Your Money Adviser: Mobile Banks Gaining Popularity With Young Consumers

Then she heard about GoBank, one of a new breed of mobile banking services aiming at fee-averse customers, especially 20-somethings or “millennials,” accustomed to doing everything on their smartphones. She now uses it as her sole bank.

Ms. Goetze is a fan of a GoBank feature that lets her check her balance quickly on her phone, without having to log in to her account. “I love, love, love it!” she said. She doesn’t pay any monthly fee; GoBank lets users choose their fee (from zero to $9 a month), and right now she opts to pay nothing. But she said she may start paying $1 a month, now that she has been using GoBank for a while and likes it. She estimates she would have had to pay about $12 a month with a traditional account.

Old-fashioned banks, of course, also offer mobile banking apps, and branchless banks aren’t new either. But the upstarts, which include Simple and Moven, especially appeal to younger customers and others on a tight budget because they shun most fees, including dreaded overdraft fees, and have no minimum balance requirements. Each differs slightly in their offerings, but all aim to simplify payments and help users closely track their spending. They’re meant to be used when customers are on the fly, rather than sitting down at a computer.

The new alternatives work with traditional banks to hold deposits, so the money in your account is F.D.I.C.-insured. GoBank is the mobile banking arm of the Green Dot Corporation, which markets reloadable prepaid debit cards and owns Green Dot Bank, which holds the funds deposited via GoBank. Simple and Moven are in effect banking services, rather than banks, but they work with traditional banks to handle the actual banking functions behind their mobile apps. Simple’s deposits are held at Bancorp Bank, based in Delaware (a spokeswoman said Simple may also partner with other banks in the future as it grows), while Moven’s are held at CBW Bank, which is based in Kansas. But customers access the service through their mobile apps or websites.

The new mobile banks are gaining in popularity. Simple became available to the public in July 2012 and now has about 80,000 customers, said a spokeswoman, Krista Berlincourt. Simple currently requires users to email a request for an invitation to join, before allowing them to register. The approach acts as a fraud deterrent and also lets the company ramp up its systems to meet demand, she said.

Moven is still in its testing phase, and also asks customers to submit an invitation, said Alex Sion, Moven’s president; he says the service has “a couple of thousand” customers. One of its distinctions is that it offers users the option to make payments directly from their phone, by tapping the phone on a payment terminal, he said.

The new mobile models are evolving, but show promise by focusing on what the customer wants to do, rather than relying on banking terms that most millennials don’t care about, said Jennifer Tescher, chief executive of the Center for Financial Services Innovation. Simple’s users, for instance, can see their “safe to spend” balance, which takes into account pending bills. Young people like to have quick access to check their balances, she said, because they have been hard hit by the slow economy and are on tight budgets. “They care about having a terrific user experience that’s easy to use and understand, and works in real time,” she said.

Jim Bruene, founder of the Netbanker blog, said the new mobile banks had a “hip” aura that appeals to young people. GoBank, for instance, offers a budgeting tool called Fortune Teller. Users can ask whether a purchase for a certain amount is a good idea, and the system will respond based on your spending — usually with a mildly sarcastic remark (“Think. When did you last see your mind?”).

Email: yourmoneyadviser@nytimes.com

Economix Blog: The Old Are Working, but Not the Young

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Economic View: A Dearth of Investment in Young Workers

For Americans aged 16 to 24 who aren’t enrolled in school, the employment picture is grim. Only 36 percent are working full time, down 10 percentage points from 2007. Longer term, the overall labor-force participation rate for that age group has dropped 20 percentage points for men and 14 points for women since 1989.

This lack of jobs will damage the long-term careers of a big chunk of the next working generation. Not working after you finish school very often means missing out on developing the skills and habits that will serve you well later on. The current employment numbers are therefore like a telescope into the future labor market: a 23-year-old who is working part time as a dog walker, yoga instructor or retail clerk may be having fun, but perhaps will receive fewer promotions as a 47-year-old.

One culprit in this situation may be the higher minimum wage enacted in 2009, but the root causes run much deeper.

Employers appear to be more risk-averse, more concerned about overhead costs and less willing to invest in developing young workers’ skills. And that seems true across a wide variety of sectors.

