Rising costs, falling income, and waving at the Rockefeller helicopter

Money Queen (Photo credit: @Doug88888)

By Caitlin Kelly

Here’s an honest, powerful and deeply depressing blog post about what American life when your income is falling and costs going through the roof:

Hubby left and again, he had to stop off at the gas station to fill up his car.  He drives around 150 miles per day for his job.  And yes! he drives a fuel efficient car that gets between 35 and 40mpg.  But it’s not working out like we planned.  With the cost of gas at over $4.15 a gallon (and still rising) and the tightness of available money, it’s becoming a nightmare, with no end in sight.

While at the gas pump, the woman in the next booth came over to my husband and asked him if he had any money to give her.  “I need money to buy gas” she said “to get to work.  I don’t have any money to buy gas to get to work nor even come back from work and get home.  Do you have any money to give me, man?” DH then realized the reality of our own financial predicament. He told the woman that he had just been fighting with his own wife over the tightness of money and our own inability to buy food and gas and pay looming tax bills.

“The only money I have that I can give you is this dollar bill,” he said and handed the woman the paper dollar bill I found in the parking lot yesterday.

I had breakfast the other morning, (total cost $11.00 for both, plus $1.00 for parking), with a friend who is single and freelancing and faces monthly living costs of $4,000; just her rent and health insurance is $2,000 every month. She has no savings anymore, having won and lost several jobs in our field over the past few years.

She has worked her whole life, like me, in journalism, and at 58 knows that the odds of finding a new full-time job that allows her to meet her living costs and save for retirement are slim-to-none.

Going back to college? For her, financially impossible. Taking some sort of quick, cheap credential? Maybe — but, really, given a choice of a 30, 40 or 58-year-old, who’s going to hire someone that age?

For millions of hard-working, educated, skilled and experienced Americans, a hand-to-mouth existence is the new normal. Especially those over the age of 50.

Here’s a powerful recent story from the Los Angeles Times about how work, even for the most highly educated, is changing for the worse:

Matt Ides has a doctorate in history and extensive teaching experience. Unable to find a full-time, tenure-track job, he took an adjunct teaching position at Eastern Michigan University, where he was paid $3,500 per class. He taught five classes one semester and four the next. One more class and the university would have had to consider him a full-time employee under university policy.

If not for his girlfriend’s salary, he said, “I would have had to live in a one-room apartment and eat soup every day.”

I moved to the U.S. in January 1988. As a brand-new driver, I was exquisitely attuned to the costs of owning, insuring and fueling a vehicle. Gas, then, cost 89 cents a gallon — today, it’s between $3.90 and $4.15 or more.

The price of groceries has shot through the roof. The cost of commuting to New York City, a daily necessity for my husband who works there, and for me to meet with clients and actually enjoy Manhattan occasionally, just rose, again, by 10 percent.

Jose and some others at his workplace are represented by a union, initially offered a 0 percent (yes) raise by his employer, The New York Times. They won a fat 2 percent a year — and the Times is considered, by some, a career pinnacle, a place you work long and hard to achieve.

I recently pulled out some old paperwork, and found an invoice from 1997 — 16 years ago — for $900. I just accepted an assignment last week from the Times for $900.

Nothing, anywhere — shoes, clothes, food, gas, insurance, dental bills, haircuts — costs what it did 16 years ago. Anyone attending university in the U.S. knows this firsthand, as tuition costs have skyrocketed, while incomes are stagnant and jobs hard to find.

Here’s the story of a graduate student at Duke, (named for the tobacco fortune family who founded it), who lived in a van in a parking lot so he could actually afford school. In a van.

Money – Black and White Money (Photo credit: @Doug88888)

Few of us are less educated, more stupid, more lazy or unwilling to work hard than we were 10 or 15 or 20 years ago.

Stagnant and falling wages for most of us are simply killing our desire, and ability, to get ahead of our monthly basic costs– to save for short or long-term needs, whether retirement, car repair, education, medical bills or (imagine), a vacation.

I’ve thought about moving far upstate, where we could probably buy an old house for cash and pay very little in property taxes. Socially? Death. Professionally, nothing would be there for my husband, who makes almost three times what I do. Making an even longer commute — with less time for himself and for us? Not a great option either.

So, moving isn’t really a smart choice. Neither Jose or I, (both award-winning veterans in our field), have advanced degrees, so no teaching jobs are open to us, even as a poorly-paid adjunct.

I had lunch recently with an editor who did exactly that, moved to the Catskills with her husband and baby. She lasted two miserable, lonely, broke years and now lives back in Manhattan.

We could, I suppose, go to a much smaller, rural place somewhere very far away in the Midwest — distant from our friends, colleagues, neighbors and social networks. But I tried rural life, for 18 months when I was 30. Sorry, for those who thrive on it, I hated it, never so lonely, broke and miserable in my life. Unless in that other place you have dear friends, loving family and/or steady work that will really help you thrive, I don’t see much appeal in moving anywhere else at this point.

