England's Housing Market Getting Too Hot Again

http://www.economist.com/news/britain/21600728-property-prices-are-rising-swiftly-bank-england-may-intervene-cool-it

Since the financial crisis, Great Britain has been recovering well. Housing prices are on the rise, especially in London. However, since last year prices have risen 6.8% and up to 13.% in London. This is nothing surprising since the demand for new housing has risen due extremely low interest rates and mortgages up to 5.5x income are available. Seeing the potential for another bubble and collapse, England's Financial Policy Committee is considering making borrowers meet more strict qualifications. One way to do this is to make banks ensure that applicants have enough to cope if the Bank of England raises interest rates as expected. Hopefully, they committee makes smart decisions so that England doesn't have another crisis in a few years.

Oklahoma Bans Minimum Wage Hikes

That headline sounds like a horrible joke, but it's real.  After some states have raised local minimum wage and President Obama and some of congress have urged the raising of minimum wage, Oklahoma has taken a huge step in the opposite direction.  The new law bans not only the raising of minimum wages in towns and cities, but also refuses to allow localities from setting required sick days and vacation days.

Critics of this move bring attention to the fact that a petition had been started to add a wage increase to the ballot measures in November.  Proponents say that allowing minimum wage to rise would result in loss of business as companies moved out of areas with a higher minimum wage and prices would rise for those that stayed.

Read the article here.

Yellen makes careful forecast on economy

http://www.washingtonpost.com/business/economy/yellen-makes-careful-forecast-on-economy/2014/04/16/19c57c64-c59a-11e3-9f37-7ce307c56815_story.html


Janet Yellen, chair of Federal Reserve, said U.S.’s economic recovery will be almost complete within two years on Wednesday in monetary policy speech. To be more specific, the Fed forecasts inflation rate will rise to moderate rate and unemployment will fall back to bottom in 2016. As the economy is recovering, the Fed nada announced that it will pull back its support.

I think this is kind of over-optimistic because Yellen just said  at the beginning of April that job market is still tough. Moreover, the higher interest rate is coming so investment will drop and we don't know how will market react.

Why long-time unemployed can’t get back on track

This article talks about true problem of long term unemployment and the risk that people face when looking for a job after being out of the market for more than 6 months. The article focuses on this who had higher income in their careers and lost their jobs. After losing their jobs, it has become very hard to go back to making the exact same money the longer they are not in the job market. Eventually, some end up having to find a job somewhere and end up getting part time jobs for fear of not having any money to live. Much of the problems that deal with this long term unemployment has to do with the fact that Congress failed to extend unemployment benefits last year.


http://www.marketwatch.com/story/for-long-time-unemployed-full-time-work-is-elusive-2014-04-04

Intersection: the Job Market, Wages, and Inflation

How much slack is left in the job market? Or in layman's terms: how many unemployed people are available to take jobs if they were to appear? "Slack," so defined, is important to Economists because "many at the Fed, believe lots of slack helps hold down inflation pressures. If the amount of slack is smaller than they think, or shrinking faster than they think, inflation pressures may start building before they know." Basically think of it in terms of Econ 110: when there is little supply (little slack in the labor market) prices rise if demand is constant. Basically, wages will begin to rise quicker if the there is little slack. This relationship illuminates why the Fed cares about wages and labor-market conditions.

This article summarizes new research showing that short-term interest rates need to be adjusted based on short-duration unemployment, not long-term unemployment as Chairwoman Yellen is wont to mention. Do you think the long-term unemployed should remain the focus of Fed policy, or should the Fed adjust its decision-making process?

http://blogs.wsj.com/economics/2014/02/12/the-best-gauge-of-the-labor-market/

Government urged to target seniors, families in budget cuts by economics group Macroeconomics

In this article, Stephen Anthony urges the government to "cut hard, and cut early on in your term". This is a contractionary fiscal policy, and helps balance the budget. He says specifically that he would like to see the family tax benefit income test lowered. Basically, people will feel the difference, rather than other programs. He says it is this important to balance our national budget.

