How A Cashless Economy Could Cost You

by Catherine New

Easy, fast and lifting money right out of your pocket. The battle to own your digital dollars has been heating up as major technology companies, retailers and payment networks ramp up their mobile payment offerings.

Last month, both Google and Starbucks made announcements aimed at growing their programs. Google Wallet is now cloud-based and can be used with multiple credit and debit cards. Starbucks has partnered with Square to create a better way to pay directly from a smartphone.

But the rise in mobile payments may not be so good for the budgetary health of consumers, who could find themselves spending more as a result, academic research suggests.

"With credit cards, people don’t remember how much they have spent and they increase [their spending]," said Min Zhao, an associate marketing professor at the Rotman School of Management at the University of Toronto. "That should apply to mobile payments."

There is not much academic research on mobile payments and consumer behavior, since the technology is still only a few years old. Prior research on cash, checks and credit cards, though, has shown that people using credit cards are more likely to make more discretionary purchases because it's easier to ignore the impact on a personal budget.

And there are other, less obvious costs associated with mobile payments that add to your bottom line. The cost of a smartphone, data plan and fees, for example, all increase the cost of commerce for consumers.

Yet a cashless future is on the horizon. Within the next five years, less than a quarter of of point-of-sale purchases will be made with paper money, according to a recent study from Javelin Strategy & Research.

But there may well be a happy medium in the form of instant account balance feedback.

Zhao said mobile and electronic payment systems have the opportunity to help consumers' spending habit as much as they hurt it by using instant text messages or other alerts to check their account balance.

These alerts could help consumers make a more immediate connection between their spending and their available funds, ultimately leading them to make wiser budgeting choices. Many prepaid card programs and online budget management tools already offer the service.

The other part of the equation: Consumers are changing their own expectations. As one Square user told HuffPost Money earlier this year, paying a small transaction fee was worth the convenience of the mobile payment system.

READ MORE

Select Group of Federal Retirees Collect Six-Figure Pensions

by Dennis Cauchon

More than 21,000 retired federal workers receive lifetime government pensions of $100,000 or more per year, a USA TODAY/Gannett analysis finds.

Of these, nearly 2,000 have federal pensions that pay $125,000 or more annually, and 151 take home $150,000 or more. Six federal retirees get more than $200,000 a year.

Some 1.2 percent of federal retirees collect six-figure pensions. By comparison, 0.1 percent of military retirees collect as much.

The New York State and Local Retirement System pays 0.2 percent of its retirees pensions of $100,000 or more. The New Jersey retirement system pays 0.4 percent of retirees that much. Comparable private figures aren't available.

The six-figure pensions spread across a broad swath of the federal workforce: doctors, budget analysts, accountants, public relations specialists and human resource managers. Most do not get Social Security benefits.

Retired law enforcement is the most common profession receiving $100,000-plus pensions, including 326 Drug Enforcement Administration agents, 237 IRS investigators and 186 FBI agents.

The Postal Service has 714 retired workers getting six-figure retirements. The Social Security Administration has 444. A retired Smithsonian zoologist has a $162,000 annual lifetime pension.

The six $200,000-plus pensions include a doctor, a dentist and a credit union regulator, plus three retirees whose occupations weren't listed.

Pensions are a growing federal budget burden, rising twice as fast as inflation over the last decade. Pension payments cost $70 billion last year, plus $13 billion for retiree health care. Taxpayers face a $2 trillion unfunded liability - the amount needed to cover future benefits - for these programs, according to the government's audited financial statement.

"These people are highly trained, highly skilled and often put their lives on the line in law enforcement," says Julie Tagen, legislative director of the National Association of Retired Federal Employees. "It's a very, very small portion of retirees at that ($100,000) level."

"Government pensions are vastly more generous than those in the private sector," says economist Veronique de Rugy of the market-oriented Mercatus Center. "It's no coincidence that if there is a good plan, it's available to federal employees rather than in the private sector."

USA TODAY and the Asbury Park (N.J.) Press - both owned by Gannett - analyzed the Civil Service Retirement System database, obtained under a Freedom of Information Act request. The Office of Personnel Management withheld some information, including names, ages and length of service.

