Joe Biden, the Student Loan Crisis, and the Problem with Economic Stimulus
Last week, for the first time since the stock market began its precipitous fall in February, the Dow Jones Industrial Average stabilized above 29,000 points.
By Monday, November 16th, the Dow had surpassed all previous records, closing at 29,950. Meanwhile, the national death rate as a result of COVID-19 is as high as it's been since May. Meanwhile, working Americans continue to struggle and suffer, wasting their gas money waiting in endless lines for limited supplies of free food.
If you, like nearly half of U.S. adults, don't own any stock at all, the numbers above are essentially meaningless. Even for most of the people who are invested in the stock market, their investment isn't substantial enough to make up for issues like widespread underemployment.
And yet, the Federal Reserve has poured $4 trillion into maintaining the stability of investment markets and ensuring that the Dow, the S&P 500 and various other numbers on charts that seem increasingly disconnected from reality move in the right direction. Why is that?
30 million people in this country are at risk of eviction. Millions of people are unemployed or underemployed from… https://t.co/pWGQY94iJT— Alexandria Ocasio-Cortez (@Alexandria Ocasio-Cortez) 1605753584.0
The answer to that question is complicated, but it is closely linked to the reason why President-Elect Joe Biden is currently on the receiving end of a lot of scrutiny and pushback on the topic of student loan forgiveness.
Recently the amount of student loan debt in the United States surpassed $1.7 trillion. That amount has more than tripled in the last 15 years, with around 45 million Americans currently holding some amount of student loan debt, and an average burden in excess of $30,000.
Most of that debt is nearly impossible to discharge through the standard bankruptcy process. And the fact that most of that burden falls on young people — whose careers are less established and who face generational declines in wages and wealth — exacerbates the impact of that debt. It's a major factor in the worrying declines in rates of home ownership, marriage, and birth rate among millennials.
It is widely acknowledged that the cost of higher education has ballooned out of control while it has increasingly been pushed as a necessary step on the path to prosperity. Underlying this problem is the fact that — unlike many developed nations — our federal government doesn't offer affordable public universities or fund education in fields like medicine and engineering where we always need more skilled professionals.
Why Is College So Expensive in America? | Making Cents | NowThis www.youtube.com
Instead we offer government-backed loans and guarantees that incentivize institutions to invest in administrative bloat and in expensive development projects to enhance their prestige and entice prospective students with unnecessary luxuries. Teenagers instilled with little sense of the financial commitments — but an unwavering belief in the necessity of college — have become cash cows.
The system as it stands is clearly broken, and whatever other reforms are called for, the resulting debt crisis is interfering with the spending power and attainment of an entire generation. In the context of a pandemic that has affected the livelihoods of so many, it would seem like an uncontroversial act for the government to alleviate some of that burden of student debt.
And for the most part, it is. Opinion polling shows that the notion of providing some amount of student loan forgiveness is broadly popular across partisan lines.
The exception is among the pundit class — and the wealthy donors they represent. Because, as various political figures — including Democratic Senators Chuck Schumer and Elizabeth Warren — have begun urging Joe Biden to make student loan forgiveness an early focus of his presidency, others in politics and the news media have done their best to push back.
When you say #cancelstudentdebt, you’re saying a minority of people who had the advantage of obtaining a degree sho… https://t.co/BMbhxUHAbK— Dan Crenshaw (@Dan Crenshaw) 1561467692.0
At the moment, a forbearance measure laid out in the CARES act has been extended through the remainder of 2020 — allowing those with federal student loans to defer payments for the time being. But further action being proposed would include forgiveness for debt owed to private companies.
Among the wide range of suggestions are legislation to provide $10,000 of debt forgiveness for individuals meeting certain restrictive criteria and $50,000 of automatic forgiveness for all student debt holders — delivered through an executive order as soon as Joe Biden assumes the White House.
In either case, some would still be left with large burdens of debt, and some would likely be hit with unmanageable tax bills — as debt forgiveness is considered a form of income. But the debate has not largely involved addressing those shortcomings. Rather, many have questioned whether we should be considering these proposals at all.
The objections tend to fall into three categories: It wouldn't help the right people, it wouldn't stimulate the economy as much as other measures, and "I paid off my student loans, so why shouldn't they?"
The last is patently asinine, and should be ignored or mocked as it applies equally to any form of progress — "My face healed after smashing against the dashboard, so why should we add airbags now?" If the people espousing this perspective want to be acknowledged for their fiscal responsibility, here's the entirety of the praise they deserve: Good for you.
