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Economics

Minimum Wage

Questions
How has minimum wage changed in the past years?
Why is minimum wage different in other states and for what reason?
How does cost of living affect minimum wage?
Could it negatively impact people/companies?

Resource Links
https://www.nationalpriorities.org/
http://libguides.ilo.org/minimum-wages-en
http://www.taxpolicycenter.org/search?filter=minimum+wage&sort_by=search_api_relevance&items_per_page=25

a.) What is the minimum wage now? In 2010 the minimum wage was 7.25 and in 2016 it has not changed much.
b.) What is the Minimum wage in New York? In 2016 it is 9.25 but it was 7.25
c.) Pew Research
http://www.pewresearch.org//search/?query=minimum%20wage

Issue one: Minimum wage being to high v.s. Pay wage for people with degrees.

– What is minimum wage for fast food and retail workers in the U.S?

– What is the pay wage for people with degrees? (Ie; Vet techs, accountant, police officer & fire fighters..)

Sources: http://www.factcheck.org/2014/05/flackcheck-org-video-minimum-wage-hike/

http://www.salary.com/9-surprisingly-low-paying-jobs/slide/8/http://www.salary.com/9-surprisingly-low-paying-jobs/slide/8/

 

Paying down the debt

Results of Google search for < pay off national debt >

Unemployment

St. Louis Fed’s U.S. Initial Jobless Claims Drop to Lowest in Almost 44 Years

That’s the lowest number in 44 years, when the workforce was much smaller. As a percentage of the workforce, today’s number is by far the lowest rate since the Labor Department began keeping track of such things.

Natural Rate of Unemployment

https://en.wikipedia.org/wiki/Natural_rate_of_unemployment

https://fred.stlouisfed.org/series/NROUST

https://fred.stlouisfed.org/series/NROU

Living wage

http://livingwage.mit.edu/

http://www.universallivingwage.org/

https://www.theatlantic.com/business/archive/2015/09/living-wage-calculator-interactive-minimum-wage/404569/

Economy

equality/discrimination

How do we stop the movement toward oligarchy in our country in which the economic and political life of the United States is increasingly controlled by a handful of billionaires?

Are we content with the grotesque level of income and wealth inequality that we are experiencing? Should the top one-tenth of 1 percent own almost as much wealth as the bottom 90 percent? Should one family in this country, the Waltons of the Walmart retail chain, own as much as the bottom 40 percent of our people? Should 52 percent of all new income be going into the pockets of the top 1 percent?
income/wealth distribution
minimum wage *
taxes
jobs/unemployment
corporate profit

Corporate Profit:

What type of corporate profit do we have now? Free market or Regulated market?

How did this change over time?

How does this compare to other countries?

How can we improve this?

Pros & Cons

Web Source: The Conference Board

Topic: American Cost of Living

Questions to Research:

1.)    Average cost of living in America then and now?

2.)    Average daily consumer spending? How does this differ throughout the economic classes?

3.)    Inflation and how it effects basically everything…?

https://www.statista.com/topics/768/cost-of-living/

 

As I said in class, if you’re going to ridicule a 40-year old racist stereotype — “Cadillac’s and huge plasma screen TVs” — you should give equal ridicule to the corporations that are ripping off the government (your tax dollars).

https://en.wikipedia.org/wiki/Welfare_queen

http://www.motherjones.com/mojo/2011/09/contractor-waste-iraq-KBR

For corporate waste try the search term “corporate welfare”. For fraud:

http://www.lawyershop.com/practice-areas/criminal-law/white-collar-crimes/government-fraud

Overview of the two welfare systems:

http://federalsafetynet.com/us-welfare-programs.html

http://thinkbynumbers.org/government-spending/corporate-welfare/corporate-vs-social-welfare/

https://www.washingtonpost.com/blogs/govbeat/wp/2015/03/17/the-united-states-of-subsidies-the-biggest-corporate-winners-in-each-state/?utm_term=.4647ff9c2510

http://www.nationalreview.com/article/374321/corporate-welfare-queens-stephen-moore

http://www.whiteoutpress.com/articles/2016/q2/top-20-corporate-welfare-recipients-america/

Jobs

Washington Post’s US factory CEOs to Trump: Jobs exist; skills don’t

Government figures show there are 324,000 open factory jobs nationwide — triple the number in 2009, during the depths of the recession.

One executive said … that his company has 50 participants in a factory apprenticeship program, but could take 500 if enough were qualified. But he said that in his experience, most students coming out of high school lack the math and English skills to absorb technical manuals.


Socio-economic mobility

Socio-economic mobility (Wikipedia) refers to the movement of people from one social class or economic level to another, often by changing jobs or marrying. This “vertical” mobility can be the change in socioeconomic status between parents and children (“inter-generational”); or over the course of a lifetime (“intra-generational”). It typically refers to “relative mobility,” the chance that a person’s income/status will rise or fall compared to others in another income/status group but can also be “absolute,” whether (and by how much) living standards in America have increased.

