Living on $2.13 an hour, plus tips

Tiffany Kirk, who is raising a three-year-old daughter, finds it hard to make ends meet because her bartending tips fluctuate.

NEW YORK (CNNMoney)

That's because the 24-year-old bartender and single mom's minimum hourly wage at the Houston nightspot is $2.13.

Kirk is one of 3.3 million workers who earn about that amount, which is also the federal minimum wage for tipped workers. Other workers in this category include hair salon employees, waiters, car wash workers, and wheelchair attendants at airports. These workers rely primarily on tips for their income.

Under labor law, employers have to make sure that workers earn at least $7.25 -- the federal minimum wage for all workers. So, if workers don't earn enough in tips, employers must make up the difference and pay what is known as a "tip credit." While Kirk's employer pays her the differential, many don't.

And most efforts to raise the minimum wage have ignored tipped workers.

For example, Maryland's governor on Monday signed a bill that will gradually raise the minimum wage to $10.10, but it exempted tipped restaurant workers from qualifying for the higher wage. Instead, the state froze their minimum wage at $3.63 an hour, a move supported by the restaurant industry.

Related: Minimum Wage: Congress stalls, states act

The industry's efforts aren't new. Several big restaurant companies, including YUM! Brands (YUM, Fortune 500), which owns Taco Bell, KFC and Pizza Hut; Darden Restaurants (DRI, Fortune 500), which owns Olive Garden and Red Lobster; and Cracker Barrel Old Country Store (CBRL), lobbied against last year's effort in Congress to raise the federal minimum wage, according to Senate lobbying reports.

The restaurant industry similarly and successfully lobbied to freeze the minimum wage for tipped workers in 1996 and 2007 when Congress approved federal minimum wage increases. As a result, the federal tipped minimum wage has remained at $2.13 per hour since 1991.

Related: What is the minimum wage in your state

Only a handful of states -- Minnesota, Hawaii, Alaska, California, Montana, Nevada, Oregon and Washington -- either already require or have enacted laws that will require employers to pay all workers at least the state's minimum wage, whether they receive tips or not.

Kirk, who is raising a three-year-old daughter, finds it hard to make ends meet because her bartending tips fluctuate.

But her living costs remain about the same. She spends about $1,700 a month on her car payment, utilities, rent, food, and other necessities. In a good month, she might bring home $2,000, which means there's little left over. She has no savings account.

"Being a waitress can be very demeaning, especially for a woman behind the bar," Kirk said. "Customers can be rude to you and not even leave a tip. But you depend on the tips, so you grin and bear it."

Just this past week, Kirk says a group of patrons ran up a $386 bar tab. They left just a $14 tip.

Still Kirk said she is fortunate that the owner of "Howl at the Moon" follows the law and pays her at least the Texas minimum wage of $7.25 if her tips don't add up.

Many businesses don't. From 2010-2012 the Labor Department's Wage and Hour Division conducted nearly 9,000 investigations of restaurants. It found that nearly 84% had some sort of wage and hour violation -- 1,170 of the violations pertained to the tip credit, resulting in $5.5 million in recovered back wages.

Related: Subway leads in underpaying workers

The White House said in a report that people in "predominantly tipped occupations are twice as likely as other workers to experience poverty, and servers are almost three times as likely to live in poverty."

The National Restaurant Association doesn't buy these arguments. "Tipped employees at restaurants are among the highest-paid employees in the establishment, regularly earning between $16 and $22 an hour," the association said in a statement.

Kirk doesn't earn nearly that much. Her pay ends up being just a little more than the median $8.94 an hour for wait staff across the United States.

Her choices are tough. "Last Christmas I couldn't buy my daughter a toy. I know she doesn't know, but it really hurts your pride," she said.

First Published: May 5, 2014: 3:17 PM ET

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GM exec tied to Cobalt retires

NEW YORK (CNNMoney)

As chief engineer for global subcompact cars, Federico also oversaw the creation of successful vehicles such as the Chevrolet Sonic and Spark.

