Monday, September 1, 2014

Too Many Consumers Don't Feel the Recovery

When the Great Recession began in 2007, the negative economic effects and consequences were immediate. Millions of consumers lost their jobs, homes and spending power.  Five years later, in 2012, the so-called experts declared the Great Recession was over.

However, in 2014, some seven years later, there are still too many consumers suffering from the negative impact of the Great Recession.  Although our economy is growing at an annualized rate of 4.2 percent, the good news isn't reaching the average consumer. Why not? There are three key indicators that tell the real story.

1. Wages are depressed. Since 2007, the average price of basic goods and services including clothing, food and housing has risen by 15 percent. Compare that to a 9% overall increase in wages for salaried employees during the same period. If you consider the 22% of consumers who rely solely on their minimum wage jobs for income, this group has fallen behind by nearly 12% in terms of their income purchasing power since 2007. Adding insult to injury, a recent Rutgers Poll reveals that 57% of respondents have "less or the same amount of earnings and savings today as they did five years ago." In other words, nearly 60 percent of American consumers are cash poor. This is not a good sign.

2. Consumers have lost faith in the American Dream.  Before 2007, over 70% of consumers indicated they believed it was possible to live the "American Dream" -- that is, get a quality education, find a good job, earn enough money to afford a home where they could raise their kids, and have some money left over for retirement or a rainy day fund.

Today, when asked that same question, the number of consumers who still believe in the American Dream has fallen to less than 40 percent. This statistic is alarming because it undermines the very foundation of our nation's economy. If educational opportunities, quality jobs and housing prices are out of reach for 60% of Americans, our nation is quickly becoming "the land of haves and have nots."

2. Consumers Can't Get Loans  Before 2007, borrowing money was easy, perhaps too easy. But, consumers were able to go to their banks and get an auto loan, a college loan, or money to remodel their kitchen. Today, main street banks are not lending money to most consumers because their credit scores have taken a serious hit due to the Great Recession. It's a vicious downward spiral.

While credit unions are trying to come to the rescue and help consumers borrow money, federal regulatory agencies like the National Credit Union Administration have all but frozen the ability of credit unions to enroll new members. This means that millions of American consumers, who seek the financial services of federal credit unions, can't even become members because the federal regulators won't allow federally-chartered credit unions, which they regulate, to add new members through  existing portals like associations and other legitimate groups.

It's a system that is terribly broken and antiquated for today's consumers, not to mention the emerging Millennial Generation comprised of over 75 million consumers between the ages of 14-33 years old, who rely exclusively on the Internet and "financial apps" for their banking needs. Why are federal credit unions being denied the opportunity to serve this group of consumers? It makes no sense.

These are the cold facts. They tell a much different story than what our political leaders and financial experts have been spouting for the past three years. Consider this. If you went to your doctor because you were sick, and they gave you a 50-50 chance of recovery, how would you feel?  The simple answer is "not optimistic!" Well, millions of  consumers are feeling the same way -- not optimistic!

So, here's the bad news. When the American Consumer Council recently asked its members if they were optimistic for their economic future, only 4 out of 10 responded "yes."  When 54 percent of America's consumers tell you that their financial status is "worse today than it was seven years ago," that's a clear indication that the Recovery is not over for most of us. It also calls into question the integrity of those political leaders and financial experts who have declared "good times are ahead for America." My question is, "Which America are they talking about?"

About the Author:
Thomas Hinton is president and CEO of the American Consumer Council, a non-profit consumer education organization with over 148,000 members.  Contact:

Wednesday, July 9, 2014

Consumers "Call to Action" -- Don't Let Federal Regulators Limit Your Financial Choices

The National Credit Union Administration (NCUA) is considering bowing to pressure from the bank lobby and limiting legitimate associations like the American Consumer Council (ACC) from partnering with federally-chartered credit unions.  If this happens, it will hurt you as a consumer. Your ability to join a credit union will be severely limited.

At a time when the NCUA should be promoting credit unions to help consumer and rebuild America’s middle-class, the NCUA is unfairly attempting to restrict association members from joining credit unions. 

We need your help to stop this regulatory meddling and send a message to Washington that consumers have rights, and consumers should be able to join a credit union through their associations or non-profit organizations, if they so choose. Did you know that over 68% of all ACC members belong to a credit union? Let’s not lose that option!

The American Consumer Council is requesting that you email Gail Laster, Director of the NCUA’s Office of Consumer Protection (OCP), and ask her to "certify ACC as SEG Compliant" so that ACC members can continue to join credit unions and enjoy the many benefits credit unions offer consumers. ACC will continue to provide consumers with financial education programs and other important services. But, we need our credit union partners to do this. Credit unions have been a key partner with ACC in delivering important financial education, programs and services to our members.  
Please act today!
Below is the email address and Twitter address for Gail Laster at NCUA-OCP: Email:   -or-  Twitter: @The NCUA  --  Phone: 703-518-6640  or  FAX: 703-518-6439

Thank you for your help on this important matter and for standing up for your right to choose your financial institution as a member of the American Consumer Council.

