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Immigrant Entrepreneurs and Their Impact on the U.S. Economy
By: Vivian Kaleta Throughout America’s history there has always been a negative stigma surrounding immigrants. Despite this, many immigrant entrepreneurs are proving this stigma wrong with their achievements. To start off, immigrants are much more likely to start businesses than people born in the United States. “The percentage of adults, both born in the United States and immigrant, who became entrepreneurs in 2016, was .31%. The entrepreneurship rate for immigrants during the same time period was higher at .52%, about twice the rate of those from the United States. In other words, “for every 100,000 immigrants, 520 became entrepreneurs in a given month.” (Kosten, 2018) Immigrant entrepreneurs are also benefiting the United States economy. Immigrant- founded businesses live on beyond their founders, generating jobs and revenue for years to come. New American Economy research found that from the 2020 Fortune 500 firm companies founded, about “45% of those firms had at least one founder who either immigrated to the United States or was the child of immigrants. In 2019 alone, a collective revenue adding up to $6.3 trillion was generated by those immigrant founded firms and they employed over 13 million people” supplying United States born workers with jobs and contradicting the common belief that immigrants “steal American jobs.” Immigrant Attorney, Kathy Sak, said she thought the word “steal” was very opinionated and harsh. “In the past couple years, the United States has received greater amounts of immigrants that have higher levels of education and are seeking opportunities to use their education in ways they couldn’t in their home country.” Regardless, immigrants are still stigmatized in business. Aleksandra Efimova, an immigrant from Russia, immigrated to the United States at age 15. She founded her business Russian Pointe which provides pointe shoes for ballet dancers. When asked about her journey, Efimova said it was not an easy task. “Everything was a big shock for being a 15 year old girl. Anything from learning the English language, establishing relationships, and adapting to a new way of life. With that in mind, America does reward those who work hard.” Efimova wanted to leave some advice for any young immigrants or children of immigrants wanting to become entrepreneurs: “Identify what the “American dream” means to you and go for it.” Although she had challenges, Efirmova sees being an immigrant as a benefit. She has connections and global experiences.
The Impact of Corporatization in Health Care
By: Rathin Shah The healthcare industry has changed dramatically over the past decade as practice models evolve from self-employed independent physicians to large practices encompassing several hundred physicians. A report from the American Medical Association published in Medical Economics found that the percentage of doctors with an ownership stake in their practice declined from 53% in 2012 to 47% in 2016. (Gopal, 2021) Similarly, The Physicians Advocacy Institute reported an 86% increase in the number of practices owned by hospitals or health systems. (Larson & Beattie, 2018) The reason for this trend is multifold. Doctors in smaller practices do not command the volume of patients that enable optimally negotiated contracts with major health insurance payers like Blue Cross Blue Shield or United HealthCare. Another reason includes the greater flexibility, structure, and benefits that well-resourced corporations offer. Dr. Amee Majmundar, an allergy immunology physician, was in solo private practice for fifteen years before she joined Duly Health & Care. Her new employer offered healthcare benefits that were too expensive to provide for herself or her employees. “I really enjoyed running my own practice, but I was unable to enjoy disability or healthcare benefits. After joining a large practice, I instantly had colleagues and coverage for vacations.” Another consideration in comparing the two practice models is overhead; the cost to run a practice including salaries, rent, and office equipment. Data from the MGMA (Medical Group Management Association) shows overhead expenses on average consume 60% of a practice’s revenue. (Tinsley, 2010, 38-43) “I was able to run a lean practice on my own because I could control costs, but now, I no longer worry about a broken printer, or obtaining quotes for a fridge that needs to be replaced. These problems are taken care of by my practice manager so I can focus on practicing medicine, the thing I enjoy most,” remarks Dr. Majmundar. The impact of this new paradigm in healthcare impacts not only the physician but the individual consumer as well. As large companies push for greater productivity and revenue, thoughtful strategies will be needed to optimize a healthy relationship between the healthcare consumer, the healthcare provider, and the corporate systems that drive the industry forward.
