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. She attended the University of Michigan and Wayne State University.
Above, an explanation of monopolies in the US, from testtube on YouTube
Monopolies are not viewed as beneficial for the American economy and (voting) consumers by the U.S. Congress. Nevertheless, monopolization remains the ultimate aim of many large businesses. Recently, Comcast made moves to take over Time Warner Cable, and this plan was opposed by many in Congress.
More details about the Comcast merger are described below by CNN:
additional information: hour-long explanation of Comcast-TWC merger issues
But now it looks as though the Comcast-Time Warner Cable merger is not going to happen, at least in the foreseeable future:
Sources: "LA weighs in on big cable merger," by Meg James and Saba Hamedy, the Los Angeles Times, April 15, 2015. "Europe is Said to be Set to Charge Google in Antitrust Case," by Mark Scott and James Kanter, New York Times, April 14, 2015."Comcast-Time Warner Merger DEAD," the Young Turks, April 24, 2015.
The Universal Service Fund (USF) charge has been around for a while...but hidden in the fine print of each of our phone bills. The fees currently amount to an average of $3 per household. The recent issues surrounding "net neutrality" have brought the fees into the public limelight. The the USF charge--set up to provide affordable telecommunications services in underserved areas such as rural and inner city communities--might also now be applied to internet provider services as well. (These are referred to as "broadband" services in the article).
I'm not sure why the question is being asked, since I know that I have been paying PLENTY for internet services for years. The net neutrality ruling basically says that I can't be gouged for even higher prices (without a concomitant increase in service quality). Here is a graphic from the Los Angeles Times that illustrates the fee structure currently in existence:
My take on the graphic is that the fees exceed the costs already. Hmmm.
Sources: "FCC's net neutrality rules open door to new fee on Internet service," by Jim Puzzanghera, the Los Angeles Times, April 9, 2015.Universal Service Fund Charge, Wikipedia.
The Chicago Cubs' Kris Bryant is a fan favorite...but he was not part of the opening day roster at Wrigley Field for this year's baseball season. A clause in the Major League Baseball (MLB) contract says that a player has to be on the major league roster for 172 days out of the 183 day season in order for it to count as a year of play for service credit. Baseball "owners" can keep a player under contract an additional year if they hold a player back in the minors for the first eleven days of the season. And this is what the Cubs did to Kris Bryant.
Of course, what they said was that Bryant "wasn't ready" for the intense extravaganza that an opening day baseball game can be. It wouldn't be legal to just be manipulating his paycheck and the club's ownership rights. Nevertheless, the situation with Bryant highlights some of the issues that will be on the table when the MLB collective bargaining agreement (CBA) comes up for renewal next year. Some of the issues include:
Meanwhile, Cubs fans hope to see Kris Bryant playing ball this year, and helping the team win the pennant.
Source: "Is Kris Bryant a Turning Point for Baseball?" by Mary Pilon, the New Yorker, April 28, 2015.
Have you played the game Monopoly? Some features of the game include:
Believe it or not, this was not the intent of the game's originator, Elizabeth (Lizzy) Magie, who originally developed the game, The Landlord's Game, as a teaching tool. She wanted people to understand how awful and destructive it was to be a tyrant of a landlord, and to experience how the poor suffered at the hands of wealthy, greedy property owners.
Her original game had two versions:
Lizzy Magie thought that folks would find the first version more enjoyable. Nevertheless, as chronicled in Mary Pilon's book, The Monopolists: Obsession, Fury and the Scandal Behind the World's Most Popular Game, it was Charles Darrow's version of the game, sold to Parker Brothers, that became the one we know today.
Actually, playing the game is an effective--albeit time-consuming and sometime painful--way to learn about money, debt and wealth accumulation.
Source: "Is Monopoly Anti-capitalist propaganda?" by Evan Puschak, for Seeker Daily, March 7, 2015.
The state of California has a financial literacy campaign in place, and Project Money is a cornerstone for that campaign. It is offered to the public at large, but is directed at people who are at the beginning stage of knowledge about financial well-being.
Business majors may find that these basic tools as a good starting point for building their own program for financial self-sufficiency.
Source: Project Money
Making money without working is a wage-earner's "dream come true." Here is the fantasy, which many middle-income workers try to actualize through home ownership:
This scenario depends on these factors:
The doomsayers in the article and video compare home ownership to a Ponzi scheme. They focus on the reality of the cyclical bursting of the housing price bubbles, saying that any ratcheting up of housing prices will eventually end up with the last-to-buy homeowners being stuck with an asset they cannot sell. Investors in Ponzi schemes, once the scheme is unmasked, also have an asset that has far less (or negligible) underlying value.
Countering this argument are the successes of many homeowners in paying off their mortgages, leaving them with low-cost housing in their retirement years, when income sources may be lower than they were while they were working. They also have the alternative of selling the appreciated assets and purchasing an annuity for an additional revenue stream.
Source: "Ponzi Property: the neoliberal delusion of home ownership," by Kean Birch, Roar Magazine, March 22, 2015.
Gravity Payments' CEO, Dan Price, took a massive pay cut in order to begin implementing a plan to pay all employees a minimum wage of $70,000 per year. Why?
“The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd,” he said.
The pay restructuring is being phased in over 3 years...$50,000 starting now, then $60,000 next year and $70,000 the year after that; other increments are also in place.
The $70,000 number was based on happiness research. Higher pay correlates with higher happiness up to the pay rate of $75,000, after which there is no positive correlation between pay rate and happiness. In the following video, CEO Dan Price makes his announcement:
Source: "One Company's New Minimum Wage: $70,000 per year," by Patricia Cohen, New York Times, April 13, 2015.
The above graphic represents a more positive outlook (in the United Kingdom) than reported in the U.S. survey below
Are you thinking about a job in finance? Consider this: a recent survey by the Options Group (executive search) found that job satisfaction among Wall Street finance workers was low.
The survey measured satisfaction along these four parameters:
These were the results:
Those that were more satisfied tended to be the executives, traders, and investment bankers. Those least satisfied were those that worked in support areas--risk management, compliance and human resources. These findings dovetailed with anecdotal evidence of Wall Street job dissatisfaction.
Something to consider...
Source: "Few in finance are happy in their jobs, survey finds," by Dean Starkman, the Los Angeles Times, April 13, 2015.
image from lady advisor.com
The U.S. Labor Department has proposed rules that will require financial advisors to actually act in the best interests of their clients--people trying to save for their retirement.
About $7 trillion in investments (defined contribution plans of several types) would be covered. These rules would update ERISA (the Employee Retirement Income Security Act of 1974). When ERISA was enacted, it focused on "defined benefit plans," which are far more beneficial to employees--and were more the norm before the demonization of pension benefits by corporation spinmeisters.
The newly proposed rules WILL BENEFIT THE JOB-HOPPING MILLENNIAL the most--even though they are about retirement (often of little interest to young adults). Here's why employees with several jobs on their resume are at risk, according to the New York Times:
"Investors are particularly vulnerable when they roll over the savings they have accumulated in 401(k)-type retirement accounts, which are overseen by their employers, into individual retirement accounts (IRAs). Brokers who are advising customers on that transaction do not necessarily have to act in the customer’s best interests and may be influenced by higher commissions or other incentives the firm has put in place.
As a result, investors’ money may not end up in the most appropriate investment, potentially costing them thousands of dollars over many decades."
See "Are your Retirement Savings at Risk?" for further explanation, by the U.S. Department of Labor, for why these new regulations are needed.
Source: "U.S. Plans Stiffer Rules Protecting Retiree Cash," by Tara Bernard Siegel, New York Times, April 14, 2015.