T HE P ENNSYLVANIA S TATE U NIVERSITY E CONOMICS A SSOCIATION P RESENTS :

T HE O PTIMAL B UNDLE
F ALL 2013:
WEEK OF

S EPTEMBER 26 TH

E DITOR : C OLE LENNON P RINT EDUCATION COORDINATOR C ONTRIBUTORS : B EN R OWLES , C ADY B OUCHER , C OLE L ENNON , L EAH G ALAMBA , R YAN S OSNADER

Upcoming Events: General Body Meeting: 9/26

BEAs GDP Estimate: 9/26

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AMERICA: GOING BACK INTO LABOR?

Much of the labor market news focuses on quantity, but it is also important to look at quality. While middle income jobs comprised 60 percent of the net unemployment increase during the 2009 recession, they have made up less than 25 percent of the jobs created during the recovery. 40 percent of job gains in 2013 were in low income sectors such as retail and hospitality. These figures are consistent with past recoveries; the growth in wage disparity is not. Real wages are finally increasing for workers between the 50th and 70th percentiles but continue to decline for workers below.BR CHECK
OUT THE ARTICLE: NYTI . MS /16 S S A 2L

Good Jobs!

RULES AND REGULATIONS: COAL PLANTS

The Environmental Protection Agency proposed a new regulation on Friday concerning the emissions of carbon from future coal plants. New plants must not discharge more than 1,100 pounds of carbon per megawatt-hour. The average coal plant currently emits 1,768 pounds of carbon dioxide per megawatt-hour, but developing technologies that trap carbon underground can prevent coal plants from reaching the limit. Additional regulations on existing coal plants are being discussed for next year, so current plants will likely need to innovate. Facilities producing natural gas and other alternatives largely meet the requirement already, so this rule could increase their competitiveness in the energy market.CL

How will coal plants fare in a possibly changing market?

Check out the Article: wapo.st/15aYgJZ

F OOD S TAMP C UTS : S OMETHING TO C HEW O N ?

Last Thursday, House Republicans managed to pass a bill that calls for drastic reforms to the U.S food stamp program. The bill cuts approximately 40 billion dollars from the program over the next ten years. It aims to eliminate loop holes and calls for stricter guidelines such as drug testing and job-training programs. Analysts estimate that within a year roughly four million people would be taken off the program and another three million every year after. Without the bill, the number of people on the program is expected to decline by 1.4 million people per year for the next ten years. LG
Check out the article: n y t i . m s / 1 a 7 Y k Z c

Maybe not too much to chew on here.

I NDIA S R ATE H IKE : I S IT A 5/5?

Indias central bank, the Reserve Bank of India, surprised markets this past Friday by raising its key lending rate. The move, from 7.25% to 7.5%, was intended to reduce Indias high inflation. This is the first rate hike in about two years. Governor Raghuram Rajan, the head of the central bank, explained that reducing inflation is his top priority. Indias markets did not react favorably to the change, but Governor Rajan expects the decision to lead to sustainable growth in the long run as the currency stabilizes. How this will play out remains to be seen. RS C HECK
OUT THE ARTICLE : ON . WSJ . COM /14BK FM 7
Whether or not we will give it a 5/5 rating, time will tell.

C ONSUMPTION C YCLES : A MERICAN E DITION

Income is an excellent predictor not just of how much you buy, but of what you buy and when you buy it. Low-income Americans spend roughly 60 percent of their incomes on housing, food, and clothes. Wealthier Americans tend to spend more on entertainment and insurance while keeping more money in savings. The data also shows that lowerincome Americans spend their money more immediately, while higherincome Americans exercise their ability to save and invest for the future. Being rich or poor in America isnt just about how much money you have; its about how you are able to use it.CL
A different consumption junction.

C h e c k o u t t h e s e A r t i c l e s : bit.ly/150YpKv 1.usa.gov/169MNEr