What Happens If We Increase The Minimum Wage?

The recent dispute in Congress that the United States federal government should raise the minimum wage, which stands at $7.25 an hour and has not been raised since July 24, 2009 — during President Obama’s first term in office when the Democratic Party still had power in all branches of government. It’s worth noting that the vast majority of developed nations have implemented a minimum wage in some form, and most of those countries have implemented a higher minimum wage than the United States.

These countries include Australia, France, Germany, New Zealand, Netherlands, Belgium, the United Kingdom, Canada, Ireland, Korea, Spain, and Slovenia. Those with lower minimum wages include Poland, Israel, Turkey, Lithuania, Portugal, the Czech Republic, Greece, Hungary, Estonia, Latvia, Costa Rica, Slovak Republic, Chile, Colombia, the Russian Federation, Brazil, and Mexico.

It’s also worth noting that many service professions allow employers to pay less than minimum wage when they expect employees will be tipped to make the difference (legally the employer has to make up the difference if they are not). Any waiter pay graphic will showcase that many of these professions utilize a “tipping pool” to allow employers to reallocate another person’s pay to a person with a job that isn’t normally tipped — thereby allowing the employer to pay the second person less than minimum wage as well.

Economists have a fairly well-rounded understanding of what happens when the minimum wage is increased, which means people are free to form their own opinions of whether or not raising it is a good idea for a particular society.

For example, many people will argue against the minimum wage because raising it means that the cost of living will go up as well. What they rarely say is that the cost of living will go up even if you do not raise the minimum wage. Other impacts are easily defined: many workers would be lifted from poverty levels or not have to work more than one job, while others would find it more difficult to find work in the first place. Raising the minimum wage seems to be a balancing act, if nothing else, and our legislators have yet to get the balance just right.

Other opponents of raising the minimum wage believe that it will lead to inflation or make American companies less competitive here at home and in international markets. Job losses, they say, would result.

According to a report released by the Congressional Budget Office (CBO) in 2019, the standard of living would be raised for approximately 17 million people if the wages were raised to at least $15 an hour by 2025. Over a million of these people would be scooped up from poverty. Another benefit would be the reduced entitlement benefits required to be doled out by the United States government. Productivity might also rise with the wages, as workers are more likely to be happy and relaxed. Less stress experienced by employees has always translated well for businesses.

Illinois Leaders Struggle To Determine Who’s At The Top Of The Economic Food Chain

Here’s an unsettling fact: the world economy becomes stronger as more people reside below the poverty level. Sounds like nonsense, right? Remember that capitalism is a young system — and a broken one, many would argue — and that we have yet to fully understand how to run it to the benefit of all. That’s why the growing wealth income disparities exist. But why is our economy stronger when the majority of people are poor?

It’s simple. A strong economy requires two things: production and consumption, and preferably in nearly equal parts. The workers produce, they are paid for that labor, and then they buy what other workers produce. It’s a cycle. But the cycle doesn’t work well when laborers produce, are paid, and then don’t consume (i.e. make purchases). That’s why a strong economy can’t sustain itself without the poor — because the poor are much more likely to spend every cent they earn.

The middle class and ultra-rich, though? They don’t spend. They save more than they earn, taking money out of the cycle and preventing the economy from becoming more robust. If that system sounds less than ideal, well, that’s capitalism. Take it or leave it.

Many of our legislative bodies have yet to figure out who resides at the top of the food chain: is it the individuals who produce and consume the most, or is it the ultra-rich business owners who provide some jobs for those who produce and consume the most?

Pat Devaney is secretary treasurer for the Illinois AFL-CIO. He said, “I would suggest that our experiences, observations and frustration caused by the inadequate investment in IDES should be an illustration on why we should invest in our state agencies.”

This comes as Democrats and Republicans argue over whether to implement fail-safe measures to help either individuals or organizations. Neither party seems willing to do both — even though compromise might be the most beneficial thing for the economy.

How Does Divorce Impact The Economy — And How Should Economic Law Reflect This?

