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Frugal Articles of the Week

By Frugaling 2 Comments

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Reading Nook Photo

Every week I like to feature a few frugal articles that caught my eyes. Curl up in your favorite reading nook and enjoy. Hopefully these encourage you to live frugal lives!

Where the poor and rich really spend their money by Max Ehrenfreund
As the gap in income and wealth widens between the rich and poor, clear patterns in spending behaviors have emerged. Noticeably, the poor are far more likely to spend income on housing as a percentage, when compared to middle and higher income groups. The effects on eating habits can also be massive, as “the poor and the middle class all spend about 19 percent their grocery budget on fruits and vegetables, about 22 percent on meats, and about 13 percent on breads and cereals.”

Gravity Payments CEO Will Live on $70,000 Worker Wage, Thinks His Life Will Be Luxe Enough by Susanna Kim
Dan Price isn’t like many CEOs. His internal compass seems to point him towards spending, owning, and making less money. Despite being the CEO of a successful credit processing company, he decided to take a large salary cut to model strong leadership. Price makes it clear that he doesn’t want overpaid CEOs to take his place someday, while jeopardizing regular employee’s positions. What a model for the entire corporate sector.

ALDI Is A Growing Menace To America’s Grocery Retailers by The Hartman Group
ALDI’s stores serve a different clientele and follow a unique business model. The market places food palettes in the center or aisles, they don’t usually take credit transactions, and often have only one brand to choose from. ALDI’s is also the parent company for Trader Joe’s. All of these factors combine into healthy savings for shoppers.

How to plan for retirement by Joshua Fields Millburn
Joshua tackles an important money issue for many: saving enough for retirement. He takes all his experience with simplicity and minimalism, and bundles it into a helpful guide for the masses. The important variable that he doesn’t acknowledge, unfortunately, is that how-to guides don’t apply to everyone. Retirement savings can frequently be a luxury in a world bogged down by student loan debt. Either way, Joshua offers some sound tips for starting your nest egg!

Filed Under: Save Money Tagged With: Aldi, articles, CEO, Frugal, groceries, Pay, Retirement, Salary, The Minimalists, week

Stephen Colbert Interviews A Fast Food Employee About Minimum Wage

By Frugaling 1 Comment

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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.

Filed Under: Make Money Tagged With: CEO, colbert report, executives, Income, Income Inequality, kfc, Pay, Salary, stephen colbert

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

By Frugaling 7 Comments

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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.

Filed Under: Social Justice Tagged With: AFL-CIO, assistance, CEO, Congress, executives, food stamps, Income, Income Inequality, income ratios, nutrition, poverty, republicans, SNAP, Wall Street, welfare, wic

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