Frugaling

Stephen Colbert Interviews A Fast Food Employee About Minimum Wage

Stephen Colbert of the Colbert Report spotlighted a KFC employee, Naquasia LeGrand, who has been advocating for a higher minimum wage. Ms. LeGrand works 15 hours a week at $8/hour. She’d work more, but she can’t – they won’t let her. She’d get another job, but KFC doesn’t schedule out – she can’t reliably predict her schedule.

She’s asking for executives to share the profits with employees on the front lines. For perspective, the CEO of Yum brands (conglomerate that owns KFC), David Novak, received $11.3 million in 2012.

Recently, I’ve been talking about income inequality, and how stagnant wages and food stamps are a consequence of executive excesses. This interview brilliantly captivates the struggle of minimum wage employees better than any article I could ever write.

The Debt Breaking Point: A Student Reforms His Budget

By Frugaling 5 Comments

Budget College Graduate Student Loans Debt — *If your budget looks anything like this truck, you’re in trouble*.

As a student, we are presented a nearly blank check in the form of student loans and financial aid packages (aka, more student loans). It can be hard to resist taking out more than you actually need. But once you open the intravenous drip of federal funds, it can be hard to quit it – hard to reduce your liabilities.

A close friend of mine confided in me that he was broke. The credit card debt had taken over. It wasn’t supposed to work out this way. He had student loans, but he knew better. Something had happened; sort of inexplicable, really. His expenditures soared, but the income was stagnant.

After realizing his budget couldn’t right itself, he scrambled to find help with friends and family. Fortunately, they supported him financially and he’s been fixing his broken budget. The following are some excerpts from our conversation (via email), as he’s learned a lot about what drove him to this level.

Romantic relationships and money

Our conversation ran the gamut, but for a moment, he focused on the impact of relationships and money. Implicitly, there’s a pressure as man (whether there should be or not) to treat and offer to pay – to be a provider.

I like the thought too about expectations, the impact on relationships (if one partner has to suddenly cut back). Part of my expectation (related to gender role socialization) has made it tough for me. I’m so used to being able to buy nice things for Susie, to pay for her dinner, to treat her to nice surprises (fuck, even for little things like buying flowers).

He ran out, and in sharing this with his partner, she was surprisingly accepting, supportive, and helpful. It can be difficult to admit budgetary defeat, and the longer it goes unnoticed, untamed, and denied, the deeper the hole can become. Here are some things he learned from confronting and sharing this realization:

…She’s been great about the whole thing. I think she’s honestly relieved a bit. She’s been much better at being frugal than me (more self-disciplined and better at handling money) from day one. I think she’s been very aware that marrying me means joining with my maelstrom of ego-driven impulse buys, not effortfully considering the true cost (long term) of my purchases, whether I can afford things in reality, and my staggering student loan debt.

Dinner Budget Student Loans Debt — *Shopping and going out can be easy – too easy.*

Last May, I realized I was sinking, and attempted to change everything because I didn’t want my debt to destroy a loving relationship. Seemingly, by confronting and asking for support from others (emotional and/or financial), the way back can be made easier. My friend decided he needed to start from scratch and analyze the budgetary gaps where money was disappearing.

The sink is shipping… How do I take back control?

For me, I had a similar experience to your 7 day challenge. I had so many little expenditures I didn’t realize (holes in the hull of my “finance boat” if you will). I had far less variety in food while I was getting the hang of it. I made rice & beans and had it for like 6 meals. I changed a few things up, would add cheese or salsa. I would wrap it in a tortilla or just have in a bowl. And I would intersperse a McDonald’s dollar menu purchase to balance it out. But it was tough feeling like I’d failed. Tough having to tell myself no, you can’t have it. I think it helps knowing I can’t “cheat” when I have these either-or decisions to make.

As he traveled through the joys of cutting back and realizing what needed to go, the budget was pretty clear; all or nothing, he had to change. The spending couldn’t be sustained. The credit cards were maxed. The student loans were tapped.

When I had literally $0 mid-way through December, I started to realize what had to be done. And magically, I was able to change my expectations, get a roommate, cancel many unnecessary things (gym membership, no more buying expensive proteins, no more consumer reports, got Comcast to lower my cable bill, etc). I’ve been able to set up a budget and stick to it. I’ve been able to track every expense, because I finally HAVE to do this. Years of attempts and failures, but finally having “skin in the game” lead to success.

Changing, fixing your budget is more difficult than it sounds

To spout out the mantras and trite cliches that simply say, “Change your budget to take in more than you spend,” can sometimes be more difficult than it sounds.

Adjusting my budget wasn’t a small change, it’s a giant lifestyle change that’s hitting nearly every area of my life. I needed to change my workout routine since I cut my gym routine. I have to get a roommate and change my living situation. I have to get used to rarely eating out. I have to change leisure time since I can’t really afford 20$+ to take Susie and me to the theater. My choice was to bottom out with no money in May again, or finally get my shit together. And for now, I’m on the get your shit together path.

