The Economy (or Why The Minimum Wage Should Be Raised)

Money is one of the things that you can guarantee will cause an argument. Some people have more money than they could ever possibly spend. However, many people are barely scraping by. In 2014, 46.7 million people in the United States were living below the poverty line. I plan to show you how raising the minimum wage in the US will not only bring people out of poverty, it will actually improve the current economic climate.

For those of you that don't know, the United States is a capitalist country. We thrive on the free market. Being able to choose where we spend our money is an American right! But, thanks to the Regan era, we are stuck in a wrong mindset. Many people seem to think that "trickle down economics," where giving benefits to the wealthy helps the rest of society, works. Well, it doesn't.

Capitalism is based on the theory that people will spend money on products. The economy needs people to have enough disposable income to keep it going. Instead of relying on the few wealthy people in society, we need the larger middle class to spend. The only way that will happen, though, is if they (and, to a lesser degree, the lower class) bring enough money into their households to pay for things like food and rent. We, as a society, need to make sure that these necessities can be covered so money can be spent on other, not-so-necessary things.

Let me give you a scenario: Bob attended college. He got his degree and is qualified to teach high school math. However, Bob can't find a job teaching. But Bob still has to eat and pay rent. (We'll be 'nice' and keep Bob single so he doesn't have to pay for diapers or baby food or daycare costs.) So Bob takes a job at his local grocery store. Bob barely makes enough money to feed and house himself. He can't afford a car or to have a meal at a restaurant or buy the nice pair of shoes.

This is the problem. Without Bob spending his money at other businesses, those businesses don't have the money to pay their workers. It is a vicious circle. However, if we paid Bob a little bit more, Bob would have some extra money he could spend on extra things. He could eat at the local restaurant, which would generate more money for the business, who could afford to pay their workers more. Then those workers would have extra money to spend at other businesses. And around and around and around.

Thanks to the media, people think that the retail workers or fast food workers are nothing but lazy scum. They are not. They are hard working people like everyone else. Maybe they prefer retail work (someone has to help you buy that shirt or that microwave) or fast food (someone needs to cook those burgers if you want to eat them). That doesn't make them lazy. That makes them useful members of society. And we need to treat them as such. There is no reason that they shouldn't be paid a wage that will allow them to not only survive but thrive as well.

To those of who you think that raising the minimum wage would result in a $15 hamburger at McDonald's. You are wrong. Dead wrong. Capitalism survives on supply-and-demand. When demand is high and the supply is high, the cost is low. I don't forsee McDonald's running out of hamburgers any time soon. Instead, the demand will increase since now Bob can afford to buy a burger. If anything, prices will decrease because the demand will be that much higher.

But where do we get the money to start the process? I know this is very unpopular but those outrageous salaries of executives need to be cut. The CEO of CVS, Larry Merlo, makes a little over $24 million. If you cut that by 25%, that would give an additional $6 million that could be spread out over their lower-tier employees and, poor Mr. Merlo, would still have $18 million per year left. The same is true for all of the top executives.

We, as a society, need to stop believing that certain work is menial or beneath us. All jobs are necessary or they wouldn't exist in the first place. Now we need to stop treating the people doing those jobs as scum. They are people too and they deserve to be treated as such. They deserve to have good, healthy food and an apartment that isn't filled with cockroaches and rats. I wish I could say that it was simple selfishness. No, we are hurting ourselves more than we are helping. Sadly, it is nothing more than greed. And greed will be what collapses our economy.

Paying for college in the United States

Choosing a college is fairly easy. Paying for it is not. Unfortunately, college is very expensive. I'm going to look into some ways that you can pay for your college education. It may not be easy but it is possible!

This won't be an option for a lot of people but I'm putting it out there anyway. There are colleges that are tuition free. Well, sort of, anyway. You don't have to put out the money for tuition yourself but it is considered a scholarship and not just a free school. In some cases, you will need to pay for room-and-board. And you almost always have to pay for books and supplies. However, without the threat of tuition debt, these are much easier to pay.

Talking about scholarships, there are a ton of them out there. You don't necessarily need to have a 4.0 grade point average in order to get them either. Do a lot of research. There are scholarships out there for minorities, veterans and their families, economically challenged individuals...you name it. There are even scholarships for various majors. I received a small theater arts scholarship in my second year of college. You could probably find a scholarship for just about anything. Keep in mind, though, that you are not the only applicant. Make sure your application is amazing so it definitely catches the eye of the board.

If your child isn't ready for college, you can still start a 529 Plan for them. A 529 Plan is a college savings fund operated by the state. (Sometimes they are operated by educational institutions as well.) These work a little like a 401K retirement plan in that they are not taxed right away. I'd recommend talking to a financial planner or accountant to see if there are any tax benefits for you if you decide to go this route.

A 529 Plan is not in your cards? Perhaps you could try some other investment strategies. Savings bonds are one way to lock away some quick cash. You buy a bond for a certain amount of money, let's say $50. After a year, the bond begins to earn interest. A bond bought today will double in value in 20 years. You can cash in it before then but you will only receive the bond amount plus the interest gained until the time it is cashed in. If you or a family member could buy a bond once a year for your child's birthday, they could amass quite a bit of money by the time they are ready to go to college. 

