Content Tagged: policy priorities

WSJ and Minimum Wage Opinions

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July 18, 2014

An interesting post in the Wall Street Journal about Obama’s proposed raise in the minimum wage led to a post on the American Enterprise Institute blog.  In general, the argument is that, even if other potential economic issues are taken out of the equation, an increase in the minimum wage tends to help low-wage workers in high-income families much more than low income families.

What in the world does that mean?

There is not a correlation between low-income families and low-wage workers.  This can be a really difficult concept for students to understand; many low wage workers are actually second job workers in a high income family, and in many cases, poor families have NO workers.

So the general idea in the WSJ is that there are fewer people living in poverty in the US than in the past, and a full 1/3 of low-wage workers were actually in high-wage families.  Running analysis and calculations, they estimate that if the minimum wage rose to $10.10 as proposed, only 18% of the benefits of these higher wages would go to low-income families.

To make a blanket statement that raising minimum wage would raise people out of poverty is false.  So…in this era of enormous student loans discouraging people from continuing post-high school training and fear of taxes as outlined in Piketty’s Capital book, what is an economically realistic answer to the issue of income inequality?

This ties extremely well to the UFR curriculum and policy priorities.  Lesson 1.4 looks at taxation and asks the essential question “Is there a fair and efficient way to fund and maintain the public services we want?”.  If decreasing the income/wealth gap is a priority, what policies need to be investigated?  If this is not a priority, why does it keep coming up in the news?

 

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Immigration Political Cartoons

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July 15, 2014

The political cartoons included in this blog are selected as tools to teach about public policy issues. Their inclusion does not in any way constitute an endorsement by Teachers College, Columbia University, of their point of view.

Political cartoons can be a powerful way to teach and talk about public policy issues in the classroom. They engaging, often funny, and they teach very complex ideas in a quick and intuitive way. We are so convinced of the value of political cartoons that, in addition to including them in many of our blogs, we feature posts that are all cartoons.

Using cartoons presents an opportunity to teach students media literacy, including the ability to detect point of view or bias. As a sequence, we strongly encourage students to study the cartoon carefully, analyze the specific context of the cartoon, and determine the cartoonist’s point of view. See the blog post of October 8, 2013 for a guide to using the political cartoons we have selected. The Library of Congress also has a a very useful Cartoon Analysis Guide.

 

150891 600 border cartoons

David Fitzsimmons, Arizona Star, 2014

 

150945 600 Immigration cartoons

David Fitzsimmons, Arizona Star, 2014

 

150908 600 Welcome cartoons

Steve Breen, San Diego Union Tribune, 2014

 

150910 600 Illegal Immigrants cartoons

Gary Varvel, Indianapolis Star, 2014

 

150837 600 GOP Immigration Demands cartoons

Kevin Siers, Charlotte Observer, 2014

 

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Which generation was affected most by the Great Recession?

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July 11, 2014

I found the most fascinating blog post with slides from a presentation from the Federal Reserve of St. Louis.  The presentation looks at Generation X and the Millenials facing life after the Great Recession, but also how they compare economically to the Greatest Generation, the Silent Generation, and the Baby Boomers.

Now, perhaps BEING a Gen-X’er makes me a little more interested, but I stayed quite awhile on slide 45 (sorry, I can’t seem to post a link to just one slide!).  Not only did the overall wealth of Gen-X families decline since 2008, they are recovering much more slowly than the older generations.  Slide 46 showing homeowner rates is even more astounding, showing that young homeowners (under the age of 40) are not only in decline, but in the words of the Fed, “plunging”.

Perhaps one of the most disturbing sets of data and projections, though, is on slide 48.  Starting somewhere between those born in 1963 and those born in 1973 (the shift from Boomers to Gen-X’ers), over the course of a lifetime, people pay out more in taxes than they receive in federal benefits.  That fear we’ve been seeing in the distance for years – of Social Security reform, or worse, of Social Security collapse – is very real for Gen-Xers and Millenials.