Like many who’ve participated on this site, asked me, or debated online, the line between frugality and simply stingy/cheap is sometimes a gray area. Being cheap can sometimes elicit a value question.

A big question a lot of this leaves me with is how to be frugal without being cheap. I think there is some overlap, but that they are different. Frugal to me means cutting back, often not being fully satisfied at the reward of more savings. Cheap to me often reflects a self-interested style of frugality. In my mind, I think of friends who would leave little to no tip at restaurants, try to get everyone else to pay for them, continually try to ask “are you going to finish that.” As I’m making huge changes, maybe I’m trying to find a way to stay congruent with my values in the process.

By sharing my friend’s hard lessons learned and insights along the way, I hope it gives you a window into a world. What you do with that window is yours.

Special thanks to my close friend and confidant. Really appreciate being able to share your growth and story with my readers. All names have been changed, but you know who you are!

The Smart Home: More Productive, Efficient, Emotive, And Economical

By Frugaling 1 Comment

Her Film Spike Jonze Smart Home Automation — *Her* by Spike Jonze.

The OS: Into our homes, hearts

Our brains are wired for interpersonal relations. Human-to-human contact reduces depression, anxiety, and a host of psychological concerns. When a child exhibits facial expressions that are more reminiscent of adults, there’s usually a cute relation to it. When a cat brushes up against you and purrs when you rub it, there’s a feeling of mutual connection. As adults, we connect with these as-if experiences – they’re so adult-like.

Skeptical Baby Meme Smart Home — *Skeptical Baby Meme*

Automated devices can be adult-like, too – mimicking that human-to-human experience and connection. In the recent film, Her, a lonely man falls in love with an operating system (“OS”). The OS predicts his needs, sends and organizes emails, and offers romantic companionship. The main character, Theodore, loves the anticipatory brilliance and personality of the device. Suddenly, this inanimate object becomes a vital part of his life – personally and professionally.

After watching the movie, a friend of mine asked if that predictive, assistive, and somewhat convivial system could ever exist. It made me chuckle. Frankly, these capabilities are nearly a reality and they’re going to lead to tremendous savings.

Beyond suggestions, you’ll find automation

If you ask Apple’s Siri (personal assistant software) how long it takes to drive from point A to point B, it’ll plainly explain how long and offer a map. The directions will account for changing traffic patterns, as well. Looking for the latest showtimes and reviews? Just ask Google Now and it’ll give you all the local theaters, films, and reviews. They all are at your service, waiting for your questions, concerns, and comments.

If an application can predict what you might like next (and is incentivized to offer paid suggestions), you’ll likely hear about some special deal at your favorite local restaurant. This could lead to budgetary problems from predictive advertising for some consumers, but there’s another side that is far more positive, environmentally friendly, economical, and a true productivity booster.

The power of smart homes, technology

Nest Thermostat Smart Home Appliances — *The Nest Thermostat*

If you’re a discerning automation expert, you may realize that asking a question and getting a simple response aren’t quite the same as engaging in full-length dialogue (back and forth) with a software package. This Her-like capability is coming to many devices. It’s going to completely revolutionize our homes, heads, and hearts.

Imagine walking up to your apartment/house, seeing the lights turn on, feeling the heat match your immediate needs, seeing the oven beginning to preheat (knowing that you got your favorite type of take-and-bake pizza); all the while, a virtual assistant checks in with you to see how your day went. This is the not so distant future.

By automating the simple tasks and leaving them to computers, we can appreciate from electricity, heating, and gas savings. Have you ever left your house’s air conditioning or heating on too high while away? How many times do you accidentally leave lights on in your house after you leave? These forgetful moments can seriously hurt your bottom line. Smart homes can predict and prevent these errors.

A few devices are already leading to serious savings. For instance, Nest has created a thermostat and smoke detector that can communicate with each other. Used in conjunction, these devices can tell when you’re presently in your home – changing the temperature to something more economical when you leave. All of it is automatic – no more adjustments. The thermostat can even be locked to prevent tampering. By properly controlling your thermostat, you can save $173 a year.

By allowing these devices into our home, we can actually be safer and more prepared if anything happens. The Nest Protect (smoke detector) sends alerts if it senses smoke and/or carbon monoxide. This is just the beginning of a serious technological evolution. The future will bring these systems in unison, and give them a voice.

The future looks frugal

There are many players in the smart home market. This has led to fractured, expensive devices. Companies are investing billions to create automation technologies with sharp designs, but they aren’t universally connected – they can’t necessarily communicate with other systems. This is where competition can hurt innovation.

These tech stalwarts and startups are battling for space in your home. Google has been on a buying spree – getting everything from Nest Labs to Boston Dynamics (a robotics company). Apple is developing and modifying Siri constantly – aiming to make it more interactive and available. Each of these iterations will further a sci-fi reality that includes a smarter home.

