The Problem With Getting Rid Of Free Checking

Free Checking. It's one of those wonderful ideas of the last, oh I don't know. However long it's existed. Banks so wanted our money, they'd bribe us with things like coolers and other junk just to get us to sign up for free checking. So free checking was basically free (plus a present!) checking.

But now banks are in a tizzy because they're being "regulated." Personally, I think it's a joke, and they should be more heavily regulated, but that's neither here nor there. The problem is, they claim they can't make money, so they need to axe free checking. After all, how are the banks supposed to make money, now that overdraft fees aren't automatic? You know, I wanted that juice to cost me 35 extra dollars. I can think of very few times when overdrafting makes sense. Even being late on payments usually doesn't cost you $35, buying a soda certainly shouldn't. Then Dodd-Frank cut in half the amount of swipe fees they could charge per swipe on Debit card fees. So now they charge for the privilege of spending your own money.


So let's see. Free checking. How does it work?


In the beginning, I give a bank what money I have. Any future money I might hope to earn will also go in their vaults. I can/will do this up to $250,000.


With my money, and the money of millions of others, they make loans. They loan people my money and charge them interest. Auto loans, mortgages, small business loans, etc. These loans (I'm not a financial planner) will likely vary from 3% to 15%. Maybe even higher, who knows. Lines of Credit, I'm sure, have even higher rates. Many banks even offer credit cards with rates in the 20-30% range.


Now, they don't get my money for free. They actually pay me some interest too. It's an amazingly high rate of .01%. Basically, I could travel in time 10,000 years and I'd still be poor (not even accounting for inflation). They also give me wonderful extras like Bill Pay (oooh) and Customer Service. Also, now that I'm a "customer" I can utilize their other services, like loans and stuff.


But now, this model is apparently unsustainable. The banks just can't turn a profit anymore because of free checking. Well, actually, that's not true. They'll keep your checking account free if you have a minimum balance varying from $1,000-$15,000; utilize direct deposit; or some other stipulations (like using Bill Pay a few times a month).


I don't agree with this. Don't get me wrong, I think people should be paid for their services. But the bank isn't exactly doing anything for me here. All they do is protect my money. Well, that's not true, if they are robbed, insurance covers the loss. If they make terrible bets with my money and lose it all, the FDIC will give me what they lost, up to $250,000.


They don't give me checks, either. I don't use them, but if I want them, I have to pay for them. I want to buy something with my debit card? They get money. 


The fact is, simple checking accounts should be free because they aren't worth that much; the value just isn't there. Having a checking account isn't some magical vessel that transforms my money into anything--it just lets me pay people. And 99% of the time I pay people, my bank gets money. The bank uses my money to make money.


But you know what the absolute worst part is? This is a fee for not having enough money. I literally just opened up a piece of mail stating that if I do not maintain a minimum daily balance of $100, I will be charged $15 a month. Sure, I may not be making the bank much money at that small a balance, but I'm not costing them anything either. So if I were living pay check to pay check (which I'm currently not, anyone want to hire me?) and had a balance hovering around $100, it would take five months before my balance was brought down to $10. And anyone living paycheck to paycheck with a small monthly balance could run into this problem, for example, senior citizens.


It's a shame the letter just mentions regulatory changes, but doesn't actually say which. I have a feeling the changes don't affect free checking accounts.

On Terrible Ironies

There is currently a movement in New York for a living wage. I wrote about Minimum Wage and how as a system it's full of fail twice back in December, and it's refreshing to see people fighting against it, even if the war isn't being won, small battles won are nice.

The problem with minimum wage goes far deeper than it's name suggests. Seriously, how has no one given this a nice sounding euphemism by now? Nothing about "Minimum Wage" connotates good feelings. Where is the pro-business lobby on this one? Oh right, they were trying to eliminate the minimum wage entirely, almost forgot.

What they are fighting for in New York is livable wages, though, not just the bare minimum. And this is why the battle, and the war, are ultimately foolhardy. You see, they are fighting and protesting over, not a livable wage, but ten dollars an hour. Could you live in NYC for ten bucks an hour? Remember, that's just over twenty grand a year, before taxes or any kind of expenses--like healthcare for example. The answer is obviously no. No one can.

Minimum wage should be abolished, and replaced with a system that scales based on location and average expenses.

Unfortunately, this won't happen because Big Business has lots and lots of money to lobby with, and Republicans (and conservative democrats) really like that money, which is why so little progress has been made for regular folks in the wage department over the years.