In the legal profession, for instance, there is less interest in hiring junior associates and grooming them for partner status. Colleges and universities are often more interested in hiring adjuncts than tenure-track young faculty members. And publishing houses, instead of providing a big advance upfront and investing in young authors over a series of books, now expect many writers to earn their share of a book’s revenue through royalties.

If we consider how many jobs are being advertised, without asking whether they are being filled, the labor market seems to be booming. If we measure labor market progress in terms of actual hiring, however, it’s clear that the economy is recovering slowly. Employers appear to be looking around for workers but then holding out for the very best candidates, and, if need be, making do with few new hires or none at all.

These are signs of a world where next year’s business income is less certain, and many employers take greater care to keep weaker workers off the corporate team. Some employers would rather spend on information technology than hire the wrong workers. Some prefer to invest in the developing world with its longer work hours and lower wages. I outline these processes in my forthcoming book, “Average Is Over: Powering America Beyond the Age of the Great Stagnation” (Dutton Adult).

Young people who are hired often fail to find desirable, high-paying jobs. If we consider four-year college graduates only, average starting salaries, inflation-adjusted, were higher in 2000 than they are today, a decline that started well before the financial crisis. On balance, though, college remains “a good deal,” in part because wages for nongraduates have fallen even more than those for graduates. That is hardly a reassuring sign for the broader economy.

THESE developments put economic pressure on higher education. If it’s harder to get a good and lucrative job after college, why should students pay ever-rising tuition rates? College doesn’t always prepare students very well for the work force, and most graduates don’t enjoy the relatively rosy job prospects of computer science and engineering majors.

As tuition increases slow because of a sluggish labor market, colleges will have to change, making their offerings more relevant. But significant improvements may be hard to come by. Slow-growing or even shrinking revenue will strip colleges of financial resources, and they may suddenly have to focus on managing a decline rather than building for a more innovative future.

Policy changes to bolster economic growth and employment, whether by simplifying the tax code, repealing some occupational licensing, bringing more rigor to K-12 schooling or accrediting cheaper online education, may help reverse or curb these trends. But to focus on policy alone is to miss the gravity of the situation.

Falling wages for new entrants to the job market suggest that a sizable chunk of the American labor force may never achieve middle-class wages in a relatively secure full-time job. And many young people don’t want to take physically demanding jobs, which are often filled by immigrants. Some young people are breaking out of these traps by starting new Internet or service-based businesses, in lieu of looking for traditional employment. But others end up in part-time, temporary or low-quality jobs, biding their time and hoping that something changes.

We may not like what the market is indicating here, but it would be a mistake to shoot the messenger — namely, the market itself. Businesses are measuring value more accurately and choosing more cautiously, and though that raises overall productivity, it isn’t good for all workers. Many face the burden of meeting the standards of a more demanding world, and not all are succeeding at that task. It’s a problem that won’t be solved by any kind of quick fix.

Tyler Cowen is a professor of economics at George Mason University.

Capital Ideas: The Idled Young Americans

THE idle young European, stranded without work by the Continent’s dysfunction, is one of the global economy’s stock characters. Yet it might be time to add another, even more common protagonist: the idle young American.

For all of Europe’s troubles — a left-right combination of sclerotic labor markets and austerity — the United States has quietly surpassed much of Europe in the percentage of young adults without jobs. It’s not just Europe, either. Over the last 12 years, the United States has gone from having the highest share of employed 25- to 34-year-olds among large, wealthy economies to having among the lowest.

The grim shift — “a historic turnaround,” says Robert A. Moffitt, a Johns Hopkins University economist — stems from two underappreciated aspects of our long economic slump. First, it has exacted the harshest toll on the young — even harsher than on people in their 50s and 60s, who have also suffered. And while the American economy has come back more robustly than some of its global rivals in terms of overall production, the recovery has been strangely light on new jobs, even after Friday’s better-than-expected unemployment report. American companies are doing more with less.

“This still is a very big puzzle,” said Lawrence F. Katz, a Harvard professor who was chief economist at the Labor Department during the Clinton administration. He called the severe downturn in jobs “the million-dollar question” for the economy.

Employers are particularly reluctant to add new workers — and have been for much of the last 12 years. Layoffs have been subdued, with the exception of the worst months of the financial crisis, but so has the creation of jobs, and no one depends on new jobs as much as younger workers do. For them, the Great Recession grinds on.