As the leaders emerge and prices begin to fall, the demands that technology and regular household devices ask of us will swiftly decline. We should have more time for work, family, and enjoying what’s really important in life. This the essence of frugality and it’s coming to fruition one smart device at a time.

In case you haven’t seen Her, here’s the trailer:

Food Stamps Are A Symptom: The Fall Of Wages Amidst Executive Excess

By Frugaling 7 Comments

Snap Food Stamps Photo — *SNAP! Photo: Sarah G/Flickr*

In 2007-2008, the US economy collapsed into a powerful, potent recession that lasted years. Rates of unemployment and food stamp use escalated during this period. Everybody suffered throughout this turmoil.

Last year, The Washington Post asserted that food stamps increased because of the great recession – noting that 47 million people were now receiving the benefit. Amidst this trouble, Republicans in Congress worked to save about $40 billion over 10 years, by removing about 3.8 million from food stamps. But this highly-contested course of action never came to fruition.

What’s SNAP and who benefits?

The timing was confusing, though. At a time where more Americans than ever were in need of the welfare benefit, Republicans aimed to reduce benefits and exclude vast swaths of people. A variety of families and individuals need food stamps. From single-parent households with young children to underpaid full-time, single employees, food stamps positively affect and bolster the budgets of those most in need.

To qualify for SNAP (Supplemental Nutritional Assistance Program) as an individual, you need to make $958 (net income) or less every month. That’s about $12,000 a year; otherwise known as, poverty for an individual. Without some sort of assistance, it’s reasonable to assume that paying for nutritional, healthy food options may be severely restricted or non-existent. That’s what makes food stamps an important necessity for those in need.

USDA Gov SNAP Eligibility — *Income Eligibility For SNAP. Chart: USDA.gov*

The demographics are growing, changing

USDA Gov Photo Food Stamps WIC — *Photo: USDAGov/Flickr*

The Guardian Liberty Voice recently highlighted the shift in food stamp (SNAP) recipients. Unlike most assumptions regarding food stamps that are propagated in our media and culture, recipients are now working harder than ever – despite needing more benefits. A sharp change occurred over the last few years:

Food stamp use is now highest among working Americans, according to government statistics. This is the first time this specific group has had majority use of food stamps in U.S. history.

As the article continues, most years the elderly and young benefited most from SNAP. Now, working Americans are the largest recipients of this benefit. The Guardian Liberty Voice calls into question growing corporate profits amidst this turmoil and economic distress for the working class.

What is especially troubling about more people being on food stamps is that corporate profits have been high yet wages continue to decline.

The $80 million government program accounts for about $1.50 per meal per recipient. That can be difficult to live on, but food stamps aim to prop up low-income households to enable them to recover and grow out of this impoverished level. Unfortunately, these populations and families have been the target of a variety of public spending and private-industry employee cuts.

Simultaneously, executives are killing companies and employee spirit

It’s reasonable to assume that corporate executives are paid more than traditional employees. Their responsibilities are far grander and they are held responsible in a number of legal and shareholder situations. Most are paid for performance and work in very competitive environments. This can breed a culture of corporate profits over people.

Income among working class and executive class swiftly changed in recent years. AFL-CIO has calculated the average executive versus worker salaries.

The CEOs of S&P 500 Index company made, on average, 354 times the average wages of rank-and-file U.S. workers in 2012.

Despite trying economic times and difficult rates of unemployment, many companies are seeing their greatest profits ever and CEOs are receiving staggering salaries (by number and ratio). Lawrence Ellison, CEO of Oracle, was paid nearly $100 million for a year’s salary. Moonves, CEO of CBS Corp., received about $62 million. Starbucks‘ chairman and CEO, Howard Schultz raked in almost $29 million. To make the top 100 CEO salary pay list, you need to make at least $18.75 million per year.

CEO-to-worker pay ratios make it clear: Executive salaries ballooned in recent years and are directly correlated with a sharp decline in employment. Wall Street tends to value this attitude towards employees; rid the excess and reward the leader, the lesser man is expendable. But unfortunately, this mentality is degrading worker rights, confidence, and consistency.

What comes around goes around

The current, frigid economic conditions have left many without an out. Executive pay, staggering unemployment, and poor business practices created a cyclical problem for the majority of working Americans. Now, they are the largest recipients of food stamps. The tragic irony is that worker pay stagnated and unemployment rates increased, while executives received bountiful bonuses.

There are few defending the most vulnerable among us. The current equation seems broken. Maybe it’s time for protections, regulations, and a general counterbalance to protect hard-working Americans looking to achieve and work for themselves? Maybe we can start with executive income ratios.

Frugaling

Stephen Colbert Interviews A Fast Food Employee About Minimum Wage