Intersections Between Mental Health And The Economy
By: Raina Koshal It is likely that you know someone struggling with a mental health disorder. Walter Payton College Prep student Maya Jha says “as I am growing up, mental health struggles are definitely becoming a more prevalent issue throughout my friends”. Additionally, Lillian Hennessy, a student from Jones College Prep, says that “more than half” of her friends struggle with mental health disorders. This doesn’t come as a surprise as suicide is the second leading cause of death among people aged 10-34 (NAMI, 2020). In fact, since 1999 the overall suicide rate in the U.S. has increased by 35% (NAMI, 2020). But mental health is much more than suicide, mental health disorders refer to a very broad amount of mental health conditions that can affect one's mood, thinking, and behavior. According to Neil Jordan, professor of psychiatry and behavioral sciences at Northwestern Feinberg school of medicine, “There is a lot of evidence that how things go in the job market are associated with people's mental health”. The US’s productivity-centered economy can be a big stressor and contributor to mental health issues within its population. Specifically, financial hardships have proven to have a direct relationship with increased mental health disorders. For example, research findings published in Clinical Psychological Science show that those who experienced a specific type of recession linked impact- financial impacts (e.g., missed mortgage or credit card payments, declared bankruptcy)- had an increased likelihood of having symptoms of depression, generalized anxiety, panic, or problems with drug use. Recession-linked impacts refer to influences from the great recession, which was one of the biggest economic declines in US history. The relationship between mental health issues and their negative economic impacts can may be seen as a catch-22 situation. This refers to when an individual cannot escape because of contradictory rules or limitations; the only way out is denied by a situation inherent in the issue. Here, economic issues greaten the prevalence of mental health disorders, but an increase in mental health disorders will result in further economic declines. Going back to the great recession example, many believe that the reason the recession had such lasting impacts and took two years to overcome, finding itself at the longest recession since World War II, was because its adverse effects on individuals mental health “compounded and prolonged its economic costs” (Clinical Psychological Science). Research done by Mclean Hospital found that mental health disorders lead to a “35% reduction in productivity, contributing to a loss to the U.S. economy of $210.5 billion a year”. During the Covid 19 pandemic, the actions necessary to control the virus as well as the pandemics effects caused many organizations to lose business and brought with it a surge of unemployment. The onset of Covid 19 resulted in many economic declines and mental health struggles of its own. Many mental health disorders can be treated effectively with quality health care, hence some believe the only way out of this catch-22 paradox and to prevent another recession situation is more government-funded mental health support. The idea being that it is a substantial financial investment that could stimulate quicker economic recovery, allowing for the easing of individual burdens in a time when treatment expenses are too costly. Government spendings on mental health issues have increased by 52% since 2009, as of 2019 the percentage of health budget spent on mental health was only about 5.5% (Open Minds Market Intelligence Report, 2021).
Importance of Financial Education for Women
By: Maggie Tsyganova In today’s interconnected world, being financially literate is more important than ever before. As Lizzy Brahin, On the Money Magazine 2020-2021 President and current freshman at Harvard College, says, “Whether you are making a decision about college or a career, personal finance is a skill you need to have regardless of your background. It allows you to become financially independent, build wealth, and set yourself up for a successful future,” (Brahin, 2021). However, women have less knowledge of personal finance when compared to men, and are unable to fully participate in economic activities. With the P-Fin Index responses of 2020, a 28 question survey for U.S. adults covering financial literacy topics developed by the TIAA Institute and the Global Financial Literacy Excellence Center, 27% of men answered the majority of questions correctly (22-28), whereas this number was only 12% for women (Yakoboski, et. al., 2020). This is a significant divide in confidence levels for personal finance. Financial confidence is closely related to financial well-being, and women lacking this personal finance knowledge significantly more, even in a well-developed country, is worrisome. Not having the necessary knowledge in personal finance also translates to a lack of female representation in traditionally male-dominated fields. The gender gap in economics is the largest of any academic discipline, where women only received about 30% of doctorate and bachelor degrees in economics in 2014, which was the same statistic in 1995 (Dolar, 2021). Lacking equal gender representation in these fields may defer women from pursuing such careers. When referring to her first corporate mentor, Tracy Frizzell, Executive Director of the Economic Awareness Council, says “it is fantastic when young female business professionals can find role models like that, as it was very important for me,” (Frizzell, 2021). Such mentors foster future generations of women leaders. More often than not, women display lower financial knowledge and confidence than men. Tara Falcone, the founder of ReisUp, believes it is important to “not shelter younger women [from] early conversations about money” (Falcone, 2021). Exposing women to financial education at an earlier age will equip them with the confidence necessary to make more informed financial decisions. Providing support for populations who are less financially literate will ensure everyone has equal chances for economic participation and opportunity.