There have been about a bajillion studies done on divorce and its relationship with our economy. Is divorce a good thing? Is it a bad thing? Economically speaking, it depends on who you ask. But it seems difficult to argue with the ethics for divorce. Women experience suicide at a far lower rate ever since Reagan’s policy of “no-fault” divorce spread from California to other states.

Knowing you want a divorce is one thing — but following through with it is another. Many people find saying the words “I want a divorce” to a partner to be one of the hardest things they have ever had to do. But hiding it can cause even more friction in a deteriorating relationship. What’s healthiest for each individual involved in the crossfire? Interestingly, it’s usually the same thing that is best for the economy. 

That means that divorce is often the best possible outcome for all parties — both foreign and domestic, if you will. Humans are notorious for retaining more energy and proving more productive when they are healthy and happy. Add stress, remove certain components of a healthy relationship, or strip away the ability of a person to remain content in life, and you almost always ensure that they slow down. That means that one person’s bad relationship can extend outward to affect many other aspects of society — including the overall economy.

Part of the reason couples actually stay in marriage is a bad economy. Those who are having trouble financially are much less likely to add to their woes by even considering divorce, much less following through with one. When the economy bounces back, though, couples tend to split apart. This was readily apparent after the economic recession of 2008. By 2012, couples were divorcing at a much higher rate. Economists rejoiced! 

Other economists actually propose that divorces might create the conditions necessary for an economic recovery! This is in part due to the fact that more singles means more real estate being scooped up. Add to that the fact that divorced singles are much more likely to hold jobs, and you can see why economists might believe remaining apart is the best thing for our economy.

Of course, not everyone agrees. According to a convenient — and we’re sure not biased — study published by the Marriage and Religion Research Institute, marriage is important not just to a society’s ability to remain, well, a society, but also to its ability to maintain a healthy economy. Interestingly, the study determined that the reason that divorce adversely affects the economy is the increase in the number of households because that means a greater need for housing, power, and resources. 

Of course, that doesn’t seem to make sense. The economy is driven by our output, or how much we produce. Before that matters, though, you have to add consumption to the equation. Using more power means a company is making more money. Buying another home means someone is making more money. The more money we spend, the more money other people make, and then they spend more too. That’s how the economy actually works.

What Is Philadelphia’s “Black Workers Matter” Economic Recovery Package

Sadly, anything titled “Black Workers Matter” was destined for a controversial reception. That was a bill recently passed by the Philadelphia City Council to make sure that many minority workers will still have the jobs from which they were laid off when the coronavirus pandemic first started. The bill should provide almost guaranteed employment for about 12,000 people in the hospitality sector. 

The package was first introduced by Councilmembers Helen Gym, Kenyatta Johnson and Isaiah Thomas. 

The package includes protections for workers who might otherwise be replaced by temporary contractors and also for workers whose place of employment was sold. 

The council members acknowledged that the hospitality industry was very hard hit by COVID-19, and continues to suffer. Employment has collapsed by about 38 percent since the onset of the pandemic. The bill acknowledges that this impact disproportionately affected African American workers — who represent a majority of the tourism workforce. 

Helen Gym said, “Today, City Council sent a message that we will not only support the tourism industry — we will protect the jobs of the workers who built it and will rebuild it as the economy reopens. The bill protects our City’s public health by ensuring the industry is staffed by the most experienced workers. For too long, studies have found Black workers are the first to be laid-off and the last to be rehired after an economic downturn. We will not stand for that in our city. Instead, we are building a recovery led by workers, prioritizing the needs of their families and communities.”

The legislation comes as lawmakers in towns and cities are struggling to adopt measures to reduce the impact of the coronavirus pandemic that has led to a widespread economic downturn. 

Thomas said, “This pandemic has hurt our local and national economy with many industries looking at months if not years of financial hardship — the hospitality industry being one of the most economically impacted sectors.”

The Economics Of Human Trafficking Are Staggering

According to the Department of Homeland Security (DHS), human trafficking is defined as “the use of force, fraud, or coercion to obtain some type of labor or commercial sex act.” When we think of human trafficking, we usually think of young kids and women who are forced into this type of life — whether by kidnapping or an alternate means of pressure or financial stress. But we rarely consider what human trafficking costs us all every day.

Human trafficking has hidden fees. These cost us our security, economic growth, and innocence. Even though the concept of trafficking is receiving more widespread attention, there are still around 25 million individuals trafficked globally each year. Those who would use humans to advance their own financial interests make an estimated combined $32 to $150 billion every year.

Author of Illicit Moises Naim said, “Throughout the twentieth century, to the extent that governments paid attention to illicit trade at all, they framed it — to their public, and to themselves — as the work of criminal organizations…Only recently has this mindset began to shift.”

Big American sexual abuse law firms like Paul Mones struggle to ascertain the reasons why their case loads are on the rise even as international authorities clamp down on these heinous acts.

One of the reasons that trafficking costs world economies so much is because the trafficked individuals do not produce wages or salaries. That loss is likely undersold by authorities. A Department of State Trafficking in Persons Report suggests that the loss amounts to about $325 billion per year, which is notably even higher than the estimated gains made by those who perpetrate this type of crime.

The impact on economies that rely on tourism is massive. Countries like the Dominican Republic, Haiti, Moldova, the Philippines, and Zimbabwe rely on money from overseas to stay afloat. 

Another hidden cost is covered by the healthcare, which must help reduce the impact of the years of trauma inflicted upon these exploited individuals. 

According to the Council on Foreign Relations, “Exploring the ways in which human trafficking enables terrorist and armed groups, finances criminal organizations, and supports abusive regimes…[could undermine] our collective security.”

The paper continues to state that “analyzing how the COVID-19 pandemic has amplified economic instability worldwide and increased risks of human trafficking and forced labor” is important to understand how authorities and citizens themselves can protect the exploited. COVID-19 has presented a golden opportunity for traffickers through this instability.

Myths about human trafficking include: It only occurs in third-world countries or outside of the United States; it only occurs to those who live in poverty; sex trafficking is the same thing as human trafficking; victims must be forced/coerced; human smuggling is the same thing as human trafficking; victims always seek help when able. 

In order to fully understand human trafficking and all its implications, we must first ascertain why these misconceptions are false — and then work to educate those who still do not understand or strive to remain ignorant.

Should Undocumented Immigrants In The United States Be Allowed Driving Cards?

A routinely provided conservative argument is that undocumented immigrants (often frowned upon as “illegal immigrants,” a derrogatory, slanderous phrase), funnel cash away from our economy. They use our socialized benefits. Of course, another oft-repeated argument is that they take our jobs. How they can simultaneously use up our benefits and take our jobs is a confusing (and untrue) topic for another day. 

In any case, the state of Indiana is considering providing undocumented immigrants with the ability to retain a “driving card” after the Notre Dame Student Policy Network published a “Driving Card Privilege Project” study. The study provided insight into the possibility that driving cards for undocumented immigrants might improve many aspects of life, including: a reduced incident rate of hit-and-run accidents, improved law enforcement, increased state revenue, and increased revenue for car insurance companies.

Senate Bill 319 was presented last session, but the GOP decided not to move forward or pass the law.

The study says: “Indian’as current policy does not keep undocumented immigrants off the roads — but it does ensure that every time an immigrant drives in Indiana, they risk a citation for driving without a license and a string of legal consequences that could culminate in deportation. The current policy not only imposes significant costs on undocumented immigrants but by preventing drivers from being certified and purchasing insurance, it produces significant welfare and economic costs for all residents.”

Imagine you were in an accident with an undocumented individual (or rather, anyone who was unable to obtain insurance to cover an accident’s costs). The person runs because to do anything else would put them on the path to financial ruin. The police launch an investigation. Your insurance will only cover certain costs, but you have no one to sue. 

These are only a few of the hidden costs that add up when some residents are treated as if they don’t belong.

Climate And Economy At Forefront Of Concern Over Indian Farm Laws

India and China are known to be two of the world’s greatest polluters — and certainly, American companies and politicians usually point to two of the world’s most populated countries when arguing over whether climate regulations are relevant to American interests. There’s one big problem inherent in those arguments: India, for example, uses about one-sixth of the energy per person as the average American. It’s comparing apples and oranges. 

The same applies to China, which is leading the world in creating new renewable energy infrastructure. It doesn’t seem to make much sense to place blame there.

Still, there are mounting concerns over climate and economy when looking at Indian farm laws. The laws are notorious for providing farmers with freedom of choice. The decision of where their crops are sold and to whom is theirs alone. Protests against the laws have been framed amidst western conspiracy theories, which seems like an easy argument to make — we’re known for them. Social media regulations toward the end-of-Trump era seem to make them even easier. 

The problem is farming is such an important part of the Indian economy — and a huge drain on the local environments. The goal for protesters is to ensure that farmers produce fewer cattle and less rice. Both of these results would be wonderful for the environment, but terrible for the Indian economy. So far, compromises aimed at reconciling the conflicts have proved difficult to achieve.

Big American firms like Hale & Monico have shown an interest in approaching litigation built on cases of personal injury due to unhealthy environmental practices. That appetite is spreading to law firms in other countries like India.

And few other solutions have presented themselves thus far. The agriculture that has sustained India for decades is built on subsidy, which is no longer a strategically tenable choice for government agencies to implement. The debt created by these programs is extraordinary, and even blamed for a string of suicides among the agricultural community. Notably, the farmers are using too much groundwater and relying heavily on fossil fuels to power farms. Without change, it’s difficult to see a positive outcome for farmers.

Even worse, desertification has become a huge issue all over the world. This is readily apparent in local regions like Punjab and Haryana, where desertification due to over-farming is a big problem.

Farmers must transition to less damaging crops, but have shown little motivation to do so — especially by the new farming laws providing them the option to basically ignore climate and environmental impacts. India is struggling to create employment in other sectors of the economy, which is part of the reason farmers continue to defend a broken system. The economy will not grow without change. It will stagnate instead.

The government — and foreign entities, certainly — must research new methods to incentivize farmers or move them away from traditional economic outcomes. So far, there has been too little dialogue to effect these changes. 

Democrats And Republics Still Fighting Over COVID Litigation Regulation

One of the major sticking points for COVID-19 relief packages passed by the U.S. Senate was whether or not they implemented protections for businesses designed to reduce litigation related to COVID-19. Generally, Democrats prefer to focus on individual protections (which means allowing litigation) and Republicans prefer to focus on business protections (which means reducing litigation). These considerations have yet to be resolved, but some state governments are taking the fight to their own legislative bodies. 

For example, Alabama Governor Kay Ivey signed into law “Act Number 2021-4” in order to address litigation concerns on February 12, 2021. 

There were actually three separate bills aimed at limited economic impacts, most of which protected businesses. The new laws aim to provide protections to businesses, schools, healthcare providers, governments, and those who work at these institutions. The recently passed laws purport to “[provide] a safe harbor to businesses that operate reasonably consistent with applicable public health guidance” to reduce “social harms of a closed economy and the resulting unemployment.” 

Alabama was not the first to enact such legislation, though. Other states with primarily conservative legislatures enacted similar laws. These include: Arkansas, Florida, Georgia, Idaho, Louisiana, Michigan, Mississippi, Nevada, Kansas, North Carolina, Ohio, Oklahoma, Wyoming, and Utah.

The laws seek to limit, but not eliminate, consumer access to claims made against businesses. Those wishing to file a personal injury lawsuit because of COVID-19 should not be dissuaded from consulting with a lawyer. The “good faith” laws do more to limit frivolous or overreaching lawsuits. Employers who completely subvert legally mandated practices are still liable in civil court.

The laws provide the basis under which a plaintiff must prove beyond reasonable doubt that a business entity helped spread COVID due to intentional acts or wanton disregard for safety procedures under local and state laws. Many governments have also placed damage limitations on these types of lawsuits.

Should You File Bankruptcy Amidst COVID-19?

It’s a difficult question to ask oneself anytime, but the stress of the pandemic has made answering it even more difficult. No one wants to lose their job, close their business, or run out of money because of an unforeseen problem. But it happens to millions of Americans every year. The stigma of doing so rarely changes the outcome. Here’s why you might or might not consider filing bankruptcy amidst COVID-19.

Last year’s CARES Act allowed many businesses to hold off declaring bankruptcy for months. By the time the next stimulus arrived, it was too late for thousands of others. Even big retailers began to feel the impact of economic decline.

When answering the question for yourself (and each individual case is different), it’s worth asking a follow-up question: Would a Chapter 7 or Chapter 13 bankruptcy change the outcome? For most people who are out of work or on unemployment payments, the answer is likely “no.” One of the biggest factors is time. Once you file for Chapter 7 bankruptcy, you cannot file again for eight years. That means dropping the hammer could reduce the debt relief options at your disposal for a long time — and you might need those if the economy continues to struggle. None of us knows what will happen.

Keep in mind that the pandemic is not over. If you don’t have health insurance and become seriously ill, the medical bills could be astronomical. It might be more beneficial to wait to file bankruptcy if the possibility of additional debt is possible in the near-future. Filing for bankruptcy won’t give you a job or guarantee that you’ll be able to make ends meet. It will only guarantee that your ability to get out of hot water is limited in the future. 

What two things should you do immediately before deciding whether or not bankruptcy is the right move right now? You should talk to a financial consultant and bankruptcy lawyer immediately. Both professionals can help steer you in the right direction by limiting payments right now or cutting needless expenditures. Don’t make a decision without consulting with the professionals who are best-versed in the long-term consequences of these types of decisions.

When deciding that filing is the right course of action, you should find out if you even qualify. Chapter 7 bankruptcy is only for those who are in exigent circumstances, i.e. there’s no way for you to possibly pay off your debt while making ends meet.

You will receive a “means test” to determine whether or not you qualify. It’s based on six months of income — which unfortunately means that even when you’re making nothing, you might not qualify yet because you were making tons of money two months ago. Tough luck, right? Be sure that your claim is almost certain to be accepted before spending money on a filing fee. You don’t want a bankruptcy filing on record if it won’t do anything for you.

It’s also important to discuss the impact of bankruptcy on your assets — because you stand to lose quite a lot.

Lawmakers Try To Reconcile Higher Taxes With Economic Relief

To say that the world is experiencing a tumultuous series of events is an enormous understatement. Our people — for the most part — know that we need to act fast to spare ourselves from the harshest consequences of man-made climate change, which will cause environmental and economic devastation in the long-term. But amidst the COVID-19 crisis, we already need economic relief. How do we pay for relief without sacrificing the need for change? 

It’s a tough equation even for the experts.

Virginia legislators are slated to pass legislation that would have an adverse effect on insurance costs at a time when many families are already struggling to find work. Senate Bills 1182, 1195, and 1202 would revise current laws relating to financial responsibility. They would implement “bad faith actions for auto claims.” They would amend the need for underinsured or uninsured coverage. For example, bodily injury coverage required would be doubled to $100,000. Those requirements would inevitably be reflected in costs.

Those against the changes argue that they will lead to more court cases, increased costs, and the need for more legislation in the future.

In addition, advocates for the legislation have allowed little room for debate and ignored inquiries into the necessity of these additions. Nancy Egan wrote in The Roanoke Times: “There has been no consumer outcry to make changes to existing auto insurance law and there is no urgent need to pass reforms, so why now?”

She continued: “The COVID pandemic continues to ravage people’s lives and livelihoods. The Biden Administration has made it a priority to provide relief to Americans during these challenging times. Virginia lawmakers should do the same and protect individuals, families and businesses from increasing auto insurance costs by voting no on SBs 1182, 1202 and 1195.” 

It’s still too early to know what will happen, but we expect that lawmakers will enact the new legislation.