Although this post is initially more personal than K-12 education oriented, this could easily be turned into information for students to determine research questions, research, and answers.  After all, this will affect them more than other generations!  When I was a high school teacher, my Economics classes would talk about the national debt and things like Social Security.  If students have information such as what is found on slide 48 as a starting place, it can lead to all kinds of rich and valuable discussions and research revolving around fiscal policy and policy choices.  What is the answer for Social Security?  How much should the government get involved in household finances, such as guaranteed mortgages or secured student loans?

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General Motors, Recalls, Bailouts, and GDP

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June 30, 2014

The last few weeks, there have been more recalls from General Motors Corporation – this time of over 7 million vehicles.  As someone who was affected by the last recall, this has been something on my radar…just keeping an eye on events.

Last week, GM told dealers across the nation to pull Chevy Cruze cars off the lot due to a faulty airbag issue, although no recall has yet been made.  Forbes has the story of the new recall, though, outlining over 7 million vehicles affected in the US for these new recalls.  When you add in GM vehicles worldwide, it rises to over 8.4 million.  This means that over 28 million GM auto owners have been affected by recalls just this year (compared to 22 million recalls from all automakers combined in 2013).  At the same time, GM has announced that it will not cap the amounts for families of victims to claim with the faulty ignition switch recall, and these compensations will start at $1 million.

If you recall, GM was one of the giants in the federal bailout of companies when the economy crashed in 2007-o8.  A CNN poll just a few weeks ago announced that 6 out of 10 Americans thought the auto company bailouts were wrong.  According to Time Magazine, the federal government lost over $11 billion in the GM bailout alone.  Toronto-based GM dealers are suing the parent company for funds not received from the federal bailout.

With all of this bad news in the press lately, you’d think GM would be worried its image is tarnished and all of these recalls might scare away buyers.   But, at the same time, an interesting set of data has been released showing that GM had terrific growth in sales in May 2014 of over 12%, and multiple plants are running at full capacity.  In fact, although May 2014 sales seem to be a fluke (numbers are projected much lower for June 2014), it seems that auto sales in general have finally bounced back to pre-Great Recession numbers.

Holy cow, what do all these seemingly unrelated facts mean?  Why am I bringing all this data into the equation?

In poking around, I found that last December, The Center for Automotive Research released an analysis of the auto bailout.  They analyzed two separate possible scenarios, and in general found that if the federal government had not stepped in with the bailout money, the results could have been catastrophic for the US economy.  They estimate that over 4 million jobs would have been lost over the first two years, which would have equated to over $105 BILLION in transfer payments such as unemployment compensation, Social Security benefits, and the like.

I thought this was a great opportunity to have kids look at the pros and cons.  A majority of people in the US still think the bailout was unnecessary – yet it saved over $100 billion according to this research.  Who are these people at the Center for Automotive Research?  What bias may they have?  Where did the money come from for the bailouts, and as they were repaid, where did that money go?  How is all of this connected to all of these recalls – what will happen if the recalls continue and eventually affect GM sales over a long period of time?

 

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Revisiting Obamacare

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February 26, 2014

The LA Times reported today that “another attempt at Obamacare ‘reform’ blows up”.  I hadn’t read up on the Affordable Care Act in a few days, so I went searching, and found some interesting information.  If you’ve been having your students follow along on the ACA debates in Congress, here’s another chapter.

The quick and dirty story is that the Save American Workers Act introduced in late 2013 was shot down by a budget analysis by our friends at the Congressional Budget Office (CBO).  Two items of note in the CBO analysis:  the bill would increase the number of uninsured people, and would cost the federal government a lot of money in the process.  Fox Business confirms the information the LA Times reported, as does MSNBC.  Having students read articles from different newspapers about the same topic could be a great lesson in bias and sourcing, by the way.

Economist Paul Krugman is talking about the ACA on his blog at the New York Times website, and on February 14, economist Greg Mankiw posted his comparison between the ACA and Romneycare on his blog.