Chicago’s Most Important Yearly Budget; What It Means For You Heading Into 2022
By: Miya Martinez The 2022 Chicago city budget is one of the single most important and controversial budgets this year. WBEZ explained how “The mayor’s office agreed to tack on $6 million to its mental health spending plan to fund nearly 30 new positions at the city’s five mental health clinics.”(WBEZ - 2021). This new budget was made to help increase funding into a variety of social programs, mental services, and environmental programs. Wirepoints, which showcases a variety of information on Chicago's current debt situation, says that one thing to take note of is “Chicago’s other local governments have total debts as a percentage of annual revenues that range from 543% to 746%. No other metro area is as indebted as Chicago is.”(Wirepoints - 2020). This means that Chicagoans will end up having to pay more taxes to not only continue settling the debt but to help and try to sustain the bill. For many Aldermen, as well as constituents, the biggest question is how the federal stimulus money should be used. Alderman Hopkins, Chicago's 2nd ward Alderman, disagreed with this budget and voted no, his reasoning being, “I’ll never vote on a budget that increases property taxes”. There is heavy belief with Alderman that the stimulus money could be used alternatively to help put down some of Chicago's debts and instead relieve these taxpayers, not force even more money out of their pockets. What's best to take note of is the abundance of sides people have on the new budget, sustainability is in question and a lot of people are wondering if it will underperform and put Chicago at an even worse state of debt collection. Nonetheless, it is also a great chance to dedicate more resources and projects into different areas of the city, as well as bringing in mental health programs to help Chicagoans; especially during a time when we need them. As a constituent of this city, it's best to stay informed and formulate your own opinion on this budget, taking into consideration every side and angle; since as of now we can only predict how the budget will play out.
How To Avoid Payday Loans?
By: Pre-Anna Reese “Did you know 12 million Americans take out payday loans each year, spending billions of dollars on loan fees or sinking them deeper and deeper into debt?” (CFPB, 2016). Payday loans are short-term unsecured loans, with high interest rates. One way to avoid payday loans is by saving your money for unexpected expenses. Payday loans are easier to obtain which may appear to be the easy way out for those in need of immediate additional funds. Dan Allen researched and wrote an article highlighting how, “People use this specific loan to cover unexpected expenses, avoid embarrassment from others, loans for bills…“(WDPGPDL, Sep 2020). The most common reason for getting a payday loan is to cover car expenses. Payday interest loan rates historically could easily go up to 400%, but not after the passing of the Predatory Loan Prevention Act, payday loans have been capped at 36%. Ms. Beasley, who has taken out payday loans, said “It seems easy to access the money”. But keep in mind when you take out a payday loan you are agreeing to pay back what you borrowed by the next paycheck. So if you live paycheck to paycheck this can be a problem. Payday loans seem like an option for you if you are financially struggling. Michelle Jackson, an author that focuses on financially empowering single women, suggests, “If you find yourself in financial distress, don't beat yourself up, but do spend time evaluating your overall financial picture before making a decision that could complicate your finances further”(HTAPDL, June 2021). How can you avoid the need for payday loans? You can start by opening a checking & savings account while you are young. This can benefit you in the long run by creating an emergency savings account that generates interest. If you do need an emergency loan, there are other companies that offer online loans for 36% percent interest or less. Ms. Meegan Dugan Bassett from Woodstock Institute stated,“Another partner, Capital Good Fund, is a nonprofit that offers financial coaching and lower-cost loans that can help people build their credit as well.” There are alternative options for everyone so make sure to do your research. Learn more here.
