All in all, it is not about protestors or ideaology. It is ultimately about jobs. It is always about jobs. Jobs will be created to build the Keystone XL and jobs will be created by the profits generated by the project. It is obvious that the Trump administration will be much more pro gowth and will not be focusing on so called Green Energy the way the Obama Admionistration did.
In the end what we want is as many jobs available as possible. If entry level workers are not able to find jobs, they will become a drain on society later. Look at Greece, where the youth unemployment rate is over 50%! Or other cities/states that have high unemployment among the young adult population like Detroit/Michigan. We also lament over the fact that many recent college graduates are unable to afford to afford an apartment in the cities they live in or even have a hard time finding work. This is due, in no small part, to the fact that they have little to no experience before and/or during their university years.
We unfortunately love immediate gratification in this country. As a negative, when the reverse happens....we do not notice. That is, when we implement a plan if we do not see negatives right away, we consider it to be a positive plan. The effect of raising wages to $15 an hour will be that while some have a better paying job; in 2-3 years many will be out of work all together. Think we pay a lot for Welfare benefits now? Just wait and see what happens.
You have obviously figured out the subject to which I am referring. It is that age old discussion about...that's right you guessed it.......MONEY. What? I thought we were talking about........? Believe it or not more parents are comfortable talking about the birds and the bees with their children then are comfortable speaking to them about managing their money and what a big part of their lives it is and will become.
I am currently writing a book on this topic that I hope to have out in the fall of 2015. But until then, maybe I can give you some food for thought as to why giving your children at least a basic education on how to handle and deal with money is important.
Financially apathetic Millennials may be the U.S's biggest liability.
Seriously, it may be the biggest issue for the generation of Americans under 40 years old. Apathy. Not really caring about much. Statistics are already showing that the millennial generation does not look to live life the same way as their parents or grandparents. Gone are the dreams to own a home. Too many of them either were burned in the housing bubble of 2008 or witnessed friends and family get burned.
So what does this mean? How does it translate to the world of Economics and Personal Finance? We have heard time and again that Millennials, (those born from 1982-2002), don't care to save that much, especially for retirement. They prefer to buy tech items like ipods, ipads and google glass. What we have not heard a lot about is how NOT spending money, especially on certain big ticket items, could hurt the economy. To further explore this topic lets take a look at some recent articles on the issue.
Stephen Gandel writes in a Fortune.com article, "not buying a house, not even being able to afford one, might be the best thing that ever happened to Millennials, financially speaking" Well this is an interesting argument and Stephen makes some good arguments on how renting versus buying is good for those in the generation of whom we speak. Is renting a better option for Millennials? It may be, but I can tell you this: it sucks for the rest of us! It sucks for the economy and quite frankly for all of the Solialist, leftist, markist redistribution folks; it is contributing to wealth inequality. That's right people! The very group whom are the biggest participants of the 99% movement are screwing themselves.
Ok, you say. Why do I care? How does this effect me? Just let the little buggers go out and screw themselves and blow all their money. Well....they are not blowing it in the standard or usual way to help our economy. By not buying cars, houses and other big ticket items their parents did at this age, they are not pumping money into the economy the way Demand Side economists would like. When 30% of 19 year olds do not have a license it can keep them from buying a car. A recent survey from American Student Assistance, (ASA), tells us that 63% of respondants say that student loan debt is keeping them from buying a car and 47% said it was keeping them from starting a small business. That small business thing really bothers Supply Side economists like myself. Because, you know, small business's create jobs! Good paying jobs!
Allow me to sum things up:
1) Less people buying cars means less jobs at OEM's (original equipment manufacturers), like GM, FORD and Chrysler, as well as car dealerships, mechanics, aftermarket stores, etc. The automotive industry, including dealerships, accounts for approximately3.5 percent of U.S. gross domestic product. In addition the auto parts industry accounts for 2.3 percent of the nations GDP.
2) Less people are buying houses and that means less jobs for real estate brokers, construction workers and little guys working at Home Depot. Private Residential Investment accounts for 5% of GDP according to the Bureau of Economic Analysis.
3) The economic impact of reduced purchasing by millennials breaks down like this:
But doesn't Astutefinances.com think that the rich and small business owners create jobs? So why are you caring about Demand Side economics? Why are you guys so interested in consumption all of the sudden? We do think small
business owners and the rich create jobs, and that is why we also see something else very interesting happening here. The transfer of wealth from those in the Millennial generation to those in generation X and the Baby Boomers. That is,
with Millennials choosing to rent more in the housing market as well as to find alternative means of transportation, they are leaving money on the table. No longer are they building equity in a home as previous generations did. Because they have massive student loan debt, (about 30,000 per person average), they are forced to pay on that instead. Investors are picking up real estate at depressed prices and renting it out to these individuals in the 18-35 year old range. This, as well as the creation of companies like Zipcar and Uber, means that less people in the 18-35 age range are building wealth while a few in that age range and many in the 36-65 age range are building wealth. It is, however, not a big 99% vs. 1% conspiracy. It is simple economics. And when it comes time for these individuals to support the economy by themselves in 10-15 years......they will not have the requisite assets to do so.
The debate has raged for the last 2 years, should we raise the minimum wage or not? Among those who are championing the proposed hike to as much as 15 dollars an hour is those whom say they cannot afford to raise a family on $7-8 dollars an hour. So let us examine what the statistics say about this. According to the Bureau of Labor Statistics: "Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the Federal minimum wage or less. Among employed teenagers paid by the hour, about 12 percent earned the minimum wage, compared with about 1.2 percent of workers age 25 and over."
In the world of economics it is very simple, you are what you eat. That is you are worth what you can produce. The 3% of adult workers who are making the minimum wage, do not have any skills. Furthermore, many of those whom are unemployed, cannot find work because they are not worth $7.25 an hour. You might say that is harsh, I call it a dose of realism. The purpose of minimum wages jobs is to allow inexperienced workers to gain experience. Once the worker has the requisite experience, he/she can move on to a higher paying job. Those workers, like Ms. Coleman, who say they need a $15 dollar an hour wage to raise their family, are unfortunately not skilled enough to demand those kind of wages. In addition, if the MINIMUM wage is set at $15 an hour, what happens to the incentive to better ones self? Well, the incentive to gain more skills runs out the door and the incentive to become educated is driving the getaway car!
But wait! Things are getting worse in this country! We must stand up and fight against the greedy business owners! Wrong again. According to the BLS: The proportion of hourly paid workers earning the prevailing federal minimum wage or less declined from 5.2 percent in 2011 to 4.7 percent in 2012. This remains well below the figure of 13.4 percent in 1979, when data were first collected on a regular basis.
Here is my final answer. We should not raise the minimum wage. If we do it will price young and inexperienced workers out of the market and will not allow them to gain the necessary experience they need to garner higher wages.
Here at www.Astutefinances.org we are always looking for good ideas on saving money. The following is a post on from a friend of mine on various ways to save money. Enjoy!
50 Novel ways to greater wealth
To save money, you just have to look around yourself and do away with items that you don’t require. Still,
here’s a list to ease your task of identifying areas where you can work to cut back on your monthly costs, save more and ultimately, become richer.
Saving money, as you can see, needs your conviction and exact implementation to extract the
best possible returns.