For many people with jobs and nest eggs, the economy is finally moving in the right direction, albeit a long way from booming. Average wages are no longer trailing inflation. Stocks have soared since their 2009 nadir, and home prices are increasing again. But little of that helps younger adults trying to get a foothold in the economy. Many of them are on the outside of the recovery looking in.

The net worth of households headed by people 44 and younger has dropped more over the past decade than the net worth of middle-aged and elderly households, according to the Federal Reserve. According to the Labor Department, workers 25 to 34 years old are the only age group with lower average wages in early 2013 than in 2000.

The problems start with a lack of jobs. In 2011, the most recent year for which international comparisons exist, 26.2 percent of Americans between ages 25 and 34 were not working. That includes those for whom unemployment is a choice (those in graduate school, for example, or taking care of children) and those for whom it is not (the officially unemployed or those who are out of work and no longer looking). The share was 20.2 percent in Canada, 20.5 percent in Germany, 21 percent in Japan, 21.6 percent in Britain and 22 percent in France.

The European economy has deteriorated over the last two years, and the American economy has strengthened modestly. But the job growth here has been fast enough merely to keep pace with population growth, which suggests that this country still lags in the employment of young adults. In 2000, by contrast, the United States led Germany, Britain, France, Canada and Japan — as well as Australia, Russia and Sweden — in such employment rates. The nation now trails them all. Older American workers have also lost relative ground, but not as much.

As Mr. Katz, Mr. Moffitt and others note, an explanation of the root causes remains elusive. But there are obvious suspects, and each probably plays a role.

The United States, for example, has lost its once-large lead in producing college graduates, and education remains the most successful jobs strategy in a globalized, technology-heavy economy. It is no accident that the most educated places in the country, like Boston, Minneapolis, Washington and Austin, Tex., have high employment rates while the least educated, including many in the South and inland California, have low ones. The official unemployment rate for 25- to 34-year-old college graduates remains just 3.3 percent.

Beyond education, the nation has also been less aggressive than some others in using counseling and retraining to help the jobless find work. To take one small example, a recent study in France by the renowned M.I.T. economist Esther Duflo and four colleagues found that placement programs for unemployed workers helped not only the workers but the economy too. The counseled workers were more likely to find work, and they did not simply take jobs from other candidates. Overall employment rose more quickly in the regions with job counseling.

Other research notes that the United States has expanded parental leave and part-time work less than other countries — and, perhaps relatedly, employment rates among women here have slipped.

Whatever role these trends are playing, they do not appear to fully explain the employment decline. It is too big and too widespread. Existing companies are not adding jobs at the same rate they once did, and new companies are not forming as quickly.

What might help? Easing the parts of the regulatory thicket without societal benefits. Providing public financing for the sorts of early-stage scientific research and physical infrastructure that the private sector often finds unprofitable. Long term, nothing is likely to matter more than improving educational attainment, from preschool through college (which may have started already).

Many business executives and economists also point to immigration policy. Done right, an overhaul could make a difference, many say, by allowing more highly skilled immigrants to enter the country and by making life easier for those immigrants already here. Historically, immigrants have started more than their share of new companies.

Perhaps the most remarkable aspect of the jobs slump is that the Americans in their 20s and 30s who have been most affected by it remain decidedly upbeat. They are much more hopeful than older generations, polls show, that the country’s future will be better than its past.

Based on what younger adults have been through, that resilience is impressive. It’s probably necessary, too. The jobs slump will not end without a large dose of optimism.

David Leonhardt is the Washington bureau chief of The New York Times.

The Boss: Hearsay Social’s Chief, on Thinking Big at a Young Age

My father, a math professor in Hong Kong, worked as an electrical engineer here. My mother was an art teacher, but once we came to the United States, she went back to school and became certified as a special-education teacher.

The immigrant experience had a profound effect on me. It taught me the importance of hard work and the value of being entrepreneurial. I saw what a hard time my parents had upon arriving in this country. It takes time to understand a new system and the tacit rules of a new culture.

My high school, the Illinois Mathematics and Science Academy, showed me that anything is possible and that you’re never too young to think big. At 15, I worked as a computer programmer at the Fermi National Accelerator Laboratory, or Fermilab. After graduating, I attended Stanford for a degree in economics and computer science.