Finally, there are loans. Federal loans are probably the worst of the bunch but there are other private financial institutions where you may be able to borrow the money for a lower interest rate. (Trust me, it's the interest rate that gets you every time.) Make sure you shop around. Do your best to get the lowest rate possible. And make sure you get a fixed rate loan. You don't need the rate fluctuating every year!

In the end, paying for college sucks a lot. Unless you are already wealthy, chances are you'll be in debt for awhile. Maybe one day the way the United States handles college will be different. We're taking some tips from other countries for health care. Why not for college too? 

I hope this little series helped you learn that college isn't necessarily an impossibility for those who aren't rolling in dough. Good luck to all of the new college students out there. Let's get smart! 

A college education without the crippling debt

Last week, I discussed the cost of a college education and the burden of student loans. Students shouldn't have to spend hundreds of thousands of dollars for their education. Today, I'm going to give you some options on how to get a college education without spending all the money in the world. 

The first option I am going to give you is usually the most overlooked. Instead of doing all four college years at an expensive school, get all of your core classes out of the way at your local community college. No matter what your major is, you will need to take some core classes - mathematics, science, english, and maybe some others. Take a look at the core requirements for the colleges you want to attend. Most community college credits will transfer to other schools. Take that first year or two to get those requirements out of the way for a fraction of the cost. 

Want to attend an out-of-state college? Students who attend a college outside of their state of residency often pay almost twice as much in tuition as those who attend colleges in their state. One option to get around this is to set up residency in the state of that school. Not everyone can afford to move to a different state before starting college. However, this would be a great time to get those core classes out of the way and get some "real world" experience in the working world. Also, if you already have an off-campus apartment set up, you can probably save on those pesky room-and-board fees.

My final tip is the one that most high school advisors give to their students. If you can find a great in-state public school, go there. Both of the colleges I attended were private. And, as I told you last time, the tuition (plus room-and-board) came out to about $50,000 per year. However, tuition at the main campus of Penn State University this year is approximately $35,000. (If you attend one of the satellite campuses instead, that could be around $30,000 instead.) That is a huge difference! 

I hope that these tips helped you or your children find ways to afford a college education. Next time, I'll be discussing ways to pay for your schooling. There is more out there than just loans on top of loans. College really can be affordable, if you know where to look. 

The Burden of Student Loans

College is expensive. I think everyone can agree on that. What everyone can't agree on is how to pay for it. Since this is a huge topic, I'm not going to cover it all in one post. Today, I'll cover the costs of college and a little bit about student loans. Next week, I'll hit you with some information on how to pay for college and some ways to get a college education without spending a ton of money. 

First, let's point out the actual costs of college. I went to two different colleges for one year at each. Since this is what I am familiar with, this is what I am going to use as an example. Yes, I know there are cheaper schools out there and I'll get to that in a minute.

My freshman year was spent at Cedar Crest College in Allentown, PA. I attended from the fall semester of 1994 through the spring semester of 1995. (Yes, I know I am old.) When I went there, the annual tuition was about $14,000. The annual tuition of attending for the 2014 - 2015 year is about $34,000. (Please note, this doesn't include room and board or books. I don't have the numbers for 1994 but, in 2014, that takes the total cost up to about $45,000 per year.) That is a huge jump! 

I transferred for my sophomore year to Beaver College (now called Arcadia University) in Glenside, PA. In 1995, the tuition was about $13,000. Tuition this year is $37,500. (Again, this doesn't include room and board or books. That total is $52,400.) Wow.

My tuition cost for two years of college comes to approximately $27,000. This still doesn't cover room and board or books and supplies, which generally adds at least another $10,000 per year. So it's safe to estimate that my two years of college cost me almost $50,000. Sadly, I didn't fully understand the cost or how to pay for it. And, here I am, about 20 years later, still nowhere near paying off my student loans. 

When I was in college, I double majored in Theater Arts and Communications with a minor in Music. While I know that Theater Arts majors don't rake in the cash, no one really told me that I would still have a difficult time paying off my student loans with a Communications degree. It is rather unfair to expect our teenagers (remember, most people entering college are 17 or 18 years old) to burden themselves with tens or hundreds of thousands of dollars of debt before they can even legally drink alcohol. Yes, there are ways to lower the costs a bit. I did get a little bit in grants and scholarships but nothing that paid the large chunk of money I now owed the school. 

Don't get me wrong. I have every intention of paying off my student loans. (Not that I have much of a choice. Student loans can't be discharged via bankruptcy and, if you can't pay and default, the government will garnish your wages.) However, having these huge monthly payments looming over my head every month means I can't do things like buy a new house or replace my ancient mattress or just go vacation. It would be awesome if the government would come up with a way to forgive student loans after a certain amount of time. (With the assumption that your loan is in good standing.) I mean, there are people on Social Security that are still paying student loans! Your student loans shouldn't last longer than your mortgage. 

Next week: Join me as I'll talk about ways to get a college education without spending a lifetime's income. It is possible! I wish someone told me this when I was young!