What Does the Debt Ceiling Mean to You?
By: Vidhi Piparia The effects of the debt ceiling are most widely seen through an elongated government shutdown; however, the effects of no money to keep the country running or paying down the debt are slightly more nuanced. The debt ceiling is a cap on how much debt the U.S. can take on, and when the country reaches that debt limit, Congress has to negotiate whether to increase the debt ceiling or not. Without this increase, the government can’t borrow money to pay federal employees or pay the bills, therefore forcing a government shutdown. However, the impacts of not raising the debt ceiling can go beyond just a government shutdown. Many people conjecture that its impact could cause a global catastrophe. Marcos Cabello writes in an article by CNET that the effects of not raising the debt ceiling “would be acute and widespread… the US GDP would decline, approximately 6 million jobs would be lost, and the unemployment rate would increase dramatically” (CNET, 2021). Although this widespread impact may not be intuitive, it is important to remember that the debt ceiling affects the U.S. at the macro level magnifying its impact to a large part of the economy. Although the effects of not raising the debt ceiling are quite calculated at the global level, the same can’t be said for the impact on financial planning at a local level. Craig Slack, the Deputy Treasurer of Chicago, said that the investment portfolio created by the Chicago Treasurer's Office cannot be guided based on the unknown, in this case, the status of the debt ceiling. Similarly, Anthony Ryan, the Lead Commodity Options Market Maker for McLaughlin Capital and current investor, said that since a “government shutdown is temporary, my investments, which are long-term, are not as affected.” It doesn’t seem like the national debt affects the local government or an individual investor much, so then why do we even have to pay off our debts? To explain this, we need the answer to the infamous question of who the U.S owes debt to? Most of the U.S.’s national debt is held by money managers, government entities, corporations, and individuals through their 401ks and pension funds (a fund that provides retirement income) within the country, while the rest of it is owed to foreign countries like China, Japan, and the United Kingdom (The Balance, 2021). Although the appropriate amount of debt is debated, there is some consensus on the idea that a substantial amount of debt will lead to economic turmoil. With that said, the U.S. is around $30 trillion in debt, the highest it has ever been, and increased by 233% since 2008 (DataLab). So, although investors and treasury employees may not be too affected by the federal debt, we the youth are going to be the ones facing the consequences of this unsustainable trend. The government can keep printing money, but things are going to be expensive when today's youth are the ones running this nation. To quote Craig Slack again, “when inflation outpaces wage growth, it's the worst thing that we can have in our economy in my mind.” At the end of the day, it’s going to be up to the youth to decide whether they are more concerned about the effects of the debt ceiling not passing, or simply the fact that we are continuously having to increase it.
The Change in Forensic Economics
By: Karis Kelly Economics is connected to a variety of careers, ranging from law to medicine. One of many subsets within law and economics is forensic economics. Forensic economics is defined as “the scientific discipline that applies economic theories and methods to matters within a legal framework” (National Association of Forensic Economics, accessed 2021). One of the major themes this economic and scientific discipline applies to is loss of enjoyment of life and commercial damages. The concept is known as hedonic damages. One key component of forensic economics is its application during a lawsuit. For instance, during a lawsuit, the idea of intangible losses (hedonic damages) and how it impacts a person’s life can be applied. Stan Smith of Smith Economics Group discussed the importance of Hedonic Damages. When he discovered this theory, it changed the game for forensic economics. It allowed for the quantification of losses without over-complicated the application. There is constant evolution within forensic economics as technology, economics, and science advance. Within the past five years, 50 journals have been published in the Journal for Forensic Economics. Research can range from assessments of damages in litigation to unemployment and work-life. (Journal of Forensic Economics, accessed 2021). New theories and ideas are changing the field and increasing its size. Not only are new ideas a factor, but the accessibility of data is another factor. An anonymous forensic accountant stated, “The increase and accessibility of data has dramatically altered the way many engagements are handled today relative to five years ago – let alone when I first began my career in forensic accounting.”The digitization of the field has created an interdisciplinary effect. Massive database software can even require Python knowledge, combining both computer science and law All in all, the field of forensic economics in a small community is constantly evolving to help its clients. Innovative theorems and technology continue to impact its continuity as a subset of economics. Forensic economics continues to emerge in litigation and grows more and more members. Interested in the field of forensic economics? Check out the National Association of Forensic Economics for a sneak peek inside the detailed work forensic economics do.
