The 5 Best and 5 Worst Regulations in Dodd-Frank
This article was originally published by the Fiscal Times on Tuesday, July 19, 2011.
By Katherine Reynolds Lewis, The Fiscal Times
Next to health care reform, no other recent legislation has caught as much heat as financial regulation. Born of the subprime housing mortgage scandal and financial meltdown three years ago, the Dodd-Frank legislation provokes either glowing praise from consumers and reformists or angry diatribes from industry officials and Republican lawmakers.
In the year since President Obama signed the financial regulatory overhaul into law, the debate has largely shifted from the halls of Congress to the offices of the regulators who are writing some 250 new rules and delivering reports and guidance ordered by the law.
But Republicans and their industry allies are still pressing for changes to dilute the impact of the legislation. Their opposition forced Obama over the weekend to abandon plans to nominate former Harvard professor Elizabeth Warren, a harsh critic of the financial industry and darling of liberal groups, to head a new Consumer Financial Protection Bureau, and instead choose former Ohio attorney general Richard Cordray.
As the new financial regulatory landscape begins to take shape, supporters of the legislation crafted by former Sen. Christopher Dodd, D-Conn, and Rep. Barney Frank D-Mass., say the government and industry are better positioned to withstand a new crisis. "The reforms put in place in Dodd-Frank will help to provide for a more resilient and strong financial system that can help to grow the economy and create jobs," said Michael S. Barr, law professor at the University of Michigan.
Detractors claim the measure actually hurts the already troubled economy and job growth, leaving the financial system less stable than it was in 2008. "While it may have increased transparency, it has increased the amount of uncertainty. We've created a new cost of capital, called regulatory risk," said Rep. Randy Neugebauer, R-Tex., chairman of the House Financial Services Subcommittee on Oversight and Investigations.
With Dodd-Frank's one-year anniversary this Thursday, The Fiscal Times assessed the best and worst effects of the landmark law, for consumers and business .
The 5 Best According to Consumer and Reform Advocates
7 Myths That Could Wreck Your Retirement Savings
This article was originally published by the Fiscal Times on Tuesday, July 19, 2011.
By Katherine Reynolds Lewis, The Fiscal Times
Despite the sluggish recovery, Americans are starting to feel a little better about their prospects. But that may not be good news for retirement savings. While the recession shocked us into boosting our near-zero savings levels, we’re already being less frugal.
After climbing to 7.2 percent in the second quarter of 2009, the U.S. savings rate dipped to 5.1 percent in the first quarter of this year, the lowest level since the financial meltdown, according to the Bureau of Economic Analysis. Meanwhile, the average 401(k) balance hit $74,900, according to Fidelity Investments. That’s only enough to cover about three years of retirement expenses.
Are you ready for retirement? Investment advisers like to trot out handy rules for savings plan. But some of this conventional wisdom makes it easy to slide off the thrifty path. Here are seven myths about retirement that can trip you up.
Myth No. 1: Max out your 401(k) contribution and you’re set.
The ‘Warren Report’ - GOP Attacks Consumer Agency
This article was originally published by the Fiscal Times on Thursday, May 19, 2011.
By Katherine Reynolds Lewis
Even before it formally opens its doors this summer, the new federal agency created to protect consumers from unscrupulous financial industry practices is coming under withering attack by Wall Street and Republican lawmakers. And despite a months-long charm offensive by Elizabeth Warren, the former Harvard professor and chief architect of the new agency, Warren has been unable to win over many of her critics on Wall Street and within the GOP.
Bills pending in the House would curb the power of the Consumer Financial Protection Bureau, while 44 Republican senators have promised to block confirmation of a director for the new agency unless those restrictive measures are approved.
With Democrats in control of the White House and the Senate, but not of the House, the legislation is unlikely to become law. But between the Senate GOP ultimatum and financial industry criticism of Warren, few believe she could be confirmed if President Obama nominates her as the director.
As a result, Obama may have little choice but to name Warren as director during a congressional recess in order for the agency to have someone at the helm when it begins to wield regulatory power this summer. Warren currently is overseeing the creation of the consumer protection bureau as a special assistant to the president. If she is made director through a recess appointment that would all but assure a politically bumpy future for the agency.
The Senate GOP pledge "creates a climate that is ugly. That is an in-your-face kind of attack that I haven't seen in 20 years in Washington," said Ed Mierzwinski, director of the consumer program at the advocacy organization U.S. PIRG. "Elizabeth Warren wants to come in and make that marketplace fair. Wall Street would prefer to decide on their own how to make money."
