Is our economy booming or just recovering?

Written by: Audrey Lehnen 

Is our economy booming or just recovering? If you have been keeping up with economic news, you might have heard that the economy has grown the most since 1984 according to NPR. I argue that the economy was simply recovering its losses due to COVID-19, and only improved a marginal percentage.

 People assume that the economy boomed because everyone started going shopping and to restaurants again, and traveling became a bigger thing than during COVID, when people were not spending as much money. Of course the economy looked like it was booming and growing at the fastest pace since 1984. Looking at the graph below, in quarter 2 of 2020 the economy was at negative 31.2% because people weren’t contributing to the economy, and in quarter 3 of 2021 it's at positive 33.8%. If you subtract the two, it's only a 2.6% increase, from what was already made up. 

Putting this in context, the United States economy is dependent on consumer spending. Whether that be travel, groceries, restaurants, it all contributes to the overall economy. With over a fiscal year to recover the economy, it's simply regaining its “former glory”, and really only increasing a small percentage. Again, people weren’t spending money, and then they suddenly did again, proving the point that it's simply recovering and then increasing a small percentage. 

Also taking into account inflation, higher wages and costs, can make the economy look like it's doing better than it is. Estimating a smaller increase on top of a recovery is more probable than a huge increase, because we weren’t doing anything new. It's like rediscovering an old song, plus one new song from the radio. You already had the old songs, so that doesn’t count, but the new song from the radio does. The economic growth is the same way. 

Optimists can argue that even the recovery is a huge economic boost and should be taken into account during the analysis of the graph. However, the super increase is due to domestic spending. Domestic spending has recovered even faster than GDP because so much of the demand has been for imported goods; the trade deficit has been growing as import growth has been buoyant and exports have been contracting. Meaning that as an economy, we rely on foreign goods, and the demand for said goods went up because of a supply problem, so demand increased, and when those products were available again, people jumped to buy them. 

So ask yourself, is the economy recovering, just like rediscovering old songs, or is it a completely new playlist because we are spending money on domestic products again? 

Horsley, Scott. “Believe It or Not, the Economy Grew Last Year at the Fastest Pace since 1984.” NPR, NPR, 27 Jan. 2022, www.npr.org/2022/01/27/1075782151/economy-gdp-pandemic-omicron-delta-inflation-labor-shortages-supply-chain.

Milesi-Ferretti, Gian Maria. “A Most Unusual Recovery: How the US Rebound from COVID Differs from Rest of G7.” Brookings, Brookings, 8 Dec. 2021, www.brookings.edu/blog/up-front/2021/12/08/a-most-unusual-recovery-how-the-us-rebound-from-covid-differs-from-rest-of-g7/#:~:text=U.S. growth has remained strong,(fourth quarter of 2019).

Should Minimum Wage be Raised?

Written By: Ben Schmidt 

In politics today, wage and the placement of minimum wage is a heated discussion. As inflation lowers the purchasing power of money, it is important that wages also shift to make sure that people remain with the same amount of purchasing power. Obviously, it would be very hard for the government to raise everyone's wage but they can at least control the minimum wage of the country, which 1.1 million workers work at (or below).

In the graph below, minimum wage, which is adjusted for inflation, is compared from 1964 to 2013. This graph shows how wage is increased and slowly loses it’s same purchasing power (peaks and the descending line that follows) as well as how much money it allows people to gain per year when compared to the poverty line. Though the orange line does represent the wage of one person over the course of the year, it is important to also consider how the poverty line is calculated. The line is purely based on the cost of the minimum amount of food needed for a family. This means that the purple line represents the amount of money needed, in a year, in order to buy enough food to live. This means that the poverty line does not look at extra costs of living, like a home, be it rent or repaying off a mortgage, or healthcare and health insurance. So while someone can survive at the poverty line, they are not living. It is also important to at least briefly consider other circumstances, like a single mother or father, where they would be working below the poverty line for a family of two. All in all, minimum wage is not a livable wage, it is only enough to survive. But, there are people against raising the minimum wage.

