Friday, October 24, 2014 10:44am
North Adams, MA now: 45 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
The Independent Investor: Are Fringe Benefits Coming Back?
By Bill Schmick On: 12:32PM / Friday January 18, 2013
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

Since the Financial Crisis, those who have kept their jobs consider themselves as lucky. That may be so, but at the same time many complain that their benefits have been cut as the price for further employment. There are signs that may be changing.

During 2008, I, like millions of other American workers, attended a mandatory meeting at a former employer. The room was rife with fear and trepidation, since just days before the owner had laid off almost half the company. Instead of more firing, he announced that the company would no longer be providing a match to our employee 401(k) retirement plans. He also reduced the number of paid time off for all of us. His announcement was met with relief that no one else would lose their job.

I'm not sure whether that employer ever reinstated his employees' benefits because I left shortly thereafter. I do know however, that many companies have started to become a bit more generous in what fringe benefits they provide their employees. The employer "match," for example, is making a comeback in some companies, but with a new twist. At that time was a company would match a certain percentage of your own contribution to a deferred benefit plan. Normally the match would range from 3 percent to as much as 6 percent of your yearly contribution.

However, IBM, the business services company with a great reputation for fringe benefits among its corporate peers, introduced a new wrinkle in their employee 401(k) matching compensation this year. Big Blue will still match contributions (and never cut them during the recession), but will now delay its contributions until the end of the year on Dec. 31. They will then pay them in a lump sum. If you leave before Dec. 15, you lose the match. The only exceptions are those that retire that year.

This week, Morgan Stanley, the global brokerage house, announced a variation on that theme. It will defer for up to three years a part of the bonuses for all those who make more than $350,000 and whose bonuses are at least $50,000.  They will also pay those sums in both cash and stock. Although it does not affect the company's financial advisers (brokers) this year, it may be a warning shot about how compensation will be paid in that group in the future. Of course, if you quit prior to the end of those three years, you forfeit any bonus that remains.

In another area, more companies are switching to a "paid time off" (PTO) option rather than the traditional allotment of a certain number of days for holidays, vacation, sickness, pregnancy leave, etc. This gives the employee the option of choosing how many days they can take off from a finite number, whether it is 15-20-30 days or whatever their company decides.

Although this change appears to be in the employee's favor, many companies are nicking away at this benefit in marginal ways. Some companies are limiting the number of days one can carry over from the preceding year while others are reducing the total number of days off that employees enjoyed under the old method.

Of course, the most formidable challenge to employee benefits is yet to come. Obamacare. The Patient Protection and Affordable Care Act, becomes effective in 2014. This year, corporations will have to devise ways to overhaul their employee health care coverage in answer to this new legislation. A couple of firms have already changed their provisions in the health care field. They are opting for what has been termed "Employee Choice" plans.

This plan will give each employee a fixed sum of money (indexed to the rate of yearly inflation) and allow them to choose their own medical coverage and health insurer in an online marketplace.

The employees, according to at least one of the companies, will be paying roughly the same out-of-pocket contributions under the new plan as they did in the old one. They claim the new approach will allow the employee to spend as little or as much on their health care as they think wise. The fear among opponents of this approach is that with the rising costs of health care, the lump sum won't be nearly enough to cover future health care needs.

All in all, the return of employee benefits has been marginal at best, but it is in the early days right now. As the nation's economy continues to grow and unemployment drops, there may yet come a time when fringe benefits will actually expand as a tool to woo hard to find workers. Right now that may seem like a pipe dream but unless this country is doomed to an eternity of lackluster growth, that day will come.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


     
The Independent Investor: What They Didn't Tell You About the Cliff Deal
By Bill Schmick On: 02:23PM / Thursday January 10, 2013
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
1
Ridiculous
0

Now that the country has avoided the Fiscal Cliff, everyone is breathing a sigh of relief. However, there have been some changes in the tax code that many of us have missed in the last-minute negotiations. For starters: your tax bill will be going up in 2013.

