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Melissa Preddy

Veteran financial writer Melissa Preddy served as a business writer, editor and columnist for The Detroit News from 1995 to 2008, is a Michigan-based freelance journalist. She now works as a writer and editor for a medical research unit of the University of Michigan Medical School. Follow her daily posts. | E-mail: Melissa Preddy

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Follow-up ideas to the gender-wage gap headlines

President Obama commemorated Equal Pay Day by inking an executive order that addresses the wage gap between men and women, at least at federal contractors. 

And while Equal Pay Day (the day a female worker catches up to a male worker’s total wages for the previous year) has come and gone, the issue remains along with a number of other developments regarding women in the workplace. 

Women at work Tshirt

Women at work on a Habitat for Humanity project in Miami. PHOTO: El Gringo on Flickr

So, I’ve compiled a variety of resources and story ideas you might use now and over the next few weeks; the issue likely will be highlighted again in May when Mother’s Day typically shines new light on parenting/workplace matters.

On the equal pay front, the White House itself was dinged this week for what critics claim is its own wage-gender gap; critics say female workers at 1800 Pennsylvania Ave. are paid only 88 cents for every dollar that male workers earn.  The awkward moment for the White House highlights what some analysts say are reasons for the gap that go beyond simple discrimination; when you mix in hours worked, the higher likelihood that women will take a career hiatus at some point and other factors, it’s a very fraught subject to report. 

For example, this PolicyMic report uses the same 77-cents-to-one-dollar figure the White House uses to describe the female/male pay discrepancy, noting that can add up to a $400,000 deficit over a working woman’s lifetime.  And as PolicyMic notes, citing the National Women’s Law Center fact sheet from November 2013, the gap is even worse for women in some demographic groups, especially Hispanic and Latina women.

The National Partnership for Women and Families also uses the 77-cent figure as a national base line and offers an interactive map of the state-by-state wage gaps; click on your state for more detailed info and analysis. 

On the other hand, some analysts disagree with the oft-cited numbers and the conclusion that women are being unfairly paid.  This Slate article, “The Gender Wage Gap Lie,”  delves into factors like education, occupation and hours worked and says the gap is as narrow as 9 cents on the dollar (meaning women earn 91 percent of what men do.) The article cites this Freakonomics analysis of MBA-d workers, which says starting salaries are on par but maternity leave, part-time work and other choices eventually led to a 40-percent pay gap between men and women.   

Obviously getting real-time wage-by-gender information from your area’s employers is going to be difficult but you might be able to obtain some stats from unions.  Perhaps taking a look at the proxy statements now emerging from publicly traded companies would be interesting; at least you can compare the salaries and fringe benefits of female senior managers to their male counterparts, and ask about any discrepancies. Bloomberg last year analyzed proxies of the S&P 500 companies and found that female execs were earning 18 percent less than men.  Why not do the same analysis for your local public companies and then ask them a) why and b) if the trend holds true among their rank-and-file workers. 

A new report CBS News cited, by the office of Sen. Amy Klobuchar (D-Minn.) points out the long-term effects of the pay gap, including a fascinating state-by-state chart of women’s earnings and eventual Social Security benefits, which of course are pegged to wages.  This is an interesting angle because a common reason women give for dropping out of the workforce to care for their children is the cost of day care which often is nearly the same as the family’s second income. 

You might talk with financial advisors about the pros and cons of biting the bullet for a few years in order to stay invested in a career, even if it means treading water until the kids are in school.  It may be that the eventual gains realized by staying employed outweigh the seeming futility of working in the pre-school years – not just in terms of closing the wage gap during working years, but for a woman’s old-age security.  And this would be a very timely approach in light of the just-out Pew research which finds that the percentage of mothers who do not work outside the home was up to 29 percent in 2012, after decades of declining.

