College Debt Is Crippling Black Graduates' Ability To Gain Wealth

Millions of Americans are plagued by student loans, an albatross hindering them from taking adult financial steps like buying a house or moving out of Mom and Dad’s basement. The Federal Reserve Bank of New York said Tuesday that outstanding student loan balances recently grew to $1.16 trillion in the U.S. But one group is disproportionately affected by student debt.

More than 40 percent of African-American families had student loan debt in 2013, compared with 28 percent of white families, according to an analysis by the Urban Institute, a Washington-based think tank studying issues of education, health policy and low-income families. African-American families also typically take on more student debt -- $10,295 on average, compared with an average of $8,020 for white families.

The student debt disparity is just one factor adding to a yawning gap in wealth between black and white Americans.

One big reason black families are more likely to borrow for college is because they’re less likely to have access to traditional sources of wealth such as inheritances, or wealth-creating tools such as homeownership, according to the Urban Institute. Once black students graduate, the extra debt may prevent them from activities that build wealth -- for example, buying a house or saving for retirement.

“Student loan debt can have ripple effects. It can delay when people buy their first home and when they begin to start saving seriously for their retirement,” said Signe-Mary McKernan, a senior fellow at the Urban Institute. “This disadvantage means that African-Americans are getting a late start in wealth accumulation.”

The Urban Institute analysis relies on data from the Federal Reserve Board of Governors' survey of consumer finances. One critique of the survey is that it underestimates total outstanding student loan debt.

One important caveat: The Urban Institute analysis relies on data from the Federal Reserve's survey of consumer finances. One critique of the survey is that it underestimates total outstanding student-loan debt. A recent New York Fed study found that lenders report higher levels of debt.

All students who weigh whether to borrow for college face a catch-22. Research shows it’s much harder to get a decent-paying job without a college degree, yet saddling oneself with loans can be daunting. Among African-American students, the choice can be particularly acute.

For one thing, African-American students are less likely to graduate from college, according to the Urban Institute, meaning they won't have a degree to help them land the kinds of jobs that will pay off loan debt. That, says the Institute, is in part because African-American students are more likely to attend for-profit colleges. Those schools often have lower graduation rates than nonprofit counterparts, and they’ve come under fire in recent years for not delivering on promises to get jobs for graduates.

And black students who do get a degree often face discrimination in finding a job. Recent black college graduates face an unemployment rate double that of their white counterparts, according to a 2014 analysis from the Center for Economic and Policy Research. A study from the National Bureau of Economic Research suggests that this may be due partly to a subconscious bias against black job applicants.

The first few years of a career are extremely important in determining how much money a person will make over their lifetime, and whether there will be enough to do things like buy a house or save for retirement. This combination of factors makes it especially difficult for black college graduates to gain wealth.

“That wealth translates into opportunity,” McKernan said.

Here's Proof You Don't Have To Sacrifice Sleep To Succeed

It's rare to get a company-wide email from your boss reminding you to sleep. But that’s exactly what happened last week to the employees at Lightspan Digital, a Chicago-based digital marketing agency.

Mana Ionescu, the president of the company, is a big fan of shut-eye and a devotee of celebrity fitness trainer Jillian Michaels. So when Michaels sent a message to her followers extolling the benefits of a good night’s sleep, Ionescu, 37, forwarded it along to her staff.

“I’m a huge advocate for sleep, and I prioritize it the same way I would prioritize going to the gym and seeing my friends,” said Ionescu, who aims for eight hours a night but estimates she gets closer to seven. “It’s so hard because it’s the thing that seems the easiest to sacrifice.”

Ionescu said she’s even been called lazy and weak after expressing her views about sleep. It’s easy to see why -- the American work culture seems to give more value to people who grind away at their jobs at the expense of sleep.

The business leaders who say they get by on very little sleep, such as Fiat Chrysler CEO Sergio Marchionne and Pepsi CEO Indra Nooyi, seem to get a lot more airtime than those who say the opposite. Everywhere are headlines about “19 Successful People Who Barely Sleep,” “Do history's greatest figures owe their success to sleeping LESS?” and “The secret of success: Needing less sleep?”

