TIME Economy

Low Wage Workers Are Storming the Barricades

Activists Hold Protest In Favor Of Raising Minimum Wage
Alex Wong—Getty Images Activists hold protest In favor of raising minimum wage on April 29, 2014 in Washington, DC.

A few weeks back, when Walmart announced plans to raise its starting pay to $9 per hour, I wrote a column saying this was just the beginning of what would be a growing movement around raising wages in America. Today marks a new high point in this struggle, with tens of thousands of workers set to join walkouts and protests in dozens of cities including New York, Chicago, LA, Oakland, Raleigh, Atlanta, Tampa and Boston, as part of the “Fight for $15” movement to raise the federal minimum wage.

This is big shakes in a country where people don’t take to the streets easily, even when they are toiling full-time for pay so low it forces them to take government subsidies to make ends meet, as is the case with many of the employees from fast food retail outlets like McDonalds and Walmart, as well as the home care aids, child caregivers, launderers, car washers and others who’ll be joining the protests.

It’s always been amazing to me that in a country where 42% of the population makes roughly $15 per hour, that more people weren’t already holding bullhorns, and I don’t mean just low-income workers. There’s something fundamentally off about the fact that corporate profits are at record highs in large part because labor’s share is so low, yet when low-income workers have to then apply for federal benefits, the true cost of those profits gets pushed back not to companies, but onto taxpayers, at a time when state debt levels are at record highs. Talk about an imbalanced economic model.

A higher federal minimum wage is inevitable, given that numerous states have already raised theirs and most economists and even many Right Wing politicos are increasingly in agreement that potential job destruction from a moderate increase in minimum wages is negligible. (See a good New York Times summary of that here.) Indeed, the pressure is now on presidential hopeful Hillary Clinton to come out in favor of a higher wage, given her pronouncement that she wants to be a “champion” for the average Joe.

But how will all this influence the inequality debate that will be front and center in the 2016 elections? And what will any of it really do for overall economic growth?

As much as wage hikes are needed to help people avoid working in poverty, the truth is that they won’t do much to move the needle on inequality, since most of the wealth divide has happened at the top end of the labor spectrum. There’s been a $9 trillion increase in household stock market wealth since 2008, most of which has accrued to the top quarter or so of the population that owns the majority of stocks. C-suite America in particular has benefitted, since executives take home the majority of their pay in stock (and thus have reason to do whatever it takes to manipulate stock price.)

Higher federal minimum wages are a good start, but it’s only one piece of the inequality puzzle. Boosting wages in a bigger way will also requiring changing the corporate model to reflect the fact that companies don’t exist only to enrich shareholders, but also workers and society at large, which is the way capitalism works in many other countries. German style worker councils would help balance things, as would a sliding capital gains tax for long versus short-term stock holdings, limits on corporate share buybacks and fiscal stimulus that boosted demand, and hopefully, wages. (For a fascinating back and forth on that topic between Larry Summers and Ben Bernanke, see Brookings’ website.)

Politicians are going to have to grapple with this in the election cycle, because as the latest round of wage protests makes clear, the issue isn’t going away anytime soon.

Read next: Target, Gap and Other Major Retailers Face Staffing Probe

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MONEY Saving

9 Ways to Trick Yourself Into Getting Rich

Profitable ways to retrain your brain

Building wealth is about more than just hitting a number. It’s also about cultivating the habits of mind that make saving second nature—or at least a whole lot less painful. But as anyone who’s ever tried to get in shape can tell you, changing behavior isn’t easy. Sometimes you need a clever “cheat” to help you on your way. So here are 8 mental tricks that can speed you on the path to financial security.

Adapted from “101 Ways to Build Wealth,” by Daniel Bortz, Kara Brandeisky, Paul J. Lim, and Taylor Tepper, which originally appeared in the May 2015 issue of MONEY magazine.

  • 1. Set a savings goal that matches your money mindset.

    hand throwing dart
    Getty Images—(c) PM Images

    When you hear the word “saving,” do you imagine the retirement you hope to enjoy? Or does your brain go right to the 401(k) forms you need to fill out? For those who tend to focus on the big picture, a specific target (say, to reach a balance of $50,000 by a certain date) can motivate saving, says Gülden Ülkümen, a business professor at the University of Southern California. If you’re thinking mainly of the nuts and bolts, though, picking a dollar figure may make the task feel harder. Instead, concentrate on putting away as much as you can.