It might be interesting to see what your area’s major employers say about the Paycheck Fairness Act, a bill in the Senate that would change how discrimination suits are handled.  Many critics say it would be more of a boon to plaintiffs’ lawyers than to actual workers and some trade groups like the National Retail Federation are publicly opposing it. 

And here as context is the World Economic Federation’s 2013 Global Gender Gap Report.


New state tax revenue data gives insight into consumer spending

New numbers from the U.S. Census Bureau on state tax revenues are just out for the fourth quarter of 2013, with the annual summary for the full year also due out April 8.

Because these figures are broken down into categories ranging from property tax to alcohol purchases, you might consider using them as a launching pad for a look at not just overall consumption of goods and services, but industry-level fiscal health, as well.

Nebraska state run horse racingFourth-quarter results of the survey “indicate the economy is improving,” as Bankrate.com reported recently; the financial site points out that property taxes, in particular, are up about 3 percent over the last three months of 2012.  More important, it’s the first time since 2009, Bankrate noted, that the total property taxes collected by states broke the $180 billion mark — a sign that real estate prices are heading up.

Here’s the link to the bureau’s latest quarterly report, and here’s a link to the page for the annual survey summary.  And while the major categories like sales, income and property taxes can provide an overall snapshot of state fiscal health — here, for example, is a Center on Budget and Policy Priorities analysis from 2013 that focuses on big-picture issues, it’s the 25 subcategories that might be ripe for interesting local angles that reflect consumer spending, confidence and income.

Hunting and fishing licenses, tobacco sales, motor fuel consumption — all are areas that are tracked by license or sales tax data.   And “severance taxes,” as this National Conference of State Legislatures graphic explained, pertain to natural resource harvesting — taking a look at historical figures can paint a picture of how materials like coal, natural gas, oil, ore, precious metals and more are being harvested.

You want to look for State Tax Collections by State; the Census Bureau’s site offers historical data searchable by year and quarter depending on which periods you want to compare.  (A chart showing quarterly collections by selected categories going back to, say, third-quarter 2008 would be quite interesting)

For example, if your region is home to a horse-racing track, check out the ebb and flow of pari-mutuel tax revenue — a timely topic with the sport’s centerpiece Kentucky Derby coming up.  Check out any pending legislation pertaining to racing — Kentucky hopes to tax online wagering, for example — and any other changes that may boost or reduce the state’s take.

Tax revenue from alcholic beverages is another area to look at; what’s behind any change?  Are consumers tippling more or less, or are new businesses adding to the tax receipts; this Reno Gazette-Journal reports that start-up distilleries and breweries are boosting Nevada’s state coffers.   The amusements category is intriguing as well — definitions seem to vary by state, with some including nightclub admission fees, others taxing pool tables and juke boxes.  Kiddie rides and pinball machines also are mentioned on some state treasury websites, though I believe this category doesn’t include casino machines.   How fascinating in this day of Candy Crush and ubiquitous slot machines to take a look at the more venerable and nostalgic business of coin-operated devices (do gumball machines count, too?) and the companies still in the business of running them.



Money Monday: Staving off student loan woes

As National Financial Literacy Month unfolds, we’re taking a look at story ideas pegged to various life stages; last week we pondered personal finance topics for young children and their parents.

Next up, a look at money issues that are front and center for young adults. This is the life stage at which establishing good habits and avoiding major pitfalls can make the difference between financial stability and decades of pasting one Band-Aid after another on one’s fiscal wounds.

hire me on mortar board

Photo: AU blog

Student loans and career choice are, of course, a big worry with this generation and perennial story topics abound.  But I do sometimes think student debt woes are overhyped; yes, some professionals graduate with six-figure debt, as do some students who choose to join elite programs that don’t generate much of a return on investment. But the average student debt of graduates is less than $30,000 – about the size of a typical car purchase – and should be manageable (assuming the grad is able to find a job.) 