But sacrificing sleep could be hurting more than just the executives in need of a good night’s rest. When people don’t sleep, they don’t function at their highest levels, research shows. In a work context, that means missing opportunities to make money. American companies are losing $63.2 billion a year due to sleep deprivation, according to a 2013 study from Harvard Medical School.

That may be why a growing number of bosses, like Ionescu, are waking up (pun intended) to this reality and extolling the virtues of a decent night’s sleep. In the most prominent recent example, Microsoft CEO Satya Nadella told ABC News earlier this month that he sleeps on average eight hours a night. Other renowned business leaders including Instagram co-founder Kevin Systrom, Microsoft co-founder Bill Gates and Facebook Chief Operating Officer Sheryl Sandberg have told interviewers in recent years they’ve realized the value in getting a good night’s sleep if they want to operate at their highest levels.

These leaders follow in the footsteps of Amazon CEO Jeff Bezos and venture capitalist Marc Andreessen, who have been bragging about their eight hours of rest a night at least since 1999, when they discussed their sleep habits with a Wall Street Journal reporter.

More and more research indicates that they’re taking the correct approach. Bosses can get mean and workers less productive when they don’t get a good night's sleep, according to one recent study. Sleep is such an important predictor of the ability to get our jobs done well that getting one extra hour a night can increase wages by 16 percent a year on average, according to a study by economics graduate students at the University of California at San Diego. That’s more than the boost from an extra year of education.

“Sleep is as important as water and food,” said Pat Byrne, the founder of Fatigue Science, a company that works with athletes and companies to help them use sleep to increase performance. But many people struggle to prioritize it.

It’s hard for people who sleep very little each night to detect the consequences, Byrne said, because after a while their bodies “re-norm” so they can continue to go through the motions during the day, even while they’re getting just four or five hours of sleep a night. But that doesn't mean the sleep-deprived person is functioning as well as he or she could be.

“It’s very insidious in that it creeps up on you,” Byrne said of the effects of a prolonged lack of sleep. That dynamic may explain why executives and others think they’re operating just fine on a prolonged lack of sleep.

Of course not everyone has the luxury of a good night’s sleep. Parents of young children and people scraping by on multiple jobs may find it difficult to get eight hours a night. But why is it so common for some of the most powerful people in the world to deprive themselves?

“One common approach to sleep is ‘I’m too dedicated to my job and too important to spend my time sleeping,’” said Christopher Barnes, a management professor at University of Washington’s Foster School of Business. Barnes’ research finds that when bosses get less sleep, they’re meaner to their employees, who end up disengaging from their work as a result.

“They might be partially correct, they might be doing really important stuff, but they might not be appreciating the fact that if they’re not getting enough sleep,” they’re probably not at their highest level, Barnes said.

Sabrina Parsons, the CEO of Palo Alto software, has a more blunt term for business leaders’ tendency to claim they survive on just a few hours of sleep a night: “Bravado bragging.” Parsons’ experience raising three young children taught her that functioning normally on a few hours of sleep a night is nearly impossible.

Now, Parsons tries to get seven or eight hours every night. She encourages her 55 employees to do the same, and to take breaks during the day to exercise or do other activities if they’re feeling sluggish.

She does this to keep workers from getting burned out -- and also to “call bullshit on everybody else” who claims to do their job well despite being sleep-deprived.

“I don’t think you really have someone who sleeps four hours every night for months and months and years and years, who is a functional person,” she said. “You’re not doing that, and if you are, then you’re not being productive.”

How The Boss May Be Quietly Pocketing Your Server's Tips

Laurie Zabawa says she'd been working at a Hilton Garden Inn in Bozeman, Montana, for seven years when the owners outsourced the management of the hotel in 2012. For Zabawa, the hotel's banquet manager, this meant that any parties that took place in the hotel would now be overseen by an outside firm, an Ohio-based company called Gateway Hospitality Group.