Although 99 percent of Americans avoided paying a higher tax rate thanks to Congress, we will all see a 2 percentage point rise in our payroll taxes. That is because neither party had the stomach to extend the tax cut President Obama had enacted in 2011. It means that households making between $50,000 and $75,000, for example, will see a tax increase of about $822 this year, while those making less ($40,000-$50,000) will see a $579 tax hike.

The headline that most Americans understood after the 11th-hour American Taxpayer Relief Act was passed was that those individuals earnings $400,000 and families earning $450,000 would see their tax rates jump from 35 to 39.6 percent. In addition, as part of the law, a new 3.8 percent tax is being levied on investment income for individuals making $200,000 and couples earning $250,000. High-income families will also have to pay higher taxes as part of Obama's health care law.

However, beneath those headline numbers lurks even greater tax increases as a result of the loss of personal tax exemptions for many middle-class income families. Most Americans recognize that $250,000 is a lot of money - if you reside in certain locales — but not much at all if you happen to live in Manhattan, Boston, Chicago or any other high-cost, urban center. Prior to the Tax Relief Act, a family of four, earning $250,000, were benefiting from $3,800 tax exemptions per family member.  

Those advantages have now been erased, effectively raising taxes 4.4 percent for every dollar that family earns over $250,000. If you have six kids, your marginal tax rate jumps to 6 percent and so on.

Higher-income Americans that make more than $1 million could lose up to 80 percent of their itemized deductions for everything from health care, home mortgage deductions, charities and even state and local taxes. When all is said and done, if you add in the loss of exemptions, health-care tax increases, etc., the effective tax rate for the highest earners could be as high as 45 percent.

Unfortunately, taxpayers in many Northeastern states, as well as those on the West Coast, will be hit the most since they normally use itemized tax deductions much more than the national average.

Some real estate-related deductions were preserved, such as allowing taxpayers to exclude income from the discharge of debt on their principal residence. This especially helps those who are considering a short sale or a lender-approved sale for less than the principal mortgage balance. It also allows a deduction for mortgage insurance payments for those making less than $100,000.

Another tax advantage for most Americans is the increase in contribution limits for retirement plans. You can now contribute $500 more to your Individual Traditional or Roth IRA for 2013, bringing the total to $5,500 with a $1,000 "catch-up" contribution for those over age 50.

The same $500 increase in contributions will also apply to 401(k), 403(b) and 457 Plans as well as for SIMPLE IRA plans for small businesses. Obviously, everyone should be contributing the maximum amount to these tax-deferred plans or as much money as you can reasonably afford to save toward retirement.

So it seems that none of us were able to dodge some increase in our taxes this year. Given the dire straits of the government's finances, I guess we should be grateful it wasn't worse.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


     
The Independent Investor: Round Two
By Bill Schmick On: 02:33PM / Thursday January 03, 2013
Important
0
Interesting
0
Funny
1
Awesome
0
Infuriating
0
Ridiculous
0

The ink is still drying on the Fiscal Cliff compromise and already the focus has shifted from preventing tax hikes to what promises to be a battle royal over spending cuts. At stake could be the future health of the economy.

The mood among lawmakers after the bruising cliff battle is downright sour. Republicans are fuming that no spending cuts were included in the compromise while those who make above $400,000 will see their taxes hiked. Democrats, on the other hand, are unhappy that President Obama didn't stick to his guns on hiking taxes for those making $250,000 or more. What both parties' radicals fail to grasp is that neither side gets all that they want in a compromise. And without compromise nothing gets done in Washington.

This week, a new Congress will be sworn in. Time will tell whether that new body of legislators, which is still controlled by Republicans, will be more amenable to compromise than the last Congress. Less legislation was passed over the last two years then just about any time in our nation's history. We can't really afford two more years of that kind of inertia.

As part of the cliff compromise, the so-called 10-year plan of sequestered spending cuts in defense and entitlements, agreed upon in August of last year, were delayed for two months. That gives the new Congress time (until March 1) to work out a more focused plan of spending cuts than the across-the-board first installment of $88 billion in cuts that no one wants to make.