Here’s a handy interactive map by the Project on Student Debt that shows the average debt and the proportion of students graduating with debt; the related database operated by the Institute for College Access and Success allows you to run all sorts of interesting tables on costs and debt by actual institution, including community colleges and trade schools.  Here’s an OregonLive take on the numbers, as an example.

Why not a comparison of the costs, debt and placement/salary rates for various degree programs across a number of institutions?  Nursing, engineering, business administration, etc. – find some real readers still mulling their options and enlist a financial planner to help them weight the dollars and cents factors of their choices.  (I once had a planner run numbers for a student who had reluctantly passed on his dream school to accept a full scholarship at a respectable but not legendary college; the planner figured that at minimum, that choice would have a $600,000 positive effect on the young man’s net worth by age 60.) 

You also might write about the pros and cons (according to financial advisers, human resource managers, etc.) of creative approaches to paying for college, including: taking a couple of years off to save before matriculating; the leap-frog approach of alternating work years with school years, borrowing from family members rather than bank, and doing as many credits as possible via advanced placement or local community college programs (like this one in Ann Arbor that helps student earn a high-school diploma and college certificate simultaneously.)

Help your audience understand  earn-as-you-learn opportunities via local skilled trades unions, including machinists, electricians and plumbing.  The U.S. Department of Labor oversees apprenticeships and operates a searchable database; I randomly selected Marion County, Ind., and got hits on more than 100 “registered program sponsors” listed with training programs ranging from boilerhouse mechanic to animal trainer to paralegal.  (A number seemed to be related to a jobs re-training program and not all are presently offering training berths but it’s a lead you can follow up on to guage the availability of apprenticeships in your county or region.)

Student debt forgiveness programs might be of interest to readers, as well:  As USA Today reported, as many as one-quarter of American workers might be eligible for debt forgiveness or an income-based repayment program.  And check out your area’s big employers – are any offering student-loan help as hiring incentives, or paying for grad shool degrees for existing workers? 

Personal finance basics

Some young adults may be learning about compound interest, budgeting and so forth the hard way as they juggle the above-mentioned loans, but it never hurts to include sidebars and infoboxes about basics like how compounding works and the concept of dollar-cost averaging.  CreditCards.com reports that “Millenials have unhealthy credit habits,” including the use of cards for revolving debt.  Again, you might use these concepts as a springboard to ask local financial planning experts (I like those with the Certified Financial Planning credential) and credit-union advisors, as well as counselors at debt-management agencies, to explain how little amounts of either debt or savings can add up substantially over time. 

It’s important for the young-adult cohort to manage what they have well; this Businessweek article “Millenials mired in wealth gap as older Americans gain,” illustrates how the housing market collapse has cost this group more than other demographics.   (As an aside, strive for balance.  Articles like this tend to portray their subjects as victims; one might also pose the question “are 30-year-olds ready for a $350,000 house in any circumstances?”  What was their rainy-day fund like, for example, and why did a plunge in the home’s value – which wouldn’t affect the monthly payment – drive homeowners into bankruptcy?  Get all the details you can to provide a well-rounded report for readers.)

And here’s a neat New York Times interactive graphic “Is it better to buy or rent?” real estate; it might make some Millenials feel better about not being able to afford property right out of the starting gate.



High-tech carts, speedier play: Golf industry courts new players

Golf’s premiere tournament, the Masters, will be swinging into action in a few days, and it’s a great peg for a look at the fiscal health of your region’s golf industry – from resorts and courses to equipment sales and lesson.

As fewer time-pressed Americans opt for a slow stroll around the links, and demographics takes its toll on an aging crop of enthusiasts, golf facilities and related businesses are hurting.

woman in yellow skirt on green golf course, blue sky

Photo: Grand Cayman Golf

This just-out article from industry publication Golf Club Management says “Golf ‘desperately needs to change its image’” and in a recent Harris poll, only 2 percent of adults picked the game as their favorite sport, according to an online report by USGolfTV.com.