The banquet workers whom Zabawa oversaw weren't being let go, so the service-industry lifer says she took the change in stride -- that is, until Gateway explained the new policy on gratuities.

By tradition, when clients of the hotel ran up banquet tabs, they'd be subject to an automatic gratuity of 18 to 20 percent. That money was then distributed among the waiters, bartenders and other food workers who handled the event, according to Zabawa. For workers earning close to minimum wage, these tips could equal half their base pay, and they were essential to making a living.

But according to Zabawa and a lawsuit she's filed in Montana state court, after Gateway took over, the automatic gratuity was renamed a "service" or "setup" fee, and the house stopped distributing that money to staff. Zabawa claims that workers were told to sign papers accepting a new flat wage that didn't include gratuities. Most workers were given a nominal raise of about $1 per hour, but it didn't come close to making up for the lost tips, she says.

As banquet manager, Zabawa says she was tasked with implementing the new policy.

"It was awful," Zabawa, 50, told The Huffington Post. "Just imagine working there with those people for years. They were my family. It was horrible to go through, and I had no options."

Zabawa claims she was pressured to quit her job after telling management she believed the new policy violated Montana wage laws. She is suing over what she deems wrongful termination, and she's asked the court to declare the hotel's use of service fees illegal.

Hilton and the hotel's operator, Bozeman Lodging Investors, did not respond to requests for comment about Zabawa's allegations. Bob Voelker, Gateway's CEO and a Hilton veteran, told HuffPost he would not comment on ongoing litigation. According to the company's website, Gateway has contracts with at least 17 Hilton-brand properties in four states.

In the service industry, it's become fairly common for the house to present customers with a charge that's implied to be a tip for the workers -- only to turn around and keep that money for itself. Such add-on costs often come in the guise of a "service" fee, and the charge tends to match what most of us would associate with a typical gratuity.

For businesses, these fees often function as a surreptitious price increase, allowing them to charge customers more while maintaining the same base price. Though these fees don't go to workers, people like Zabawa believe their presence makes customers assume that the bartenders, servers and others who rely on tips have somehow been covered.

"I had employees who quit," Zabawa said. "They just weren't willing to work there anymore."

Zabawa's employees weren't the only workers feeling burned by such fees. In 2010, catering employees who worked the U.S. Open at Arthur Ashe Stadium in New York sued the concessions company there for allegedly pocketing a 21 percent service fee that was tacked onto customers' bills. The workers, who also claimed they were shorted on overtime pay, argued that the service fee was portrayed as a gratuity. The class-action lawsuit was settled in 2013 for $600,000.

As HuffPost reported in 2011, beer and hot dog vendors at New York's Yankee Stadium claimed they were victims of a similar scheme. The stadium's concessionaire, Legends Hospitality, was attaching a 20 percent service fee to the drink and food orders in the stadium's luxury boxes, but the vendors who sold those orders were only taking in 4 to 6 percent in commission. According to a lawsuit filed by the vendors, the remainder of that 20 percent fee was going to Legends, which, at the time, was jointly owned by the New York Yankees, the Dallas Cowboys and the investment bank Goldman Sachs. (After it was sued, Legends made clear on its menus that only a small portion of the fee went to servers.)

The practice has even made its way into the pizza delivery business. As HuffPost reported last year, Pizza Hut, Papa John's and Domino's now commonly tack nominal "delivery fees" onto the tabs of delivery orders. Those fees, which are usually between $1.50 and $3 a pop, do not go to the drivers, even though many customers forego a driver tip believing that they do. Many career drivers told HuffPost they believe the practice has helped depress wages in their field.

HuffPost readers: Do you work in a job where "service fees" do not go to workers? Tell us about it.

One former catering worker at the U.S. Open said the use of service fees not only hurts workers' paychecks, but also creates confusion and tension among clients.

"In this industry, it happens a lot. A client will have the assumption that the service fee is indicative of some type of gratuity going to the employee," said the worker, who asked to remain anonymous due to the litigation. "They're feeling that they're already being forced to pay a tip. A strange sort of animosity can build up between the client and the server."