Federico had been involved in the investigation into problems with the Cobalt, which has been the subject of a massive recall and numerous investigations due to an ignition switch problem that's been tied to at least 13 deaths.

Federico's retirement was entirely voluntary, a GM spokesman said, and has nothing to do with his work on the Cobalt.

Timeline: Steps to a recall nightmare

Federico, who is 56 years old, has worked for the automaker for 36 years. He got his engineering degree at the General Motors Institute, now known as Kettering University and was previously the chief engineer for Cadillac.

"Jim plans to take on new engineering and design challenges outside of the auto industry," GM said in a statement.

GM recalled 2.6 million cars because of a problem in which the ignition switch can too easily be moved out of the "run" position while driving. The recall included the Cobalt and similar models. GM has recently begun repair work to fix the problem on owners' cars.

First Published: May 5, 2014: 4:27 PM ET

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Coke to drop flame retardant from drinks

Coca-Cola has already removed from Powerade a chemical that is linked with fire retardants. It will remove it from all drinks.

NEW YORK (CNNMoney)

Brominated vegetable oil, also known as BVO, contains bromine which is used as a flame retardant in plastics, upholstered furniture, and some clothing for children and is not approved for use in foods in Japan and the European Union.

Coca-Cola (KO, Fortune 500) uses the chemical in Fanta, Fresca and some citrus flavored fountain drinks.

Related: General Mills: Original Cheerios are GMO free

The move to remove BVO from drinks originated in a Change.org petition started by Mississippi teenager Sarah Kavanagh in 2012.

Kavanagh petitioned Pepsico (PEP, Fortune 500) to remove BVO from her favorite drink Gatorade. The company relented after the petition garnered momentum and 200,000 people signed it.

Kavanagh added Powerade to the petition, which received 59,000 signatures. Coca-Cola dropped BVO from Powerade's fruit punch and strawberry lemonade flavored drinks in "the last month or two," according to a spokesman.

According to the Mayo Clinic's website, BVO has been linked to memory loss and skin and nerve problems when consumed in large amounts.

BVO is used by beverage makers to help stabilize ingredients in flavored drinks and prevent them from separating.

The soft drink giant said it will transition to other ingredients that are found in other beverages and also chewing gum.

Coke reiterated that its drinks are safe, saying "All of our beverages, including those with BVO, are safe and always have been -- and comply with all regulations in the countries where they are sold. The safety and quality of our products is our highest priority."

First Published: May 5, 2014: 4:44 PM ET

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Red Bull picks up deal with Clippers

L.A. Clippers owner Donald Sterling.

NEW YORK (CNNMoney)

The two will resume marketing immediately and continue a partnership with Clippers star Blake Griffin, the company said.

Red Bull and a dozen other companies suspended sponsorships with the Los Angeles-based NBA team after racist comments made by team owner Donald Sterling were revealed.

Neither said how much the team or Griffin deals are worth. But Griffin holds a lucrative, five-year contract with the team, according to California and sports media reports.

Red Bull said the Clippers would donate 50% of Red Bull's payments to "charitable initiatives" and funnel all profits "exclusively into basketball operations," rather than to Sterling.

The company's decision, announced early Saturday, follows similar moves from two other high-profile sponsors.

On Tuesday, Adidas and Samsung said they were resuming ties with the team, citing NBA sanctions against Sterling announced earlier in the day. NBA Commissioner Adam Silver said he would ban Sterling from league facilities and games, level a $2.5 million fine -- the maximum under league rules, he said -- and push for a sale of the Clippers.

Related: Clippers sale will bring many bidders, huge payday

"We fully support the league's decision. As a long-term partner of the NBA, we are proud that the Commissioner is taking serious action to ensure prejudice is not tolerated in the game," Adidas said in a statement. Samsung called the Silver announcement "momentous."

But most companies that dropped ties to the Clippers haven't announced they're reestablishing marketing deals.

Those companies include Corona, Kia, Sprint and State Farm. Amtrak said it would make a decision ahead of the next NBA season.

A change in team leadership could make it easier for the sponsors to return. The NBA said it has begun searching for a new CEO to lead the team, and owners of the NBA's other teams are set to consider forcing Sterling to sell the Clippers. That would require support from 22 of the other 29 owners.

