Economic Policy

Brief # 117 – Economic Policy
By Rosalind Gottfried

Inflation occurs when the value of money decreases, largely due to increases in prices which are not matched by rises in income. With the vaccine rollout, people are emerging from their pandemic cocoons and demands for goods and services are surging. High demand, coupled with reduced supplies, is causing prices to rise.

Brief # 120 – Economic Policy
By Patrick Dwire

As restaurants, hotels and entertainment venues begin to open up in California as the state officially re-opens with virtually no Covid restrictions, many of these employers are having trouble finding workers. Low-income workers are getting blamed for not jumping at these job openings, which seems to lead many Republican policy makers immediately to the conclusion that unemployment benefits must be too generous.

Brief # 119 – Economics Policy
By Lily Cook

After an initial review from the Oversight Board, Facebook finally announced the company’s decision on the fate of former president Donald Trump’s account. In a blog post, the Facebook Vice President of Global Affairs Nick Clegg responded to the Oversight Board’s charge that the company’s initial decision of an indefinite punishment was ‘not appropriate’ by announcing that Trump’s ban would be in effect for 2 years starting from January 7th.

Brief #117—Economics
By Lily Lady Cook
President Biden’s $2 trillion American Jobs Plan (AJP) will allot about $400 billion towards the caregiving workforce. In particular, funds will be allocated towards home health care workers, who provide services that run the gamut from short-term nursing care to longer-term daily visits. Many home health care workers are women, immigrants, or people of color. About 40% are on SNAP or Medicaid; their median hourly wage in 2020 was $13 with an average annual salary of $27,080.

Brief #116—Economics
By Rosalind Gottfried
The April reports showed that unemployment was 6.1%, up from 6% the previous month.  There were 266,000 new jobs; a figure that fell short of the anticipated one million new jobs.  This was on top of revised job estimates for March, which were down to 770,000 from earlier estimate of 916,000.  The portion of the labor force teleworking went down from 21% in March to 18.3% for April. Unemployment went up among black workers; at 9.7% they were the only group to undergo an increase in unemployment.  White unemployment was at 5.3%, indicating the duality of the job market on the basis of race.  Women dropped out of the labor force, bending to the pressures of home and child care, with 165,000 leaving the workforce. 

Brief #115—Economics
By Lily Lady Cook
U.S. Secretary of Labor Marty Walsh told Reuters in an exclusive interview at the end of April that he supports reclassifying certain gig workers as employees. In 2017, approximately 34% of the workforce in the US were independent contractors, and even more supplement their income with freelance work. These types of jobs can allow for greater flexibility and independence with regards to hours and variety of work. Yet the tradeoffs can be disproportionate: there’s often less job security, no employee-provided health or retirement benefits, and more expensive taxes.

Brief #114—Economics
By Rosalind Gottfried
Americans owe 1.7 trillion dollars in student debt.  This figure represents an increase of 102% from 2010.  The issue is seen by many as one of racial and economic equity.  This is because the greatest portion of student debt accrues to lower and middle income students and to students who are Latinx , African American and/or women.  Twenty five percent of African Americans and twenty percent of Hispanic Americans are behind in their debt payments.  Students of color are also more likely than other bearers of student loans to have left school without a degree or to have jobs where their pay is not commensurate with the average college graduate’s pay scale. 

President Biden’s recent corona virus relief bill provided for a moratorium on loan payments until September 30, 2021 and exempted them from accruing interest during that time period.   He has also exempted debt forgiveness or cancellation from being taxed.  At the same time, a recent US Court of Appeals ruling has made it more difficult to excuse student loans if a person declares bankruptcy.  This would not impact a one-time loan cancellation but applies to people making payments on existing loans which would not be canceled under a new guideline.

Brief #113—Economics
By Rosalind Gottfried
Biden is proposing an ambitious two part tax plan to expand the American economy.  The cost will be 2.3 trillion dollars and it will make America more competitive, create jobs, re-establish the infrastructure and help Americans’ quality and standard of living. Biden’s plan is in direct opposition to the prior administration’s massive budget cuts of 2017; that plan benefited only the wealthy and failed to produce promised increases in business investments.  The Trump administration cut corporate taxes to 21%, down from 35%.  Biden will increase them to 28%.  In 2020 the fortune 500 companies paid 11.3% in income taxes and many companies paid nothing; for example, Amazon, Chevron, IBM, and Halliburton.  In addition to raising the corporate tax level the plan will stop multinational corporations from avoiding taxes on overseas profits, instead treating them as if they were domestic income.  It will establish an effective minimum tax on foreign investment.  A large part of this increase will fall to “foreigners” who comprise 40% of shareholders.  This will fund phase one of the program which will focus on infrastructure development in highways; mass transit; broadband access; support for electric vehicles; and veteran hospitals.  It will also address research and development to fund home healthcare for the elderly and the disabled, an expenditure that can be reduced significantly by keeping people at home rather than institutions.

Brief #112—Economics
By Rosalind Gottfried
Biden’s 1.9 trillion dollar American Rescue Plan is viewed as adding to the already ballooning federal deficit.  Certainly the pandemic has added to that burden but the structural issues go much deeper than the necessary expenditures to address the desperate economic  situation which befell many Americans.  The deficit is expected to reach 35 trillion dollars by the end of the 2021 fiscal year; it stood at 28 trillion prior to the latest stimulus.  In the first five months of the fiscal year the deficit was 68% greater than for the same time in the previous year.

Brief #111—Economic
By Rosalind Gottfried
President Biden’s 1.9 trillion dollar American Rescue Plan contains the most comprehensive anti-poverty program since President Johnson’s War on Poverty in the 1960s.  The program will reduce overall poverty by one third and child poverty by one half.  Poverty is expected to be reduced to 8.7% for the year compared with 13.7% previously.  The effect on Black and Hispanic families will be even greater bringing 38% of Black families and 43% of Hispanic families out of poverty while affecting more than one half of the children in these demographics.  This wide ranging program attacks poverty from multiple sources though it contains one time payments and policies which will expire at the end of 2021; nothing in the program extends into 2022 at this time.