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Teri Bernstein, MBA, CPA has been teaching full time in the Business Department of Santa Monica College since 1985.  Prior to that, she worked in Internal Audit and Special Financial Projects for the 1984 Los Angeles Olympics, CBS, Inc., and Coopers & Lybrand (which is now part of PricewaterhouseCoopers).  She attended the University of Michigan and Wayne State University.


  • The Income Gap: How to fix it

    image from therealsingapore.com Robert Reich , U-C Berkeley professor and noted economist, is a huge fan of the middle class. Therefore, income equality is an issue that he has a lot to say about. And--unlike Thomas Piketty --Reich does not believe we are doomed. Some major factors which influence his position include the following actions which need to be taken to counteract the income gap: Make work pay. If a minimum wage of $15 per hour were attached to the fast-growing fields of hospitality, restauranteurism, and tourism, this would make a huge difference. According to Reich, " No American who works full time should be in poverty. " Unionize Low Wage Workers . Unions gave the middle class clout, and unions are now the only way that low-wage workers can face off against global competiion. Invest in eduation. This might seem like a no-brainer, but education costs money and the uneducated sometime do not have a voice in policy decisions. According to Reich, " Education should not be thought of as a privae investiment; it is a public good that helps both individuals and the economy. " Invest in infrastructure . This means road, public transportation, decent rents in places near to work, affordable utilities, education from age 3-23. Everything. America is behind on investing in these basic, business-supporting needs. Pay for these investments with higher taxes on the wealthy . According to Reich, " Between the end of World War II and 1981 (when the wealthiest were getting paid a far lower share of toalt nation income), the highest marginal federal income tax rate never fell below 70 percent, and the effective rate (including tax deductions and credits) hovered around 50%. But with Ronal Regan's tax cut of 1981, followed by George W. Bush's tax cuts of 2001 and 2003, the taxes on top incomes wer slashed, and tax loopholes favoring the wealthy were widened ." M ake the payroll tax progressive . Since payroll taxes are 40% of government revenues, shouldn't they be progressive, if that is an American value? Government could exempt the first $15,000 of income from these taxes for a start. R aise the estate tax and eliminate the “stepped-up basis” for determining capital gains at death . OUCH. This one would personally hurt me, but I have to admit that inherited wealth is not really fair. Taxing wealth that has not been personally earned is actually a very good idea--especially as far as adjusting for income inequality is concerned. Fist step : reduce the taxable threshold on inherited wealth from $5.34 million down to $1 million. How many people is that going to hurt? And those that it does "hurt"--can they afford it? Stepped up basis inequality : Here is how the current rule works: If my parents sell their house before they die, they are subject to tax on the increase in its worth since they bought it. But...if it is in their estate, it passes to their heirs at the value it had the day they died. The increase in capital worth that occurred while they were alive is NEVER TAXED. Is that fair? Constrain Wall Street : Resurrect the Glass-Steagall Act in full and restrict the size of banks--back to the 1975 level ideally. (Fat chance). Give all Americans a share in future economic gains. According to Reich, one thing that aggravates the inequality is that, " The richest 10 percent of Americans own roughly 80 percent of the value of the nation’s capital stock; the richest 1 percent own about 35 percent. " He advises that," As the returns to capital continue to outpace the returns to labor, this allocation of ownership further aggravates inequality. Ownership should be broadened through a plan that would give every newborn American an “opportunity share” worth, say, $5,000 in a diversified index of stocks and bonds—which, compounded over time, would be worth considerably more. The share could be cashed in gradually starting at the age of 18 ." RADICAL. Get big money out of politics. If corporations, with multi-thousand...and now multi-million dollar contributions to lawmakers allowed didn't control our political representatives, average Americans might have a voice. the Supreme Court's Citizens United decision made that impossilbe. But a Constitutional Amendment (according to Elizabeth Warren) or at least full disclosure (still possible under current Supreme Court direction, but not yet mandated by law) would be a step in the right direction. Is there a chance to reign in income equality? What are we willing to do to make that a reality? Source: " Robert Reich: 10 ways to close the inequality gap: The former secretary of labor on American society's single greatest obstacle -- and what we can do about it , " by Robert Reich, the Salon , May 13, 2014. F ollow up: What are some of the highlights of Robert Reich's resume? Are you inclined to listen to his ideas because of this resume, or reject...
  • "Chef": social media meets career path crossroads