Several states have recognized the problems stemming from service fees and tried to address them in their own ways, with laws now on the books in Hawaii, Massachusetts, Minnesota, Montana, New York and Washington state.

In Hawaii, any hotel or restaurant that tacks on a service fee is required to distribute that fee in full to employees. A similar statute in Massachusetts applies the same rule to the service industry at large, while also barring management from sharing in employee tip pools. In Washington state, service fees may be used, but receipts must show clearly how much of the fee goes to employees.

Recently, the hotel workers' union Unite Here has worked to insert language into local wage laws to ensure that service fees stay with workers. According to the minimum wage ordinance passed last year in Los Angeles, which established a $15 wage floor for large hotels in the city, any such fee belongs to the workforce, regardless of what management chooses to call it -- be it a "service charge," a "delivery charge" or a "porterage" fee, to name a few examples.

The Montana law, which would cover Zabawa's hotel, defines a service fee as "an arbitrary fixed charge added to the customer's bill by an employer in lieu of a tip." According to state code, such a fee "must be distributed directly to the nonmanagement employee preparing or serving the food or beverage or to any other employee involved in related services."

"Defendants admit they do not provide the 20% arbitrary fee to the nonmanagement staff members," Zabawa's lawyer, Jason Armstrong, wrote in a court filing, referring to Gateway and Bozeman Lodging Investors. "The question then becomes one of law; is the policy legal or not under the law?"

According to Zabawa, the hotel lost many of its servers under the new gratuity policy, since for them it effectively translated to a pay cut. Zabawa said she was simply instructed to hire new employees.

After workers lost their tips, one of the servers brought the language of the Montana statute to Zabawa, she claims in her lawsuit. Zabawa, in turn, took the server's concerns to a manager for Gateway. Zabawa alleges in her suit that she was then instructed to "write up" the "problem employee" and fire her. Zabawa says she refused.

Zabawa says she then lost her position as banquet manager and was switched to a sales job. In her lawsuit, she argues that leaving "was the only reasonable alternative" at that point. Under Montana law, such a voluntary termination could still be considered wrongful discharge if the employer created an intolerable situation.

After eight years at the hotel, Zabawa wound up working part-time at Pier 1 Imports before finding a new job in banquet work. Her income has taken a sharp drop, she says, but that's something she's managed to live with.

"I go to sleep at night knowing that I'm not apologizing [to my employees] and that I'm not sorry every day," she said.

Sparkling Water Is The New Soda

The hottest drink in America is water with bubbles.

Long a kitchen table staple in European households, sparkling water is making inroads in the U.S. thanks largely to Americans’ waning interest in soda. Between 2009 and 2014, the volume of carbonated bottled water sold in the U.S. has increased by 56.4 percent, according to data from Euromonitor International, a market research firm. Soda drinking declined sharply during the same period.

Still, sparkling water sales are a fraction of soda sales. The U.S. soda market is worth about $39 billion, according to Euromonitor. The market for unflavored sparkling water, flavored sparkling water and "functional" water -- a category that includes flavored still water and enhanced still water like Smartwater -- is just $4 billion.

It has a way to go before it catches up to soda, but sparkling water is indeed having a moment.

The growth in millions of liters of sparkling water sold in the U.S.

The decline in millions of liters of soda sold in the U.S. Note that the scale is very different from the chart above, with soda sales still dwarfing sparkling water sales.

Americans’ growing obsession with health is the biggest reason for the shift, according to Jonas Feliciano, a global beverage analyst at Euromonitor. Coke and Pepsi have resorted to hawking products like energy drinks and even milk to boost sales as Americans become increasingly wary of the high levels of sugar in soda.

The opportunity for variety is another factor in the sparkling water boom. These beverages are available in a range of flavors, from orange-pineapple to kiwi-strawberry. Feliciano noted that most mainstream soda comes in just cola and lemon-lime flavors. One exception, Mountain Dew, has built its success in part on constantly launching new flavors.

“[Americans] are turning away from things that identify with soda and instead are turning toward things that identify with water,” Feliciano said. “If I’m looking for health and I’m looking for variety, sparkling water with different flavors seems to provide that.”

