Saturday, October 22, 2011

You Raise Me Up

Halloween marks the starting line of the great annual holiday race.  First Halloween, then Thanksgiving, followed by a big a religious Holiday of some sort (yes, Christmas is actually a religious holiday), and ending with New Year’s.  That is a lot of festive celebrating in over a 2 month period.  Fortunately, celebrating things is usually fun.  We get to see family and friends, eat lots of delicious (but not nutritious) food, and hopefully get some presents.  Some of us might even have a birthday celebration squeezed in there, bonus points (unless you’re too close to Christmas to make it a separate event, then you get minus points). 

The unfortunate part of the holiday season is that someone has to pay for it: you.  All of us are stuck with paying for part of the bill.  And while retailers (the entire economy, really) rely on the holidays for a large part of their financial success, we are constrained by what we earn (assuming we spend responsibly).  That seems to be a problem for many of us, who aren’t seeing much in the way of raises, especially while we are seeing increases in prices that continue to shrink the value of every dollar we make.  According to data released Thursday, our average weekly earnings went up by 1.8% over the last year, to $753 per week, yet the prices we pay for stuff increased by almost 4%.  So, in “real” terms, our wages have gone down over the last year.  That is not exactly setting the mood for the upcoming celebrations.

For those of us daring to be bold, or getting our annual performance reviews, now is the time to be brave and ask for a meatier raise.  How much should we be getting?  Certainly it varies by occupation, industry, and which part of the country you are in.  Another factor is your educational attainment.  Take a look at the national average wage by educational attainment (median means 50% of people make above this amount; 50% make less).  Where do you fit in?  For the record, 54% of us have a high school diploma or an associate’s degree.
Average (Median) Weekly Earnings by Educational Attainment (3Q, 2011)


Now think about our average wages in terms of the cost of the new iPhone 4S, which was apparently oversubscribed.  These phones start at $199 dollars, plus all of the monthly connection fees, internet usage, and apps that go along with it.  The cost of the phone by itself is 26% of an American’s average weekly earnings.  And we aren’t about to give up our lifelines to today’s information economy.  Yet we haven’t even touched food, rent, utilities, healthcare, or gas (which, at the current average of $3.47 per gallon can easily cost over $50 for a tank).   It’s hard not to notice how much a pint of ice cream, or a box of cereal, costs these days.  A bag of potato chips can easily reach $5.  At this rate something’s got to give.  Hopefully for you it’s your salary – and a big increase at that. 
Tell your boss that you deserve to be compensated among your peers.  Or that you would like your company to pay for classes, so you can climb the ladder of educational attainment (you would like to “be the best you can be”).  More compelling, tell your boss that you are losing money if your wages do not keep up with basic inflation (cost of living).  If we can’t afford to buy the stuff we make, then who is going to fill that role?  (What is an “export” anyway?)  It could ruin the foundation of our economic well-being (over-spending has nothing to do with it).  Yes, it’s true that as employer’s costs go up, prices go up and we’re back to where we started in terms of purchasing power.  But at least our fixed debt will go down in real terms, very good for our mortgages.  Now is the time to make your case.  Good luck!
(Bureau of Labor Statistics, Energy Information Administration)

Monday, October 17, 2011

And We're Back

The last month has been quite the whirlwind: Oktoberfest, Oktoberfest, Oktoberfest, and of course “Kim's Fairytale Wedding: A Kardashian Event.”  Not even Teresa Guidice from Real Housewives of New Jersey could compete with her sister-in-law hating antics (sorry, it was a nice try, but the table flip was better).  A special congratulations to Kim is in order for reaching the epic Paris Hilton status, what a prize.  How does she do it?  The first thought that comes to mind is clearly how hard she works for what she has.  Just look at the wedding, how much time she needed to spend “looking her best” with so many people watching!  All that make-up!  It is a tough job, but someone has to do it.  Or do they? 
We’ve had a lot of time to appreciate Kim K’s (or any “K’s”) societal contribution lately.  The Kardashian wedding special is so pervasive you can run but you can’t hide: it’s always on.  We’ve been forced to watch it so many times we might actually decide it’s worth an Emmy.  It’s getting about as much press as Prince William’s wedding, except there is one minor (unimportant, really) difference: he is likely going to be the next King of England.  The bad news is the next (and ultimate) step will be for her to go to jail.  Everyone’s footsteps she is following has taken a turn in the slammer: Paris, Lindsay, and Nicole have all donned the stylish orange suit.  It will be a full circle, from sex tape (remember Ray J?  remember “One Night in Paris”?) to jail.  She’ll join good company, from Michael Vick and Plaxico Burress to rappers TI and Lil’ Wayne to Charlie Sheen.  But don’t worry; if past trends are anything, she will make it through and make even more money for it.
Given reality TV is probably never going away, and given the lot of people given their own shows, we can’t help but wonder why we don’t have our own show already.  Why be “unemployed” when you can do no work and get paid?  Slowly jobs are coming back, in September the economy added 103,000 jobs, with revised job gains totaling 184,000 in July and August.  Employment in “Information,” where TV and movie broadcasting jobs live (where TV and movie “stars” live), increased by 34,000 jobs in September (mostly due to 45,000 striking telecom workers returning to work, but we’ll choose to ignore that).  While these aren’t tremendous gains (unemployment stayed above 9% - that’s quite high), we’ve all got to start somewhere right?  If they can do it, so can we!
If reality “stars” can be famous by having cameras follow them shopping, so can we.  We certainly know how to shop til we drop.  We spend money regardless of whether we should or shouldn’t be (aren’t credit cards great?).   Retail sales in September were up 1.1% over August, exceeding expectations of a 0.8% increase (go us), while our spending money after adjusting for prices (“real disposable income”) decreased by a combined 0.5% in July and August.  Relax, we’re not pulling a Teresa Guidice who actually went bankrupt from over-spending.  We are just pulling from our savings, down $30 billion in August.  We are destined for stardom, who needs savings anyway?  It’s not like this attitude got us into this economic mess.  Not creating value to the economy and spending money like we are?  Oh, wait.
Before we forget our reality dreams, maybe we should consider adding the next dimension: going global.  Maybe we can “trade” each of the three main Kardashian sisters as an honorary gesture to commemorate each of the three recently passed Free Trade Agreements (of course with Kim going to South Korea because that’s the most publicized agreement) and let other countries finance what makes us so interesting.  In return, these countries can have the best of America in their backyard.  Reality TV pushing the final frontier.  Now that’s a prize we can take to the bank. 
(Bureau of Labor Statistics, U.S. Census Bureau, Bureau of Economic Analysis)