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Gulf Today
a day ago
- Business
- Gulf Today
Why Medicaid work requirements won't work
Kathryn Anne Edwards, Tribune News Service The US labour market is a truly astonishing thing to behold. It includes 171 million Americans, as young as 14 and older than 90, some who never finished elementary school and others with PhDs. It is resilient and dynamic, shrinking during recessions but growing again after. It provides the majority of Americans with the majority of their income. All of which is to say: It is common to look to the labor market as a kind of salve for all economic wounds. Whatever the problem is, the solution is to get people working. Unfortunately, it's not that simple. For all its strength, the labor market is encumbered by the low-wage labor market — where work doesn't support a stable living, and where jobs are so bad they're more salt than salve. This is a reality that Republicans in Congress, in their current push to impose work requirements on Medicaid recipients, ignore. They are making policy for a labor market that doesn't exist. The 'low-wage labor market' is a vague designation. It's typically defined as those workers who have relatively or absolutely low hourly earnings, such as the bottom quintile or quarter of wage earners, or earners below some nominal wage cutoff. Whatever the definition, however, there are some aspects of the low-wage labor market that are obvious: The low-wage labor market is large. At least 39 million workers in the US earn less than $17 an hour, which is the equivalent of $35,360 annually. That is just below 138% of the poverty threshold for a family of three — the income needed for parents to be eligible for Medicaid in states that expanded it under the Affordable Care Act. Earnings in the low-wage labor market are volatile. Earnings volatility measures change in wage income from one month to the next. Instability at both the very top and very bottom is so great that economists have a term for it: the 'wild ride.' Recent research from the Brookings Institution's Hamilton Project shows that low-wage earners see more spikes and dips in income than any other group, with the dips being especially large. They have the most volatile earnings when measured by the coefficient of variation, regardless of whether the household has a single or multiple earners. That volatility can be partly attributed to unpredictable hours. Many low-wage earners are employed in shift work, in which their hours and schedule can vary week to week, often with little notice. According to Harvard's Shift Project, two-thirds of workers in retail and food service get less than two weeks' notice of their schedule, half get less than one week's notice, and 70% report that the timing of their scheduled shifts changes at least once a month. This flexibility is more likely to be imposed by employers rather than requested by employees; the more volatile the hours, the fewer hours typically worked. Low-wage jobs usually also have low-quality benefits. Of private-sector workers in the bottom 25% of the wage distribution, 30% do not have access to any type of leave, whether it is sick, holiday, vacation or personal. Some 56% do not have access to an employer-sponsored health-care plan, while 84% do not have access to an employer-sponsored dental plan. And 50% do not have access to a defined-contribution retirement plan. The bottom line is clear. Working Americans are eligible for social benefits such as Medicaid not only because their pay isn't high enough, but also because it isn't reliable enough. Classic labour theory holds that workers are balancing two conflicting goals: the consumption of purchased goods, and the consumption of leisure time. The former requires time at work; the latter requires time away from work. It is up to the worker to calibrate how much of each they want. Of course, economists will try to predict how workers and consumers will react to any change in their earnings. If a worker gets a wage increase, the 'income effect' would push them to work less: They can still consume the same amount of purchased goods but also have more leisure time. Alternatively, a wage increase could trigger the 'substitution effect,' pushing them to work more: The price of leisure (foregone wages) is now more expensive. But what if that worker gets a non-wage increase from a public benefit? There is no substitution effect, just the income effect — that is, they would work less. This is the economic foundation for the idea that public benefits discourage work. Work requirements are meant to counter this incentive. It sounds reasonable. But for at least 39 million Americans, work brings low wages, unstable earnings, unpredictable hours and few benefits.
New York Times
31-03-2025
- Business
- New York Times
How Much Does America Spend?