    [View:http://community.cengage.com/GECResource/themes/gew/utility / :550:0] trailer of the movie "CHEF" from YouTube By most accounts, "Chef" is not a profound film, but it is an engaging story that coincidentally highlights several aspects relevant to business and career realities. Here are some of the highlights (spoiler alert): a chef is at odds with his boss: the boss wants a conservative menu; the chef wants to be creative the boss gives the chef an ultimatum a food critic uses Twitter to soundly criticize the chef the chef learns about Twitter from his son, but responds to a tweet in what he thinks is a personal environment, but what is in fact, the Twitter universe emotional outburst gets viral attention, leading to the end of the chef's employment career path crossroads: chef starts a food truck the best-of-all-possible outcomes evolves For business students, this stream of events produces some obvious questions: Can being fired be the best of all possible events? Is Twitter a profound and effective marketing medium for a restaurant? What are the regulatory requirements for setting up a food truck in various states or other jurisdictions? Is being an entrepreneur the answer to every worker's dreams of real fulfillment and financial success? Can financial backing realistically materialize in the way it does in this movie? However these questions are answered, "Chef" remains an engaging and inspirational advocate for the entrepreneurial spirit. Sources: "‘ Chef’ movie review: Jon Favreau makes a satisfying return to his indie roots , " by Michael O'Sullivan, Washington Post , May 15, 2014. F ollow up: What would you do if you were in a job where you felt your best qualities were not appreciated by your boss? What are the pros and cons of taking action--either for the character in the movie, or as you would imagine in your own situation? Are you a Twitter user? Have you ever been a part of a communication situation that has spiraled out of control? What examples from fairly current events can you cite where Twitter users did not understand the way that Twitter works...with unfortunate and unforeseen consequences?
  • Millennials trash privacy rights...and so do those controlling "big data"

    from blog.insideview.com " Your personal information is yours ." According to the LA Times, "A new report, written by a group led by White House counselor John Podesta , says that big data — the various entities that benefit from knowing all there is to know about you — is growing out of control." What does this mean? It means that sensors are everywhere: in our homes on city streets on wearable devices embedded in credit cards on our computers on our phones in our doctors' offices with our insurance companies at our places of business Business and government agencies are not going to be restrained from using this data if only "voluntary codes of conduct" are in place. Regulations and audited compliance will be the only things that protect us. "Consumer data" is personal data. NSA monitoring and widespread (but withheld) knowledge of the Heartbleed Virus means that businesses are not acknowledging personal rights. The business perspective might be: WE NEED this data to efficiently MARKET to our target demographics. But if Verizon is selling to third parties information about websites you are visiting and purchases you are making online, shouldn't you have a say? Or at least get a financial piece of the action? "We are concerned," says Jeff Chester, executive director of the Center for Digital Democracy, "that the principle is collect first and worry about privacy and consumer protection later." Maybe we should take the lead from Europe, where they set the line of scrimmage with this principle: "all people have a right to privacy." In U.S. law that right is only implied. Moreover, the EU has taken the following step: "In response to the NSA spying revelations, the European Parliament passed even stricter privacy rules in March. They still have to be approved by the European Union's 28 member countries, but represent the region's commitment to individual rights. The new rules wouldn't just give people more control over who can obtain their personal info but also grant a right to have online data erased — a so-called right to be forgotten." Wouldn't that be a right we could appreciate. Source: " Ownership of personal data still appears up for grabs , " by David Lazarus, the Los Angeles Times , May 6, 2014. F ollow up: Do you read the privacy disclosures before you agree to them? Why or why not? Reminder: have you changed your passwords in response to the Heartbleed virus? Remember: the passwords you have "out there" may be a ticking time-bomb. Would you value the European protections with respect to privacy? Would you like to be able to have your online data erased? Why do businesses support the loss of personal privacy? What are the pros and cons of this from a business perspective?
  • Accounting skills linked to moral high ground

