You work. You pay taxes. Then…You Work Some More.

You spend your entire life waiting to be an adult, and when that moment comes, you determine life stinks. You’ve got bills to pay, and entry-level jobs may involve burgers and fries. There are many good jobs, too.

If you plan on working for a living rather than sitting on a couch watching Netflix, labor law is a great area to dig into. You’ll want to become familiar with some of the government agencies and regulations that keep you safe and help you to know your rights.

The US Department of Labor regulates all things that have to do with hiring, firing, and working. These laws come to you courtesy of 100 years of US history, from the industrial period to present. Activists, labor unions, and grassroots movements have fought for things like the 40 hour workweek, time and a half wages for overtime and certain conditions, and other key employee rights. The Department of Labor protects employers, too.

The Occupational Health and Safety Administration falls under the Dept of Labor.  OSHA is responsible for reducing industrial and workplace accidents throughout the nation.

Critical questions: 

Which regulations and laws protect you as an employee? How? Are there any that hinder you?

How do you navigate the system if you encounter a labor situation that needs resolution? Which laws apply, and how do get through the red tape.

Where do you see employees making changes to labor laws in the news today?

What are some unique situations where labor law might apply to special groups such as teens, older people, or people of different races, religions, or ethnicities?

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How do you know if the news is telling you the truth?

“I saw it in the paper?” Does that make it true?

The Huffington Post reports we get as many as 1/3 of our news from private citizens.

These days, we get our news from so many sources that it’s really tough to be able to tell what to believe. If you look carefully, though, you’ll be able to detect bias and agenda. Every news source reports from a unique standpoint. They may be as objective as possible, or they might be broadcasting their opinions outright. As you start to look at the news, you must understand the following:

  • News reporters have unique backgrounds that affect how they report the news.
  • News is increasingly filtering down from “eyewitnesses ” and first-person accounts via social media. These are not trained journalists.
  • You have nearly endless choices of the type of news you will consume and where you can get your news. This means news outlets have to compete for your time or click.
  • There are different ways people like to consume their news. Some people like to read their news in a news feed, others prefer a brief and still others go right to traditional broadcast news or 24-hour cable news. YouTube is fast emerging as the source of choice for many of you.
  • News stories must have the basic “Who, what when, where, and why,” but they also have a unique point of view. You must determine that point of view and whether it makes sense when compared to all the other outlets reporting that story.
  • Data in the news can also be skewed, the same as stories. Make sure you corroborate all the news and data that goes into your brain. Ultimately, you make the call.

News Challenge: 

1. Notice where you are getting your news.

2. Evaluate whether that news is reliable.

3. What is your attitude toward the news–are you a believer or a skeptic?

4. Find news outlets that align with your beliefs, and those with whom you tend to disagree.

Suze Orman Says “Show Me the Money”

Financial expert Suze Orman makes a living giving advice. Her book “The Money Book for the Young, Fabulous & Broke” is a go-to book on how not to mess up your life, and how to fix it if you already have. I suggest you read it. It’s cheaper on Kindle. Suze would appreciate you saving a few bucks. Maybe you can buy a couple copies and share them, or one of you, an enterprising one, would like to rent it to others. Her surprising view on budgets is interesting. Don’t restrict, change a few things and head toward success.

Watch a few segments of her “Can I Afford It?” segment to see if you are on track to retire. Here, Josh wants to look cool and buy a Tesla. Is it a good call?

Let’s put this in terms you can relate to–not many Teslas in our parking lot. There’s a phone in every pocket, though.One kid said, “Miss, I’m going to be out Friday. I have to get my iPhone.” Hmmm….

The iPhone6 is a big consumer deal. People are camping out. Is an iPhone6 really necessary? Is an iPhone necessary at all? What about team Droid here?

In order to make this purchase, first consider needs vs wants. Do you need a phone at all? It’s a big expense. There’s an opportunity cost to your phone–it’s not only the cost of the bill, it’s the cost of the other things you could do or buy with that cash. You could invest. You could save for college. You could blow it on Pop Tarts and Monsters. Who knows. Give it some thought.

So, Suze Orman would say deal with your needs first, put an 8 month emergency buffer together, fund your company’s retirement plan for you, your 401K (you don’t have this yet) up to the percentage your company matches, then fund your Roth IRA up to the $5K allowed each year by law.

Ramit Sethi, of the I Will Teach You to Be Rich camp would say something similar but argue you can spend lavishly on things you really love and value, but don’t waste money on stupid things. And yes, fund those retirement accounts.

Analyze the smartphone purchase now:

Critical questions: 

  • Is it a need or a want? Some of you made the case that you use it as a laptop, and tech’s certainly going that way. If you are using it for work, internships, or school productivity, what’s the lowest cost option that will still be productive?
  • Are you falling victim to brand loyalty even if the data looks like you should be making another consumer decision?
  • Is the opportunity cost of having a top of the line phone preventing you from getting to other, more important, savings goals?
  • What will you do when you’re no longer freeloading off your parents? How will you pay this bill?
  • Consider price, features, and durability and give an honest reflection as to whether your communications budget is serving you well.

A bit of a review…

We’ve had a long week discussing the fact that taxes (boo) are not fun, cash flow needs to be there, and we must attend to our income to expense ratio. There are only two ways to come out ahead–make more money or spend less. We’ll examine two schools of thought on this. One school says save your cash. A penny saved is a penny earned. The second school of thought says this: “A penny’s not much. You need to make more money.”

We’ll discuss both.

Meanwhile, please check your knowledge of this week’s material by taking this short assessment.

Hand Over Your Money…It’s College Time

YOU NEED TO RESEARCH COLLEGE BEFORE YOU GO!