You know what the worst part about this nonsense is though? It's not that it won't happen; I think we've resigned ourselves to that (as sad as that fact may be). No, it's that the people who fight against minimum and livable wages are the same people who fought for the Bush tax cuts being extended for uber rich people and for keeping executive pay high (and keeping "golden parachutes") "because we need to entice them to stay as CEOs, even if they are running the company into the ground" or something.

The message they're sending?

You only deserve the money if you earned it by running a business poorly, but those people who are now out of work, because that douchebag doesn't understand how to run a profitable company, sorry you're going to need to take a pay cut or lose your job. Don't worry though, with luck, you'll be able to find a job with another company-- and that same douchebag might just be running that one into the ground, too.

Causes I Believe In (Especially For The Holidays)

It's Christmastime, among other holidays, and it's a time when we often reflect on the year, and look forward to the year ahead. Granted, we also freak out about the fact that we still haven't finished our shopping, fret over gifts that need wrapping, and convulse at the mere thought of all the food that needs cooking; but all in all, it's a happy time. Even in the worst of times, we've got it pretty good here.

While we may spend our days pinching our pennies, wondering when things are going to get better (in about five years, if you're curious; sorry), there are people in the world in far dire straits than we. In honor of the season, and being thankful and hopeful, here are some of the causes I believe in because the reality that they need to exist kind of makes me sick.

charity: water is a pretty new charity; I believe they've only been around for a few years, but it's one I believe in. It's on the top of my list, actually. I've already decided that when I can start taking pictures for money, that the first $5,000 (every year) will go to charity: water so they can build a new well where it is needed.

charity: water exists to bring water to areas that have no access to clean water. To me, this is a travesty (that people don't have access to clean water, not the charity). If there is one thing that we take for granted in life, I think it is water. We use tons of water. We boil potatoes in it, make pretzels in it, boil bagels in it, take showers with it, wash our cars with it, et cetera. And yet, there are people who can't even get a glass of water, much less the gallons upon gallons that we use on a daily basis.

I don't know all of the statistics, but I also don't particularly care; ten people without water is too many. but according to charity: water, there are almost a billion people without access to water-- that's one in eight people. Almost every death resulting from unsafe, unhygienic water is a child. Bad water keeps children out of school and parents out of work. The walk to a water source can take a woman (because it's always the woman) three hours, the return trip carrying a forty pound jug of water, where they are extremely vulnerable to violence and sexual assault (among other things).

With a well in their community, this walk is transformed to only fifteen minutes (hooray! No more back pain!). Building wells employs local people, providing them with work. The wells also provide women with jobs, namely leadership positions which would otherwise be pretty much impossible. Wells allow for children to have safe drinking water, saving thousands of lives a year and allowing them to go to school because they are healthier. charity: water also provides the communities with latrines to emphasize sanitation and hygiene.

I really like this charity, and its rare to find a charity where 100% of your contribution actually goes to the charity's mission. Every single dime they get goes to building projects because all of their overhead is sponsored.

Twenty dollars can give one person with water for twenty years. This isn't one of those creepy "just thirty cents a day to sponsor Eli. You'll receive pictures and updates, et cetera" type deals. People are dying because they can't have a basic human necessity. Clean, safe water ought to be a human right, not a privilege, so give them money. Every $5,000 well provides water for 250 people. If you want to get something in return for your contribution (I understand, no worries), there are many gifts you can receive (or give to others). I'm partial to the Thermos. For $40 (that's, like, two DVDs) you can provide clean water to two people for 20 years and you get a sweet Thermos: win-win, no? I think the Photobook would make a good present too. Sitting on your (or someone elses) coffee table, it's sure to start up a conversation. The right kind of conversation.

Here's a video from a completed project:

Toms Shoes

This one isn't a charity; I'm just going to get it out there. But that doesn't make their mission any less worthwhile. Essentially, Toms is a company that will provide a pair of shoes for someone in need every time they sell a pair. They are for-profit, but there's no harm in that. I really like their shoes; they are extremely different from what we find here. They are (I believe) based on a shoe style from Argentina. The shoes are all pretty affordable, usually in the range of $60, some costing around $100.

I like these. They seem warm and fuzzy, but still stylish and masculine.



If you are looking for something more substantial for winter, they also offer boots. I like these ones, but these are also pretty agreeable.

We all buy lots of shoes every year, why not pick up a pair of unique, stylish shoes simultaneously helping someone desperately in need of shoes? (By the way, they have shoes for the ladies and children, too!)

