The middle class has President Obama’s attention.
In his State of the Union address on Tuesday, Obama made the middle class one of his top priorities.
“We gather here knowing that there are millions of Americans whose hard work and dedication have not yet been rewarded. Our economy is adding jobs, but too many people still can’t find full- time employment. Corporate profits have skyrocketed to all-time highs, but for more than a decade, wages and incomes have barely budged. It is our generation’s task, then, to reignite the true engine of America’s economic growth: a rising, thriving middle class,” Obama said not long into his speech.
The president challenged Congress “to assist an American middle class squeezed by rising costs and stagnant wages, making clear that he will devote much of his second term to closing the income gap between rich and poor,” wrote The Washington Post’s Scott Wilson.
Jillian Berman, writing for the Huffington Post, said that “Obama painted a picture of a future nation with a growing economy resting on the backs of Americans with an accessible pathway to the middle class.”
Mark Landler of the New York Times wrote that Obama, “seeking to put the prosperity and promise of the middle class at the heart of his second-term agenda, called on Congress on Tuesday night to raise the federal minimum wage to $9 an hour, saying that would lift millions out of poverty and energize the economy.
Christine L. Owens, executive director of the National Employment Law Project, said in a statement, that she applauds the president for putting jobs and the economy front and center, reports UPI.com.
“President Obama’s remarks tonight show he understands that a higher minimum wage is key to getting the economy back on track for working people and the middle class,” Owens said.
But hold up, wait a minute. Can the promises be kept?
It will be hard, The Post’s Jim Tankersley writes.
“There are two kinds of middle-class Americans struggling today,” he says. “There are the people who can’t find work or can’t work as many hours as they’d like. And there are full-time workers who can’t seem to get ahead.”
He goes on: “Obama seems to have embraced an approach pushed by the Harvard economists Claudia Goldin and Lawrence Katz: helping more Americans graduate college and go on to high-skilled, higher-paying jobs. It’s a longer-term bet. But as senior administration officials like to say, the problem didn’t start overnight, and it’s not likely to be solved overnight, either.
Giving the official GOP response to Obama’s address, Sen. Marco Rubio (R-Fla.) also focused on fixing the middle class. “In a 2,500-word address that was a sort of miniature State of the Union address in its own right, Mr. Rubio mentioned the ‘working class’ and the ‘middle class’ 17 times,” the Wall Street Journal reported.
And how would Rubio fix the middle class?
“Economic growth is the best way to help the middle class,” Rubio said. “Unfortunately, our economy actually shrank during the last three months of 2012. But if we can get the economy to grow at just 4 percent a year, it would create middle-class jobs.”
He then made a case for simplifying our tax code. And he said that “helping the middle class grow will also require an education system that gives people the skills today’s jobs entail and the knowledge that tomorrow’s world will require,” Rubio said.
I heard a lot of promising. But where’s the beef?
The Color of Money Question of the Week: What are your thoughts on the promises of prosperity for the middle class? Send your responses to email@example.com. Put “State of the Union’s Middle Class Promise” in the subject line. Be sure to include your full name, city and state.
Mind Your Manners
When dining out, I try not to turn around when I hear some wailing kid causing a commotion. I’ve been there as a mom, who so wanted to dash before my dinner so the scene would not disturb others. I understand how hard it can be to keep your children quiet.
But one diner earned a meal discount -- for her well-behaved kids.
Staffers at Sogno Di Vino restaurant in Poulsbo, Wash., were so impressed by the manners of one patron’s children that they deducted $4 from her bill, the Associated Press reports.
Laura King, a mother of three – ages 2, 3 and 8 --- said that she posted the receipt on her Facebook page and that a friend later posted it on Reddit.
“This was definitely a random act of kindness,” King told the New York Daily News. “We didn’t go to the restaurant expecting a reward. We expect our kids to act this way whenever we are out and about. This was just a small surprise.”
“Everybody in my generation was raised to behave in restaurants,” Sogno di Vino owner Rob Scott told AP. “That parenting skills have been forgotten in some cases.”
So should bad-behaving kids result in a surcharge?
They won’t get one at Sogno Di Vino, Scott said.
And speaking of awarding kids for certain behavior, Scott Baier of Boston recently made headlines for offering his 14-year-old daughter money to stop using Facebook.
On his blog, Practical Sustainability, Baier drew up a Facebook Deactivation Agreement stating that he will pay his daughter $200 if she stays off the social media site.
“We are very surprised by all the media interest, but this was not the goal,” Baier said about the agreement that was initiated by his daughter. “Hopefully, this will inspire a few other dads/daughters to consider a similar hiatus.”
Here’s another question for you: Do you think kids should be financially rewarded for behaving a certain way, such as getting good grades, curtailing their social media addiction or being respectful in a restaurant? Send your responses to firstname.lastname@example.org. Be sure to include your full name, city and state. Put “Mind Your Manners” in the subject line.
Let’s Talk Money
Are you sweet on your Valentine’s but not on their money habits?