And every day, right over my head, I hear the sound of income inequality — as a helicopter thud-thud-thuds across the sky very close to my balcony. It’s a Rockefeller, flying to work in Manhattan, 25 miles south; their huge, gated estate lies about a 10-minute drive north of our town.

How’s things with you these days financially?

Are you as worried as I am?

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It’s all about the Benjamins (or euros or pesos or pounds) — are you saving?

That’s the American $100 bill.

Saving money is my single greatest challenge. (That, and earning a lot more — like trying to double my income this year in a dying industry. No pressure!)

Today’s New York Times paints a grim picture of how tough it is to save money now, especially for younger people:

A new study from the Urban Institute finds that Ms. Brady and her peers up to roughly age 40 have accrued less wealth than their parents did at the same age, even as the average wealth of Americans has doubled over the last quarter-century.

Because wealth compounds over long periods of time — a dollar saved 10 years ago is worth much more than a dollar saved today — young adults probably face less secure futures for decades down the road, and even shakier retirements.

“In this country, the expectation is that every generation does better than the previous generation,” said Caroline Ratcliffe, an author of the study. “This is no longer the case. This generation might have less.” The authors said the situation facing young Americans might be unprecedented.

A broad range of economic factors has conspired to suppress wealth-building for younger American workers; the trend predates the Great Recession. Younger Americans are facing stagnant pay — the median income, when adjusted for inflation, has declined since its 1999 peak — as well as a housing collapse and soaring student loan debt.

I grew up in a family with good taste and the money to indulge it — cashmere and trips to Mexico or France, a nice house, decent used cars, good food. My maternal grandmother inherited an insane amount of money and ran through it as fast as she possibly could, blowing it on jewels and furs and gorgeously-decorated apartments and a limousine service with a thin driver named Raymond.

It’s weird to grow up around a lot of money and develop tastes for luxury — and then choose a field, journalism, that has rarely paid me enough to satisfy them.

Saving money is so boooooooooring!

And so utterly necessary.

American Buffalo (coin) (Photo credit: Wikipedia)

But I save 15-25 percent of my income every year, as does my husband. It means a lot of self-denial and self-discipline, certainly if your income is barely meeting your basic expenses, even pared to the bone.

I’d so much rather go to Paris and buy lots of pretty clothes and see Broadway shows and go away for romantic weekends. But to save the dough we need to retire — which we very much intend to do — demands it. Working freelance also means having no idea, most of the time, what my annual income will be. Not even next month’s.

So it means being aware at all times of what I’m earning, spending, saving and carrying in debt, (and at what rates of interest.) It’s only in the past three or four years — and I’m in my 50s — that saving diligently has finally felt worth it, as my retirement fund is now six figures.

It feels good! (Cue James Brown…)

James Brown (2001) during the NBA All Star Game jam session (Photo credit: Wikipedia)

It’s terrifying to plan so far ahead, to hope we’ll live that long, and healthily, to wonder if all this daily self-denial is even worth it. I get why people don’t.

Saving a ton is certainly easier if you also earn the maximum you possibly can. That might mean working two or three jobs for a while.

Many women, though, remain deeply uncomfortable asking for more money, whether in a salary negotiation or freelance gig. No one is going to hand it to us!

One of my favorite books — every woman who works must read it – is “Women Don’t Ask”, which examines the many reasons women continue to receive lower pay than men for the same work. Mostly because we’re too damn scared to ask for more! (Men do, almost every single time.)

The more I make, the more I can save. (And occasionally splurge.) That motivates me every single time to ask for more work and the highest possible rates for it.

Here’s an honest and moving post about money — and being in your 20s and needing/wanting a lot more of it.

Here’s a really interesting interview with an expert in behavioral finance who thinks we should be forced into saving by the government, as they do in Israel and Australia.

saving and spending (Photo credit: 401(K) 2013)

Do you save money?

Do you find it difficult?

Any tips you can share?

How to manage your money

There are so many people eager to tell us how to do it.

But how many of them are right?

I recently recently reviewed a terrific new book, by a fellow New York writer, Helaine Olen, called “Pound Foolish: The Dark Side of the Personal Finance Industry” for The New York Times; here’s my full review.

She’s largely scathing of the Big Names who make a shitload of money telling us what to do with our own — (my finger slipped and typed “yelling.” That, too!)

English: CNBC’s “Mad Money with Jim Cramer” came to Tulane University’s Freeman School of Business Oct. 19, 2010 to broadcast in front of a live audience as part of the show’s “Back to School Tour.” (Photo credit: Wikipedia)

People like Jim Cramer, Suze Orman and Robert Kiyosaki.

In 2012, I wrote a personal finance column for five months, every week, aimed at Canadian readers. I learned that every personal finance author seems to have a different opinion:

Love ETFs! Hate ETFs! Bank six months’ savings! No, three! Mutual funds are great! No, never!