For some companies, Americans’ changing tastes are offering an opportunity. The growth in sales at Washington-based Talking Rain Beverage Company, which makes flavored sparkling water, has pretty much directly mirrored the rise of the beverage's popularity. The company brought in more than $384 million in sales in 2014 compared to just $2.7 million in 2009. Sparkling Ice, a Talking Rain line of zero-calorie sparkling water in flavors like pink grapefruit and peach nectarine, is responsible for most of that growth.

Kevin Klock, Talking Rain’s CEO, says the company doesn’t try to make health claims about its drinks because shoppers recognize on their own that sparkling water is probably healthier than soda.

“It’s great that it’s zero calories, but it’s probably not the number one thing the consumer is looking for,” Klock said. “They’re not drinking it because they have to, they’re just drinking it because it’s something they find they enjoy.”

Sparkling Ice on display in New York.

Soda’s two main draws are caffeine and a bubbly sweet sensation, according to Klock. As concerns about soda’s health consequences mount, drinkers are turning to coffee and energy drinks for their caffeine fix, and flavored sparkling waters for that throat-tickling combination of bubbles and sweetness.

“I don’t see it as a fad,” Klock said of flavored sparkling water, noting that the trend in all beverages, including liquor and beer, is toward more variety and flavor.

SodaStream is betting big that interest in sparkling water continues to grow. The at-home carbonation machine company has shifted its marketing in recent months to focus more on the product's ability to make sparkling water and less on its ability to make soda. SodaStream rebranded its devices as sparkling-water makers instead of soda makers, and it has changed its slogan from “set the bubbles free” to “water made exciting.”

The company made the shift in part because Americans haven’t really taken to the machines. In the U.S., SodaStream is probably better known for its Scarlett Johansson commercials than for its carbonation device. So far, just 1.5 percent of households in the U.S. have a SodaStream, compared to about 20 percent of households in Finland or Sweden, according to Daniel Birnbaum, SodaStream’s CEO.

SodaStream's 2014 Super Bowl ad.

Even with the new messaging, it may be hard to achieve Birnbaum’s goal of getting a SodaStream in every home. Feliciano notes that low-income shoppers aren’t likely to make the switch from soda to sparkling water anytime soon. Even those who don't shell out for a SodaStream machine -- the cheapest option on the company's website is $79.99 -- will probably find better deals on soda than sparkling water.

While there's not that much difference in the average price per liter ($1.10 per liter for soda versus $1.30 per liter for sparkling water, according to Euromonitor), the supermarkets, discount outlets and convenience stores where most low-income Americans shop offer promotional deals on soda that often make it much cheaper than sparkling water, according to Feliciano.

“This is still not for the masses,” Feliciano said.

But Birnbaum is confident that Americans' shift away from soda is more than just a whim.

“We feel like we are now at the early stages of a revolution in the beverage industry in America,” Birnbaum said, noting that about 70 percent of SodaStream’s customers globally use the machine only for carbonating water.

“The death of soda comes with the life of something else,” Birnbaum said.

One Peruvian Woman Is Standing Up To A Gold-Mining Goliath

This story was reported with Roxana Olivera, a Toronto-based investigative journalist living in Peru.

SOROCHUCO, Peru -- On a remote farm deep in the Peruvian Andes, in a region where sheep outnumber people by a comfortable margin, a very small woman is foiling the plans of one of the biggest mining companies in the world.

Máxima Acuña, who stands just over 5 feet tall -- if one includes in the measurement the traditional wide-brimmed hat she almost always wears -- has withstood threats, beatings and legal challenges in her improbable bid to hang on to what she declares is her property: 67 acres of windswept grass framed by rolling hills and several high mountain lakes.

Last week, dozens of private security officers working for Minera Yanacocha, a Peruvian company that is majority owned by Newmont Mining Corp. of Denver, ripped apart the foundation of a new home the family was building as Acuña stood nearby, crying.

