Having To Question Your Healthcare

In a medical emergency, dial 9-1-1 – it is ingrained into every American’s head from childhood. What is only realized after you call 9-1-1 and the ambulance takes you to the hospital is the hefty bill that comes with it. But what are we supposed to do in a state of emergency, not call an ambulance?

As medicine advances, more patients are being treated effectively and more lives are being saved. However, the costs associated with these advances are astronomical, and many Americans don’t even know how much they are paying for healthcare. Similar to the habit of calling an ambulance, most people don’t immediately start thinking about cost and start questioning their course of treatment – they just want to get better. This is one of the root causes of the healthcare crisis in the United States. Patients trust their doctors, and they should. However, they are increasingly being steered in more expensive directions because of new technologies and increased healthcare costs across the nation.

Of course, the healthcare crisis in the United States is multi-faceted. It involves the question of who has access to healthcare, health insurance costs, political interest, lobbying power, mergers and more. Often the topic of healthcare gets so complicated that people don’t even know what their opinions are or how to address the issue. But one thing is extremely clear, healthcare costs are rising and it is directly affecting Americans. According to The Wall Street Journal, the United States spends more per capita on health care than any other developed nation. Soon, the U.S. will spend almost 20 percent of its GDP on health. This is not because Americans are buying more healthcare overall, but because what they are buying is becoming increasingly more expensive. Health insurance costs and out-of-pocket prices are increasing. For a healthy individual, this is likely just increased costs associate with annual visits to a general physician. Although significant, this doesn’t have dramatic impacts on individuals and families. However, for individuals with life-threatening diseases, disabilities or cancer, these costs become a huge burden. As seen in the chart below, the price of prescription drugs due to pre-existing conditions and hospital care expenses have grown exponentially since 2000. Physician and clinical service prices have increased as well, but more moderately.

When looking at specific individuals plagued by horrible circumstances of health, it is easy to see how these increased prices have become a problem. For example, according to the American Diabetes Association, the total costs of diagnosed diabetes in 2017 was $327 billion, increasing by $82 billion since 2012. For a Type One Diabetic who is insulin dependent, many of these costs are associated with the insulin they must purchase in order to survive. When grouping together Type One and Type Two Diabetics, the largest components of expense are hospital impatient care (30 percent) and prescription medications to treat complications of diabetes (30 percent). These dramatic numbers are a trend seen among life-long diseases that require many doctor appointments, occasional hospital visits and a lot of medication.

A Duke study published last year, where 300 cancer patients were surveyed, revealed the financial distress a cancer diagnosis causes a household. On average, cancer patients in this study were spending 11 percent of their household income on their cancer treatments. Those who reported the most financial trouble were spending more than 30 percent of their household income on their care, even though more than 60 percent of the people surveyed were covered by private insurance. These expenses are not the first thing someone things about when they receive their diagnosis, but for many, they are very difficult to ignore and that has an impact on their health. An associate professor, oncologist and member at the Duke Cancer Institute, S. Yousuf Zafar, says, “The financial toxicity of cancer treatments is impacting patients’ ability to pay for care, and is likely impacting how well they do.” Zafar says during the recession ten years ago she started noticing patients asking for less expensive treatments and wanting to cut back on the frequency of their treatments. This is a trend that has continued even as the economy has recovered – even in privately insured patients.

Although the United States is constantly making medical advances with treatments that can dramatically increase an individual’s quality of life and life expectancy, the economic burdens are holding a lot of patients back from embracing these new technologies.

A new, advanced diabetes technology, the Dexcom G6, continuously monitors glucose levels in a revolutionary way. With insurance, most patients have to pay an out-of-pocket cost of $349 for a box of three sensors that last ten days each. That is about twelve boxes a year, for a total of over $4,000 a year spent on Dexcom supplies.

Revolutionary drugs are now also being created to treat cancer. Recently, James P. Allison and Tasuku Honjo were just awarded a Nobel Prize for their research on cancer immunotherapies. Immunotherapy treatments are seen as a beacon of hope for many people with cancers such as melanoma, lymphoma, lung, kidney and bladder cancers. It is amazing. However, when these treatments are unaffordable to most, they are not being utilized to their full potential. Ezekiel Emanuel, a professor at University of Pennsylvania’s Perelman School of Medicine, says, “What we’ve seen over the last two decades is the cost of cancer drugs go through the roof. Every year, the introductory price seems higher and higher and higher.”

According to Forbes, the cost of cancer drugs has increased from $50,000 per patient in the mid-1990s to $250,000 today – four times the median U.S. household annual income. A treatment of $850,000 for a single patient is not unheard of with immunotherapy. Not only does this mean people can’t access these medications, it means they are unsustainable in the U.S. health system as a whole. However, still, the U.S. government plans to increase its budget towards medical research for the third consecutive year.