Personal finance is deeply personal, affected by family, culture, education, understanding, (two very different things!), greed, fear, hope, comfort, wishful thinking. And the larger economy. In the 1980s, I earned 18 percent on my Canada Savings Bonds. Not today!

At 19, I was handling my money alone. Like every other, it’s a skill best acquired through practice. I was living alone, earning income as a freelance writer and photographer, putting myself through university and living on a stipend of $350/month in Toronto, where my rent, for a tiny studio apartment in a lousy neighborhood, was $160 a month. That left me $190/month — or $2,280 for the year for everything else: dentist, haircuts, clothing/shoes, laundry, food, phone, answering service.

Oh, and tuition and books; University of Toronto then (mid-1970s) cost $660 a year.

My parents never helped me out financially — beyond the cost of my small, cheap first wedding. And no chance to go home and live free or cheaply for a while after the age of 19.

Mutual Funds for Dummies … U.S. Funds at War — Too simple? (Monday, June 4, 2012) …item 3.. Music to Help Study and Work – 26:39 minutes … (Photo credit: marsmet545)

Here are some of the many factors affecting our ability to earn, save and invest, in bold:

One reason we’ve been able to save a decent sum for retirement is having no children, an estimated annual cost, per child, of $10,000.

I chose a profession, journalism and publishing, that often pays crap. I did expect to have a steady income, and a staff job making $60-80-100,000 a year throughout my 30s, 40s and beyond. But my first New York magazine job, in 1990, paid $40,000 — $5,000 less than I’d earned at a  Montreal newspaper in 1988.

(Thank God for my pre-nuptial agreement, and alimony, both of which gave me time to get back on my feet and find a well-paid staff job.)

Yet three recessions since 1989 — with 24,000 journalists fired in 2008 — and ongoing upheaval in my industry have put paid to any notion of a steady, high income.

Once you’re earning beyond your basic needs, (and learn to keep your overhead low,) save like crazy and invest thoughtfully to keep your nest egg growing, no matter how slowly or how small.

Luckily, Jose’s staff newspaper job is steady, union-protected and a kind of work that does not damage his health or strength. Unlike many Americans, we’re extremely lucky he has a company pension to look forward to. He has also been responsible enough to make a will and designate me the beneficiary of all savings to protect me financially if he dies before I do. (I did this for him as well.) If you have assets, and dependents, protect them!

Do you play the CPW game? Cost per wearing? Better quality clothes and shoes, even pre-owned and repaired, typically last longer than cheap crap you have to keep replacing. (And earning more money to pay for!)

I bought an apartment in June 1989, a one-bedroom. I’m still here. I certainly didn’t plan that, and fear I’ll never live in a house. I’d kill for a fireplace and backyard! But that real estate decision, (a long term mortgage with a decent rate, and low maintenance costs) allowed me to do good work I enjoy, even freelance, living alone, and allowed me to save 15-20 percent of my income every year, even when it was laughably low.

Read this life-changing book, and decide what is truly worth most to you — owning even more/bigger/newer stuff or enjoying free time. You can’t ever buy more time!

We drive a used, paid-off car, with no plans to replace it any time soon. (See: low overhead.)

Managing your money intelligently and attentively is a wearying life-long game of Whack-a-Mole. Just when you think things are going smoothly, boom! The car or house needs a costly repair or your kid needs braces or you lose your job — or all three happen at once.

Here are a few tradeoffs that work for me:

I don’t write a lot of checks to charity — but donate my time and skills to several volunteer boards and organizations instead.

I chose not to continue my formal education beyond a B.A. — but I attended Canada’s top university and, ongoing, read widely, attend conferences and network assiduously to stay current in my industry. Until or unless I know the ROI on an advanced degree, I won’t assume any educational debt.

We drive a battered old car — but it takes us safely, affordably and comfortably 10 hours north to Canada to visit family and friends.

We live in a smaller space than I’d prefer, with no second bedroom for my office or a bed for guests — but it allows us the extra cash to travel, save and entertain.

Managing your money means making choices, every single day. It means determining what matters most to you, and examining — truthfully — why that choice matters right now more than anything. (Designer labels, a trip to Paris, a new pair of skis, a second bedroom, a fourth child, grad school….)

Do you manage your money well?

Where did you learn those skills?

Personal Finance (Photo credit: 401(K) 2013)

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Another way to make your first date a living hell

Credit Score Compare (Photo credit: Casey Serin)

Yes, really.

Now it’s considered normal to ask if your dinner partner has a decent credit score:

It’s so widely used that it has also become a bigger factor in dating decisions, sometimes eclipsing more traditional priorities like a good job, shared interests and physical chemistry. That’s according to interviews with more than 50 daters across the country, all under the age of 40.

“Credit scores are like the dating equivalent of a sexually transmitted disease test,” said Manisha Thakor, the founder and chief executive of MoneyZen Wealth Management, a financial advisory firm. “It’s a shorthand way to get a sense of someone’s financial past the same way an S.T.D. test gives some information about a person’s sexual past.”