This report by the National Golf Foundation, “Golf Participation in America, 2010-2020,” (PDF) is worth a read; it says that after finishing the 20th century on an upswing, the pastime has been in decline with participation rates dropping yearly since 2000.  The group forecasts a 1 percent annual growth rate, mostly among high-income people, and expects as many as 1,000 golf courses to disappear this decade.  Clearly golf is falling out of favor among middle-income people for economic and lifestyle reasons.

Here’s an article from the Greater Baton Rouge Business Report, “Taking a mulligan,” that features a list of defunct courses and even an anecdote about a public pension fund’s disastrous investment in golf facilities.

But golf is big business and important to many tourist and resort economies; CNN reported last year that an industry estimate puts the game’s total economic impact at $177 billion a year in the U.S. alone.  So checking in on what courses, clubs, coaches and related businesses are doing to reach a new generation of players is fodder for some interesting business stories.

golfer shot from the ball's point of view

Photo: Phillip Ritz

The Sioux Falls (Iowa) Argus Leader says “Country clubs adapt to survive,” and notes that fitness facilities are one way that private clubs are trying to appeal to a new clientele; eased dress codes, on-premises sports bars and kiddie pools are other tactics. Speeding up the pace of play is another aspect of modernizing the sport; GolfBallsUnlimited – which bills itseslf as a resource for bulk, used and recycled balls (an interesting angle for a story – you could expand it to recycling of gear in other pastimes as well) just issued a press release saying slow play is “killing golf,” and hinting that better-quality balls are part of the solution.

Another tech angle:  Golf carts with GPS.  It would seem difficult to get lost on the average suburban cart path but who knows?  What other amenities do the latest models feature?  Lots of aftermarket fans and air-conditioning systems are out there, and Golf Car News, the industry publication, offers other potential story nuggets.

I also see a lot of thriving driving ranges and wonder, are time-deprived would-be players substituting a quick dash to the range for full-scale play?  How are the ranges adapting; they used to be no-frills facilities and now seem to feature nicer amenities; I even saw one that appeared to have air-conditioned bays.  It’s an entire industry that might make for a new twist on the business-of-golf story; seek out story leads at the Golf Range Association trade group site and its related industry magazine.

Also worth a look at trends in corporate and fundraising golf outings; are these staying in favor or falling prey to more family-friendly events?  Check bookings at local courses or clubs and ask corporate organizers about trends they’re seeing on their end.


Assess the vacation home market as getaway season draws near

Whether a lakeside cabin, desert ranch, riverside RV or beachfront cottage, owning the getaway home is many a consumer’s dream.

And as summer draws near, a new spate of information indicating an upswing in buyer demand makes this an opportune moment to take a look at trends in the sale of second homes and other types of vacation property.

Second homes  modular mountain home

Mens Journal urges readers to buy their second home first.

About 25 percent of Baby Boomers say they plan to buy a second home as part of their older-years strategy, according to a new survey out from Better Homes and Gardens Real Estate LLC; the survey also includes other factoids about the over-50 crowd’s property-buying and selling plans, if that’s your angle.

And the National Association of Realtors today releases its annual Investment and Vacation Homes Buyers Survey.

The NAR report shows that 2013 vacation home sales soared 29.7 percent, to an estimated 717,000 properties, compared to 2012.  Further, vacation home sales accounted for 13 percent of transactions last year, the highest since 2006, and the median price of a vacation home was up 12.5 percent to $168,700.

Interestingly, investment home sales, one of the hottest market segments in recent years, showed a decline in 2013, dropping by about 8.5 percent but still well over a million transactions.  If you’ve been following that trend in your region and its effect on neighborhoods and would-be buyers, this might be time for another look.

The complete report is available from the NAR’s media relations office and includes buyer demographics, down payment medians and more.

