By Katherine Reynolds Lewis
c.2008 Newhouse News Service
Photo of Thom Schoenborn by Kraig Scattarella
Summer interns are ripe for exploitation.
They're desperate for real-life experience to help them land a permanent job, at a time when the economy is slowing and positions are scarce. Many are willing to work for free or below market rates, just to get a foot in the door.
But that doesn't mean employers should take them up on the offer.
"It's very tempting to try to come up with unique ways to get more out of your company, but the way to do it is not to bring in people who are unpaid," said Jay Zweig, a labor lawyer at Bryan Cave in Phoenix. "An internship, to be unpaid and legal, needs primarily to be a learning experience for the intern and not something where the intern is expected to produce work product that is going to benefit the employer."
You Can't Just Call People Interns to Avoid Paying Them
Financial Optimism Linked to Consistency of Savings
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
Photo of Stacy Clark-Warren by Roadell Hickman
You don't need a big bank account to feel financially secure.
Rather, it's the ability to save regularly even a little that makes you feel optimistic about your financial future, research shows.
"Even people that didn't have a large balance in their savings and investments the fact that they were putting away money every month had a huge impact in how secure they felt," said Marty Durbin, president of First Command Financial Services in Fort Worth, Texas, which released a two-year study of over 9,300 families' savings habits and beliefs.
"When they have that feeling of financial security, it's a positive feedback mechanism that psychologically encourages them to do more," Durbin said.
In the last decade, the U.S. savings rate already low compared with most other developed countries has plummeted further. Americans saved 0.5 percent of their disposable income last year, down from 4.3 percent in 1998, according to data from the federal Bureau of Economic Analysis. The savings rate even dipped below zero in the third quarter of 2005, meaning people spent more than they earned.
Smart Money Moves Are Easier in Hindsight
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
Ready to scream if you hear one more can't-lose stock tip or secret for making a fortune in real estate? Who can truly say whether popular investment advice will leave you richer or poorer a year from now?
Hindsight is an easier game, and it can sometimes inform your future decisions. Let's look back over the past year at the financial moves that turned out to be brilliant.
20% of U.S. Employers Violate Leave Act, Study Says
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
WASHINGTON -- One in five U.S. employers violates federal law by offering workers less than the required unpaid leave to care for a sick family member, new child or their own serious illness, according to a new report by the Families and Work Institute.
About 18 percent of large employers and 21 percent of smaller employers surveyed said they provide fewer than 12 weeks, the report said.
"There are so many reasons you could imagine an employer not complying," said Kate Kahan, director of work and family programs for the National Partnership for Women and Families. "The bottom line is the same, which is the employee loses out. This is such basic protection that it's horrible."
But the U.S. Labor Department questioned the report's conclusion.
"We know of no independent verification of their number," spokeswoman Dolline Hatchett said. "Compliance rates are hard to verify without sophisticated sampling techniques, and there is insufficient data in their analysis to allow one to assess an employer's compliance with the law."
Reverse Mortgages Should Be Last Resort
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
Photo by B.K. Angeletti
Diane and Peter Carrara moved into their dream house in Chepachet, R.I., in 1958. It was an unfinished shell — no doors, bathtub, heat, or even finished flooring — but it was near a lake and nestled in the woods, just like they wanted.
They talked the owner into accepting $50 a month the first year, while Peter finished enough of the house to qualify for a mortgage. They pinned blankets across the kitchen doorway to keep in the stove's heat, and slept on the floor "with all the clothes we owned on our back" and their 2-year old son between them, Diane said.
Over the next half-century, they finished the basement and the walls, added a deck, and landscaped the property, with Peter doing most of the work.
So when the medical bills started piling up a few years ago, they weren't about to sell their home. They signed up for a reverse mortgage that gave them $20,000 up-front, a line of credit, and $400 a month for as long as one of them lives in the house.
"I've been here 50 years, sweetheart," said Diane Carrara, 72. "If I have to take an ambulance out of the hospital to die here, that's what I'll do."
This determination to leave your home feet first, or not at all, is part of what prompted 107,367 government-insured reverse mortgages in 2007 — a 41 percent jump from the previous year, according to the National Reverse Mortgage Lending Association.
European-Style Covered Bonds Eyed for U.S. Mortgages
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
WASHINGTON -- This week's government seizure of Fannie Mae and Freddie Mac leaves a big question unanswered: What will replace or supplement the two mortgage giants in supporting a healthy and active housing market?
In announcing the takeover, Treasury Secretary Henry Paulson said the companies could increase their mortgage holdings to about $850 billion each by the end of next year, and then he wanted the portfolios cut by 10 percent a year until they're $250 billion each.
Some financial experts say instruments known as covered bonds could fill the void, and develop into a flourishing market that would grease the wheels of U.S. real estate.
Covered bonds are sold by financial institutions and backed by a pool of mortgages that the institution holds separate from its other assets. They've grown to a $3 trillion market in Europe, which has no equivalent of Fannie or Freddie.
"Covered bonds could become a very effective solution to the housing finance system in the United States," said Peter Wallison, a fellow at the American Enterprise Institute, a free market think tank in Washington.
Charity Malls Allow Painless Online Donations
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
Debating whether to send flowers or make a donation to Mom's favorite charity for Mother's Day?
Now you can do both.
Web sites with names like Benevolink and BuyforCharity use your online shopping to benefit philanthropic organizations, without costing you a cent more.
Here's how it works: You sign up with the site and designate a charity to receive cash. Most sites, known as charity malls, will let you enroll a new organization if your favorite isn't already listed.
Then you visit the charity mall when you shop online, clicking through to your favorite retailer. The merchant gives a percentage of your purchase to the mall, as a referral fee. The charity mall passes on a portion of that fee to the group you designate.
In Big Finance, Interconnections Are Double-Edged
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
WASHINGTON — This is Ben Bernanke's reality: The Federal Reserve Board couldn't allow Bear Stearns & Co. to go bankrupt.
The collapse of the fifth-largest securities firm would have hurt its trading partners, customers and investors. Worse, it would have sent shock waves of fear through the financial markets as everyone asked: If Bear can fail, is anyone immune?
"At the end of the day the financial system hangs together because of confidence," said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pa.
Once that confidence is shaken, investors and customers of other financial institutions might demand their money or ask for new collateral, even as creditors refuse new loans — a classic run on the bank.
As one bank after another falls short of cash, credit freezes up. The banks have to sell assets to survive, depressing prices and hurting the already-struggling economy.
Taxes May Have Nowhere to Go But Up
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
If you're grumbling about the size of your tax bill this year, brace yourself.
Many financial advisers predict that tax rates are going to rise to cover the escalating burden of an aging population and the federal debt.
"In all the discussions I have with contemporaries, we do expect rates to go up at some point in the future," said Ira Herman, a partner at J.H. Cohn, an accounting firm in Roseland, N.J.
Each American's share of the federal government's unfunded obligations amounts to $175,000 comparable to a home mortgage with no collateral, said Stuart Butler, a vice president at the Heritage Foundation.
When You Find Your Valentine On The Job
By Katherine Reynolds Lewis
c.2008 Newhouse News Service
Photo by Kraig Scattarella
Office romance often brings to mind an adulterous affair or supply-closet rendezvous a la "Grey's Anatomy."
But people who met a soulmate at work are fighting to change that rap, which discourages many from dating a colleague. They tout the workplace as the ideal venue to get to know possible partners.
"The office lends itself to these old-fashioned courting rituals of yore," said Stephanie Losee, San Francisco-based co-author of "Office Mate." "You get to know the substance of the person."