    image by Javier Jaén from the article linked below Americans don't understand much about accounting and finance. Jacob Soll , a professor of history and accounting at the University of Southern California, thinks that this lack of cultural literacy in accounting may be partially responsible for the unfettered lack of morality and self control exhibited by financial institutions in modern life. He makes the point that when accounting skills were pervasive in society, people viewed keeping things in balance as a moral prerogative as well. In the heyday of the Dutch East India Company and the Medici financiers in Italy, portraits of businessmen were painted with the individuals actually doing accounting, or with their books of account in prominent display. The basis essence of double-entry accounting is fairness and equality in each business transaction. Debits = Credits. According to Soll, as a society we have left the understanding of these accounting basics concept to "specialists and computerized banking." He suggests, " If we want stable, sustainable capitalism, a good place to start would be to make double-entry accounting and basic finance part of the curriculum in high school, as they were in Renaissance Florence and Amsterdam ." It can't hurt. Source: " No Accounting Skills? No Moral Reckoning ," by Jacob Soll, New York Times opinionator , April 27, 2014. F ollow up: Do you want to get started on your accounting literacy? Check out this link from the Accounting Coach. Summarize what you learned. What is the historical significance of the Dutch East India Company?
  • What "the 1% don't want you to know": Paul Krugman on Thomas Piketty

    image is from an interview at BillMoyers.com, via VIMEO According to Paul Krugman 's analysis of newly observed changes in the structure of the U.S. economy, if you are not part of a family in which you will get a piece of inherited wealth--you and your own heirs are doomed. Not only will you never be rich--you and your family will become poorer with each generation...as those with inherited family wealth become richer. The focal point of the interview linked above between Bill Moyers and Paul Krugman is the new book by Thomas Piketty of the Paris School of Economics: Capital in the Twenty-First Century . In the book Piketty delineates how 67% of the increase in the top-heavy distribution of wealth that has occurred since the 1970's is the result of huge raises given to corporate executives. These huge salaries, combined with tax and other governmental policies in the U.S., have created the perfect storm for the formation of an oligarchical economic structure that has now become hard-wired and institutionalized. Krugman makes the additional point that wealth is now so concentrated that it is invisible to most of the public--the shear size of the fortunes are out of the realm of what the average person can understand in terms of wealth management. The impact of this wealth concentration on middle and lower income people in the United States is much more pronounced than it is in Europe because governmental policies in Europe create a higher standard of living for the poorest 20% by providing health care, higher minimum wage and other income and social service support. book image from amazon.com Krugman experienced reading Piketty's book as as "Eureka!" moment, as it showed how radically the economic structure had changed when analyzed over the long term. The book also pointed out that o nce wealth is held in the hands of the oligarchical few, it becomes nearly impossible to change the laws to tax the wealthy at a greater rate. The concentrated wealth has gained control over public policy as well. Can the situation be changed--to favor real competition and the growth of small businesses and the middle class? I'm going to read the book to find out... Source: " Bill Moyers w/Paul Krugman: “What the 1% Don't Want You to Know ” " by bobswern, the Daily Kos , April 18, 2014. F ollow up: According to Paul Krugman, what forces might counter the oligarchical situation which we now find ourselves in? [this is about 18 minutes into the interview] What is the "high r, low g" economy that Krugman refers to? According to Bill Moyers and tax analysts, how many times greater are top management salaries more than low income workers, based on recent tax data?
  • Researchers find USA is no longer a democracy; what does this mean for middle income business people?

