White-collar job cuts are increasing.

The pandemic severely affected low-income jobs in mainstream industries such as hotels, restaurants, and retail however now we are noticing a similar trend spreading in high-income jobs. When corporate level layoffs increase it’s a pure indicator of the economic impact of a recession and tells us that there is a traditional recession happening beneath the surface of this public health crisis. The white-collar job cuts are increasing as we move further in this pandemic. Big insurance company Allstate announced that it would layoff about 3800 workers. ExxonMobil plans to layoff 1900 workers, mainly at the headquarters in Houston. Raytheon a major defense contractor plans to layoff 5000 workers, mostly corporate employees, and contract engineers. Similarly, people working with state and local governments are also at risk because of the reduced budgets. 

Economists argue that this is a secondary impact of the pandemic which will slow down the recovery process as layoffs ripple across different industries. Generally, in recessions, higher-wage workers are better off since they have stable jobs and savings. However, increasing layoffs in the white-collar sector during a recession can be very impactful because they spend the most. Are we moving towards a white-collar recession?

Money-Printing Slowdown Leaves Governments to Take Up Stimulus Slack

 As many of the world's largest central banks have reduced the frequency at which they are printing monies, government entities are taking the decision to increase their spending. Governments are working to prevent and minimize the havoc that would stem from the possibility of another shutdown. As European countries begin entering their second wave of shutdowns, and the United States prepares for its heavily anticipated presidential election, even small changes to economic policy is leaving economists, politicians and the alike in states of angst considering current social and political climates; hence the current trend of wanting to balance the money-printing slowdown with other fiscal stimuli. The Bank of China is said to have determined that they have sufficiently provided fiscal assistance and shows little signs of a willingness to do more. The European Central Bank, People's Bank of China and the Bank of England are said to be following a similar trend. This also includes the US Federal Reserve.

Europe's biggest asset manager is cited as saying that this slowdown will be a cause for concern for months to come and that it "may cause a sort of taper tantrum in markets and a possible re-pricing of inflation expectations." As a precaution, IMF experts are urging governments to “ensure fiscal support is not withdrawn too rapidly.”

For Retailers, a Halloween Shock: It’s Actually Happening

Sales of Halloween costumes and decorations have been stronger than what was expected with the pandemic. People are seeing this day as the last day for the kids to have fun outdoors before winter hits. “While Mr. Berman, like many other business owners, has welcomed the volume of Halloween sales given the uncertainty of the moment, he noted that before the pandemic, 2020 was poised to be a bonanza for the holiday and party industry.” Some business owners are saying people are dressing up and decorating the house much more leading to more sales than ever before in the history of their stores. “The National Retail Federation, an industry group, expected Halloween consumer spending to hit about $8 billion this year, a decline from $8.8 billion last year, as a result of fewer Halloween parties and haunted house visits and less trick-or-treating. But enthusiasm around costumes and decorations has persisted.” Halloween sales are higher than anyone could have ever expected, but It is nice to see strong sales considering this crazy year. 

Do you think that Halloween fun will get too chaotic and we will see a rapid increase in cases to come? Do you think a significant increase in cases will lead to a shutdown like in France? Increased sales will help our economy now, but do you see it coming back on us with a shutdown?

Maheshwari, Sapna, and Gillian Friedman. “Get Your Hand Sanitizer Costume. Halloween Is Still Happening.” The New York Times, The New York Times, 29 Oct. 2020, www.nytimes.com/2020/10/29/business/halloween-costumes-decorations-sales.html.

Jobless claim lower than expected

 The number of first-unemployment-benefit filers fell to the lowest level in the pandemic as it declined for a second straight week. The jobless claims came in at 751,000 which was down 40,000 from the last week. The initial speculated jobless claims for the week was presumed to be 778,000. This comes on the brink of  a ride in COVID infections as the assumed blowback would an increased in the jobless claims. To further on this trend the continuing jobless claims dropped 709,000 to 7.75 million. All of this data comes as law makers continue to delay the next round of stimulus for the economy. Maybe the election will have an impact on what is going to happen? 

 https://www.cnbc.com/2020/10/29/weekly-jobless-claims.html

Covid-19 Explodes the Myth That Women ‘Opt’ Out

 In August and September, more than a million people dropped out of the workforce. Eighty percent of them were women. Women have been losing jobs at a rate far higher than that of men throughout this recession, figures that can’t be entirely explained by industry effects. And it might get worse. One in 4 employed women (1 in 3 mothers) are considering quitting or dialing back at work, according to McKinsey — the first time in six years of research that they’ve found any difference in men’s and women’s interest in quitting.

The “Opt out myth” is the assumption that one reason, maybe even the main reason, you don’t see more women leading organizations or governments is that so many women “choose” to stay home. In reality, the number of women who give up their careers is small, and the choice is almost never truly a free one.

However, women do not “opt out” of the workforce, but now they are being forced to because of Covid-19. They are struggling to find caregivers while daycares, schools and home caregivers are not available during this time. So, are women still considered the person who should not work and stay home to take care of the house and kids? And will this get worse from now on with Covid-19?

https://www.bloomberg.com/amp/opinion/articles/2020-10-20/covid-19-explodes-the-myth-that-women-opt-out-of-the-workforce

The Future of Pennsylvania's Energy Sector

    During the campaign's of both President Donald Trump and Vice President Joe Biden, the energy industry, specifically fracking in states such as Pennsylvania have been a major area of contention. Donald Trump has claimed that Joe Biden will destroy the energy industry, banning fracking in Pennsylvania and pushing towards only renewable energy. The issue here is that in Western Pennsylvania, fracking makes up a large portion of the job market. Many in the industry compared it to the steel industry in the 19th and 20th centuries, everyone knew someone who worked in it. 

    Biden's plan is one in which new fracking will be limited, and a push for increased jobs in wind and solar energy. Those who agree with his principles argue that thousands of similar paying jobs to that of the fracking industry will open up. These will range from jobs requiring a high school diploma, to some upper level jobs requiring masters or bachelors degrees. Jim Spencer, a businessman who manages wind and solar farms in the area, predicts that they future will hold fracking alongside an increase in renewables. He recognizes the large scale employment that comes with building and managing the renewable farms. On the other hand though he thinks that for when the sun is not shining or the wind not blowing, natural gas can keep things running. Spencer is more so of the mindset that coal will be phased out, as both other options are cheaper.