College Finance for First Generation Students
By: Elizabeth Rebollo The misconceptions and misinformation about saving money and the social and economic struggles first-gen students face are some of the many reasons why some end up dropping out. Bianca Camerena, the Chief of Staff of Peoples Gas gave me the opportunity to talk about her college experience as a first-gen student and how she learned determination to be successful in her career “I learned how to fail – literally a class and how to bounce back. I leaned on a community of friends that came from the same background – we were all inexperienced in college – we knew we had to succeed but were not aware of all the programs and help available; we all had to work to pay off school loans and living expenses and more importantly we just knew we had to finish school to get a career – which was a success.” First-generation students tend to graduate at lower rates than their peers with parents who earned a four-year college degree. According to National Center for Education Statistics data “Only around 65% of high school seniors complete a FAFSA each year, and first-generation and low-income students are less likely to complete an application.” In some instances, it would help if colleges made it easier for students to interpret the financial aid options available and make it easier to understand for those who are receiving the offers. Apart from making it more accessible, it would also be helpful to learn the misconceptions and misinformation about saving money. “Close to half of Gen Zers (48%) go to their parents for money advice.” according to a NerdWallet study. Many social struggles can have an influence on first-generation students' decisions. “Close to three-quarters of Gen Zers (72%) feel regret about their personal spending at least sometimes. More than half who ever feel regret about their spending have felt this about food-related spending, including dining out (54%), on-the-go food/beverage purchases (54%) and food delivery (52%).” Fewer seek out money advice from finance websites, with less than a third of Gen Zen (32%) using financial service companies and other financial websites, like blogs. At Peoples Gas, Camarena goes on to explain that many companies like hers offer college scholarships to children of current employees while some larger companies may offer scholarships to any students regardless of family employment. “The opportunities are vast and I would highly recommend first-gen students to lean on counselors, friends, and teachers; and make sure to use their resources including the internet!” she says.
The Business of the Film of Industry
By: Oscar Boccelli The Lord of the Rings, The Avengers, and SCREAM! Most people have likely heard or seen these famous movie series, but when you stream your favorite TV show or movie, you likely never stop to think about the business implications at play. When we begin to look beyond our screens, it’s apparent that two of the largest factors that play into a movie performing well are merchandising and high ticket sales. A prime example of a film taking advantage of marketing genius is the Star Wars Series, which “brought in $700 million in retail sales in 2015” (Zipin, 2021). In general, famous movie series can take advantage of their fan bases. Matthew Steele, a Research Manager at ERm Research LLC experienced this firsthand, finding that “the average Mandolorian watcher owns six Star Wars toys.” Clearly, dedicated fan bases drive more value. Another more obvious reason movies perform well is due to their efforts to drive up ticket sales, and the numbers are only continuing to grow. “In 2019, global box office revenue hit a record of $42.5 billion” (McClintock, 2021). Of course, ticket sales have obviously been greatly impacted by COVID. Ethan Moskal, a former Production Assistant at Michael Bay’s Ambulance emphasizes the importance of “timing and streaming in improving ticket sales.” With regards to timing, he has found that “holiday films tend to perform better than other times of the year.” Concerning streaming, it is important for films not to be streamable so quickly, otherwise, people have no incentive to go to the theaters and purchase tickets. That in turn explains why it can take several months, and even years before TV shows and other filmography become streamable. Between all the efforts to improve ticket sales and merchandising done by successful films, it is apparent that many forces are determining whether a film will perform well or not. The next time you head to the movie theater, make sure to look beyond the screen!
