The Effects of Immigration on the American Economy

The Effects of Immigration on the American Economy
Written by: Ava Wille

Immigration results in many pros as well as a few cons that impact the United States economy.

Based on a report done in 2017, immigrants actually have an overall positive effect on long run growth. It is entirely true that first generation immigrants cost the government more than native born Americans, no one can argue that point. Keeping this in mind, it is important to also consider the fact that second generation immigrants are “among the strongest fiscal and economic contributors in the U.S.”. They contribute more then their parents took, and more than the native borns contribute in a given year. It should be also noted that it is more difficult to say how much undocumented immigrants contribute, as they’re more difficult to survey, but it is suggested that as they are usually younger and do not qualify for public benefits, they also do not have any detrimental effects on the US economy. There are also downsides to immigration however. It is true that there is a limited supply of jobs for people who couldn’t afford to finish high school or college, a demographic which is represented largely by the Hispanic and black communities. Luckily, thanks to new policies that make it easier for immigrants to pursue higher education, more and more immigrants are earning college degrees, which means they are contributing more and more to higher positions.

There are still negatives however. It is much easier to exploit immigrant labor, as they are willing to work for extremely low wages, coming into the country fresh and needing a job. In fact, the Mercury News found in union elections that in at least 50% of campaigns involving a majority of undocumented workforces, threats were made to call immigration over the unionizing activities. This is a despicable practice that is a reason why it is easy to keep wages for the workers. To keep up with the demand for labor, we actually need immigrants who are willing to take jobs that are easy for them to come into without needing to take the time to pursue a formal education. If supply increases while demand remains the same, price falls. While the cheap labor does mean the price falls for consumers, we should be helping those who are truly in need of it. Therefore, the overall current labor laws and the way that employers abuse them is a negative effect at this point.

Overall, there are many different effects of immigration on the economy, too many to fit in one post, but the two main ideas are that immigrants have a positive long run effect on economic growth, but are easier to exploit for cheap labor. Please feel free to comment below if you think that immigrants have an overall more positive or negative effect on the United States economy based on the information given above.

Credit Card Debt is it Preventable?

Credit Card Debt is it Preventable?
By Benjamin Ours

In 2018, US households accumulated an additional 26 billion dollars in credit card debt. Americans accumulate this over simple reasons such as misunderstanding credit, not making a budget, or emergencies and unforeseen expenses. It doesn't help that the APR, the rate which you accumulate interest is high. According to CNBC, It’s currently sitting at 17.73%. With all this against you, is credit card debt preventable? Yes, it is preventable, and the most efficient way to prevent credit card debt is literacy in your credit card statements, using balance transfers, and making a budget.

What is the minimum payment on your credit card statement? The minimum payment allows you to pay the minimum amount on your balance. However, According to creditcardinsider, credit card companies offer a grace period (as most do), it must give you at least 21 days from when you get your statement to pay before it starts charging interest on purchases. Especially if your a heavy spender, and are unaware of this, it will make you go into financial debt fast. An important tip to prevent this is to write down purchases so you don't go blind, and go unaware of your spending. Remember the minimum statement is not what you should pay, it's your full balance on time so it doesn't collect interest and lead you into piling more credit card debt. You should know and understand all parts of your credit card statement so you don't make a bad choice that could even affect your credit score and worse your life.

Another way you can prevent more credit card debt is a balance transfer. The idea is you transfer your credit card debt to another credit card, with a lower interest rate. It allows you to pay off the debt you have with no interest. However, you do have to pay a balance transfer fee of 3% of the debt you have. For example, if your debt is $3,000 then if you would have to pay 3% of it, which would cost you $90. You cant transfer to the same type of credit card; you have to open a new card from a different bank. If you don't pay your debt on time you will be charged interest like before. This will lead to more debt as you'll have to pay for both cards now. If you chose this option its recommended to have a plan before you to maximize this grace period. Most people pay the minimum payments on pay periods then when the grace period is over they wonder why they are in so much debt. This way is risky but with planning, you can get rid of your debt.

