United States Economy
The United States’ economy is essentially the base of society. However, throughout history, as the economy has grown, serious problems have come up. The poverty rate today is extremely high, the minimum wage is not sufficient in providing for a family, and there is also discrimination and inequality all over the employment frontier. Also, many businesses are reluctant to enable employees to form unions. All of these problems over time have led to serious debate for change in the economy. However, it is easier said than done. “Making Ends Meet,” written by David Patton, Ron Powers and Steve Herminghausen, aid to these issues by suggesting three approaches that may help today’s economy become more efficient.
As mentioned previously, poverty and the low minimum wage are a big problem in the economy. The poverty rate has remained largely unchanged since the 1960’s. Today, an estimated 32.2 million Americans live below the poverty line. These people are also not receiving sufficient funds to help their families. This does not directly tie into the low minimum wage, but they do relate to each other in some cases when even the working poor cannot provide for themselves. Today, many Americans are struggling to stay financially stable. However, for the less wealthy, the minimum wage is simply not enough money to make ends meet. Poor people working full time cannot even make enough to bring them above the poverty line. Technically in any economy there are going to be people in poverty. The problem is that there are way too many people in that category than there ever should have been. And it is also a fact that people without money cannot invest and/or contribute to the growing economy.
The other problems facing the economy such as discrimination, inequality and the prevention of forming unions is also not taken lightly. Discrimination, in my opinion, is the largest preventable issue in the economy. It is preventable because it involves social change. Businesses discriminate during the hiring process against every category one can discriminate. Gender, age, ethnicity and religion are all discriminated against in some part of the economy, and this leads to inequality within the workforce. For example, in some businesses, men are paid more than women. Some African Americans are denied employment or are left as a last resort when hiring. And it could all be prevented if there were no prejudice.
Another important issue within the economy is unions. Many employers are reluctant if not opposed to enable their workers to form a union. This is because the workers would become higher maintenance in terms of paying for health benefits, higher wages and the workers would be less expendable. With employees not in unions, they have little or no protection against losing their job at any given time. Unions provide protection from the employer’s or company’s threat of unemployment, no benefits or low wages. However, today only certain occupations have organized unions and many are continuing to fight to begin their own.
All of these issues have built up and accumulated over time, and now is the time to be thinking about what can be done about it. In “Making Ends Meet,” written by David Patton, Ron Powers and Steve Herminghausen, there are three separate approaches designed to try to help fix these problems. However, before even going on, all of these approaches and any other approach are going to take a pretty long time, but in the long run may just work.
The first approach suggests that society needs to stress personal responsibility so that people will avoid financial instability. For example, teaching younger children the importance of saving money and teaching them about priorities may in the future lead to them making their own good decisions and being more money conscious. Showing a child or young adult that things they want differ from necessities, and that their lives won’t be less fulfilling without all their wants is helpful in making them responsible economic decisions later on. Also, credit cards try to attract high school students to make a profit. If society was already making rational choices, then no one would be in enough debt to hurt them.
Although this approach seems helpful, it does have some tradeoffs. For example, if the effort to cut back on personal spending succeeds, it may cause business to just raise prices. This overall could have a dampening effect on economy. Also, the reality is that not everyone is going to make good economic decisions. Some people are required to spend ultimately all of their money, in some cases, to support their families.
The second approach mentioned is focused more on improving employment opportunities. Wages have not risen as fast as the cost of major necessities including education, housing and health care. To help solve this issue, the approach suggests the federal government increases the minimum wage; the government and businesses provide affordable child care for working parents; and county and local governments could adopt “living wage” ordinances. Also, it suggests that a worker’s rights to organize unions without the threat of job loss and employer intimidation should be better protected.
The downsides to these suggestions vary. Raising the minimum wage may influence business to increase prices which would ultimately hurt a majority of society. Employers are also already paying costs of government directives, therefore providing child care, adoption of “living wage” ordinances and allowing the organization of unions would cost them even more. This would also lead to a reduction in profits within companies and hurt workers’ pension funds. Ultimately, in this approach, government interference within the free market creates more problems than it solves.
The third and final approach involves “rethinking the safety net.” This means that government programs that were developed in the past to help Americans financially are today inadequate in doing their purpose, and need to be redesigned according to today’s social and economic needs. Suggestions for help include extending unemployment insurance, because when laid off, a worker’s unemployment benefits may diminish before finding a new job. An increase in public funding for services within the community may also be increased. Mass transit could also be improved to lower costs of commuting to work. Another affordable suggested action would be the provision of affordable health care from the federal government to the general population.
There are of course several problems with these actions as well. Many critics believe some people will take the safety net for granted and abuse it. Also, it can prevent people in some cases from leaving that economic situation. Government programs have also frequently shown to be unresponsive and insufficient.
This approach would require a lot of public funding, specifically for mass transit and providing community services such as child care, health care and affordable housing. The tradeoff to this is such an increase may reduce maintenance to government programs such as homeland security and also lead to increased taxes among the public.
All three approaches posses their own flaws and tradeoffs. However, I feel the best way in which to help the economy in all these issues is to use a combination of all three approaches, with certain aspects of each approach involved. First, to suggest what can be done. Schools should definitely emphasize job readiness, financial competence and promote easy access to classes on money management. People should also be taught to know what’s popular on the market is not always in their best interest. The federal government could also increase the minimum wage slowly and observantly of the changes of the economy associated with each raise in price.
Other actions that should be taken include government, as well as public funding combined to supply child care, health care and affordable housing in ways that won’t raise taxes extremely. Very importantly, workers should be better protected from employer intimidation when attempting to organize unions. Businesses need to take employees seriously and understand that although it will cost more to pay a union income, it benefits the employees’ welfare and may improve their individual performance. Mass transit should also be improved. It will help economically and environmentally. And finally, employment insurance should be extended as well.
However, the government regulations and public funding would have to be carefully planned and observed. Government interference would be at a minimum to try to maintain a free market as well. And, as always, any action has a consequence or tradeoff. This one will as well. People may abuse funded services, so perhaps the services must be better regulated in order to be eligible and maintain eligibility. Altogether, I feel that a mixture of approaches is the most economically efficient course of action.
The American economy is forever changing and growing. Many problems exist within the economy that must be handled today, and there are many views on how to do so. And although many things need to be done, it will take time and thorough observation in order to produce the most efficient economy.