The thought of not calling 9-1-1 because of the cost of an ambulance ride seems absurd. But people with life threatening conditions are now forced to consider limiting or withdrawing treatments and care that could have extraordinary impacts on their health conditions.

With a health system that has become unsustainable, how can the United States maintain a healthy, long-living country? The answer may be to look at preventative care, which will cost less in the long-term. Former head of the Centers for Medicare and Medicaid Services under President Obama, Dr. Donald Berwick, notes,” We put far more into hospital care than we do keeping people from having to be in the hospital.”  However, with this idea lies another problem.  Going back to the almost 20 percent of the nation’s GDP being within the healthcare sector, it is evident how the significantly the industry contributes to the country’s economy. While much of this has to do with spending, another – fairly large – part of this has to do with the employment the health care industry has brought Americans. In December 2017, the health care industry surpassed the retail industry as the country’s largest employer. It surpassed the manufacturing sector in 2008.

This points to the vast amount of power there is in the industry, which makes it such a tough issue to tackle. Healthcare is a complicated issue, and there is no easy answer. However, it is unfair to ignore the many Americans who are burdened with these costs, when they are already being burdened by a life-altering medical condition.

Amazon: Leading the US Toward Livable Wages?

Amazon has revolutionized online commerce. It has created a monopoly-like business with the online sales of books and has aggressively expanded into other product categories. In addition, it has enticed countless customers with its two day prime shipping option. Recently, Amazon continues to lead the way for modern US businesses with its decision to raise the minimum wage from $11 to $15. This move was partially enacted to rectify the bad reputation it earned given Amazon’s harsh treatment of its workers. However, Amazon does not want to lose its competitive advantage by paying a higher minimum wage, and so it is now lobbying for a national minimum wage hike. Initially the rise may result in the loss of customers due to higher prices on goods, but it could help Amazon entice new employees. The increase in minimum pay will create both positive and negative effects for the company. 

Amazon has been notorious for its poor treatment of workers. In 2015, interviews with current and former employees revealed Amazon’s highly competitive and hostile work environment. Senior managers had incentives to attack one another’s ideas in meetings believing conflict creates innovation. Workers were penalized or pushed out for suffering a cancer diagnosis, miscarriage, or other personal challenges. However, it was reported that there were many opportunities to move ahead in the company. Amazon is all about growth and so it is not a good environment for a workers who are content to stay in the same position. Consequently, Amazon maxes out its pay scale after several years at each tier in an effort to promote forward momentum. In addition, the company was known for providing good benefits which contribute to total compensation. (Adams) While Amazon’s aggressive culture did have some redeeming attributes, its constant need for growth resulted in a cutthroat work environment. 

Amazon treated its lowest paid employees the most poorly. There have been numerous reports of warehouse workers who have suffered from workplace accidents/injuries and who have been fired or put on unpaid leave and so been unable to produce income. There are other cases of warehouse employees who couldn’t overcome the fatigue of the job and so were forced to quit before they got injured. (Sainato) According to the Guardian (https://www.theguardian.com/technology/2018/jul/30/accidents-at-amazon-workers-left-to-suffer-after-warehouse-injuries), “Amazon’s warehouses were listed on the National Council for Occupational Safety and Health’s ‘dirty dozen’ list of most dangerous places to work in the United States in April 2018. The company made the list due to its pattern of unsafe working conditions and its focus on productivity and efficiency over the safety and livelihood of its employees.” (Sainato) Amazon’s reputation as a power-hungry corporation with little regard for its workers has resulted drastic changes such as the change to its wage scale. 

Amazon has expanded its markets into many different regions of the US economy. According to the Forbes (https://www.forbes.com/sites/lauraheller/2016/11/30/amazons-growing-stranglehold-on-the-us-economy/#d407c09eb408), the Institute for Local Self-Reliance states, “Today, half of all U.S. households are subscribed to the membership program Amazon Prime, half of all online shopping searches start directly on Amazon, and Amazon captures nearly one in every two dollars that Americans spend online. Amazon sells more books, toys, and by next year, apparel and consumer electronics than any retailer online or off, and is investing heavily in its grocery business.” (Heller) Amazon’s tactic is to draw members in using Amazon Prime, which gives exclusive offers and better prices. Consequently, Amazon seeks to be the website that consumers look to first for the best deals. (Heller) Once Amazon had gained a substantial number of Prime Members, the company announced in April 2018 that it would raise the cost of membership from $99 to $119. This helped drastically improve Amazon’s profitability. The company’s net income for the first quarter of 2018 was $1.63 billion, compared with net income for the first quarter of 2017 of $724 million. A major factor in this jump in profit is its cloud computing and advertising businesses as well as the boost to the cost of Prime members. Profits are expected to continue to grow. (Wingfield)