The last and most efficient way to prevent credit card debt is simply making a budget. For how easy it sounds many people find it hard to start. According to moneyunder30  As you’re working, make sure you list the amount, the interest, the term, your monthly payments, and the available credit limit for each debt. This will help you understand the full breadth of the situation, and give you solid numbers to work with when you create a budget (spoiler alert). Not only will a budget help you come to terms with where you are but help start to take action. You can start simply with a spreadsheet or look at mobile budgeting apps. I recommend the mint budgeting app as all your information is there and it's free. Also while creating a budget don’t forget to include an emergency fund for an unforeseen expense.

If you use one or all of these tips, it will help you get on the track of preventing more debt and provide a happier you. What are you waiting to do, start saving!

Works Cited

Ashe-Edmunds, Sam. “Main Reasons People Get in Credit Card Debt.” Pocketsense, 10 Jan. 2019, pocketsense.com/main-reasons-people-credit-card-debt-4089.html.

Cannon, Ellen, et al. “What Is a Balance Transfer, and Should I Do One?” NerdWallet, 6 June 2019, www.nerdwallet.com/blog/credit-cards/balance-transfer-3/.

“How Paying a Credit Card & Statements Work.” Credit Card Insider, www.creditcardinsider.com/learn/how-paying-a-credit-card-works/.

“It's All Coming Together.” Mint, www.mint.com/.

Leonhardt, Megan. “55% Of Americans with Credit Cards Have Debt-Here's How Much It Could Cost You.” CNBC, CNBC, 5 June 2019, www.cnbc.com/2019/05/17/55-percent-of-americans-have-credit-card-debt.html.

“What Is a Credit Card Interest Rate? What Does APR Mean?” Consumer Financial Protection Bureau, www.consumerfinance.gov/ask-cfpb/what-is-a-credit-card-interest-rate-what-does-apr-mean-en-44/.

Opportunity Cost of Fraud: Is it Worth it?

Opportunity Cost of Fraud: Is it Worth it?
Written by: Ian Young

Whether the case be one of an accidental fraudster, or a fraudster with malicious intent, fraud surrounds us everyday. Asset misappropriation plagues small businesses constantly. We also hear stories of bigger fraud cases, like that of the 1MDB scandal, where the 1MDB trust fund bypassed anti-money laundering laws and was embezzled by the prior Malayasian Prime Minister. With so many people committing fraud, one asks themselves, is it worth it? If it was not worth it, then why would people continue to commit fraud? We are going to answer these question here today by looking at the most infamous fraud case to date, that of Bernie Madoff’s ponzi scheme.

First before we get into whether it was worth it for Bernie Madoff, you need to know what a ponzi scheme is, and the extent of Madoff’s crime. A ponzi scheme is a fake investment scheme, where the fraudster in question never invests the money. The investor takes money from new “investments” to pay the “interest” of the old “investments.” This is why ponzi schemes are also referred to as the “rob Peter to pay Paul” schemes, because you rob the new investors to pay the old ones. This is why ponzi schemes are doomed to fail from the start, but can last indefinitely as long as the scheme continues to get new investors.  Bernie Madoff had the largest ponzi scheme, and while it is hard to nail down the exact price because it was an international ponzi scheme, it is believed that he stole around “$64.8 billion in client assets.” (Will Kenton) $64.8 billion is a lot of money, but what was the opportunity cost worth it?

Now that we know how much money Madoff made in the ponzi scheme, we need to figure out how much money he was making before to see how much money he could make. What people don’t remember is that Bernie Madoff was the head of a very successful and legitimate stock exchange company. At the height of his stock exchange company Bernie Madoff was making roughly $100 million a year. (Will Kenton) We do not know how long the ponzi scheme was running, but it is thought to be going for 17 years. So just looking at the period of when the ponzi scheme was running Madoff gave up $1.7 billion for $64.8 billion. If the story would have ended the moment the FBI put hand cuffs on Madoff, then yes it would have been worth it, but the story did not end.