Some ideas for specific story angles:

Timeshares.  Always an interesting slice of the market.  This recent Motley Fool article says that big-name purveyors are increasingly competing with the secondary market of individual sellers using wide-reaching online databases to find buyers.  Why not check out some of the “vacation ownership” communities in your area and talk with developers and vacationers about trends? The American Resort Development Association, the industry group, also has a website full of story nuggets from state-by-state legislative issues to the program for its conference, which opens April 6.

Being a vacation-home landlord.  Is this a good retirement or investment strategy?  HomeAway Inc., an online rental marketplace, is just out this week with its most recent survey of rental landlords; it says bookings are stable and notes, interestingly, that the average age of rental owners is trending down.  The survey also cites the top locations for vacation rental sales, most are in the south but I wonder if the firm would run numbers upon request for other states.  In addition to owning full-time rentals, how can consumers turn a dime occasionally?  Here’s a recent Forbes piece, “How to use AirBnB to profit from your second home;”

Non-traditional second homes.  The motor home parked all season in one reserved spot or the city pied a terre for those who prefer martinis to mosquitos might make for some interesting real estate markets depending on the standout features of your region.  Ask around among real estate agents about any offbeat demands from second-home buyers.

And here’s a neat twist from Men’s Journa:  “Buy your second home first.  It chronicles the experiences of upwardly mobile young renters who are finding weekend properties more affordable than condos or apartments in the cities where they work.  An interesting trends piece and of course a good springboard for writing about the tax implications of primary and second homes.

The family cottage.  Equitable use by multiple family members, inheritance problems and economic woes are problems faced by the second and subsequent generations to inherit these getaway gems.  Plus, today’s youngish families may prefer jetting off to a variety of destinations to cooking marshmallows on the same old campfire each weekend.  What’s happening in resort and lakeside areas near your market, traditionally home to the weekend cabin.  Are more being converted to year-round residences, sold out of the family of origin or used as rental property.




As autism prevalence soars, which businesses strive to accommodate?

The Centers for Disease Control and Prevention published an amazing statistic last week:  One in 68 U.S. children has an autism spectrum disorder – up 30 percent from just two years ago, according to a CNN report.

Here’s the basic fact sheet on the disorder from the CDC’s extensive autism portal; it says “People with ASD often have problems with social, emotional, and communication skills. They might repeat certain behaviors and might not want change in their daily activities. Many people with ASD also have different ways of learning, paying attention, or reacting to things. Signs of ASD begin during early childhood and typically last throughout a person’s life.”

Autism Business

Image of the child: HealthNews.com

The astounding prevalence (an estimate, it should be noted, based on a smallish study) of this developmental disability is really an amazing public health issue for medical personnel, educators, child care providers and of course parents.  And while experts debate the causes, diagnosis and treatment of autism or the various autism spectrum disorders, it’s a condition that is increasingly of interest to businesses, as well.  Which is where we come in.

According to the advocacy group AutismSpeaks.org, more children are affected by autism than by diabetes, AIDS, cancer, cerebral palsy, cystic fibrosis, muscular dystrophy or Down syndrome combined.  And as it’s considered a lifelong diagnosis, obviously many adults and their families presently and in the future will be coping with autism as well.


I think it’s worth it for business writers to take a look at the “industry” of autism, as well as the increasing number of businesses that are making accommodations for those with autism spectrum and other disorders that make them sensitive to sensory experiences. (Also, April is Autism Awareness Month, if you need another news peg – and it may be prompting companies into reviewing their own training and procedures.)

For example, the Detroit Metropolitan Airport recently said kicked off Onboard with Autism, a program that enlists the TSA and airlines in allowing families to conduct “flight rehearsals” to familiarize people with autism with the routine and sensory experience of checking in, going through security, boarding an aircraft and listening to flight attendant safety instructions.

What’s going on at your local airport, and other businesses that cater to the general public with services or events that could be problematic for those with sensation issues?  Here’s a community playhouse that holds autism-friendly programs and a Tampa, Fla. Holiday Inn that bills itself as autism-friendly; it says it provides “comfort items” and special staff training to help families with an autistic member.  Movie theaters sometimes hold special programming, and a number of hair salons – like tHairapy in San Diego – serve special-needs people with autism and related disorders.  What an interesting niche.