Stripper ‘Consultant’ Strikes Back against Boss
This article was originally published by the Fiscal Times on Thursday, March 31, 2011.
By Katherine Reynolds Lewis
When Ramona Cruz worked as a stripper at three different clubs in Massachusetts, her bosses dictated everything, from her skimpy attire, hair and makeup to the long hours she performed on stage and when she could participate in more lucrative private dances with customers.
Because she was eager for a job, Cruz agreed to work for no wages or benefits, just tips from her customers. Moreover, she had to share part of her tips with the club's other workers. Last fall, Cruz was stunned to learn from a friend that by law she should have been treated as an employee entitled to a minimum wage, overtime and other protections.
Instead, the club owners had gotten around federal and state labor laws for over a decade by classifying her and other exotic dancers as “independent contractors” who were entitled to none of those benefits. Last September, Cruz, 35, the mother of an eight-year-old girl, sued to recover the lost wages, tips and fees she was required to pay to work in the clubs, in three pending class-action suits challenging the classification of strippers as independent contractors.
"You don't feel like an independent contractor because you have to follow all their rules," Cruz, who now works as a home health aide in Boston, told The Fiscal Times. "We had to be there or we got late fees. Whatever they said went."
Economy Grows, But Jobs Don’t
This article was originally published by the Fiscal Times on Thursday, March 24, 2011.
By Katherine Reynolds Lewis
Of all the woes of the Great Recession, one anomaly is the most troubling: How can the economy be growing while unemployment remains so high? The breakdown in the historic relationship between GDP growth and jobs has confounded experts ranging from White House Chief Economist Austan Goolsbee to Cato Institute scholar Mark Calabria.
Under the principle known as Okun's law, named for Arthur M. Okun, an economist who worked for Presidents John F. Kennedy and Lyndon Johnson, a 3 percent increase in U.S. gross domestic product should lead to a 1 percent drop in the unemployment rate. Yet as the U.S. economy rebounds from the latest downturn, the jobless rate remains stubbornly high — as much as 2 percentage points higher than economic theory predicted. Possible explanations include overly cautious employers, a lack of worker mobility and simple measurement error.
New Tax Laws Make Filing a Bureaucratic Nightmare
This article was originally published by the Fiscal Times on Friday, March 18, 2011.
By Katherine Reynolds Lewis
Taxes are never fun, but this year is proving especially painful. Not only did the Internal Revenue Service fail to finalize all its systems and forms until mid-February, some popular tax breaks expired in 2010.
It wasn’t until mid-December that Congress reached a compromise for legislation to extend tax cuts enacted under President George W. Bush that were set to expire at the end of last year. As a result, the IRS wouldn’t accept tax returns filed electronically until mid-February, as it updated its tax guidance, instructions and software, and many tax preparers waited until that point to begin work on clients' returns.
The delay was unavoidable because of the late action by Congress, said IRS spokesman Eric Smith. "Some returns could not be actually sent electronically until mid-February."
This year's headaches reflect the increasingly complicated tax code and contentious debate over tax legislation, which leads to last-minute legislation with short-term compromises. In the near term, lawmakers struggling to agree on a budget -- and pare a projected $1.6 trillion deficit -- are in their fifth month of stop-gap measures to keep the government operating. In the long term, they hope to reduce the federal debt and deficit without sending tax rates through the roof or eliminating cherished federal programs.
"We've had so many changes in tax law in the last 18 months that people are genuinely confused about what the rules are," said Joseph McLeod, tax partner in the Raleigh, N.C. office of Cherry, Bekaert & Holland, a certified public accounting firm. "Tax-return preparation has gotten more lengthy, more complicated. It takes more of our time, so we have to bill more at the very point in time when people want to pay less."
Investors Beware: Return to Stocks May Be Too Late
This article was originally published by the Fiscal Times on Monday, March 7, 2011.
By Katherine Reynolds Lewis
Investors are worried about the federal deficit, still-high unemployment and rising oil prices, which are raising the specter of inflation. But they’re buying stocks, afraid of being left out as major indexes rise to their highest levels in nearly three years. They may be too late.
Individuals tend to sell out of the market near the bottom and buy back close to the top — realizing their losses and missing out on potential gains, experts say. After the flash crash in May 2010, massive amounts of money flowed out of stock mutual funds: $82.3 billion in the eight following months, according to Chicago-based research firm Morningstar. The Standard & Poor’s 500 index went on to double from its low in March 2009, the fastest such increase in the index's history.
