Dollars and Sense 3-8-13

Updated: Friday, March 8 2013, 09:26 PM EST
Dollars and Sense 3-8-13 story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - The Federal Reserve Bank says that all but one of the major banks in the U.S. could withstand a severe recession.

Josh Roe has that story in tonight's Dollars and Sense.
Dollars and Sense 3-8-13
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Last Update on June 30, 2015 07:30 GMT

OVERTIME PAY

WASHINGTON (AP) -- Salaried workers who earn nearly $1,000 per week would become eligible for overtime pay under a proposal that President Barack Obama has unveiled.

The long-awaited overtime rule from the Labor Department would more than double the threshold at which employers can avoid paying overtime, from the current $455 a week to $970 a week by next year. That would mean salaried employees earning less than $50,440 a year would be assured overtime if they work more than 40 hours per week, up from the current $23,660 a year.

Obama wrote in an op-ed in The Huffington Post that officials must "keep making sure hard work is rewarded. That's how America should do business. In this country, a hard day's work deserves a fair day's pay."

To keep up with future inflation and wage growth, the proposal will peg the salary threshold at the 40th percentile of income, individuals familiar with the plan said. They requested anonymity to discuss the proposal ahead of the official announcement.

Obama is set to promote the proposal during a visit Thursday to La Crosse, Wisconsin.

INCOME INEQUALITY

Incomes rise for bottom 99 pct.; US inequality worsens

WASHINGTON (AP) -- Solid job growth is finally boosting people's paychecks.

Incomes for the bottom 99 percent of American families rose 3.3 percent last year to $47,213, the biggest annual gain in the past 15 years. That's according to data compiled by economist Emmanuel Saez and released yesterday by the Washington Center for Equitable Growth.

The increase likely reflects robust hiring last year when employers added 3.1 million jobs -- the most since 1999. That lowered the unemployment rate to 5.6 percent from 6.7 percent a year earlier. Strong job gains and a falling unemployment can help broadly raise incomes as businesses are forced to offer higher pay to attract workers.

With more money in their wallets, Americans are spending more freely. Auto sales reached the highest level in nearly a decade in May. Sales of clothing and building materials also jumped last month. And home sales are at an eight-year high.

Still, income inequality worsened in 2014. The richest 1 percent of Americans posted a much bigger increase in pay: their incomes soared an average of 10.8 percent to $1.3 million. The wealthiest 1 percent also captured 21.2 percent of all income in 2014, up from 20.1 percent the previous year.

MICROSOFT-AOL

SAN FRANCISCO (AP) -- Microsoft is handing off some its digital advertising business to AOL and selling its street-image mapping operation to Uber, as the giant software company tries to focus on activities more relevant to its core business.

Meanwhile, AOL is adopting Microsoft's Bing search engine, replacing Google as the default option for visitors who want to search the Internet on AOL websites. That means Microsoft will get a share of revenue from advertising that's tied directly to Internet searches performed on AOL.

But Microsoft, which is based in Redmond, Washington, will let AOL take over the selling of other types of advertising on Microsoft websites and apps, including MSN, Skype and Xbox. An AOL Inc. spokeswoman said the New York-based online media company will extend job offers to all 1,200 people who worked in Microsoft's advertising business.

Microsoft Corp. CEO Satya Nadella has been saying he wants to focus more on the company's core software business and related services, while warning employees of the need to "make some tough choices in areas where things are not working." Microsoft representatives indicated Monday that both the AOL and Uber deals are an outgrowth of that strategy.

DUKE ENERGY-CEO

RALEIGH, N.C. (AP) -- Duke Energy Corp. CEO Lynn Good is getting a raise a year after the country's largest electric company confronted a coal ash spill that coated 70 miles of a North Carolina river in sludge containing toxic heavy metals.

The company said Monday in a regulatory filing that its board of directors approved raising Good's annual salary by $50,000 to more than $1.2 million. The directors also approved bigger boosts in incentives, potentially pushing her annual compensation to $10.5 million a year.

Good previously topped out at about $8 million a year if she met short- and long-term goals.

Duke Energy directors docked Good's pay about $600,000 in 2014, the year of the spill. Company directors said that was because the spill will cost $192 million in cleanup, legal fees, and fines to settle a criminal case.

PUERTO RICO-ECONOMY

SAN JUAN, Puerto Rico (AP) -- Puerto Rico's governor says he will create a financial team that will meet with bondholders and seek a moratorium on debt payments.