The fact remains that many people are not able to pay off their student loan debts, which can have a ruinous effect on their credit rating, affecting everything from interest rates on other loans to — in a cruel twist — their employment prospects. There is a disturbing potential for an accelerating debt cycle that becomes impossible to escape.
“Things were bad for me, so they should stay bad for everyone else” is not a good argument against debt cancellatio… https://t.co/yyC60K5Uyz— Alexandria Ocasio-Cortez (@Alexandria Ocasio-Cortez) 1605569343.0
Even for those who are able to pay off their debts may feel pressured by the monthly payments to accept employment that they otherwise wouldn't — contributing to an imbalance in the employee-employer relationship that could further suppress wages. In short, it's bad.
So while it's valid to point out that there are others in the economy more in need than college graduates, we can't ignore the reality of the student debt crisis. Along with other important measures — further extension and expansion of unemployment benefits, rent subsidies, and direct payments to make it easier for people to stay home — student loan forgiveness should be considered an essential part of COVID relief.
Which leaves only one complaint left: It wouldn't do enough to stimulate the economy.
The basic issue is that the benefit of debt forgiveness is spread out over years or decades of remaining loan payments. And because it would also contribute to recipient's tax burdens, there is a concern that much of the cost of debt relief would not result in short term increases in consumer spending — the kind that spurs quick economic growth.
While that's worth being aware of, doesn't this objection have its priorities reversed? Isn't the entire purpose of a strong economy to improve people's lives? So why are we unwilling to improve people's lives unless it primarily contributes to short term economic growth?
Clearly our entire system has embraced this inverted way of thinking. That's why it can pass almost without notice when the Federal Reserve spends $4 trillion to prop up investment markets.
We happily spend that amount on measures that only directly benefit the wealthy, and yet — when it's suggested that we should spend a fraction of that on a popular policy that could improve the lives of 45 million Americans — it becomes a point of great contention.
We all seem to have forgotten the essential truth that the economy is meant to serve us — not the other way around.
Over two years into the most momentous event in our lives the world has changed forever … Some of us have PTSD from being locked up at home, some are living like everything’s going to end tomorrow, and the rest of us are merely trying to get by. When the pandemic hit we entered a perpetual state of vulnerability, but now we’re supposed to return to normal and just get on with our lives.
What does that mean? Packed bars, concerts, and grocery shopping without a mask feel totally strange. We got used to having more rules over our everyday life, considering if we really had to go out or keeping Zooming from our living rooms in threadbare pajama bottoms.
The work-from-home culture changed it all. Initially, companies were skeptical about letting employees work remotely, automatically assuming work output would fall and so would the quality. To the contrary, since March of 2020 productivity has risen by 47%, which says it all. Employees can work from home and still deliver results.
There are a number of reasons why everyone loves the work from home culture. We gained hours weekly that were wasted on public transport, people saved a ton of money, and could work from anywhere in the world. Then there were the obvious reasons like wearing sweats or loungewear all week long and having your pets close by. Come on, whose cat hasn’t done a tap dance on your keyboard in the middle of that All Hands Call!
Working from home grants the freedom to decorate your ‘office’ any way you want. But then people needed a change of environment. Companies began requesting their employees' RTO, thus generating the Hybrid Work Model — a blend of in-person and virtual work arrangements. Prior to 2020, about 20% of employees worked from home, but in the midst of the pandemic, it exploded to around 70%.
Although the number of people working from home increased and people enjoyed their flexibility, politicians started calling for a harder RTW policy. President Joe Biden urges us with, “It’s time for Americans to get back to work and fill our great downtowns again.”
While Boris Johnson said, “Mother Nature does not like working from home.'' It wasn’t surprising that politicians wanted people back at their desks due to the financial impact of working from the office. According to a report in the BBC, US workers spent between $2,000 - $5,000 each year on transport to work before the pandemic.
That’s where the problem lies. The majority of us stopped planning for public transport, takeaway coffee, and fresh work-appropriate outfits. We must reconsider these things now, and our wallets are paying
the price. Gas costs are at an all-time high, making public transport increase their fees; food and clothes are all on a steep incline. A simple iced latte from Dunkin’ went from $3.70 to $3.99 (which doesn’t seem like much but 2-3 coffees a day with the extra flavors and shots add up to a lot), while sandwiches soared by 14% and salads by 11%.
This contributes to the pressure employees feel about heading into the office. Remote work may have begun as a safety measure, but it’s now a savings measure for employees around the world.
Bloomberg are offering its US staff a $75 daily commuting stipend that they can spend however they want. And other companies are doing the best they can. This still lends credence to ‘the great resignation.’ Initially starting with the retail, food service, and hospitality sectors which were hard hit during the pandemic, it has since spread to other industries. By September 2021, the US Bureau of Labor Statistics reported 4.4 million resignations.
That’s where the most critical question lies…work from home, work from the office or stick to this new hybrid world culture?
Borris Johnson thinks, “We need to get back into the habit of getting into the office.” Because his experience of working from home “is you spend an awful lot of time making another cup of coffee and then, you know, getting up, walking very slowly to the fridge, hacking off a small piece of cheese, then walking very slowly back to your laptop and then forgetting what it was you’re doing.”
While New York City Mayor Eric Adams says you “can't stay home in your pajamas all day."
In the end, does it really matter where we work if efficiency and productivity are great? We’ve proven that companies can trust us to achieve the same results — or better! — and on time with this hybrid model. Employees can be more flexible, which boosts satisfaction, improves both productivity and retention, and improves diversity in the workplace because corporations can hire through the US and indeed all over the world.
We’ve seen companies make this work in many ways, through virtual lunches, breakout rooms, paint and prosecco parties, and — the most popular — trivia nights.
As much as we strive for normalcy, the last two years cannot simply be erased. So instead of wiping out this era, it's time to embrace the change and find the right world culture for you.
What would get you into the office? Free lunch? A gym membership? Permission to hang out with your dog? Some employers are trying just that.
The rising trend of pet-friendly offices is part of the effort to incentivize employees to come back to work in person. Many companies completely embraced the remote-friendly convenience of WFH. Digital nomad culture emerged and “second cities” arose when people exited New York, San Francisco, and LA, and headed to Denver, Austin, Charlotte, Nashville, and Raleigh.
But now, employees and employers have a choice to make. The question now is: to return or not to return to the office? This is no longer about forcing employees to commute. Post The Great Resignation, employees feel more empowered to leave in-person positions and seek out remote jobs. So if offices want people to return, they’ve got to do a ton to entice their employees.
Some huge companies with giant operating budgets are not worried. With major perks like shiny facilities and full-service food bars, they feel comfortable requiring in-office work days — even if it’s for a hybrid week. But the solution might be simpler: pet-friendly workplaces.
The Allure of Pet-Friendly Offices
According to the Washington Post, pet-friendly workplaces are becoming a common solution to improve employee morale and appease the rising number of pandemic pet owners. “As offices start reopening and thousands of workers are being called back for the first time in two years, some companies are allowing employees to bring their pets. About 23 million American households adopted a pet during the pandemic, according to the American Society for the Prevention of Cruelty to Animals. Many workers say they find pet-friendly environments an important perk for their new furry family members. A recent survey conducted by Banfield Pet Hospital, owned by Mars Inc., showed that 57 percent of the 1,500 pet owners polled said they would be happiest returning to a pet-friendly workplace. Half of the 500 top executives surveyed said they are planning to allow pets at the office. Tech companies including Google, Amazon, and Uber plan to continue to allow dogs at their offices, even with their flexible office policies.”
With so many people adopting and fostering since the pandemic, becoming a pet parent is a trend. And to welcome these new additions into people’s lives, it makes sense for some workplaces to welcome them into the office.
After spending unlimited amounts of time at home, many pets grew greatly attached to their “parents” — and pet-parents feel the same about their pets. Rather than keeping them locked in the house while their caretakers head off to work, this is a mutually beneficial solution to the current separation anxiety faced by pets.
Pets have also been shown to boost happiness in pet owners. According to heart.org, “Studies show that dogs reduce stress, anxiety, and depression; ease loneliness; encourage exercise and improve your overall health. For example, people with dogs tend to have lower blood pressure and are less likely to develop heart disease. Just playing with a dog has been shown to raise levels of the feel-good brain chemicals oxytocin and dopamine, creating positive feelings and bonding for both the person and their pet.” Most likely, this might have a similar effect on people who bond with animals at work that don’t even belong to them, lending an overall mood boost to the office.
The controversy behind pet-friendly workplaces
However, not everyone is as enthusiastic about the prospect. Some would rather keep the office separate from their personal lives. Some are allergic to pets. And some people simply don’t like animals.
Offices considering pet-friendly policies are weighing the pros and cons to keep everyone happy. According to the Washington Post, clear guidelines and communication can increase the chances of success.
“Before making the jump, pet experts say that leaders should first understand whether their employees have interest in, or strong feelings against, having a pet-friendly office. Doing an anonymous survey may allow employees to freely share thoughts on the matter.”
Overall, the key to a policy like this is flexibility. “Be ready to adjust: Above all, pet-friendly offices should be ready to listen and adjust their policies as they go. What works for one office may not work for another, but experts say proper planning can lessen much of the burden.”
Ensure your office is actually suited to the pets you want to welcome. “A well-developed pet-friendly office should be both safe and welcoming to pets. That means companies should consider blocking off areas that could be dangerous to pets as well as making sure pets have access to clean water, food, and places to rest.”
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Did you hear about the Great Resignation? It isn’t over. Just over two years of pandemic living, many offices are finally returning to full-time or hybrid experiences. This is causing employees to totally reconsider their positions.
For many employees, full-time remote work offered newfound flexibility to work around their schedules — whether it be picking up kids from school, or working when they feel most productive. Many employees seized this freedom to escape big cities and relocate and prioritize their quality of life. Remote-work lovers are demanding offices remain closed or requesting it as a benefit or work option. And if their company insists they return? Many would rather look for new jobs in the flourishing remote-first corporate environment.
However, some missed the structure of the office and its offers of accountability, collaboration, more amenities, and . . . friendship. But not all companies are created equal. Some hope to lure employees back by upgrading the office experience. Turns out, the millennial start-up with that Day-Glo ping-pong table and IPAbeer-on-tap isn’t actually the dream if it comes with a toxic work environment (we’re looking at you WeWork). As companies add in-office perks, employees are requesting more support, boundaries — and even arrangements like the four-day workweek.
For the best of both worlds, companies are adopting hybrid systems. However, reports from CNBC and BBC imply that this may be a taxing option. Having one foot in the office and the other in your office kitchen is far from ideal for most employees, research says.
LinkedIn’s 2022 Global Talent Trends report reveals that of the 500 C-level executives surveyed, 81% said they’re changing workplace policies to offer greater flexibility.
But according to CNBC, “emerging data is beginning to show that hybrid work can be exhausting, leading to the very problem workers thought it could solve: burnout. More than 80% of human resources executives report that hybrid is proving to be exhausting for employees. This is according to a global study by employee engagement platform TinyPulse. Workers also reported that hybrid was more emotionally draining than fully remote and more taxing than even full-time office-based work.”
BBC agrees, reporting: “Emerging data is beginning to back up such anecdotal evidence: many workers report that hybrid is emotionally draining … Workers, too, reported hybrid was more emotionally taxing than fully remote arrangements – and, concerningly, even full-time office-based work. Given many businesses plan on implementing permanent hybrid working models, and that employees, by and large, want their working weeks spent between home and the office, such figures sound alarm bells. But what is it specifically about hybrid working that is so emotionally exhausting? And how can workers and companies avoid pitfalls so that hybrid actually works?”
“Overall, human resources executives thought that hybrid and remote work were the most emotionally exhausting for employees, but that wasn’t the case,” Elora Voyles, a people scientist at TinyPulse, told CNBC.
So with every employee having various experiences and opinions about what works best for them and their lifestyles, it makes sense that people are job-hopping to suit their newfound preferences.
Frankly, some are job-hopping to enhance their compensation. Statistically, most people realize their greatest salary increases when they move from one job to another. Remaining at the same company for years and years often limits how much you can make as your career advances. One popular female finance guru, Cinneah El-Amin told Afrotech: “I am a staunch advocate for more women to job-hop, to get the money they deserve, and to stop playing small when it comes to our careers and the next step in our careers.”
The research supports this, with Zippia claiming: “Generally speaking, a good salary increase when changing jobs is between 10-20%. The national average is around 14.8%, so don't be afraid to ask for a similar increase. At a minimum, you should expect a wage growth of at least 5.8% when you change positions.”
However, a job search can be daunting, despite the potential benefits. But if you can land a role in a new company — and potentially boost your salary while you’re at it — you will challenge yourself and constantly keep learning. LinkedIn Learning, for example, is one platform that can help you level up your skills and give you an edge to land the job.
LinkedIn Learning allows you to take advantage of the moments that truly matter. It offers courses on subjects that will carry you through every step of your career. Their instructors have real-world experience.
Check out the LinkedIn Learning Pathfinder and it will generate a custom list of courses based on what you want to achieve. Learn more about recent top career development goals and acquire the skills to help you reach them.
Unsure what to do and how to start your job search? Let LinkedIn Learning be the first step you take in the path to a new and improved career.