Politics

What is the Minimum Wage in Massachusetts?

June 21, 2021 By Lindsey Boycott Leave a Comment

Massachusetts’ minimum wage is climbing. It currently sits at $13.50 but will be moving again next year. It’s an important step in the right direction, but will it be enough?

Minimum Wage on the Rise

In the blue hills of this great state, those working in minimum wage positions received a 75 cent raise to $13.50 on January 1. It’s the third year in a row that hourly rates bumped up, but it won’t be until 2023 that the state crosses its $15 finish line. It’s a positive step in the right direction, but according to MIT’s wage calculation, one adult with no partner or children needs $17.74 to meet their basic needs. One adult with one child would need $36.88. The numbers don’t always tell the whole story, however.

Service Workers Considered Differently

Interestingly, there is another minimum wage to consider. Service employees currently make $5.55 an hour if they receive over $20 in gratuities a month. However, in fields like the hospitality industry, workers don’t need to worry about the disparity. Instead, employers must ensure their staff receives at least $13.50/hr via an hourly rate and tips.

If employers cannot achieve this, the business must pay staff the difference to bring the hourly rate to the minimum wage in Massachusetts. It’s also important to note there are regulations about handling tips. Gratuities must either be retained by the worker or managed through a valid tip pool as defined by MGL c.149-152A. This wage will also increase on January 1 for the next two years, $6.15 and $6.75, respectively.

Ways to Stretch Your Dollar

Despite the difference between the current hourly wage and your actual living costs, you can always get creative when you’re trying to make ends meet. One of the easiest ways to get started is to track your expenses. While it sounds obvious, you might be surprised to learn that you spent $400 a year on streaming services. Get a free money tracking app like Simplifi to help you whip those dollars into shape. See other money tracking below.

App	Fees and Minimum	Best for:
Personal Capital	Free	Monitoring wealth and spending
Simplifi	Free	Personal budgeting
YNAB	$84 a year or $11.99 a month (after a 34-day free trial), free for students for 12 months.	Personal budgeting

If you’re more of a money mover and shaker, a side gig is always an excellent way to bring in some extra bucks. You can sign up with the TaskRabbit app if you want to pick up odd jobs to get you by – think yard work and IKEA furniture assembly. However, if you’re looking for something a little more formal, look no further than remote and adaptable job specialist Flexjobs. Most jobs are geared towards less conventional employment arrangements and might be just what you’re looking for in a secondary hustle. Here are other job marketplaces as well.

Platforms	Best For:
Fiverr	Finding Freelancers
Bark	Finding Unique Freelancers
Appjobs	Gig Economy Professionals

How to Make a Difference

If you’re not satisfied with what your elected officials are doing on the minimum wage front, there are several ways to get your voice heard. For example, RaiseUp Massachusetts was launched in 2013 after individual coalitions lobbying for better wages banded together. They’ve succeeded in getting new legislation passed like increases in the minimum wage and paid sick time, but the work continues. Contact them if you want to get involved.

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Photo by Jessie McCall on Unsplash

Chip Shortage Reduces New Car Production and Sends Used Car Prices Higher

April 4, 2021 By Max Erkiletian Leave a Comment

With Spring in the air and the lure of the open road, you may be thinking of buying a new car. If you are, be sure to buckle up — you are in for a rough financial ride.

A worldwide shortage of semiconductor chips is playing havoc with the manufacture of new vehicles across all brands. More and more automotive plants are closing temporarily due to the shortage.

Used Car Prices Rising

“The auto manufacturers are in a situation where they can’t fill production to capacity,” George Peterson, President of automotive research and consulting firm AutoPacifc told Saving Advice. “At the same time, consumer demand is spiking. So there is a crisis in the supply chain. That means many consumers will move to the used car market. Because of the increased demand, consumers will pay more.”

Used car prices are already moving upward. In the first half of March, wholesale used car prices jumped 3.74 percent, according to the Manheim Used Vehicle Index.

“The latest trends in the key indicators suggest used vehicle values are likely to continue to see appreciation in the days and weeks ahead,” according to Manheim. Leading the way in used vehicle sales are pickup trucks.

New Car Supply

Most dealerships maintain a couple of month’s supply of all current year models. So inventory would not be affected immediately. However, a Wall Street Journal survey found dealers are experiencing inventory reductions. The uptick in sales that usually occurs in Spring and Summer will put more pressure on the supply line.

Meanwhile, manufacturers may be forced to reduce or halt the production of some models in favor of more popular ones, according to Peterson. In that case, high-profit vehicles, such as pickup trucks and SUVs will be prioritized.

Car and Driver has predicted that one million fewer cars will be manufactured in the first quarter of 2021. Already, manufacturers have announced reductions totaling 680,350. The result, according to the magazine, will be a loss of $61 billion dollars to the industry worldwide.

History Repeats Itself

We have seen this before, says Peterson. In 2020, many automotive plants closed for various periods of time. The reason for the closures then was COVID-19. Chip producers decreased production and shifted supply to other customers. When auto production ramped up again, there were fewer chips available.

Along with the shortage, the automobile industry has increased its use of semiconductor chips. As many as 100 can be found in some vehicles. They are used in everything from Bluetooth, engine management systems, road navigation, and collision detection systems.

That makes cars more expensive. Semiconductors make up around forty percent of the cost of a new car, according to consulting firm Deloitte.

Possible Surge in Used Lease Cars

With the reduction in new car production, as Peterson says, consumers are more likely to turn to used cars. Fortunately, there may be a ready supply.

“Top of the line car sales three years ago totaled about 16 to 17 million,” says Peterson. “About 40 to 50 percent of those cars were lease cars and they are coming off lease, so there is a good supply of quality used cars coming on to the market.”

However, any potential buyer will be able to find out the approximate cost of the selected used car. To do this, they just need to order a vehicle history report.

Some Manufacturers Reducing Chips

“GM is shipping some of their trucks without components that aren’t essential to safety or operation,” says Peterson.

General Motors decided to ship some Chevy Silverados and GMC Sierras without a nonessential chip. The decision results in a drop of one gallon per mile in fuel economy.

“When you’re trying to sell vehicles,” says Peterson, “fuel efficiency becomes less important.”

Is There an End in Sight?

No one has set a date for when they see the chip shortage ending and automobile production returning to normal.

Manufacturers are scrambling for chips and chip producers are expanding operations. But building a new plant and getting it into production takes considerable time.

In the meantime, the semiconductor industry will face more strain in the future. Automobile companies are continually creating more tech-heavy vehicles. With the push to electric vehicles leading the way.

A Government Call to Arms

President Joe Biden has responded to the chip crisis with a call for money and action.

Wednesday, Biden called on Congress to authorize $37 billion to stimulate semiconductor chip manufacturing in the United States. In addition, the president signed an executive order to address the shortage.

“I’m directing senior officials in my administration to work with industry leaders to identify solutions to the semiconductor shortfall,” Biden said on Wednesday. “Congress has authorized a bill but they need $37 billion to make sure that we have this capacity. I’ll push for that as well.”

Biden was referring to the $37 billion needed to fund provisions of the National Defence Authorization Act. The law is aimed at boosting semiconductor chip manufacturing in the United States. However, Congress is yet to fund the legislation.

The executive order kicks off a 100-day review of supply chains for semiconductor chips as well as electric car batteries, rare earth minerals, and pharmaceuticals.

The president met with a bipartisan group of lawmakers Wednesday, before his televised remarks.

American semiconductor companies account for 47 percent of chip sales globally. However, only about 12 percent of chip production is done in the United States, according to the Semiconductor Industry Association.

Conclusion

The semiconductor chip shortage will be with us for an indefinite period of time. Scarcity drives prices higher. As a result, vehicles and many other products that use chips will cost more until the shortfall is resolved.

If there is a silver lining, it looks like the White House, Congress and the semiconductor industry are on the same page.

Weekly Wrap: Vaccine Passport Coming As Scams, Car Prices, IPOs All Trend Up

April 3, 2021 By Max Erkiletian Leave a Comment

One old dirty trick is still with us. However, other financial matters are changing quickly. Check out this week’s financial wrap.

Tax and Social Security Scammers Add to Their Bag of Tricks

The phone rings. Caller ID shows a Washington, D.C. number. You answer and an official-sounding recording says you are in trouble with the Internal Revenue Service (IRS). Or, your social security number has been used in criminal activity. You need to respond quickly.

You are on your way to losing money to a scam artist if you obey the instructions.

