Surprising Minimum Wage Jobs

Not all who earn minimum wage, or close to minimum wage are the uneducated, or retail and fast food industry jobs.  With growing pressure to increase minimum wage, CNNMoney comprises a list of other jobs who make low wages, similar to the minimum wage.  On this list: Regional Pilot, Adjunct Professors, Models, Home Health Aides, and Vet. Techs.  These are low earning jobs that require long hours and heavy training to perform them.  Occasional arguments against raising the minimum wage is that they are not "hard working" jobs, but what about these careers?  Raising the minimum wage could ultimately raise their wages as well.  Are these jobs also "undeserving" of a higher living wage?

Read this article here

Kazakhstan's economy: Tenge fever

Protests in Kazakhstan are starting to arise after the recent devaluation (Feb. 11) of the countries national currency the tenge. The value of the tenge fell by 19%, this fall has lead to an increased wariness and fear among detractors of president Nursultan Nazarbayev who believe the devaluation will lead to a spike in inflation and fall in standard of living. The country is one rich in natural resources (oil) but is one that imports many consumer goods. Central-bank chief Kayrat Kelimbetov, the man that announced the devaluation while Nazarbayev was in Sochi, Russia at the recent Olympic games, cited tapering of American quantitative easing in America and a falling rouble (the Russian currency) as reasons behind the recent devaluation.

http://www.economist.com/news/asia/21597005-anger-devaluation-hints-broader-malaise-tenge-fever

G20 pledges to add $2 trillion to global economy

http://money.cnn.com/2014/02/23/news/economy/g20-meeting/index.html?iid=SF_E_Lead

The 19 richest nations in the world and the European Union plan on adding 2 trillion dollars to the world economy, through policy making. The idea is to support global growth. Experts are both supportive and skeptical at the same time. Structural reforms is said to be the main driver behind this plan. Also Citi's Steven Englander noted, "The policy of choice appears to be infrastructure investment financed by the private sector, but encouraged by tax incentives,"

Obama drops controversial Social Security proposal

http://money.cnn.com/2014/02/20/news/economy/obama-social-security-chained-cpi/index.html?iid=SF_E_River

This article talks about President Obama's lack of interest to reduce the annual growth in social security benefit, but by switching to the "chained CPI", it would result in "smaller" benefit increases than using the normal consumer price index. The article also talks about how chained CPI  would affect the United States. Chained CPI would slow all federal payments' growth rate, such as pensions for civilian workers and the military, veterans' benefits. It would also cause higher tax by slowing changes to tax parameters that go up with inflation. And according to the Congressional Budget Office, switching to chained CPI would reduce deficits by $233 billion over 10 years. Many people are complaining about our President has no willingness for doing anything, not even address looming debt crisis.

Obama unveil plans to bring back manufacturing jobs to the US

President Obama recently plans to unveil two new manufacturing institutes in Chicago and Detroit as part of a larger initiative. 

Each institute will function as a “teaching factory,” the official said, and will provide training for workers while also helping companies get the expertise and equipment they need to offer new products and manufacturing processes.

This highlight the determination to create new and "high paying" manufacturing job in the US job market of the president. The goal of this initiative is to create a national network of up to 45 manufacturing institutions. 

To me, a "high-paying" manufacturing job is somewhat of a paradox. What do you think?

Source: Obama to unveil new manufacturing institutes in Chicago, Detroit

U.S. Deficit Falls to 680 Billion.

The federal government has announced that the annual deficit is the smallest it has been since 2008. At the height of the recession, we were 1.4 trillion. Last year, our debt made up 6.8% of the GDP. Now that number has fallen to 4.1%. The author at CNN.com attributes the success to “across-the-board budget cuts, and tax increases on high-income households during the 2013 fiscal year”. Fannie Mae and Freddie Mac returned a large portion of the bailout they received in 2008. Areas where government spending increased were Social Security and Medicare. Last year the deficit was estimated at 1.1 trillion dollars, it was a big step to get our debt down to 680B.  Let’s hope we stay on the right track.

http://money.cnn.com/2013/10/30/news/economy/deficit-2013-treasury/index.html?iid=SF_BN_River

Russians Return to Cyprus, a Favorite Tax Haven

This article discusses the business transition to Cyprus by Latin Americans, Canadians, Germans, and the largest, Russians. The question they are aiming to answer is, why now? Even after a financial crisis, investors see that the legal and tax system is relatively stable, especially compared to that of Russia. When Cyprus's economy crashed last spring, they had seized most of the offshore accounts and turned them into bank shares; allowing wealthy Russians to become some of the biggest Cyprus bank shareholders- whether they wanted to or not. Unemployment jumped from 14% to 17.5%, among that, youth unemployment is at a heaping 40%. Now, 300% of private debt is represented in the 17 billion euro country due to defaults on loans and decreased deposits.