K.I.N.D. (Kids In Need Of Desks)

I was watching The Last Word last night when I saw a segment on this charity run by UNICEF with MSNBC to provide desks to children in need of them in Africa. The segment started with a clip of Ann Coulter arguing that America is the most charitable country in the world, but that this is thanks to conservatives and not liberals, because liberals are apparently stingy or something. (Nevermind that progressive causes tend to focus on spreading wealth around, et cetera). Lawrence O'Donnell then went on to say that in a day his viewers had donated around a million dollars.

Regardless, kids need desks. Have you ever studies on the floor? Taken a test on the floor? It's not easy, I imagine, and is probably pretty discouraging, wouldn't you think? Each desk costs $48. That's probably what a nice bottle of wine costs. $48 provides a desk for two kids (hopefully they don't peek during those tests!), which is kind of a trivial amount, if you think about it. Want to outfit an entire classroom of thirty with desks? Only $720.

If you want to help provide desks to children in Malawi, head over to UNICEF and donate.
Here's the link.

Some statistics:
In Sub-Saharan Africa, forty-five million children don't go to school.
Only 20% of students who do go have desks.

Visit msnbc.com for breaking news, world news, and news about the economy

Kids need desks, no matter where or who they are.

Be kind this holiday season (and beyond). There are people far worse off than we, and they can use some help.

We're All A Bunch Of Kholops

It's true. In case you're unfamiliar with the term, Kholops are like serfs, except instead of having its etymology based in French and Latin, it's based in Ukrainian, like me.

It's no secret I'm not a fan of the corporatization of the world and the incessant bureaucracy that such a life entails.Workers and company owners nowadays are far too removed from each other, in my opinion. I mean in the literal sense, too, not just financially. Let's say you're a regular worker at a regular company, you might have as many as 3 supervisors. There are supervisors, managers, operations managers, department managers, so on and so forth. This system would work fine for me. In this system, you can, on a daily basis, interact with your superiors and work together. Unfortunately, this is merely the beginning; this is serfdom.

After the initial supervisory tiers, there are the corporate social orders. There are district managers, regional vice presidents, area presidents, presidents, executives, CEOs, CFOs, CBOs, CCOs, CMOs, so on and so forth. When is the last time you met any of these people in your company? How accessible are they? At a company with tens of thousands of employees, how can we expect them to care for one person?

We're all familiar with the concept of being just a number. I suspect this concept has its origins in prison, since prisoners are often prescribed numbers. Large companies, too, have to treat their employees in this manner; it's inevitable. I can't imagine knowing more than a hundred or so people well, so how could a CEO of a large company be expected to know anything about its employees, even their names?

In that same sense, workers are merely numbers, replaceable by cheaper workers. This is a big part of the current unemployment crisis. Businesses can be very picky about who they want to hire and how much they value them. People have to accept massive pay cuts because if they don't, someone else will. But then, how does that make us seem if we are so willing to devalue ourselves? What does is say if we are not only willing, but begging, to be another number, so long as that number isn't adding to the unemployment rate?

We are kholops, and large businesses are our lords. We work for them, they watch over us, but they are responsible for us. If we mess up, it's on their hands. As such, we are replaceable. In feudal times, Lords could sell or kill their serfs much like they can, and do, now in a figurative sense.

Financially, it's like each job level represents a social order, with pay increasing exponentially the higher up the social ladder you find yourself. Workers earn peanuts and the upper echelon of the company earns thousands of times what the soul of the company earns. I don't like this and neither should you.

This is why I love small businesses. This is why when I have money, they get it. I may hate telephones, but I can call the owner and talk to them, most of the businesses here even encourage it. When I walk into a store, the people there are earnestly engaging because they love what they do; it's not only their livelihood, it's their lifeblood.

I hope we can break down these walls that have been created. Every wall that's fallen has started with a small stone being removed.

On Minimum Wage

Minimum wage is kind of misleading. One would think, by its name, that it is the very least you could make and survive, but that's just over $17,000 before taxes in Connecticut, and ours is higher than the rest of the country's. I can't think of a single place you could live in Connecticut on that. Maybe you could hope to find a couch to sleep on at someone else's home, and hope they don't charge you rent?

I understand the argument people will make; minimum wage isn't meant to live on, it's for 16-year olds who are working their first job. Maybe that's true, but I believe there's a better way to go about it. Technically, for the first forty-five days (give or take, I'm not an HR person) they don't even have to pay minimum wage.

So how about we make the minimum wage something a person could actually survive on? Connecticut is expensive. Our taxes are high (we have the third highest tax burden of the country, go us!), homes cost a fortune, and land is exorbitant. So make the minimum wage something like $20/hour. Don't think I don't understand what that means though. Believe me, I know that people would argue that that wage would crush small businesses, but I think those people are wrong.