“Consumers reported losing more than $3.3 billion to fraud in 2020, up from $1.8 billion in 2019,” states a report from the Federal Trade Commission. “Nearly $1.2 billion of losses reported last year were due to imposter scams, while online shopping accounted for about $246 million in reported losses from consumers.”

Expanding Fraud Opportunities

The IRS and social security scams have been around for years. But now the same techniques are being used to take advantage of fraud related to COVID-19.

The crimes include stealing unemployment benefits, stimulus checks, fake COVID treatments, and bogus charities.

Formula for Fraud

The tried and true template for all these frauds is the IRS phone fraud. Although it can and has been carried out with texts and emails.

With IRS phone fraud, you get a call like the one detailed above. Fear is a big part of the scheme’s success.

The call seems official because it comes from a Washington, D. C. number. However, scammers spoof calls. That is where false information is used to make the call appear to come from a legitimate source. Some phone providers even offer spoofing services that work like prepaid calling cards.

The Call Is Not From the Government

“Government agencies like the Internal Revenue Service (IRS) or the Social Security Administration (SSA) won’t call, text, or email you out of the blue to demand payment right away,” writes FTC Attorney Emily Wu in an agency blog post.

The IRS Confirms Wu’s Assertion

“The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information,” the service says.

To help consumers, the IRS has posted a list of current scams.

To report a scam call, email or text, contact the FTC.

Here is how the FTC suggests you handle a government imposter call.

Here’s Why Your Next Car (New or Used) Will Cost More

You may have heard semiconductor chips are in short supply. The chip drought will short circuit any ideas you had about getting a bargain on your next car.

Semiconductors make up around forty percent of the cost of a new car, according to consulting firm Deloitte. Without them, modern automobiles can not function properly. Auto manufacturers around the world have slowed production as a result of the shortage. That means fewer new cars are coming to market.

Check out Saving Advice’s look into the semiconductor shortage and the impact it will have on your wallet. Our special cover will be available in Sunday’s edition.

IPOs Continue To Boom, SPACs Bust As Opportunity Opens for Small Investors

The surge in IPOs that began last year has charged into 2021 and is rising. Meanwhile, small investors are able to join the stampede.

Companies raised $174 billion on 494 offerings in 2020, according to FactSet, a financial data and software company.

“In aggregate, IPOs raised $174 billion in 2020, a 150% increase over 2019,” according to FactSet.

The number of companies raising over $1 billion set a record at 28. DoorDash and Airbnb both exceeding $3 billion.

IPO Market Off to a Strong Start in 2021

This year is shaping up as an IPO tsunami. Through mid-March, 302 IPOs have raised 102.3 billion, according to Dealogic.

SPACs Go Splat

The only sour note is the recent downturn in Special Purpose Acquisition Companies (SPAC).

SPACs are often called “blank check” companies. They are shell companies. These companies raise money through a stock offering to invest in other companies.

SPACs joined in the IPO surge last year. They now have an estimated $1 trillion in buying power, according to Business Insider. However, average SPAC returns are minus 34 percent between January 2019 and June 2020. Many are trading below their IPO price. Consequently, the market seems to be cooling.

Democratization

IPOs have long been reserved for wealthy and institutional investors. However, SoFi is trying to change that. The investment company is offering IPOs to clients with $3,000 or more in their account. Robinhood is planning to do something similar.

Vaccine Passports Are Coming

Soon, you may be asked to show your passport when you attend public events. No, not that passport. The one showing you have been vaccinated against COVID-19.

The Biden Administration is considering “vaccine passports”. These credentials would be displayed on free smartphone apps or printed.

The White House, various tech companies, local governments, and universities in the United States are trying to develop a credentials plan.

Global Effort

Internationally, the World Health Organization (WHO) is exploring vaccination passport ideas.

Several airlines are testing a digital travel pass developed by the International Air Transportation Association.

The European Commission is contemplating a “digital green certificate”. The voucher would be for travel within the European Union. It would be proof of vaccination, a negative COVID test, or a previous infection.

Everybody Has a Plan

Countries and organizations are researching or have announced plans to implement vaccination passports.

Israel is developing a “green pass” to travel. In Demark, a “Coronapas” will be required to enter hair salons, movie theaters, and restaurants, according to the BBC. Meanwhile, Sweden, Estonia, and Greece are also considering issuing vaccine passports.