P.S.  Please send a copy of your email to ACC at:

Friday, June 27, 2014

Corporate Social Responsibility and the Minimum Wage

Perhaps, the “Father of Corporate Social Responsibility” was Henry Ford. One hundred years ago, in 1914, Henry Ford stunned the industrial world by more than doubling wages to $5 a day. As a result of this progressive move, Henry Ford helped build America’s middle class and create today’s consumer-driven economy. He also put his Ford brand on the path to great success by endearing his company to every American family.
It’s now time for this generation of business leaders to follow in Henry Ford’s visionary footsteps and practice CSR by raising the minimum wage to a “living wage.”  And, what should that wage be? According to MIT’s Living Wage Calculator, it varies from city to city across our nation. But, regardless of the wage amount, the goal must be to lift people above the poverty line and expand America’s middle class so that we can experience a sustained economic recovery and ensure prosperity for the next twenty years. To calculate your city or state’s living wage, visit:
Here are three living wage examples. In San Diego, the MIT Living Wage Calculator calls for $11.38 per hour or $23,671 per year. In Atlanta, it’s $10.10 per hour or $21,007. In New York City’s Queen Borough, it’s $12.75 or $26,521 per year. None of these wages are outside the boundaries of fair and reasonable compensation.

Can any prudent business leader or entrepreneur seriously argue that raising the minimum wage to a “living wage” will “break the bank?” If so, I would question that leader’s logic and standard of fairness. I would also ask them to live on $7.50 - $8.25 an hour for the next 30 days to see how it feels to struggle in the trenches of corporate America to make ends meet. I’m sure their opinions of what is “fair and reasonable” would change quickly.

If we truly believe that our nation stands for Life, Liberty and the Pursuit of Happiness, doesn’t part of that sacred covenant also ensure that minimum wage earners deserve a fighting chance to experience the American Dream? If not, then greed and arrogance will rule us.

Let’s set aside the politics and arguments of greed to come together and strengthen America’s middle class. Let’s follow Henry Ford’s lead and do the right thing. Actually, according to the American Consumer Council, raising the minimum wage makes good business sense. By boosting the minimum wage, companies will help expand the middle class and empower more consumers. This will create more spending and help to create higher corporate profits. That’s good for businesses, shareholders and investors. 

As the power shifts from the corporation to the consumer, it’s time for business leaders to stand up for consumers by ensuring a living wage for all workers. It’s time to rebuild America’s middle class.

About the Author:  Thomas Hinton is president of the American Consumer Council, a non-profit consumer education organization with over 145,000 members. He can be reached at: 

Sunday, March 2, 2014

Why Do Leaders Lie?

This week it was learned that General Motors had known about a faulty ignition switch problem for at least a decade. Yet, their leaders did not sound an alarm to consumers. In a written statement issued by GM, the company acknowledges that 13 deaths and 31 crashes are linked to an ignition switch problem in certain car models in which the ignition switch inadvertently moves to the "off" position and turns off the engine. In those instances, many electrical components in the affected vehicles wouldn't work including airbags, which wouldn't deploy in crashes.

This is a serious problem that has not only resulted in the unnecessary and tragic deaths of 13 people, but it calls into question the integrity of GM’s leadership. Why did they withhold this information from consumers and dealers? If the leadership at GM did not tell us the truth, they lied. It’s that simple. There’s no shades of gray when it comes to life and death issues. Sure, they can settle lawsuits and buy the silence of grieving families. But, the fact is leaders lied. It’s that simple.

When human lives are at stake and the leadership of a company knows they have a faulty problem with their product, leaders have a sacred responsibility to come forward and warn consumers. When leaders do not come forward and issue a warning to unsuspecting consumers, it is a criminal act and they should be charged, convicted and punished harshly to send a message that society will not tolerate liars whose silence or misleading statements cause deaths.

It has become all too convenient for leaders to lie. Recently, consumers were sickened by contaminated Foster Farms chicken. Their leaders did not come forward and accept responsibility until they were pressured by consumer organizations and retailers. Why? What were Foster Farms leaders afraid of?

Toyota’s leadership denied any responsibility related to its faulty accelerator problems in 2009.  Its chairman was shamed before the United States Congress and Toyota suffered major losses because of its credibility gap and deceptive practices. Ironically, despite jury convictions holding Toyota responsible for the sticky accelerator problems, the U.S. Department of Transportation issued a report stating most of the crashes were the fault of drivers who stepped on the accelerator instead of the brake. What rubbish! Tell that to the widow of the California Highway Patrol officer and his passengers who died in a fiery crash caused by the faulty Lexus accelerator. Is anyone with a brain suggesting a CHP officer doesn’t know how to tell the difference between the accelerator and the brake?  So, this is the nonsense companies and government agencies are feeding us; and, they expect us to believe them!  No wonder consumers have lost faith and trust in government and corporations.

