Since the start of the pandemic in 2020, the Federal government has been extremely involved in the U.S. economy. Stimulus after stimulus has been passed by Congress without much thought about the externalities of such new policies. One of the largest interventions by the government over this time period has been the increased amount of unemployment insurance benefits available to individuals that have lost their jobs.
The Group of Seven (G7), which consists of seven wealthy democracies including Canada, France, Germany, Italy, Japan, the UK, and the US, met over the weekend to consider a ‘global minimum corporate tax rate’. A new minimum rate of at least 15% was tentatively agreed on.
Since its inception due to the passage of the Fair Labor Standards Act of 1938, the minimum wage has been a highly debated topic. Originally set at 25 cents, the minimum wage has grown much larger over time. The Federal minimum wage currently stands at $7.25, unchanged since 2009 (DOL, 2019). Many states, however, have decided to set their own minimum wages, and some are much higher than the minimum Federal level. In this study, we attempt to determine the effect that minimum wage laws at the state and Federal level have had on poverty in the United States.
Congress will soon be passing a new Covid-19 stimulus package worth nearly $900 billion. This new package provides relief for individuals that are unemployed by extending federal unemployment insurance programs as well as providing an additional $300 per week benefit. It also includes loans for businesses, testing and vaccine funds, as well as funding for schools.
Adam Smith (1723-1790), explained why some countries were rich while others were poor in his 1776 seminal book The Wealth of Nations. Since Smith, and despite efforts by economists and government to explain differences between wealthy and poor nations, the wealth gap continues to widen. Several factors may determine to some degree the wealth of a nation. These include, but are not limited to decentralization, corruption, democracy, education, trade, and institutions.