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Economics in the News - Dec. 28-Jan. 3 HOW ECONOMICS IMPACTS OUR LIVES ON A DAILY BASIS

Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.

"There is one rule for the industrialist and that is: make the best quality goods possible at the lowest cost possible, paying the highest wages possible." -- Henry Ford, Founder of Ford Motor Company.
Why did the stock markets soar in 2020 while COVID-19 continues to ravage the United States with an estimated 3,000 deaths per day and more than 800,000 people filing for unemployment benefits per week?

Thanks to the Federal Reserve’s support to keep interest rates low and programs provided by Congress in March from the CARES Act, Americans’ after-tax personal income in 2020 increased 8% from March to November. Households also spent less, resulting in record savings. Many poured their extra cash into the financial markets. [The New York Times]

The United Kingdom has officially withdrawn from the European Union. The break between the two became official at midnight Jan. 1, 2021 in Brussels and 11 p.m. in London on Dec. 31, 2020. The separation between the UK and the EU took more than four years after the historic 2016 vote and marks the largest economic change the UK has made since World War II.

A free trade agreement that was settled on Christmas eve allows the UK to conduct trade deals around the world while Britain and the EU will continue to buy and sell goods without establishing tariffs or quotas. [Associated Press]

Airlines are crafting their strategies and forecasts for 2021 with the airlines taking various approaches. Industry executives and analysts are preparing for a fury of travel as summer of 2021 approaches, as more people become inoculated.

Some airlines, such as Alaska Airlines, are buying new planes for their fleets while others such as JetBlue and Southwest Airlines are adding new destinations to serve passengers. Other airline companies are taking a more cautious approach, as the companies aim to compete for a smaller number of passengers. [The Wall Street Journal]

Winter has arrived. Restaurants are trying to come up with ways to safely serve their customers with the coronavirus pandemic worsening. Restaurants are expected to lose more than $230 billion in 2020, as Americans opt to avoid gathering in restaurants and choose to eat at home.

In an effort to offer a safer dining experience, restaurant owners are turning to tents, igloos and greenhouses. The innovative outdoor setups are also steps that restaurants have taken into consideration with the restrictions imposed by numerous state and local government officials on indoor dining to limit the spread. [NPR]

Many locations across the United States raised their minimum wage at the start of 2021. Twenty states, along with 32 cities and counties raised their minimum wage to $15 per hour. In Florida, voters in the November elections voted to approve a $15 per hour minimum wage by 2026.

By 2026, 42% of Americans will live in a location with a minimum wage of at least $15 per hour. Some economists believe that lifting the minimum wage could aid communities in the economic recovery of the coronavirus pandemic. Other economists and business owners argue that raising the minimum wage will lead to more layoffs and an even higher unemployment rate – especially in the service industries that have struggled to remain open. Visit Higher Rock Education's free lesson, Supply and Demand – The Costs and Benefits of Price Controls to learn more about how an increase in the minimum wage would affect the economy. [The New York Times]

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All images credited to iStock.