Discussions about federal spending are difficult because the numbers are so large that they can be difficult to grasp. How many ordinary folks can truly comprehend how much $1 billion — that's a thousand millions — is? And still, it's a rounding error (just 0.01 percent of spending) compared with the nearly $7 trillion federal budget. This is the context for the federal spending cuts led by President Trump and Elon Musk's Department of Government Efficiency. Last week, the administration announced its latest dismissals: 10,000 employees at the Department of Health and Human Services. That sounds like a lot of people, but it's small for a government that employs three million civilian workers. How much has DOGE pared back so far? Federal spending is actually higher this year than it was at this point in 2024, according to the Hamilton Project. Today's newsletter walks through what the federal government spends money on, to clarify these big numbers and show the actual effects of Trump's efforts. Growing debt Since the early 2000s, the federal government has spent more money — sometimes much more — than it collects in taxes. That has caused the debt to grow to levels not seen since World War II. Federal debt as a share of G.D.P. U.S. entered World War II 2008 financial crisis Covid began 100% of G.D.P. 80 60 40 20 1900 1920 1940 1960 1980 2000 2020 U.S. entered World War II 2008 financial crisis Covid began 100% of G.D.P. 80 60 40 20 1900 1920 1940 1960 1980 2000 2020 Note: Chart excludes debt the federal government owes itself. Source: Congressional Budget Office By The New York Times Federal spending by function in fiscal year 2024 From October 2023 to September 2024 Total: $6.8 trillion Social security 21.6% Medicare 12.9% Defense 12.9% Other health services (includes Medicaid) 13.5% Other 4.6% Income security (includes welfare programs) 9.9% Education 4.5% Interest payments 13.1% Veteran's benefits and services 4.8% Transportation 2% Total: $6.8 trillion Social security 21.6% Medicare 12.9% Defense 12.9% Other health services (includes Medicaid) 13.5% Income security (includes welfare programs) 9.9% Other 4.6% Education 4.5% Interest payments 13.1% Veteran's benefits and services 4.8% Transportation 2% Note: Numbers may not add up to 100 percent due to rounding. Source: Treasury Department By The New York Times Federal spending in the fiscal year 2022 From October 2021 to September 2022 Total: $6.3 trillion Each square represents 1 percent of spending. Federal work force wages and benefits: $271 billion or 4.3% Total: $6.3 trillion Each block represents 1% of spending. Federal work force wages and benefits: $271 billion or 4.3% Sources: Congressional Budget Office; Treasury Department By The New York Times Want all of The Times? Subscribe.
Bloomberg
14-03-2025
- Business
- Bloomberg
What If DOGE Doesn't Actually Save Any Money?
Every business day, the Treasury Department releases numbers on how much money the US government took in and paid out the previous one. You can get them straight from the source, or in simplified form at the Hamilton Project's Tracking Federal Expenditures in Real Time site. What they show so far is that, despite all the noise from Washington about layoffs and canceled programs and other cutbacks, the federal government has been spending money faster since President Trump took office on Jan. 21 than it did over equivalent periods in 2023 and 2024. (Adjust for inflation and the lines come a little closer, but 2025 spending remains higher.) It's still early days, of course. The contracts canceled and workers laid off by Elon Musk's Department of Government Efficiency and other decision-makers within the Trump administration will show up over time, not all at once. I certainly wouldn't predict that the lines will never cross. But with Musk promising cuts that, as Bloomberg News put it this week, would surpass those imposed by Margaret Thatcher in the UK in the 1980s as a share of gross domestic product, it's worth considering a different scenario. What if all DOGE's work turns out to barely make a dent in federal spending?
USA Today
12-02-2025
- Business
- USA Today
Wages are rising faster than inflation. Why are consumers still feeling the pinch?
Hear this story By most accounts, wages have risen faster than inflation in the 2020s. Yet, for many Americans, it doesn't feel that way. A closely watched Index of Consumer Sentiment, published by the University of Michigan, fell to 67.8 in February, its lowest mark since last summer. A recent survey by WalletHub, the personal finance site, found that most Americans don't think their bank accounts are keeping up with inflation. And a CBS poll found that two-thirds of consumers think President Donald Trump isn't focused enough on prices. All this consumer ennui comes at a time when inflation is not actually that high. Prices increased by 2.9% in the 12 months through December. Capitalize on high interest rates: Best current CD rates Consumer prices are about one-fifth higher now than before the pandemic, from inflation's cumulative effects. But salaries are also rising, and by most measures, they are rising faster. Wages outpaced inflation in the pandemic years An interactive data tool launched by the Hamilton Project, part of the nonpartisan Brookings Institution, allows users to compare recent wage growth and inflation by several different measures. Bottom line: Almost any way you slice them, wages rose faster than prices from the end of 2019 through the end of 2024. 'If you start, basically, at the beginning of COVID, wages have grown faster than inflation by the standard measures,' said Gerald Cohen, chief economist of the Kenan Institute of Private Enterprise at the University of North Carolina at Chapel Hill. Brookings researchers launched their wage tracker to 'bring some light to a very muddled conversation,' said Wendy Edelberg, director of the Hamilton Project. 'We started it because there were stories all over the press, some of them saying wages looked strong, and some of them saying wages looked really weak.' As it turned out, analysts were looking at different measures and time periods, and sometimes reaching opposite conclusions. For example: hourly wages have mostly outpaced inflation since the first quarter of 2020 – but not since the second quarter, when earnings soared. Last year, President Joe Biden and presidential candidate Kamala Harris labored to persuade voters that the historic inflation surge of 2022 was over, and that rising wages had effectively erased its effects. But consumers were mad about prices, and they blamed the Democrats at the polls. Donald Trump regained the presidency, in part, on a pledge to bring prices down. Now, many consumers fear he will push them up. In the University of Michigan survey, Americans said they expect inflation to rise to 4.3% this year under Trump's lead. Why are consumers still feeling the pinch? Here are five reasons. Americans aren't used to inflation Inflation reached a 40-year high in mid-2022, a surge sparked by COVID-19. Before the pandemic, annual inflation hadn't topped 5% since the Great Recession of 2008. 'For many people, this was their first time experiencing inflation,' said Ryan Sweet, chief U.S. economist at Oxford Economics. The Federal Reserve aims for a target of 2% annual inflation: A level so low, consumers will forget about it. 'We want inflation to be to that point where people don't really think about it, where it doesn't impact your behavior,' Cohen said. Consumers think inflation is unfair The dramatic uptick in pandemic-era prices made consumers mad enough to evict the Democrats from the White House. Exit polls showed inflation loomed large in Trump's triumph. That impulse illustrates a fundamental difference between how consumers feel about inflation and wages, economists say. 'People tend to view inflation as something someone else inflicts on them,' said Joshua Gotbaum, scholar in residence at the Brookings Institution. 'They view higher pay as something they earned themselves.' Workers feel they deserve their wage increases, the economists said. When inflation hits, they look for someone to blame. 'The thing about inflation is, people think, 'I'm getting ripped off,'' said Mark Zandi, chief economist at Moody's Analytics. Wages didn't rise for everyone While it's true that wages rose faster than prices during the pandemic, those are averages, and they don't apply to everyone. Many Americans saw their inflation-adjusted wages decline between 2020 and 2024, economists say. And wages had stagnated for lower- and middle-income Americans before the pandemic. "People were already sort of feeling strapped, so it's no surprise that people are feeling strapped now," said Elise Gould, a senior economist at the left-leaning Economic Policy Institute. In the pandemic years, wages didn't outpace inflation by much. According to an analysis by the left-leaning Center for American Progress, a worker at the median income saw wages rise by only 3.4% between February 2020 and September 2024. Once you adjust for inflation, real wages 'aren't much higher than they were prior to the pandemic,' Zandi said. Consider, too, that some prices rise faster than others. Housing prices rose by more than 25% between December 2019 and December 2024. Food prices rose by nearly 30%. 'For a person that spends much of their income on food and housing, this means their real wage might not have really kept up with their personal inflation,' said Jesús Fernández-Villaverde, an economist at the University of Pennsylvania. Prices rose more on everyday items When prices rise dramatically on items consumers buy regularly, like eggs, consumers take note. Wages rose faster than inflation in the pandemic years, but egg prices rose faster than wages. Spiraling grocery prices register for consumers whenever they visit the supermarket, said Brendan Duke, senior director for economic policy at the Center for American Progress. 'I buy eggs constantly,' Duke said. Democrats and Republicans see things differently In the months before the 2024 election, Republican consumers fretted about inflation, and Democrats chilled. After the election, the parties switched places. 'Democrats are more fearful of inflation now, and Republicans less so,' said Skanda Amarnath, executive director of Employ America, a left-leaning think tank. Throughout 2024, Republicans consistently said they expected inflation to rise, while Democrats predicted it would ease, according to University of Michigan consumer surveys. In January, Republican inflation expectations abruptly dropped to 0.1%: GOP consumers now expect no inflation in 2025. Democrats, on the other hand, now predict prices will rise by 4.2%. Who's right? Time will tell.