The cause of the conflict is the same that has haunted Peru since Spanish conquistadors first landed on its shores 500 years ago. There is gold on Acuña’s land. Or, more accurately, under it: at least 6 million ounces, here and on adjacent property, according to Newmont.

The company wants to build a $4.8 billion mine, known as Conga, to extract the precious ore. Buenaventura, a Peruvian company, and the International Finance Corp., the private-lending arm of the World Bank., hold minority stakes in the project, which is meant to replace a depleted mine nearby.

Acuña’s neighbors seem to have gotten the message that standing in the way of such a lucrative development is a losing proposition. They are long gone. But Acuña, who is 44, and her husband, Jaime Chaupe, have declared they won’t be intimidated into leaving.

“The Yanacocha clan can hire all the lawyers in the world, but let them produce documents to show that I sold them my land," Máxima Acuña said recently. "They claim that I am squatting on their property. They claim that they are the legitimate owners, but they don’t show any papers that indicate that I sold them my land.”

Newmont says it purchased the Acuña property and surrounding acreage from the local community in 1997. Peruvian courts have twice affirmed its ownership, the company says.

Stories of individual resistance to lucrative construction projects in developing nations rarely end well for the stubborn holdout.

Acuña claims Yanacocha and its security forces, as well as allied police, have engaged in a campaign of harassment. In 2011, Peruvian police moved onto the disputed property and beat Acuña and her daughter "without compassion," Acuña told the New Internationalist in an interview the next year.

In more recent years, even as local activist leaders leading the fight against the mine adopted her as their spiritual leader -- at one point, she was even flown to Paris for an event -- the endgame seemed to grow near. A 2012 court decision seemed to seal the family's fate. The Acuñas, the judge declared, were squatters. Another court ruling in 2014 affirmed the same thing, the company says.

In December, however, a judge in Cajamarca, the regional capital, threw out a criminal complaint that Yanacocha, backed by Newmont, had filed against the Acuñas. The family and their attorneys from a nonprofit legal group for indigenous people celebrated the ruling as vindication that their claim to the land was valid. (In Peru, private parties can sue alleging criminal conduct, unlike in the United States, where such claims are reserved for government authorities).

The Acuñas live in a tiny grass and earth hut, highly vulnerable to the cold that is a steady presence at these high altitudes of more than 12,000 feet. In January -- mid-summer in the Southern Hemisphere -- they started to build a new home a few hundred feet away.

On Feb. 5, Yanacocha dispatched its security forces to the site. They wore face masks and carried riot shields.

What exactly happened next isn’t clear. Photographs taken by the company’s agents and posted on Yanacocha’s website depict the security forces facing off against two young men.

Acto de defensa posesoria se llevó sin violencia de nuestra parte http://t.co/ffRWb49kW3 pic.twitter.com/EDhyGX0jEf

— Minera Yanacocha (@MineraYanacocha) February 3, 2015

A photo tweeted from Yanacocha's account shows two people who appear to be throwing dirt or rocks.

Eventually, the security forces ripped apart the house's foundation, and left.

Newmont claims the new house was being built on Yanacocha land, outside the bounds of the property the Acuñas claim as their own. The December court decision changed nothing with respect to earlier rulings that confirmed its ownership of the property, the company says.

"Yanacocha remains committed to demonstrating respect for human rights and host communities, and will continue to seek measures to minimize conflict," Newmont spokesman Omar Jabara said in an email. "At the same time, the company will take respectful, lawful and prudent measures to manage its lands safely, and prevent future -- and new -- unauthorized occupation on company property."

The family and their attorney claim the structure was on Acuña property.

[ENVIVO]Conferencia de prensa de Yanacocha en #Cajamarca sobre defensa posesoria, síguela aquí http://t.co/3x7W4owLuX pic.twitter.com/QDQAB0rGbA

— Minera Yanacocha (@MineraYanacocha) February 4, 2015

Another photo of the confrontation, tweeted from the Yanacocha account. The foundation of the planned Acuña home that mine security destroyed is in the foreground; the family's current house is in the distance.