    image from globalresearch.ca Many of us educated in the United States grew up thinking that "democracy" and "free markets" went hand-in-hand, and that both were "as American as apple pie." But a newly published research study, Testing Theories of American Politics: Elites, Interest Groups and Average Citizens , by Martin Gilens of Princeton and Benjamin I. Page of Northwestern University, makes the case that the U.S.A. is no longer a democracy. Their findings, in a nutshell: " Comparing the preferences of the average American at the 50th percentile of income to what those Americans at the 90th percentile preferred, as well as the opinions of major lobbying or business groups, the researchers found out that the government followed the directives set forth by the latter two much more often ." In other words, these groups have influence over public policy, regulation and law-making: Americans with income of 90% and above major lobbying groups major business groups In fact, Gilens and Page found that, " the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy ." If there are few major employers, or power is concentrated in the hands of the few, what is the mechanism for paying adequate wages and salaries to workers and middle managers? There is no incentive to pay fair salaries if the number of employment options has diminished, and the regulatory bodies are controlled by the companies that are supposed to be regulated. There are an increasing number of op-ed pieces, research papers, and books addressing the issues of income inequality and the diminished existence of truly free markets. Both have affected the economy and business practices in the United States. Sources: " Princeton Concludes What Kind of Government America Really Has, and It's Not a Democracy ," by Tom McKay, PolicyMic , April 16, 2014, citing an article to be published this fall in Perspectives on Politics . F ollow up: Do an internet search for "oligarchy" AND "free markets". Summarize the results of your search. According to the article by Tom McKay (or the research paper itself), what are some specific implications of Gilens' and Page's findings for middle-class business people? Play the devil's advocate: why is an oligarchy good for American business?
  • One really good bank for small businesses; Where is YOUR money?

    image from www.cleveland.com What makes a bank a "good bank" from the standpoint of supporting business growth and providing excellent service to customers? According to Steve Steinour, chairman and CEO of Huntington Bank: " Small businesses are the foundation of our Main Street economies throughout the United States. These businesses generate two-thirds of all of new jobs and help keep our neighborhoods healthy. Huntington is committed to supporting small-business growth as a key way to strengthen our communities as they continue through the economic recovery." Huntington Bank--a regional bank in Ohio--is the 33rd largest bank in the U.S. and has branches in Ohio, Michigan, Pennsylvania, Indiana, West Virginia and Kentucky. Nevertheless, Huntington Bank will probably be the number one small-business lender in the United States this year. For the first six months of federal fiscal year 2014 (which ends June 30, 2014), Huntington has the largest number of SBA loans. The classic business model for a traditional bank (as opposed to an investment bank) is to take depositors money, on which one interest rate is paid, and loan it out to regional businesses at a higher rate, thereby generating a profit. Investing in local businesses is the way to build strong business communities. On a side note, first quarter profits were down for Huntington, so a buy-back of shares is planned to help investor returns. First-quarter profits were $149 million, a declined of $4 million from a year ago. Per share, profits were unchanged at 17 cents. Sources: " Huntington Bank on track to become nation's largest small-business lender, but profits dip in first quarter, " by Teresa Dixon Murray, the Plain Dealer , April 16, 2014. F ollow up: What does "pent up demand" mean? Give another arena where this phenomenon has been observed. Where is YOUR money? In a mega-bank like Bank of American or Wells Fargo? Or in a bank with high numbers of small business loans? Watch the film " It's a Wonderful Life. " How does the Savings and Loan depicted in that film exhibit the characteristics of a bank that is important to small businesses? How does buying back shares help the returns for the bank's investors (as opposed to the banks depositors or creditors)?
  • Lobbying community leaders to work against their communities

