News In Brief
A (borrowed) Penny for Your Thoughts?
In an ironic twist, the state of California plans to borrow money from the University of California and California State University systems, both of which had their funding grossly reduced earlier this year.
The new proposal under Senate Bill 79 would create a new investment fund for UC, CSU, California Community Colleges and the Judicial Board, requiring them to contribute no less than $500 million in order to receive a return from the state. Perhaps most distressing is the fact that the staggering demand comes at a time when the public education system just suffered $650 million in budget cuts.
According to UC and CSU officials, the UC system anticipates to transfer approximateky $1 billion worth of cash reserves into the fund, while the CSU system will provide $700 million. The new investment fund will allow the state to tell Wall Street that it has a $1.7 billion cushion as a backstop. This could help the state reduce borrowing funds or lower their interest rate, but it is unclear of how much California will save.
Additionally, the plan does nothing to relieve students burdened with skyrocketing tuition, faculty with plummeting paychecks, or fired low-wage employees.
Democrats contend that Senate Bill 79 is only essential to manage the state’s cash payments, instead of resolve the impending budget crisis. They drew an analogy to to how the state borrows cash each fiscal year from Wall Street and reapys the debt in late spring after collecting from tax payments.
Republicans, on the other hand, claimed the bill is proceeding too rapidly and that there was insufficient time to properly evaluate the proposal. They asserted the bill could help Democrats lessen a future deficit or prevent “trigger cuts” by receiving cash against the fund.
Given that the bill grants the state $1.7 billion in “borrowable resources”, the cash is basically available for the state to use in the future if deemed mandatory.
SB 79 was passed in the Assembly with a 46-25 majority.
Could Higher Wages Actually Kill Jobs?
UC Irvine’s Professor David Neumark argues that raising the minimum wage will contribute to teenagers and young adults not being able to find jobs.
Neumark’s past research in 2008, in collaboration with Federal Reserve Board director William Wascher, has shown that according to a majority of studies, the raising of the minimum wage has often been accompanied by a decrease in available jobs.
In the long run, according to these studies, the result would be detrimental rather than beneficial to the economic situation. Dr. Neumark is a professor of economics at UC Irvine.
His research has included studies on the effects of various contributing factors towards the labor market, including such topics as racism and segregation in the working environment and its effect on the labor market.
Zotwheels off to a Running Start
Environmentalists have been considering a new urban bike-sharing program in the U.S. modeled after UCI’s Zotwheels.
Zotwheels is a bike-sharing program that allows students to rent bikes at four locations around campus, use them for a short distance, and then return them at a certain location. This method is good for the environment and adds to UCI’s sustainability efforts of reducing their carbon footprint. While this method is useful for college students, environmentalists have been wondering if this same idea could work well in cities across the United States. Social Bicycles, a company based in New York City, would allow members to use a smartphone or computer to find a bike location, enter in their account information, rent a bike for a short distance, and then return it at any location.
There have been talks to expand the bike locations to San Francisco, Calif.; Portland, Ore.; Bloomington, Ind.; and Buffalo, N.Y. The company hopes to have its first 60 bikes delivered by October.