The “Silver Lining” of the Post-Pandemic Labor Shortage: Teen Labor
By: Anika Dewjee “The U.S. is currently facing a record shortage of workers, with 9.3 million open jobs” (NBC News), which has left restaurants, stores, and bars short-staffed just as demand ramps back up post-pandemic. This labor shortage has turned the economy upside down and has forced small businesses to seek alternate sources of labor to keep their doors open. In particular, teen labor has been very valuable to struggling businesses as high school students are less affected by many of the factors holding back labor supply. For example, high school students do not typically receive unemployment benefits, are unlikely to have childcare responsibilities, and are less likely to become morbidly ill from Covid-19. Additional benefits of teenage labor are increasing availability with remote learning and willingness to take jobs that many adults find undesirable when receiving post-pandemic economic benefits. These factors have all contributed to the fact that “the employment-to-population ratio for teenagers hit a 13-year high in May” (Bloomberg) as many turn to this younger demographic of employees. Ali Dewjee, the owner of Chicago Indian fast-casual restaurant Bombay Wraps, who has never hired teen workers pre-pandemic, says that “the silver lining” of the pandemic was “discovering a whole new demographic of workers.” He and his team “were amazed by the level of professionalism and work ethic displayed by this cohort” and plan to hire high school students in the future. This unprecedented shift in the workforce has not only been beneficial to businesses but also to teens, as “more than 32 percent of teens have a summer job this year, the highest since 2008” (NBC News), according to the Bureau of Labor Statistics. Teenagers are taking advantage of these opportunities to save up for college, gain work experience, enhance their résumés, earn and manage money, and even make money for post-pandemic pleasure. Caitlin Froning, a Chicago teen who began working at Nothing Bundt Cakes this summer, says that “holding my first job during a pandemic has helped me realize the importance of conscious spending and being more financially responsible.” Sources: https://www.nbcnews.com/business/business-news/teen-workers-fill-job-shortage-what-happens-when-summer-fades-n1272915 https://www.bloomberg.com/opinion/articles/2021-06-08/is-there-a-labor-shortage-not-among-teens Interviewees: Ali Dewjee and Caitlin Froning
Unmet needs of Chicago Public School Students with Special Needs
By: Blake Berry Insufficient funding is a critical issue among many U.S public school systems including the Chicago Public Schools. The Chicago Public School (CPS) System “has only 66% of the funding it needs to adequately serve the more than 355,000 students in its schools every day” (The Chicago Public Education Fund, 2019). This lack of funding affects the majority of CPS schools, making it impossible for the administration to provide resources that are essential to their student’s learning experience, including elective courses and extracurricular programs such as sports, arts, and music opportunities, and academic clubs. Special education students are often overlooked when it comes to discussions of allocating what little funding CPS offers, despite being a student population with critical needs. As a result, these students are denied access to fundamental educational resources they are entitled to. Jenesse Adames, a senior at Whitney M. Young Magnet High school, the high school with the largest population of deaf and hard of hearing students in the district, details her experience as one of the few hard-or-hearing students in her classes. “It’s very isolating, being the only one in the class who can’t speak. When the interpreter is absent, it’s hard to communicate with the teacher and to learn the lesson.” CPS’s shortage of interpreters and substitutes is an issue that affects thousands of students’ learning experiences. Every student should have equal access to quality education. “CPS continues to fail to meet the needs of too many kids in its special education program, and that’s nothing new. It is a failure that dates back decades. 60 employees in the CPS special education department have left in the last two years” (Chicago Sun-Times, 2021). Atrise Kelley, Director of Diverse Learners at Whitney Young speaks about what the district can do to improve the number of support students with special needs receive. “The district could do better at placing students in this type of environment,” she says. By this type of environment, she is talking about schools like Whitney Young that have programs and staff dedicated to providing for students who need extra care. The research cited above and expert interviews indicate that more needs to be done to help students with special needs. What can other concerned Chicago Public School students do? Consider expressing your concerns during the Chicago Board of Education’s monthly board meetings at the CPS loop office.