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Keep your eyes on our nation’s grand minimum wage experiment – things could get interesting

(FINANCE NEWS) Fully 19 states and 21 local jurisdictions will raise the minimum wage in 2017, “the year of the minimum wage increase.”

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“The year of the minimum wage increase”

Thanks to the efforts of laborers and activists, the new year will herald in a new era of higher than ever minimum wages. According to the National Employment Law Project, 19 states and 21 local jurisdictions will raise the minimum wage in 2017. Politico named this year “the year of the minimum wage increase.”

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Hitting double digits

While some wage increases simply reflected the rising costs of living, increasing by mere pennies, some increases were more remarkable.

Arizona increased minimum wage the most, raising it from $8.05 to $10. Maine increased from $7.50 to $9; both Washington state and Massachusetts set theirs at $11. Six states plus the District of Columbia have minimum wages in the double digits, and Oregon will become the seventh later this year. New York and California are increasing theirs to a historically high $15.

These raises represents perhaps the largest experiment in increasing workers’ wages in recent history.

Undoubtedly, it is the first time that a large number of minimum wage workers will receive over $10 an hour for their labor.

Impact on the economy

Economists disagree about how these changes will affect the overall economy. So far, it appears that those who warned that raising wages would lead to lay offs and unemployment were off-base.

Studies show very little evidence that raising the minimum wage decreases overall employment. That said, these studies collected data from smaller, more gradual increases.

Before 2015, few states had a minimum wage about $10, and states rarely increased them by more than $1 at a time. It remains to be seen how the increase will affect the overall economy, but so far the changes have been positive and there are reasons to be optimistic.

Stay tuned. These changes will undoubtedly dramatically improve the lives of many low-wage workers. But only time will tell the impact on the overall economy.

#MinimumWage

Ellen Vessels, a Staff Writer at The American Genius, is respected for their wide range of work, with a focus on generational marketing and business trends. Ellen is also a performance artist when not writing, and has a passion for sustainability, social justice, and the arts.

Business Finance

How to survive a recession in the modern economy

(OPINION / EDITORIAL) Advice about surviving a recession is common these days, but its intended audience can leave a large gap in application.

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recession squeeze

There’s no question of whether or not we’re in a recession right now, and while some may debate the severity of this recession in comparison to the last major one, there are undoubtedly some parallelssomething Next Avenue’s Elizabeth White highlights in her advice on planning for the next few months (or years).

Among White’s musings are actionable strategies that involve forecasting for future layoffs, anticipating age discrimination, and swallowing one’s ego in regards to labor worth and government benefits like unemployment.

White isn’t wrong. It’s exceptionally important to plan for the future as much as possibleeven when that plan undergoes major paradigm shifts a few times a week, at bestand if you can reduce your spending at all, that’s a pretty major part of your planning that doesn’t necessarily have to be subjected to those weekly changes.

However, White also approaches the issue of a recession from an angle that assumes a few things about the audiencethat they’re middle-aged, relatively established in their occupation, and about to be unemployed for years at a time. These are, of course, completely reasonable assumptions to make… But they don’t apply to a pretty large subset of the current workforce.

We’d like to look at a different angle, one from which everything is a gig, unemployment benefits aren’t guaranteed, and long-term savings are a laughable concept at best.

White’s advice vis-a-vis spending is spot-oncancelling literally everything you can to avoid recurring charges, pausing all non-essential memberships (yes, that includes Netflix), and downgrading your phone planit’s something that transcends generational boundaries.

In fact, it’s even more important for this generation than White’s because of how frail our savings accounts really are. This means that some of White’s advicei.e., plan for being unemployed for yearsisn’t really feasible for a lot of us.

It means that taking literally any job, benefit, handout, or circumstantial support that we can find is mandatory, regardless of setbacks. It means that White’s point of “getting off the throne” isn’t extreme enoughthe throne needs to be abolished entirely, and survival mode needs to be implemented immediately.

We’re not a generation that’s flying all over the place for work, investing in real estate because it’s there, and taking an appropriate amount of paid time off because we can; we’re a generation of scrappy, gig economy-based, paycheck-to-paycheck-living, student debt-encumbered individuals who were, are, and will continue to be woefully unprepared for the parameters of a post-COVID world.

If you’re preparing to be unemployed, you’re recently unemployed, or you even think you might undergo unemployment at some point in your life, start scrapping your expenses and adopt as many healthy habits as possible. Anything goes.

Note: This article was originally published in August 2020.

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Business Finance

7 ways spending habits have changed since COVID-19

(FINANCE) How are spending and saving habits changing for Americans during the pandemic?

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Wallet open with $5 bill out, reflecting spending habits

Regardless of whether you’ve lost your job or kept it during the pandemic, you have undoubtedly been affected financially in some way over the past 8 months. For those who have been furloughed or laid off, it’s more obvious. If you’ve kept your job, you might be operating in a limited capacity, experiencing setbacks, or have a decreased client base. Of course, some of us are luckier than others, but if you’re not Jeff Bezos or Elon Musk (who have seemed to profit endlessly during COVID), chances are your bank statement looks a little different than you thought it would.