Gov. Alejandro Garcia Padilla made the announcement Monday night after saying that the U.S. territory's $72 billion public debt is unpayable. He said he would seek a moratorium of several years but did not provide specifics.

Garcia's comments come just hours after international economists released a gloomy report on Puerto Rico's economy.

Legislators are still debating a $9.8 billion budget that calls for $674 million in cuts and sets aside $1.5 billion to help pay off the debt. The budget has to be approved by Tuesday.

In Washington, the White House yesterday threw cold water on the notion of bailing out Puerto Rico, instead urging Congress to consider changing the law so the island can declare bankruptcy.

EXPORT-IMPORT BANK-MCCONNELL

WASHINGTON (AP) -- The top Republican in the Senate says supporters of the federal Export-Import Bank have enough votes in the chamber to revive it and will get a chance to do so.

McConnell, who opposes continuation of the bank, made the assessment in a telephone interview from his home state of Kentucky, where he is spending Congress' July 4 recess. He said he expects supporters to try to attach the reauthorization to a highway bill.

The 81-year-old bank will expire at midnight Tuesday. It is a federal agency, created during the Depression, that makes and guarantees loans to help overseas buyers purchase U.S. products.

The issue has become a test of GOP purity. Tea party-backed lawmakers and outside conservative groups have denounced the bank as crony capitalism and vowed to get rid of it. They've pressured other lawmakers to go along. Allowing the bank to go out of business, even temporarily, is a sharp setback to traditional GOP allies in the business community.

Supporters such as the U.S. Chamber of Commerce argue that the agency helps many smaller companies and is necessary to keep U.S. businesses competitive.

OBAMA-TRADE

WASHINGTON (AP) -- In a rare bipartisan scene at the White House, President Barack Obama signed into law two hard-fought bills giving him greater authority to negotiate international trade deals and providing aid to workers whose jobs are displaced by such pacts.

The measures were politically linked to secure bipartisan support for the trade legislation, and they set the stage for the Obama administration to conclude negotiations on a 12-nation Pacific Rim economic pact.

Obama praised the bipartisan cooperation that made the legislation possible as he put his pen to the measures in a crowded East Room signing ceremony.

The trade bill gives Congress the right to approve or reject trade agreements, but not change or delay them. Obama defied the wishes of most members of his Democratic Party and frayed relations with organized labor to push the legislation. The worker assistance was part of a broader trade preferences bill that extends a measure easing trade between the U.S. and sub-Saharan Africa.

WALL STREET EXEC-SEXUAL HARASSMENT TRIAL

NEW YORK (AP) -- A young Swedish woman who sued her former Wall Street executive boss over lurid allegations of sexual conquest, betrayal and stalking has been awarded $18 million by a federal jury in New York.

Twenty-five-year-old Hanna Bouveng accused Benjamin Wey in an $850 million lawsuit of using his power as owner of New York Global Group to coerce her into four sexual encounters before firing her after discovering she had a boyfriend.

The jury in federal court in Manhattan awarded her $2 million in compensatory damages plus $16 million in punitive damages on sexual harassment, retaliation and defamation claims. It rejected a claim of assault and battery.

Bouveng, who was raised in Vetlanda, Sweden, testified that soon after Wey hired her at New York Global Group, the CEO began a relentless quest to have sex with her. She says he fired her six months later after she refused any more sexual contact and he found a man in her bed in the apartment he helped finance.

Lawyers for Bouveng say the 43-year-old Wey also sought to defame Bouveng by posting articles on his blog accusing her of being a "street walker," a "loose woman" and an extortionist.

GREEK YOGURT-SCHOOLS

BOISE, Idaho (AP) -- Public schools across America will soon offer Greek yogurt as a meat substitute in school lunches beginning this fall.

Chobani, a manufacturer of Greek yogurt, announced Monday it has been selected by the U.S. Department of Agriculture to supply the yogurt as part of the federal school lunch program.

The USDA decided in April to include Greek yogurt as a permanent option in its school lunch program after classifying it as an approved meat substitute in 2013. Chobani was selected as the exclusive provider after it successfully led a Greek yogurt pilot program over the past year, expanding the program from four to 12 states.

During the first three months of the pilot program, schools in Idaho, New York, Arizona and Tennessee consumed 200,000 pounds of Chobani Greek yogurt. By the time the program was expanded, schools were ordering 700,000 pounds of yogurt.

Company officials did not disclose the value of its USDA contract.

Chobani, which is based in New York and opened one of the biggest yogurt processing plants in the world in Idaho nearly three years ago, leads the U.S. in Greek yogurt production.

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