New York Governor Andrew Cuomo has recently proposed that New York join a number of other states that have restricted the use of credit reports as a required screening procedure in connection with employment. It should be noted that we are talking about credit histories, not credit scores, which are algorithms, based upon some of the information in your credit report/history.
The general arguments against their use are that these checks can create unnecessary hurdles for workers who have poor credit, especially if it is because of a catastrophic event or a recessionary economy, and that they typically don't tell employers much about the applicant’s ability to do the work that the job requires.
Under the proposal, employment credit screening will still be allowed for certain jobs, such as law enforcement, where there is a concern of bribery, or for occupations that come with fiduciary responsibilities or involve access to trade secrets or national security. There are many other exceptions that will quickly come to mind.
When looking at this issue, what is less discussed are some of the reasons why employers many generally want to use those credit checks to learn more about a prospective employee, especially when, as is often the case, they have a large number of qualified candidates who can “do the work.” Two things come to mind for me.
First, some employers just put a premium on having employees in their organization that have good judgment. If a prospective employee has had a long history of bad financial judgments, and has really been irresponsible with their finances, why wouldn’t that employer want to know that? Why shouldn’t that employer know that, especially when there are many other applicants who have exercised good judgment in that area of their lives?
Second, there are many studies that show that people with considerable debt and financial problems do not perform as well at work. They are often severely stressed-out, and often have interpersonal and family relationship problems because of their debt problems, among other problems. Then there is that television commercial which asks, are you losing sleep because of your credit card debt? The bottom line is that it really can affect your performance at work. A recent survey found that 72 percent of Americans admitted that they have worried about their finances at work.
On a different subject, I had a wonderful experience over the Holidays that I would like to share with you. I had a furnace issue (it always happens on a weekend or holiday), and the technician who came was looking at some CARE things from over the years that I have framed and hanging on a wall near the furnace room. He said to me, "I knew you looked familiar. I was in the Class of 1999 at Churchville –Chili H.S., and you came to my school." I asked him if he remembered anything. He said that he only has one credit card, and although he does have less than a $1,000 balance on it, he saves about 25 percent of everything he makes, so is prepared for emergencies and the future. He also remembers that cash is king and how passionate and sincere he felt that I was in trying to help them. That’s why I will continue going into the schools, even when someone has to carry me in and out. That’s also the kind of difference that parents and grandparents can make if they take the time to teach personal finance to the children in their family. It is also why every student needs to take a personal finance course in high school.
On yet a different subject, I only recently learned of this apparently growing trend. As mobile home/trailer park owners pass, the properties are being brought up by investment companies and management companies, which are then raising the rents significantly, at least on a percentage basis. According to theguardian.com in 2015, Frank Rolfe, the US’s 10th-biggest trailer park owner, was the co-founder of a boot camp designed to teach other people how they too can become millionaires from mobile homes using this technique.
It is basic capitalism on the one hand, but there is a human aspect to the story. Even though I am all over Western New York doing financial literacy presentations, and I drive past many mobile home parks, I never realized that, according to time.com, 22 million Americans with a medium income of less than $30,000 live in mobile homes. It turns out that many of these Americans are also seniors, veterans or disabled, and they can least afford these rent increases, but usually have few other options. Even in New York, again according to time.com, there are 70,300 trailers across more than 1900 parks.
As you might expect, legislatures are starting to look at rent control options, so it will be interesting to see if and how this trend continues.
On the final subject of avocados, I happen to eat a lot of them. I generally buy large size ones at BJ’s for $.90 each, significantly cheaper than at Wegmans for $1.49 each, the last time I checked. Now you can get them cheaper, but they are usually smaller, and I don’t really know how to determine unit prices when it comes to single avocados. It’s not really about the price per pound, unless you are making guacamole. I am always telling students to build good money habits, like being frugal so you can get the best value for all of your hard-earned dollars, and that frugal habit and mindset will help you to be on the lookout for good values. By the way, that doesn’t mean that you don’t also address your all of your other financial goals. Well, last week, Aldi had avocados on sale for $49 each. The first thing I thought was that they were the small ones, but, of course, I had to check them out anyway. It turns out they were the large ones. I purchased 15 of them during the week, and I think I am turning green.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo or at http://www.monroecopost.com/search?text=Ninfo.