Текст книги "Английский язык в экономике, бухучете и банковско-финансовой деятельности"

Text 11. Welfare and Work

THE WALL STREET JOURNAL

CLASSROOM EDITION

In August 1996, President Bill Clinton signed into law a bill that radically restructured the U.S. antipoverty program. The legislation turned welfare programs over to the states and imposed a five-year time limit on benefits. It also required beneficiaries to find work in two years.

Has the welfare-to-work provision succeeded in moving welfare recipients out of poverty? Nancy L. Johnson (R.-Conn.), chair of the Human Resources Subcommittee of the House Ways and Means Committee, says yes in this excerpt from «The Results Are In: Welfare Reform Works,» an opinion piece from The Wall Street Journal. Former welfare recipient Sara Day would say no based on the excerpt from The Wall Street Journal Classroom Edition article «Why a Welfare Success Story May Go Back on Welfare,» by Christina Duff, Staff Reporter of The Wall Street Journal.

Has Welfare Reform Cut Poverty Levels?

YES

By Nancy L. Johnson

On the third anniversary of the historic 1996 welfare-reform law, the law is working better than anyone ever dared to hope. A host of studies now provide good information on two major questions about the effects on mothers of welfare reform:

1. Do families have more income? There are no reliable national data on the income of mothers leaving welfare. But we can examine changes in the income of all poor and low-income mothers.

According to the Census Bureau, those whose incomes were in the bottom 20 percent of mothers – averaging about $6,500 in 1997—had income increases of nearly $500 between 1993 and 1997. Thus this bottom group, which includes most mothers on welfare and some who left welfare, is somewhat better off than in 1993.

The big story concerns the income of mothers in the next bracket, who had average incomes of $13,500 in 1997. These mothers lost about $1,500 in cash welfare and food stamps but gained nearly $3,000 in earnings and the earned-income tax credit over the period. Combine this with modest increases in child-support payments and nonwelfare government benefits, and these mothers were about $1,500 better off in 1997 than in 1993. Here is the group of mothers that represents the greatest success of welfare reform.

2. Have they escaped poverty? If mothers leaving welfare were falling into the abyss [bottomless hole], poverty rates would increase, or, at best, stagnate.

Opponents of welfare reform predicted it would cast a million children into poverty. In fact, both overall poverty and child poverty declined in 1995, 1996, and 1997, the latest years for which we have data. Poverty among black children declined more in 1997 than in any previous year.

NO

By Christina Duff, Staff Reporter of The Wall Street Journal

Sara Day could be considered a welfare-reform success story. After 10 years on welfare, she has a two-year-college degree and earns $11 an hour as a secretary at a prep school. Her welfare cash and food stamps stopped a year ago, and her government-paid health care ended in March. Her only major tether is medical care for her children.

So why is the 28-year-old single mom contemplating a return to welfare?

Because her take-home pay and child support total $1,435.50 a month, and food, rent, and other basic expenses total $1,418.37, not counting clothing, diapers or pills for her migraines. To make ends meet, she lets bills go unpaid and sends her children to day care even when she isn’t working so they can get the free lunch.

She has no health insurance, and her partially subsidized rent is climbing faster than her paychecks.

Ms. Day is a face behind the statistics cited both by welfare-reform supporters and critics. Her family is one of about 1.6 million families that have left the welfare rolls in the past three years, and she is one of those cited in state surveys that find up to 70 percent of former recipients have found work. Low-wage workers are enjoying solid raises at last, and the federal earned-income tax credit is supplementing their income, as it is Ms. Day’s.

But a new study by the Institute for Wisconsin’s Future suggests welfare reform may be more successful at moving low-income families off welfare rolls than lifting them out of poverty. The liberal nonprofit group found that the number of welfare recipients in Wisconsin decreased by 67 percent between 1986 and 1997, but that the number of people in poverty fell by only 11.8 percent. Wisconsin launched its welfare reform effort in 1986.

Questions to students:

1. What statistics on poverty does Nancy Johnson cite to prove the welfare-to-work provision of welfare reform is successful?

2. What data in the second excerpt indicate that welfare reform may not be successful in moving former welfare recipients out of poverty?