  • 2. Whatever the goal, keep it real.

    money sitting on top of target
    Getty Images

    “You don’t want goals that are so aggressive that you’ll lose steam,” says Lisa Ordóñez of the University of Arizona, who has studied the effects of goals on behavior.

  • 3. Use windfalls to ramp up.

    stack of cash
    Jonathan Kitchen—Getty Images

    The easiest dollars to set aside are the ones you aren’t used to spending. So put a portion of bonuses and tax refunds into savings. Make raises an occasion to up your 401(k) contribution. About 44% of plans have some kind of auto-escalation feature, which allows your savings rate to rise with your income, but you may have to specifically sign up for this option.

  • 4. Don’t make financial decisions after a rough day at work.

    woman after rough day at work
    Garry Wade—Getty Images

    You save more when you feel powerful, even when it’s for a quirky reason. A recent study in the Journal of Consumer Research found that people who had just answered questions while sitting in a tall chair were more likely to save money than those on a low ottoman. A practical takeaway: Consider reserving your major financial chores for “up” days when you are feeling in command, says study coauthor Anne-Kathrin Klesse.

  • 5. Ignore the three-year plan.

    person on starting line of race
    Louis Fox—Getty Images

    Credit card statements must show how much you’d pay if you settle in three years, if paying the minimum takes longer. That’s good if it speeds you up. But business professors Neal Roese and Hal Hershfield have found that people who see a three-year example may pay back more slowly than otherwise, perhaps because they (incorrectly) take the example as a suggestion. Faster is better: Pay a $5,000 credit card debt (at 15%APR) in one year instead of three, and you’ll save $824.

  • 6. Start small to pay off big debt.

    balls of cash increasing in size
    Getty Images

    If heavy balances are weighing you down, start paying off the smallest balance first, suggests Beverly Harzog, author of The Debt Escape Plan. The math says to go after the card with the highest interest. But unless there’s a big difference in two cards’ rates, it’s often more helpful to get positive mental feedback from clearing a debt so that you sustain your repayment plan.

  • 7. Lobby yourself.

    hand mirror on yellow
    Judith Collins—Alamy

    At the end of the day, the only person who can persuade you to be a disciplined saver is you. Now there’s a way to communicate with your future self. Go to FutureMe.org and send yourself an email, which you can schedule for delivery at a later date. For instance, if you know that a bonus is coming at the end of the year, send yourself a reminder to sock the money away for retirement. You’ll thank yourself later.

  • 8. Budget like it’s yesterday.

    piggy bank divided in sections
    Alamy

    Maybe you have several recurring bills that are on the verge of going away, like car loans or student debt payments. When that happens, don’t free up the cash. Instead, set aside the same amount of money—you’ve shown you can afford it—to bolster your nest egg. For example, keep saving $450 a month (the typical nut on a five-year auto loan for $25,000) after the SUV is paid off, and you’ll drive off with more than $140,000 in 15 years, assuming 7% annual returns.

  • 9. Shift your view.

    hands holding binoculars
    Getty Images

    Around age 50, you enter peak saving years. Imagine your goal now not as a lump sum—which can be abstract—but as a monthly retirement income. A study in the Journal of Public Economics found that savers who were shown income projections socked away more. To get a ballpark sense of where you are, use T. Rowe Price’s free online retirement-income planner.

TIME Economy

5 Stats That Explain the Super Wealthy

The Davos World Economic Forum 2015
Jason Alden—Bloomberg/Getty Images Aliko Dangote, billionaire and chief executive officer of Dangote Group, pauses during a session on day two of the World Economic Forum (WEF) in Davos, Switzerland, Jan. 22, 2015.

From Nigerian billionaires to Russian oligarchs, numbers that explain how wealth works in politics

The world will always be divided into “the haves and the have nots,” but lately seems the ‘haves’ are capturing more and more of the world’s wealth. Yet, even the super wealthy are feeling the impact of political turmoil. Here are five stats that explore the plight—and flight—of the world’s richest.