I thought this concern raises two major issues. One, is it really possible for a politician to cut programs at the beginning of their term. With our current political system, cutting programs doesn't allow for re-election. Also, targeting areas of the programs, some economists say it will hurt those who are already hurting. I am not sure specifically where government programs would be helped or hurt, but I know cutting a program isn't necessarily easy.

On the other hand, cutting programs is a better political strategy than raising taxes. We saw this during the Clinton administration.

Do you think cutting programs is politically possible to balance a budget?

Where would you target the cuts?

http://www.abc.net.au/news/2014-04-14/government-should-target-seniors-familes-budget-cuts-economists/5387174

Technology unemployment fell from 3.5% in the previous year to just 2.7% in the first quarter of 2014. The most growth occurred in technology consulting, with 17,200 new jobs being created. Data processing and hosting jobs lost 1,600 jobs from the previous quarter, and computer and electronic products lost about 2,900, according to government data. This report shows  that technology workers continue to be far more likely to find work than the workforce as a whole. Dice president (Dice released the report) said, “More and more companies are turning to consulting companies to help them harness the new tech age: analytics and data, infrastructure flexibility and making internal and external applications easy to use,” in a statement regarding technology unemployment. I think it is safe to say that seeking employment in the field of technology remains one of the safest bets when trying to obtain a job.

http://www.washingtonpost.com/business/on-it/tech-unemployment-drops-to-27-percent-in-the-first-quarter-of-2014/2014/04/09/391848cc-bffe-11e3-bcec-b71ee10e9bc3_story.html

Talk about Leisure Time

In an interesting move, the French government and business sector have colluded to introduce new laws which will protect approximately 250,000 employees from having their leisure time interrupted. Employees in the digital and consultancy sectors will now no longer have to respond to work-related emails outside of work hours (basically after 6pm). This will help to maintain a policy enforcing a 35-hour work week, introduced in 1999. As it is, studies show that in Europe people tend to enjoy themselves and work less than Americans do, including working less hours per week and working fewer weeks per year. Personally, I think that in a world driven by money, it is nice to see emphasis being placed on living outside the work place. Thoughts?

http://www.theguardian.com/education/2014/apr/09/new-work-life-balance-france-sweden-laws-countries-better-job-hours-work

260,000 graduates in minimum wage jobs

Will getting a college degree guarantee a higher paying job? In theory, yes. In reality, apparently not at the moment according to this CNN article by Emily Jane Fox. According to the Bureau of Labor Statistics, about 260,000 people who had a college or professional degree are currently earning at or below federal minimum wage of 7.25 per hour last year. The worst year of low income college grads are in the past (327,000); however, 260,000 is still a significantly high number comparing to what it was before the Great Recession.
Consistent to my last blog post, the article mentions that the only jobs that are really growing in the U.S. are low-wage jobs; in addition:

"and at the same time, wages across occupations, especially in low-wage jobs, are declining."

 This online article also features a short video (~ 3 min) called "The engineer drop-out problem", which is worth checking out.

Thank you for reading
Comments are appreciated.

Source 260,000 graduates in minimum wage jobs

http://www.bostonglobe.com/opinion/editorials/2014/04/11/idle-workers-low-interest-rates-time-rebuild-infrastructure/UIYHNLdzN0frz0VMVkTS1K/story.html

This article talks about how a new influx of jobs created by repairing our countries current highways, airports and bridges. Rebuilding our nations infrastructure will lead to new jobs that could boost our current economic situation. Vice President Biden recently compared Laguardia airport to a third world country which is something that these new jobs could fix, as well as helping our countries economy. This would not be the first time our country has done something like this, most criticism for the idea comes from people that know what happened before. Much of the reasoning behind this idea also stems from the low interest rates that we see and idle workers.