Cheap is the new cool but will America stay thrifty?

(YEAGER, THEIR, CONSUMER, SPENDING, SAVING, MONEY)

By Claudia Parsons
NEW YORK (Reuters) - When Jeff Yeager`s book "The Ultimate Cheapskate" came out 18 months ago, he felt like a voice crying in the wilderness telling people to ditch their cell phones, hoard their pennies and pay off the mortgage.
Now the Internet abounds with self-proclaimed penny-pinchers offering tips on living frugally as the recession bites into America`s shop-`til-you-drop lifestyle.
The rise of thrift may be bad news for a U.S. economy where in 2006 consumer spending accounted for 70 percent of gross domestic product.
"Cheap is the new cool," said Yeager, who also has a blog called "The Ultimate Cheapskate" offering advice on enjoying life more by spending less. An Internet search for "cheapskate" finds a string of similar blogs.
"When the book came out, it and I were viewed as quaint little novelties, but now it`s being taken much more seriously," Yeager said.
When he advised people to focus on paying off their mortgage as soon as possible and stay in their first home forever, Yeager said his publisher warned him to tone down his "radical" ideas.
Now the subprime mortgage crisis has shown the fallacy of acting as if house prices always go up and people are saving like rarely before. Official data last week showed that U.S. savings jumped to a record annual rate of $768.8 billion, the highest level since records began in 1959, and the saving rate climbed to a 15-year high of 6.9 percent of income.
Yeager said it was discouraging that hopes of an economic recovery are pinned on consumer spending rather than manufacturing and production.
"Some of the lessons we should be taking away from this -- like we can`t live on borrowed money, we can`t live beyond our means -- part of the solution being put forward for getting out of this mess goes back to that," Yeager said.
It is a paradox that Lauren Weber, a journalist and author of the forthcoming book "In Cheap We Trust," a history of thrift in America, said is part of the national character.
Thrift, hard work and simple living were deeply embedded in America`s early values, embraced by the Puritans and founding father Benjamin Franklin whose aphorism "a penny saved is a penny earned" is often invoked today.
"We`re very confused," Weber said. "We`re told that saving money is good for the soul, it`s virtuous to save money. On the other hand, we`re told it`s basically unpatriotic, it`s like burning the flag, to cut up your credit cards."
Credit card debt soared 25 percent in the past decade as consumers were flooded with offers of easy money, pushing spending up at rates that far exceeded wage growth.
In the last decade, American households piled on $8 trillion in debt, an increase of 137 percent, taking total consumer debt to around $14 trillion by late 2008, including home mortgages, credit and store cards and auto loans.
With the collapse of home prices and stock investments, consumers are changing their ways, at least for now.  Continued...
Original article

Police in west Urals search for security guard who stole $8 mln

(POLICE, GUARD, MILLION, RUSSIA, LARGEST, SHURMAN)

NIZHNY NOVGORD, June 26 (RIA Novosti) - Police in the west Urals are searching for a security guard who stole 250 million rubles ($8 million), a local police spokesman said on Friday.
The theft, one of Russia`s largest, took place at about 12:00 p.m. local time (06:00 GMT) on Thursday. Alexander Shurman, 36, was one of three guards carrying cash for Russia`s largest bank Sberbank.
Threatening to shoot his colleagues, he forced them to stop the vehicle in a forest, and transferred the money to another vehicle driven by accomplices.
"A search is underway," the spokesman said.
A $10,000 reward has been announced for any information leading to Shurman`s arrest, and an investigation has been launched. Over 50 police investigators are involved in the hunt.
A police source told the Komsomolskaya Pravda tabloid that Sberbank security guards had had their wages cut last month.
"Carrying huge sums daily and hardly making ends meet - anyone would go nuts," the source said.
Neighbors said Shurman, who has two children, one with a second wife, did not drink or smoke and played tennis and went running every morning.
 
Original article

Workplace theft saps Cuba`s state-run economy

By Tom Brown
HAVANA (Reuters) - In a cramped apartment just behind the renowned Partagas cigar factory in central Havana, the factory worker displayed his wares.
Shiny wooden boxes of Cohiba, Montecristo and Partagas cigars -- considered among the finest in the world -- emerged from a duffel bag as the worker, who gave his name as Jose but asked not to be identified further, offered them at a steep discount to those on sale in the Partagas store.
"This isn`t stealing. We do it to survive," said Jose, who explained that his wage in the factory amounted to less than $20 a month. Without slipping cigars out of the state-run business and selling them to tourists, he and his family would not get by, Jose said.
Cuba`s communist authorities take a dim view of such "survival" tactics, which have existed for years in some form or other in a society whose citizens often wryly joke "if it`s not illegal, it`s prohibited."
A popular Sunday night drama on state television highlights the crimes and punishment -- including long jail terms -- meted out to Cubans responsible for "counterrevolutionary" acts such as black market sales of goods, such as beef, cigars and rum.
"I could get in a lot of trouble just for talking to you ... I could go to prison," said the Partagas worker.
He and three fellow workers reaped just 20 percent of the revenues from the "bolsa negra" or black market deals, Jose said. Plant managers and foremen keep the other 80 percent and split it among themselves and police or Interior Ministry officials who turn a blind eye to the illicit sales, he said.
Former President Fidel Castro complained bitterly about theft from the workplace in a speech in November 2005. But he fell ill not long after that, and little seems to have been done about a problem so commonplace that Castro described it as having created a class of "nuevos ricos" or new rich which he said threatened the very lifeblood of the Cuban Revolution.
The government routinely blames many of Cuba`s economic problems on the U.S. trade embargo against the island that which has been in place since 1962.
"ESCAPE VALVE"
But the problem of theft from state-owned businesses is an embarrassment for a government that has long prided itself on socialist egalitarianism and a sense of ethical superiority.
President Raul Castro, who took over from his ailing elder brother Fidel last year, has called for more efficiency, austerity and sacrifice as the global recession squeezes the centralized Cuban economy with dips in foreign currency earners such as tourism and nickel.
Nevertheless, many Cubans see themselves as victims of a flawed economy and say workplace theft is one of the things still keeping the Cuban Revolution alive.
"It`s sort of our escape valve," said one taxi driver, who asked not to be named. "If they were to take that away people could get pretty angry and things might get out of hand."
Dissident blogger Yoani Sanchez, whose wry comments about daily life in Cuba have won her international acclaim, described pilfering from the workplace as "a socially accepted way of breaking the law" in a website posting this week.  Continued...
Original article