1. Nigeria’s super rich

For a country that relies on oil for almost 70% of state revenue, crashing prices spell trouble. The stock index dropped 40% in 2014, while the currency has lost a fifth of its value over the last six months. But the person who has been hit hardest is the person who can most afford it. Africa’s richest man, Aliko Dangote, earned Forbes’ “Biggest Loser” title—his wealth has fallen the most of anyone on earth in dollar terms. Yet he still has a $14.7 billion fortune and his companies account for a quarter of the market capitalization of the Lagos stock market. Even as youth unemployment and corruption remain staggeringly pervasive, economic growth has enriched the country’s elites. Nigeria’s population of high net worth individuals grew 44% between 2007 and 2013.

(Forbes, Forbes, Financial Times, New World Wealth)

2. Oil prices and sanctions hit Russia

Russia has also been battered by tanking oil prices, and sanctions have had an outsized impact on Russia’s wealthiest and those closest to Vladimir Putin (who are often one and the same). The country lost the most billionaires in 2014, down to 88 from 111. Between February and December of 2014, the combined wealth of the country’s 20 richest people shrank by 30%. In other words, .0000001% of Russia’s population lost $73 billion—a sum on par with the annual GDP of neighboring Belarus. It’s no wonder India overtook Russia for third place on the billionaires list last year.

(Forbes, Forbes, CNBC, Wall Street Journal, World Bank)

3. The millionaire exodus

Millionaires have been voting with their feet. Between 2003 and 2013, 76,200 Chinese millionaires emigrated, representing 15% of China’s total and the largest exodus of millionaires of any country. Over the same span, 27% of Indian millionaires, some 43,400 people, left as well. In third place, France saw 13% of its millionaire population leave, perhaps due to what they viewed as excessive taxation on the wealthiest. Russia came fifth in sheer number of departing millionaires; they accounted for 17% of Russia’s millionaire population. Where are they all heading? Mainly the UK, the U.S., Australia and Singapore. The number of UK fast-track or Tier 1 visas (which require a $3 million investment in British assets) provided to Russians increased nearly 70% last year.

(CNBC, Business Insider, Bloomberg)

4. Billionaire cities

A few years ago, New York surpassed Moscow as the top city by billionaire population. Hong Kong, London, and Beijing round out the rest of the top five. Yet, unlike Moscow, where 80% of Russia’s billionaires reside, New York has less than a sixth of America’s. The United States spreads the wealth: 11 U.S. cities have 11 or more billionaires. California itself has 131—if it were a country, it would have more billionaires than any country except the U.S. and China.

(Forbes, Knight Frank, Forbes)

5. Big money in Chinese politics

While many of China’s wealthiest may have left the country, there are plenty who still fill the highest ranks of government. More than one in seven of the 1,271 richest Chinese are serving in Parliament or its advisory body. These 203 delegates are collectively worth over $460 billion. For some perspective, the richest representative in the U.S. government would be the 166th richest member of China’s government. Even as Chinese leader Xi Jinping clamps down on corruption and pressures elites to rein in their extravagance, China’s wealthy are still spending. Chinese now represent nearly a third of the world’s luxury sales, although roughly two-thirds of these sales take place outside the country.

(CNBC, New York Times, NBC News)

MONEY Wealth

These Are the World’s Most Expensive Cities

No, New York isn't among the top 10. Nor is Tokyo. Hint about the most expensive city: Don't take any chewing gum when you visit.

MONEY road to wealth

How I Made $100,000 Teaching Online

Meet Nick Walter, a programmer who makes a living seated at his kitchen table.

MONEY Wealth

The Super-Rich Have a Racial Wealth Gap, Too

Even at the top end of the economic scale, the financial differences between black and white Americans are big — and they've changed little in 30 years.

MONEY Love and Money

What Fifty Shades Gets Wrong About Money and Sex

FIFTY SHADES OF GREY
Chuck Zlotnick—Focus Features/Courtesy Everett Collection

The hit novel turned film suggests wealth makes men sexy to women. That's misleading.

Does money make men more attractive to women? On the surface, both popular culture and social science research seem to say yes.

You can’t take a step into the academic literature without tripping over a study showing that women place higher value than men on a partner’s wealth, that women are more attracted to men with nice cars, or that women orgasm more with rich partners.

The standard social science explanation for this phenomenon gets expressed in evolutionary terms: Because impregnating as many women as possible gives a man’s genes an evolutionary advantage, men are more superficial and promiscuous. Conversely, because of the time and energy required for a single pregnancy, women are choosier and more preoccupied with finding a mate rich with resources to provide for offspring. Or, at least, that’s the theory.