    Wouldn't millions of Americans be happy to have the choice to use pre-filled-in tax returns? Even according to the IRS, tax filing is expensive: Why would religious leaders, small town politicians, and a state NAACP official write letters to newspaper editors and op-ed pieces that spoke against such an option. The arguments they used was that the option would hurt low-income people and create a conflict of interest for the IRS, who could misuse their power against vulnerable taxpayers. As it turns out, the indignant individuals arguing against the implementation of the super-simplified tax system had been lobbied by individuals like Emily Pflaster, who works for Intuit's public relations firm, JCI Worldwide . Intuit makes the tax preparation software called Turbo Tax . Intuit's public relations reps did not point out some of these particulars, which were articulated by ProPublica : return-free filing would allow million of taxpayers to do their returns in minutes returns could be filed for free the IRS would use information that is already submitted by banks and employers...and taxpayers could review the items and make adjustments this program has been endorsed by former President Reagan and President Obama Also, according to ProPublica's research, Intuit spent over $2.6 million last year on lobbying. Sources: " TurboTax Maker Linked to 'Grassroots' Campaign Against Free, Simple Tax Filing ," Liz Day, ProPublica via Mother Jones , April 14, 2014. F ollow up: Describe the difference between "Grassroots" campaigns and "Grasstops" campaigns Would you take advantage of a pre-filled-in tax return option? Why or why not? Who are the ideal candidates for this option?
  • SAT scores wanted by employers in hiring process

    chart published in the Wall Street Journal Did you think that once you got into the college of your choice that you could forget about your SAT scores? As it turns out, they might follow you from job search to job search. What employers are looking at these scores? McKinsey & Company , Bain & Company , Goldman Sachs . Even though performance on ACHIEVEMENT tests rather than APTITUDE tests (like the SAT) is a better predictor of success, the differences aren't enough to make employers develop their own tests. It is easier for employers getting thousands of applications to use the usually-available SAT test score to weed out candidates from these large applicant pools. And according to the NYT article, the SAT " measures what psychologists call 'g,' or general mental ability — how well a person might respond to an unspecified challenge. In this age of rapidly changing technology and constantly upgraded skills, 'g' may be a better predictor of success than expertise in a specific software package . " Sources: " How Businesses Use Your SATs ," by Shaila Dewan, the New York Times , March 29, 2014. F ollow up: What do you think about the pros and cons of using SAT scores to weed out candidates for employment? What did the article say were reasons that some employers do NOT use SAT scores in their hiring decisions?
  • Too late for Obamacare?

    image from healthcare.gov website Many individuals who have not been lucky enough to have parent-sponsored or employer-sponsored health care--as well as uninsured individuals--procrastinated when it came to signing up for insurance under the Affordable Care Act (Obamacare). Some of the hesitation was due to the technology failures, but some of it was due to a mis-perception about where one might land in the pie-chart below. The big fear, of course, is that one would be unable to get a good deal on new insurance, and would fall into the 3% "potential losers" category. In any event, the "deadline" for enrollment was March 31, 2014. But there might be ways for those who did not manage to obtain coverage to still be enrolled, according to an Associated Press article. image from offeringhope.org Here are some possibilities to obtain a second chance to sign up, or avoid a fine for being uninsured: TAKE ADVANTAGE OF THE GRACE PERIOD : If you started to enroll by March 31, but couldn't finish, have until April 15th to complete an online application or until April 7th to turn in a paper application. USE A SPECIAL ENROLLMENT PERIOD : Special 60-day enrollment periods are being considered by the federal call center (800) 318-2596 and by the state marketplaces. Some of the special extension are being granted for emergency hardships, for example: bad weather, domestic abuse, illness, errors by advisors and insurance companies. These special enrollment periods also open up throughout the year for life events (job changes, marriage, divorce, parenthood). SIGN UP FOR MEDICAID : There is no deadline for those eligible for Medicaid to sign up--and now Medicaid is open to adults making less than $16,100 per year, as well as families with children. BUY INSURANCE OUTSIDE THE GOVERNMENT MARKETPLACES : Even if you can't get the government subsidies this year, you can still buy insurance privately. Obamacare means you can't be refused for pre-existing conditions, so it will be more "worth it" than it was before. PLAN AHEAD FOR THE NEXT ENROLLMENT PERIOD : It starts November 15, 2014 and it runs for 3 months. Do your research early! Sources: " Putting Rate Shock Into Perspective ," by Joan McCarter, The Daily Kos , October 31, 2013. " It's STILL not too late to sign up for Obamacare ," by The Associated Press via blackamericaweb.com , April 1, 2014. Follow up: What is one of the hurdles that people wanting to take advance of the grace period or special enrollment periods have to jump through? Will proof be required, or is it on the "honor system"? Explain the pros and cons of this. In an ideal world, how would health insurance be handled? Do some research and provide support for your answer.
  • IRS says Bitcoin is not currency, it is "property"