It’s difficult to quantify how many daters factor credit scores into their romantic calculations, but financial planners, marriage counselors and dating site executives all said that they were hearing far more concerns about credit than in the past. “I’m getting twice as many questions about credit scores as I did prerecession,” Ms. Thakor said.

I like Manisha a lot, having interviewed her for my own work. But this is…weird.

No?

I loathe debt. Hate it. Hate it! I grew up in a freelance family, where debt is just dumb if you don’t have a steady, known income. I also grew up in Canada, where there is no tax deduction for mortgage interest, as there is in the U.S., where even interest on credit card debt (!) was, for a while, tax deductible as well.

So I get why you don’t want to marry a deadbeat and sacrifice your own excellent credit score – often called a FICO score in the U.S. — to someone else’s crummy fiscal habits. I have heard far too many horror stories of people — too often women — who had no idea what insanity their husband or boyfriend was perpetrating financially until it bit them on the ass.

What do you think of this new trend?

Would you bail on someone new if they refused to share their score, or had a lousy one?

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Doormat or diva? The freelancer’s dilemma

Freelancer (video game) (Photo credit: Wikipedia)

I’ll quote from the email directly:

Your invoice got lost in accounting again.

And, no, I’m no longer working for this client. They did pay me the full amount they owed for all the work I’d done, and sent the check Fed Ex — which I insisted on — and they graciously actually did.

The great challenge of working freelance?

When do you stand up for yourself?

When do you accept crap without complaint ?

I started freelancing as a magazine and newspaper journalist when I was still a college undergraduate. I needed that income to pay my bills, for tuition and books and clothes and housing and food, with zero financial aid or any help from my parents. My writing was not some cute hobby or unpaid internship or spare change I planned to blow on shoes or partying. This was the cash I needed to support myself.

So I learned at a very early age to negotiate, to ask for what I thought was fair. I once overheard an editor begging a fellow freelancer, (a man, older than I), not to quit his weekly column, for which he was getting — in 1978 — $200/week. She was paying me $125. I was 19.

Lesson learned. You can’t get what you don’t ask for.

But you can’t ask for what you don’t know is possible.

Every woman working for income needs to read this great book, “Women Don’t Ask”, which teaches women to negotiate (better) and explains culturally why we often just don’t even try. Men usually do!

Here’s a long, smart and persuasive blog post about why women freelancers so often undervalue their skills and under-price them as a result.

Like many self-employed people, I work alone in a super-competitive field, one (journalism) that is shrinking and whose pay rates have been cut in recent years even as our living costs soar. That means being up to date on what’s happening out there with my colleagues.

Are they getting screwed, too? (Often, yes. When I posted the comment above on Facebook, I quickly got sympathetic replies from peers across the nation with similar stories.)

Standing up for yourself, all alone, is scary.

If freelancers, (some of whom just refuse to stand up for themselves), just keep on accepting the bullshit — “Oh the person in accounting who writes the checks is on vacation” -- you’re going to be a broke, angry, bitter doormat. The people feeding you this BS certainly got their paychecks! Their lights are on, their phone bills and rent paid.

But if you fight the bullshit and demand better treatment, even politely at first, people can dismiss you as a diva, never work with you again and tell everyone they know you’re a pain in the ass.

Here’s a link to one of my favorite blogs, Freelance Folder, with a list of how and when to say no to a client.

And another, on how to spot a PITA client before signing a contract with them.

This one, on how to avoid burnout, is something I need to read more often.

If you work for yourself, how do you negotiate this crucial balance between assertiveness and deference?

Did I choose the wrong country?

Globe (Photo credit: stevecadman)

How interesting to see that Canada — where I was born, raised and lived until 1988 — now has a higher per-capita wealth than the United States; $363,202 in assets to the average American’s total of $319,970.

From the website Daily Finance:

Indeed, the crash in U.S. home prices means that Canadians own real estate that is on average worth $140,000 more than that held by Americans. They also own twice as much property and have nearly four times as much equity in it after mortgages are taken into account.

One small bright spot for residents of the beleaguered U.S.: Americans still have greater liquid assets than Canadians. But even this statistic serves mainly to underscore the magnitude of the housing market catastrophe.

Public policy may be in part to blame: As The Globe and Mail points out, “Canadian leaders rejected mortgage interest deductibility,” making it somewhat harder for citizens to get so deep into mortgage debt. Moreover, subprime mortgages — those ignes fatui of the American economy — did not catch on in Canada the way they did here.

All of which leaves our “thrifty, socialist neighbors to the north” — who have long eschewed both the dynamism and the risk of the American system in favor of higher taxes, greater regulation and a sturdier social safety net — looking pretty clever right now.

Having survived three (so far) recessions in the U.S. since moving here, I’ve often questioned my decision. But I’ve also met some of my professional goals here, and more easily in a nation whose population is 10 times larger, than would have been possible at home, where about ten people in my industry got the best jobs and clung to them for decades.

I’ve married two Americans, one wretched, one not. I’ve survived being a crime victim here twice and the subject of a $1 million lawsuit from a minor car accident. Instructive!

