Low and High Income Earners Less Likely to See Salary Changes

Earn a lot? Earn a little? Then you’re less likely to move up and down the income ladder than workers in the middle of income distribution, according to a new report  (pdf) from the Small Business Administration.

The SBA’s Office of Advocacy said workers in the top and bottom ranks of earnings distribution are less likely, or about 45 to 50 percent, to see significant changes in salary than middle-income workers, who are about 75 to 82 percent likely to move up and down the salary scale.

Some other interesting highlights:

*Income mobility among female workers at 73.2 percent was much higher than male workers at 69.8 percent in the 1990s;

*Female workers also experienced higher exit rates, or about 75 to 85 percent from the lowest ranks of income than their male counterparts;

*Self-employed individuals are more mobile, that is they have bigger salary fluctuations, than paid employees. The self-employed “experience more year-to-year changes and volatility in income than payroll workers.”;

*Whites are more likely to experience self-employment than minorities; and

*Workers in small firms have less formal education than their counterparts.

Next Year, Maybe the SBA Will Remember the Alamo

The Small Business Administration oversees the HUBZone Program designed to aid Historically Underutilized Businesses, and once again a government watchdog group has found the program rife with fraud (pdf).

The program has been staggering under charges for years that businesses are fraudulently or inaccurately representing themselves to get into the program. The Government Accountability Office did a test to see if the SBA has improved any of these perennial problems by creating four bogus businesses, one whose main address was listed as the national historic landmark the Alamo.

The GAO found that the SBA could have easily done online searches to determine the validity of these fake firms and while it's improved its process slightly for entering the program, it's still shamefully behind.

The SBA took about seven months to process each of these bogus applications and lost documentation, according to the GAO report.

Government Ruling Invites Everyone to Make an iPhone App

Anyone and everyone can now develop applications not approved by iPhone maker Apple, thanks to a government ruling this week.

The Monday ruling by the U.S. Copyright Office exempts iPhone application developers and others from being sued for breaking the encryption on the iPhone’s operating system in order to run third party applications not approved by Apple.

“The evidence supports the contention that a technological measure is adversely affecting adding applications to the iPhone,” wrote Marybeth Peters, the copyright office's top lawyer, in her recommendations (pdf).

The ruling lays out that consumers can now break into "computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset."

The iPhone has spawned a cottage industry of application developers and small businesses. Some small firms sprouted up to help other small businesses develop their own iPhone app. I wrote a story about it for MainStreet.com.

The 1998 Digital Millennium Copyright Act says it's illegal to break the digital locks protecting copyright owners’ content unless it’s for a non-infringing use, which is something the Copyright Office and Librarian of Congress define every three years.

The Copyright Office said in its remarks that the record indicates that the total number of "jailbroken" iPhones constitutes up to 10 percent of all iPhones sold.

Members of wireless industry firms are cautioning users who jailbreak their mobile devices, saying tinkering around with the system could invite security breaches, malware and system instability.

SBA Looking for Proposals for Regional Clusters Initiative

The Small Business Administration recently announced its Regional Clusters Initiative, which aims to accelerate small business opportunities in existing business clusters by offering technical assistance, business training, counseling and other services.

The SBA is looking to work with 10 to 15 existing regional clusters nationwide in fiscal 2010. These clusters will create and follow roadmaps that enhance their region's ability to compete on a national and global scale, attract further business investments, and create sustainable job growth.

SBA will accept proposals from local and regional cluster initiatives for funding of up to $600,000 per cluster. SBA is launching two programs within the initiative: Regional Innovation  Clusters and Advanced Defense Technologies.

SBA support will be targeted toward the needs of entrepreneurs and small businesses. To access the agency's request for proposals to participate, frequently asked questions about the initiative and more information, go to www.sba.gov/clusters/index.html. More info on the RIC and ADT clusters is also available at www.fedbizopps.gov.

Beanetics. It's Cool Beans.

I took a drive out to the dog groomer last week. It's a fair distance to go to get a dog groomed, but one-third the cost of the going rate for the same services in my neighborhood as I talked about in an earlier post.

While my daughter and I were waiting, we thought we'd go explore the neighborhood and stumbled upon Beanetics, a coffee shop in Annandale. It's an espresso-sized little place with a few local artist photographs on the walls and when we paid a visit, two people were surfing away at their laptops thanks to free wi-fi. It's in a subdued strip mall, which like many similar malls in the United States, have hidden gems.