The light at the end of the tunnel seems to be the tax haven that businesses see. Even with a corporate tax increase last year, Cyprus still holds one of the lowest in the eurozone. At 12.5%, they compete with other popular countries like France, 33.3%, and Germany, 29.5%. Now, the registration list is overflowing at 273,000 companies that wish to move in.
I would think that after the crisis and the bank share stunt that was pulled, Russians would have no interest in moving. The reality is, for many, is that they have no other options. Returning to Russia would have no benefit. But, their mindsets are the same as many; very small investment is going towards Cyprus banks. Even with promises and tightened regulations, no one has expressed interest in taking the risk.

Health care to the states

We are now five months into the six-month roll out of Obamacare, and fewer than one quarter of americans believe the President’s health care law will actually improve their family’s health care.  Long wait times, inefficient systems, dysfunctional websites and fewer choices are some of the reason americans are suspect.  People want their states to have more control over their healthcare.  Having separate states control more will help with innovation, preventing fraud, and creating more choices.  The HCC is the group that is trying to bring more power to the states, but the HCC needs congressional approval to take affect in the member states.  96% of health care is provided and consumed in ones individual states so why not give the state the health care power.  DC doesn't think that the states have the interest in their citizens but people are starting to want decisions make closer to home.  

http://www.forbes.com/sites/theapothecary/2014/02/23/the-health-care-compact-fixing-american-health-care-one-state-at-a-time/

"get out of jail free" card

For some the weather has been a "get out of jail free" card for the economy but others believe it is a weak excuse. Three companies quickly pointed fingers towards the weather for their poor sales. The fifth company in 24 hours to blame the weather on slow sales was Lumper Liquidators, they were not alone as they were accompanied by Mattress Firm Holding, Group One Auto, La-Z Boy, and Panera. While the winter may hurt companies due to the dangerous weather conditions the spring has always been much better to the companies hurting from the winter putting them in good shape come summer. Another scare front the weather is the treat of the thought running out of natural gas. This may be a concern but in the reality it is something that will be hard to reach.




http://www.cnbc.com/id/101427902

Fed Misread Crises in 2008, Records Show

In 2008 the Federal Reserve voted unanimously against cutting interest rates and inherently bailing out Lehman. On Friday the Federal Reserve released the transcripts of the 2008 meetings, which set monetary policy. The transcript provided a clear step-by-step image of the Fed’s important decisions. By the end of the year the Fed had reduced short-term interest rates to almost zero the lowest they have been since the great depression. During this recession the writer explains, “The Fed relied on economic models that assumed the existence of smoothly functioning financial markets limiting its ability to project the consequences of a breakdown.” The officials were heavily focused on the risk of inflation rather then the issue of rising unemployment. Mr. Bernanke insisted that the downfall of Lehman could not have been prevented without changes in federal law.

http://www.nytimes.com/2014/02/22/business/federal-reserve-2008-transcripts.html?ref=economy&_r=0

Big Businesses hit back on Minimum wage

A recent government report that was released has estimated that a bump in the federal minimum wage could potentially cost the U.S. economy half a million jobs. President Obama has been lobbying for congress to increase the hourly minimum wage from 7.25 to 10.10 dollars. On a positive note, the increased income is expected to lift around 900,000 Americans above the poverty line.  The article explains the strategy of large firms battling against the president’s initiative.

Research shows that “Several big restaurant companies -- including YUM! Brands, which owns Taco Bell, KFC, Pizza Hut; Darden Restaurants which owns Olive Garden and Red Lobster; and Cracker Barrel Old Country Store directly lobbied against a bill to raise the minimum wage last year”. Both companies have fore warned “investors that an increased minimum wage would adversely affect profit margins, according to SEC filings”.

http://money.cnn.com/2014/02/21/news/economy/restaurants-minimum-wage/index.html?iid=SF_E_LN

China's Migrant Workers Lack High-End Skills

China is already facing the challenge of a shrinking labor force. Its working age population—16 to 59—declined by more than 2 million people, to about 920 million last year, compared with 2012. And while the total number of migrant workers is still increasing slowly, up 2.4 percent, to 269 million, last year, many lack needed skills. That’s despite the fact that wages keep rising, up about 14 percent, to around 2,600 yuan ($427) a month last year. China is aiming to shift its economy to higher-value-added industries and lessen its reliance on low-end, low-skill manufacturing of shoes, clothes, and toys, a process officials have dubbed tenglong huanniao, or “clearing the cage and changing the bird.” To meet the skills gap, the government will offer more training programs and educate at least 10 million migrants a year. Beijing intends to provide training by 2020 for the entire “new generation” of migrant workers, or those born after the 1980s, which now number about 100 million, according to Yang. Beijing will also provide small loans ranging from 50,000 yuan to 100,000 yuan to support migrant workers who want to start their own businesses in their hometowns.