In Peru, the incident has dominated the news cycle, provoking condemnation even from some media outlets traditionally seen as business-friendly. At a press conference earlier this week, the father of Peru's president declared that Acuña is a "heroine" for standing up to the mine.

For Newmont, the episode is another public relations mess in a region where its reputation is already tattered. For more than 20 years, it has pulled gold out of the ground of a huge mine near Conga, a development local peasant farmers blame for polluting their water and land.

In 2012, Peruvian police shot and killed five people protesting Conga, including a teenage boy. In the aftermath, Newmont declared that Conga was on indefinite hold while it builds reservoirs meant to replace water lost when several mountain lakes at the Conga site are dug up. There is no time frame on when the project will start up again, but Newmont has said it wants to marshall public support first.

Now, Newmont faces the prospect of more protests and turmoil. In Lima last week, a group gathered in support of Acuna outside of Yanacocha headquarters. Lynda Sullivan, an activist who lives in the town of Celendin, near the proposed Conga site, said organizers are attempting to stage a similar rally outside of Newmont's Denver headquarters on Thursday, and at Peruvian embassies around the world.

For Acuña, the mantle of resistance hero is weighing heavy. She recently sought medical treatment for symptoms relating to exhaustion and stress. In recent days, her family has sought to deflect a swarm of reporters seeking interviews.

But this past weekend, she talked with a visiting journalist and issued one of the defiant declarations that have endeared her to supporters.

"Yanacocha wants to have my land for free,” she said, her eyes swelling with tears. “But I will not leave my land. I am the rightful owner of this land. I have property papers to prove it. God is my witness.”

How The Post Office Could Take On The Payday Loan Industry

With the idea of postal banking becoming more mainstream in the U.S., the head of the largest union of postal workers says he plans to make a revived banking service part of his union's upcoming contract talks with the U.S. Postal Service.

Mark Dimondstein, president of the American Postal Workers Union (APWU), told The Huffington Post that postal banking -- when post offices also offer simple banking services like checking and savings accounts -- is "an idea that should be reborn and whose time has come."

"Basic postal banking is done in many countries around the world, and in many of those countries it's a revenue-driver for the post office," Dimondstein said. "We think it's a win-win-win situation. It's great for the public. It's great for the post office. And it's great for postal workers."

Dimondstein's plans to make postal banking part of contract talks were first reported by Salon's David Dayen.

The U.S. Postal Service once offered simple banking services to the public, but federal reforms abolished the services in 1966. With the postal service now facing a drop in first-class mail and costly mandates from Congress, the notion of restoring banking has been bandied about as a way to get the agency on more solid footing while extending some basic services to underbanked communities.

In particular, it's been pitched as a potential alternative to the high-interest payday loans that poorer Americans rely on.

Last year, the postal service's Office of the Inspector General recommended that the agency consider offering check cashing, money transfers and modest loans to customers who don't have their own banks. The idea has gained currency not only with postal service boosters, but also with critics of Wall Street, including Sen. Elizabeth Warren (D-Mass.).

In an op-ed last year, Warren argued that the postal service is the one organization with "the public mission, the infrastructure, the experience and the well-trained employees needed to help address this problem" of predatory lending aimed at the poor.

One interested party that hasn't endorsed the concept of postal banking is the postal service itself. Patrick Donahoe, the postmaster general until earlier this month, "scoffed" at the idea during a press conference late last year, according to the Associated Press. "Our role is delivery," not banking, Donahoe said.

It isn't apparent yet how receptive Donahoe's replacement, Megan J. Brennan, might be to reviving postal banking services. Asked whether the agency's new management would entertain such a discussion, an agency spokeswoman said, "We'll just have to wait and see what's addressed during the negotiation process" with the union.

The divide over postal banking is part of a broader philosophical disagreement over the future of the post office. Heading an agency faced with red ink -- most of it due to a requirement imposed by Congress that the agency pre-fund retirement benefits years in advance -- Donahoe sought more latitude to streamline the postal service, pushing proposals that would eliminate Saturday delivery and close more mail processing facilities.