Yahoo
11-02-2025
- Business
- Yahoo
Trump blasts WFH policies: ‘Nobody is gonna work from home. They are gonna be going out, playing tennis, playing golf'
President Trump partially justified the buyout for federal workers as a push for productivity, saying those who work from home are, in reality, slipping off to enjoy sporting endeavors. President Donald Trump has delivered a harsh blow in the battle for flexible work, saying federal workers who log on from home are only working 10% of the time and are likely to have two jobs. When signing a host of executive orders on Monday the Commander-in-Chief was asked for his response to a Boston judge blocking Elon Musk's plan to use buyouts to incentivize federal workers to leave the government's ranks. The President said he didn't know how the plan could be declared illegal, saying, "I got elected on making government better, more efficient and smaller. That's what we're doing." He added the buyout offered is "generous" with more than 60,000 former staffers now signing up to quit. On top of the buyouts, another tactic to push staff to quit—advertised by DOGE boss Elon Musk and his former partner Vivek Ramaswamy—was to require them to come back to the office full-time. President Trump doubled down on this stance yesterday, saying: "I happen to be a believer that you have to go to work. I don't think you can work from home. "Nobody's going to work from home, they're going to be going out, they're gonna play tennis, they're gonna play golf. They're gonna do a lot of things—they're not working." He added: "It's a rare person that's going to work. You might work 10% of the time, maybe 20%, I don't think you're going to work a lot more than that." President Trump also believes some federal workers are balancing two jobs. "I think they…have an obligation not to have a second job when they're supposed to be working for the federal government," he added. "You're going to find that a lot of these people have second jobs—they'll be collecting a federal government check and they'll be working two jobs. That's big trouble for them." President Trump's RTO mandate presents more of a problem to some departments than others. For example, according to an August 2024 report compiled by the Office of Management and Budget (OMB), 2,341 of the Department of Education's 4,245 staff work remotely—that's more than 55%. Moreover, in the General Services Administration, 49.8% of the nearly 13,000 staff work offsite. Time and again, it has been argued that flexible working has greatly helped mothers stay in the workforce. Research from the Hamilton Project at the Brookings Institute conducted in 2023 found approximately a quarter of women with children—regardless of the age of their youngest child—reported working from home in the first half of 2023. This was significantly higher for women with at least one child under the age of five. Such working moms may question when they could fit in a quick round of golf among their parenting and professional duties, but President Trump himself finds the time. In 2021, the Washington Post analyzed how often the Republican politician was on the course—having said he wouldn't have time at the start of his term. Yet two weeks into his term at the Oval Office, the WaPo found, Trump was back on the green and returned for two consecutive weekends. The analysis adds that, overall, President Trump likely played around 261 rounds during his administration—approximately once every 5.6 days—but this could be higher given that his staff didn't declare the activity, as the Obama administration had previously done. It seems President Trump's second term is kicking off in much the same way, after the Oval Office occupant enjoyed a round with sporting legend Tiger Woods on Sunday morning, before jetting to the Super Bowl. It was his second trip to Mar-a-Lago, his private golf club, since he was sworn in on Jan. 20. Marc Andreessen, of Silicon Valley veterans Andreessen Horowitz, previously said he had spent half his time at the Florida resort since Trump's win. 'He will happily talk to distinguished visitors about like who the vice president should be, and then he'll ask the caddy," Andreessen told the Honestly With Bari Weiss podcast—indicating he's joined Trump on the course. He added: "It's been painted in a negative way, but there's a real strength to it, which is like he really talks to regular people a lot, he's in that mode all the time talking to everybody.' This story was originally featured on