The people-against-minimum-wage’s first argument is that if the minimum wage were to increase, the businesses would start to lay off workers because their profit margins would lessen. It is important to understand that this concept isn’t wrong. If the amount of money that it takes to produce something is too high, firms will try to minimize these extra production costs. The issue with these concepts is that there are other inflation-esque properties that are functioning at the same time that are also reducing the money it takes to produce products. You can see it at the grocery store, where companies are reducing the size of their products—like the size of cereal boxes—but selling these products at the same price, this concept is called shrinkflation. Similarly, some companies are reducing the quality of their product in order to keep that product at the same price, this is called skimpflation (in a sense, it seems to be the inverse—of inflation—change in a company’s product to keep prices the same but it is really just following inflation). Connecting this back to laying off workers, if the minimum wage did raise, the amount of money needed to make a product would rise but because of the lowering of quality and quantity of their product, this raise would have minimal effect.

Overall, while companies may push back against a raise in minimum wage, it is important to consider the worker because a change in minimum wage would be able to increase the quality of a person’s life. And in a more cynical sense, a more healthy worker means a better, and more efficient worker, so, in the end, it is important that minimum wage increases to meet the inflating economy and lowering purchasing power of a person’s wage.

Works Cited

“Pros & Cons - ProCon.org.” Minimum Wage, 26 Jan. 2022, minimum-wage.procon.org/.

“Raise the Wage.” National Archives and Records Administration, National Archives and Records Administration, obamawhitehouse.archives.gov/raise-the-wage.

Travel Industry Predictions

Written by: Ava Kiel 

I predict the travel industry will take the longest to fully recover from the coronavirus, however the industry will drastically spike soon. 

International countries that are vacation-populated rely heavily on the travel industry. Some countries have a high share of GDP generated by travel and tourism. Take Macau, China for example; it is famous for the blend of Portuguese and Chinese cultures, the architecture, and it’s gambling industry. 50.2% of Macau’s economy solely depends on tourism- which is the most out of any other country worldwide. 100 to 120 million direct tourism jobs were put in jeopardy when Covid-19 came around. Now in 2022, as society is slowly coming back to how it was pre-pandemic, many tourism jobs are still predicted to remain unfilled. 

With these negative effects, I do however believe there to be an increase in demand for travel within these next few years. With canceling vacations during the pandemic, people are now planning to make up for lost time post pandemic. Whether it’s by car, train, airplane, etc., more people will hit the road. According to AAA Newsroom, “Airlines will see a 184% increase from last year”. The economy for those countries that rely on tourism are starting to see hope again. Using the example of Macau again, businesses would rely on international tourists before. Now, businesses like restaurants have been leuring in the locals as well. Special deals are offered to generate more business. With the Covid vaccines and protocols, more protection is shown to make people feel traveling is an option once again. 

People cannot wait to get out of their houses to travel, vacation, or see family; which is why I predict there to be a drastic spike soon in the tourism industry, even though it will take the longest to fully recover from the coronavirus. 

Shown above is a graph of the countries’ economies that rely most heavily on the tourism industry. This source is created by Rachel King, an author for Statista. 

Works Cited

Leposa, Adam. “Stats: Travel Industry Second-Fastest Growing Sector in the World.” Travel Agent Central, 27 Feb. 2019, www.travelagentcentral.com/running-your-business/stats-travel-industry-second-fastest-growing-sector-world.

Published by

                                    Statista Research Department, and Feb 4. “Countries with the Highest GDP from Travel and Tourism 2019.” Statista, 4 Feb. 2021, 

www.statista.com/statistics/1100368/countries-highest-gdp-travel-tourism/.

Torkington, Simon, et al. “This Is the Impact of COVID-19 on the Travel Sector.” World Economic Forum, www.weforum.org/agenda/2022/01/global-travel-tourism-pandemic-covid-19/.

Cryptocurrencies and the Economy

Aden Weier

 In the economy, the new way of making money and investing money is in crypto currency like bitcoin and ethereum. This has pushed many investors to want to get their way into the crypto market with how they can spend little and make big in the long run however you have to time the crypto market in the right time otherwise you can also lose a lot of money. 

If you have a computer at home you can actually mine crypto currencies using your graphics card. Each graphics card has a hash rate and that is how much your computer can solve complex equations to figure out the code to get some crypto currencies. And since people mining cryptocurrencies has seriously affected the graphics card mark. Due to the high demand the price for graphic cards has increased and people are buying them and scalping them to make more money then what the card is actually cost.  

As you can see the price of graphic cards has skyrocketed due to the high demand for cards to mine crypto. Also there is low supply because of the computer chip shortage happening all across the world so Nvidia cannot manufacture all the cards they want. Due to the high rise of crypto and mining crypto it is affecting the economy hard for supplies that everyone uses.

As I personally mine crypto as well I was able to get a 3070 just for 110% MSRP of the actual cost. And every second my personal computer is making money and investing all of it into the market to hopefully get a great outcome in the future.

Hong, Euny. “How Does Bitcoin Mining Work?” Investopedia, Investopedia, 11 Jan. 2022, https://www.investopedia.com/tech/how-does-bitcoin-mining-work/.

Joel Hruska on March 3, 2021 at 8:16 am Comments. “Nvidia's RTX 3000 Prices Have Gone from Bad to Brutal.” ExtremeTech, 3 Mar. 2021, https://www.extremetech.com/gaming/320487-nvidias-rtx-3000-prices-have-gone-from-bad-to-brutal.

“Leading Cryptocurrency Platform for Mining and Trading.” NiceHash, https://www.nicehash.com/my/dashboard. 

The US Unemployment Rate

 The U.S. Unemployment Rate

Ethan Kettner

Currently in the US it’s no surprise that the current unemployment rate is where it’s at. The population of the world is growing at a rate that is exponentially greater than the job growth for skilled high paying positions. Not only that, but we’re fresh off of one of the worst economic recessions in history from covid. The current unemployment rate is at 3.9% which is still high, and calculates to aout 198,000 U.S. citizens that are currently unemployed. The covid-19 pandemic was the greatest economic downturn since the great depression, because the unemployment rate reached 14.9% in April of 2020 which is the highest since the great depression. I believe that the unemployment rate is a bigger problem that the government has to narrow their broad power on because the unemployment rate also directly correlates to the poverty rates and the country's GDP. 

It’s not as many jobs are not hiring because currently most commercial companies and restaurants are understaffed but people are just not interested in taking part in low paying skilled jobs like that. So because of this the high skilled and paying jobs are decreasing at a n exponential rate so the work force can only be speculated to become increasingly difficult for future generations. 

You might ask yourself what are options that the government has to increase employment. Professionals speculate that one option is if they were to provide government funded training programs where unemployed individuals can get the education and experience that is needed for them to get back into the workforce. But as we know in economics there are always tradeoffs for everything. If we were to go through with this then that would also greatly increase government spending which is already a problem in our nation with our global debt growing everyday. Which also comes with trade offs which might force the government to have an expansionary plan of action to increase taxation to repay for the government spending. 

So in conclusion, I applaud the government and any readers of this blog post for understanding the problem at hand in our nation and if given the opportunity, help those people who are living under the poverty line. 

Works Cited

Amadeo, Kinberly. "What is the current U.S. unemployment rate?" The balance, 7

     Jan. 2022, www.thebalance.com/

     current-u-s-unemployment-rate-statistics-and-news-3305733. Accessed 12 Jan.

     2022.

Trading economics. "United States Unemployment Rates." Trading economics, 12

     Jan. 2022, tradingeconomics.com/united-states/unemployment-rate. Accessed

     12 Jan. 2022.

The Housing Market

 The Housing Market

Noah LaPorte

In the current housing market the inventory is far lower than the demand. When the supply for an item which in this case is a house stays relatively the same, while the demand increases, it causes the price to shoot up. 

For example, according to US.News.com, “Real estate information company Zillow predicts home prices will end 2021 a whopping 19.5% higher than the end of 2020.” This means it may be the perfect time to sell due to the large demand for housing. But with that buying houses are becoming much more competitive.

This lack of inventory is partially due to many more people purchasing multiple houses and either renting them out, or flipping them for higher prices. This being a very smart investment for many is making it very hard for some to find houses that are affordable.

Although this isn’t the only cause for this shortage. To sum up business insiders, there isn't enough foreclosures occuring to make a difference in this supply shortage. This added on to the rising prices for land and building materials making it harder to build new homes.

This graph above shows how the length of time it takes to build a home is rising and more jobs are being unfilled within construction. Correlating the fact that the lack of construction workers is partially causing houses to take longer to build. Causing a smaller supply increase than would be needed.

This will only continue to be a problem, I was able to talk with realtor Lisa Nevinski who has over 20 years of experience and happens to be my mom. She states, realtors without any experience causing prices to go 20,000-40,000 dollars over list price. With 10-20 offers on each home this problem will only continue. 

Our age group will have to deal with this problem in the next few years, but how will we fix it?

Works Cited 

What to Expect from the Housing Market in 2022 | Real ... 

https://realestate.usnews.com/real-estate/articles/what-to-expect-from-the-housing-market. 

Sheffey, Ayelet. “3 Reasons Why the Housing Shortage Will Last for Years, Goldman Sachs 

Says.” Business Insider, Business Insider, 19 May 2021, https://www.businessinsider.com/housing-shortage-real-estate-inventory-foreclosures-builders-millennials-goldman-sachs-2021-5. 

Negative Economic Impacts of College Football Bowl Games

 Negative Economic Impacts of College Football Bowl Games

Alexander Kuhnle

Each year the college football season is capped off with 44 bowl games including 2 College Football Playoff games, and a national championship game. Each bowl game is played between division 1 teams with 6 or more wins, and teams are placed in tiers based on skill level and popularity. Bowl games bring in great revenue for the participating athletic programs and grow exposure from a regional to a national level. However, the economic impacts that each game has on the schools, teams, players, and fans tend to be far more negative than positive. 

Recently, NCAA student-athletes gained the ability to profit off of their NIL(name, image, likeness), essentially allowing for a long-awaited payment system in college sports. Top talent players in each sport have been able to make money off of brand deals, merchandise, and social media presence. Even less popular sports and players have been able to generate profits for themselves while balancing a student and athlete lifestyle. Yet, schools still profit marginally more than a collective sum of each college athlete. Bowl games are a frequent example of poor wealth distribution by the NCAA. The TV revenue, sponsorship money, and ticket sales go largely towards the university. Thus, players are earning more money for filming a commercial than playing for millions to see. A frequent trend for NFL prospects is to sit out what they view as meaningless exhibition games. In one of the premier games, the Chick-fil-A Peach Bowl, the two most talented players, Pitt's Kenny Pickett and Michigan State’s Kenneth Walker III, both sat out to stay healthy in preparation for the upcoming NFL draft. In turn, the game had an attendance of 41,230 compared to a less popular bowl played in the same stadium earlier in December, the Celebration Bowl with 48,653. Prospects sit out these games because when healthier they have an increased chance at being selected higher in the NFL draft, which increases initial contract value. For players, the trade-offs of playing in the game means engaging in a non-profitable activity, diminished draft stock, and risk of injury. 

While each bowl brings in large amounts of revenue for each team, programs actually lose money each year if they become eligible to play in a bowl game. There are 10 conferences in college football, and each consists of 10 to 14 teams. Part of the annual revenue that each team generates is shared equally throughout their conference. According to Business of College Sports, Wisconsin just earned around $2,900,00 from participating in the SRS Distribution Las Vegas Bowl. This figure is added to a pool of earnings shared with every other Big Ten member . Meaning, Wisconsin will receive a fraction of the full Las Vegas Bowl payout to put back into their program. Additionally, each bowl game requires athletic programs to purchase more than 10,000 tickets to their game to resell to fans and students. In 2018, Western Michigan had 10,000 unsold tickets to the Famous Idaho Potato Bowl, costing the university over $400,000. Schools must also help fund the travel expenses for the team to each bowl game such as airfare, hotels, and events. As well as expenses for staff members, cheerleaders, and the band. Athletic programs gain exposure for upcoming recruits through bowl games but also endure essentially a taxation of their earnings. 

Every bowl game is forced into some form of a sponsorship deal or large-scale advertisement by broadcasting programs like ESPN and CBS. Whether it be outright naming a bowl game after a brand like the Cheez-It Bowl, Outback Bowl, and Guaranteed Rate Bowl, or obscure naming rights added onto traditional titles, like the Jimmy Kimmel LA Bowl presented by Stifel, or the Taxslayer Gator Bowl, each game is plastered with advertisements. Depending on the scale of the game, 3-year sponsorship contracts can add up to more than 20 million dollars. The naming rights include logos on the field and embedded commercials during the game. Yet, only the New Year’s Six bowl games generate enough return on investment for these sponsor companies. New Year’s Six bowls(Rose, Orange, Sugar, Fiesta, Cotton, and Peach) are the highest tier largely played between the top teams and conference winners in the country. The other tiers consist of Power 5 vs Power 5, Power 5 vs Group of 5, and Group of 5 vs Group of 5(Power 5 conferences, SEC, Big 12, Big 10, ACC, PAC-12. Group of 5 conferences, C-USA, MAC, AAC, Sun Belt, MW). The P5 vs P5 games bring in large amounts of revenue due to larger fan bases and support, yet still not enough for sponsorship companies to break even with the large advertisement deals. NY6 games can generate such large earnings because over 70% can be attributed to costly items like lodging and food/beverage, not to mention marginally higher national TV viewership. As shown from a study by SDSU on the Economic Impact of Bowl Games, while G5 vs G5 games have the highest percentage of food and beverage earnings, those earnings are still vastly lower than every other level. Those low-tier games have around 10,000-20,000 in attendance, compared to 40,000-90,000 for the NY6. As more fans at those more prestigious games mean more consumers, and thus a higher revenue in each category. In total, sponsors rarely make a return on their huge investments because of a lack of demand both on TV and at the game for a majority of the annual bowls. 

Works Cited

“Are Bowl Games Worth It? A Look at Their Economic Impact.” Front Office Sports, 18 Dec. 2018, frontofficesports.com/bowl-games-economic-impact/.

Humphreys, Brad. “More on the Economics of Bowl Games.” The Sports Economist, 27 Sept. 2019, thesportseconomist.com/more-on-the-economics-of-bowl-games/.

Kristi A. Dosh “College Football Playoff Payouts 2021-22.” Business of College Sports, 23 Dec. 2021, businessofcollegesports.com/college-football-playoff-payouts/.

Mosley, Kyle T. “Celebration Bowl Attendance, Viewers Outpaced Several FBS Bowl Games.” HBCU Legends, HBCU Legends, 1 Jan. 2022, www.si.com/college/hbcu/celebration-bowl/celebration-bowl-attendance-viewers-outpaced-several-fbs-bowl-games.

Rishe, Patrick. “Do The Economics Of Bowl Games Make Sense For Schools, Sponsors?” Forbes, Forbes Magazine, 1 Jan. 2014, www.forbes.com/sites/prishe/2014/01/01/do-the-economics-of-bowl-games-make-sense-for-schools-sponsors/?sh=21b11a2213cf.

Sutton, Dave. “Bowl Game or Bust: Is Title Sponsorship Worth It?” TopRight Partners, 17 Mar. 2021, www.toprightpartners.com/insights/bowl-game-bust-title-sponsorship-worth/.