Adding even more drama to these difficult negotiations is the looming threat of another debt ceiling in our nation's borrowing abilities. That ceiling, which now stands at $16.394 trillion, will expire at the end of February. The president has already said he won't make the same mistake he did last year by allowing Congress to use that ceiling as leverage to force further cuts in spending. But Congress is bound and determined to do just that.

In addition, the credit rating agencies were disappointed by the cliff compromise. The deal did little to alleviate their concerns over the burgeoning deficit. Moody's, which still maintains a triple-A rating on U.S. debt, could join Standard & Poor's in reducing their credit rating on U.S. government debt unless more cuts are made and soon.

Beyond the rhetoric and posturing of this debate that most assuredly will be with us through most of this first quarter, there are some very real consequences for our economy, employment and our nation's future. At long last, the U.S. economy is beginning to grow at a sustained rate, thanks to the efforts by the Federal Reserve Bank. Its QE 1-2-3 appears to be working and the economy is gaining momentum. Fed Chairman Ben Bernanke, however, has cautioned that without simulative fiscal policy out of Washington lawmakers there is not much more he can do.

Yet, Republican lawmakers are insisting that the government do the exact opposite — cut spending, not increase it. They demand austerity now and a reduction of the deficit now. It is similar to the stance of Germany and its Chancellor Angela Merkel two years ago. Their misguided policy drove half of Europe into a recession and unemployment rates, in some countries, as high as 24 percent. Why do they think it won't happen here?

I do not condone this country's out-of-control spending, or the deficit, or our addictive need to borrow and borrow. I think it is despicable, dangerous and has gone on far too long. But there is a time and place for everything. Now is not the time to find fiscal religion.

Let the economy continue to grow, gather strength and then cut spending and even raise taxes again if necessary. Give growth another year to work its magic. That will give the economy enough staying power to weather a bout of austerity. My bet is that if we do, tax revenues will explode, the deficit will flip to a surplus by 2016-2017 and we won't need to hike taxes for anyone. It has happened many times in our nation's history and I believe it could happen again.

In the past, the problem has been that when the good times begin to roll, the notion of austerity and spending cuts are conveniently forgotten in Washington. That's the time we will need the tea party and its devotion to fiscal discipline. Let's hope they are still around and stay true to their economic goals by that time. In the meantime, let us grow.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


     
The Independent Investor: Can American Workers Handle a Manufacturing Renaissance?
By Bill Schmick On: 10:32PM / Saturday December 29, 2012
Important
1
Interesting
1
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

The rate of unemployment and the lack of jobs have bedeviled Americans for over four years now. Although under 8 percent, the jobless rate remains stubbornly high and yet, there appears to be plenty of work - if you have the skills to qualify.

"There is a mismatch between the jobs that are available and the people that we are interviewing," explained the chief executive of a huge German engineering firm, looking to hire skilled manufacturing workers.

It is the same story wherever you go. If you can believe the Bureau of Labor Statistics, there was a shortage of 7 million skilled workers in America as of two years ago and that number is increasing. They are forecasting that shortage will balloon to 21 million skilled workers by 2020.

Most scholars will tell you that the lack of education within the American work force is behind these depressing numbers. To make matters worse, the average education of U.S. workers is expected to decline over the next 10 years, which will further widen the gap between supply and demand for skilled help.

Readers who have been reading my columns understand that the rising cost of higher education is now beyond the means of more and more Americans. At the same time, the vast majority of the work force is making less in 2012 dollars than their fathers did. One major reason for this trend is that low-wage work constitutes a growing share of the jobs produced by the U.S. economy.

The Labor Department forecasts that among the top 30 occupations that will add the greatest number of jobs between 2010 and 2020, 24 typically require only a high school degree or less. Only six occupations, among them registered nurses, elementary teachers and accountants, require more.

Yet scholars, politicians and pundits alike keep pointing to increased education as the answer to reducing unemployment. Many workers have dutifully followed that advice only to discover that many would-be employers now consider them overqualified. The jobs available for the most part are in openings for cashiers, home health aides, retail sales persons and the like.

Other jobs, such as long-haul truck drivers or manufacturing jobs demand a certain combination of skills that blend both technical as well as academic training. I believe as more and more college-educated workers realize that they must also incorporate some technical training in their resumes, those jobs will be filled. Many corporations are also realizing that fact and are providing training in those technical skills to new workers.