3. Analyzing Information: How much money does Sara Day have each month for clothing, diapers, and medicine after she pays for food, rent, and other basic expenses? Does your answer support or refute the Wisconsin study that says reform may lift people off welfare rolls but not out of poverty?

4. Reading Graphs: Was the rate of child poverty rising or falling in the two years before welfare reform began? Can you use this graph to support the opinion that welfare-to-work is lifting people out of poverty?

Text 12. The Minimum Wage

THE WALLSTREET JOURNAL

CLASSROOM EDITION

In 1938, President Franklin D. Roosevelt signed into law a bill that established a federal minimum wage of 25 cents an hour. This wage initially applied to employees involved in interstate commerce or production of goods for interstate commerce. Later it was extended to include employees of companies doing at least $500,000 in business a year and also to employees of government agencies, hospitals, and schools.

Congress and the President have raised the minimum wage over time to reflect changes in the cost of living. Here are two excerpts from The Wall Street Journal Classroom Edition. One, written by Clinton administration officials, supports an increase; the other, written by a restaurant manager, argues against it.

Should the Minimum Wage Be Increased?

YES

By Robert E. Rubin, Ronald Brown, Robert B. Reich, Joseph E. Stiglitz, and Laura D’Andrea Tyson

Stagnant wages are a 20-year problem that won’t be solved overnight. Addressing this long-term challenge will require a persistent and comprehensive economic-growth agenda.

One action we can take right now is to insist that the minimum wage be a living wage. Every member of the president’s economic team believes this step will increase wages without costing jobs.

The president has proposed a 90-cent increase in the minimum wage, to $5.15 from $4.25, spread over two years. This is the same plan that won overwhelming bipartisan support when Congress voted to raise the minimum wage in 1989.

Indeed, the first 45 cents of the new increase wouldn’t even restore the buying power the minimum wage has lost since the last increase five years ago. And if we don’t act this year, it will fall to a 40-year low in terms of purchasing power.

Of the 10 million workers who would benefit from Mr. Clinton’s minimum-wage increase, 69 % are age 20 and older. The average minimum-wage worker brings home half of the family’s earnings. And, according to the Bureau of Labor Statistics, 59 % are women – many of whom shoulder most of the burden at home.

A minimum-wage increase can make a real difference. For a full-time minimum-wage worker, it means an additional $1,800 in earnings – enough to buy seven months of groceries or several months of child care.

NO

By Dee Dee Stanback

I have one word of advice for those who would raise the minimum wage: Don’t.

In 1979, I was a single mother with two children, just barely surviving on welfare. The monthly AFDC check was enough to pay the rent with just a little left over for food, clothes, and other necessities.

Today, I’m a manager at a popular restaurant. I help supervise nearly 200 employees. My family has a good roof over its head, insurance, everything we need. One of my children plans to go to college; the other is an honor-roll student. I’m very proud of my family, my career, and the turn my life has taken.

What made the difference for me? A minimum-wage job. I was scared to death when I went to interview for a dishwasher’s position at this restaurant. I had no education, no experience, no training, and few skills. But I had the determination and drive to persuade the general manager to give me a chance.

Just getting the job in the first place was more important to me than the salary level. That dishwashing job was the first rung on the ladder of opportunity for me. And once I got my hands on that ladder, I never let go.

With every new position, I acquired new skills to become a more valuable worker: personal responsibility, a commitment to excellence, self-esteem, pride. That’s a lot more than you learn on welfare.

But raising the minimum wage will destroy the kind of entry-level jobs that gave me, and millions like me, a chance. The people who will get hurt the most are the people with the fewest skills, least experience, and most-limited education – those who enter the job market with the least to offer, but the most to gain.

Questions to students:

1. According to the authors of the «Yes» excerpt, how would employees benefit from a higher minimum wage?

2. Why is Dee Dee Stanback afraid employers won’t hire people like her for entry-level jobs if the minimum wage is raised?

3. Critical Thinking: In what ways might a higher minimum wage help the economy grow?

4. Reading Graphs: Based on the table below, has the buying power of minimum-wage workers, as reflected by the minimum wage in 1998 dollars, increased or decreased since 1980?

