Consumer Confidential: Highest minimum wage, generational income

Here's your rainy-days-and-Mondays Monday roundup of consumer news from around the Web:

--Our friends up north in San Francisco are making history with the first minimum wage to top $10 an hour. Come New Year's Day, the city's hourly wage for its lowest-paid workers will hit $10.24, more than $2 above the California minimum wage and nearly $3 more than the working wage set by the federal government. San Franciscans passed a proposition in 2003 that requires the city to increase the minimum wage each year, using a formula tied to inflation and the cost of living. And even though some businesses may see this as a burden, they should remember what Henry Ford said when he boosted his employees' wages back in the day: A well-paid worker is simply another customer for his products. Smart. (Associated Press)

--Speaking of having more cash on hand, here's a topical question: Are young people today better off than their parents? At least when it comes to income, the answer depends on gender. Today's young women make $1.17 for every $1 their moms earned back in 1980. Young men, however, are earning 10 cents per dollar less than their fathers did 30 years ago, new research shows. The study, compiled by the nonprofit Young Invincibles and the think tank Demos, looked at wage data for 25- to 34-year-olds in 2010 and compared it with the wages of that same age group in 1980. What they found is that young women are faring slightly better than their mothers did at the beginning of their careers, mainly because of advances for women in the workplace. Meanwhile, young men have fewer opportunities overall, due to the decline of manufacturing, construction and other male-dominated industries. (CNN Money)

-- David Lazarus

Photo: As far as minimum wages go, San Francisco is tops. Credit: Justin Sullivan/Getty Images

 

Consumer Confidential: AA still flying, Volt loaners, cellphone parking

Here's your try-a-little-tenderness Tuesday roundup of consumer news from around the Web:

-- American Airlines may be bankrupt, but passengers shouldn't notice much difference. The airline says it will continue to operate flights, honor tickets and take reservations. Delta, United, Continental and US Airways have all gone through Chapter 11 bankruptcy proceedings. Travelers continued to book tickets. Planes still took off and landed and frequent flier miles were still earned and redeemed. In fact, the bankruptcy process is usually more troublesome for the airline's shareholders, who tend to get wiped out. American says it may reduce its flight schedule "modestly" as it restructures. The only real risk to American's passengers is if the restructuring fails. In that case, the airline ultimately liquidates and ceases to fly. (Associated Press)

-- General Motors doesn't want people freaking out over reports of batteries bursting into flames in Chevy Volts. The carmaker is offering free loaner vehicles to Volt owners if they're concerned about reports of battery fires after crash tests. GM reiterated its belief that the Volt is a safe car but said it will contact all Volt owners to make the free loaner offer. The National Highway Traffic Safety Administration has opened a formal safety investigation into fire dangers of the Volt. This move came after the agency replicated an incident from last May in which a Volt battery caught fire three weeks after going through a safety crash test. (MoneyWatch)

 -- Wouldn't it be nice if you could feed a parking meter remotely? San Francisco is giving just such a system a try -- via cellphones. The city will alert drivers with a text message when their parking meters are about to expire. Drivers will be given the option to put more money on the meter remotely using their phones, which will cost 45 cents for each transaction. The Municipal Transportation Agency will first test the service at curbside meters and two city-owned parking lots in the Castro district before deciding whether to offer them elsewhere. The fine for parking at an expired meter in the Castro is $55. In the city's downtown core, it is $65. (Associated Press)

-- David Lazarus

Photo: American Airlines may be bankrupt, but it's still flying. Credit: Irfan Khan / Los Angeles Times

 

Got alcohol? Gov. Brown legalizes flavor-infused drinks

Aficionados of cocktails infused with fruit, vegetable or spice flavors won a political victory when Gov. Jerry Brown signed into law a bill making them legal.

Although the Prohibition-era restriction on the practice of flavoring vodka, gin and other distilled alcoholic beverages with flavors had largely been ignored, proponents of the bill argued that the old law needed to be changed.

State Department of Alcoholic Beverage Control regulators argued that bartenders who infused the flavors into the spirits violated state statutes designed to keep the three functions of the liquor industry -- distilling, distributing  and serving -- separate.

The updating of the law was sought by a coalition of business and tourist industry groups including the Golden Gate Restaurant Assn., the California Chamber of Commerce, the Family Wine Makers of California and the California Restaurant Assn.

"I'm pleased that the governor has recognized the need to update an unnecessary regulation that has prevented businesses across California from making infused beverages available to their customers," the bill's author, state Sen. Mark Leno (D-San Francisco), said Wednesday.

"In San Francisco and other cities where tourism is critical to the local economy, restaurant owners have been asked to stop serving infused cocktails in the name of an outdated law written decades ago."

The bill sailed through the state Legislature without receiving a dissenting vote.

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-- Marc Lifsher

Photo: Ricardo DeAratanha / Los Angeles Times

Home sales up in Bay Area while median price declines

Sales of Bay Area homes increased in August from the same month a year earlier but remained below average for the month. Prices continued to drop. The median home price fell in August from the same month a year earlier for the 11th consecutive month.

Sales of so-called distressed homes –- where the borrower is in default or the home is in foreclosure –- made up half of the market for previously owned homes, according to San Diego real estate firm DataQuick.

Sales were up 9.1% from the prior month and 12.2% from the same month a year prior. A total of 7,513 new and previously owned properties sold. The median, which is the point at which half the homes sold for more and half for less, declined 1.1% from the prior month and was down 3.9% from a year prior to hit $370,000.

“The sliver of positive news here is that, no matter how you look at it, last month’s sales beat the year-ago numbers, which were pretty lousy,” said John Walsh, DataQuick president. “Lower prices and mortgage rates lured some homebuyers off the sidelines last month, but too many others lacked the confidence to step into the game."

Sales of foreclosed homes made up 26.4% of the resale market while short sales -– where the bank allows a home to be sold for less than the debt on the property -– made up about 18.6% of the market.

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BofA, Chase must do more to help troubled homeowners, Obama administration says 

-- Alejandro Lazo

Twitter.com/AlejandroLazo

Photo: San Francisco. Credit: Getty Images

 

Immigrant women share family recipes at cooking school start-up

There’s no shortage of cooking schools in California, but there aren’t many like Silicon Valley-based Culture Kitchen, which is focused solely on ethnic food and taught by immigrant women.

The Mountain View culinary start-up, which claims to “use food as a means for cultural exchange,” was founded by Stanford graduate design students Abby Sturges and Jennifer Lopez. The women were inspired by their research trips abroad to Myanmar and Kenya, according to Fast Company.

Courses, taught at venues such as Whole Foods, cost between $40 and $60 and involve recipes passed down through generations.

An upcoming class offers a gastronomic tour of Vietnam, involving rice crepes from the northern part of the country, coconut and turmeric pancakes from the central area and spring rolls from the southern portion. The instructor, Linh, hails from Saigon and is a pastry chef by day and credits an “army of aunts” for her cooking skills.

Other chefs were born in Colombia, Mexico, Thailand, Nicaragua and the Ukraine.

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Owner of Daikokuya ramen restaurant pays $145,000 in overtime back wages

-- Tiffany Hsu

Photo:  Vietnamese wraps are the sort of foods taught by Culture Kitchen. Credit: Los Angeles Times.

Bay Area home sales dip in July

Home prices dipped in July in the Bay Area as potential buyers and sellers took time out to ponder dreary economic reports and a budget standoff in Washington, a real estate information service said.

Sales fell more than usual from June -– especially for homes above $500,000 -– but edged higher than July last year, according to DataQuick.

“We’re still looking at a dysfunctional market. Distribution curves are lopsided, bottom-feeding is still prevalent and the lending market is just plain weird, said DataQuick President John Walsh. “We’re off bottom by all metrics, but far from anything resembling normal.”

The median price -- the point at which half the homes sold for more and half for less -- paid for all new and resale houses and condos sold in the Bay Area last month was $374,000, down 1% from June and down 7% from July 2010. The June median was the highest this year, while the July median was the second-highest.

A total of 6,887 new and resale houses and condos sold in the nine-county Bay Area last month. That was down 13.9% from June and up 1.7% from July 2010.

Counties tracked in the Bay Area are Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Solano and Sonoma.

 -- Roger Vincent

Photo: San Francisco. Credit: Getty Images

 

 

Bay Area housing market weakens in April

The Bay Area’s housing market slipped in April, with sales for that month hitting a three-year low and the region’s median home price falling year-over-year for the seventh consecutive month.

The market has been sluggish ever since the expiration of tax credits last spring, and economic uncertainty has kept sales lackluster.

Sales fell 3.7% from the prior month and were down 3.1% from April 2010, according to real estate research firm DataQuick of San Diego. A total of 6,789 new and previously owned dwellings sold last month.

“April activity looks weak on the heels of March,” John Walsh, DataQuick president, said in a statement. “What’s clear now is that 2011 is off to a slow start, but it’s a little soon to write off the rest of the year.”

The median price paid for all new and resale houses and condos in the Bay Area last month was $360,000, the same as last month and a 2.7% drop from April 2010. The median -- which is the point at which half of the homes in the region sold for more and half for less -- has fallen for seven consecutives months on a year-over-year basis after a solid year of gains.

One optimistic sign: Sales of so-called distressed homes made up a slightly smaller percentage of the resale market. Foreclosures made up 28.7% of the resale market last month, down from 31.5% in March and 29.5% in April 2010. Short sales made up an estimated 18.6% of the market last month, up from 16.7% in March and 17.6% in April 2010.

-- Alejandro Lazo

Twitter: @AlejandroLazo

Photo: Rows of homes in San Francisco. Credit: Justin Sullivan / Getty Images

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Foreclosure rate slows as repossession timeline lengthens

Southern California home sales in April hit a three-year low for the month

 

Bay Area housing market slow in February

The Bay Area’s housing market couldn’t shake off a slump in February with sales flat and prices falling. 

The region’s median home price of $337,250 was down 0.2% from the month before and down 4.7% from February 2010, according to San-Diego based DataQuick Information Services. The median has fallen year-over-year for five consecutive months after 12 months of annual gains.

Home sales were up 0.5% from January but down 0.9% from February 2010. A total of 4,991 newly built and previously owned houses and condos sold in the nine-county Bay Area last month.

Distressed sales -- foreclosures and so-called short sales, where a bank allows a troubled borrower to sell a home for less than the outstanding mortgage debt -- accounted for just over half of the Bay Area’s resale market last month.

-- Alejandro Lazo

San Francisco sick-leave law working, study says

San Francisco's 4-year-old, mandatory sick-leave law has gained wide acceptance among employees and their bosses, a new study by the Institute for Women's Policy Research says.

The voter-approved law, the only one of its kind in California, gives workers one hour of paid sick leave for every 30 hours on the job. Workers can accrue up to five days at any given time at companies with less than 10 employees and nine days at any given time at those with more than 10.

Surveys of 700 employers and 1,200 employees by the Washington institute found that two-thirds of employers support the San Francisco law, and only 1 in 7 employers complained that it affected their profitability.

The typical worker covered by the law used only three days per year to stay home sick or to care for children or relatives, the study said. One quarter of employees queried took no time off for illness.

"San Francisco's policy helped parents, workers with chronic diseases, low-wage workers and others with minimal impact on employers," said report co-author Vicky Lovell. "The paid sick leave ordinance serves as a model for the rest of the country."

A bill to expand the San Francisco program statewide is expected to be introduced this year in the state Legislature by Assemblywoman Fiona Ma (D-San Francisco). Similar bills failed in previous years.

"Nobody wins when workers show up to work sick," Ma said. "The lack of paid sick days is a public health concern. It harms children and families and decreases productivity at work."

It's important for workers to be able to stay home when they are sick, said Daniel Conway, a spokesman for the California Restaurant Assn. But arranging for time off should be left to informal arrangements between restaurant owners and their employees, he said.

"We're looking to give employers and employees maximum flexibility. That's something unique to the restaurant industry," Conway said."Mandates by their very nature negate that flexibility."

-- Marc Lifsher

More signs of a weak housing market emerge

More signs of residential real estate weakness landed in the housing reporter’s in-box Thursday morning:

-- The Commerce Department’s latest read on new residential construction got the economists talking.

National housing starts were up 3.9% from October, but down 5.8% from November 2009. Meanwhile, permits, which some economists view as a steadier view of builders' intentions and less influenced by seasonal variations, were down 4% from October and 14.7% below November 2009.

Patrick Newport, U.S. economist for IHS Global Insight, had this to say:

Housing starts remain depressed for three main reasons. First, the jobs recession has sharply reduced the rate of household formation, which has led to "doubling up" and a drop in immigration. Second, financing is hard to get. Third, the housing glut and the wave of foreclosures hitting the market have depressed housing prices, making it hard for builders to make a profit on a new home.

Assuming credit markets continue to improve, the key for housing going forward is employment growth. New jobs will require that new homes be built nearby. More important, the household formation rate will pick up once job growth takes off. Increases in the household formation rate will then reduce the housing glut, which will stimulate new construction.

Here is the take on starts from Michael D. Larson, a housing and interest rate analyst with Weiss Research:

The latest housing report has a little bit for everyone -- Grinches and Santa Claus-types alike. Single family starts rose to a seven-month high, with broad-based regional strength. Permit issuance was relatively healthy as well. But the apartment and condominium market continues to lag, with both starts and permits falling. That leaves the overall construction industry limping into the close of a relatively lousy year.

So what does 2011 have in store for housing? More signs of stabilization. House prices are cheap again, and the labor market is holding steady. Consumer confidence is firming a bit, while lending standards aren't getting tighter anymore. But "stabilization" isn't the same as "improving dramatically." Housing and construction lack the catalysts for a robust recovery. So if you'll pardon the pun, 2011 looks to be another rebuilding year.

-- A separate report released Thursday morning showed Bay Area home sales were well below their year-earlier levels in November, and the median home price took a dip as sales in more expensive locales stalled.

Investors pay big premiums for office buildings with tenants

Many investors are eager to buy office buildings again –- as long as they don’t have to run the risk of trying to find tenants to rent space in them.

Well-occupied buildlings in stable, high-status markets such as Washington, San Francisco and Los Angeles’ Westside have commanded investor interest for months, but the price difference between the “have” and “have not” buildings is growing increasingly stark, according to real estate data provider CoStar Group.

Prices for the the most desirable buildings in the country’s top markets increased nearly 44% in the second quarter from the previous quarter this year and CoStar thinks the trend extended through the third quarter.

"Assets with quality cash flows in primary markets such as New York, D.C., Boston, and San Francisco have fetched some eyepopping prices this year,” CoStar said in a story posted Wednesday.

Investors want to avoid the risky challenge of trying to find tenants. Many companies cut staff or closed their doors during the recession, and the office market has yet to catch up with all the downsizing.

Upscale office buildings that were virtually full sold for an average of $327 a square foot between Oct. 1, 2009, and Sept. 30, 2010, CoStar said. Similar buildings that were virtually empty sold for about a third of that price  -- $118 a foot.

-- Roger Vincent

Photo:  The San Francisco skyline.  Credit: Bloomberg News