Personal income level slips for first time in two years
Steve Chiotakis: There's word this morning from the government that people spent slightly more money in August -- 0.20 percent more. But income -- what people make -- fell for the first time in nearly 2 years.
Let's get a little analysis on that...Jill Schlesinger is editor-at-large with CBS/MoneyWatch and she's with us live from New York as she is every Friday morning. Morning Jill.
Jill Schlesinger: Good morning.
Chiotakis: Why are we making less money?
Schlesinger: Well it's actually a longer-term trend, you may be surprised to even know that, but really since the 60's until today, real disposable income has been slowing. Of course since the recession, conditions really deteriorated further. That's because companies were reducing all the hiring and their hours and that was an effort to make more money whatever way they could.
Chiotakis: Well one company, Jill, is trying to make more money. Bank of America, it was announced today, is gonna start charging its debit card users $5 a month starting next year. I mean, we know they wanna make money, but what's really behind this?
Schlesinger: Well no one ever accused banking with the Red Cross, so yes they do want to make money. But this is actually a direction reaction to credit card reform, banks really kinda threatened us during that whole process. They said "well, you know, government, if you reduce the amount of money we make in swipe fees, we're going to have to make that up someplace else." And evidently, banks are going right to the heart of the matter, they're going to debit cards. Banks were actually about to live 6.6 billion in lost revenue from those swipe fees so I'm not surprised they came out at this and they came out at it hard.
Chiotakis: And some other banks have done this as well, to be sure.
Schlesinger: Absolutely, I think this is going to be a trend, banking is going to cost more for all of this and I think that that is something we have to just take in and say all right, we know it, let's make sure we know what we're paying for.
Chiotakis: The future of banks. Jill Schlesinger from CBS/MoneyWatch joining us live from New York. Jill, thank you.
Schlesinger: Take care.