The financial crisis and Great Recession shook Americans' confidence in the markets, and investors withdrew $216 billion from stock mutual funds from 2007 through 2010, according to Morningstar. "This was fundamentally different from past bear markets," said Morningstar analyst Kevin McDevitt. "There are a lot of people who felt they didn’t want to play this game anymore and felt the whole system was rigged against them." The S&P is still down about 5 percent from the start of 2007.
Sentiment started to change this January, when $15.8 billion flowed into U.S. equity funds, the biggest January since 2004, though small relative to the $3.5 trillion in overall assets held in the funds. A new Wells Fargo-Gallup poll found that retail investors remain wary of investing in stocks, but the market's climb is pulling many back in. The federal budget deficit — tied with unemployment — is the top worry of individual investors, a concern for 71 percent of those surveyed.
"It's shocking to me that the federal budget deficit would rank ahead of energy prices, ahead of access to credit, ahead of the questions that have dominated the media," said David M. Carroll, a senior executive vice president at Wells Fargo. "It's food for thought for our representatives in Washington."
State Debt Crisis: Preview of Federal Pain to Come
This article was originally published by the Fiscal Times on Monday, Feb. 28, 2011.
By Katherine Reynolds Lewis
As Illinois lawmakers wrestle with a $13 billion budget deficit – the equivalent of half the overall budget for the year – they are finding that simply keeping up with the interest payments on the debt is an onerous task. This year’s price tag: a crippling penalty of more than a half-billion dollars on debt issued in 2010.
Nevada, California and Texas are struggling with deficits as large as 44 percent, 29 percent and 32 percent, respectively, and these and other states will feel the impact of rising borrowing costs. So far, the solutions from both Democratic and Republican governors, including proposals for sharp cuts in government workers' benefits and a scaling back of bargaining rights, have sparked protests in Wisconsin and Ohio.
Beyond the grim implications for cash-strapped states, this scenario offers a preview of the pain that might befall the federal government if investors in U.S. Treasuries start to demand a premium because of uncertainty over the federal fiscal situation. Already, the Obama administration's budget proposal for 2012 projects that interest payments on the national debt will quadruple over the next decade, from $207 billion in 2011to $844 billion in 2021. Interest on debt held by the public is estimated to climb from 7.7 percent of total federal outlays in 2011, to 15.8 percent in 2016. If interest rates rise, those debt costs will climb even higher.
"If we don’t get a handle on our fiscal situation, investors will grow more nervous and demand a higher interest rate to buy our debt," said Mark Zandi, chief economist at Moody's Economy.com. "That, combined with deficits, will start to gobble up our budget and resources and ultimately will swamp us, much like rising interest payments swamped a number of European countries."
Homeowners Exhale as Fed Reverses Course on Mortgages
This article was originally published by the Fiscal Times on Tuesday, Feb. 15, 2011.
By Katherine Reynolds Lewis
Millions of homeowners facing foreclosure dodged a bullet when the Federal Reserve Board changed course on proposed changes to mortgage rules, instead deferring to the nascent Consumer Financial Protection Bureau in the first skirmish over regulatory authority under last year’s sweeping financial reform legislation.
A coalition of consumer groups took the unprecedented step of asking the Fed to withdraw two sets of rule proposals on consumer mortgages and turn them over to the new bureau created by the Dodd-Frank Act. In a brief statement this month, the Fed cited more than 5,000 comments received on the matter and said it plans to wait for the bureau, which will take over authority on consumer mortgage rules in July 2011.
If the Fed had finalized the rule proposals, it would have eliminated a longtime consumer right to void a mortgage under certain circumstances, one of the best tools homeowners have to halt foreclosure. Consumer advocates say the rule also would have opened the door to risky reverse mortgages, and would allow changes in advertising that would permit false statements.
Nearly 11 million Americans owe more on their homes than the properties are worth, and 3.4 million homes have been lost to foreclosure since the recession began, according to CoreLogic. The foreclosure crisis has spawned accusations that lenders used improper documentation and procedures to seize homes, prompting investigations by state attorneys general and members of Congress, as well as lawsuits estimated to end up costing banks as much as $52 billion.