Before he was tried in court, he was arrested, and was released on a $10 million bail, raising the opportunity cost to $1.71 billion. The Court case was a brutal one for the defendant, Madoff stole so much money that the government was not willing to give him a plea bargain, and sentenced him on eleven counts of felony. (justice.gov) Madoff got sentenced to 150 years in prison, because he took the full blame of the ponzi scheme. This was controversial because there is strong evidence to believe that his family knew of and helped with the ponzi scheme, but that is a discussion for another time. The important part is that Madoff was sentenced to 150 years in prison, those are 150 years that he could be hypothetically making money if he did not commit fraud. So $100 million a year for 150 years brings the total to $15 billion, so the total opportunity cost would be $16.71 billion. But you might be thinking, “Ian, even if Madoff was locked up at his birth, there is no way he could be alive for 150 years, much less be working and making money that whole time!” This is correct, however you need to take into account that Madoff’s children could take over the company, or he could sell the company for a similar profit, which is why I am still including it in the opportunity cost.

But wait there’s more! Even though one Bernie Madoff’s papers his ponzi scheme was responsible for $64.8 billion, this number is drastically overstated. This is because a lot of the money was fabricated interest that only existed on paper. Even though the $64.8 billion adequately represents the time stolen from the investors, the actual principal investments only total $20 billion. Madoff also had a lot of his assets seized. When all was said and done, the total amount of money was $104 million in assets. That brings the opportunity cost up to $16.81 billion. Then you need to consider how Madoff’s family was impacted, because after all they were working at his “investment” company. The total lawsuits to be brought against the Madoff family were roughly $199 million(CNN) this brings the opportunity cost of the crime up to $17 billion.

There is still a $3 billion dollar difference from the amount that Bernie Madoff gained in his ponzi scheme to the opportunity cost, but there is still one factor left unanswered. Those are the lives that Bernie Madoff took indirectly due to his ponzi scheme. Bernie Madoff’s son hanged himself at the age of 46 on December 11, 2010, and Bernie Madoff himself has stated that he is responsible. Charles Murphy, a well-connected hedge funder with Bernie Madoff, lost $7 billion with Madoff; this drove him to jump from his hotel room on the 24th floor to his death.(CNBC) Who knows how many others could not pay their medical bills, could not make their mortgage, and had to spend the rest of their lives barely making ends meet because they lost their life savings with Madoff. Due to this Madoff stole the lives and freedom of many people when he stole their money.

It was not worth it for Bernie Madoff, and if it was not worth it for someone who stole $20 billion, it will never be worth it.

Works Cited

“Bernard Madoff Fast Facts.” CNN, Cable News Network, 24 July 2019, www.cnn.com/2013/03/11/us/bernard-madoff-fast-facts/index.html.

JeffCoxCNBCcom. “Investor Burned by Bernie Madoff Jumps to Death from Hotel.” CNBC, CNBC, 28 Mar. 2017, www.cnbc.com/2017/03/28/charles-murphy-investor-burned-by-bernie-madoff-jumps-to-death.html.

Kenton, Will. “The Bernie Madoff Story.” Investopedia, Investopedia, 4 May 2019, www.investopedia.com/terms/b/bernard-madoff.asp.

Longley, Robert. “What Is Fraud? Definition and Examples.” ThoughtCo, ThoughtCo, 26 Aug. 2019, www.thoughtco.com/fraud-definition-and-examples-4175237.

ScottCohnTV. “10 Years Later, Here's What Became of Bernie Madoff's Inner Circle.” CNBC, CNBC, 11 Dec. 2018, www.cnbc.com/2018/12/09/heres-what-became-of-bernie-madoffs-inner-circle.html.

The Economic Downside of the Foster Care System

The Economic Downside of the Foster Care System
Grace McGowan
Economics A2

The foster care system is a temporary arrangement for kids whose parents are unable to care for them. Adults sign up as foster parents to care for these children in the place of their birth parents.
This, I’m sure, most of you probably already knew. What you probably don’t know, however, is that there are over 400,000 kids in the USA’s foster care system every year.
That number has been rising.

In 2017, over 690,000 children were in foster care.
Sadly, a lot of kids don’t even end up getting adopted or returning to their homes. In 2017, more than 17,000 foster kids turned 18 or 21 and aged out of the system. Aging out of the system is when foster kids turn 18 or 21 years old (varies based on state) and are legally considered adults. They are therefore forced to move out of their foster home and start life on their own.