Amazon’s rapid growth created the necessity to hire more employees. However, the growth in jobs came mostly at lower levels. Amazon is leading the shift in the United States’ economy to technology focused jobs. According to USA Today (https://www.usatoday.com/story/tech/columnist/2017/01/13/amazons-jobs-creation-plan-comes-amid-labor-pains/96488166/), “The impact is felt far beyond Amazon, labor and retail experts said. The breakneck growth of Amazon is ‘upending’ the retail industry, which accounts for one out of every eight jobs in the USA, says Stacy Mitchell, co-author of a recent report that concluded Amazon eliminated about 149,000 more jobs in retail than it has created in its warehouses.” (Swartz) While Amazon may be creating jobs in its own market, it exerts a downward pressure on wages as competitors that are pressured by Amazon’s low prices are forced to cut costs too. Their growth doesn’t necessarily make up for the losses it’s causing. This graphic demonstrates the rapid increase in employees that Amazon has hired from 2007 to 2018.

 

Amazon’s work force has grown by more than 6x since 2017. While the growth has been rapid, the pay for low-wage workers has not increased until 2018. 

Consequently, while Amazon is creating jobs, the type of jobs it is creating is not beneficial for the overall economy as these jobs do not provide a livable wages. This exerts pressure on government aid where costs are paid by the taxpayers. Additionally, many of the jobs that are being created are only part-time positions which cannot support an individual, let alone a family. Amazon is just one example of a major corporation trying to characterize its underpayment of workers as a boost for the American economy. Walmart is another culprit. (Picchi) According to CBS News (https://www.cbsnews.com/news/amazon-walmart-retail-hiring-wages/), In its latest hiring plan, Walmart said it will add 10,000 retail jobs. The company didn’t immediately return a request for comment about what those jobs will pay or what types of roles they’d represent. The typical Walmart sales associate with two children earns little enough to qualify for government assistance, such as food stamps, Medicaid and home energy assistance, Making Change at Walmart said.” (Picchi) These individuals have jobs yet receive the same government assistance as an unemployed individual would receive. Amazon and Walmart are creating these jobs not to boost the economy, but to boost their profitability. Unfortunately for Amazon, this story has been analyzed and reported. Therefore, in order to boost its public image, Amazon raised the minimum wage from $11 an hour to $15 an hour. 

Amazon sought to rejuvenate its reputation with the wage boost. However, the company didn’t want to lose its competitive edge by raising wages, and so is lobbying the rest of the country to follow suit. Amazon did not lead other retail chains with this increase. Last year, Target announced that it would raise its minimum wage to $15, Costco raised its minimum pay to $14 an hour, and in January of 2018, Walmart stated that it would raise its starting wages to $11 an hour. The federal minimum wage is $7.25, however it varies from state to state. In California, it will rise to $15 on January 1st. According to Sen. Bernie Sanders, it was inevitable that Amazon would increase minimum pay levels. He is quoted in Amazon to Raise Minimum Wage to $15 for All U.S. Workers, stating, “‘I think they saw the writing on the wall. I think they saw the calculation that it was indefensible that a man whose wealth is over $150 billion be able to continue paying workers wages that are so low that they are forced to rely on federal benefits.’” (Weise) The public is feeling wealth inequality more as the gap continues to grow in the United States and, the pressure for change is growing.

Amazon may appear to be creating positive changes for its workers with this wage boost, however Amazon may in fact be cutting other benefits in this process. The minimum wage was increased to $15 an hour, but another new policy eliminated bonuses and the ability to receive stock in the company for warehouse workers. Amazon had utilized a restricted stock unit program which gives shares to workers who have stayed with Amazon for a certain amount of years. This program will now be phased out. (Pisani) Further, there are Amazon employees who are against the increase in minimum pay. According to The Washington Post (www.washingtonpost.com/business/economy/amazons-15-minimum-wage-doesnt-end-debate-over-whether-its-creating-good-jobs/2018/10/05/b1da23a0-c802-11e8-9b1c-a90f1daae309_story.html?utm_term=.2ef42b164dd0), employees voiced these concerns: “They asked why people who had been toiling in the company’s warehouse for years would now be paid similarly to new employees and temporary holiday help.” (Long) These offsets in benefits, as well as the perceived advantage for new employees over old employees, harm the positives created by a higher minimum wage. It seems clear that companies will attempt to get some concessions for raising salaries through cuts in different areas. 