Canadians are generally much more risk-averse, which I find boring and annoying (if, yes, more fiscally prudent.) Americans, for better or worse, are generally excited to try new things and less freaked out by failure. I like this a lot, and it’s one reason I came and stuck around. But it also assumes — which isn’t true for so many people here now – you can actually afford to fail.

Without a toxic mortgage I kept my home and built equity; the U.S. mortgage interest tax deduction (thank heaven) was a real help to me as a single freelancer.

The “American dream” of home ownership is typical of a major difference between the two nations — because it has long been such a powerful part of how Americans view their lives, no politician (even if it would have been wise to do so) dared mess with it.

And so bankers made out, literally, like bandits, selling the most appallingly toxic mortgages to people with no clue what they were getting into.

Canadians don’t have a “Canadian dream”, at least none I’ve ever heard as part of the standard cultural conversation.

The CDO crisis, fueled by greed on both sides and fed by the oxygen of enormous profits on one side and the illicit thrill of actually buying a house with 0% down, almost left the financial system here DOA. If you want to watch a real thriller, which really explains it, rent the terrific films Too Big to Fail and Inside Job.

While Americans, once more, are this week mourning the latest massacre of civilians attending a film near Denver by a deranged shooter armed with four guns, urban Canadians in Toronto are also confronting a shocking level of gun violence; ironically, Jessica Ghawi, a young sports reporter, had just escaped a shooting in June at Toronto’s Eaton Centre, a huge downtown mall, when she was killed in Aurora.

I wrote my first book about American women and guns, which one critic called “groundbreaking and invaluable”, my goal to understand, and explain, why Americans are so deeply attached to private firearms ownership.

But another recent shooting in Toronto claimed the lives of two people and when I went to check that story, yet another shooting had occurred since then.

So — which country is the better choice?

It’s an ongoing question for ex-patriates like myself, some of whom have husbands or wives or partners and children and jobs they value in the United States (or vice versa.) After the horror of 9/11, many of my Canadian friends urged me to “come home”, even though I’d already lived in the U.S. since January 1988.

While he loves Canada and would be happy to live there, my husband has a great job in New York City, which offers a pension we will both need. As an author and freelance writer, I can, theoretically, work from anywhere.

Both my countries have strengths and weaknesses.

The reasons we each choose to move, or stay, are multi-factorial: friends, work, climate, proximity to (or blessed distance from) family, excellent medical care and insurance, history, geography, a spiritual community, a landscape we love, a sense of history or shared culture…

Here’s a recent radio interview with Paul Martin, former Canadian Prime Minister, with Brian Lehrer, one of my favorite interviewers, on WNYC’s The Brian Lehrer Show. He does a great job explaining the differences in public policy-making between the two countries.

If you’ve left your native country to try another, how’s it working out for you?

If you’ve moved to the U.S., do you (ever) regret it?

Do you plan to move elsewhere?

Why?

Want to flee poverty? Don’t be American

Gini_Coefficient_World_Human_Development_Report_2007-2008 (Photo credit: jiruan)

Depressing, lucid and infuriating, this recent piece in Bloomberg Businessweek lays out a stark analysis of American income inequality, now at its worst level in decades:

A recent finding nicknamed the Great Gatsby Curve may be the most controversial of all. With it, University of Ottawa economist Miles Corak makes the strongest case yet that inequality and mobility are intertwined—the more unequal a society is, the greater the likelihood that children will remain in the same economic standing as their parents. His research comes as the country—and the presidential candidates—debate inequality and what, if anything, government should do to slow or reverse its trajectory. According to the Pew Charitable Trusts’ Economic Mobility Project, Americans believe more ardently than their global counterparts that “people are rewarded for intelligence and skill.” And yet, according to Corak, it’s as simple as this: “More inequality means less opportunity.”

The reporter only had to travel an hour out of New York City, where the magazine is published, to find extraordinary wealth — Greewnwich, Darien, New Canaan, Connecticut, home to billionaires — right next to grinding poverty, in towns like Bridgeport.

If the region were a country, it’d be the world’s 12th-most unequal, ranking just below Guatemala. Economists measure income disparity using the Gini coefficient: A measure of 0 means all money is evenly distributed; 1 means one person has it all. The U.S. had a Gini of .467 in 2010, up 2 percent since 2000, census data show. (With the exception of Chile and Mexico, it has the highest level of disparity of the 34 countries that belong to the Organization for Economic Cooperation and Development.) The Bridgeport region’s Gini grew 17 percent during this time, to .537, making this 625-square-mile swath home to the biggest income divide of any metropolitan area in the U.S.

I live a 20-minute drive from these towns, so I see these disparities in my own life.

They are increasingly common here, and increasingly intractable.

– If you can prepare sufficiently to get into college, can you handle the work and graduate?

-- Can you even afford college? How?

– Can you get a job that pays your bills and your student loans?

– Can you save any money?