I realize that that is a lot of money; it's a bit over $41,000 before taxes, and I understand that costs three times more per employee than it does now. I can add up the numbers and figure what that would do to our local grocery store (who pays minimum wage) and realize the costs that would add on. I do realize that this would cost billions of dollars across the country and cost large companies like Target and Wal*Mart millions. But that's okay. I don't mind.

For what it's worth, if I ever employ someone, I am going to pay them a fair wage, not minimum wage, and here's why. Do I want someone doing the bare minimum for me? Say I owned a grocery store, does paying my employees minimum wage inspire them to care? There are a lot of theories in running a business, and I don't know any of them, but I know how I'd run mine: I want everyone to care. When I see school pictures from Lifetouch (or any of the other studios) I can tell the photographer doesn't care. The entire process is filled with people who don't care.

Lifetouch could actually use a pre-school photographer right now; let's look at what they want:

Requirements
• High school diploma or equivalent
• Customer service experience strongly preferred
• Excellent communication and interpersonal skills
• Previous experience working with children preferred
• Ability to work with minimal supervision as well as in a team environment
• Willing to work a varied seasonal schedule, including early mornings
• Demonstrate a positive and professional image
• Ability to effectively interact with preschool age children and adults
• Accessibility to reliable insured transportation to reach assigned locations. Vehicle insurance must be current and in compliance with state law.
• Must have a valid driver’s license
• Ability to operate camera equipment
• Ability to travel up to 75 mile radius

First and foremost, they want someone who graduated high school, fair enough. They want someone who has customer service experience. I can see that being useful, but for pre-school kids? I kind of don't think customer service helps you deal with pre-schoolers. Communication and interpersonal skills are great, too, but four and five year olds require far different approaches with regard to interpersonal skills than, say, teenagers or adults. Just sayin'. Finally, they get to working with children. I think this is more important, personally. Children are very fickle, and can see right through you; knowing how to approach them and deal with them is paramount, in my opinion. The next few make sense and are basically par for the course with any job. Eighth on the list is the ability to interact with teachers and students, really? Again, I'd suggest this would be more appropriate at number two or so, certainly not eight. Astonishingly, though, is that second to last is the ability to operate a camera, which unto itself is incredibly vague.

If you think about it, though, you realize what their priorities are. Lifetouch doesn't want to hire photographers. No, photographers are expensive. They want someone who can take a picture the way they tell them to. Notice, they don't look for photography experience, just the ability to operate a camera. My niece is four and can operate a camera; alas, she doesn't have a high school diploma though, their number one priority. It doesn't talk about pay, but I'm going to assume it's not a lot; they're looking for, arguably, the bare minimum.

Think about when you go to retail stores and how unhelpful people are. Sure, you get that one really helpful kid that you always look for (that was me!), but most of the people seem like they could care less, right? Well, why should they? These kids generally get treated like garbage (I've seen it, and it's been me), they need to do the jobs of three people, and they have to deal with customers who are usually upset for a reasons that aren't their fault. So for $8.25 an hour, how much do you think they are going to care? Not much, they just want their shift to end.

Imagine if they were paid $20 an hour though. Yes, it's a lot of money, but I think it's worth it. Consider how expensive training employees is; companies hate having to hire people because of that cost. Most of the time they have to go through the pain that is hiring someone because someone quit or was fired. If a business owner needs to hire someone new because business is going so well, I doubt they'd be unhappy. I bet business owners would treat that process better if it cost them $20 an hour, but more importantly, they'd put more effort in because the quicker their employee can work, the better.

Anywhere I have ever worked, training has been an afterthought. They stick you in front of a computer, or have you listen to a CD, or watch a video. That's hardly effective training. It's like going to college. Book knowledge is great, but the real learning is the first six months on the job (from what I hear, I wouldn't know). You had better believe anyone I hire, will be trained by me. I want to know them and I want to trust them. An employee for your company represents you; would you want that person to honestly care, or be there for spending money, because that's what minimum wage is at its current rate.

At this point, I've discussed why I would pay someone a fair wage, but am I right? Moral obligations to your fellow man aside, what about financially? It is awfully expensive to be a human being sometimes, you know. Maybe I am a dreamer, and what I envision in my mind is utterly wrong, but this is how I see it.