Text 13. The Heart Of the American Economy

Top 10 Reasons To Love Small Business

WASHINGTON, D.C. – Just in time for Valentines Day the Office of Advocacy of the SBA offers the top 10 reasons to love small business, the heart of the American economy.

Top 10 Reasons To Love Small Business

10. Small businesses make up more than 99.7 % of all employers.

9. Small businesses create more than 50 percent of the nonfarm private gross domestic product (GDP).

8. Small patenting firms produce 13 to 14 times more patents per employee than large patenting firms.

7. The 22.9 million small businesses in the United States are located in virtually every neighborhood.

6. Small businesses employ about 50 percent of all private sector workers.

5. Home-based businesses account for 53 percent of all small businesses.

4. Small businesses make up 97 percent of exporters and produce 29 percent of all export value.

3. Small businesses with employees start-up at a rate of over 500,000 per year.

2. Four years after start-up, half of all small businesses with employees remain open.

1. The latest figures show that small businesses create 75 percent of the net new jobs in our economy.

The Office of Advocacy, the «small business watchdog» of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.

For more information, visit the Office of Advocacy website at www.sba.gov/advo.

Text 14. Tax Credits

THE WALL STREET JOURNAL

CLASSROOM EDITION

Debating Current Issues

In the days before the 1999 State of the Union address, the Clinton White House proposed nearly a tax credit a day. According to The Wall Street Journal Classroom Edition article «Payback Time,» by Jacob M. Schlesinger, Staff Reporter of The Wall Street Journal, each credit was «designed to ease some pocket of concern in the prosperous economy of the United States.»

There was a credit for people caring for disabled relatives at home, a credit for businesses that help immigrant employees learn English, and a credit for small businesses that begin offering health insurance. For a President who promised to live by tight spending rules, tax breaks offered a way to pursue a wide-ranging social agenda. But are tax credits really effective fiscal policy?

Are Tax Credits Effective Fiscal Policy?

YES

Mr. Clinton’s proposed budget for the fiscal year that began on Oct. 1, 1999, illustrates how sharply the political consensus on taxes has shifted over the past decade.

In 1986, Congress passed and President Reagan signed a landmark tax-reform law that swept away a raft of special breaks and lowered rates across the board. The long and bipartisan list of backers agreed that the economy, and government, would function more efficiently as a result.

But since then, President Clinton and other politicians chipped away at these reforms, using the tax code to encourage what they considered desirable behavior or to favor powerful constituencies.

President Clinton pushed to expand the earned income tax credit for the working poor, and proposed tax breaks for education. Republicans championed lower rates on capital gains to boost investment, an expansion of individual retirement accounts to lift household savings, and tax credits for families with children.

In the late 1990s, with the budget turned to surplus for the first time in decades, Republicans were calling for large, across-the-board tax cuts. While President Clinton opposed these cuts, he figured it would be easier to fight back with more limited cuts of his own rather than simply oppose tax relief. «If we’re going to cut taxes, we should do it in targeted ways we can afford that serve the right ends,» said Bruce Reed, head of the White House Domestic Policy Council.

Clinton advisers said that, in many cases, social tax incentives made more sense than spending programs. Tax credits are designed to steer private-sector activity, and therefore appear to work more efficiently than spending programs.

Administration officials praised the earned income credit, for instance, saying it draws lower-income people into the labor force because they have to work to get the money. This would be preferable, officials said, to traditional welfare handouts that were often blamed for discouraging poor people from seeking jobs. Moreover, providing money through tax credits doesn’t require creating costly new bureaucracies or new procedures to dole out the funds.

NO

Tax-code tinkering draws fire from across the political spectrum. Many conservatives consider it offensive for government to tie so many behavioral strings to a family’s after-tax income. «It’s the basic liberal notion of taking our money and giving it back in dribs and drabs only if we spend it on things they think are good,» says Kevin Hassett, an economist at the conservative American Enterprise Institute in Washington.

Some liberals complained that the bold-sounding proposals allocated little money to serious problems, and smacked more of campaign sound bites than serious policy. They also maintained that the truly needy often get left out: The poorest third of American families already pay no income tax, and therefore would get scant benefit from this smorgasbord of new tax credits.