    [View:http://community.cengage.com/GECResource/themes/gew/utility/ :550:0] video from BizJournals Bloomberg Even though Bitcoin has an internet presence as a currency, the Internal Revenue Service sees it differently. This means that transactions in Bitcoin have to be reported on tax returns in a way similar to a stock investment. The plus side is that the ruling by the IRS gives Bitcoin more legitimacy. The downside is that tax consequences have to be a consideration in all Bitcoin transactions. The rationale used by the IRS in its determination was that Bitcoin "does not have legal tender status in any jurisdiction." What this means to an individual possessing Bitcoin is that a gain or loss between the date acquired and the date spent now has tax consequences...and there are vastly different consequences for short term transactions (taxed at "ordinary rates"--up to 39.6%) and long term transactions (taxed at "capital gains" rates, which are far less--20%). This may cause a slowdown on transactions in Bitcoin, as holders might "hoard" the currency to achieve "capital gains" rate status. The ruling by the IRS has shifted Bitcoin from an unregulated status to a traditional investment asset, at least for US taxpayers. For some Bitcoin enthusiasts, this is definitely unfavorable. Source: " I.R.S. Takes A Position On Bitcoin: It's Property ," by Rachel Abrams, New York Times , March 26, 2014. Follow up: What do you think the IRS ruling will have on the use of Bitcoin as an intermediate or virtual currency? Do you see the ruling as a positive or negative event for Bitcoin? If you were (or are) a Bitcoin enthusiast, what actions would you take with respect to the status of your investment as it now stands?
  • Long-term care insurance hikes rates 90%

    image from www.planaheadny.com The above chart represents nursing home costs increases, which are probably at the root of the rate hikes charged by private insurers. If you are a student, you are probably more interested in the health-care options of Obamacare than in long term care insurance. But because your parents are more likely to be drawing on long term health insurance, its cost and viability might be of some concern to you. The main "bright line" of sustainability and fairness separates the positions on long term care along the same line as it does on general health care: Does the private insurance marketplace provide better coverage per dollar, or would a government-sponsored "single payer" plan be better? One couple with private long-term insurance, provided by John Hancock, was recently informed that their premiums would almost double from last year to this year: Up to $3,714.38 for the husband and $4,642.97 for the wife. On a percentage basis, this represents a 90% rate increase. Nothing has changed about the couple themselves, but the marketplace of nursing care costs and the possibility of future claims has caused the insurance company to hike the rates. To put it more clearly: this couple, the Holtzmans, have been paying premiums for 10 years. They have never made a claim. Still, their premiums have increased this much. " This seems unconcionable ," Holtzman said. Would this happen with single-payer, government-sponsored insurance? Probably not. We have not seen these kinds of spikes in Medicare insurance payments, and that is the currently operative single-payer plan that is in place in the U.S. What does this mean in terms of risk management on an individual level? Source: " Feeling ill effects of private long-term care insurance ," by David Lazarus, The Los Angeles Times , March 25, 2014. Follow up: Would you buy long term care insurance? Do you want your parents to be covered by this insurance, or are you willing to take over their care if they become disabled for a long period of time?
  • Unpaid Internships cartoon: Not Funny