While there, I was an intern at Microsoft and developed the RSS news aggregator for Outlook, the company’s e-mail offering. I also volunteered in East Palo Alto, Calif., teaching and encouraging low-income elementary students to become interested in math, science and technology.

Based on that experience, I founded the Camp Amelia Technology Literacy Group, a nonprofit, in 2003. It provided free computer training and software for urban youth. Camp Amelia has since merged with another technology education nonprofit, SearchLit.org.

In my senior year, I was a Mayfield Fellow; the program essentially provided a crash course in starting a company. I was the Phi Beta Kappa class speaker at my 2005 commencement and then stayed at Stanford to get a master’s in computer science. Next, I studied at the University of Oxford on a Marshall Scholarship and received a second master’s, in Internet studies. While in England, I also worked on the corporate strategy team at Google’s offices there.

In 2006, I got a call from a recruiter for Salesforce.com and decided to join the company as a product director. In 2007, I became intrigued by Facebook’s developer platform and decided to create an application within Salesforce.com called Faceconnector, which enabled Salesforce customers to view select Facebook profile information as permitted by each Facebook member. I allowed people to use it free, and word spread quickly. Shortly after that, Prentice Hall contacted me with a book deal. I spent 2008 writing “The Facebook Era: Tapping Online Social Networks to Build Better Products, Reach New Audiences and Sell More Stuff.”

I realized that social media would be transformational for businesses and decided to start a software company that would help Fortune 500 companies manage their marketing efforts using social media. Steve Garrity, who had been a computer lab partner of mine at Stanford, left his job at Microsoft to start that company, Hearsay Social, with me in 2009.

I’m passionate about encouraging women and girls to pursue math, science and engineering. At times, it was intimidating for me to be the only woman in an advanced-level engineering class, and it’s still intimidating at C.E.O. events. But just by showing up, my female colleagues and I are making it easier for those who come after us.

Young Litigator Pushes the Limits in Her Private Time

By Michael Tierney All Articles 

Daily Report

November 6, 2012

Thompson hangs from a zipline during one adventurous outing, but she likes to take regular sightseeing vacations, too.

Among lawyers, Sara Thompson is hardly unique in pursuing after-work-hours endeavors to retain her zest for life.

What separates Thompson from the herd is a tendency to tackle challenges that are not her normal cup of tea. More like a cup of castor oil.

Normally disinclined to become one with nature, she roughed it during a four-day hike at the famed Milford Track in New Zealand -- and cannot wait for the sequel.

Preferring to log miles on planes to vacation spots, the travel buff recently decided to try covering long distances by running. Shin-splint trouble from training has not dissuaded her from taking on a half-marathon, with a full one on her possible to-do list.

Once intimidated by the notion of sitting at a poker table with serious players, Thompson has become a semi-regular at various casinos and aspires to stack chips at the World Series of Poker someday.

Not every venture is initially beyond her comfort zone. Thompson, reared in a cooking-minded family, prepares a mean meal while dabbling in oddities such as cupcakes and infused liquor. It should come as no surprise that the competition-minded Thompson, whose practice at Greenberg Traurig focuses on medical devices and pharmaceuticals, plans to eventually audition for television's Master Chef.

Do you have a general philosophy about staying busy outside of your work by seeking out new activities?

I'm always looking to try new things. One advantage of being single is having more time to look for opportunities to do this. The first eight or nine years of my practice, I didn't travel a lot because I was focused on my work. In 2008, I made a point of starting to take big trips. With work, we have a hard-charging group here, but they have been very supportive of the crazy activities that I do.

When I went to New Zealand, I thought it would be controversial since it was six weeks before a big trial. I told them I was going to be gone 17 days. They won't be able to reach me by cellphone. They knew I would come back and bust my hump for four months.

Where does your interest in travel come from?

When I was a kid, we didn't take a lot of vacations. My parents built their own business and worked hard on that. If we took a vacation, it would be to visit family. So there are a million places I want to go to. I have a long list of places that I'm keeping.

Do you look for trips that are more adventurous than sightseeing?

A little bit of both. I'm more outdoorsy now than I was. When I went to New Zealand, I had to buy my first hiking boots. I think I only broke them in for a day. It was something very outside my comfort zone.

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