Restaurants, theme parks, dental offices, all are places that likely are under increasing pressure to serve this clientele.  Your area and state advocacy groups likely can provide examples of businesses that do and don’t accommodate, as well as insight into pending legislative issues.  Check this Autism Society database that helps you search for advocacy groups, care providers and other involved parties all at once.

Training teachers, first responders and other in understanding the issues of those with autism is another industry that is revving up; I got a number of hits searching “autism business consultants” and “autism training” with a geographical term for my area.  Are more companies that serve the public hiring experts?  Even as a defensive measure, perhaps; lawsuits like this one against a hotel chain charged with not accommodating an employee with autism – as well as ADA-related suits by patrons – may rise with the prevalence of the disorder.

Finally, on an upbeat note, here’s a Wall Street Journal report, “How autism can help you land a job,” about companies actively seeking autistic adult employees, if you want to do a workplace piece about jobs for people with this lifelong conditions.



Money Monday: Story ideas for reaching parents, kids and teens

Welcome to Money Mondays! April is widely recognized by the financial industry and various consumer protection groups as National Financial Literacy Month, and in honor of it we’ll kick off each week with posts about a variety of hot topics in personal finance as well as resources to help reporters tackle them.

Some financial matters span every age range, while others tend to affect people in specific life stages.  We’ll follow that theme and start the month off with some story ideas for finance as it relates to babies, children and teens.

This artistic piggy bank was created to help teach about personal finance. Photo by Flickr user dbking

Money is an issue even before birth; the U.S. Department of Agriculture recently published a new Expenditure on Children by Families report and projected that parents will spend an average of $241,080 to raise a child born in 2012.  That’s a daunting figure and of course real-life spending varies wildly, but you might parse the averages in various categories (shelter, clothing, school, etc.) and get area budget experts, money-smart bloggers and other pros to offer tips for painlessly paring the tab.

A fun round-up of babysitting rates in various districts and neighborhoods might be a good tsk-tsk feature and a heads-up for teenage entrepreneurs; I’m talking casual parents-night-out or after-school sitting vs. day care and was shocked to hear parents recently saying they’re resigned to $50 in babysitting bills for an evening out.  What are the variable rates depending on number and ages of the kids being watched, whether meal preparation or late-night stays are involved, etc?  Maybe bartering with prospective sitters might be one way to economizing; trading tutoring or term-paper editing, or cooking or the use of a gadget, in exchange for date-night child care.

Many parents these days know the importance of reading to infants, what how about developing a child’s money sense?

Sometimes frivolous-seeming features can underscore why so many adults grow up to be challenged in financial matters. I once roamed a big chain toy store looking for games and toys that taught kids about money.  No dice; a tiny vending machine took money to dispense fake food, dress-up purses held baby cells phones to ingrain personal connectivity but with no mention of the monthly tab, and fashion dolls had glamorous occupations like “shopper” and cruise-ship passenger; none were accountants, financial planners or budget manager.  Instructional videos, flash cards and “educational” toys weren’t much better.  Though a recent search did turn up a “Trip to the Credit Union” coloring book, which is a start.

girl with play money

Click photo for Forbes' 5 most important money lessons for kids.

Not to sound like the Grinch, but since financial stumbles can affect a person’s choices in education, career, lifestyle and even relationships you might want to talk with educators about what’s lacking in personal finance messages for kids and teens, and try to find some programs in your area that fill the need.  The Jump$tart Coalition can put you in touch with member agencies in your state, and here’s an enlightening map of state financial education requirements; you will see that many states have none.  Ask legislators and education department officials about the gap.

Tips for making allowances a learning tool, early investing opportunities (yes, kids under age 18 can open a traditional or Roth IRA), gadgets and apps that teach children about money skills, all are components of useful stories that help families fill educational gaps.