Amazon is a powerhouse in terms of efficiency and profit growth. The company is revolutionizing the future and the technological shift in the American economy. With this leadership comes a responsibility and the public has begun to hold Amazon responsible for its treatment of workers. Amazon has recently announced that it will be raising its minimum wage from $11 to $15. This may be the result of a movement for livable wages in the United States. However, the impact of Amazon’s contribution to the prevalence of low wage jobs will not simply be remedied with this increase.

Sources:

 

https://www.nytimes.com/2018/04/26/technology/amazon-prime-profit.html

https://www.forbes.com/sites/lauraheller/2016/11/30/amazons-growing-stranglehold-on-the-us-economy/#d407c09eb408

https://www.forbes.com/sites/susanadams/2015/08/18/how-people-who-work-for-amazon-really-feel/#550db6343305

https://www.theguardian.com/technology/2018/jul/30/accidents-at-amazon-workers-left-to-suffer-after-warehouse-injuries

https://www.statista.com/chart/7581/amazons-global-workforce/

https://www.usatoday.com/story/tech/columnist/2017/01/13/amazons-jobs-creation-plan-comes-amid-labor-pains/96488166/

https://www.cbsnews.com/news/amazon-walmart-retail-hiring-wages/

www.washingtonpost.com/national/amazon-to-cut-bonuses-stock-benefits-as-it-raises-wages/2018/10/03/03248dc4-c757-11e8-9c0f-2ffaf6d422aa_story.html?utm_term=.d635eb0e156d.

www.washingtonpost.com/business/economy/amazons-15-minimum-wage-doesnt-end-debate-over-whether-its-creating-good-jobs/2018/10/05/b1da23a0-c802-11e8-9b1c-a90f1daae309_story.html?utm_term=.2ef42b164dd0

How Metro Fares and Micromobility are Changing Urban Transportation

There are many reasons why individuals opt to take public transportation. It is financially more affordable, convenience and speed. Though in cities like New York and Los Angeles, citizens have been complaining that the transportation price has risen too high and, especially in New York, commuters are not seeing any change reflecting in repairs and upgrades and are therefore turning to other modes of transportation.

In August, “Annual subway ridership fell in 2017 to about 1.73 billion trips, down about 2 percent from 2015, according to statistics from the Metropolitan Transportation Authority, and subway officials said ridership continues to slip, falling during the first five months of this year by about 2 percent.” (NY Times) In New York, this 1.73 billion trips, with each trip costing $2.75, that would total to over $4.75 billion.

But is that enough to cover the cost of rebuilding the underground systems and ensuring up to date security that was built in 1953? It is a challenge to make that conclusion when the city is home to “The Most Expensive Subway Track on Earth.”

New York is not the only city where natives fear that their form of public transportation is getting too expensive. Angelenos in California must pay $1.75 per ride, not including transfers. So my ride from USC campus to Glendale which includes 3 transfers would cost $5.25 each way and take over an hour. While I could instead take an Uber Pool Express, which is consistently around $7 and gets me home in half the time.

Los Angeles also has had an influx of electric scooters interrupt their mission of encouraging commuters to use their metro rail, bus, and bike systems. Companies like Bird, Lime bike and now Uber Jump in Santa Monica, are seamless and convenient forms of transportation which only cost $1 to unlock and about $0.15 to ride per minute. But how do these startups contribute to the local and national economy, and is it to the same extent that investing in public transit would have?

These companies contribute to finding the solutions for micromobility in urban environments. Creating vehicles built for first and last mile solutions. This is because, “part of the hype surrounding the micromobility space stems from the fact that roughly 60% of trips in the US are five miles or less.” (CB Insights) and that fewer people are already choosing to find other means of transportation besides public transit. Since 2015, according to the American Public Transportation Association, there has been a 4% decrease in public transportation usage.

This could cause a long-term economic problem for cities budgets to have funds to repair, replace, and keep up with the maintenance of pre-existing and future transport plans. Though the micromobility startups show no sign of slowing down their usage and losing their hype, besides legislation restraints, cities will have to find ways to keep their riders riding.

 

“There is no money”

“I’m afraid there is no money.”

Probably not among the first things you want to hear less than 24 hours after being appointed by the Prime Minister himself to Her Majesty’s Treasury, is it?

But, this was what British Liberal Democrat politician David Laws was faced with on the morning of 13 May, 2010, his second day as Chief Secretary to the Treasury. In the letter Laws’ predecessor, Labour politician Liam Byrne, left for the new Chief Secretary, he wrote: “Dear Chief Secretary, I’m afraid there is no money. Kind regards – and good luck! Liam.” Although meant as nothing more than a jest, the letter ended up having a real impact on British politics. The Conservative-Liberal Democrat coalition government, well, mostly the Conservatives, used it as a proof of Labour’s previous economic failure under Gordon Brown throughout their time in government, and during the 2015 election. Just how bad was the economic mess that the coalition government had to deal with, and how did it impact British politics as a whole? Let me try to explain.

David Cameron showing a photocopy of the infamous letter during the 2015 General Election campaign.

Since his premiership was, unfortunately, met with the global recession in 2008, when the then Prime Minister, Gordon Brown, called the general election in April 2010, the most scrutinized part of his legacy was a peacetime record-high deficit of £157 billion. As shown in the graph below, the United Kingdom borrowing in proportion to GDP shot up over 300% between the years 2008 and 2010. Admittedly, the global recession, like the name suggests, hit more than just the United Kingdom, and the Gordon Brown-led Labour party was hardly the main cause of it. Still, in the 18 months after the recession, the Brown ministry had no effective solution to it aside from more borrowing, and, as a result, the economy showed no signs of recovery. The failing economy was most likely what prompted Byrne’s joke. Unsurprisingly, Brown, the Prime Minister, lost him his credibility as an economic mastermind that he had built up over the past decade by producing and maintaining a strong and stable economy as the Chancellor.

In retrospect, the “no money” problem had been more than just an economic mishap for the United Kingdom. The aforementioned political, as well as economic impact, is turning out to be more profound than people had foreseen. In spite of Labour’s poor performance in the 2010 General Election, the Conservative party, though the biggest party, failed to win a majority in the parliament. Partly thanks to the extremely rocky economic state of the United Kingdom, Nick Clegg, leader of the third biggest party, the Liberal Democrats, put the interest of the United Kingdom above his party interests, and went into a full coalition with the Conservatives, so that the U.K. would not be stuck with either no government, or an unstable minority government. As most junior parties in the history of coalition governments worldwide, his party was diminished in the next general election, losing 49 of its 57 members for parliament. As they did with the letter, the Conservatives took advantage, and formed a majority government in 2015. Having promised a referendum on the EU, the Conservatives delivered it the next year, and led to the Brexit fiasco that we know of today.

As we can tell from the graph above, after the coalition government took over, slowly but surely, Britain’s debt problem healed. What is a lot harder to figure out is Brexit, which one could argue was, on some level, a byproduct of the economic mess that Labour had left. In an alternate universe, where Labour had proven slightly more competent in solving the recession, the Conservatives would have been less successful in the General Election, and probably would not have been able to deliver the EU referendum. Who would have guessed? Having “no money” could eventually be more harmful to a nation than just having no money.

The Wheelbarrow Problem: Lessons in Hyperinflation from Weimar Germany and Venezuela

Dresses made of paper money. Children playing games with blocks of cash in the street. Hundreds of bank notes for one roll of toilet paper. These are signs of hyperinflation or when the rate of inflation accelerates at such an extradorinaiy rate it renders currency useless and creating intense Economic Disaster.

In August, according to the New York Times, Venezuelan inflation was at 32, 714 percent and rising. Prices were doubling every 26 days on average, according to BBC World News. Coffee prices had soared to 2.5 million Bolivars as Venezuelans resorted to electronic transfers via credit cards to avoid lugging around large amounts of cash.

In an attempt to slow climbing prices, the government issued new banknotes and announced that they would lop off 5 zeros off the currency. The Venezuelan government hopes this change will help deter what economists have grown to call the “wheelbarrow” problem, when prices increase to a point where wheelbarrows of paper money have to be wheeled in to afford the simplest of items.

Examples of hyperinflation in Weimar Germany and current-day Venezuela.

Weimar Germany had a huge ‘wheelbarrow problem’. “A few million marks meant, nothing really. It was just that it meant more lugging,” described artist George Grosz in an interview about his experiences. “The packages of money need to buy the smallest item had long since become too heavy for trouser pockets.”

By November of 1923, it took a trillion marks to make one US dollar, according to PBS.The German mark was rendered essentially, useless. The German people used marks as wallpaper, toys, and fuel for household hearth and returned to bartering with loaves of bread and potatoes.  In order to combat further disaster, the Weimar government lopped off zeros of currency and issued a new currency- the Rentenmark.

However, when it comes to inflation and the economic medicine prescribed as a remedy to that inflation, one variable is important to remember: belief. During the days of hyperinflation, the German people did not trust that inflation would slow down, and spent fast and recklessly. “One had to buy quickly because a rabbit, for example, might cost two million marks more by the time it took to walk into the store,” said Grosz in an account.

Did the German people believe in the new Rentenmark? “I remember,” recounted one German woman, “the feeling of having just one Retenmark to spend….Just to buy something that had a price tag for one Mark was so exciting.” The Retenmark eventually returned German currency to pre World War I exchange rates at 4.2 Rentenmark per US dollar.