The records cover 1.9 million federal civilian pensions. Congress members were not included, nor were military retirees.

The average federal pension pays $32,824 annually. The average state and local government pension pays $24,373, Census data show. The average military pension is $22,492. ExxonMobil, which has one of the best remaining private pensions, pays an average of $18,250 per retiree, Labor Department filings show.

The federal government has two retirement systems: one for those hired before 1984 and another for those hired after. Under the older system, employees did not participate in Social Security. The older system covers 78 percent of current retirees and accounts for 96 percent of six-figure pensions. All federal retirees receive health benefits.  

READ MORE

Make Job References Work For You

by Ruth Mantell

In a close contest between job applicants, a good reference can be pivotal.  The wrong reference can strike a blow.

Tammi Pirri, human-resources vice president for Burlington, Mass.-based Black Duck Software, recently called references for a software developer. One reference was the applicant’s then-current and unsuspecting supervisor.

“The manager was shocked, to say the least, that the person I was calling about was looking to leave their company,” Pirri said. “We did not hire that individual and he was fired.”

Some employers don’t call references, and companies can restrict information that references share. Still, job seekers should strategize when selecting current and former supervisors, colleagues and subordinates to provide testimonials about their competence and character.

Common reference mistakes include not asking for consent to use people as references, and not letting references know to expect a call. “We sometimes catch people off guard who didn’t know that they were references and the quality of the discussion isn’t good,” said Mark McKeen, a talent acquisition manager at General Motors. “That’s a red flag [about] the job candidate’s attention to detail.”

Here are a few other reference mistakes to avoid.

Using only positive feedback

References should offer a balanced view that includes areas for growth. “You need someone who is an advocate, but can also be somewhat objective,” said Nancy Donohoo, partner at Grant Cooper HealthCare, an executive search firm based in St. Louis.

When checking references for a health-care financial officer who left a financially troubled hospital, Donohoo didn’t hear enough details about the cause of the negative financial performance. “The candidate needed to provide references that could give some detailed examples, but I just kept getting surface references who said it wasn’t his fault, that the hospital was in bad shape,” she said.

But people should avoid a reference with a too-negative view. Deborah Keary, vice president of human resources at the Society for Human Resource Management, an Alexandria, Va., professional group, said a former co-worker who had been fired recently asked her to be a reference.

The person was “let go for breaking a company rule that was fairly serious. I said ‘I can’t provide a reference, I know that you did not leave in good standing,’” Keary said. “I wish she had known to not ask me.”

For references on networking websites, job seekers should focus on quality, not quantity. “Don’t canvass everyone you’ve ever worked with,” said Charles Purdy, senior editor at jobs website Monster.com.

Mixing up stories

Workers and references should have the same version of a job applicant’s work history.

While recently checking references for a financial-services executive, Geoff Hoffmann, chief operating officer of DHR International, an executive search firm in Chicago, found that the candidate’s account of his departure from a prior firm was too rosy.

“He said he transformed the department and built a loyal following and was seeking his next big challenge, but it turned out that the person was almost forced out and his reference said ‘I can’t imagine he felt this way,’?” Hoffmann said. “An individual can completely misread relationships with past employers, [indicating that] this person’s level of self-awareness is pretty low.”

References can also reveal lies. GM’s McKeen checked references for a controls engineer, and found an embellished resume. “A person claimed that he had several years of experience, which was the minimum threshold, but he had less than three months,” McKeen said. “That’s an integrity issue.”

Picking inappropriate individuals

Before listing a reference, check his or her reputation.

Paula Hunter, executive director of Outercurve Foundation, a Wakefield, Mass., nonprofit software foundation, suggested researching a reference’s online footprint. “Make sure [the person isn’t] saying anything that could put you at a disadvantage,” Hunter said.

And references shouldn’t lie. Tom Gimbel, chief executive of Chicago staffing firm LaSalle Network, discovered that a bookkeeper applicant listed his brother as a reference. “The [reference] was saying he was a manager and it sounded like he was reading off a script,” Gimbel said. “The whole thing just fell apart. He didn’t know who the CEO of the company was. There’s only so long you can keep the lie going.”

READ MORE