– Can you afford to acquire, if necessary, even further educational credentials?

– Do you have the requisite social skill and emotional intelligence to take advantage  of — and create for yourself — every possible connection and opportunity?

The leap from poverty to even relative affluence seems unimaginably large now for too many.

My husband grew up in a moderate-income family, his father a Baptist minister of a very small congregation in a small city. Thanks to his father’s service, Jose was able to attend college on full scholarship and graduate debt-free.

Armed with talent and drive, my husband won a secure job at The New York Times in his mid-20s. Today, I wonder how many could replicate that leap.

I came to the U.S. from Canada in June 1989, seeking better work opportunities. I had several clear advantages: no children; serious savings; a demanding liberal arts education and college degree, no debt; fluent English; competence in two other foreign languages.

Plus, perhaps most crucially, confidence in my abilities and the (ugh) willingness to cold-call more than 150 strangers to land my first New York City job.

Today, full-time freelance, earning about that same staff salary 24 years ago, I probably look like a downwardly-mobile failure, which is pretty ironic, given my initial ambitions for immigrating. But I still have short and long-term savings, thanks to a combination of extreme frugality, a lucky lawsuit settlement and a husband with a decent, union-protected income.

A low-wage job, part-time with no health insurance, is no way out out of poverty. In the United States, in 2012, the word “job” is now about as meaningless as the word ‘blue” to describe the sky. 

Millions of working-class and middle-class Americans are being totally knee-capped by crappy wages, part-time work, no union protection, (7 percent unioized in the private sector, 12 percent in the public), chronic unemployment or underemployment — and no one who really gives a damn whether things get better for them.

Yesterday, The New York Times ran a story about how many older Americans are now losing their homes, even those who lived frugally. The cost of living here is crazily rising while many home values have plummeted:

Once viewed as the most fiscally stable age group, older people are flailing…while people under 50 are the group most likely to face foreclosure, the risk of “serious delinquency” on mortgages has grown fastest for people over 50…

Among people over 75, the foreclosure rate grew more than eightfold from 2007 to 2011, to 3 percent of that group of homeowners…

Older Americans are losing their homes because of pension cuts, rising medical costs, shrinking stock portfolios and falling property values, according to Debra Whitman, AARP’s executive vice president for policy. They are also not saving enough money.

Half of households whose head is between 65 and 74 have no money in retirement accounts, according to the Federal Reserve.

I’ve put that last sentence in boldface because it is so deeply shocking and depressing. Fifty percent of Americans facing the traditional age for retirement have no money at all beyond their Social Security benefits?

So, even if you flee poverty in your teens or early adulthood, you’ve got a 50 percent chance of hitting the skids in your golden years?

Nice.

Do you fear falling (further) into poverty?

Any thoughts on how to fix this mess?

Negotiating — every freelancer’s challenge!

Freelancer (video game) (Photo credit: Wikipedia)very single new client means a new set of negotiations. Your ability to negotiate will make the difference between surviving and thriving, intellectually, physically, emotionally — and financially.

I began selling my photos when I was 17, and my writing when I was 19, so I’ve been at this for a while. I also grew up, as I’ve written here before, in a family of freelancers. No one had a paycheck or pension, just their talent,  hard work and ability to negotiate — or have an agent or lawyer do it for them.

So I grew up lucky in this respect, knowing firsthand that many things in life are negotiable.

Tips:

— Know what you want to achieve before you take/make the call, send the email, Fed-Ex a work sample or schedule a meeting. People are busy, juggling family and work, study and travel. The kind of people you probably most want to negotiate with, i.e. with a budget or network that might use your skills, are probably really busy. Decide exactly what you want to have happen as a result of your interaction with this person: a gig, a contract, a column, an ongoing relationship, a referral. That clarity will focus your thoughts and actions.

– What’s your fallback position? We all know we might not get exactly what we want or even 20 percent of what we want. So what are your Plans B-F? Have a few alternative outcomes in mind, and ones less demanding or risky to your contact, so you don’t have to end the conversation with a shrug or silence. I’ve asked for all kinds of things I never got. It’s all experience, information and practice.

– Know, and stick to, your absolute deal-breakers. We all have them. They’re called principles. Know when and why you will simply walk away from a deal. Unless you’re about to become homeless if you don’t take on this gig, you have choices. Never assume you have to take on anything because you are young or inexperienced or new to the city, whatever. If a contact really skeeves you out, drop it. There are other clients out there! Yes, really.

– Do your due diligence. Before you initiate contact with anyone with whom you hope to do business, you must try to find out who they are, how they think, where they were educated, (back to grade school, if possible), their cultural or religious background, their global perspective (or lack of same) and some of their private passions, whether soccer, Chopin or ska. Your goal is not only not to offend, but to connect, authentically and enthusiastically, with their interests, experiences and values. Most people want to work with smart and enjoyable people, not just perky opaque robots trying to suck up to them and sellsellsell. Between every form of social media, and some thoughtful sleuthing, you can easily come to the table with a deep(er) appreciation of your contact’s perspective.