The National Credit Union Foundation sponsors Biz Kid$, a TV show that teaches young people about entrepreneurship and basics like credit, spending and the stock market; check with your local credit union about other outreach to teens and children.

Teen earning, spending and saving are interesting topics, especially in recent years when the percentage of employed teenagers has plummeted; according to the latest Bureau of Labor Statistics Employment Situation report, the participation rate in the workforce of those age 16-19 is only about 32 percent.  The Las Vegas Sun says youths encountering a bleak jobs market “might be permanently scarred” with reduced earning power following them for a lifetime.  What jobs fairs, workshops and other opportunities are out there for teens?

And are they working for pocket money or to contribute to household necessities?  What tips do financial planners have for youth; this is a good time to illustrate the wonder of compound interest for those in a position to put by a few dollars.  College choices loom too; have a planner outline the lifelong consequences of, say, doing the first two years of undergrad on a pay-as-you-go basis at the local community college vs. the four-year schools teens in your area favor.


Will 2014 new car sales build on last year’s momentum?

Last year’s new car sales in the United States proved a turning point of sorts, soaring 50 percent higher than the dismal post-recession slump of 2009, as CNN Money reported in January.  While the annual sales pace was still 2 million vehicles off the heyday of 10 years ago, consumers (who had been hanging on to their older vehicles for unprecedented lengths of time) did take the keys to 15.6 million new passenger cars and trucks, a gain of more than 12 percent over 2012.

New Car Sales  Chevy Code  Acura NSX  BMW i8

These are three of Car and Driver's 25 cars worth waiting for out of the 2015 models. CLICK photo for full report.

But new car purchasing chilled a bit in December and has been slower than hoped the first couple months of this year; no doubt carmakers are hoping that a forecasted March uptick of 2 percent year-over-year will wave the green flag on another car-buying frenzy in 2014.  But with new car sales for the first quarter due out from major automakers on April 1, you might want check on momentum at dealers in your area.

There are a couple of signs that might not bode so well for the new-car sales industry:  An intriguing release by Interest.com on its 2014 Car Affordability Study says that residents of only one U.S. city — Washington, D.C. — can afford a new car on that community’s median income.   That’s according to the formula recommended by the Interest.com site (a sister to the respected Bankrate.com site) which includes a hefty down payment and monthly obligation of no more than 10 percent of income.  By its calculations, consumers in many major cities can’t afford the $32,000-plus average price tag on a new vehicle; the study indicates the max it thinks a median-income household should spend on a new car, which in Miami, for example, is about $15,000.

Now of course, not every consumer sticks to those sensible guidlines, but there is no question that stagnat wages,a  sluggish job market, the drumbeat of income inquality woes and other factors are factors that could snuff out the fire in car-buyers’ bellies.  Already, they are stretching auto loans to the max with a third of loan terms being six years or longer, according to this J.D. Power report from February.  Consumers also are using more auto leases than they have since 2000 — another way to get into a car that might be bigger than one’s budget.  Automotive News reports that auto loan delinquencies, while low, did edge up recently, and that lending to subprime borrowers (with lower credit scores) are rising slightly as well.

These factors could be a blip or a trend; I’d get out and talk with dealers, credit unions and banks, repo companies and others about the local forecast for 2014.  And is the silver lining possibly better deals for buyers?  The Motley Fool postulates about a “price war” among automakers if sales don’t reflect a little more octane in coming months.

Conveniently, the U.S. Bureau of Labor Statistics is just out with its report on personal income by state for 2013; it notes that personal income in every state grew more slowly last year than in 2012.  (I don’t know that the BLS numbers are the same ones used by Interest.com, by the way.)  You might find the various income reports for your state helpful in establishing context.