Foster care kids don’t get to choose their own fate. They are born and placed into these ill-fated lives. Just because they are wards of the state, that doesn’t mean they aren’t real people. The problem is not the kids, the problem is society. These are our kids. When we deprive them of a good family, education, and stability, we are setting them up for failure, and it’s damaging our economy and society as a whole.

Everytime a child ages out of the system, we as a society fail them and ourselves. We create more poverty, homelessness, and in some cases crime in our nation.

Furthermore, there was a study done on children’s mental health in foster care; 42% of teenagers ages 15 to 19 had a mental health disorder. These kids have these health problems due to poor foster or group homes with bad foster parents, along with their home trauma they experienced prior.  Those with mental illnesses are less likely to be able to hold down a job and they are more likely to end their own lives.

More specifically, out of kids who have aged out of the foster care system, 20% of them “will instantly become homeless” (51). In general, these kids are not only more likely to become homeless than other kids, but they are also more likely to become incarcerated and be unemployed. Even more striking than this, “less than 3% will have earned a college degree [and] 71% of women will be pregnant by 21” (Adoption).  Only around half of foster care kids even graduate from high school. Education is not only a national right, but it is “an investment in a nation’s human capital” (Adoption). The more kids are educated, the more successful they will be. They will be more able to make a living for themselves and make their impact on the right side of the economy.

If we don’t make a change now, the number of foster kids will continue increasing, making it harder to find funding in the government for their basic needs.

America overall needs more and better foster and adoptive families. It is the most clear and effective way to make a change and give these children the proper homes that they need. Offering better and more training for these foster families will also make an impact on how the children are raised and treated for. These children need to be treated as real children. Bettering these kids is bettering our whole society.

The foster care system cannot be fixed with one child, with one year, not even with one generation, but it all starts with one person.




Works Cited
“51 Useful Aging Out of Foster Care Statistics: Social Race Media.” National Foster Youth Institute, 26 May 2017, www.nfyi.org/51-useful-aging-out-of-foster-care-statistics-social-race-media/.

“Adoption Advocacy and Awareness.” National Council for Adoption, www.adoptioncouncil.org/.

Doyle, Joseph J, and Anna Aizer. “Economics of Child Protection: Maltreatment, Foster Care, and Intimate Partner Violence.” Annual Review of Economics, U.S. National Library of Medicine, Aug. 2018, www.ncbi.nlm.nih.gov/pmc/articles/PMC6469872/.

“The Impact of the Economic Crisis on Foster Care.” FosterClub, 10 Jan. 2019, www.fosterclub.com/blog/foster-care-news/impact-economic-crisis-foster-care.'

Zill, Nicholas. “Adoption from Foster Care: Aiding Children While Saving Public Money.” Brookings, Brookings, 29 July 2016, www.brookings.edu/research/adoption-from-foster-care-aiding-children-while-saving-public-money/.

What is College Doing?

What is College Doing?
Emily Kiser

The average college student debt is $26,000-32,000 at time of graduation. Many would say that the debt accrued is far out-weighed- by the experience and preparedness they receive. Although, one could argue that college tuition is negatively affecting our economy. The goal of the graduate is to contribute to society, which enhances the circular flow of income within our economy.  The Atlantic reports that 53% of all college students in the US are unemployed or work in a job that doesn’t require a bachelor's degree. Consumer affairs states that it takes a new graduate 5-7 months to find a well paying job in their field. In the interim, the graduate is accruing more debt including interest. This could put the economy at a disadvantage. The research shows that leaders in businesses are unimpressed by the quality of students graduating.With a competitive arena of colleges, schools may be lowering their standards in order to graduate more students annually. It is also possible that college students are not being trained to transition into their new field or work place. Although, students are well educated by the time they graduate, there seems to be a lack of commitment to helping them transition into the workplace. Students are not prepared with a plan or job prior to completing their training years. This is an easy fix within the school systems. A change in the curriculum is not a cost factor and would benefit both the schools ratings and the students looking for jobs as a new graduate. Unemployment in the US is at an all time low, yet the statistics make one rethink the appeal to go to college.

Even after looking at the negative impact of going to college, there is even more evidence that college graduates are coming out ahead and impacting our economy positively . A college student may spend four or more years earning a degree, but the research shows that the opportunity cost of these students benefit from having a degree. A recent study from Georgetown determined that college graduates earn $1,000,000 more in earnings throughout their life.

Business often look for employees in the workplace with a college education for many reasons. Higher productivity, strategic and critical thinking, and problem solving skills are part of the higher education training. This benefits businesses overall. It could also bring a host of other positive benefits such as improved health and wellness, a stronger work ethic, increased voting rates and contributions to their community. College graduates are also contributing more in taxes and less reliant on government services. This improves the overall health of the economy.

Both the pros and cons of attending college have been discussed. In conclusion it seems that more college graduates will enhance the economy's overall health.. Young people are getting the opportunity to receive higher pay, better benefits, and satisfying careers. Businesses within our economy are finding productive, self starters who improve the overall health of their companies. This, in turn will benefit our economy. There is still the question of how to make higher education more attainable and affordable for every person, but that is a blog for another day.



“College Is More Expensive than It's Ever Been, and the 5 Reasons Why Suggest It's Only Going to Get Worse.” Google, Google, www.google.com/amp/s/amp.businessinsider.com/why-is-college-so-expensive-2018-4.

Education, Liberal. “The Economics of Higher Education.” Association of American Colleges & Universities, 30 Dec. 2014, www.aacu.org/publications-research/periodicals/economics-higher-education.

Rampell, Catherine. “Why Tuition Has Skyrocketed at State Schools.” The New York Times, The New York Times, 2 Mar. 2012, economix.blogs.nytimes.com/2012/03/02/why-tuition-has-skyrocketed-at-state-schools/.

Job Growth Falls Short!

Job Growth Falls Short!
Jaden McManus



Donald Trump released a tweet on September 5, 2019 “Really Good Jobs Numbers!”. After the jobs numbers were released Trump released a video on twitter covering the fact that there were multiple job opportunity increases for those of different races, while he isn’t focusing on that expected projections in the workforce to be 150,000 by August not meeting the goal and hitting the job growth of 130,000 jobs. As the job growth increased so did the percentage of discourced or underemployed workers from 7% to 7.2%. But Donald Trump isn’t wrong about the positives that come along with the job growth.
The average hourly earnings increased to 0.4% as for over the total year has hit 3.2%, which was a one-tenth of percentage better than expected. As expected with the job growth increase the labor force participation increased to 63.2%, which is the highest it has ever been since August 2013. Most claim that the report had some negatives but overall was a pretty positive report. With the job growth having positives of breaking new milestones like the labor force participation and the total number of Americans considered employed raised as well, there is still focus on the job growth not meeting the expected growth spurt. Along with the labor market being considered to be in a strong position and for the consumer to be “strong”.
The monthly job growth has slowed down to 158,000 to when it was originally a year ago 223,000. This has raised concerns that the economy is slowing down and may be headed for recession. Because of past months numbers even the past months were revised lower, for example. In June, it was 193,000 to 178,000 which predicted July to be 164,000 to 159,000. Which brought the job growth down to 156,000 for the month of August. The economy is facing Recession fears as the job growth rate was at 3% about a year ago and has dropped down to 2%, the Federal Reserve had its first cut rate since the Great Recession.
Overall there is change to help the U.S. have a healthy economic outlook. As for right now the job growth rate is expected to be between 2%-3% so the rate we have right now isn’t going to cause too much of a scare to cause another form of the Great Recession. Currently there isn’t too much inflation or deflation and the unemployment rates are to stay natural. Trump has “promised” and planned for the economic growth to increase to 4%. With the rate currently being 2% it may be harder to reach the goal Trump has set. Considering the factors of supply, demand, economic future, and capital availability.

Economic Effects of Increasing the Minimum Wage

Economic Effects of Increasing the Minimum Wage
By Norah Krause

The first federal minimum wage, established in 1938, was $0.25 per hour. It was one of the aspects of the Fair Labor Standards Act of 1938. Since its introduction, the federal minimum wage has been raised 22 times by 12 presidents. According to the Economic Policy Institute, the federal minimum wage was last raised in 2009. Many states have increased their minimum wages, including California, Massachusetts, and Oregon. Washington D.C. has the current highest minimum wage at $14.00 per hour. Proponents for raising the minimum wage say that it's currently too low to live on and that increasing it will create jobs and grow the economy. Opponents say that many businesses can’t afford to pay their workers more, and will need to lay off workers, close, or reduce hiring; and that raising the minimum wage will increase the price of consumer goods. However, the benefits of increasing the federal minimum wage outweigh the disadvantages.

According to Ben Zipperer, an economist at the Economic Policy Institute, “A national $15 minimum wage by 2024 is an important corrective to ensure that low-wage workers share the benefits of economic growth.” Recent research on the economics of the minimum wage shows that prior state wage increases have had “little to no negative consequences and instead have meaningfully raised the pay of the low-wage workforce.” Three states have a minimum wage of $12 per hour: California, Washington, and Massachusetts. California is expected to increase its minimum wage to $15 per hour by January 1, 2022. As of now, the minimum wage increases in California have not had an adverse effect on its unemployment rate. As seen in this graph, the current unemployment rate in California is 4.1% and the rate has been decreasing since 2012.

Although the dropping unemployment rate may not be due to the increasing minimum wage, it shows that increasing the minimum wage does not directly increase the unemployment rate. The unemployment rate of most states is either dropping or remaining unchanged, regardless of whether a state has a higher minimum wage than the federal minimum wage or not.
Supporters of increasing the federal minimum wage say that the current wage is too low to live on. The minimum wage was designed to create a baseline standard of living for employees. If the minimum wage falls below the living wage of an area, it’s no longer fulfilling that original purpose. According to the Living Wage Calculator developed by Dr. Amy K. Glasmeier of MIT, the living wage for one adult in Waukesha County, WI is $11.65 per hour, $4.40 more than the federal minimum wage. This calculation takes into account expenses including food, medical, housing, transportation, and taxes.

https://youtu.be/-SCB1t28nDU
This video shows the life of a single mother and her son living on $7.50 an hour. She struggles to pay for food, rent, childcare, and health care. Without rent assistance, food stamps, and childcare help, she would likely be living in a shelter with her son. Safiyyah is one of the roughly 1.8 million people with hourly wages at or below the federal minimum. Although they make up only 2.3 percent of hourly workers, their struggles are evident. Many rely on government assistance in the form of welfare programs, like Safiyyah does. Some work multiple part time jobs to cover expenses. According to the House Committee on Education and Labor, an adult with two children is left thousands of dollars below the poverty line when living on the minimum wage. Living on the federal minimum wage alone is impossible. The current wage no longer fulfills its purpose of creating a standard of living for American workers.

The unemployment rates in states that have increased their own minimum wages have not been negatively affected by those changes. This shows that increasing the federal minimum wage is unlikely to increase the unemployment rate. Also, the current federal minimum wage is impossible to live on. These are two reasons that the federal minimum wage should be raised. However, there are many arguments both for and against raising the federal minimum wage. What are some that you’ve heard? How do the two sides of the argument compare?







Works Cited
“Minimum Wage Tracker.” Economic Policy Institute, 12 July 2019, www.epi.org/minimum-wage-tracker/. 

“Pros & Cons - ProCon.org.” Minimum Wage, minimum-wage.procon.org/.

Scott , Robert  C. Raising the Minimum Wage: Good for Workers, Businesses, and the Economy. edlabor.house.gov/imo/media/doc/FactSheet-RaisingTheMinimumWageIsGoodForWorkers,Businesses,andTheEconomy-FINAL.pdf.

“Who Earns the Minimum Wage?” American Experiment, 23 Mar. 2018, www.americanexperiment.org/2018/03/earns-minimum-wage/.

Zipperer, Ben. “Gradually Raising the Minimum Wage to $15 Would Be Good for Workers, Good for Businesses, and Good for the Economy: Testimony before the U.S. House of Representatives Committee on Education and Labor.” Economic Policy Institute, 7 Feb. 2019, www.epi.org/publication/minimum-wage-testimony-feb-2019/.