In the U.S., belief in strong social and economic mobility, that Americans rise from humble origins to riches, has been called a “civil religion,” “the bedrock upon which the American story has been anchored,” and part of the American identity (the American Dream), celebrated in the lives of famous Americans such as Benjamin Franklin and Henry Ford, and in popular culture (from the books of Horatio Alger and Norman Vincent Peale to the song “Movin’ on Up”). Opinion polls show that this belief has been both stronger in the US than in years past, and stronger than in other developed countries.

However, in recent years several large studies have found that vertical intergenerational mobility is lower, not higher, in the US than in comparable countries.

Economic Policy Institute’s U.S. lags behind peer countries in mobility

The notion that anyone in America who is willing and able to “pull themselves up by their bootstraps” can achieve significant upward mobility is deeply embedded in U.S. society. Conventional wisdom holds that class barriers in the United States are the lowest among the world’s advanced economies. Motivating this belief is the notion that there is a tradeoff between market regulation and mobility; advanced European economies are characterized by higher taxes, greater regulation, more union coverage, universal health care, a more comprehensive social contract, etc. Because some see these policies and institutions as impediments to mobility, mobility is believed to be greater in the United States.

While faith in the American Dream is deep, evidence suggests that the United States lacks policies to ensure the opportunities that the dream envisions. According to the data, there is considerably more mobility in most other developed economies. The figure below, from The State of Working America, 12th Edition, measures the relationship between earnings of fathers and sons in member countries of the Organisation for Economic Co-operation and Development (OECD) with similar incomes to the United States and for which data are available. An elasticity of zero would mean there is no relationship, and thus complete intergenerational mobility, with poor children just as likely as rich children to end up as rich adults. The higher the elasticity, the greater the influence of one’s birth circumstances on later life position.

The relationship between father-son earnings is tighter in the United States than in most peer OECD countries, meaning U.S. mobility is among the lowest of major industrialized economies. The relatively low correlations between father-son earnings in Scandinavian countries provide a stark contradiction to the conventional wisdom. An elasticity of 0.47 found in the United States offers much less likelihood of moving up than an elasticity of 0.18 or less, as characterizes Finland, Norway, and Denmark.

The Fading American Dream: Trends In Absolute Income Mobility Since 1940

Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang
2016

One of the defining features of the “American Dream” is the ideal that children have a higher standard of living than their parents. We assess whether the U.S. is living up to this ideal by estimating rates of “absolute income mobility” – the fraction of children who earn more than their parents – since 1940.

We measure absolute mobility by comparing children’s household incomes at age 30 (adjusted for inflation using the Consumer Price Index) with their parents’ household incomes at age 30. We find that rates of absolute mobility have fallen from approximately 90% for children born in 1940 to 50% for children born in the 1980s. Absolute income mobility has fallen across the entire income distribution, with the largest declines for families in the middle class. These findings are unaffected by using alternative price indices to adjust for inflation, accounting for taxes and transfers, measuring income at later ages, and adjusting for changes in household size.

Absolute mobility fell in all 50 states, although the rate of decline varied, with the largest declines concentrated in states in the industrial Midwest, such as Michigan and Illinois. The decline in absolute mobility is especially steep – from 95% for children born in 1940 to 41% for children born in 1984 – when we compare the sons’ earnings to their fathers’ earnings.

Why have rates of upward income mobility fallen so sharply over the past half century? There have been two important trends that have affected the incomes of children born in the 1980s relative to those born in the 1940s and 1950s: lower Gross Domestic Product (GDP) growth rates and greater inequality in the distribution of growth.

We find that most of the decline in absolute mobility is driven by the more unequal distribution of economic growth rather than the slowdown in aggregate growth rates. When we simulate an economy that restores GDP growth to the levels experienced in the 1940s and 1950s but distributes that growth across income groups as it is distributed today, absolute mobility only increases to 62%. In contrast, maintaining GDP at its current level but distributing it more broadly across income groups – at it was distributed for children born in the 1940s – would increase absolute mobility to 80%, thereby reversing more than two-thirds of the decline in absolute mobility.

These findings show that higher growth rates alone are insufficient to restore absolute mobility to the levels experienced in mid-century America. Under the current distribution of GDP, we would need real GDP growth rates above 6% per year to return to rates of absolute mobility in the 1940s. Intuitively, because a large fraction of GDP goes to a small fraction of high-income households today, higher GDP growth does not substantially increase the number of children who earn more than their parents. Of course, this does not mean that GDP growth does not matter: changing the distribution of growth naturally has smaller effects on absolute mobility when there is very little growth to be distributed. The key point is that increasing absolute mobility substantially would require more broad-based economic growth.

We conclude that absolute mobility has declined sharply in America over the past half century primarily because of the growth in inequality. If one wants to revive the “American Dream” of high rates of absolute mobility, one must have an interest in growth that is shared more broadly across the income distribution.