If so, join me today at noon ET for my live online discussion to talk about ways to bring the love back to your finances.
Be sure to send your money questions in early or read the archives later.
It’s My Money
Here’s another story about a kid and money.
The reader asked: “How would you respond to the parenting column about a mom’s conflicted feelings about allowing her daughter to splurge on an American Girl luxury with her birthday money?”
In the essay, “Forget the American Girl store. Just give us a Sprite,” William writes about the money that her daughter spent on her doll.
“My daughter, 6, spent more money on a hairstyle for her doll last weekend than I spend on a shampoo, cut and dry for her at the local salon,” she wrote. “It was hard to watch, but also really sweet to see her carefully open up her pink plastic princess wallet and count out her birthday money at the cash register for something that she really wanted . . . I had made a deal with her: I would pick up the cost of lunch, but any shopping she wanted to do had to come out of part of her birthday money.”
I thought the article by Williams was right on the money. We have to allow our children to spend their money so they understand what it feels like to let it go -- even on things we think are frivolous.
Now, there are times I will step in and stop my kid from spending his or her own money. My daughter Jillian loves Twix candy bars. She would eat them for breakfast, lunch and dinner. So I say no – often – when she begs to buy the candy by mockingly saying, “It’s my money.”
Other times I cringe but let her spend on something I wouldn’t. Still, as you might expect, my kids are pretty frugal because they have spent years listening to me and watching me talk about the importance of being a good money manager. Children can learn to imitate what they hear and see.
2013 Tax Season
If you’re thinking about proposing on Valentine’s Day, or at all, the Tax Policy Center has a calculator to help you see if saying “I do” will result in a higher or lower tax bill.
As the Tax Policy Center explains, “A couple suffers a ‘marriage penalty’ if its partners pay more income tax as a married couple than they would have as two single individuals. Conversely, the couple receives a ‘marriage bonus’ if its partners pay less income tax as a married couple than they would have as two single individuals.’
The center’s calculator lets you see what situations receive tax penalties or bonuses from marriage.
Roberton Williams, a contributor to Forbes.com, explains in a recent article three tax provisions that will increase marriage penalties a lot in 2013 for many high-income couples. First on his list is the new tax rate created by the American Taxpayer Relief Act passed by Congress at the beginning of the year.
The law created a new 39.6 percent top tax bracket, which starts at $400,000 for single filers and $450,000 for couples filing jointly, Miller reports.
So “consider two people, each with $400,000 of taxable income,” he writes. “Unmarried, neither would hit the 39.6 percent rate. Married, they would pay the top rate on $350,000.
Family Financial Fights
In my column last week, I wrote about a daughter who wanted to know if her aging mother should leave money in her will to pay for her nephew’s college education. Here’s my take.
Do you have a family story that sounds like that? If so, send me your story to email@example.com. Be sure to include to your city and state and put “Family Financial Fights” in the subject line.
The Tipping Point
Last week, I wrote about Chelsea Welch, an Applebee’s employee, who was fired after posting the restaurant receipt online for Alois Bell, pastor of the Truth in the World Deliverance Ministries.
On the bill, Bell wrote: “I give God 10 percent. Why do you get 18?” Bell was objecting to the automatic 18 percent tip she was charged. Applebee’s later clarified that Bell paid the tip.
For last week’s Color of Money question, I asked: “Was it right for Applebee’s to fire Welch?”
Unlike the online outpouring of support for Welch, many of my readers felt the waitress was wrong to violate Bell’s privacy. And just in case you missed this point, she hadn’t even waited on Bell’s table. I’m just saying.
“Ms. Welch exhibited very bad judgment in allowing the offending message to appear online,” wrote Thea Kester of Ashville, N.Y. “However, if she was an otherwise good employee, I think that a severe reprimand and promise to terminate her position should her offense be repeated should have been sufficient.”
Marlene Mills of Lansdale, Pa., wrote: “I don’t thing Welch should have posted the picture of the receipt on the Internet, but I don’t think she should have been fired either -- maybe suspended for two or three weeks. Welch should apologize to Bell personally, and Bell should call Applebee’s and see what she can do to get Welch’s job back. Applebee’s is right when they say their customer’s information is private, and should be kept private by their employees.”
“Yes, it’s fair for Applebee’s to fire the waitress,” said Belinda Larson of Wyoming, Minn. “She violated her company’s policy and the customer’s right to privacy – regardless the reason. It’s a shame when folks use social media for revenge tactics.”
“As a company, it is their right to fire anyone, especially for a breach in privacy,” wrote Felisha Crise of Albuquerque, N.M. “In the future part of the hiring process for all businesses should be to have a policy that the employee must sign and agree to, stating such work-related incidents should not be allowed to be posted to social media websites, as most issues of this type do fall under privacy. That would solve the problem with people who do not think a post thoroughly through before uploading it. Also the petition to get Welch’s job back is absolutely ridiculous!”
Tia Lewis contributed to this report.
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