Standardization

The potential for chaos is great.

The Federal Health IT Coordinating Council cited the need for one coordinated plan to avoid confusion.

The council stressed that “A chaotic and ineffective vaccine credential approach could hamper our pandemic response,” The Washington Post reported.

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The Day After Election: The Financial Fall Out

November 11, 2020 By Tamila McDonald Leave a Comment

Typically, presidential elections influence the financial landscape of the United States. Each candidate has their own views about government regulation, industry development, and other areas that impact the nation’s economy. Who ultimately comes out ahead has an effect on the markets, at least for a period. Plus, the political uncertainty that lingered during the days it took to identify a winner had an impact. If you are wondering what the financial fallout of the 2020 election looks like, here’s what you need to know.

Why the 2020 Election Was Different

The 2020 presidential election was anything but simple. It took several days for ballots to be tallied in some key states, creating a degree of uncertainty regarding the future of the United States.

Additionally, lawsuits put some doubt over what results would stand, promoting a contentious environment and ensuring that, even once a winner was initially identified, it would take much longer to find out who would actually hold the mantel of president in 2021. This amplified the sense of uncertainty.

There is also the issue of a divided Congress. Republicans seemed primed to hold onto the Senate, while Democrats maintained the majority in the House. With that potentially comes a combative climate, something that can slow decision-making at key times, such as when it comes to passing additional stimulus in response to COVID-19 or future annual budgets.

The Financial Fall Out of the 2020 Election

Ultimately, the 2020 election created a sense of doubt. The slow initial outcome boosted feelings of uncertainty and fears that the result would get tied up with recounts and lawsuits bolstered that notion.

For some, this prompts shifts in their investment strategies. Individuals may look toward options that are viewed as safer, like gold, or at least make an effort to reduce the volatility of their portfolio. This is especially true for those nearing retirement, where preservation is often a priority.

For those investing long-term, the impact may be smaller. At times, it may even signal opportunity, as they may go looking for “deals” as the stock market fluctuates. Additionally, immediately after election day, the stock markets actually experienced a notable gain. This indicates that some investors are feeling bullish, even during these odd times.

Short Term Post-Election Climate

It’s also crucial to remember that most of the notable market movement in a post-election climate is often short-term. While it may persist longer in 2020 due to the heightened degree of uncertainty, it will most likely calm, potentially in fairly short order.

Ultimately, who is elected president has an impact. Both candidates have different views on the economy, various industries, economic stimulus due to the pandemic, and much more. Once the winner is officially chosen, the market may experience some dramatic shifts.

At times, investors try to align their portfolios with areas that are likely to achieve gains once the new president steps into office and begins influencing policy directly. This leads to shifts, but once the president has been in place and their direction settles in, the changes are usually less dramatic. Some may experience losses during these initial days, it’s true. But there can also be gains and are often recoveries.

In the end, movement in the market is normal. While the election may lead to some financial fallout, it can also lead to improvements. The big key is typically time.

Can you think of any other things that cause an election financial fallout? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. If you want to be able to customize your blog on your own domain and need hosting service, we recommend trying BlueHost. They offer powerful hosting services for $3.95/month!

Best Ways to Invest After the Election

November 3, 2020 By Trey LaRocca Leave a Comment

The stock market has been an anomaly lately. With coronavirus, a volatile energy market, and worldwide business closures, there are many factors that sway the markets other than the election. With that said, the election is sure to have a massive effect on our investments. As we have seen the last four years, just a single Tweet from the president can make or break certain stocks for a time. As a result, you can be sure that the outcome of this election will make waves on Wall Street. So, how should we invest after the election?

Stay Your Hand

As far as Election Day is concerned, I would suggest you wait a little bit. While there may be a pretty convincing victor tonight, it looks like there will be substantial pushback no matter which way it goes. This means you may invest according to one outcome, just to have lengthy court cases or vote counting delays tank your investment. If there isn’t a convincing winner, there is even more reason not to pull the trigger. Uncertainty is not what you want to bank your future on.

Avoid Single-Stock Investing

This is pretty much par for the course when discussing any investing. Whether it is attached to the election or not, stock trading is best done through mutual funds or index funds. this diversification makes the investments safer long-term, and avoids one ruined stock taking your whole retirement down with it.

