In our This Week in Money series, we break down the week’s big stories that could affect your money.
Number of the week: $21 billion
That’s how much the Center for American Progress estimated it’d cost the U.S. in terms of GDP if all paid working women had taken the day off on International Women’s Day—also dubbed A Day Without a Woman this year—on March 8.
If that actually happened (it wasn’t realistic for many women), hospitals, schools and day cares would pretty much have to shut down, as women dominate the workforce of nurses, teachers and child care providers—vital but, with the exception of senior and specialized nurses, notoriously underpaid roles.
The February jobs report was huge.
Here’s what happened: During the first full month of President Trump’s administration, the U.S. added 235,000 jobs in industries including health care, private educational services and professional and business services—blowing away economists’ expectations of 190,000 new jobs.
Significantly, we also saw a bump up in labor force participation from January’s 62.9 percent to 63 percent, meaning more people are looking for (and finding) jobs. Wage growth even picked up the pace, increasing by 6 cents to $26.09 an hour, on average.
Why it matters: The positive movement is another step toward full employment and indicates a strengthening economy—all but confirming that the Federal Reserve will announce an interest-rate increase at its mid-March meeting. The downside? Higher rates means our debt gets more expensive and mortgage rates are heading up, unwelcome news if you’re planning to buy or sell a home soon. (Although they do remain near historic lows.)
The bottom line: A strong labor market means a strong economy and a happy stock market. But brace yourself—and your budget—for those higher rates. If you have debt on a variable-rate credit card, in particular, now’s the time to pay it down.
“Repeal and replace” may soon be more than just a GOP catchphrase.
It faces plenty of opposition—from Democrats, some Republicans and groups like the AARP and American Medical Association. But President Trump tweeted his support, and two House committees gave their approval, moving the bill to the next stage of the legislative process.
Why it matters: The proposal isn’t the extreme makeover some conservatives are seeking: Several popular ACA provisions, like young adults remaining on their parents’ plans till 26 and insurers not being able to deny coverage based on pre-existing conditions, will remain. But the nips and tucks are enough to dramatically alter health insurance for millions of us.
Here are some of the bigger changes:
- It’d eliminate the mandate requiring Americans to have insurance, though going without for more than two months would still incur a penalty—a premium surcharge of 30 percent when you try to purchase a new plan.
- Say goodbye to tax credits and hello to… tax credits. Currently, certain households are eligible for credits—the amount is based on income and local insurance costs—to help cover out-of-pocket expenses. Under the new plan, credits are based solely on age.
- High earners get a tax break. To help fund the ACA, a 3.8 percent investment income tax and 0.9 percent additional tax was levied on individuals earning more than $200,000 ($250,000 for married couples). The new plan would repeal those, resulting in a tax cut of $33,000 for the top 1 percent but virtually no savings for the majority of us.
The bottom line: Which plan is better? Depends who’s asking—credits and costs can vary greatly according to income and location. But, generally, the ACA law in place now offers more assistance to people who are older, have lower incomes or live in higher-premium areas.
Want more info on how this could affect you? Check out this quick summary.
March 10, 2017