The Fed’s proposed rules "would have been disastrous for homeowners … At the time of the worst foreclosure crisis in anyone's memory, they were pulling the rug out from the most vulnerable consumers this law intended to protect," said Nina Simon, director of litigation at the Center for Responsible Lending, which filed joint comments with the National Consumer Law Center, the National Fair Housing Alliance, Consumers Union, the National Community Reinvestment Coalition and other consumer groups.
Treasury Plan to Wind Down Fannie and Freddie
This article was originally published by the Fiscal Times on Friday, Feb. 11, 2011.
The Obama administration released a white paper proposing the gradual winding down of Fannie Mae and Freddie Mac and overhauling the mortgage securities market.
By Katherine Reynolds Lewis
The Obama administration Friday laid out an ambitious vision for U.S. housing finance reform, in which the government gradually diminishes its role and private investors return to the mortgage securities market.
But the plan doesn't specify how to overhaul or eliminate Fannie Mae and Freddie Mac, instead setting out three possible options for the mortgage giants, which have been operating under government conservatorship since September 2008. Under the landmark Dodd-Frank financial overhaul legislation approved last year, the Treasury Department was supposed to present to Congress by Jan. 31 a report on the government-sponsored enterprises (GSEs) to help lawmakers write legislation to reform the agencies.
"This is a plan for fundamental reform — to wind down the GSEs, strengthen consumer protection, and preserve access to affordable housing for people who need it," said Treasury Secretary Timothy Geithner in a statement. "We are going to start the process of reform now, but we are going to do it responsibly and carefully so that we support the recovery and the process of repair of the housing market."
At stake are the health of the real estate market, economic growth and, some argue, the future of the 30-year fixed-rate mortgage. The challenge for policymakers is to attract private investors back into the mortgage market while retaining the benefits that Fannie and Freddie established — a liquid secondary mortgage market and greater access to homeownership. The administration and lawmakers are also attempting to prevent a repeat of the excessive risk-taking and inadequate supervision of the housing market that led to the 2008 financial crisis, while reassuring foreign investors in housing bonds and U.S. government debt.
Whistleblower Rule: Business Leaders Want it Changed
This article was originally published by the Fiscal Times on Monday, Feb. 7, 2011.
The SEC will soon issue a rule giving corporate whistleblowers the chance to collect big money for reporting securities violations, but the business community fears a wave of frivolous claims.
By Katherine Reynolds Lewis
In his continuing outreach to business leaders, President Obama spoke at the U.S. Chamber of Commerce this morning about global competition, technological innovation and the outdated or unnecessary government regulations. But a major concern of many corporate leaders is a proposed federal rule giving corporate whistleblowers an opportunity to collect hundreds of thousands of dollars for reporting securities law violations. The rule has alarmed the business community, which argues that the plan would encourage frivolous claims and undermine a decade of work to provide safe reporting channels for whistleblowers.
By April 17, the Securities and Exchange Commission must give final approval to the rule, which Congress ordered as part of the Dodd-Frank financial overhaul law aiming to prevent a repeat of the 2008 financial crisis.
Corporate lawyers and lobbyists have asked the SEC to require whistleblowers to report problems internally before going to the government, to limit the people eligible to collect a bounty and to extend the time a company has to correct violations. On the other side, lawyers who represent whistleblowers say the provisions the SEC proposed are needed to protect tipsters from retaliation and prevent corporate cover-ups.
The rulemaking is the latest in a series of government attempts to encourage corporate employees with knowledge of fraud or other violations to come forward. The Sarbanes-Oxley Act of 2002 — which Congress passed in response to accounting fraud at Enron, WorldCom and other corporate giants — required companies to establish internal reporting programs and made boards of directors and top executives personally liable for neglecting to investigate fraud complaints. In both 2001 and 2008, scandals over the activities of publicly traded companies quickly spread from the stock market to the broader economy, affecting everyday Americans as well as shareholders.
"This is one of the most explosive issues that has come up in a while for such a broad group of companies," said Alice Joe, a senior director at the U.S. Chamber of Commerce, which represents more than three million businesses. "Our companies have spent millions of dollars over the past 10 years trying to build up these compliance programs. Now you've got a rule that the SEC has proposed that is going to incentivize whistleblowers to completely bypass these systems."
Reforming Fannie and Freddie: a $6 Trillion Dollar Problem
This article was originally published by the Fiscal Times on Sunday, Jan. 23, 2011.
As the administration prepares its proposals for overhauling Fannie Mae and Freddie Mac, the housing industry and public interest groups are floating ideas of their own.