Will the Venezuelan people believe in the new currency? The story is more complex than it appears. According to the United Nations, 2.3 million Venezuelans have fled to neighboring countries. Venezuela’s inflation has helped contribute to other problems as well: water shortages, power cuts, and supply shortage caused by lack of foreign investment in Venezuela’s infrastructure, according to the BBC. While the German government of the late 1920’s was able to stabilize both it’s country and it’s economy, Venezuela will have to solve these issues in addition to it’s wheelbarrow problem.

 

Sources:

https://www.bbc.com/news/world-latin-america-36319877

https://search-proquest-com.libproxy2.usc.edu/hnplatimes/docview/161560392/fulltextPDF/3D5CFD9C41B047ABPQ/1?accountid=14749

https://www.facinghistory.org/weimar-republic-fragility-democracy/economics/personal-accounts-inflation-years-economics-1919-1924-inflation

#Trending: What can fashion and style trends tell us about the economy?

You can find economic indicators everywhere. From plastic surgery to the number of unclaimed bodies at your local morgue, to even the ‘intensity’ of marine corps advertisements, economists have found countless ways to chart the economic growth of the United States in recent years. However, for the last century of so, researchers and experts have found an area that can tell us quite a lot about the economy: fashion.

For example, let’s start with shoes. According to IBM, The “High Heel Index” works like this: the better the economy is going, the lower the heel. The 20th century echoed this theory quite nicely- in the 1970s, large platform heels and boots were in style, replacing the short, kitten-heeled sandals of the 60s. By the time of the “dot-com bust” at the end of the century, the low, block heels of the 1990s were replaced by high, stilettos popularized in shows like Sex and the City.

Social media analysis by IBM found that heel height peaked at 7 inches around the end of 2009- which according to the World Bank, the US GDP was at its lowest point. By 2011, when US GDP ceased it’s steady incline, heel height had fallen to around 2-3 inches.

The relationship between the strength of the United States economy and fashion extends to male style trends as well. According to Vox, beards can signify the triumph of American capitalism and innovation as they were popular with both Gilded-Age titans of industry and “characteristically disheveled figures” of the tech look like Steve Jobs.

However, it’s important to remember the significance of historical and cultural context when tracing the relationship between fashion and economic trends. For example, in the 1920s and 1930s hemlines were a much better tell at economic health. According to ABC News, economist George Taylor took note of how in the 1920s or the “The Age of the Flapper”, women took to higher hemlines to show off their stockings. By the time of the Great Depression, those stockings had gotten pricier, and women lowered their skirts to hide bare legs.

However, some fashion experts say the Hemline theory doesn’t quite add up. Valerie Steele, acting director and chief curator of The Museum at the Fashion Institute of Technology in New York, told ABC News: “Hemlines were starting to come down in ’27 and that was two years before the market crash.”

So is it possible to use fashion as a way to interpret the economy? Fashion, like any other industry, is certainly part of it. As for heel heights, hemlines, and beards- we’ll have to leave it to economists and historians from the future to decide.

Sources:

https://tradingeconomics.com/united-states/gdp

https://www.vox.com/videos/2017/3/17/14939608/beard-popularity-economics

https://www-03.ibm.com/press/us/en/pressrelease/35985.wss

https://business.financialpost.com/business-insider/the-40-most-unusual-economic-indicators

https://abcnews.go.com/Business/story?id=86787&page=1

The value of views: How internet influencers have changed the economy of entertainment

$16.5 million that’s how much Daniel Middleton, the highest paid YouTuber of 2017, made last year, according to Forbes. Since its founding in 2012, Middleton’s channel “DanTDM” has amassed over 20 million subscribers, 13 billion total video views and an active audience that keeps coming back for more gameplay videos.

Middleton’s position isn’t an idiosyncrasy. Falling only a few places behind him are the household names Logan Paul (18.5+ million subscribers) and Jake Paul (17+ million subscribers), who made $12.5 million and $11.5 million in 2017, respectfully. That same year, the highest paid female YouTuber was Lilly Singh “||Superwoman||” (14+ million subscribers), who made $10.5 million.

“Influencers are social media ‘stars’ who have monetised their subscriber base on Instagram by posting pictures and endorsing brands,” defines Yasmin Jones Henry of the Financial Times. The modern world of internet influencers/content creators, however, has only sprung up in the past decade, so how did these individuals go from making videos in their bedrooms to raking in millions of dollars? The answer is simple: advertisements.

In the past, advertisers have paired with traditional media, like television and radio, to focus on larger interests in hopes of having their product be a contender for the general audiences. Influencer marketing, however, has come along with more niche, new-form media, which has allowed advertisers to hyper-target consumers for more successful sales.