Heat is on for parents lining up affordable summer kid care

Some of us still are bracing for snowstorms as winter clings to spring with icy fingers — but for some working parents, the balmy days of June and beyond loom uncomfortably close.  That’s because vacation time for school-age children brings up the need for supervising and entertaining kids too young to hang out alone, and it’s none too soon to take a look at the business and personal finance implications of the summer camp and day care industries.

Camp Pinewood YMCA

Camping is about learning skills, developing character and making friends. And giving kids something to do. Photo: Camp Pinewood YMCA


From the parents’ POV

This is a huge personal finance story that encompasses out-of-pocket spending, potential tax credits for care costs, the opportunity costs of using vacation time to cover kids’ free time and issues created in the workplace by parents scrambling to make sure their children aren’t left unsupervised.  This annual report from Child Care Aware, while not directly addressing seasonal child care needs, provides a lot of benchmark cost information.

This timely Boston Globe article, “Sticker-shocked parents plan now for children’s summer activities,” is a great one to localize.  It says care and activities can cost $500 per kid per week, or abut $6,000 per child for a full summer.  And the logistics of piecing together a summer’s worth of supervision — between parents’ vacation, grandparents’ visits, camps, summer school or tutoring and so on — are even more daunting.   Why not do a roundup of offerings from various for-profit and non-profit activity centers in your area, as well as a look at rates and regulations at traditional day care operators.

Here’s an About.com article, “Everything you know about sumer camp planning,” that offers some story germs from the parental point of view.  You might also look for creative solutions for cash-strapped parents; perhaps teaming up with another family to share a sitter or swap responsibilities when one parent or the other is on vacation.

The New York Times reported last year on an American Express spending survey that figured the cost of kids’ summer activities at $856 per child (and that’s the average; the affluent cohort spends considerably more.  The Amex Survey measures things like day camps, educational activities, parties and more, in addition (apparently) to day-to-day child care costs.

Climate Camp, England

Physical challenges can be a healthy part of summer camp. Photo: Manos Simonides

Don’t overlook the tax implications.  For starters, over the course of a summer it’s quite possible for parents to exceed the threshold that requires them to pay the “nanny tax” to household workers, as this CBS News report points out. Enlist an area accountant to explain how this works, perhaps connect you with clients who pay the tax in summer and advise on ways to avoid the hassle (like hiring a different type of business to care for the child.)  On the other hand, parents may find that certain types of summer activities qualify for the dependent care credit of up to 35 percent of expenses; here’s a brief from the Internal Revenue Service and a primer from TurboTax.

And how about workplace policies; do parents of vacationing kids get dibs on prime time off, or perks like leaving early, telecommuting, etc.?  Here’s a U.S. News & World Report piece that discusses who “gets the shaft” at work; that’s a can of worms you might address with area unions, HR reps and business owners.

As a business and jobs opportunity

The market research firm IBISWorld reported last fall that day care is a $46.6 billion industry, with non-employers making up 90 percent of players.  That means small independent care providers dominate; what opportunities and niches exist in your area for providing licensed summer child care?  Who’s doing it and what do they earn?  Here’s an interactive map of state child are licensing regulations for easy access.

What other opportunities exist for enterprising tutors, nannies, mentors and others who can fill this niche?  What about opportunities for hourly workers; Snag A Job.com is listing many summer child care jobs. How about camp counselors, health care workers for camps and activity centers, security providers and so on?   What about services for special needs children, or for single parents and those who have fewer resources?

Note  that transportation is a factor in addition to activities and supervision, as well as backup planning in case Plan A falls through.  Those needs offer business opportunities to entrepreneurs; check out this All Student Shuttle Service from Texas, which will zip children around to extracurricular and summer activities or even home from school if they feel ill; it’s already urging parents to “register for summer camp/summer school transportation.”  What an interesting business model that both families and prospective business operators would like to read about.  What costs are involved for operators and what about liability for drivers and owners?  What sort of online scheduling services, apps and security features are state of the art in the student transportation business?

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