By Katherine Reynolds Lewis
As the Obama administration struggles to draft a report to Congress on how best to overhaul Fannie Mae and Freddie Mac, industry and public interest groups are promoting plans of their own for the two mortgage giants.
The proposals range from replacing Fannie and Freddie with new, chartered private firms to gradually shrinking and privatizing them. After the housing bubble burst, leading to the worst recession since the Depression, the government stepped in to secure the companies’ $6 trillion worth of U.S. mortgages in order to avoid an even worse financial calamity.
The Treasury faces a Jan. 31 deadline under the Dodd-Frank law to make recommendations on the future of Fannie and Freddie, although the Fiscal Times reported last week that they may miss the deadline because of sharp divisions within the administration. The stakes are high: Economic growth, return of private capital to the housing market, resilience in the event of future crises and continued consumer access to 30-year fixed-rate mortgages all hinge on the right strategy.
Most interested parties agree on the basic outline of a new structure that would divide the functions of Fannie and Freddie between government and the private sector in order to shift the mortgage securities market back to private investors while ensuring Americans' access to affordable housing and credit.
Administration Split Over Fannie Freddie Strategy
This article was originally published by the Fiscal Times on Thursday, Jan. 20, 2011.
With a Jan. 31 deadline looming for making recommendations, the Obama administration is badly divided over how to reform Fannie Mae and Freddie Mac, the financially strapped and controversial mortgage giants.
By Katherine Reynolds Lewis
The Obama administration is sorely divided over how to reform Fannie Mae and Freddie Mac, the controversial mortgage giants. Sources familiar with the discussions raise the possibility that the White House will miss its statutory deadline for submitting recommendations to Congress.
The dispute pits White House economic advisers, who favor merely offering lawmakers a menu of possible next steps without committing to a specific direction, against officials at the Treasury and Department of Housing and Urban Development, who want to endorse an explicit federal guarantee for the mortgage companies and throw the administration's support behind it, the sources said.
The controversy is as much over strategy as substance. White House advisers aren’t certain whether going out on a limb with a specific plan will drive reforms of the federal housing finance program in a constructive way, or present an easy target for opponents. Administration officials who object to offering an explicit guarantee so early in the process say it would make it harder to negotiate a compromise. Instead, they argue, the administration would be better off laying out a range of options, to give them maximum flexibility in talks with Democratic and Republican lawmakers and industry officials.
The government currently supports 97 percent of the mortgage market, and the two entities own or guarantee nearly three quarters of that amount, or $6 trillion in debt, which policy experts and stakeholders agree can’t be indefinitely sustained.
Rough Unemployment Road for Men Could Be Ending
This article was originally published by the Fiscal Times on Thursday, Dec. 23, 2010.
While women fared much better than men throughout the recession, the gap in the unemployment rates between men and women is beginning to narrow as more and more men are going back to work.
By Katherine Reynolds Lewis
Nearly two years after being laid off from his information technology sales job, Alan Yellowitz of Fairfax, Va. finally landed a job. He's making less than half of the $200,000 to $300,000 a year he once earned, but it's enough to keep the lights on, pay the mortgage and feed his family of four. "After 22 months of unemployment, we feel like we can breathe again," said the 47-year-old Yellowitz. "It's still somewhat rough. We’re still digging out of a hole. But getting a regular paycheck every two weeks feels amazing."
Yellowitz was a casualty of what some call the “mancession", more than two years of rampant unemployment that disproportionately hurt men more than women. Men did so poorly because far more of them worked in industries hit hard by the economic downturn – particularly manufacturing, construction and financial services. Women, by contrast, are disproportionately represented in sectors that are more resistant to economic cycles, such as health care and education.
With the recession officially over and the job market slowly improving, long-time unemployed workers like Yellowitz are beginning to find work. While the unemployment rate for men dropped by nearly a full percentage point to 10.6 percent in November from its 11.4 percent high last October, the female unemployment rate is holding steady near its 8.8 percent high of October 2009. Even though the uptick in employment for men is still relatively small the data suggest that the jobs now opening up are going to men more than to women.
"Men's unemployment rose faster and further than women's, but it has since recovered somewhat. In contrast, women's unemployment, while having peaked lower, hasn't actually come down," Betsey Stevenson, the chief economist at the Department of Labor, said in an interview with The Fiscal Times. "It does seem like the recovery has been more beneficial to men at this point. Some of this has to do with where the cuts [were] the deepest and where we [have] been able to add some jobs back."
One important question yet to be answered is whether males are merely bouncing back from the extreme job losses suffered during the Great Recession, or whether we are seeing the long-predicted turning point in the labor market in favor of women. Women hold an edge in the job market in part because they hold the majority of advanced degrees, and some experts believe that employers will hire and promote women to higher levels as a result. Thus far, the average woman still earns less than a comparable man, even when adjusted for hours worked and time out of the labor force.
House Republicans' Latest Fight Against Derivatives Reform
This article was originally published by the Fiscal Times on Thursday, Dec. 16, 2010.
Two House Republican lawmakers want financial regulators to slow down new rules for derivatives trading to avoid the effects on big corporations.
By Katherine Reynolds Lewis
Two key Republican lawmakers urged financial regulators to slow down the progress of new rules for the nearly $500 trillion over-the-counter derivatives market, an early sign that the new Republican House majority aims to delay and scale back the landmark financial regulatory overhaul that President Obama signed into law in July.
"As our economy slowly recovers, we have serious concerns that the Dodd-Frank bill for Wall Street reform will force American companies, which did not cause nor contribute to the financial crisis, to move billions of dollars in capital onto the sidelines to comply with the law," Reps. Spencer Bachus, R.-Ala., and Frank Lucas, R.-Okla., wrote in a letter dated Thursday, Dec. 16, to the heads of the Treasury Department, Securities and Exchange Commission, Federal Reserve Board and Commodity Futures Trading Commission. The two are the incoming chairmen of the House Financial Services and Agriculture Committees, respectively.
The Republicans' strategy is to delay implementation of the Dodd-Frank legislation until 2012, in hopes that a new Republican president and Senate will roll back or repeal the law, said David Min, associate director for financial markets policy at the Center for American Progress.
"They're trying to run out the clock a little bit," Min said. "They will try to delay the process through hearings, through tough letters and proposed legislation, but ultimately the presidency is held by Obama and the Senate is held by Democrats."
Banks Lose with New Derivatives Controls
This article was originally published by the Fiscal Times on Thursday, Dec. 9, 2010.
The Commodity Futures Trading Commission is considering new rules that could move derivatives trading to an exchange or clearinghouse, which would have a big impact on the profits of Wall Street banks.
By Katherine Reynolds Lewis
Federal regulators next week are set to propose new rules for trading over-the-counter derivatives, part of an effort to bring the $450 trillion market under government control for the first time, and shifting the balance of power between centralized exchanges and the world's largest financial institutions.
Congress tasked the Commodity Futures Trading Commission with shedding light on the opaque derivatives markets and bringing the majority of market activity -- possibly 80 or 90 percent -- into clearinghouses and centralized trading facilities. At stake is which market participants will profit and the cost of the new rules. Derivatives, financial contracts whose value is based on the price of an underlying asset such as a commodity, interest rate or currency, have been wildly profitable for Wall Street in recent years. The five largest U.S. dealers reaped an estimated $28 billion in 2009, according to an analysis by Bloomberg News.
Why Your Co-Workers May Hate You
This article was originally published by the Fiscal Times on Friday, Nov. 12, 2010.
It's parents vs. the childless at some workplaces as benefits geared to parents are seen as biased and unfair.
By Katherine Reynolds Lewis
With the holidays approaching, tension is mounting in some workplaces over which employees get time off — and which remain in the office while their co-workers enjoy turkey leftovers and long weekends out of town.
On one side: parents; on the other: childless people. Productivity demands have caused increased stress for all workers who feel they’re doing their job and two others; yet it’s often the child-free employees who pick up the slack because of a co-worker's flexible schedule, holiday plans or maternity leave. In this time of tight budgets and lean staffing the left-behinds are saying “enough.” They flock to online forums like The Childfree Life and STFU Parents to vent about being taken for granted because they have no children.
"You can work all the holidays, you can take the weekend trips, you can work late when your colleagues have to run home for the soccer practice or the recital," said Laura S. Scott, Roanoke, Va.-based author of "Two Is Enough" and founder of The Childless by Choice Project. "There's an assumption that the childfree don't have lives outside of work. There needs to be an acknowledgement that all employees, whether they have children or not, need work-life balance."
The work-life field was born in response to the flood of women entering the workforce in the 1970s, and in recent decades became mainstream as more employers recognized the value of flexible work benefits in attracting top talent. This summer, the Obama administration has spotlighted workplace flexibility through public statements, the first-ever White House summit on the topic and a pilot program giving federal workers greater flexibility.
But as employers compete to appear family friendly to both prospective employees and the government, they risk alienating child-free candidates who worry they will become second class citizens in the workplace. "The best employers provide flexibility equitably," said Ellen Galinsky, president of the Families and Work Institute. "Where the person with a kid might need to take off the day after Thanksgiving, the person without children may have a friend who is ill. None of us are without personal responsibilities."
With young people delaying marriage and child-rearing, and some never having children, there are more child-free people in the workplace. Nearly one-in-five American women will never bear children, double the percent in the 1970s, according to the Pew Research Center. But everyone has parents. In the last year, 42 percent of workers the Families and Work Institute surveyed have had elder care responsibilities, and 49 percent expect to in the future, Galinsky said.
Financial Advisors: New Rules Protect Consumers
This article was originally published by the Fiscal Times on Friday, Nov. 5, 2010
With more than 100 professional designations for financial-services providers, it can be hard to figure out who you can trust with your with your money. New government regulations may change that.
By Katherine Reynolds Lewis
Wondering whether to jump back into the market after the Federal Reserve's plan to pump $600 billion into the economy sent stocks to their highest level since September 2008, but worried about the uncertain outlook? People looking for good financial advice can have a hard time.
There are no federal rules for the training or conduct of someone who hangs a shingle as a financial planner. “Certified” financial service providers include more than 100 professional designations, with acronyms like CFP, CFM, CIMA, CFA, CLU, CPA, EA and PFC, representing everything from a single self-study course to years of education, professional training, continuing education, testing and ethics.
Adela Pena, 63, thought she was being responsible when she took early retirement from a telecommunications company in 1998 and invested a $400,000 lump sum pension payment in an annuity recommended by a financial adviser. She watched the value of her portfolio plummet and the adviser stopped returning phone calls. By 2008, she had only $49,000 left.
“Now all I’m living off is my Social Security and the generosity of my children,” she said in an interview from her San Jose, Calif., home. “It’s not like I spend my money foolishly. My children and I never really went on vacation because I wanted to make sure I had some money in my old age so they wouldn’t have to worry about me.”
New Government Oversight
Now, for the first time, financial planners could be subject to government oversight and broker-dealers could be required to act in their customers’ best interests, after two landmark reviews ordered by Congress in this summer's financial regulatory overhaul. The initiatives could reshape the marketplace for financial and investment advice. Policymakers hope new rules will restore some of the confidence shaken by the global financial crisis and stock market collapse in 2008, and better protect investors for the future.
“If I go to someone who markets himself as a doctor or a lawyer, I know that person has passed an exam and that person is subject to a code of professional conduct,” said Marilyn Mohrman-Gillis, managing director for public policy at the Certified Financial Planner Board of Standards, the organization that grants the CFP designation. “It’s easier to be a financial planner than it is to be a cosmetologist.”
High College Dropout Rate Threatens U.S. Growth
This article was originally published by the Fiscal Times on Tuesday, Oct. 28, 2010
Just over half the students who enter a four-year college complete their degree and even fewer community college students graduate, leaving many without the qualifications they need to land a job.
By Katherine Reynolds Lewis
Millions of first-year college students and their families now paying for the most expensive postsecondary education in U.S. history face a land mine: just 56 percent of those who enroll in a four-year college earn a bachelor’s degree. Those new undergraduates are now reaching the end of the first semester, a critical crossroads between finishing and dropping out.
Some students drop out because of trouble paying the cost — the average college debt upon graduation is a whopping $24,000. Others struggle to hold down a job while also attending college — tuition, room and board at many private universities tops $50,000 a year, and some state schools charges $10,000 a year just for tuition. But more than half of first-year students are simply underprepared for college-level work, said Jeff King, director of the Koehler Center for Teaching Excellence at Texas Christian University, which is developing a tool to identify students who are most at risk of dropping out. “There’s increasing pressure … to prove that after these thousands of dollars that parents are paying for a credential, the students are learning,” King said.
Education policymakers for decades have focused on opening the doors to higher education to more students, without much thought about whether those students are prepared and what happens if they’re not. Now, they’re starting to take action. Over the past decade, the U.S. has fallen from leader to 12th place in the ratio of young people with the equivalent of a bachelor’s degree, well behind Russia, Canada, Korea and Japan.
