Economics in the News – June 26 – July 2, 2023
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o The United States Supreme Court struck down President Joe Biden’s student-loan forgiveness plan to forgive loans held by 40 million Americans. The Supreme Court ruled that the plan exceeded the authority Congress delegated to the executive branch. Conservatives argued that debt shouldn’t be passed onto others.
Progressives to continue to pressure Biden to forgive student loans, leading to his decision to pursue legislation to erase $10,000 in student debt for borrowers who earn less than $125,000 a year and an additional $10,000 of additional relief for those who held Pell Grants. [The Wall Street Journal]
o Texas has felt the brunt of unprecedented summer temperatures, with hundreds of Texans becoming sick and more than a dozen deaths due to heat-related causes. The heat wave came earlier in the season than normal because a heat dome caused triple-digit heat and humidity. During the heat wave, daily temperatures were broken in cities such as San Antonio, Abilene, Austin and San Angelo. Near the Mexico border, Del Rio broke its daily record high for 10 consecutive days.
Residents have been asked to cut back on electricity use to ease stress on the power grid. State officials have opened cooling centers throughout the state. So far, the state’s power grid has held up despite an unofficial all-time peak electricity demand record with residents and businesses wanting to keep the air conditioning working. [The Wall Street Journal]
o The television landscape has made dramatic changes in the last decade, as streaming has upended the way viewers consume TV programs and movies. Soap operas are nearly obsolete, as are daytime talk shows, such as those once hosted by Oprah Winfrey, Ellen DeGeneres or Phil Donohue. But throughout the changing landscape, game shows continue to survive.
America’s longest-running game shows, such as “Jeopardy!” and “Wheel of Fortune,” remain among the top ratings outside of live sports. Both of ABC’s premier programs attract around nine million nightly viewers and generate millions of dollars in profit each year. “The Price is Right” on CBS also continues to thrive with plans for a new studio. Game shows are among the least expensive programs to create because many episodes can be filmed in a short period. They are also attractive to the older crowd – people 60 and older – who are the largest demographic still consuming traditional television. [The New York Times]
o Tipping has been on the rise in America since early in the COVID-19 pandemic, but customers are getting increasingly frustrated with the tipping culture. Businesses such as fast-food restaurants, grocery stores, plumbers, and self-checkout machines are all asking for tips. However, tipping culture may have reached a tipping point. Tips are down 10 percent for restaurant workers this year, but experts warn that if tipping goes away restaurants will need to raise prices in order to keep up with their workers’ wages.
Three reasons that tipping has changed is due to the pandemic, technology and the job market. In the early stages of the pandemic, tipping became a way to support essential workers in a time of crisis and many Americans tipped workers that weren’t previously tipped prior to the pandemic. Technology has also played a role in the evolving tip climate, along with the added social pressure of standing in front of the service worker delivering a service. The job market and inflation have also contributed to the tipping culture, as restaurants, coffee shops and other service industries are luring workers with better benefits and higher pay. One way that restaurants can offer more pay without raising prices is tipping. [NPR]
o Health care facilities throughout the United States are struggling to remain properly staffed. Facilities turned to temporary aid during the COVID-19 pandemic because of high turnover, fluctuations in demand, and work-life balance. However, the temporary staff is paid more than the regular staff, causing long-term employees to feel undervalued and resign and to join as a temporary nurse.
The issue has impacted the bottom line for health care facilities across the country, leading to big losses. The staffing issues are leading to a decline in quality of care a patient receives and a rise in medical errors. New graduates are now opting to join staffing agencies which provide institutions with contract-based temporary work. [TIME]