“One result of social media has been the democratization of influence and creativity. We no longer need the approval of large corporations to determine what content is truly worthy of views,” writes Matthew Biggins in an article on influencer economics for Medium. Biggins is right — we, the viewers, have taken the power out of the hands of big corporations and have redirected that decision-making authority to ourselves. We decide what we like and what content to ingest, which produces a positive feedback loop of receiving content that repeatedly satisfies us. This is where influencers come in. As viewers constantly returned to the same creators for reliable quality content, the influencer economy continued to expand, leader influencers naturally to become the next tool for advertisers to use.

“Sixty percent of Gen Z are more likely to believe what a YouTube star says over what a movie star says,” said Deborah Weinswig, the Managing Director of Fung Global Retail & Technology,

Images from Visual Capitalist.

In late 2017, roughly 70 percent of brands were using influencers. On just Instagram, which is a platform often used to establish or expand a creator’s social media presence, influencer marketing is a $1 billion industry, according to Retail Dive. Overall, companies primarily have been redirecting their advertising funds to online video and sponsoring Instagram posts, which can cost companies tens of thousands or hundreds of thousands of dollars per post.

Though influencer marketing is clearly the future of business and retail (and the large sums of money involved seem to indicate success), the newness of influencers still has kinks to be worked out when compared to traditional media advertising. While the number of traditional media viewers tends to be concretely-based, many pages with thousands of followers may consist of purchased, fraudulent fans, leaving companies to make investments they can’t be sure will yield the results advertised.

Nonetheless, the way consumers discover and purchase goods in our larger economy is changing for good. No longer can the intertwined economics of entertainment and retail sales rely on relating to the general public in hopes that something will stick.

“Beyond creating content for brands, another driving force of the influencer economy is the consumer’s hunger for representation,” writes Bof Team for Business of Fashion.

So, yes, individually liking something on Instagram is an economic transaction after all. Welcome to the influencer economy.

Why is Free Trade Good?

        Image Source: The Wall Street Journal

On Sep. 24, the United States will begin imposing tariffs of 10 percent on another $200 billion worth of Chinese goods. That tariff rate will rise to 25 percent beginning Jan.1. Subsequently, China retaliated as promised on Tuesday that it would enact tariffs on $60 billion in U.S. goods from aircraft to liquified natural gas.

From July this year, the trade battle between the United States and China started that the U.S. imposed 25 percent tariffs on $34 billion worth of Chinese goods as part of President Trump’s tariffs policy. As the trade war escalates over time, an unavoidable question occurs to me: what’s the meaning of the continuously escalating trade war with retaliation?

When searching “trade war” on the internet, the headlines like “Will tariffs hit American more than China?”, “What’s at stake for the U.S.?”, or “China once looked tough on trade. Now its options are dwindling.” popped up on the screen. Now that the negative effects of the trade war with retaliated tariffs can be realized by both sides, why not negotiate a peace treaty? A free trade is better than retaliated tariffs.

Early in 18th century, an economist Adam Smith wrote in his book The Wealth of Nations: “It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.” This is the core of free trade: businesses concentrate on services or goods where they have a distinct competitive advantage so that they could swap something with lower cost and all profit by doing so. However, a free market is being devalued and tariff is becoming a weapon for the state’s rivalry.

Generally, tariffs opposing free trade can be used for five reasons: protecting domestic employment, protecting consumers, protecting infant industries, national security, and retaliation. As President Trump claimed that US jobs got “stolen” by China and increased tariff on imported goods can boost American business interests, he enacted tariffs for protecting domestic employment, businesses, and consumers.

In terms of employment and businesses, it is true that jobs have been lost in America due to cheaper foreign imports under free trade. However, protectionism will destroy more jobs than it can create. The economist Milton Friedman famous for his support for free market wrote in his book Free to Choose: A Personal Statement (1980, p41): “our real objective is not just jobs but productive jobs—jobs that mean more goods and services to consume.” Increased tariffs do retrieve some labor-intensive manufacturing industries, but jobs provided by them will lead to increased producer costs, increased producer costs will lead to increased products costs, increased products costs will lead to fewer sales and fewer tax recipients, fewer sales will result in fewer jobs and fewer profits.

As for consumers, increased imported tariffs will limit consumers’ freedom to choose products and force consumers to pay more for products while free trade can increase the number of goods that domestic consumers can choose from and decrease the cost of those goods through increased competition. In the long run, the living standard and quality of consumers will be negatively affected by trade barriers. Also, the government has to spend more subsidies on an increased demand for public services because of increased living costs.

In addition to the US, China will also be negatively affected by the trade war in the same way although Chinese policymakers think they have a prudent financial and monetary policy to face the pressure from Washington. China’s economy is always much more vulnerable to exports than America’s economy and China is still trying to shift its growth model to one relying more on consumption and less on investment and exports. Thus, it could take a bigger hit from the escalating trade war.