Meanwhile, tax experts bemoaned the continued cluttering of an already-complex tax code. Take the $1,500 Hope credit for college students, which was passed by Congress in 1997 and took effect for tax filings due in 1999. To apply for the credit, a person must fill out Form 8863, which is accompanied by two pages of instructions. The Internal Revenue Service figured the form will add an average of 91 minutes to the tax-preparation time of anyone claiming the break.

Though advocates say tax credits provide incentives to alter behavior, some economists counter that they often just give a break to taxpayers who would have done the desired deed anyway.

A tax credit enacted in the late 1970s to encourage companies to hire people off welfare was widely attacked as a bust: Many firms hired people based on other qualifications, then checked to see if they could claim the credit for an employee they would have hired anyway.

Questions to students:

1. Why did Clinton administration officials claim the earned income tax credit encouraged lower-income people to get a job?

2. Why do some liberals criticize tax credits?

3. Critical Thinking How do tax credits provide a way to «pursue a wide-ranging social agenda» at a time of tight spending rules?

4. Reading Graphs Use the chart to calculate the amount that tax credits for energy and the environment will cost in one year.

Self-test

1. The income, property, goods, or services on which people pay tax is called a

• tax rate.

• tax base.

• sales tax.

• revenue.

2. Which of the following would be a progressive tax?

• People earning $35,000 pay 10 percent tax, while people earning $100,000 pay 30 percent tax.

• People pay 10 percent on property whether it is worth $50,000 or $500,000.

• All people pay a 15 percent income tax.

• Everyone pays a 5 percent sales tax.

3. What provides the largest portion of federal revenue?

• corporate taxes

• tariffs

• FICA taxes

• individual income taxes

4. What is a person’s taxable income?

• the gross income received from salaries, wages, tips, and commissions

• all the income that was withheld by an employer and sent to the federal government

• a person’s gross income after subtracting exemptions and deductions

• all the personal exemptions and deductions a person has

5. What is withholding?

• a statement to employees telling them how much taxes they owe

• a way of collecting taxes from the salaries of employees

• a pension paid to retired people

• a kind of insurance for employees who lose their jobs

6. Most federal mandatory spending is spent on

• defense.

• interest on the national debt.

• salaries for people in the federal government.

• entitlements.

7. An example of federal discretionary spending is

• transportation.

• Social Security.

• Medicare.

• food stamps.

8. Which of the following would be paid for with a state’s capital budget?

• lawmakers’ salaries

• education

• salaries of state troopers

• a new bridge

9. One feature common to states is

• a balanced budget requirement.

• an income tax.

• a sales tax.

• the same percentage of spending on Medicaid.

10. The main source of revenue for local governments is

• a sales tax.

• license fees.

• property taxes.

• income taxes.

Text 15. A Strong Dollar

THE WALL STREET JOURNAL

CLASSROOM EDITION

Debating Current Issues

In the mid-1990s the U.S. government encouraged the dollar’s rise in value compared with the Japanese yen and German mark while trying to keep inflation low and interest rates steady. The goal was to encourage stable economic growth for the United States.

In supporting this policy, Treasury Secretary Robert Rubin and Federal Reserve Chairman Alan Greenspan also in some ways were selecting winners and losers in the U.S. economy. That is the conclusion of the following excerpts from The Wall Street Journal Classroom Edition article «Winners and Losers» by Michael M. Phillips, Staff Reporter of The Wall Street Journal.

Should the U.S. Government Support a Strong Dollar?

YES

In Minnetonka, Minnesota, executives at Insignia Systems Inc. cheered every time the dollar gained further against the yen in 1997. The company expected to turn its first profit in several years, mainly because the rising greenback had cut the cost of Japanese-made sign-printing machines that Insignia imports and resells to U.S. retailers. Insignia Systems estimated that the dollar’s earlier tumble, which bottomed out at 80.63 yen in April 1995, cost the company $2 million a year.

Some companies that use imported products also benefited from the currency realignment in 1997. Rohr Inc., a San Diego aircraft-component manufacturer, realized some savings on the MD-11 engine pylons it buys in Japan. And since Boeing Co. reported that the rising dollar hadn’t hurt jet sales, Rohr was shielded from the dollar’s downside as well. «There’s tremendous demand out there for new aircraft,» said Laurence Chapman, Rohr’s chief financial officer.