And another reason: The Clippers could become increasingly prominent on the NBA scene. On Saturday night, the team moved forward to the semi-final round of the NBA playoffs.

-- CNNMoney's Chris Isidore and Katie Lobosco contributed to this report

First Published: May 4, 2014: 3:36 PM ET

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Stocks: It's the Janet Yellen show this week

NEW YORK (CNNMoney)

Federal Reserve chief Janet Yellen will head to Capitol Hill to answer politicians' questions Wednesday about the health of America's economy.

With earnings season winding down and few other economic reports on the horizon, Yellen's testimony could move the markets.

Stocks are in record territory these days. The Dow hit an all-time high last week, and both the Dow and S&P 500 are close to new heights.

Yellen's script is likely to mirror the Fed's policy statement last week when it decided to dial back its bond-buying program by an additional $10 billion. But Yellen's "off-the-cuff" remarks have moved markets before. The Dow fell more than 100 points in March when Yellen gave a press conference after a Fed meeting.

Related: Stocks slump on Yellen rate hike remark

Investors may glean further clues on the Fed's playbook to stop its stimulus program (known formally as "quantitative easing") when lawmakers pepper the Central Bank chief with questions. Yellen is also likely to be asked about her take on the big drop in April's unemployment rate: Is this a real turnaround or a temporary blip?

Related: Hiring is up in April, unemployment down

Overseas, the European Central Bank and Bank of England are scheduled to make interest rate decisions.

On the geopolitical front, Wall Street will continue to keep a wary eye on the situation in Ukraine. Tensions between Kiev and Moscow have ratcheted up in recent days, highlighted by a military operation on Friday aimed at regaining control of the pro-Russian stronghold of Slovyansk and weekend clashes in the Black Sea port city of Odessa that killed several dozen people.

Russia's economy is clearly suffering -- the IMF says President Vladimir Putin's nation is already in recession -- but so far the spillover to other regions has been minimal.

The economic calendar is sparse, especially compared with last week's flurry of indicators that included major employment, manufacturing, housing and consumer spending reports.

The frantic pace of "report cards" for Corporate America also slows down this week, but there are a few more to go.

Results from brewing giants Anheuser-Busch InBev (BUD) and Molson Coors (TAP) are "on tap" this week, just in time for the alcohol heavy Cinco de Mayo celebration.

Related: Top 20 stable stocks amid rough seas

The lone members of the Dow Industrial index in the earnings spotlight are Walt Disney (DIS, Fortune 500)and Pfizer. (PFE, Fortune 500) The drug giant may take the opportunity to respond to AstraZeneca (AZN)'s decision last week to reject a buyout worth $106 billion.

Investors will be watching closely to see how Internet stocks, the former darlings of Wall Street, react to the latest earnings from the likes of AOL, (AOL) Orbitz Worldwide (OWW) and cybersecurity firm FireEye. (FEYE) Shares of Twitter (TWTR)and LinkedIn (LNKD) tumbled last week as stronger than expected revenue and earnings numbers failed to quell fears these stocks are too expensive and no longer growing fast enough.

Tesla (TSLA), which has also been caught up in the recent pullback from momentum stocks, will drive up to the earnings stage on Wednesday afternoon. The electric auto maker's shares are well up on the year but off 20% from recent highs.

First Published: May 4, 2014: 10:01 AM ET

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The best states to retire in are a little surprising

Badlands National Park (pictured) is among the nature sites that South Dakota has to offer.

NEW YORK (CNNMoney)

South Dakota topped Bankrate's list. Its low taxes, lack of crime and easy access to quality healthcare make it the country's best state for retirees, according to Bankrate's rankings, which equally weighted weather, cost of living, crime, quality of health care, state and local taxes and general well-being.

Overall, Midwestern and Mountain states dominated the list, with Colorado, Utah, North Dakota and Wyoming rounding out the top five.

All of these states tend to have excellent healthcare and some of the lowest state and local tax rates in the country, which can make a big difference for retirees living on fixed incomes, said Chris Kahn, research and statistics editor at Bankrate.