    part of a graphic story by Matt Bors, published by Upworthy Here is another story about unpaid internships. It seems as though unpaid internships have gotten out of hand. In 1992, 17% of post-college positions were unpaid; now it is 50%. Many interns do work that for-profit businesses usually need to pay people to do. They are profiting from unpaid labor. The argument made by corporations (and sometimes college counselors) is that an unpaid internship can lead to a job. But, check out these statistics: worked an unpaid internship....and got a job: 37% did NO internship....and got a job: 35% worked a PAID internship...and got a job: 63% So, it looks as though the employers willing to pay are more willing to employ. An organization now working to end unpaid internships is FairPay Campaign . Source: " Half Of Interns Are Victims Of This Illegal Act After College. It's Really Not OK .," by Matt Bors, edited by Joseph Lamour, Upworthy , posted on Facebook , March, 2014. Follow up: What is the elephant in the room regarding economic class and unpaid internships? What are the far-reaching consequences of the increase in unpaid internships related to this issue?
  • Borrowing money from your boss...good idea or bad?

    image from blog.financialsecurity.org Let's say you have an sudden financial crisis. Your car needs an unexpected, major repair...or your dog needs a few thousand dollars worth of surgery--and you don't have the cash. If you can't reasonably take on (additional) credit card debt, if you don't have family members to ask, or you don't have a major asset such as a house to borrow against, where can you turn for a loan? Well, there's the "workplace loan." At first glance, it might seem like a good idea. Get a cash advance from your employer and pay it back as a payroll deduction. The "messy" part of setting up the loan contract can now be handled by middlemen, such as Think Finance's product called " elastic ." Through this vehicle, loans of $200 to $1000 can be made...with a fee of 5% of the loan amount, plus interest. Another company, FairLoan , offers a similar service...at interest rates ranging from 18% to 30% plus a 5% loan origination fee. This sounds pretty pricey to me. The set-up is starting to remind me of historical " company towns ," where employees seemed to be taken care of by companies that built housing around coal mines or factories and provided stores and short term credit. But what resulted over time were employees that became so indebted to their employers that they could not move or take any stand against company policy. Also, the employer controls the interest rate and fees. The only other source of emergency loans for those with limited credit resources is the " payday lender ," which often charges up to 300% on an annual basis. image from forums.debtcc.com Source: " Take Out A Loan--From Your Employer ," by Gigi Douban, Marketplace American Public Media, March 21, 2014. Follow up: What is a "payday loan"? What are the pros and cons of this type of loan? What unforeseen consequences might be the result of an employee owing money to its employer, in terms of workplace events? How can a third-party facilitating the loan mitigate these possible consequences?
  • Coffee convenience bad for the environment (and expensive)

    image from www.coffeemarvel.com As a committed coffee enthusiast, I periodically pine for a Keurig single-service brewing machine. The problem is, the little cups that that machine requires are not only expensive--they are bad for the environment. Still--the convenience and the visual artistry of it all does speak to me. I have to admit that the first time I tried to use this machine--at a motel--I had no idea how to manage it, and I made every mistake, creating a colossal mess. Now, however, I am an expert, and each morning--as I am either making my pot of home brew or walking the 1/2 a block to my neighborhood coffee house--I fantasize about what it would be like to have one of those splendid little single-brew machines. I'm not alone. In 2008, single-pod coffee sales were $132 million; in 2013, they were $3.1 Billion. But there are issues. First, to properly recycle the remains of the pods means separating the aluminum top, from the plastic pod, from the wet coffee. Do users really do that? Probably not. Moreover, the #7 plastic that almost all of the K-cups are made from is not recyclable. In addition: there are a lot of tiny cups to recycle. To put it in perspective, the 8.3 billion cups produced last year by Green Mountain for Keurig machines would circle the earth more than 10 times. For now, I'm sticking to home-brewed or my Tall red-eye half-caf dark in a personal cup at my local coffee place. Source: " Your Coffee Pods' Dirty Secret ," by Maddie Oatman, Mother Jones , March 19, 2014. Follow up: Make a chart comparing the cost of a cup of coffee, 5 cups, 10 cups, 20 cups, 100 cups and 365 cups brewed vs. K-cup. What can you conclude from this analysis? What are all of the environmental and health issues of these cups, according to the article?
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