The US economy continues to do well despite a trade war and a prolonged government shutdown. Thanks to the stability of the growing economy, many businesses have seen increased demand for their services and, therefore, an increased need for workers. Jobless rates have been declining as more people have been able to find and keep jobs. This has placed upward pressure on wages and other forms of employment compensation. Income growth is, of course, needed to fuel consumption and feed a virtuous economic cycle. Looking at the Chinese economy, which faces numerous structural issues including lack of self-sustaining domestic consumption, it is obvious why businesses need more Americans to make more money. Unfortunately, not all businesses and industries can support higher wages and salaries. The simple truth is that not all workers can be high wage earners, but it is the trajectories of a person’s income and career that actually matter more than their current socioeconomic standing. That is why all businesses need to give their employees opportunities to grow.
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US President Donald Trump is using a government shutdown to pressure Congress in order to obtain funding for one of his policy priories. It happens to be $5 billion for a section of wall along the US-Mexican border. For Trump, victory means looking like he won the fight, not necessarily getting the funds he seeks. No cost is too great. It does not matter how much it costs or who the government shutdown hurts as long as Congress submits to Donald Trump. Congressional Democrats are not willing to yield while Congressional Republicans are trying to get up the nerve to criticize the Republican President. For his part, Senate Majority Leader Mitch McConnell abdicated his responsibility in the affair. To get his way, President Trump is selling the drama by telling the world the shutdown could last for months to years. Professional media outlets are helping him by showcasing the worst-case scenarios of the shutdown. As the President, Donald Trump has the power to end the shutdown with a simple signature, but it is not the President who, ultimately, has the responsibility to end the shutdown. It is Congress and members of Congress have the power to do it without him.
The Federal government shutdown over border wall funding impacts the United States in many ways, some more noticeable than others. While the shutdown will inconvenience Americans who need to utilize government services, the approximately 800,000 Federal employees directly impacted by the partial shutdown and the thousands of Federal contractors who will not receive back pay for their missed work face financial hardships. Politically, the situation can leave Americans conflicted. On the one hand, shutdowns will do little to disrupt the lives of average Americans in the short-term while there is a great deal of resent toward government workers among the populous. Federal employees with an undergraduate degree or less are paid 20% to 50% more than their private sector counterparts thanks mainly to their benefits. On the other hand, shutdowns do have long-term consequences and most Federal employees still struggle with the same financial hardships as all average income Americans. It can be easy to resent the benefits, pay, and job security government workers enjoy at the expense of taxpayers, but most Americans can also sympathize with the plight of Federal workers.
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April 2020
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