I live in Woodbury, it is a small, but affluent town. We have a lot of elderly people here and probably more antique shops than I can count. But let's pretend it's your town. Think of all the business and workers in your town, think of the people spending money. Imagine they all made $40,000 minimum. Most who retail jobs shop where they work. It's convenient because they are there all the time and they know where everything is. Plus, I bet if they were paid well, they'd like the store more (and care about being there more). There are a lot of little shops here in Woodbury. We have a really awesome indie toy store, Geppetto's, but it's expensive. That is, I can't afford it, unless I really think the recipient will appreciate the gift. But I'd rather shop there than K-Mart. Actually, I wouldn't buy a toy from another store (unless it was similar in style). I do this because their toys are well constructed and will last, unlike those from most stores.

There's a grocery store here too. It's different than your average grocery store, though. There are two checkout lanes, they use a wood stick for an order divider. They offer local produce, and local handmade items. I can buy chocolate goat milk there (yum!), along with all kinds of spices and baking goodies I've not found elsewhere. But I can't afford it, although I really wish I could. I want to give them my money (and indeed I sometimes do), but just not enough of it.

I could do a lot with $40,000 a year, though. Combined with Krissy, we'd make no less than $80,000 pre-tax. That's a number I like, and it's just above the number surveys have shown is what it takes to make people happy. (Technically the survey is $75,000 a year per person). We could do a lot with that money, we could, you know, actually live a life. We could, and would, spend money at local businesses. We would buy handmade crafts from local (and not-so-local, thank you Etsy) crafters. We might go out to eat at one of the few nice local places once a week instead of cooking. Ayla's is good for lunch, too. What I'm trying to say is that we would inject a lot more money into the economy, specifically, the local economy. So while it may cost businesses more to pay $20 per hour, in the long run they will reap the benefits.

I wonder what's better for the economy, money circulating or sitting in stocks. Does it really help small businesses when people own billions of dollars in stock? I'm pretty sure if we all had more money, we'd be likely to spend it, no?

Good For Youth?

Something that I think might be even more important, though, is for the younger workers. Teaching kids financial sense aside, a higher minimum wage is common sense. There's no denying that we've become indebted to credit card companies. But what might surprise you is that student loan debt has surpassed that of credit card debt.

Americans owe some $826.5 billion in revolving credit, according to June 2010 figures from the Federal Reserve. (Most of revolving credit is credit-card debt.) Student loans outstanding today -- both federal and private -- total some $829.785 billion

Yeah, we have a combined $1,656,285,000,000 (that is, one trillion, six hundred fifty six billion dollars) in debt between the two. Considering also that 84% of students had credit cards in 2009 with an average debt of $3,173, maybe having the option of saving is a viable one. I figure even working part-time, a student could feasibly save quite a bit before school, and work some during school part-time as well. I don't see how slapping graduating college students with anywhere from $50,000 to $400,000 in debt is a good idea. Perhaps a better, more honest, minimum wage could alleviate some of that. (The larger problem of tuition costs and banks shelling out awful loans could use a revamp, too).

Good For The Elderly?

I've had the pleasure of working with some amazing older folks. Granted, some were a bit ornery and obnoxious, but most of them were happy people who I'm glad to have worked with. But I don't think we ought to have people working until they die. I'm all in favor of people working because they want to, but they shouldn't have to work to pay bills at seventy or eighty.

Let's face it, the older we get, the more our health, and that of our loved ones, suffers. Healthcare is, regrettably, far too expensive. Social Security isn't exactly an amount one can live on, so we have to use savings. Healthcare can obliterate savings in a matter of months to a few years. Increasingly, people are working longer than they have to just to survive. What if those older people, instead of making a paltry $8 or $9 per hour made over twice that. They are capable, and work harder than most people I've worked with. And, hey, they may even enjoy going to work, too.

Unfortunately, I don't see this ever happening. Minimum wage has stayed the same for fifty five years once adjusted for inflation, but the cost of living has skyrocketed. Minimum wage is supposed to combat poverty, but politicians who decide minimum wage don't have to worry about ever earning such a pitiful wage. Maybe they should.

Perhaps having public service jobs pay minimum wage could make a difference. Public service is, after all, a service, not a career. (FYI: most members of congress are actually millionaires). At minimum wage, politicians wouldn't be doing the job for the money, but for the people they represent. It's hard for me to imagine that a millionaire can understand my plight and where I am coming from on a daily basis.

For what it's worth, poverty, in Connecticut, is defined as $21,027 for a married couple with two children. I'm not even going to address how ridiculously low that is. I actually kind of wrote about it here, with some caveats. First, the numbers I used are for a married couple with no children. Second, I used $40,000 in annual salary, almost double the poverty level. My question is, if a married couple in Connecticut can't survive on $40,000 a year, then how can we expect a family of four to survive on $21,027?

Be Kind.