The free market with free trade is not perfect but it can correct itself better than state, because sometimes government regulations will be used for political rivalry regardless of long-run losses, for example, the current trade war.

How the World’s Most Secluded Country Survives

There are not many countries that want to be associated with violent tyranny, the absence of freedom, and a disgusting lack human rights. This makes finding a trade partner very difficult for the North Korean government. It doesn’t look very good when you supply your main export, coal, through child labor and what is essentially slavery. On top of that, international organizations like the United Nations and NATO often require members to impose strict sanctions in response to the way North Korea treats its citizens. So how does a country that is so universally hated survive?

North Korea’s economy is still up and running for one reason: China. 83% of North Korea’s exports are to China. Though countries like India, Russia, Pakistan, and Burkina Faso are also trade partners, China’s relationship with North Korea is immense in comparison.

Though one may think that China simply wants to expand its economy and trade with whoever it can, there is another glaring reason for its support of the authoritarian regime. China is not only North Korea’s trading partner, but also its neighbor. If Kim Jong Un’s iron fist lost its grip, millions of refugees may seek shelter across the border, giving China big problems.

Information about the Chinese-North Korean relationship is pretty available, but there is another major country accused of trading behind the scenes: Russia. In Spring, eight U.S senators wrote a letter to Trump urging him to take immediate action against Putin. Lawmakers, along with many analysts, strongly believe that Russia is employing North Korean prisoners in Siberia, trading oil, and exporting supplies related to chemical weapons to Syria. If these allegations are even remotely true, then Russia would be outright defying several international organization agreements, such as U.N-wide sanctions.

Looking forward, North Korea may be thinking about expanding its economy beyond its current limits. Some experts believe that Kim Jong Un is looking for ways to improve trade. U.S President Donald Trump thinks so too.

Back in June, Donald Trump and Kim Jong Un met in Singapore for a historic summit. After the meeting, Trump said that Un had agreed to begin denuclearization, and that once that happens, trade with the notoriously isolated country might just be an option for the United States.

“They (North Korea) have great beaches. You see that whenever they’re exploding their cannons into the ocean. I said, ‘Boy look at that view. Wouldn’t that make a great condo?’” Trump told reporters after the summit.

If North Korea were to suddenly abandon its nuclear weapons and give its citizens basic rights, its economy could skyrocket. However, signs of that actually happening are still slim.

The Response to Retail Activism

A turbulent few years of American politics has created new groups of activists across the nation standing up for themselves, what they believe in and what they feel is right. The #MeToo movement disrupted Hollywood and has spread to Silicon Valley and to Washington. Black Lives Matter rallies have filled the streets of the United States. Celebrities and professional athletes have made statements of support on national TV. As we are living in a time of activism, people are encouraged to participate.

It is no longer acceptable to just stand by – for individuals, or for companies. This age of activism is translating to the way consumers behave. Support – or disapproval – of a company’s values is shown in purchase behavior. It may seem like a risky PR move for a company to stake a political or social stance, but recent events have demonstrated the possible pay-off.

On September 4th of this year, Nike released the following ad starring Colin Kaepernick:

Kaepernick was the part of a highly controversial protest starting in 2016. He and other NFL players began kneeling during the national anthem to protest racism, police brutality and social injustice. President Trump politicized the protests and many viewed it as disrespectful to those who have served our country. Nike took a huge risk with this ad, that would potentially alienate many of their previous customers.

Backlash seemed immediate after the ad was released. Social media sites flooded with videos of people burning their Nike products and criticizing the language of “sacrificing everything.” President Trump even partook in the conversation:

Although many – including fellow athletes LeBron James and Serena Williams – supported Nike’s decision to run this ad, the media primarily emphasized the negative reactions. This made Wall Street and Nike investors nervous. On the day the ad was released, there was a larger than normal sell-off of Nike stock.

However, as seen in the graph above, it was very insignificant in the scheme of things. In fact, since the ad was released Nike’s stock has seen reached an all-time high.

Instead of the #NikeBoycott approach, many people actually showed their support for the brand by going out and buying their products. According to the research firm Edison Trends, online sales jumped – sales rose 31% from Sunday (September 2nd)  through Tuesday (September 4th). While that spike didn’t last long, it demonstrated the way consumers felt towards Nike and the divisive stance they took.

The support shown on social media, in sales and in pieces of journalism like, This Life: If Nike can stand with Kaepernick, I can shell out extra for sneakers, speak to the way retail activism works in this political climate. While the long-term stock and sale performances will likely not be heavily effected, the immediate reactions of consumers are telling. People will remember what Nike stands for when they go to buy their next pair of running shoes, and an individual’s own beliefs will impact whether they buy Nike or a competing brand.