Fox News reports that there are now 4 million people enrolled in the ACA,  but the Huffington Post says that there is a growing number of the uninsured who are mistrusting of the ACA and are not enrolling because of the “hype”.

This sparks another great opportunity to look at rhetoric, politics, and decisions that are made that affect the national budget.  Have students look at all of the data – what is rhetoric and what is truth?  How can you tell?

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The Unemployment Dilemma

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January 7, 2014

Although the recession officially ended, the United States is faced with unemployment rates that are still seen as “too high” – and still have a large number of people receiving unemployment benefits.  Many of those benefits ran out at the end of 2013, and Congress and the President have been haggling ever since on what to do.

With the agreement of the Senate today to extend long term unemployment benefits, it could be another great opportunity to bring to your students the idea of balancing the budgets and policy priorities.  The full Congress still must approve, but President Obama has put his full support behind passing the bill.

UFR Lesson 1.5 is on Balancing the Federal Budget, but focusing in on Activity 3 would bring your students into the world of balancing the budget in the short term.  Have students analyze the political cartoon at the beginning of Activity 3, and compare them to the cartoons below.  What kind of policy priorities are being shown by Congress’ activity?

A few other resources:

Bill Day, 2013

 

Jimmy Marguiles, 2013

 

 

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More Murray-Ryan Budget Cartoons

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January 3, 2014

 

In the last couple of weeks, there has been a huge increase in the number of political cartoons poking at the Murray-Ryan Budget Plan.  The October 13 blog shows some great ways to bring political cartoons to students with authentic, critical analysis.

Use the Mini-Lesson on Federal Budget Basics in the UFR Economics Lesson 1.5 to help out on basic vocabulary on the federal budget and what it means to balance a budget – or if that’s even desired.

 

R.J. Matson, St. Louis Post-Dispatch, 2013

 

Steve Breen, San Diego Union-Tribune, 2013

 

 

Joe Heller, Green Bay Press-Gazette, 2013

 

Michael Ramirez, Investors Business Daily, 2013

 

 

Gary Varvel, Indianapolis Star, 2013

 

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Murray-Ryan Budget Cartoon Roundup

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December 27, 2013

 

The advent of the 2013 Murray-Ryan budget agreement has brought a great opportunity for political cartoon analysis in the classroom.  The October 13 blog outlines some great ways to bring political cartoons to students through authentic, critical analysis.  Close reading, followed by asking what students see and think is happening, and then asking about the author’s point of view leads to a thorough analysis!

Michael Ramirez, 2013

Nate Beeler, 2013

Adam Ziglis, 2013

Mike Luckovich, 2013

Steve Sack, 2013

Nate Beeler, 2013

 

 

 

 

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Measuring Inequality

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December 5, 2013

How do you measure the wealth/income gap?  Although seemingly a straightforward question, as with many things, the real answer is: it depends.  Every once in awhile, a video comes across Facebook feeds showing the “real” inequality of income in the United States.  Then, there are blog posts like this one from the Wall Street Journal, looking at the income gap.  So, as educators, we look for what we think is a reliable source, and come up with this statement and visual from the 2010 census showing the share of household income by quintile.

How can we tell what’s “true”?

Income inequality is a measurement of the distribution of wealth.  It compares households across a region (or country, or the world), and is traditionally measured by economists using the Gini coefficient.  A Gini coefficient of zero means that everyone earns the same income, and a coefficient of one means that one person holds all the income and everyone else has zero.  Why do we care?  Income inequality measures are used to justify policy aimed at income distribution, including taxes, Social Security overhauls, Medicare and Medicaid, and health care decisions. For example, if we, as a society, think that we must change Social Security to be more “fair”, that would more than likely lead to an increase in personal income taxes.  What effects do these decisions have on us as citizens and consumers?

Many beliefs about income inequality tie in to political and economic beliefs about the role of government.  Is it the government’s responsibility to ensure that the Gini coefficient is at a “good” point?  Who decides that point?  What trade-offs must occur in government and society in order to decrease inequality of the distribution of wealth?