Most recent estimates indicate that the U.S. manufacturing sector is short roughly 80,000 to 100,000 highly skilled workers. That sounds like a lot but it is actually only one percent of the manufacturing sector's work force, according to the Boston Consulting Group. But it does represent almost 8 percent of the skilled workers in that sector.

When you delve into the figures behind the shortages, one realizes that only seven states show a real gap in skilled manufacturing labor know-how. Therefore, the skills gap is largely a local and not a national shortage. Much of the so-called shortage is of some corporations' own making. It is natural when planning a factory or plant in a new location to seek an area where the lowest cost wages and tax structure prevail. It was one of the reasons that foreign auto manufacturers selected the Deep South to establish their U.S. operations.

What companies fail to recognize is that a major reason for a region or state's low labor costs are the lack of skills and education provided by that work force. You can't deliberately locate your plant in an area that abounds with unskilled labor and then bemoan that same lack of skills.

Don't get me wrong, there is a gap in skilled labor in this country but it is not as large as some would have you believe. Hopefully, as time goes by, more and more manufacturing jobs will return to this country and as they do, those jobs will be filled by Americans. There may be a time lag, such as the one we are experiencing today, but the gaps will be filled and quickly.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


     
The Independent Investor: The Business of Guns
By Bill Schmick On: 07:05PM / Friday December 21, 2012
Important
2
Interesting
0
Funny
1
Awesome
1
Infuriating
3
Ridiculous
1

 

The firearm industry has a lot going for it. It is responsible for a piece of this country's economic recovery including job growth as well as providing a hefty contribution to the tax base. It also sold the weapons that recently cut down 26 people, including 20 children, in a Connecticut elementary school. 
 
Gun manufacturers employ roughly 200,000 Americans in well-paid jobs. They contribute about $31 billion to the economy and $4.5 billion in federal and state taxes. There were 50,812 retail gun shops in America and gun sales were at a historical record high as of last month. Without them, this country's 13 million hunters (present company included) would be reduced to throwing rocks at this season's white tail deer herds.
 
In addition, we have the mega-trillion dollar global aerospace and defense industry. When we think of that sector, we usually talk about aircraft carriers, the next generation of fighter planes and things like tanks, armored personnel carriers and such. Yet, there is a thriving business in manufacturing assault rifles and military hand guns that continue to turn up in civilian society.
 
I live in the Berkshires. It is a rural community, similar to other areas in Maine, New Hampshire, New York, Connecticut and Vermont where most of my readers live. I am a deer hunter (although I haven't hunted since I got Titus, my 4-year-old Lab). I still own two high-powered hunting rifles and a turkey shotgun. Every weekend in Hillsdale, over the last month, I would dun my old orange hunting jacket when I walk Titus because I know hunters are in the woods. I am not afraid because hunters are a responsible, safety-conscious lot. It is a way of life and I appreciate the sport.
 
An acquaintance of mine, on the other hand, is a retired IT programmer, who lives in Delaware. He is not a hunter and yet he owns dozens of rifles and handguns. Most weekends you will find him on a special rifle range, along with several off-duty state troopers, pulverizing old trucks and cars for fun. They fire every type of assault rifle imaginable. It is his hobby. They are a big business for gun shops and shows but there are far fewer gun enthusiasts like my brother than there are hunters in America.
 
In my opinion, the guns this retired IT guy collects are quite different from those I have in my gun cases. The difference: his weapons were manufactured by some nation's defense industry for the express purpose of killing human beings. Mine were designed and manufactured to hunt wild animals, specifically deer. I was relieved back in 1994 when the sale of the assault rifle was banned in America, but the ban expired during the Bush era. It was never reinstated and since then sales have exploded.
 
The political clout of the National Rifle Association (NRA) in league with the Republican Party is largely responsible for this present state of affairs. The NRA spent $9 million trying to defeat President Obama and other Democrats during this last campaign to no avail. But after last week's horrible tragedy in Sandy Hook, even the NRA sounds like it is willing to re-think its blanket support of all guns for anyone.
 