    Trump and many of his Republican supporters are fearful of Biden's plan with the fracking industry. They are unsure whether to trust him and the Democrats, as they believe their policies will greatly reduce the scale of fracking. That means less jobs for them, lower wages, and a reason for mass exodus from the region. To them, the fracking industry has provided opportunity in a rural and otherwise unprosperous place. In the end it seems many Pennsylvanians are hedging their bets that there will be some sort of combination of renewables and fracking, regardless of the candidate.

https://www.wsj.com/articles/in-battleground-pennsylvania-fracking-and-renewables-compete-to-be-the-future-of-energy-11603979272

GDP Increases during Q3

 The US saw a increase in Gross Domestic Product of 33.1% during the third quarter. This comes after GDP decreased by 31.4% during quarter two. The gains are attributed to increased consumer spending, which increased by 1.4%, strong gains with business, residential investment increased, and increased exports. The gains in these areas come as states were able to ease up on the lockdown guidelines, allowing citizens return back to some normality. 

As strong as the GDP report was, there are still concerning figures that will likely inhibit economic performance in the next quarter. Since March there have been $22 million jobs lost, of which only half have been recovered. This leaves unemployment at 7.9%, a rate more than double its pre-pandemic level. Without the passage of another stimulus package, and a forecasted insurgence of COVID cases during the winter, it is unlikely to have the continued success that was seen in quarter 3. 

https://www.cnbc.com/2020/10/29/us-gdp-report-third-quarter-2020.html

U.S. consumer spending beats expectations in September

 According to a report from CNBC consumer spending increased by 1.4% in the month of September. Previously, in the month of August we saw an increase of consumer spending of 1%. These numbers were promising since consumer spending accounts for two thirds of economic activity. However, as COVID cases are beginning to surge again there is a high possibility of consumer spending decreasing in the fourth quarter. Personal income increase by 0.9% which exceeded the 0.4% expected increase. Due to everything going on I think consumer confidence will fall and as a result consumer spending will also fall in the following quarter.

U.S. Economy days before an election

On Tuesday, November 3rd either Donald Trump or Joe Biden will be elected for president of the United States. And the current state of the economy has been a contentious point for both candidates. Trump has been quoted as saying "we are rounding the corner" with this virus while Biden argues that the economy is struggling greatly. 

The truth; however, may be somewhere in the middle. Trump is correct when he boasts our 3rd quarter economic growth of over 33% which is a phenomenal figure in a vacuum. Though this can be heavily offset by the 31% decline we saw in the 2nd quarter.

Additionally, our economy has contracted 3.5% as a whole when compared to 2019. I believe it is unfair to blame Donald Trump entirely for the current state of the economy. There was so much uncertainty and panic during the first lockdown which could have affected these percentages. Still the entire U.S. government--not solely Trump--should share the blame. Our COVID response has been relatively weak when compared to other countries, and lawmakers from each side have used this as a political tool to siphon votes. It would be interesting to see how seriously politicians may have taken this virus if we were not in an election year.

 Many argue that we should not be "reopening" business at the moment and should take any means to control the transmission of coronavirus. It has become apparent that a shutdown is largely unpopular with voters, effectively ruling that out as an option. If our current economy is doing as poorly as it was in the 2nd quarter; this would almost guarantee a defeat for Trump.

Ultimately, the outcome of the election will be great news to some and horrible news to others. Our biggest concern should be working together to help the citizens. But I am afraid that the politicians from the losing party will do anything to ensure the failure of the president elect. Regardless if it is Trump or Biden.

https://www.marketwatch.com/story/heres-where-the-economy-stands-as-the-us-chooses-between-trump-and-biden-2020-10-31

Fed lowers minimum loan level for small business lending program

 In efforts to continue to help small and medium businesses get through the pandemic,  the Federal Reserve is reducing the minimum loan size down to $100,000 from $250,000. Along with this they have also decided to ease restrictions on companies that are participating in the Paycheck Protection Program. These decisions were in response to the growing concerns of an economic slow down in the winter due to both COVID and the current stalemate on future stimulus checks. 

As cases continue to grow around the world there has also been many talks of future possible shutdown in a number of countries. I think that by making these loans more accessible to these small business it could possibly help them survive another shutdown. 

Airlines will struggle long after passengers feel safe to fly again

 The current financial issues the airports are facing are due to the unfortunate global pandemic which ceased or halted travel for a while. It is predicted that this issue will continue on after the pandemic is over. With so many people having lost their jobs, the lack of business travel has especially hurt airlines financially. As well, there will most likely not be much business travel for years due to the fact that many companies have downsized, getting rid of employees. It is expected that business travel will go down by as much as 20% in the next couple of years because of this. This has caused US airlines to lose over $12 billion just in the second quarter. The airline industry has been placed in a crisis that it will take a very long time to recover from.

Historically it always takes a long time for business travel to recover after a recession so when do you think the airlines will recover the airlines ?

https://www.cnn.com/2020/10/27/economy/airlines-pandemic-recession-impact/index.html

Trump, Biden clash over climate, oil industry in final debate

The last presidential debate, which took place on September 22th, 2020, between former Vice President Joe Biden, who represents the democratic party, and the President of United States Donald Trump, representing the Republican party, raised many interesting points. The moderator Kristen Welker addressed many interesting questions towards both individuals, which got some very interesting responses. 

A major topic of discussion was climate change, where President Trump had a standard approach while Joe Biden presented some futuristic solutions. President Trump said he loves the environment, but he is unwilling to sacrifice businesses for the environment. One can agree here that business needs a priority in such a huge and influential economy, but perhaps there is more than what meets the eye. Joe Biden talked about he would slowly move to a climate-friendly economy, which would inevitably create many more jobs and improve the economy. Also, Joe Biden said, “Global warming is an existential threat to humanity, we have a moral obligation to deal with it, and we’re told by all the leading scientists in the world we don’t have much time.” (Bernstein) Joe Biden wanted to show that he as a candidate, understands the problem at hand and considers it his responsibility to improve. Joe Biden plans on making/promoting businesses that lessen the damage caused due to climate change. The President accused Joe Biden that he would get rid of hydraulic fracturing, which is used to extract natural gas from shale. Fracturing has shown many benefits but also has its downsides. Many environmentalists are against fracturing. Overall, President Trump's accusation here did have some basis to it. Joe Biden said he would ban it only on federal land in his defense. 