One reoccurring theme in the UFR curriculum notes that the national budget reflects national priorities.  Although it would be very easy to link income inequality to UFR Lesson 1.4 (Taxation), it is also an implicit part of the lesson in 1.1 (Social Security and the National Debt), 1.2 (Medicare and the National Debt) and, when graphs and charts are used for analysis, encourages student growth of analytic critical thinking skills.  An overarching question of “Is it the government’s responsibility to ensure that there is equal distribution of wealth?” could be a point to return to throughout a unit on the national debt.  Student answers may change throughout the unit, or throughout the course, depending on what data is gathered and analyzed.

So, there’s the formal economics of income inequality.  But, the question remains:  how can we tell what’s “true”?  After all, data is analyzed differently by disparate groups.  How could this be brought into the classroom to determine (1) reliability of sources, (2) reliability of data, (3) reliability of reporting, and (4) the reliability of using these resources to guide national policy?

This could be a great connection not only to having students learn about income inequality, but also building skills in map and graph interpretation, and bias in sourcing.  Teachers could start by pulling different sources – the video mentioned in the first paragraph, the WSJ blog, and the census data, as well as sources found on your own.  Encourage students to take some time to do a close read on the information from different sources.  Students should also read the comments on the blog from the WSJ, where people disagree with the blogger’s opinion, or how the Gini is determined, or even when the Gini is determined (Before taxes?  After taxes?).  How do all of these effect what we see as the Gini coefficient?  What does it mean to be a reliable source?  Which data set is “true”?  Which data set should be used to help guide federal policies to decrease income inequality, which President Obama has stated is a goal for his next three years in office?

Other resources for teaching income inequality:

 

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Fears of Social Security and Medicare’s Demise

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April 24, 2012

The annual report on Social Security, published Monday, stated that the retirement program “is on track to go bankrupt three years earlier than expected if reforms are not made,” reports Rachel Younglai and Glenn Somerville for Reuters.  The funding for Medicare similarly appears to be depleting quickly.  Social Security, the report projected, would begin to run out of money for retirees’ pension checks in 2033, while Medicare would run out of funding entirely by 2024.

These projections relate closely to the fact that baby boomers, 78 million Americans born between 1946 and 1964, began retiring last year.  As they continue to do so, the strain on both Social Security and Medicare will increase.

Younglai and Somerville quote two trustees of Social Security as warning lawmakers that they must act quickly in order to prevent the demise of the program.  Because a large portion of the funding for Social Security comes from payroll taxes, a current suggestion for how to keep the program afloat is to raise payroll taxes.  Right now, the payroll tax on employers and employees is 12.4 percent.  The recommendation is to raise the percentage collected to 16.7.  This 4.3 percent increase is estimated to cover the growing costs of Social Security so that the benefits will continue to be paid in full.

Congressmen also have considered raising the retirement age or cutting certain benefits to the wealthiest citizens.  Because of the impending elections, however, it is unlikely that any decisions will be made regarding these issues, Younglai and Somerville report.  The most urgent issue, trustees of the Social Security fund reported, was the disability insurance program, whose funding likely will be depleted by 2016.

In terms of Medicare, Republicans are pushing to overhaul the entire program, while Obama and the Democratic party claim that his new health care plan has added eight more years of life to its funding.  Because both political parties strongly disagree on a solution, Younglai and Somerville explain again that it is unlikely for any changes to be made before the next election.

Bringing the Article into the Classroom

Teachers may begin by asking the students how the article relates the current U.S. economy to funding both Social Security and Medicare.  Why does the state of this country’s economy influence the funding of these two federal programs?  What other issues does the article point out as influencing the potential demise of Social Security and Medicare?  The teacher may also ask students to come up with alternative federal budgets, tax plans, or even Medicare and Social Security distribution plans that take into account the depleting funds.  Finally, the teacher may ask students how the issues raised about Medicare and Social Security relate to the federal budget and federal deficit.

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