My own opinion is that the hunters of America hold the key to getting these kids- killing firearms off the streets. We hunters, of all people, know the difference between the guns that are necessary for sport and those used for some neo-Nazi target practice in the back woods. 
 
If you are a hunter and are reading this, do yourself and your sport a big favor and let your voices be heard. Assault weapons have no business in our sport or on the streets of America.
 
Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


     
Page 17 of 40... 12  13  14  15  16  17  18  19  20  21  22 ... 40  
News Headlines
Atlas Wealth Management Moving to North Adams
Lanesborough Officials Debate School Spending
Adams Seeks Fix to Visitors Center's Ineffective Geothermal System
Mount Greylock Committee Taking Up Delayed Superintendent Search
North Adams to Williamstown Bike Path Public Meeting Set
Pittsfield Schools Review Teacher Evaluation Process
'North Adams' Added to Harriman-West Airport Name
Tri-District Search Committee Advises Interim Superintendent
BMC Awarded $3M for Health Care Center in North Adams
Pittsfield Expecting Heavy Usage at Renovated Common

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (148)
Independent Investor (201)
Archives:
October 2014 (7)
October 2013 (2)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
March 2014 (6)
February 2014 (6)
January 2014 (7)
December 2013 (8)
November 2013 (7)
Tags:
Congress Selloff Currency Stocks Fed Oil Bailout Federal Reserve Markets Deficit Metals Rally Taxes Euro Energy Debt Ceiling Greece Europe Election Japan Economy Stock Market Jobs Retirement Debt Fiscal Cliff Commodities Pullback Europe Crisis Housing Banks Recession Interest Rates Stimulus
Popular Entries:
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Don't Fight the Fed
The Independent Investor: Does Cash Mean Currencies?
@theMarket: QE II Supports the Markets
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: The Elephant in the Room
@theMarket: So far, So Good
The Independent Investor: OPEC's Oil Ploy
@theMarket: Are We There Yet?
The Independent Investor: Why Is This Recovery Different?
@theMarket: October Starts Off on High Note
The Independent Investor: Money & Divorce — What You Should Know
@theMarket: Wash, Rinse and Repeat
The Independent Investor: Is Wall Street Responsible for Climate Change?
@theMarket: Waiting on the Fed


View All
Boys and Girls Cross Country
Boys and Girls Cross Country was held at Windsor Lake on...
Western Mass Golf
Four Berkshire County golfers qualified for the state...
Football: Franklin Tech vs...
McCann Tech holds on for the win Saturday afternoon. McCann...
Colegrove Park Elementary...
Mayor Richard Alcombright and the City Council were updated...
Boys and Girls Cross Country
Berkshire Chamber Greylock
Boys and Girls Cross Country
The Lenox boys and girls teams both cleaned up on Senior...
Volleyball: St. Joe s vs...
Taconic takes 3 from St. Joseph Tuesday night.
Ramblefest 2014
Adams residents enjoyed entertainment, food, and locally...
Girls Soccer: Hoosac Valley...
The Wahconah girls soccer team on Monday advanced to an...
Berkshire County Classic Golf
Francois Benistand, an exchange student from the south of...
Indashio Fashion Show
Fashion designer Indashio holds his second FAME Festival in...
Football: Pittsfield vs...
Senior quarterback Nick Clayton marched his team 80 yards...
Football: Lee vs Drury
FINAL: Lee Wildcats beat Drury 24 -14.
Football: Taconic vs Hoosac...
FINAL: Hoosac Valley 51-14 over Taconic.
Soccer: Mount Greylock vs...
Eric Hirsch scored twice, and Taylor Carlough played strong...
Boys and Girls Cross Country
Boys and Girls Cross Country was held at Windsor Lake on...
Western Mass Golf
Four Berkshire County golfers qualified for the state...
Football: Franklin Tech vs...
McCann Tech holds on for the win Saturday afternoon. McCann...
Colegrove Park Elementary...
Mayor Richard Alcombright and the City Council were updated...
Boys and Girls Cross Country
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved