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Can America Compete?; The Veteran Jobs Battlefield; Loving Your Job; The Prepaid Card Debate

Aired January 21, 2012 - 09:30   ET


CHRISTINE ROMANS, HOST: Times could soon be changing in your life.

Good morning, everyone. I'm Christine Romans.

This may be your year to move up or move out of your job into something better. We're going to tell you how.

Plus, they served their country, and now they're coming home. We'll look at the job challenges and opportunities many veterans face.

And the great prepaid debit card debate. From Russell Simmons to Suze Orman, the good, the bad and the ugly of these celebrity-branded cards.

But we begin with jobs and how to get big business to make more of them. To hear the corporate members of the president's Jobs Council explain it, the problem is not creating jobs, it's creating qualified workers.

GE's CEO Jeff Immelt, who runs that council for the president, he told him this week, again, there is no silver bullet to create jobs now. And, at the White House, executives worried about the quality of America's workforce.


SHERYL SANDBERG, CHIEF OPERATING OFFICER, FACEBOOK: That business find out (ph), my own included, we're desperately trying to hire more people, but it has to be people who have the technical skills to meet the jobs we need, and it gets harder and harder to find them.


ROMANS: That's Facebook's Chief Operating Officer. She noted that there are 3.2 million job openings in America that are today going unfilled.

Nick Kristof is a two time Pulitzer Prize-winning columnist for "The New York Times;" and Leigh Gallagher is the assistant managing editor of "Fortune" magazine. Welcome to both of you.


ROMANS: And, you know, Nick the fact is conversation in boardrooms, frankly, is not how do we put the long-term unemployed back to work, it is how can we get a better workforce here in this country, because we have a lot of opportunities and - and, frankly, a lot of options elsewhere?

KRISTOF: Sure. I mean, I frankly think that this kind of a council and this kind of job owning doesn't really accomplish very much for the unemployed. I think calling on companies to hire people as sort of a patriotic duty, to source domestically rather than abroad, at the end of the day I think companies are going to do what is in the interest to their bottom line. And I think we get - the way we get more jobs has more to do with improving education -

ROMANS: Right.

KRISTOF: -- with training, with dealing with the housing mess so that consumers have more money that they can actually spend in the economy, rather than kind of talk it through.

ROMANS: Well, what you hear - I mean, when you see the president sit down with these corporate leaders is you hear the president say how are we going to create jobs? And you hear the corporate leaders say how are you going to give us a better workforce? And, in the middle - in the middle there's this big, wide expanse of wait a minute, we still have a lot of people who need solutions today, not when we can someday fix the education system.

KRISTOF: Absolutely. And - I mean, I think very few people are actually talking about one of the crucial burdens on the whole economy and one of the real impediments to getting people spending again, and that is the housing mess.

ROMANS: Right.

KRISTOF: And we've got to resolve that, and to do that we have to write down -

ROMANS: So we could do more -

KRISTOF: -- principal.

ROMANS: We could do more to fix the whole job thing by fixing the housing thing, you think, than what we're talking about at the president's Job Council?

KRISTOF: Absolutely, because we have to get consumers spending again. and consumers aren't spending when their mortgages are underwater. It's just a huge drag on the entire economy, and, you know, I think the White House hasn't done enough on that, but clearly the business community hasn't done enough either.

ROMANS: I want to talk to you a little bit more, Leigh, about the competitiveness issue, because Harvard surveyed nearly 10,000 alums and I think nearly four out of 10 of them said that they think the - that this country is going to be less competitive over the next three years - in three years, and that's going to mean lower wages, lower benefits for workers. It sounds pretty pessimistic, and all of the news flow, frankly, is pessimistic about American competitiveness, which makes me wonder maybe this is the bottom? I don't know.

LEIGH GALLAGHER, ASSISTANT MANAGING EDITOR, FORTUNE: Well, you know, there's a massive shift that's happening here that is sort of at the epicenter of all this, and this - this predates the financial crisis. But we're going from a manufacturing economy to a service economy, and that's been happening for a long time. It's still happening.

So many of the jobs, when the job market does come back, the jobs are going to look different. They've been transitioning for a long time, and what that means is there's so much more importance and emphasis now on education. So -

ROMANS: Well, some of those service jobs, though, are not going to need high education. When you look at the fastest growing jobs in this country, they are cashiers, they're retail clerks. They're jobs that you can't send a kid to college on, right?

So it's a two tiered service sector. It's one where the knowledge- based economy are paid great, and then a very large number of jobs are created where they're not going to replace the wages and benefits of those manufacturing jobs.

GALLAGHER: That's true. If you look at the sectors that are doing so well right now, though, tech and - I mean, what's happening in Silicon Valley, they can't find people anywhere there. I mean, that's - those are education-driven jobs.

The other thing is the economy will come back when demand comes back.

ROMANS: Right.

GALLAGHER: As Nick said, I mean, companies are not just going to create jobs because it's their civic duty. There has to be demand. And we don't yet know when that's going to happen.

ROMANS: OK, so let's talk - Nick, I want to talk about the business - the big business wish list, right? They want less regulation, they want offshore drilling, they want lower taxes and simpler taxes.

I'm going to show you what the tax code looks like, or the antiquated version of the tax code, looks like since 1913. It was 400 pages in 1913, by the way. It's now 72,000 pages.

You can see, when you get to the right of that screen, they'd like that simpler and of course they'd like to lower their - their tax rate. Is that the answer, making business less tied up in red tape?

KRISTOF: Well, we raise taxes in the Clinton administration and had a huge increase in - in jobs. We lowered taxes in the George W. Bush administration, and had very anemic job growth.

There's clearly some long-term relationship between marginal tax rates and economic growth, but it's a pretty weak relationship. ROMANS: Nick Kristof of "The New York Times;" Leigh Gallagher, thank you so much. Nice to see you.

The U.S. unemployment rate 8.5 percent. America's recent vets are coming home to an unemployment rate that will shock you, next.


ROMANS: There are more than two million American veterans who've served since September 11th and too many of them are now coming home from the toughest job of their life to find the toughest job market of our generation. CNN Pentagon correspondent Barbara Starr explains.


BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Military veterans crowd this Washington, D.C. job fair, hoping to find work. Among them, young veterans aged 20 to 24. A staggering 30 percent of them are unemployed. The job picture is not getting better.

UNIDENTIFIED FEMALE: We're scheduling interviews for that today.

STARR: Marines Corps Lieutenant Colonel Ken Crabtree, a financial specialist, is leaving the Marines later this year, and already he's looking for work.

LT. COL. KEN CRABTREE, U.S. MARINE CORPS: With the current economy, I definitely don't want to leave up to chance that I'm going to just fall into a job.

STARR: Understandable anxiety for all veterans. Last month the unemployment rate for male veterans who served in the current wars was nearly 12 percent, much worse for female veterans, 21 percent. The national average is 8.5 percent.

So Crabtree's first stop, like most here, learning to write a resume that highlights military skills that will interest a potential new employer.

UNIDENTIFIED MALE: It's a - it's a process.

STARR: Former Marine Kevin Schmiegel runs veterans job fairs for the Chamber of Commerce. He says vets must be savvy.

KEVIN SCHMIEGEL, U.S. CHAMBER OF COMMERCE: They need to start thinking about where are the jobs, not just thinking about going to their hometowns, but where are the states where there's low unemployment.

STARR: To improve things, experts say business must commit to veterans. The White House has called on the private sector to hire or train more than 100,000 veterans or spouses by 2013.

BRAD COOPER, JOINING FORCES, WHITE HOUSE INITIATIVE: This effort here is one tool in the toolkit. STARR: The Veterans Affairs Department sponsored this job fair. It required each employer here to be ready to offer at least 25 jobs to veterans. A total of 6,500 jobs are available. Interviews are on the spot.

Twenty-seven-year-old former Marine Alex Ellis may have just gotten the break he badly needs. He left the Marines Corps in 2007 after serving in Iraq. The only job he's been able to get since, part-time security guard.

(on camera): You go up to a booth. Tell me about that.

ALEX ELLIS, VETERAN: I just ask if - if they were hiring police officers, and they said that they were, and they handed me the paper and said if you fill this out we can get you in for the physical and the written test on February 4th.

STARR (voice-over): He's been checking out what's available here with local law enforcement agencies.

Navy veteran Aaron Isaac is about to get called in for his own job interview.

AARON ISAAC, VETERAN: I have high hopes because, I mean, you already know like the interview, if - if you already have the interview, then that means they like you. All you had to do is go in there and show them why they like you on paper.


ROMANS: Barbara Starr joins us now.

Barbara, you know, double-digit unemployment for these vets. What kind of military assistance, job assistance and training, is the military, the government providing for these folks?

STARR: Well, in terms of the military, what they're trying to do is get these veterans, these young people, right before they leave the military, to start thinking more about their future. Get them organized, where do they want to go, what kind of jobs are they looking for, get a resume together. But a lot of it's really falling on the VA now once these guys are out of the active duty, to provide some of that job counseling and try and help with job placement.

A little good news, that young man we saw at the very end, Aaron Isaac, he got back to us and told us he wound up leaving the job fair with, indeed, an offer, a job offer from a federal law enforcement agency.

ROMANS: Oh, that's fantastic. And, you know, here's the thing. I mean a lot of the job coaches for the military, they point out - or for people who are coming from the military, the leadership and the skills you get in that toughest job you'll ever love or the toughest job you'll ever have, right, they translate. That leadership translates to the private sector. And one thing we found is that there are so many companies who have vets in them who are looking for that leadership and are actually seeking out - the key is connecting them, the companies and the veterans.

STARR: Oh, absolutely. You know, just think of one example that we keep hearing about, so many of these veterans have been drivers, driving the heavy duty armored vehicles out in the war zone for years. They come back, they can't get a commercial driving license that they need if they want to work for a transportation company where there are jobs. So the teamsters union, for example, stepping in, trying to help young vets get that certification, get that licensing.

ROMANS: Excellent. Barbara Starr, thanks for your report.

And if you are a company who is actively looking right now to try to hire vets, please let us know. You can - you can send us Twitter, go on Facebook, find us, let us know because we want to talk about you and what you're trying to do.

All right, hate your job? Want to try to find a new one? This is your year to do it. We're going to show you how, next.


ROMANS: All right. This is finally the year to upgrade your job. Recruiters, HR managers, career coaches are telling us 2012 is the year to make the move. Seventy-nine percent of workers plan to look for new opportunity as the economy improves. This is according to a survey by FPC, that's a national executive search firm.

So if you want to move on, you want to move up, either because you're unhappy with your job, you feel you can do better elsewhere, listen up, Caroline Ceniza-Levine started a career coaching firm called SixFigureStart and she's here to tell us what we've been hearing. I think for the first time in three years, this is your time, you can do it.

I mean this is the year if you didn't want to rock the boat two years ago this year there's another boat to jump into. Go ahead and rock a little bit.

CAROLINE CENIZA-LEVINE, CO-FOUNDER, SIXFIGURESTART: This is absolutely the time. The market is improving. You're seeing that in the media and I'm hearing it anecdotally -

ROMANS: Right.

CENIZA-LEVINE: -- with companies and organizations I'm working with.

ROMANS: So we know there are 3.2 million job openings. We know that. We wish there were more. But frankly that's 3.2 million job and it's in business services, utilities, health, transportation. You identify healthcare, environmental, digital tech. Tell us where to look.

CENIZA-LEVINE: Well, those are industries that are growing, but everybody is hiring. So just remember the job search is individual, which means there's a company that you're interested in, and it's not in one of those industries that we just said, healthcare, environmental, it doesn't mean they're not hiring. So you want to check that.

ROMANS: Yes. And I think that there are jobs that are available that aren't actually posted in some cases. You've got a lot of managers who are stretched super thin. I mean, they've been telling me, we're ready to hire, as soon as we get one more big order. We're ready. They're on the edge of hiring. You know, maybe - maybe they're going to.

How do you switch - how do you switch from one industry to another?

CENIZA-LEVINE: Well, easiest way to switch is to keep something that you do already constant. So if you have a function that's translatable across industries, human resources, accounting, sales, marketing, there are a lot of skills that different industries need. So if you can prove that you have that skill, you can cross industry that way.

ROMANS: And use a little research on the industry to move into, right? You need to know the language of the industry.


ROMANS: It doesn't translate exactly, but you need to be able to talk the talk.

CENIZA-LEVINE: Absolutely. Because they want to know that you know their company, that you know their industry and you can come in and do a job from day one.

ROMANS: We know that there are voluntary turnovers on the rise. We know that people are - are moving and we know that frankly, managers are worried about people moving and that's kind of a good thing if managers are a little bit nervous about losing you. That means you might be in a position to negotiate something a little bit better for you where you are right now.

CENIZA-LEVINE: Oh, absolutely. I mean the last few years you've heard of people taking on two, three different roles, right? And so now you can ask for a title bump perhaps, a salary bump to compensate for the fact that you're doing more work.

ROMANS: Let's talk about long-term unemployed. Because you said something to me that I think is really interesting. You said the job market is individual and you're not necessarily writing off the job market opportunities for people who have been out of work six months or longer.

CENIZA-LEVINE: Your job search starts now, OK? So even if you haven't found a job before, there are things you can do in terms of upleveling your resume, your on-line profile, reconnecting with your network, looking at new companies, looking at new industries, maybe something that you've mentioned, Chris - ROMANS: Right.

CENIZA-LEVINE: -- some of those industries catch your eye. So they're always going to be more opportunities and you can start from today and look for those.

ROMANS: Caroline, thank you. So nice to meet you.

CENIZA-LEVINE: Thank you, Chris.

ROMANS: Come back again soon.

All right. The great prepaid debit card debate is on. Suze Orman, Russell Simmons, Tom Joiner and more, all of these cards causing a little bit of a stir. We're going to get to the bottom of it for you. That's next.


ROMANS: All right. The concept of a prepaid debit card is simple. You add cash and you subtract for each payment you make. Every time you use it. That's the simple part. It controls your spending and it avoids debt. Simple.

The complicated part is the long list of fees often associated with these cards, fees in fine print. These are cards usually targeted for people who don't or can't use banks.

Suze Orman has just put her name on one of these prepaid cards. And it renews the debate really over whether these cards help or hurt consumers. The debate that began back with, you know, the Kardashians and their fee rich card that they ultimately abandoned.

Ryan Mack is the CEO of Optimum Capital Management. John Ulzheimer with We talked about the Kardashian Sisters. They bailed out. There are cards also from Russell Simmons and from others - other celebrities, and, you know, people who have - who have a following.

And Ryan, you say, point blank, these aren't illegal. There's nothing illegal about these cards. You say it's immoral. Prepaid debit cards are immoral. Why?

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, first of all, in a capitalist society, people have a right to go out and try to make money. This is a perfectly legal and so I don't find anything wrong from that perspective.

But I say they're immoral because essentially what they do is they make money off the backs of low income individuals, individuals who are poor who don't know any better that there are quite - frankly quite a slew of other alternatives available where they can't - don't have to pay fees. They can establish credit and use as just as easy alternative to getting back in the system and don't have to insert themselves in any permanent underclass of society. ROMANS: OK. We'll talk about what those ways are that you think people should be using instead of prepaid credit card - or debit cards.

I want to bring in John quickly. Because, John, I mean, tell me about the fees associated with these cards in general. You know, Suze Orman's card, for example, she said she has kept the fees as low as she possibly can. Because, you know, you can't - you can't use the bank system for free. I mean, there are fees involved.

But in general the fees run the gamut. And some of these cards have very, very high fees.

JOHN ULZHEIMER, PRESIDENT OF CONSUMER EDUCATION, SMARTCREDIT.COM: Yes. I'm going to have to disagree with Miss Orman with respect to her comment that the fees are modest or lower, whatever.

We actually did a comparison of her card relative to some of the other cards on the market. Her card has 20 separate fees associated with it and that doesn't include the fee that you're going to pay to Western Union, for example, for loading money on top of the card. The other fees are 17 for the rush card, 9 for the Green Dot card, 7 for the Little Wayne Discover Prepaid Card and 1 for the American Express Prepaid Card.

So I don't think I agree that the fees are low. And it doesn't matter. Fees set up in almost an impenetrable minefield that the consumer has to walk through every single month. And if you misstep once or twice and you find yourself paying more for the use of your own money, then you would pay for a properly managed checking account at a bank or Credit Union.

ROMANS: So let's talk about the people who - so, Ryan, who wants to use a prepaid card? It's people who are the unbanked, it's people who for whatever reason are not banking at a Credit Union, right, or nor banking at a traditional bank.

And I will say for people who don't have a very much income and they're trying to have a regular bank, you know, a fee-based checking account at a bank, they're getting hit by a lot of fees, too.

MACK: Again, well, Suze Orman said something else very striking to me. And the minute these individuals who have these prepaid debit cards say something striking, they say if we can teach you how to use our cards responsibly, then we can minimize the fees.

Well, as much effort as it goes into teaching how to minimize the use of the card and minimizing the fees, we can also teach individuals for free, again, we're not going to get paid this route by using credit cards responsibly.

ROMANS: And I don't want this entire segment to be just dwelling on this one card, the Suze Orman's. I want - people who are trying - who are interested in prepaid debt cards are wondering, you know, when and if they're ever good for me, but in terms of establishing a credit history, you know, and let's roll the sound bite from Suze Orman. She's actually trying - she says she's entering a space - she's trying to change things. She's trying to work with one of the credit agencies to allow these to help you build a credit history. Let's listen.


SUZE ORMAN, HOST, CNBC'S SUZE ORMAN SHOW: The intention of this card is to change credit scoring in the United States of America. The intention behind this card is to give people the least cost-effective way for them to be able to pay online, to be able to have a card to access things because it's very dangerous today sometimes to carry cash around.


ROMANS: So, John Ulzheimer, we want to - we want to be able to pay our bills on time with a prepaid debit card and have the credit agencies know about it so it can help you and it can get you on the radar. You know, that's a good way to be moving, right?

ULZHEIMER: Well, it's a little bit arrogant for Suze to suggest that she can somehow change the credit scoring system.

Look, here's - here's the problematic thing about prepaid debit cards, they're not credit products. They're not an extension of credit. They're money loaded on to - they are gift cards essentially with a brand associated with it. They're not reported to the credit reporting agencies.

This particular card, the transactions may be reported to TransUnion, but I got to tell you the wrong people have been invited to this party. FICO is the one who controls the FICO credit scoring system, not TransUnion. They have - they're not involved in the research associated with this card. That's the whole issue there.

ROMANS: So bottom line, Ryan Mack, I want you to round it out for us. Bottom line, if you want to not get into debt and you want to be a responsible user of a card, what is it that you should be using?

MACK: Well, essentially you should go with a website like and put - put your zip code in if you forgot the credit unions that are in your local area. You can go to and figure out which banks in the area that offers no fee to type accounts, where you can get a no fee debit card. You should go to and essentially get your credit report and start to go through the process of establishing history.

ROMANS: I can see you guys really feel strongly about these - these prepaid cards, all of them in general. Thanks, guys, John Ulzheimer and Ryan Mack. Talk to you again soon.

So here's the bottom line with prepaid debit cards. Be wary of them. They're useful only if you're really trying to stick to a budget or you want to maybe give it instead to a - instead of a credit card to your college-bound kid, although Ryan Mack said he wouldn't even give this to his college-bound kid. He would give them just - maybe a loaded gift card instead or cash.

There's a long list of fees in fine print that could end up costing you way too much on these, depending on the card you may get charged for checking your balance. There are often fewer protections on a debit card or credit card if you lose it.

And listen to how "Time" Magazine boils it down. Consumers who use prepaid debit cards as a substitute for mainstream financial products are relegated to an economic underclass that prevents them from borrowing or obtaining credit on the best terms, ouch.

Now, there are alternatives and getting into the banking system will help your credit. Use a debit card from your bank or look to a Credit Union. If your debt is a problem, get it under control. Talk to a non-profit credit counselor for help. You can got to the National Foundation for Credit Counseling site,, and you can find a credit counselor near you to get started.

Let's keep talking about all of this. Job opportunities for vets coming home. Is this your year to move up in your company? Hey, is corporate America doing enough to create jobs here? Are you specifically trying to hire veterans?

We want to hear about it. Tell us via Facebook and Twitter. The handle for the show is CNNBottomLine. Please reach out to me, @ChristineRomans if you want to know more about the topics we cover here.

Don't forget about my new book with Ali Velshi, "How to Speak Money." This helps you build the vocabulary you need to be fluent in the decisions you're making about student loans, mortgages, you job, all of that.

Back now to CNN SATURDAY for the latest headlines. Have a great weekend, everybody.