Beanetics is actually a little cramped, although we had a good time. What intrigued us the most was the enormous bright-red coffee roaster and scale that take up a significant portion of the shop's space - and what intrigued me the most was the excellent coffee.

I'm not an avid coffee drinker by any stretch of the imagination, but I spend a lot of time in coffee shops to file stories and meet contacts and usually try out a cup where ever I happen to be. People often suggest to meet at Starbucks because it's so widely known and prevalent. (In fact, there's so many, I've several times been in situations where someone I was supposed to meet has been sitting in a Starbucks half a block away because we weren't specific enough to say the exact address, only the neighborhood.)

Beanetics bills itself as Annandale's only independently owned micro-roasting facility, and it sells 15 different kinds of fresh-roasted coffee daily.

The company has a colorful brochure, which advertises that "customers can watch as we use a computer-controlled roaster in our glass-enclosed roasting room." That sounds a bit fancy, but it's true.

After we finished our snacks, which they brought to us, I asked the barista (who is also the roaster) if he could give us a "tour" of the roasting room. He took myself and my six year old into the room, explained how the massive, shiny machine worked and let her take home a few pre-roasted greenish-gray coffee beans. When we showed them to her younger brother, he was greenish-gray with envy.

I enjoyed our experience and applaud the employees for taking the time out to show us how things worked. It's also an experience we couldn't have had at Starbucks.

IRS Releases Proposed Regs to Charge Fee for Tax Preparers

The Internal Revenue Service has released proposed regulations that would establish a fee for individuals who apply for a preparer tax identification number, or PTIN. 

Proposed regulations that were issued in March would require some tax return preparers to obtain a PTIN.  The IRS is working to finalize those proposed regulations, which are the first of a series of steps planned to increase oversight of federal tax return preparation.

The proposed regulations (REG-139343-08) would establish a fee of $50, payable to the IRS, to cover technology costs, as well as compliance and outreach efforts associated with the new PTIN program.

The proposed regulations also ask for an additional fee that the IRS says is expected to be substantially lower than $50 to be charged by the third-party vendor chosen to operate the new online system. That fee amount is expected to be announced soon, as well as additional details about the launch of a new online application system, according to the tax agency. These fees could change in future years as program costs are reevaluated.

Agencies are directed by the Office of Management and Budget to charge user fees to recover the cost of services that convey special benefits beyond those available to the general public, such as the authority to prepare federal tax returns for compensation.
    
Tax professionals and others have until Aug. 23, 2010, to submit comments regarding the proposed regulations. The official publication date of these proposed regulations is July 23.

In January, IRS Commissioner Doug Shulman announced the results of a comprehensive six-month study of the tax return preparer industry, which proposed new registration, testing, and continuing education of tax return preparers.

"With more than 80 percent of American households using a tax preparer or tax software to help them prepare and file their taxes, higher standards for the tax return preparer community will significantly enhance protections and service for taxpayers, increase confidence in the tax system and result in greater compliance with tax laws over the long term," according to the IRS.

We're Happy When Busy, But Want to be Lazy

We're happier when we're busy, but our instinct is to be lazy, according to researchers whose data was published in the British Psychological Society's Research Digest blog.


When given a choice between executing a task for 15 minutes or waiting quietly for 15 minutes, most people chose inertia. But the students who worked on their task reported that they were subsequently much happier than those who chose inactivity.

Researcher Christopher Hsee did a couple of studies, including one asking students to evaluate a bracelet and then were given the option of either spending 15 minutes lolling around or 15 minutes disassembling and rebuilding the bracelet. Those given the option to reassemble the bracelet into a new design tended to take up the challenge over those who just had to rebuild the same thing. Those who took up the challenge reported feeling happier than those who sat idle.


Hsee's team say there is a case for encouraging "futile busyness" or "busyness serving no purpose other than to prevent idleness. Such activity is more realistic than constructive busyness and less evil than destructive busyness."


In most small businesses, there is not a lot of opportunity for lazing around. It's more of a mentality addressing "how many of these tasks can I realistically get done on my to-do list today while addressing multiple unexpected situations."


But I think it is food for thought. While most of us crave "down time," in reality we feel good when we are asked to offer new ways to create things (like rebuilding a bracelet into a new design) and are busy. I think it's also an indicator that it can help to include all levels of employees in some of the decision-making process that goes on at a company. It's empowering and allows growth.


By the way, according to the study, airports have tapped into this "futile busyness" concept. Some airports have deliberately increased the walk to the luggage carousel so as to reduce the time passengers spend waiting around for luggage to arrive.