"Yes you are still going to need a snow shovel... but you're getting a lot in return for that cold weather," Kahn said.

And while sunny Florida is popular among many retirees, it ranked near the bottom of the list -- in 39th place -- in part because of higher crime and living costs and lower quality healthcare. Meanwhile, California ranked 28th, weighed down by high state taxes and living costs.

Related: Best places to retire

Here are the 10 states offering the best mix of affordability and lifestyle, according to Bankrate.

1. South Dakota: Yes, the temperatures dip below freezing (a lot), but South Dakota boasts low crime, quality healthcare and no state income tax.

And beyond the Badlands and Black Hills, there is plenty to do. In the small town of Aberdeen, S.D., for example, retirees can enjoy its historical downtown, home to farmers markets and holiday events, and easy access to both local arts and outdoor activities, like cross-country skiing.

2. Colorado: Not only does Colorado offer much milder winters, but its residents also benefit from high quality healthcare and a lower-than-average tax burden. Plus, its residents are among the most content in the country, according to an annual survey by Gallup of general well-being.

One downside: The cost of living is higher than in 28 other states.

Less congested and cheaper than nearby Denver, Colorado Springs, Colo. has access to one of the country's leading cardiovascular hospitals as well as parks, trails and the Rocky Mountains.

Related: Are you on track for retirement?

3. Utah: Utah offers up plenty of options for both nature lovers and city dwellers. And, for retirees, its low cost of living and high quality healthcare make it even more attractive, Bankrate said.

Salt Lake City offers a bustling downtown, with arts and cultural events and a light rail that makes getting around town easy. It's also just a half hour drive away from hiking, skiing and other outdoor activities.

4. North Dakota: Residents here have to deal with some of the coldest weather in the country.

But North Dakota has its advantages: extremely low crime and even better healthcare. Plus, its residents report the highest level of general well-being in the country.

5. Wyoming: For a tax-conscious retiree, there is no state better than Wyoming, Bankrate found. The "Cowboy State" also has low crime and moderate living costs, although the quality of its healthcare is far below that of the top ten states, according to government statistics.

6. Nebraska: It's not just about wide open spaces. Nebraska is one of the most affordable states in the country, has relatively low crime and residents enjoy a high level of general well-being.

Related: Meet the country's roving retirees

7. Montana: Retirees have plenty of room to roam in Montana. Even though it's one of the largest states in the nation, the state has one of the smallest populations.

The cost of living isn't as low here as it is in some of the other Mountain states, but Montana's lack of a sales tax helps to offset some of the extra cost.

The resort area of Kalispell, Mont., has the largest freshwater lake west of the Mississippi, as well as a regional medical center that ranks as one of the country's top hospitals.

8. Idaho: Idaho not only has the lowest crime rate in the country, but it's also one of the most affordable states. Residents do pay higher taxes here than in other Mountain states, though the tax burden remains below the national average.

In Boise, Idaho, retirees can find access to arts and outdoor activities, and a massive new cultural center is set to open there next year.

9. Iowa: Another cold state to make Bankrate's list, Iowa boasts low crime and living costs and high-quality healthcare.

In the college town of Iowa City, Iowa, retirees can take up a class at the University of Iowa or enjoy free concerts and outdoor movie nights in the summer.

10. Virginia: One of the warmest spots on the list, Virginia has one of the lowest crime rates in the country.

For seniors looking for a coastal lifestyle, Norfolk, Va. is home to miles of beaches and sailing and kayaking in the Chesapeake Bay. The city is also home to an art museum, theater company and opera house.

First Published: May 5, 2014: 2:00 AM ET

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Are rich investors overconfident?

57% of rich investors are in high spirits.

(Money Magazine)

Five years into the bull market, 57% of well-off clients polled by wealth manager deVere Group are bullish on the next 12 months -- the most since 2007.

Skip the celebration: Optimism usually peaks as the good times end. Instead, follow this three-step plan for handling the emotional side of investing.

