During the 2008 Recession, the Emergency Unemployment Compensation (EUC) program provided the long-term unemployed an unprecedented maximum 99 weeks of benefits. Some weeks of extended benefits were available to workers in all states, but workers in the states with the highest unemployment rates received the maximum weeks of benefits.
The nation’s supply of financial capital consists largely of the flow of savings from American households. However, in today’s monetary environment, savers are pressed — they might as well put their dollar bills under a mattress.
President Barack Obama has tagged the growing inequality of income over the past three or four decades as “the defining challenge of our time,” an often-repeated claim recently echoed by economist Thomas Piketty in Capital in the Twenty-First Century. Numerous social and economic factors explain why the income and wealth gaps have grown, from the rise in family breakdown to the incentives embedded in government welfare programs.
Poverty has exploded to record levels under President Obama.
Both proponents and opponents of federal minimum-wage hikes are convinced that if Congress raises the minimum wage (whether to $9 or $10.10 or $15 an hour) the welfare of tens of millions of low-income workers will rise by a comparable amount. The two sides disagree over the extent of the job losses low-wage workers will suffer, but both sides acknowledge that most econometric studies over the past half-century show that a 10 percent hike in the federal minimum wage results in job losses for unskilled workers of no more than 3 percent, and potentially less than 1 percent. Most recently, the Congressional Budget Office found that if the minimum wage is hiked to $10.10, expected job losses by 2016 will amount to a scant 0.3 percent of the jobs affected.
Market analysts usually attribute changes in the prices of commodities — uniform, widely traded goods, such as metals — to higher or lower demand in major world economies, such as the United States and China. However, the price of a commodity also relates to the value of the currency in which prices are expressed, in most cases the U.S. dollar.
Most people who earn the minimum wage or slightly more are the only earners in their households and, therefore, are poor, right? And so, if the federal government or state governments raise the minimum wage, that will be a nicely targeted way of helping poor people, right?
The United States and other countries intermittently or persistently pursue currency depreciation – to the point that the phrase “currency wars” is now part of many nations’ vocabularies. Switzerland and Japan remained among the holdouts for many years. But, in the last few years, central banks in both countries have joined the movement.
The economic downturn that began in 2007 has been particularly hard on both educated workers and employers. However, a 2012 survey from the staffing firm Manpower, Inc. found that nearly half of employers are still having difficulty filling jobs. Yet, according to the Bureau of Labor Statistics, half of all college graduates under the age of 25 are either unemployed or underemployed — working part-time or at a job below their skill level.
On January 1, 2013, taxes will go up and federal spending will be cut as a result of an agreement last summer between House Republicans and President Obama. Under current law, increases in the top rate of nearly every major federal tax will go into effect on January 1 because the Bush tax cuts expire and tax increases to pay for ObamaCare go into effect.
Employment dropped dramatically in 2008 and 2009. The economic recovery (in gross domestic product) began in June 2009, but it has been an unusually slow recovery, with job growth even slower. As a result, jobs are the biggest issue facing the economy and policymakers.
Beginning in late 2007, the Federal Reserve eased monetary policy aggressively to deal with the emerging financial crisis and the recession that grew out of it. By the end of 2008, the federal funds rate — the interest rate targeted by Fed policy — had been reduced to a zero-to-quarter-percent range.
The unemployment numbers show that employers are still struggling to create jobs. Two distinctly different approaches to job creation have been proposed at the federal level. One piece of legislation, the Jumpstart Our Business Act (JOBS Act), was recently passed and signed into law.
In response to the 2008 financial collapse, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank increased regulation of banks, stockbrokers, insurers and other financial institutions that are “too big — or interconnected — to fail” and that could require a government bailout to prevent a banking system collapse.
Our nation has gone to great lengths to protect people from private monopolies through the Sherman and Clayton Antitrust Acts, the Justice Department’s antitrust unit, and public service commissions that regulate utilities in every state. All this effort is directed against the actions of privately owned companies that would like to raise their prices and increase their profits.
In the last several years Washington has experimented with larger economic interventions than ever before — yet, year after year, the economy merely trudges along. The recovery from the 2008-2009 recession has been unusually weak. All agree that something is seriously wrong, but theories as to what the problem might be range from one extreme to another.
The headline unemployment rate fell to 8.2 percent for June 2012 — down from 9.1 percent one year earlier. A declining unemployment rate is encouraging. But some of the improvement has come from those whose unemployment benefits have run out. Washington does not count these people as “unemployed.”
More than 75 years since the system was created, unemployment insurance is still a contentious issue. Whether the problem is a lack of available work or the resistance of the unemployed to seek new work, the unemployment system itself seems to be failing to do its job. However, we could speed the re-employment of the unemployed by using staffing agencies to match people with available positions.
A single, oft-cited statistic is that women make 79 cents for every dollar that men make doing the same work. However, that average number fails to account for factors aside from discrimination that can affect an individual’s pay. When experience and other factors are considered, the wage gap narrows.
Our country is in far worse fiscal shape than its $14 trillion — and rapidly growing — official debt suggests. Indeed, that figure measures just a small portion of the government’s total liabilities. It leaves out, for example, the obligation to pay hundreds of trillions of dollars in Social Security and Medicare benefits to today’s and tomorrow’s elderly.
The Family and Medical Leave Act of 1993 (FMLA) requires employers to allow employees to take 12 weeks of unpaid leave annually for a serious illness, to care for an immediate family member, or following an adoption or birth. The FMLA now applies to companies that employ 50 or more workers, but during the campaign President Obama supported expanding it to cover businesses with as few as 25 employees.
The popularity of 401(k) plans has grown in recent years. According to the Employee Benefits Research Institute, almost two-thirds of employers offer such plans and millions of employees now contribute to them. These defined contribution plans allow workers to set aside part of their earnings in tax-deferred retirement accounts that are invested in stock and bond funds.
Nationwide, average retail gasoline prices are nearing the all-time inflation-adjusted high of $3.40 a gallon reached in 1981, lending urgency to renewed calls for U.S. energy independence. Analysts often tout Brazil as the epitome of energy self-sufficiency. Brazil imported more than 80 percent of its oil in the 1970s, but it likely reached energy independence by the end of 2007, according to projections from the U.S. Energy Information Administration (EIA).
One of government's biggest challenges is to develop policies that raise the standard of living in a society without creating large income gaps between the rich and poor. But to a great extent, raising living standards and redistributing income are mutually exclusive goals.
Economists often refer to the U.S. trade deficit and the federal budget deficit as problems of inadequate domestic saving. They speak of these deficits “crowding out” domestic investment. They allude to unspecified relationships between these deficits but seldom explain them, confusing everyone.