So how do these changes affect how we’re spending this year? Here are 7 ways Americans have changed their spending habits since March.

Out of work, using up savings

For those who are out of work and require more to live on than the negligible unemployment amount (especially after the extra $600 in COVID relief expired), resorting to savings is a means of survival. I’m sure no one imagined the “rainy day” they were saving for would be the economic repercussions of a global pandemic, but here we are.

Slashing expenses, saving more

We all arguably have less to spend money on these days. Going out to eat and drink? Travel? Shows and events? Not so much. It’s possible our wallets might be feeling a bit flush (especially if you’re still employed). As a result, many Americans are putting this new extra cash into their savings. Re-fluffing your financial cushions is a smart move, no doubt about it.

Putting life on hold

Did you want to move to New York City last spring before all hell broke loose? Did you want to buy a house or go back to school? You’re not alone. With all the financial insecurity that COVID-19 has brought on, it’s no wonder why many Americans are putting their dreams on hold.

Paying off debts

Similar to stock-piling cash for saving, many Americans are taking this time to pay off debts they have, weather that be a mortgage, students loans or something else. Smart move, I must say.

Looking to buy a home

Have you saved so much during the pandemic that you actually have enough to make a down payment on a house? Good for you!

It’s also important to note here that this trend also applies to those who participated in the mass flights from major cities to the ‘burbs – why live in a tiny, cramped apartment during a pandemic when you could buy a spacious home 30 miles away?

‘Comfort shopping’

Ain’t nothing wrong with a little retail therapy. If you’re using your end-of-the-month surplus on fun items for you, your home or others, I totally get it. Chase that serotonin rush – times are hard out here!

All that aside, as a consumer, I find market trends and marketing techniques during COVID so interesting. Absolutely no shade if you end up buying that $80 face cream because #selfcare (I’ve been there), but I have a fun time dissecting the ways in which digital marketers are extorting the current moment for financial gain. Think about it the next time you’re about to buy something you 100% would not have in a pandemic-less world.

Donating more than ever

On the other side of the spectrum, many Americans who have a little extra to spend right now are helping out their communities and other funds by donating to them. Whether it be mutual aid funds that provide meals to members of the community who need it right now, or to national funds that support disenfranchised or marginalized groups hit hardest by the pandemic, Americans are donating more than ever – especially with their stimulus checks!

It’s always interesting to see how large-scale events impact micro-economies, such as individual American households. The discrepancy between those who are working and those who are not plays a crucial role in dissecting spending habits but have less to do with the overall picture than one might think.

It will be interesting to see if COVID-induced spending habits will just be a fad for these dire times, or if they will continue after a vaccine is widely distributed. It seems only time will tell.

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Business Finance

Will China’s new digital currency really compete with the US Dollar?

(BUSINESS FINANCE) It isn’t the first time that China has tried to compete with the dollar, but the release of a digital currency has lead some economists to raise red flags.

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Man holding phone in one hand and credit card in other hand, handling digital currency.

For decades the US has been the world standard for foreign trade. As of 2019, 88% of all trades were being backed by that almighty dollar, making it the backbone of the world economy. However, China may be sneaking in something new for digital currency. 

In the last few months, over 100k people were “airdropped” cold hard digital currency. This currency came from People’s Bank of China (PBOC), who has created a digital manifestation of the Chinese yuan. This is planned to run concurrently with its paper and coin playmates. Upon initial inspection, they resemble the same structure as Bitcoin and Ethereum. But there’s a major difference here: The Chinese government is the one fronting the money.

The suspected plan behind this is that the government plans to tightly control the value of the digital yuan, which they are known to do with the paper one as well. This would create a unique item within the world of cryptocurrency. Personally, I don’t think that any of this is going to go anywhere soon. Too many people still need hard currency but it does open up a unique aspect of currency that has only just started since debit and credit cards. It gives the government the ability to spy on its cryptocurrency users. Being able to monitor transaction flows can reveal things like tax evasion and spending habits. There is even the possibility of experimenting with expiring cash.

But how does this affect the US? There’s a method that has been used by Americans since WWII called dollar weaponization.  The exchange domination allows the US government to monitor how the dollars move across the border. Along with that monitoring they are actually able to freeze people out of global financial products as well. It’s a phenomenal amount of power to hold. 

The concern for economists is that the price fixing capabilities of this new currency as well as its backer being an entire countries government could affect everything about the global financial system. Only time will tell how true that turns out to be.

There are a number of possibilities that could come up honestly and they could fall flat on their face unless they put their entire monetary worth behind it. Only time will tell but some economists are already calling for DigiDollars from the American government. Another step into the future.

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