The success of the Fifty Shades of Grey franchise certainly does little to dispel all this. The story—for those living under a rock—details the sexual awakening of a young woman seduced by a billionaire, whose physical attractiveness is matched only by his fleet of luxury cars, helicopter, penthouse apartment, and cushy CEO job running his own company. In other words, as author E.L. James has put it, Christian Grey is “every woman’s dream.”

“He’s very good looking, he’s very good at sex, he’s disgustingly rich,” she told TIME.

To be fair, it’s intuitive that a partner with means is more desirable than one without, all else being equal. A recent poll found that 78% of coupled Americans of both sexes say they’d prefer a partner who is good with money over one who’s physically attractive. And if you are a man who feels pressure to impress women with your money, or a woman who felt titillated reading about Christian Grey’s alpha status, you probably buy into the theory without even realizing it.

But as it turns out, this popular narrative about men, women, sex, and money isn’t all it’s cracked up to be.

A recent study has found that the common depiction of women primarily seeking out rich and powerful men (and men seeking out young and attractive women) is fairly uncommon in practice and—crucially—doesn’t reflect the reality of successful relationships or what actually makes people happy.

The research, by University of Notre Dame sociologist Elizabeth McClintock, has found that gender differences more or less disappear when you discard self-reported attraction scores and instead examine how real couples pursue one another, date, and settle down. In reality, rich women are just as likely as rich men to use their status to snag a more-attractive mate. And across the board, relationships in which people are essentially trading status for sex tend to be uncommon and short-lived.

Instead, McClintock found that the biggest force that predicts a successful match between people is actually how well all of your qualities match up. That means, for example, that people of similar physical appeal tend to pair off, and those with comparable educations and financial means are drawn together.

What’s perhaps counterintuitive, then, is that a woman seeking a rich man is actually better off getting herself a raise than a makeover. Likewise, a man seeking an attractive lady will see higher returns investing in a gym membership than a brokerage account.

So why does the tale of the rich, experienced man seducing the pretty ingenue persist in popular imagination, not to mention the academic literature? McClintock found that many existing studies took for granted the very gender roles they were supposed to be measuring, examining only women’s attractiveness and men’s status or money, while ignoring men’s appearance and the wealth and education of women.

As Northwestern University psychologist Eli Finkel told New York magazine: “Scientists are humans, too, and we can be inadvertently blinded by beliefs about how the world works.”

Indeed, we’re all better off disposing of our blindfolds—even if they’re made of the finest satin.

 

TIME Innovation

Five Best Ideas of the Day: February 20

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Hollywood’s diversity problem goes beyond “Selma.” Asian and Latino stories and faces are missing.

By Jose Antonio Vargas and Janet Yang in the Los Angeles Times

2. Shifting the narrative away from religion is key to defeating ISIS.

By Dean Obeidallah in the Daily Beast

3. Innovation alone won’t fix social problems.

By Amanda Moore McBride and Eric Mlyn in the Chronicle of Higher Education

4. When the Ebola epidemic closed schools in Sierra Leone, radio stepped in to fill the void.

By Linda Poon at National Public Radio

5. The racial wealth gap we hardly talk about? Retirement.

By Jonnelle Marte in the Washington Post

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Food & Drink

This Caviar May Be the Most Expensive Food in the World

At $114,000 a kilo, this dish is not for everyone

A fish farmer in Austria is offering a caviar dish that he says is worth $114,000 per kilo.

The white caviar “Strottarga Bianco” concoction includes rare albino sturgeon dried roe sprinkled with gold leaf, according to the website for Walter Gruell’s fish farm. The dish is only available on customer order.

“It is certainly not a product for everyone, but there is definitely a market for extremely exclusive products especially when they are something new,” said Gruell’s son Patrick, who helped develop the caviar, according to Yahoo News.

According to the Guinness World Records, the most expensive food on record is also a caviar: Almas, from the Iranian Beluga fish, sells for roughly $35,000 per kilogram.

TIME White House

Here Are the 10 Richest Presidents in American History

Who brought the most green to the White House?

You may know a lot about our 44 commanders-in-chief, but do you know how big their bank accounts were?

Watch the video above to see which presidents brought the most green to the White House.

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