Yes, some of President Trump’s criticism of the democratic party had a premise, but Joe Biden perhaps gave concrete examples as to what the issue at hand is and how to deal with it. Do you guys think climate change is an important topic of discussion especially in the presidential debate? If yes, then which candidate presented a more apt front/view regarding climate change. 

 

References:

Bernstein, Sharon. “Trump, Biden Clash over Climate, Oil Industry in Final Debate.” Reuters, Thomson Reuters, 23 Oct. 2020, www.reuters.com/article/usa-election-debate- climate-change/trump-biden-clash-over-climate-oil-industry-in-final-debate- idUSKBN2780HW.

France is latest nation to return to lockdown amid COVID surge

Starting this week France will go back into a nationwide lockdown to try to contain the COVID-19. The new measures stated which will come into force on Friday and will last until December 1, that people have to stay in their homes except to buy essential goods, seek medical attention, or use their daily one-hour allocation of exercise. In the beginning, the lockdown was effective at containing the virus, but it started spreading again after relaxing the rules.

France has reported 523 new deaths from coronavirus during the last 24 hours, the highest daily toll when the virus was at its most severe. “France’s death toll is more than 35,000 and is the seventh highest in the world” according to Reuters News Agency data.

Earlier this month, Macron announced a nighttime curfew in Paris and other big cities, but now officials have recognized that this measure had proved not enough to bring down infection rates, and therefore calling for more severe response.

https://www.aljazeera.com/economy/2020/10/28/france-becomes-latest-nation-to-return-to-covid-19-lockdown

DC Delaying Stimulus and Fed Running Out of Ways?

 As we know, representatives within Washington have delayed the fiscal help to citizens further. However, there are bigger problems with this delay other than you and I not getting government aid. The Fed actually seems to be relying on the stimulus to be passed. What is interesting is that economists such as Mark Zandi stated that "(The Fed) just doesn't have much room to maneuver with regard to monetary policy".

While no chairman of the Fed will actually state this outlaid, economists are starting to believe the Fed is running out of "weapons in their arsenal". There are still some left such as adopting yield curve control through bond purchases, right? Well, these bond yields are at historic lows and even Fed officials are skeptical about the impact of yield curve control. 

If the fed were to run out of options to help the economy during this time and COVID continues to go uncontrolled, what would this mean for our economic system? Could we see a potential "fail" like the Great Depression or will we continue to operate efficiently?

https://www.cnbc.com/2020/10/28/the-fed-.html

Californians vote on the future of Uber

     On November 3rd, Californians will vote on a ballot initiative, proposition 22, that will shape the future of ride-hailing firms and gig-economy platforms such as Uber. The issue at hand is whether or not Uber's freelance drivers, couriers and other gig workers should be considered employees. This means that those who are working for the company would be entitled to benefits such as unemployment insurance and sick leave. Proposition 22 is a stab at balancing workers protection with the gig industry's flexible working hours that ensure customers never wait long amounts of time for a ride or a meal. 

    Uber created the template for the gig economy by matching real time demand with real time supply. Initially, riders and drivers both benefited from this as Uber and its competitors such as Lyft subsidized rides in an effort to gain market share. However, in recent times companies like the ones mentioned have begun to cut cost, especially last year after they went public. Moreover, Uber's average"take rate", the % it keeps from ride fare, has gone up 6% from 2017. This means that drivers lose out on potential earnings. 

    How much these drivers earn per hour as been a hot topic. Nonetheless, they currently receive zero benefits from their work. This may not come as a concern to drivers who Uber on the side, however, critics of the company have stated that a majority of those who work for Uber do it full time. The state of California also shared these concerns, and consequently passed a law called AB5 which redefines independent contractors as those who are free from the control and direction of the hirer. Gig firms have argued that they can comply with AB5, but on October 22nd an appeals court ruled that they probably cannot, pending a full trial next year. It is important to note that compliance with AB5 would force these firms to entirely restructure their business models. Uber also stated that it would have to let go of 76% of its drivers, with the rest only working during peak hours. Ride fares for Uber are also estimated to rise anywhere from 25% - 111%. Uber's opponents disagree with their future forecast and have countered with the claim that AB5 would only raise the firm's cost per driver by a third while preserving flexibility and protecting vulnerable workers. 

    This is where proposition 22 enters the picture. It would essentially scrap AB5's narrow definition of independent contractors, while providing workers with some benefits, including net earnings of at least 120% of the hourly minimum wage and health-care stipends. This could pave the way for portable benefits, something that prominent economists, such as Alan Krueger have advocated for. Critics have said that prop 22 is lopsided, while backers have said that if it is not passed, it could be the end of gig-work as we know it.

Do you believe that prop 22 will get passed? If not do you think that the consequences to the gig-economy will be as severe as stated?

https://www.economist.com/business/2020/10/27/californians-vote-on-the-future-of-uber

What would a Biden presidency mean for the US economy?

Economists say that Joe Biden proposes the most expansive tax and spending policies and regulations in modern US history. Prior to the 2016 US election, Donald Trump made a host of grandiose promises about the transformative impact his policies would have on the US economy. Tens of millions of jobs would be created. GDP would grow at rates not seen in decades. However, the record has not exactly lived up to that, which may be blamed on the pandemic or just bad policies.

