Sweeten the Paycheck

Date: Sunday, November 10, 2013

Title: Supporters Say Minimum Wage Hike Gaining Support
News source: NPR
Article date: November 06, 2013 7:03 PM

Author of article: Marilyn Geewax

Summary: More than 6 in 10 voters in New Jersey approved an increase in their state's minimum hourly wage. In January, the wage will rise to $8.25, well above the federal minimum of $7.25 an hour.

Issue: Raising the minimum wage could have very positive and very negative effects.

Argument: "We know our economy is stronger when we reward an honest day's work with honest wages," Obama said. "But today, a full-time worker making the minimum wage earns $14,500 a year."   Vs.   "When you raise the price of employment, guess what happens? You get less of it," Boehner said. "At a time when the American people are still asking the question, 'Where are the jobs?' why would we want to make it harder for small employers to hire people?"

Claim: Raising the price no matter good or bad, will affect business owners.

Supporting evidence:

• "Labor costs are one of the most significant line items for restaurants," Melvin Sickler, who owns franchises of the Auntie Anne's Pretzels and Cinnabon brands, told the Senate at a March hearing on wages. A round of federally forced wage increases "would be very difficult for my business to withstand."
• One supporter, Dan Preston, co-owner of Telequest Inc., a video company in Princeton, N.J., released a statement saying: "The costs of higher wages are offset through greater consumer demand, increased employee productivity and substantial savings from reduced employee turnover, for example."
• Polls typically show that minimum wage hikes win the support of at least 2 out of 3 voters. For example, a Gallup poll taken earlier this year showed 71 percent of Americans would approve a wage hike.

 

Analysis: I had a summer job. I earned minimum wage. I was a dog watcher and there was good and bad but the bad would have felt a lot better if I was getting more money. The paychecks sure would’ve been nicer. I do understand that it would have affected the owner of the business. It was run by her alone and she had five dogs herself. It was understandable that she could only pay me minimum wage. However there were adults working there. They had apparently worked there a long time so perhaps their pay was higher, however if it wasn’t it would be very difficult to work there I think. Minimum wage is not enough for someone living on their own, and supporting themselves.  

Relate to economic concepts: If minimum wage was to increase people might feel like they had more ‘spending money’ they would then put more money back into the economy through purchasing things. This would make for a healthier economy.

uh oh

Date: Sunday November 3^{rd 2013}

Title: Obamacare delay would send rates soaring
News source: CNN MONEY
Article date: Published: November 1, 2013: 7:02 AM ET
Author of article: Tami Luhby

Summary: Due to major technical problems having to do with Obamacare republicans and some democrats in congress want to give individuals more time to sign up for Obamacare due to difficult enrollment. However delaying Obamacare by just a few months could send insurance premiums through the roof.

Issue: Because of the delay less people will have insurance by the end of 2013 and because of this insurance premiums will have to rise in order to not lose money.

Claims:

• It's possible some insurers could appeal to state and federal regulators to increase the premiums mid-year, but there's not a lot of precedent for that, said Yevgeniy Feyman, fellow at the Manhattan Institute, a free-market think tank.
• Under the current plan, open enrollment will end March 31, allowing insurers to base their 2015 rates on the risk pool of their 2014 enrollees. If the mandate is delayed and that risk pool is made up of mostly older, unhealthy people, insurers will jack up their premiums.

 

Argument: It’s fair to give people extra time due to technical issues vs. this will hurt the people who were able to sign up and who sign up later on.

Supporting evidence:

• “Insurers set their rates for 2014 assuming that all Americans would be subject to the individual mandate, which requires them to get health insurance or face penalties.”
• Under the Affordable Care Act, insurers must provide coverage to everyone -- even the sickest people -- which would greatly increase insurers' risk and cost.
• if the mandate were delayed by a year, many of those lower-cost folks may not sign up. About 2 million fewer people would would obtain coverage in the individual market, according to the Congressional Budget Office.

 

Analysis: This is a tough one. I think it’s really not fair to punish people for not being able to do something do to a technical issue. It’s bad to punish someone for something that is not their fault. I also don’t feel too bad for insurance companies. Because they were using young couples use of their plans to their own benefit anyway. They were being sneaky. I do feel bad for those who will be affected by the rise if it does happen because it’s also not their fault that the younger people were delayed signing up.

Relate to economic concepts: If people are spending more money on insurance they will likely but less money into the economy. That's not good.