— What do they want? Basic, but easily forgotten in our rush to get the gig, get paid, get paid more, become famous, get the referral, whatever. You must have some clear notion how they’re thinking about this meeting, (even only by phone or email), in order to think through your arguments and talking points. What’s their motivation for taking your call, reading your email or coming to a meeting with you now?

— Have you investigated the potential obstacles to getting what you want from them? Maybe your contact’s life is in turmoil professionally or personally, (i.e. be patient), or their business/industry is tanking (see: due diligence), or they don’t know enough about you to feel you’re worth their time or money or (worst case) they might have heard or seen something negative about you. Until and unless you anticipate (and overcome) these possible roadblocks, your negotiation is imperiled by poor preparation.

— Never arrive empty-handed. I don’t mean arrive at a business meeting carrying flowers, but bring some intellectual brio to the game. I had two meetings in the past two days, one by phone with someone who is an absolute leader in his field and one this morning with another like him. I was honored, and nervous! In both instances, to my surprise, I shared some information with them that was news to each. The point? Offer something of value to them — a book, a link, a blog they might not have heard of, re-con on a client or conference in your shared field of interest. Don’t just suck up their time and energy.

— Assistants and secretaries are your best friends. I’ve often been on a first-name basis with someone’s right hand long — i.e. months of calls and emails to them alone — before I ever got to deal with my target client/source directly. Be kind, patient and genuinely friendly with them. They’re making decisions about you with every contact, and can grease the wheels to a meeting, (and that negotiation you’re itching for) or kill it.

– Know what your competitors are doing. Every freelancer in the world is competing with dozens, hundreds, possibly thousands of others with excellent skills/education/contacts/experience. Don’t freak out about it. But be aware what others are getting (in payment, terms, conditions) by staying on top of your industry. So if you come in quoting rates much higher than your competitors’, be ready for push-back and know how to clearly explain the value you offer. (If you’re always desperately low-balling, that’s a failed negotiation in my book.)

– Why do they want you? This is key to a successful outcome. Unless or until you’ve established a clear, consistent and impressive track record that shows your value, you don’t have much. This puts you in a weak(er) negotiating position. So what’s your strategy? Will you work for less? (Maybe there are other significant benefits here beyond cash.) Can you get a referral or reference from this client? If you have a strong hand, use it! I’ve asked for more, and gotten it. You can’t get (any of) what you don’t ask for.

– What’s their budget? A standard question I get is: “How much will it cost me to have you….” Edit a manuscript or write website copy or help tailor a query letter. My standard answer is: “What’s your budget?” That often kills it right there, as they have no idea, or they hope it’s really cheap, and I’m not. You also to determine their goals, timeline, internal and external obstacles and resources. If they can’t pony up the money you want(ed), is there another benefit this gig or client can offer?

Here’s a great book, “Getting to Yes.”

Any tips you can share?

Related articles

• 12 Negotiation Tips Freelance Writers Can Use to Earn More (freelanceswitch.com)

Going once, going twice…the allure of auctions

Score! Total cost $110.

Just went to my first small-town auction in ages. Score! The photo above shows my loot: a folk art horse, two Victorian transferware platters, an early Oriental rug, an early mixing bowl and a handmade wooden box.

Did I need them?

Need!?

How could I resist?

I saw in the front row with my Dad, (who scored a pile of picture frames, a lovely wooden side table and a double bed — a great wooden bed-frame for $20.) There was a serious bidding war over a set of china — that went for $2,100 — but many items went for crazy-low prices, like a gorgeous Victorian wicker rocker for $5.

You can’t buy an hour of street parking where I live for$5!

The lady behind me was thrilled to nab a Victorian platter in her great grandmother’s pattern for $20. A dealer came with her 13-year-old parrot, Winston and he hopped happily onto my hand. The woman beside us beat us out for a pair of Victorian silver plate candlesticks for her daughter’s wedding gift.

I’ve scored many of my favorite things at auctions, whether in Bath, England, Toronto, Stockholm, New Hampshire or rural Nova Scotia.

In Bath, in the 1980s when my mom lived there, I got a lovely little hand-painted pottery jug, (which perfectly fit a Melitta filter holder and became my default coffeepot), for $18. In Toronto, a gorgeous brass bed. In Stockholm, a huge black metal tray with elegantly curved edges and in New Hampshire, all sorts of things, from a senneh kilim for $50 to drawings, etchings and funky objects like early wooden candleboxes or tool trays.

I still own, use and love three painted, rush-seated chairs I bought at a Nova Scotia rural auction (and shipped home to Toronto by train.) Their original paint is alligatored, their rails and stiles weathered and worn.

My most recent major auction acquisition is a lovely teal-tinted armoire, said to be 18th. century, which — including shipping from New Hampshire to my home in New York — still cost less than junk-made-in-China-on-sale from a mass market retailer. I bid on it by phone, having only seen a small-ish color photo on their website. Talk about a blind date!