Postal unions have staunchly opposed such moves and argued that they will lead to the so-called death spiral, in which reduced services inevitably lead to the agency's demise.

APWU will begin negotiations for a new contract with the postal service next week, and the union expects the agency to seek concessions in employee health and retirement benefits -- a common feature in nearly all union contract talks these days. Though it isn't clear how postal banking could fit into such a contract, Dimondstein said he believes the negotiations will provide a good opportunity to put the proposal before postal management.

"We think it's most appropriate that the needs of [postal customers] are talked about at the bargaining table," Dimondstein said. "And I can tell you this: I haven't met a single person -- though I don't run into Wall Street bankers often -- who think this is a bad idea."

Japan Is Considering Making Vacation Mandatory. The U.S. Should, Too

Japan wants to cut off its workaholics, and America could learn a thing or two from the proposal.

A measure slated to come before Japan’s parliament sometime in the next four months will require workers to use at least five of their 10 guaranteed paid vacation days per year. The United States, where many employees leave vacation days unused or don't have any at all, might do well to craft a similar model for its workers, even if Americans' reasons for ignoring paid time off are quite different from those of Japanese wage earners.

Overworking is a chronic problem in Japan. In the 1990s, the term for sudden death caused by exhaustion and overwork became a household name: karoshi.

Group identity is deeply ingrained in many facets of the ethnically homogenous country's culture, and Japanese workers are afraid of letting their colleagues down by voluntarily taking time off, says Paul Jaffe, a former longtime resident of Japan and consultant at Japanese Intercultural Consulting.

“People tend to not want to put burdens on other people and not push their own benefit ahead of others,” Jaffe told The Huffington Post. “It’s very common for people to have vacation days they don’t take.”

To convince workers to spend time away from the office, the Japanese government has created more national holidays in recent years. If the whole team is encouraged to take the day off, the thinking goes, then individuals will. But public holidays do not guarantee paid time off, so they may act as more of a nudge than a push. Now, the government hopes mandatory time off will help foster a culture in which workers prioritize their free time and expect colleagues to do so, too.

Many workers in the United States also leave unused vacation days on the table. About 40 percent of Americans didn’t plan to take all of their time off last year, according to a survey from the U.S. Travel Association and GfK, a market research firm. More than 20 percent of workers said the main reason was fear that their absence would prove them to be replaceable.

A survey released last month found almost 42 percent of Americans didn’t take a single vacation day in 2014. This Google Consumer Surveys report, published for travel website Skift, also found that women tended to use fewer vacation days than men, and that employees in younger age ranges were going light on vacation days.

A federal policy for mandatory time off, similar to what is being proposed in Japan, might allay the fears of workers spooked about losing their jobs for spending time away from the office. It would be a big step, though. As it stands, the U.S. is the only advanced economy that doesn’t require companies to offer paid leave.

This 2007 chart, showing how the U.S. doesn't require vacation days, really highlights "American exceptionalism" at its worst.

Still, Americans are less likely than Japanese workers to spend countless hours in the office.

“I’ve heard Japanese executives here [in the U.S.] ask questions like, ‘Why do Americans go home so early?’” Jaffe recalled. “They haven’t grasped fully the situation here, the family situation, the sociological situation where people have kids and they have to go pick them up from school.”

For now, it's unclear whether Japan's mandatory vacation measure will pass.

The core of Prime Minister Shinzo Abe's platform has been economic reform measures -- dubbed "Abenomics" -- meant to jumpstart Japan's anemic economy. Mandatory paid leave could be part of that: Workers forced to spend time out of the office may spend more money shopping, stimulating commerce throughout the country.

Motoatsu Sakurai, president of the nonprofit Japan Society and a former Japanese ambassador to the U.S., likens this proposed social engineering to some affirmative action policies in the States. He said that setting quotas for the number of racial minorities and women admitted to colleges or hired at companies makes institutions see, and ultimately depend on, the benefits of diversity.

“It helps eliminate these kinds of extreme cases of social issues,” Sakurai told HuffPost. “For Japan, when people get used to it, nobody will want to have less holidays.”