While some single stocks may skyrocket momentarily off the heels of this election, that growth may not be sustainable. Mutual funds and index funds, like the S&P 500, ensure that you can take advantage of the consistent growth of the entire market. With that said, there are certain industries that you may want to focus on depending on which candidate wins.

The Impact of Your Investment Strategy

If Biden Wins

Biden has pushed hard for massive government spending on green energy. While he may be slow to enact these plans, stocks in the green energy industries like solar and wind should respond well to a Biden victory. Not only that, but they are more likely to grow if a Biden administration subsidizes them.

Avoid fossil fuel stocks, as Biden has been remarkably inconsistent when it comes to fracking. He has an extensive history of claiming he will ban fracking (or phase it out) to serve the greater aim of complete eradication of fossil fuels. As a result, these stocks will probably not respond well to a Biden victory.

If Trump Wins

To start, take the Biden predictions and flip them around. Fossil fuel jobs have been a topic of note for Trump, and he has been aggressive about protecting those jobs. AS far as green energy goes, he hasn’t been outright hostile, but clearly does not seem to be looking to increase subsidies to their benefit.

Trump is more of an all-rounder play. Say what you want about Trump, but the market seems to love him. If Trump wins, hammer the S&P 500 or index funds like it, and hold. It seems like the entire market will grow faster under Trump, and there is no reason to take unnecessary risks while stimulus is still being negotiated, as that will likely have an even larger impact on Wall Street than the election will.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. If you want to be able to customize your blog on your own domain and need hosting service, we recommend trying BlueHost. They offer powerful hosting services for $3.95/month!

What Does Joe Biden Have In Store For Our Taxes?

November 3, 2020 By Trey LaRocca Leave a Comment

It’s almost time, people. The election is coming up tomorrow, and whoever you’re voting for, you want it to be over. For those who may still be considering who to vote for, there are a few points of concern for each candidate. Among other probable flaws of a Joe Biden presidency, there is a concern that he may raise taxes on the middle class. Does this have any merit?

Why Is This a Question?

My biggest issue is that this is even a question. Biden has yet to actually release a comprehensive tax plan, but has vague promises of a miracle tax on the rich that will pay for his lofty spending goals. The reason people are concerned about tax increases under Biden is that he has some proposed plans for the climate and healthcare that would cost a great deal of money. If Biden just itemized those initiatives, estimated costs, and released a tax plan that could cover those costs, we wouldn’t have to wonder.

Won’t He Only Raise Taxes on Those Making $400k or More?

As far as Joe Biden says, his tax plan will pay for everything he plans to initiate in his presidency with a simple wealth tax on those making $400k or more, along with some alterations to tax code to close loopholes. In fact, he even promises lower taxes through credits for low-income Americans and small business owners. The issue is, that is such an obvious fairytale that it is a wonder how news media continues to perpetuate it.

This isn’t a partisan opinion, it is simple math. We wouldn’t even be able to close our current deficit under a tax plan like that; even if you could, it would take so much money away from those making $400k+ that we would almost immediately see a mass exodus of jobs and commerce from the US.

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Politicians Never Tell the Truth About Taxes

If that wasn’t enough, politicians also have a long history of lying about this particular subject. Trump and the GOP’s tax plan touted massive decreases in taxes on middle income Americans, but the difference was fairly insignificant. Obama (with Joe Biden as his VP) promised lower taxes for low income Americans; they then proceeded with over 20 initiatives to raise taxes that all affected those citizens.

Consider Platform Spending

Trump has been no stranger to spending. He added even more of a deficit to the already record-breaking spending of the previous administration (yes, even before COVID hit). That being said, the Democrats openly and explicitly want to enact several policies that will massively outspend anything the GOP would put on the table. The money that the Democrat Party wishes to spend has to come from somewhere.

In Summary

The short answer: We don’t know what will happen with our taxes if Biden is elected. If you take his word for it, the wealthy will be garroted; that will have its own consequences.

The more likely possibility, going off of his party’s history, and the history of the administration for which he served as VP: Everybody’s taxes are going up. He may not do it through income tax or payroll taxes, but sales taxes and any other sneakier methods are almost certain to make an appearance. If they don’t, and Biden enacts even one of his spending plans, he will have such a historic deficit that he risks never being re-elected. He will be much more likely to raise your taxes than to risk losing, as politicians always are.