It arrived with a few unexpected scratches and cracks, but I love it.

At yesterday’s auction I saw its twin, and a lady standing beside me said, “I have one just like it. It’s really old.” So maybe mine is 18th century after all…

When I lived for a while in a small town in New Hampshire I had no friends, family, job or other distractions so for amusement I began attending a local regional auction house every Friday. I learned a lot:

what’s a marriage (two pieces of different origin, materials and/or period that have been recombined)

what local dealers wanted (early American furniture) and did not (rugs and drawings)

how to make super-quick decisions

how to trust my gut (after doing my research on periods, materials and construction)

how to decide on my top price and stick to it (buyers usually pay an additional 15 percent premium, easy to forget if you get into a bidding war)

Have you ever bought at auction?

Snag anything great?

I don’t (only) want to do more faster. Do you?

productivity (Photo credit: Sean MacEntee)

Since my wedding in September 2011, (when we took a week off locally afterward), I haven’t taken more than four days off in a row. My last extended vacation was in May 2005, three weeks in Mexico.

I’m taking a month off, starting today — but will still blog here three times a week. I’ll also be working on a book proposal and one or two short articles, but only after the first 12 days of rest, relaxation, seeing friends and family, recharging my spent battery.

In the past 12 months, I’ve:

published my second book; done dozens of media interviews and speaking engagements to promote it; written a new afterword for the paperback, which is out July 31; hired an assistant to help me with all of this; negotiated more speaking engagements; addressed two retail conferences in Minneapolis and New Orleans; gotten married in Toronto; helped my husband deal with kidney stones; had my left hip replaced and done 3x week physical therapy for two months; served on two volunteer boards, and additionally visited Chicago and Toronto for work.

Oh, and blogging here three times a week, working with a screenwriter on the television pilot script for Malled (not picked up), and writing for a living.

Kids, I’m fried!

Time to not be productive, which leads me to this essay raises an important question, and one especially germane to any economy premised on “productivity”:

But there are sectors of the economy where chasing productivity growth doesn’t make sense at all. Certain kinds of tasks rely inherently on the allocation of people’s time and attention. The caring professions are a good example: medicine, social work, education. Expanding our economies in these directions has all sorts of advantages.

In the first place, the time spent by these professions directly improves the quality of our lives. Making them more and more efficient is not, after a certain point, actually desirable. What sense does it make to ask our teachers to teach ever bigger classes? Our doctors to treat more and more patients per hour? The Royal College of Nursing in Britain warned recently that front-line staff members in the National Health Service are now being “stretched to breaking point,” in the wake of staffing cuts, while a study earlier this year in the Journal of Professional Nursing revealed a worrying decline in empathy among student nurses coping with time targets and efficiency pressures. Instead of imposing meaningless productivity targets, we should be aiming to enhance and protect not only the value of the care but also the experience of the caregiver.

The care and concern of one human being for another is a peculiar “commodity.” It can’t be stockpiled. It becomes degraded through trade. It isn’t delivered by machines. Its quality rests entirely on the attention paid by one person to another. Even to speak of reducing the time involved is to misunderstand its value.

The only thing this industrial mindset — speed the production line! -- produces in me is frustration and annoyance.

I also attach value to the production of:

deep friendships; a happy and thriving marriage, my own physical and mental health, daily, and weekly, periods of rest and reflection.

I recently asked a friend, who out-earns me by a factor of 2.5, how she does it. The answer was to quadruple my workload, and at a speed I think probably, for me, unmanageable.

My book “Malled”, which describes my 27 months working as a part-time retail sales associate — supplemented by dozens of original interviews with others in the industry — has brought me paid invitations to address several conferences of senior retail executives. I suggest to them every time that focusing solely on UPTs (units per transaction — i.e. why they try to sell you more shit unasked for, than you want) and sales per hour is not the best or only way to go.

But numbers are safe and comforting. When corporate players hit their numbers, they keep their jobs and get their promotions/bonuses. Metrics rule.

Except when they don’t.

I once spent an hour talking to a female shopper in our store. Turns out we had a lot in common. She spent $800, which remained the single largest sale I ever had there. She also asked if I knew a good local psychotherapist. Not many people would have asked that question of a minimum-wage clothing clerk, but she’d clearly decided to trust me. I did know one and recommended him.

A year later she returned, glowing, with one of her teenage daughters, to thank me for helping her survive a very tough transition in her life.

That “transaction” is completely meaningless in any economic sense.

Yet:

— it enriched the therapist, who well deserved a new client.

– it enriched my customer’s soul, which needed solace.

– it enriched her three daughters’ lives as their mother found help she needed.

– it enriched my heart to know I’d been able to make a good match and help her.

But these powerful emotional connections are routinely dismissed as valueless behavior on any corporate balance sheet — because they can’t be quantified, measured and compared to other metrics.

Which is why I have such a deeply conflicted relationship with capitalism.

How about you?

Do you think working harder and faster is our wisest  or only choice?