I’m sorry. I don’t like to shout at you. It’s not very polite. One trend I’m seeing in our economics classes is of the people who intend to go to college 80% of you have no idea where or why. It’s like someone said you had to do something after high school but you were never sure what. The first week of class was dedicated to setting SMART goals.

College is one of the most expensive purchases you will make. Yes, that’s right. Purchases. Investments. Emptying of your wallet, depending on your perspective.

The jury’s out on this one, folks. Many economists are conflicted. Some say you should go to college right away because you will have increased earning potential. Others say the thousand plus percent increase in the cost of college over the last decade cancels out that benefit, and entrepreneurship is the way–find a mentor, network, and research to get into your field.

I’m going to stand in the middle on this one. For some of you, college is a must. I don’t want my neurosurgeon apprenticing and googling the answers. Sorry. But then again, there are, in fact, some degrees that are worth more than others. Take a look at this graph. This shows there are many more people than jobs for mathematics and computer science degrees. Sadly, it shows my field as the one with very few jobs and a surplus of degrees.

What does this mean?

1. Research your colleges. In order to do this, you should have a spreadsheet. I made one for you. You can cut and paste this into a working spreadsheet in your google drive, this one’s read-only. Feel free to add or subtract columns for things you value, like clubs or athletics.

2. Know the deadlines. They come up quick. You should be reviewing your spreadsheet for deadlines.

3. Narrow down colleges to a “yes,no,maybe” column. If possible, visit colleges on the likely list.

4. Look at the $$$$ column. Pay attention to scholarships and deadlines for scholarships. There are a ton of scholarships in areas you might not think about–corporate, ethnic, religious, gender, or experience-based scholarships. This requires research, application time, and hard work. It’s a part time job.

5. Fill out your FAFSA. This is the form that goes to colleges telling how much financial need your family has. Do this immediately after your family files their taxes. Some aid is first-come-first served. Being early helps here.

6. Don’t decide based on one factor. You have to be able to pay for the college once all the aid comes in. Sure, I’d like to own a Ferrari, but it doesn’t make sense. I’m broke, and my neighborhood gets snow. Potholes alone rule out the Ferrari. college is not an emotion based decision. IT’S AN ECONOMIC ONE. Sorry. I’m screaming again.

7. Think outside the box. I can’t recommend the Reserve Officer’s Training Corps program enough. The military, if you qualify, will pay for your degree(s) and give you a commission as an officer. In an economy where many qualified people are in debt and underemployed, it’s a reassuring thing to get out of college loan free with a guaranteed job. Again, you’ll need to attend to every detail in the application process, which is coming up quick.

But where does my money go?

You can’t get where you’re going if you don’t have a roadmap. We’ve talked about setting SMART goals (Specific, Measurable, Achievable, Realistic, and Time-oriented) in order to succeed in the future, both financially and in life. 

“This is hard!” you said. Yup. Supposed to be. And it’s supposed to be annoying enough that it sticks in your brain and makes you continue to think, when you make social or economic choices, “Does this help me achieve my goals?” 

Things fall into two categories: productive and not productive. By cutting down on the not productive, you will become amazing. It’s a subtle thing, but it’ll happen. One morning you’ll wake up and realize you’ve reached your destination. 

What then? Touchdown dance perhaps? Nope. Time to set new goals and get there, too. 

Now that you’ve set your goals, you might think, “OMG, these things are expensive.” Yup. 

That’s where the budget comes in. 

You can’t meet your financial goals if your money’s flying out the window. When we discuss budgeting, we’ll talk about two schools of thought–this will be a recurring theme in this course. 

1. The School of Savings. Many leading financial planners will tell you to save. Save money, then you’ll have money. Spend money, and the reverse is true. This is a great strategy, one we’ll work on together. 

2. The School of “Spending money on a coffee today doesn’t matter.” Many leading entrepreneurs say the only way to reach your financial goals is to make money. Saving a dollar on a coffee makes you feel deprived. You should budget your money such that you know what you want out of life (see: our lessons on SMART goals), then enjoy those things and eliminate spending on the junk. 

Challenge: 

During the following week, track all of your spending. You can do this using an app or in your notebook. Keep the information all year. We’ll be working with this to construct budgets next week, though. 

Double Secret Challenge: 

If you choose a budget tracker app, review it for the class. Tell what you used, ease of use, whether it’s free or paid, and whether you felt it gave you more awareness of your budgetary situation. 

 

Resources: 

Best Budget Blogs: Learnist 

How to Set up a Budget: Money for 20’s (this is a sneak preview for next week…bring a calculator!) 

Outline: Chapter 6, text outline 

Know Your Rights

What are your rights as a consumer? We often look at consumer protections in terms of things like the lemon law or product safety, but they go deeper than that.

You will come upon a situation where you need redress. You’ll need to be able to know how to pursue a complaint professionally.  

1. Which agency do I use?

2. What do I really want as far as indemnification (being put back in the position I was in before the situation occurred)?

3. What’s the correct–and kindest–way to get this resolved?

Think of as many situations you know where a product was unsafe, not what you expect, a company didn’t do the right thing, or you found you got the short end of the stick. Sometimes the squeaky wheel gets the grease, but often it’s the smooth operator who gets the job done. 

Research as many government protection agencies as you can, and what they currently handle as far as protecting consumers. Remember, this is what your tax dollars pay for. We’ll discuss their role in society… and oh yeah, taxes, too. You got to pay The Man if you expect to have protections under the government. 

 

Resource: Chapter 1 outline from the official economics book has lists of consumer protection agencies, but these change constantly. Know that you must research to see what divisions and agencies will be handling your complaint.