Some companies benefited on the interest-rate side of the economic equation, since economists believe that a stronger dollar can help check both inflation and the Fed’s urge to raise interest rates.

U.S. consumers also could find lower prices for imported Japanese and European goods, although there is typically some delay before discounts appear on the shelves.

NO

The pains and profits of the strong dollar policy aren’t evenly distributed. The negative impact goes beyond the usual complainers – U.S. auto makers have been most vocal about the rising dollar. On the pain side, there also are small commodities exporters, huge manufacturers, even service providers whose clients or competition are overseas. As the dollar climbs, these companies face the choice of cutting export prices and accepting lower profits, or passing along the price increase and losing customers.

AlliedSignal Inc., a Morristown, N.J., multinational company, ended up losing a customer in 1997, in this case a $13 million contract to supply air-bag modules to Japan’s Suzuki Motor Corp. «We had a huge cost disadvantage because of the strong dollar against the yen,» said Mark Greenberg, vice president for external communications.

Economists say the impact of the surge in the dollar isn’t always clear right away. The industries that feel it most quickly are often those competing head-to-head with Europeans or Japanese to sell goods that are roughly indistinguishable. In 1997, Feedcom Enterprises Inc. of Seattle earned 90 percent of its revenue exporting livestock-feed hay to Japan. Weakness in the yen, however, gave North Korean and Australian hay a price edge, and during one period, Freedom’s sales were down 15 percent. «It’s a very price-sensitive commodity,» said Ed Bitanga, Feedcom’s head of international sales.

Another exchange-rate-sensitive industry is tourism, since one palm-edged beach can quickly substitute for another if prices change. In the spring of 1997, the Hawaii Visitors and Convention Bureau revised downward by 120,000 its estimate of how many Japanese would visit that year. The reason? The slow economy and the falling yen made it too expensive for many Japanese to travel to the United States.

Questions to students:

1. What impact does the rising value of the dollar have on the cost of Japanese equipment that Insignia Systems imports and sells in the United States?

2. How did the strong dollar cause AlliedSignal to lose a contract?

3. Critical Thinking How can a stronger dollar help keep inflation in check?

4. Reading Graphs Did the dollar get weaker or stronger between April 1997 and July 1997? Did it get weaker or stronger between October 1997 and July 1998?

Self-Test

1. Nations specialize when they

• have few natural resources.

• produce certain goods and services more efficiently than others.

• import more than they export.

• export more than they import.

2. Comparative advantage is the ability of a country to

• have more physical capital than another.

• produce everything its people need and want.

• produce a good at a lower opportunity cost than another country.

• borrow more money from other countries.

3. Which statement illustrates the law of comparative advantage?

• A country makes the goods it produces most efficiently and trades for others.

• A country makes all the goods it needs.

• A country buys all its goods from other nations.

• A country exports all its raw materials and imports all manufactured products.

4. What is the purpose of import quotas?

• to increase the amount of certain imported goods

• to decrease the amount of certain imported goods

• to lower trade barriers

• to create a self-imposed limitation on imports

5. A tariff is a tax on

• raw materials.

• exported goods.

• imported goods.

• any form of international trade.

6. The most basic argument in favor of protectionism is that it

• protects workers.

• protects consumers.

• defends nations against trade wars.

• helps a country’s currency appreciate.

7. Which of the following is an example of a trade war?

• Two countries reduce all trade restrictions on each other.

• Two countries compete to see which can produce the most of a certain good.

• Consumers in two countries refuse to buy the goods of the other country.

• Two countries impose tariffs on each other’s products.

8. Recent trends toward trade restrictions have been to

• lower only those trade barriers related to technology.

• shield a country’s automobile industries.

• increase trade barriers.

• decrease trade barriers.

9. When a nation’s currency appreciates, which is the most likely result?

• Its exports and imports will increase.

• Its exports and imports will decrease.

• Its exports will increase and its imports will decrease.

• Its exports will decrease and its imports will increase.

10. A country that imports more than it exports has a

• trade deficit.

• trade surplus.

• balance of trade.

• export quota.