http://www.businessweek.com/articles/2014-02-21/chinas-growing-ranks-of-migrant-workers-now-lack-skills#r=nav-r-story

Revolution on Pause

This is less a news article and more an op-ed on why America doesn't see a revolution of the working class akin to the New Deal era or other such historical periods. The author argues that theoretically, American society today is prime for a "revolution" given the huge income disparity in the country. He cites three reasons for the lack of such a change:

1) The working class is held in stasis due to a fear of losing their jobs in a time of high unemployment and high proportion of people living paycheck-to-paycheck. Basically, low job security. He also mentions the decline in labor unions as a factor in the loss of this security.

2) Students, similar to workers, don't dare "rock the boat." Due to rising debt at the point of graduation and the fact that bankruptcy does not forgive loans, students are afraid to take a stand and ruin their credit scores.

3) And lastly, he cites the cynicism of the American public, which believes that the government is inherently ineffective and cannot enact powerful legislation.

The article is an interesting read and combines both historical perspectives with the facts.


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http://www.truthdig.com/report/item/why_theres_no_outcry_for_a_revolution_in_america_20140127

Clean living pays off

             http://www.economist.com/blogs/freeexchange/2014/02/environmentalism

  

   Debates and policy to reduce pollution are seen as detrimental to growth in an economy. Previous polices that have decreased subsidies for fossil-fuels have cut carbon emissions and boosted the economy. The article talks about a paper that discusses different measures to cutting pollution that may have had beneficial long-term economic impacts for individuals. The authors are comparing the adult labor-market outcomes of those born in two different areas; places were the clean air act of 1970 decreased pollution and people in areas where pollution remained constant during this period. They discovered that those born in areas of decreased pollution earned more by their thirties. Doesn't this seem a bit strange? Since the clean air act forced many dirty factories to close, one would expect the incomes to decline because of unemployment increasing. The authors actually found that benefits of better childhood health on adult incomes outweighed the other negative economic effects. Exposure to pollution when young may affect the rest of your life. These environmental issues need to be considered with more care by politicians.

Fed Misread Crisis in 2008, Records Show

http://www.nytimes.com/2014/02/22/business/federal-reserve-2008-transcripts.html


This article goes talks about the huge crisis that happened in 2008 when the Lehman Brothers filed for bankruptcy in 2008 because the Federal Reserve officials thought that by bankrupting Lehman Brothers it would restore a sense of livability on Wall Street.  This past friday the transcripts of the Fed's 2008 meetings were published finally reveling the mistakes of the Fed officials about economic conditions during the climatic moths of the financial crisis.  It is shown on the hundreds of pages of transcripts, based on the recording made at the time and in these transcripts shows that the "officials repeatedly fretted about the over stimulating the economy, only to realize time and again they need to redouble efforts to contain the crisis."

How Obamacare Could Unlock Job Opportunities

There has been a lot of talk lately about Obamacare and how it will affect the United States. This article talks about some of the positives and negatives of this new policy. Some specific examples of the benefits of Obamacare were provided in the article, one idea that I had never thought of was brought up in the article, that some people who currently are unhappy with their jobs only keep such jobs for the benefits (such as health care). Under the new Obamacare policy it would allow people to leave their jobs and look for a more suitable job while maintaining their health coverage. This topic can be controversial politically but this article stated some ideas from both sides. http://www.nytimes.com/2014/02/23/magazine/how-obamacare-could-unlock-job-opportunities.html?ref=economy

The Current State of Unemployment

http://www.upi.com/Top_News/US/2014/02/23/The-Issue-Number-without-unemployment-benefits-approaching-2-million/UPI-91591393147800/

This article lays out a clear picture of how America's unemployment has evolved over the past few months. Additionally, it discusses how the FED will adjust to changing chairmen. This month, unemplouyment has fallen to 6.6%. There are two major issues that become relevant because of this. First, the major reason for the drop in unemployment is because of a diminishing labor pool. Secondly, the Fed has announced that once the unemployment falls to 6.5% they will diminish the amount of monetary policy they implement. Besides the decisions made by the Fed, there are many other important parts pointed. The most important of these is the fact that a vast majority of the public blames an inactive congress for most of the unemployment that America is facing.

"Minimum wage fight: here we go again"

A recent proposal by democrats is calling for a raise in the minimum wage to $10.10. The raise would bring around 900,000 families above the national poverty line. According to sources, It will also raise the income of around 16.5 million workers, but as we learned last unit in economics, the raise of the minimum wage will also cause a decrease in jobs. An estimated 500,000 jobs will be lost due to the increase. When the proposal was released, it was brought with much opposition, and a report was underway to try to deter any future vote by congress by 2016. The main argument against is that our country's main concern is unemployment, and the raise of minimum wage will have an opposite effect of what we are trying to do as a country.

http://management.fortune.cnn.com/2014/02/19/minimum-wage/?iid=SF_E_River

http://www.economist.com/blogs/economist-explains/2014/02/economist-explains-5

Why airlines make such meagre profits:

 "Despite incredible growth, airlines have not come close to returning the cost of capital, with profit margins of less than 1% on average over that period. In 2012 they made profits of only $4 for every passenger carried."

One of the main problem's in contemporary aviation is the majority of planes, airports, and air-traffic control are monopolies;
Another major problem is the vulnerability to negative external factors or events such as 9/11, flu outbreaks, and rises in oil prices.

But as airlines increase efficiencies and capabilities in the context of capacity, marginal profits could increase around 2% which doesn't seem like an appropriate increase from this recent plateau, however it is a viable step at this point even compared to other markets.  

Yellen inherits fractious Fed, minutes show

http://www.marketwatch.com/story/yellen-inherits-fractious-fed-minutes-show-2014-02-19

This article discusses how at the January meeting, the Fed voted to reduce the asset purchase program as well keep rates low, at least until the unemployment rate drops below 6.5%.  It goes on to talk about how there was some controversy with the final decision.  Some Fed employees expressed the concern that monetary policy shows that interest rates do in face need to rise, while others felt that keeping them low was the way to go.  Some employees also argue for a slower tapering whereas others argued “Clear presumption in favor of continuing to reduce the pace of purchases by a total of $10 billion at each policy-making meeting, especially if there is no evidence of a change in the outlook."  Later in the article, it discusses how the vote for lowering interest rates was all over the place, and it was hard to come to a clear consensus as the December job report was weak.  They go on to say how March's report will be very interesting depending on what has happened in both January and February.

After GOP filibuster bid, Senate votes to suspend Treasury’s borrowing limit

This article deals with the passing of the piece of legislature that suspended the Treasury’s borrowing limit.   There was some controversy with the passing of this law through the senate as some GOP candidates created a filibuster.  This filibuster was broken as a vote by the democrats and some select republicans, including Senate Minority Leader Mitch McConnell.  The importance of needing this legislation passed came from the closing deadline, in which the US would again go over the approved debt ceiling.  At the same time the stock markets had been fluctuating and creating a downturn which stems from the expected impact of going over the debt ceiling.  In addition this is believed to bring about issues with the elections for certain GOP candidates because of the traditional view of the GOP.  

Economy suffering from a cold?

This article focused on the current seasonal fluctuations of the economy, and more specifically-- the role weather plays in regards to the seasonal fluctuations.  Consumer spending is down during the winter months due to the cold and in many places the poor driving conditions.  Many consumers attempt to wait out the winter months before making their purchases in March and April, when spending and growth bounces back to normal.  It is not only consumer spending that takes a toll due to weather conditions, it is also the shipping of many important natural resources such as coal and oil.  The difficulty involved in shipping these items during the winter months when driving conditions are far from ideal, are often associated in slight price increases for the resources.  

For a glimpse at emerging market problems, follow the gold…

This article talks about using the level of gold imports as an indicator of strength for emerging markets. When the amount of gold demanded in a market rises, it signifies lost faith that the local market’s currency’s ability to hold value, or that the local economy is going to experience growth.  In India, however, the latter is not likely. Growth has fallen to 4.5%, nearly half the level it endured during its early days as a member of BRICS. This combined with a major rise in the level of gold imports could mean problems for India. The level of gold imports rose so fast last year that India had to impose new taxes on gold in order to slow demand. High levels of gold imports lead to high levels of inflation expectation, as seen in the graph in the article, which in turn leads to an increase in interest rates and a decrease in investment. The central bank has already begun increasing interest rates. Analysts at the Institute of International say growth may increase to 6% or more this year. If not, however, India’s economy could be in some serious trouble. 

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/02/21/for-a-glimpse-at-emerging-market-problems-follow-the-gold/?wprss=rss_business&clsrd

Gap and Minimum Wage

Gap has voluntarily increased their minimum wage to $9 and expects to raise it to $10 in 2015. Many are saying that the reason that Gap has made this move is because of the scandal in Bangladesh. In recent news Gaps factory garment factory located there has had terrible working conditions as well as factory disaster that killed thousands. So because of this recent scandal for Gap to clear they’re name they have decided to increase they’re employees minimum wage and it seems to be doing well for them.

http://www.huffingtonpost.com/2014/02/20/gap-minimum-wage_n_4826415.html?utm_hp_ref=business