices. While I’m certain there are still ways for celebrities to use their star power for commerce (perfume line anyone?) are clothing lines still the answer?
Are any of you still shaking your derriere in your Dereons?
Slim Thug visits “The Daily Show” to shoot a funny sketch about how your favorite emcee deals with the economy.
In economic news, ya’ll have finally learned to stop treating credit cards like they’re your own personal sugar daddy and now spend your money via debit cards. Hopefully each of you have mastered the art of not overdrafting and setting yourself up for bank fee hell.
It’s probably a good thing, too, because there’s not much credit available to most of us anyway. And while there’s support growing for the idea of giving tax credits to companies who will hire your unemployed self, there are other reports that suggest that there are actually good jobs out there…only you may not qualify for them.
I know, it’s depressing and doesn’t help you push through the day with a smile on your face. But have no fear, “The Daily Show” is here.
The hilarious Wyatt Cenac (if you don’t believe me, ask Variety) did a sketch last night about how rappers have dealt with the recession that features Houston’s own Slim (well, not really) Thug.
Look and laugh:
|The Daily Show With Jon Stewart||Mon - Thurs 11p / 10c|
|Slim Thug Feels the Recession|
And just for some inspiration, shortly before Wyatt got this gig at “The Daily Show,” he was working the door at Lucky Strike in Hollywood. It had been four years since he wrote for “King of the Hill” and in that time he had recently been evicted, his car had been repossessed and owed a friend one month's rent for his new place.
Now he’s making me laugh. This is your cue to smile now.
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