Sober advice

Do more research. Watch for other ominous signs of overconfidence.

One noted by Leuthold Weeden chief investment officer Doug Ramsey: Trading in speculative penny stocks jumped last year to its highest level since 2007.

Stay on target. Are you too prone to trading as the market's mood -- and yours -- shifts? Go for set-it-and-forget-it options like target-date funds.

In 2008, while panicked savers yanked $229 billion from stock funds, target-date funds saw inflows of $42 billion.

Related: Tools to make your money grow

Watch your wallet. As market confidence rises, resist the urge to splurge on stuff other than stocks.

For every $1 increase in stock wealth, consumer spending jumps 2¢, according to Moody's Analytics chief economist Mark Zandi.

In a bubbly mood? Go ahead, congratulate yourself on getting that much closer to your long-term wealth goals!

First Published: May 2, 2014: 6:55 PM ET

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Buffett's Berkshire misses estimates

Berkshire Hathaway earnings miss analysts' earnings per share expectations by $23.

NEW YORK (CNNMoney)

Berkshire Hathaway (BRKA, Fortune 500) is a broad-based investment conglomerate whose holdings include insurance, utilities, railroad, finance, manufacturing and retail companies such as Geico insurance, Burlington Northern Santa Fe railroad, and Dairy Queen.

The company earned a profit of $4.7 billion during the first quarter, down from about $4.9 billion during the same period last year.

Operating earnings per share, came in at $2,149 for the quarter, missing expectations from analysts polled by Thomson Reuters by about $23.

But, Class A Berkshire shares were trading $192,255 Friday and shares are up about 8% this year, beating the broader market.

The underwriting insurance sector took the biggest hit during the first quarter, dragging down the conglomerate's results.

First Published: May 2, 2014: 6:59 PM ET

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GM recalls SUVs for inaccurate fuel gauges

GM is recalling more cars.

NEW YORK (CNNMoney)

The auto manufacturer said Saturday it is recalling 51,640 SUVs because of possible inaccurate readings of their fuel gauges.

The recall involves 2014 models of Buick Enclave, Chevrolet Traverse and GMC Acadia. GM (GM, Fortune 500) said a software problem could lead to a faulty reading on both the high and low end of the range by as much as one quarter of a tank.

If a customer runs out of fuel without any warning from the fuel gauge, it will cause the vehicle to stall and increase the risk of a crash, the company said.

GM said dealers will reprogram the software for free, starting immediately.

Related: GM recall timeline

The latest recall comes as the company is dealing with a battery of recalls involving millions of vehicles that range from Buicks to Saturns and Chevrolet models.

GM has especially come under fire for its recall of 1.6 million vehicles worldwide for an ignition switch problem. GM engineers knew at least as early as 2004 of the problem, but the company did not recall the vehicles until February of this year.

At least 12 deaths have been linked to the ignition switch issue. The number of vehicles covered by the recall has also doubled since it was originally announced.

The company's CEO Mary Barra has apologized and has also testified before Congress.

Related: Barra on recall: 'Terrible things happened'

Last month, GM reported that its earnings for the first three months of the year were virtually wiped out from the cost of repairing millions of vehicles, which could total as much as $1.3 billion.

First Published: May 3, 2014: 4:58 PM ET

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Bill Gates no longer Microsoft's biggest shareholder

Bill Gates sold nearly 8 million shares of Microsoft over the past two days.

NEW YORK (CNNMoney)

In the past two days, Gates has sold nearly 8 million shares of Microsoft (MSFT, Fortune 500), bringing down his total to roughly 330 million.

That puts him behind Microsoft's former CEO Steve Ballmer who owns 333 million shares.

Related: Gates reclaims title of world's richest billionaire

Ballmer, who was Microsoft's CEO until earlier this year, was one of Gates' first hires.

It's a passing of the torch for Gates who has always been the largest single owner of his company's stock. Gates now spends his time and personal fortune helping run the Bill & Melinda Gates foundation.

The foundation has spent $28.3 billion fighting hunger and poverty since its inception back in 1997.

First Published: May 2, 2014: 5:34 PM ET

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