It seems the system is full of liars who will do anything and say anything to cover their rear. But why? What’s wrong with coming clean and telling people the truth? No one is suggesting that a company needs to admit guilt. That’s why we have courts. But, certainly, when the data suggests you have a problem with a product, you need to alert your consumers. It’s the only way you will maintain their trust and earn their respect. But, corporate leaders have been taught by their shareholders and lawyers to be silent, say nothing, don’t admit to anything that could negatively impact our quarterly earnings. This is the low level to which corporate leadership has sunk. Had it been the daughter of GM’s president who was killed because her ignition switch clicked off, I wonder how fast GM’s engineers would have identified and solved the problem?

Now, GM has serious credibility problems with consumers. Let me put it in terms the bean-counters and leaders at GM can relate to. The bottom line question that GM should be worried about it this: “What parent would ever buy their teenager a GM product knowing its leadership withheld data that contributed to the death of 13 people?” The answer is no one!

Sunday, December 1, 2013

Is Employee Engagement Worth All the Effort?

by Tom Hinton

It’s no coincidence that most of the best-in-class companies also have fiercely loyal and dedicated workforces. When top-performing CEOs from companies like Apple, Amazon, Southwest, Starbucks and Berkshire Hathaway talk about why their companies are most admired, they always cite their people and, specifically, employee engagement as one of the keys to their profitability and success.

What exactly is Employee Engagement? I define it as a person’s emotional connection to their company. Twenty years ago, it was enough to merely pay your employees a fair wage and provide good working conditions. Today, however, things have changed in the workplace. Your best and brightest employees have choices. They won’t settle for the status quo. This is why your company and its management team must challenge employees with meaningful goals and assignments. Leaders must set the bar high with a corporate visions that inspire employees and tasks them to help customers use the company’s products and services to make the world a better place. This is how the era of Employee Engagement is defined.
How can your company or organization successfully engage its employees? Having learned by trial and error over the past 15 years, here are three keys steps I recommend:

1.     Take the Pulse of your Workforce. There’s no point in running a race if you don’t know where the starting point and finish line are, right? So, it’s imperative that you assess how your employees are feeling about their company, their work, and their ability to contribute to its success in meaningful ways. We always conduct an in-depth assessment that includes a cross-section of employees as all levels of the company. What we learn is invaluable and helps leaders chart their course for innovation, improvement and implementing a strategy for long-term growth and customer loyalty.

2.     Fix What Doesn’t Work and Fix it Fast!  Once you’ve completed the assessment phase, you will know exactly what is working and what is broken in your organization. Trust me, your employees will tell you. The next step is to challenge your management team to fix it – and fix it fast! The key here is to demonstrate forward progress. Don’t be surprised if your management team resists. Most managers are not visionaries and they are comfortable with the status quo. So, be prepared to kick a few butts and shake things up in order to demonstrate you mean business! Effective leaders understand the status quo is a fatal flaw in any organization.  This step requires courage and conviction.             

If your company has been stuck in neutral for some time, your employees will be favorably impressed by any significant action you take to implement positive changes that help them do a better job and get better results. This is why it’s important to prioritize the things that you need to fix, change or improve within each department and business unit. Basically, you have 90 days to act if you want to have any credibility as a leader.  People will embrace your new vision, but only if they see actions after words.  Remember the words of Ray Kroc, who put McDonald’s on the global map. Kroc said, “People are like bananas. They’re either green and ripening or yellow and rotting!” You always need to keep your people greening.

3.     Set the Bar High.  Most companies under-challenge their employees. As a leader, you need to set the bar high by inspiring your people with a vision that challenges them to be the best. This means soliciting their ideas, asking them to make a commitment to be the best, and incentivizing them to reach that bar. Then, you need to give them the tools and resources necessary to accomplish that vision. Finally, as the leader, you must always be the “voice of success” and be relentless in your pursuit of your vision. This is how you convert followers into believers, and believers into evangelists.                                                     

As your employees make progress and achieve various levels of success, be sure to reward and recognize them. Salute and praise your top performers in each department. Invite them to share their success stories with others in the company including other divisions. Create a culture of “success and celebration” within your organization that motivates your employees to raise their performance levels and inspires them to set the bar even higher while achieving new records for sales, productivity, innovation and cost savings. 

This is the stuff success is made of. This is how good companies become great, and great companies become legendary. Employee Engagement is a key part of every company’s success formula.

About the Author:  Tom Hinton is president of the American Consumer Council. For more information, please contact: