7 Mindblowing Economic Trends You Need to Know About
Photo Credit: Shutterstock.com
Stay up to date with the latest headlines via email.
The good, the bad, and the downright crazy in economic trends....
1. America lags behind much of the world on minimum wage. On May 18, the Swiss will vote on a proposed minimum wage of — are you listening American CEOs? — nearly $25 per hour. That would be, oh, about three times the current U.S. minimum of $7.25 per hour. The proposal was put forward by SGB, the country’s biggest union, and backed by the Socialist and Green parties. Though many in Switzerland, including the business community, oppose the hike, the Swiss system of direct democracy, which allows its citizens to vote on a variety of economic issues, can produce unpredictable results.
The U.S., meanwhile, can’t seem to get even a paltry raise through Congress, and falls behind Australia, France, New Zealand, the U.K., Canada, and Japan on minimum wage rates. If you include the robust social services available to many of the low-income workers in those countries, the American rate is even more appalling.
According to the AFL-CIO, in no state in America could a minimum wage worker working a 40-hour week afford a two-bedroom apartment. Even a raise to $10.10 per hour would not be enough to get many people out of poverty.
2. American millionaires: tax us! You read that right. A recent CNBC Millionaire Survey shows that most American millionaires consider inequality to be a “major problem” for the U.S. and that two-thirds support higher taxes on the wealthy. Our rich folks still flatter themselves that they have been rewarded with all their money because of hard work and they remain unabashed about the size of their fortunes. But they seem to have absorbed enough of the public’s increasing alarm about inequality to admit that there seems to be some sort of unfairness going on. Many of them think the problem must be education.
Democratic millionaires, as you might have guessed, are much more open to the idea of taxing the rich. Among those who think inequality is a concern, 78 percent of Democrats would be in favor of higher taxes on the wealthy, compared to only 31 percent of Republicans. Yet in the wake of Thomas Piketty’s bombshell book, Capital in the 21st Century, support for taxing the rich is even creeping into publications you don’t exactly associate with Marxist redistribution, like Forbes, where contributor Joseph Thorndike recently allowed that taxing the rich a bit more — nothing extravagant, mind you — might not be such a bad idea.
3. Retirement nightmare. Americans are freaking out about retirement, according to a new poll. Fifty-nine percent of citizens are afraid they will not have enough money for their senior years, says Gallup's annual Economy and Personal Finance poll, conducted in April among 1,026 adults. The next biggest fear is medical costs.
Experts used to say that a comfortable retirement — not a cushy one, you understand— required $1 million in savings. But now even that ginormous number appears too low, what with rising medical costs, disappearing pensions, insufficient 401(k)s, and low interest rates.
4. Economic fears kill baby-fever. The financial crisis sent birth rates plummeting around the world as couples either lacked money or worried too much about future shortfalls to feel comfortable having children. Today, global birth rates still haven’t bounced back.
This doesn’t bode well for the economy. As Thomas Piketty has pointed out, economic growth is associated with robust population growth — as are lower rates of inequality. When more people join the workforce each year than leave it, you get more people spending and producing. And when there are more babies born, the influence of concentrated wealth is curbed because inheritances mean less.