Expats in Asia best paid, but U.S. and UK-based suffer: poll

By Miral Fahmy
SINGAPORE (Reuters Life!) - Want the good life despite the dire economy? Head east, according to a survey showing some of the world`s highest-paid expatriates live in Asia and the Middle East.
A third of all expats in Russia -- the highest proportion in the world -- earn more than $250,000 a year, followed closely by expats in Japan and Qatar, according to the 2009 Expat Explorer survey, commissioned by HSBC Bank International, the offshore financial services arm of HSBC Holdings.
Between a third and a quarter of foreigners working in Hong Kong, the United Arab Emirates, Thailand and India earned annual wages of more than $200,000, while countries such as Malaysia, China and India, were ranked among the cheapest for accommodation.
"Asia is home to the highest paid expats in the world, with one in four expats earning more than $200,000 per year," said the survey (here).
Russia was ranked the number one country overall for expats in terms of wealth. The rest of the top nine were all in Asia and the Middle East.
Building a nest egg is one of the perks of expat life for many people, and the survey showed that Saudi Arabia, Russia, Qatar, India and the United Arab Emirates were the top five countries where people have increased their savings.
But the global economic crisis has taken a heavy toll on expats in Britain and the United States, where close to a quarter are considering returning home, compared to just 15 percent overall, due to the high cost of living, lack of savings and lower wages.
Generous salaries are also relatively scarce in Australia and Belgium, the survey showed. More than 60 percent of expats in both countries earn under $100,000, making them the poorest expats wage-wise when compared to a global average of 35 percent.
LARGEST SURVEY
"We have seen some interesting trends in terms of how expats are reacting to the credit crunch, but what is also interesting to see is that they remain a wealthy group of individuals," Paul Say, head of marketing and communications for HSBC Bank International, said in a statement.
"Over half the expats surveyed are actually earning $100,000 and over -- no mean feat particularly in the current climate."
Expat Explorer, now in its second year, surveyed more than 3,100 expats from various nationalities living in 26 countries. HSBC said it was the largest survey of its kind.
More than two-thirds of expatriates worldwide said the credit crisis had changed the way they spend their money, with luxuries and day-to-day spending the most affected. Nearly 40 percent said they were saving more for a rainy day.
Over half of the expats in Japan -- the highest globally at 53 percent -- said they were cutting back on holidays and other perks, while almost one in two expats in Thailand and Hong Kong -- the second and third globally, were also scaling back.
In contrast, two-thirds of expats living in Qatar said the global financial crisis would not change their spending attitudes at all, followed by more than half of those living in Bahrain, which HSBC said indicated that some oil-rich Gulf Arab states have not been hit as hard by the downturn.  Continued...
Original article

UAE issues guidelines to improve workers' housing

DUBAI (Reuters) - The United Arab Emirates, criticized by rights groups for its treatment of migrant laborers, Monday outlined standards for workers' housing, but employers still have five years to comply with the rules.
It was also not clear what consequences employers would face if they failed to abide by the guidelines.
The majority of the Gulf Arab country's 4.5 million population are foreigners, many of them Asian construction workers hired to develop the UAE's modern cities.
"Each facility operating in the country should upgrade its current workers' accommodation conditions to comply with these standards. Employers are given a maximum period of five years, commencing on the day the decision comes into force," the cabinet said in a statement.
The new manual for employers says rooms should have three square meters per worker and no more than 10 should live in one room.
The manual also includes standards on sewage systems, air conditioning, building materials, indoor air quality, elevators, emergency exits, green spaces, shops, toilets, television rooms and medical facilities, it said.New York-based Human Rights Watch has criticized authorities over Saadiyat island in Abu Dhabi which is planned to be the center of a prestigious cultural district. The developer says workers' accommodation standards will be exemplary.
The UAE is trying to fend off criticism over human trafficking, including maids and other workers trapped into paying fees while their passports are confiscated. A labor ministry official said last month that as well as encouraging "model" housing, the UAE would set up labor courts and allow workers to switch jobs if employers delay wages by two months. It was not clear when this would come into effect.
The government says workers can rest for several hours in the middle of the day during summer, when temperatures and humidity in the Gulf hit dangerous levels.
In recent years workers have gone on strike over late payment of wages. Monday's statement said workers can now report delayed salaries through a Ministry of Labor website.
(Reporting by Andrew Hammond; Editing by Thomas Atkins and Jon Hemming)

Source: Reuters