Biden's manifesto proposes:

• A major increase in infrastructure and clean energy spending, certainly more than is currently planned or proposed by Donald Trump

• More spending on education, healthcare and the social safety net

• A hike in corporate profit taxes, reversing the steep cuts made by Trump in 2017

• An increase in personal income taxes, mainly hitting the well-off

In total, analysts at the credit rating agency Moody’s estimate Biden’s plans add up to $4tn of additional spending in the three years to 2024 and $1.4tn of additional taxes over that same period. But there’s more to economic policy than tax and spending. Biden’s pledge to decarbonise the US economy by 2050 implies more regulation of polluting US industries. His more liberal approach to immigration suggests a reversal of Donald Trump’s restrictive executive orders in this area. His stance on healthcare hints at restrictions on drug pricing and Biden supports a gradual doubling of the federal minimum wage, which hasn’t been lifted since 2009. While Biden has promised a tough line on China, it’s generally expected that he would halt Donald Trump’s protectionist trade wars of the past four years.

Will a Biden presidency affect the economy positively or negatively?

https://www.independent.co.uk/news/world/americas/us-election-2020/biden-economy-jobs-gdp-spending-2020-election-trump-b1256958.html

GDP Report next week will show record breaking growth

 https://www.cnbc.com/2020/10/20/the-gdp-report-next-week-will-likely-show-record-breaking-economic-growth-but-it-may-not-help-trump.html

On Thursday next week the U.S. will announce the GDP growth for the previous quarter and it is expected to show some record breaking growth. Now, obviously, this growth can be misconstrued with the current economic climate. The U.S. is going to experience serious growth because of the down turn that we experienced in the past 8 months. The timing of this news may be good for President Trump as it will come just a few days before election day, but this growth shouldn't necessarily be attributed to Trump's presidency. The growth is really just a product of the recession that the country experienced. 

The reason that this news may not necessarily help Trump in the polls is because the presence of mail-in ballots and early voting. In addition to this the Federal Reserve is forecasting that we are going to have a major drop in GDP this year. It will be interesting to see the if there is any change in the polls after the information is announced. 

With the projected increase in GDP, there is an increase in the economic conditions in the next six months. This is interesting because we are beginning to have a "relapse" when it comes to the COVID-19 pandemic and it seems that the potential for a shutdown or partial shutdown is becoming more and more possible. It seems as if the outlook of the economy is dependent on if there is a vaccine within the next six months. 

'Selfish and reckless.' More than 700 economists strongly oppose Trump's reelection

According to the CNN’s article, there are more than 700 economists, 7 of those include Nobel Prize Winners, who are opposed to Donald Trump’s reelection. This does not come as a surprise as Trump has faced a lot of opposition and suffered from backlash after making economic decisions many times. The argument presented by these economists in a letter, is that Trump’s behavior during his first term is “selfish and reckless” and therefore, Americans should not allow him to perpetuate it for another 4 years.


They highlighted in particular his economic response during the COVID-19 pandemic which they believed “endangered economic recovery” as well as Public Health. More importantly, these economists pointed out the damage caused in the public sector and in the United States relations with foreign trade partners, which they claim are direct results of Trump’s incompetence and economic proposals which did not effectively foster economic growth. We are now less than two weeks away from the November 3rd election, and this released letter might change some people’s opinion or maybe confirm others’ positions.


So what do you think of these economist assessments of Trump’s economic policies and behaviors during his first term? What are your predictions of what would happen to the U.S. economy if president Trump were to get elected for a second term?



https://www.cnn.com/2020/10/22/economy/economists-oppose-trump-election/index.html

Lawsuit against Google

 Antitrust laws are simply laws put in place to prevent monopolies. These laws according to the Merriam-Webster dictionary define them as "consisting of laws to protect trade and commerce from unlawful restraints and monopolies or unfair business practices"

In the past, these laws have been used against huge corporations such as Microsoft and their "Internet Explorer" web browser. Since every Windows computer came with the browser pre-installed, the Justice Department argued it had an unfair advantage over other web browsers and won the case against Microsoft. This judgment helped many other companies including Google founded a year later. 

Now the time for Google to face that same fate seems near. On Tuesday, 20th October the Department of Justice filed a lawsuit against Google accusing it of engaging in anticompetitive practices similar to those of Microsoft. The lawsuit goes into detail about partnerships among others that have made Google accountable for 80% of search queries on the internet, in the USA. 

Integellencer writes " the DOJ argues that the company takes the windfall profits that it reaps from its dominance of search advertising and invests them in paying mobile-phone manufacturers, carriers, and web browsers to make Google their preset search engine — which only increases Google’s search dominance and thus its ability to further lock out competitors through similar business arrangements. The suit also takes issue with Google’s practice of making its search app undeletable on its own Android operating system. Taken together, the government argues that these deals erect insurmountable barriers to competing search engines, leaving Google with the power to dictate terms to advertisers and consumers."

Google on the other hand argues that “people use Google because they choose to — not because they’re forced to or because they can’t find alternatives.” 

It is only a matter of time until we see the court’s verdict and the effects of this verdict brings on tech companies. 

Source: https://nymag.com/intelligencer/2020/10/doj-google-antitrust-lawsuit-explained.html

Coronavirus and the Housing Market

 https://www.economist.com/finance-and-economics/2020/09/30/why-despite-the-coronavirus-pandemic-house-prices-continue-to-rise

Counter to the performance of the housing market in the last recession, the housing market in 2020 has not mirrored these same downturns. In the second quarter of this year, housing prices in middle and high-income countries have increased: rising at an annual rate of 5%. Domestically, prices in medium-sized houses have increased more than in any time prior to the ‘07-’09 recession. These increases can be explained by monetary and fiscal policy, as well as buyers’ consumption preferences. Internationally, central banks have cut policy rates by two percent this year and Americans can take out a 30-year fixed mortgage at an annual rate almost a percentage lower than at the beginning of the year. Historically, decreasing interest rates, as experienced now, have directly correlated to increased housing prices. However, this increased tendency to lend has not affected everyone equally, as those with lower incomes are not receiving large loans. Fiscally, governments have instituted a host of bailout bills, intending to maintain the income of average consumers. In G7 countries, household disposable income was roughly $100 billion higher than before Covid-19, despite the rise in unemployment. Various countries have instituted policies to preserve incomes, such as Netherlands’ banning of foreclosures and Japanese banks’ deferral of principal repayments on mortgages. Finally, buyers’ preferences have appeared to lead to an increased desire to increase the size of their home. While housing markets in big American cities are not doing well, reports do not indicate Americans are fleeing cities to move to suburban areas. In fact, housing prices in urban and suburban areas have increased at the same rate. People are likely looking for larger houses in areas they already live in, rather than seeing to purchase larger houses elsewhere — possibly due to the fact that homes are becoming both residential and office spaces.

It will be interesting to see how housing prices change as we get further into the pandemic. If fiscal stimulus ceases, it is possible that consumers will be less willing to purchase houses, as they will lose disposable income. Additionally, the expected market volatility brought by the upcoming election will also likely create uncertainty regarding the housing market. If the pandemic worsens an increased demand for housing may not match the limited supply of construction. However, as the author declares: “It may take more than the deepest downturn since the Depression to shake the housing market’s foundations.”

Federal Budget Deficit Skyrockets to Record High of $3.1 Trillion

https://www.wsj.com/articles/u-s-budget-gap-tripled-to-record-3-1-trillion-in-fiscal-year-2020-treasury-says-11602871210

Workers move towards more flexible hours

 Since the invention of the clock and time zones, laborers have been compensated from their work based on the hours of work rather than level of production. This has created an incentive and desire to work as many hours as possible to gain more money. Previously, there was a system dubbed "putting out" which paid workers based on their output. Yet the clock completely usurped this system and gave way to set shifts and schedules that still persist today.

 There has been a slight transition since the pandemic hit. Flexible working existed well before the pandemic. But it only offered employees the ability to choose when in the day they worked their allotted hours. Now, companies are allowing more and more employees to work from home and are allowing them to focus on tasks rather than working for a set 40 hours a week. 

A growing trend for millennials is the abolition of the 40 hour work week. Advances in machinery, increased wealth, and literacy has allowed companies to be more efficient which could ultimately eliminate the need for workers to stay and essentially "take up time".

Do you believe America is trending towards a more production based wage system or will they stick with the hours as a basis of measurement?

https://www.economist.com/business/2020/10/17/countering-the-tyranny-of-the-clock

Coronavirus Pandemic Putting Damper on Holiday Shopping Season

The article talks about that the coronavirus pandemic and how it is creating novel hurdles for Americans’ spending this holiday season, posing potential challenges for an economy that leans heavily on their willingness to consume, which we will observe during the holiday season how people will spend this year compared to last year. Likewise, the households will face the prospect of Halloween without treaters, Thanksgiving without family travels, Black Friday without crowds, and a December without parties and in-person gift-giving. 

According to the National Retail Federation, the holiday the sale which usually extends over November and December represents roughly 20% of annual U.S. retail sales each year, and retail spending accounts for about 25% of consumer spending in a typical year.

Several economists are predicting little growth or none whatsoever this year compared with 2019. US chief economist Joe Brusuelas expects retail sales to increase just 0.5% this holiday season, partly because Congress has not passed a new stimulus package. On the other side, Sucharita Kodali, a retail industry analyst at Forrester Research Inc. expects retail spending this holiday season to be flat compared with 2019, She predicts online sales will grow 20% to 25%, the sharp decrease in foot traffic at brick-and-mortar stores are expected to keep overall spending in check this November and December.

The question, which is that given the coronavirus constraints, will there be much Halloween spending this year compared to last year?

https://www.wsj.com/articles/coronavirus-pandemic-putting-damper-on-holiday-shopping-season-11603029601

What Happens if Roe v. Wade is Overturned?

 The almost-certain confirmation of Amy Coney Barrett to the Supreme Court has increased the chances that Roe v. Wade will be weakened or overturned. If that were to happen, abortion access would decline in large regions of the country, a new data analysis shows. Legal abortion access would be unchanged in more than half of states, but it would effectively end for those living in much of the American South and Midwest, especially those who are poor, according to the analysis. 

Because abortion will only be allowed in certain states this causes inequality in abortion access. Women will have to travel to clinics, possibly pay for hospital stays, and leave from work. This could mean that about 100,000 fewer abortions in the United States which could result in many more children in the foster care system or more people needing help from the government to take care of their children. So, my question is will the overturning of Roe v. Wade cause the economy to worsen?

https://www.nytimes.com/interactive/2020/10/15/upshot/what-happens-if-roe-is-overturned.html?smtyp=cur&smid=tw-nytimes

Working From Home Might be the New Normal

In response to the initial wave of the Coronavirus, the amount of people working from home increased dramatically. New innovations in technology allowed the at home worker to be more productive than in the past, we even see this in our own lives, via zoom. This increased productivity is why many companies are planning to keep many workers in their homes, even after we eventually find our way of the pandemic. 

One of the companies listed in this group was Facebook. Mark Zuckerberg said that as many as 50% Facebook employees could be working remotely within the next five to ten years. As of June, Facebook employed over 52,000 people globally. That means that over 25,000 employees will be working from their homes, significantly reducing the amount of physical capital needed for onsite offices.

Do you think in areas of jobs where physical labor isn't needed, that working from home will become the new normal? Personally, I believe that this will be the case. As working from home adds overall efficiency and utility of resources in the economy. 

https://www.cnn.com/2020/10/18/business/virtual-work-offices-pandemic/index.html

US election 2020: The young people struggling in the 2020 economy

The pandemic has had a huge impact on the young people in the US.S it is getting worse with the election being there. 

Joshua Boyer, a 30-year-old, was living his American dream. He planned to launch his social work career and start a family with his Fiancee in a few years and buy a new house. Since his graduation, he remains without a job for 5 months even though he has applied for about 300 openings. he had a similar experience in 2008 when he graduated from high school in the midst of a global financial crisis. At that time, he entered the military to escape the desolate prospects that were ready to face him in the labor market. His only concern was that this would be another year where the world will face another lost generation.

A'Naiya Davis, a 23-year-old, worked in the minimum wage retail positions after she graduated from college in 2018. She finally ended up moving out from her parent's home as she had landed a role as a content specialist but ended up losing it in June during the Pandemic cuts. Even though she got another job in September the intervening months made her take money out from her savings. She talks about how she would have really liked to live without a roommate or even buy a new home, but now all those things feel out of reach since the pandemic has cut her off.

Do you think we will face the same situations after graduating?

https://www.bbc.com/news/election-us-2020-54471388

Shoppers Came Back To Department Stores In September, Lifting Retail Sales

In September, shoppers' spending on clothes and cars had increased. Also, so has the amount spent at departmental stores. U.S retail spending has gone up by 1.9% compared to August which has given a boost of confidence even though signs have indicated a slowing down in economic recovery. All types of stores had an increase in spending with the exception of electronic stores. Clothing as well as departmental stores saw the biggest boost which is good for them because these stores have faced major financial losses during spring. Over the summer retail spending has improved so much to even surpass the pre-pandemic levels. However, there was a sense of worry in July/August as this growth had severely slowed down. This slowing-down has also affected job growth, and women have abandoned jobs/ left the workforce. People are still relying on unemployment benefits. As holiday season approaches will shoppers continue this way and spend a lot like they always do or will the pandemic affect their budgets and net spending. The retail industry will be tested during these end of year sales and economists say that the amount spent will be divided between those badly affected during the pandemic and those who were well off during these times. Only time will tell what the retail industry is going to look like in the next few months.

https://www.npr.org/sections/coronavirus-live-updates/2020/10/16/919330560/shoppers-went-back-to-department-stores-in-september

$600 Stimulus Checks Increased Savings

 According to "anonymized bank data" the recent $600 weekly unemployment benefit the government handed out was very beneficial to American saving. Moreover, it helped pay workers more than enough to make up for lost wages and enabled spending during unusual times. Not only that, but workers were starting to save more as well. However, when the weekly money stopped the same workers had to blow through the savings in just under four months. The reasoning is that households have to make a choice between stopping everyday purchases or stop paying mortgages and student loans. This is causing a dilemma and a terrible choice for "the macro economy. My question would be do you think that the governments unusual generosity should have been enough or do you believe that the government needs to lend out more money? Furthermore, should the lent money be equal across all jobs or should your usual wage depict the amount of money you should receive?

https://www.nytimes.com/2020/10/16/upshot/stimulus-checks-unemployment.html

India Turns to Economic Overhaul as Growth Prospects Slide Amid Coronavirus

The unfortunate coronavirus pandemic caused India to endure an economic crisis. In fact, out of all of the world’s largest economies, India’s economic decline hit the hardest. Since numerous city jobs vanished amid the coronavirus pandemic, farming jobs are more important than ever. Thus India began to rely on it’s agricultural economy. However, the agricultural economy is under numerous regulations. The government worked to alter these restrictions. Suddenly, farmers were allowed to sell a majority of their produce to consumers instead of wholesale markets (what they were required to do in the past). Many of these wholesale markets have closed as a result. This led to protests from both farmers and wholesale market workers who now struggled even more to make money. In the long run this will benefit farmers by capturing at least some of the profits that have traditionally gone to those buying and reselling their crops, the question is can the farmers withstand this change long enough to receive profits.

https://www.wsj.com/articles/india-turns-to-economic-overhaul-as-growth-prospects-slide-amid-coronavirus-11602586802

The deflated CARES Act leaves more in poverty than before pandemic

 According to the New York Times, since the Coronavirus Aid, Relief, and Economic Security Act, or CARES, has run out of money, more then 8 million Americans have fallen into poverty. Two new studies conducted by Columbia University’s Center on Poverty and Social Policy, the other by researchers at Universities of Chicago and Notre Dame, found that since federal aid has dried up, poverty rates have risen to higher levels than before the pandemic. Moreover, the latter study found that poverty rates have affected black families disproportionally. 

Although it was expected that the CARES act wasn't going to last forever, economic recovery has been too slow to make up for these loses. In May, this aid package help keep up to 18 million Americans out of poverty. But, ever since the package has expired the poverty rate has risen to a higher level than it was before the pandemic. Furthermore, something to take into account is that the number of people suffering from poverty may actually be higher then stated. The two main concerns being raised is that families may have been miscounted or just left out. Those who are being excluded from the data consist of immigrants and low-income minorities. The issue with this is that census data directs over $1.5 trillion in federal funding to state and local governments, and that these funds will go to areas which are over-counted, not under-counted, leaving those struggling most out to dry. 

Do you believe that the data on how many people have fallen into poverty is being skewed to make political parties look better with the upcoming election? Or more because of poor data collection from immigrants and low-income areas?

https://nextcity.org/daily/entry/depleted-cares-act-leaves-more-in-poverty-than-before-pandemic

How the U.S. election could affect Europe’s markets, economy and trade

The article talks about how the upcoming U.S. election matters not only for the American people and the country’s economy but will also have a significant impact across the Atlantic. Europe’s financial markets and economic prospects will be affected by whoever is in the White House after the vote. 

It is possible that the losing side may take it to streets and the matter may have to be resolved by the Supreme Court in the end and this could temporarily hit markets and consumer confidence in United States and beyond. Steen Jakobsen, chief economist at Saxo Bank, said that the markets are underestimating the possibility of a contested election and can disrupt the markets if they don't prepare for it.

“Another issue at stake is trade. If Trump is re-elected there are fears he could start a trade war with Europe, as he has previously threatened to do, claiming last year that Europe has in many ways treated the U.S. worse than China. A trade war would be damaging to both the European and U.S. economies, though the EU stands to lose more if tariffs are imposed on its exports to the States.

A victory for Biden could bring with it another challenge for Europe. According to the article, a “blue wave” Democratic sweep could “potentially pave the way for major tax hikes in the U.S. and excessive labor market regulations that may curtail U.S. trend growth and affect export-oriented Europe.” Biden as president may undo Trump tax cuts, add further tax increases and pursue an expansionary spending and social policy. In contrast, a Biden victory may also mean that the outlook for equity markets outside the U.S. will be positive.

Do you think the U.S. economy will do better under a Trump or Biden administration?

https://www.cnbc.com/2020/10/14/how-the-us-election-could-affect-europes-markets-economy-and-trade.html

One Step Closer to Agreeing on Relief

     As the debate in Congress continues over additional coronavirus relief, both sides just got one step closer to a compromise. Treasury Secretary Steven Mnuchin has told Democrats that the administration is willing to agree to terms on a national testing strategy, just part of the whole relief bill. Although it is still uncertain whether Senate Republicans will come to terms with many of the Democrats demands, this is a small step in the right direction. With jobless claims continuing to rise, Americans across the country are in desperate need of assistance. Small businesses are swamped with expenses, and not enough income to keep them afloat. It will be interesting to see whether Trump and the Republicans really wait until after the election to get relief, or if negotiations will be done before. Additionally, now that the Republicans have conceded on a smaller part of the bill, will the Democrats do the same? Now is not the time to begrudgingly plant oneself on one side of the aisle. Politicians need to come together and do what is needed most in such a desperate time.

 https://www.wsj.com/articles/white-house-agrees-to-national-coronavirus-testing-strategy-11602767703

Surging Euro Presents E.C.B. With a Dilemma

“A rising currency is eroding the competitiveness of European exporters. Central bankers are starting to worry.” The pandemic led to European policymakers increasing government stimulus and monetary policy. They also put up strong travel restrictions and mass gathering restrictions. The measures the policymakers took caused and are continuing to cause unwanted side effects. “The euro has risen 10 percent against the dollar since March, a vote of confidence by investors that also creates big problems for European exporters.” Sales have already been impacted by the virus, but this rise hurts the exporters because now the products are more expensive for customers paying with other currencies. Also, there is a risk of deflation because of the strong euro with imported goods becoming cheaper for European consumers. The Governing council is monitoring the euro exchange rate, but the European Central Bank isn’t too concerned yet. The dilemma that policymakers face is that “any overt action to weaken the currency might be interpreted as a violation of a de facto nonaggression pact among the world’s largest economic powers.” There is an agreement to not manipulate currency rates which could help one economy, but at the same time hurt others.

Ewing, Jack. “Surging Euro Presents E.C.B. With a Dilemma.” The New York Times, The New York Times, 10 Sept. 2020, www.nytimes.com/2020/09/10/business/ecb-euro.html. 

Fed warns that delayed stimulus will have consequences

 Minneapolis Federal Reserve President Neel Kashkari has issued a warning stating that if the next round of stimulus for the United States economy is not approved there will be "enormous consequences". This comes on the brink of the election as President Trump has decided to shut down talks regarding the stimulus until after the election. Not supplying the American economy with stimulus will result in a more intensified downturn as workers, businesses, and governments need more cash immediately. There will be ripples that are felt through the economy once individuals cannot afford to pay their bills. The Federal Reserve has been continuously warning congress of the impact that the lack of stimulus could have. Kashkari stressed that whatever assistance is needed to anyone affected by the pandemic is important and should be delivered. The most interesting point that was stressed by Kashkari is that providing public funds to help the private sector presents no "moral hazard" as the down turn was not caused by systemic failure but by the pandemic. In conclusion, with millions of people affected by the pandemic the incorrect way of dealing with this situation is to let the people deal with it on their own. 

https://www.cnbc.com/2020/10/07/feds-kashkari-warns-delaying-stimulus-will-have-enormous-consequences-.html

Congress Pursue Second Round of $1,200 Stimulus Checks

    In a statement on October 6th President Trump said he plans to pass a “major stimulus bill” if he is re-elected on Nov. 3. because according to him Democrats were “not negotiating in good faith.”A statement which he later reiterated in a Twitter post by saying that he would agree to sign a bill by congress of $1,200 stimulus checks. 

People have had divergent opinions on the passing of these coronavirus relief checks, some suggesting that it did not boost the economy while others argued that it was simply the government's role to provide aid to its citizens as they struggle in the midst of an "economic downturn". As of right now, leaders in congress and house officials are discussing the bill, which will eventually pass in the coming weeks to relief millions of Americans as well as some small businesses. But it is not sure yet given how divided the parties are over this matter. 

What kind of impact do you think Trump's statement could have on the passing of the bill? The article stated: "Academic studies show stimulus payments targeted toward lower-income and unemployed people would be more effective at encouraging spending." Do you then think it is necessary for a second round to checks to be pursued given this expected positive outcome? 

https://www.washingtonpost.com/business/2020/10/09/covid-second-stimulus-checks/

Cinemas Shutdown

With coronavirus cases rising in the country, major movie theater chains are closing their doors. Albeit, temporarily. In part, this is to help curb the spread, but the major reason being, film studios are pushing back their films and postponing it to further dates. If there are movies to show in the theatres, they might as well be closed. 

Cineworld announced it'll be closing it's 663 theatres in both the USA and in the UK as well. Universal has announced the postponing of their new James Bond film "No Time To Die" to next year. The decision by Cineworld to close these theatres is going to see about 45,000 employees in the USA and in the UK affected. 

Another studio which is also postponing a film is Warner Bros. They too are postponing their new, remade film "Dune" to October 1, 2021. This is almost a year away from it's intended release in December 2020. 

John Fithian expressed his concerns saying "If the studios continue postponing all their releases, the movie theaters aren’t going to be there for those postponed releases." He further went on to say in the interview, "They have to consider whether they want the long-term viability of the theater platform to be available to them. And I think they do since about 80 percent of the movies that were scheduled during our closed period have been postponed for future theatrical release and not taken to the home."

Other big films set to release this year like, “Wonder Woman 1984,” from Warner Bros. has already delayed its release from October to Christmas Day. “Soul,” the latest from Disney’s Pixar animation studio, is scheduled for a Nov. 20 release. These movies however may also be postponed to next seeing as they will almost certainly do poorly in the box office as many people will be staying home and avoiding cinemas in a bid to not catch the coronavirus. 

Lobbying efforts to save the movie theater business have been fierce. They called on lawmakers to help the industry with an additional loan and grant programs that could help sustain the theaters until the pandemic subsides. If this aid does not come, they estimate about 69% of the small and midsize movie theatres in the country would file for bankruptcy. “If one of two things doesn’t happen, either Congress gives us substantial support quickly or New York gets open and the movies come back and the patrons come back, most of our companies are going to go under,” Mr. Fithian said.

 https://www.nytimes.com/2020/10/05/business/media/regal-theater-shutdown.html

While Millions Lost Jobs, Some Executives Made Millions in Company Stock

 While Millions Lost Jobs, Some Executives Made Millions in Company Stock

During the pandemic, many companies rewarded their senior executives with stock options, which provides the owner the right to acquire company stock at a later date but at the same price the day it was offered, or a restricted share, which is a stock that executives cannot sell for months or years. This has allowed many superrich and corporate executives to gain exorbitant amounts of profits. However, most Americans own little to no stock which is just "a reminder that income and wealth in the U.S. economy are tilted heavily toward a tiny number of top earners who own significant amounts of stock." According to Brandon Rees, "the stock market is not an indicator of the health of the economy for working people; it’s an indicator of economic inequality," and "these C.E.O. payments reflect that reality."

For decades, corporate boards try to incentivize executive managers with company stock as pay to make them more accountable for shareholders, yet executive managers still end up doing better than what might be justified by a company's business performance. Debra DeShong, an MGM representative, justified MGM Resorts International chief executive, William J. Hornbuckle's, significant gain through restricted stock units by stating "Mr. Hornbuckle . . . volunteered to help the company conserve cash by exchanging all . . . of [his] cash compensation for the remainder of 2020 [worth $700,000] for restricted stock units that vest at the end of the year," and "by doing so, they took on great risk, risk that still exists in that we are not operating under normal circumstances and we are still in a period of recovery." All of Mr. Hornbuckle's 2020 awards have now appreciated to a combined $4 million. Furthermore, Edward W. Stack, the chief executive of Dick’s Sporting Goods, "received 355 percent more stock options for his 2020 award than for his 2019 grant and 142 percent more restricted shares" in March when the stock market was close to its low point. When his 2020 awards were issued, they "were worth about $7 million . . . and are now valued at a combined $67.4 million." In Dick's last fiscal year before the pandemic hit, "[Mr. Stack's] compensation was 1,487 times the pay of the company’s median employee" which raises many concerns from employees and shareholders.

Is it fair to provide company executives many stock rewards, even during a pandemic, when they seem to make an exuberant amount comparatively to majority of other employees and Americans in the long-run? What do you think can be done to prevent such extreme income inequality?

Geneva Passes $25 Minimum Wage

 https://www.cnn.com/2020/10/03/world/geneva-switzerland-minimum-wage-trnd/index.html

Geneva, Switzerland citizens voted to increase their minimum wage to equivalent of $25 USD. This is believed to be the highest set minimum wage in the world. A minimum wage this high is very foreign to Americans who are used to the highest minimum wage being ~$15 and the federal minimum wage being south of $8. One interesting note from the article is that Switzerland does not have a federal minimum wage, but the need for a minimum wage is being taken on by their equivalent of states. 

There is a good deal of speculation that the COVID-19 pandemic helped to push this vote to pass. This makes sense because of the amount of essential workers that needed to continue to work throughout the pandemic and there could be an increased appreciation for these workers.

Do you think that it is feasible that we could see a minimum wage this high in the U.S. in the near future? Do you think that it would result in inflation and/or an increase in unemployment? What other factors should be taken into consideration when making a decision like this? 

Bidenomics

 https://www.economist.com/leaders/2020/10/03/bidenomics-the-good-the-bad-and-the-unknown

After the recent presidential debate, many have wondered about Biden’s economic stances and policies. As Trump tried to paint Biden as someone without knowledge in economics, this article highlights many of the policies Biden has advocated for during his campaign. One of the most important aspects of ‘Bidenomics’ is Biden’s rejection of some of the more extreme liberal policies supported by fellow Democrats, such as Medicare For All and publicly-provided, guaranteed jobs. In fact, Biden’s plan for public spending accounts for only a 3% annual increase in GDP. Democrats such as Elizabeth Warren and Bernie Sanders advocated public spending increases on the order of 16-23%. Still, Biden proposes that the spending he is suggesting would be financed by taxes, a higher proportion of which would be paid by large firms and the wealthy. Other parts of the ‘Bidenomics’ initiative include bailouts for small businesses, by offering them grants and loans: a service Biden believes Trump has largely overlooked in the midst of Covid-19. Additionally, by improving relations with China, Biden hopes a better international rapport would allow for an international distribution of a Covid vaccine. Much of Biden’s proposed public spending would be harnessed to improve middle-class living standards, through spending on education, health care, and, most notably, a $15 federal minimum wage.

Despite Trump’s depiction of Biden’s economic policies, Biden is far from a socialist. In fact, many Democrats worry about his policies not being liberal enough. It is understandable, however, that Biden wants to present himself as a moderate, logical alternative to a polarizing figure like Trump. Unfortunately, if elected, this presentation will likely come at the cost of real social and, perhaps, economic progress. Biden has to find a way to balance a careful strategy to get into office, while still seeking to affect change. It is very possible that Biden will wait to assert himself, and his economic policies, until potentially becoming president.

The pandemic depression maybe over, but the pandemic recession has just begun.

 The author talks about how the economic recovery process is a long and slow procedure that holds the economy at risk for the unknown future. He emphasizes the job crisis issue that penetrates deeply into the economy and relates it to the fact that the pandemic squeezed years of change into a few months. The article argues why pandemic job losses are worse compared to past recessions. Similarly, it highlights that big business such as Shell, Disney is laying off thousands of workers, white-collar jobs have dropped by 3.9 worse compared to the 2008 recession and a similar pattern is obvious across other industries. The author suggests that the mechanical effect of shutdowns is causing these high levels of unemployment. He says that a vaccine is not the only cure the economy needs and it will not take us to the pre-pandemic level. As many jobs will no longer exist and massive readjustments will be needed in the labor market that will certainly take a lot of time. Furthermore, it talks about how different sectors like printing services, automobile dealerships, truck transportations, and real estate are adjusting to the new normal. For some industries, it has been easy and profiting and for some, it’s been getting worse.    

Considering the structural readjustment, technological advancements and other factors that affect the labor market and employment will it be more easier or difficult to get a job in the future? Comparing low-income to high-income jobs. 

https://www.nytimes.com/2020/10/03/upshot/pandemic-economy-recession.html