Making Money Working

Weekly Pulse: GOP Plays Chicken with the Debt Ceiling

By Lindsay Beyerstein, Media Consortium blogger

Sen. Jim DeMint (R-SC) is calling for a "big showdown" over the upcoming vote to raise the nation's debt ceiling to $14.3 trillion from $13.9 trillion. The debt ceiling is simply the maximum amount the government can borrow.

Congress routinely raises the debt ceiling every year. It's common sense: Since the government has already pledged to increase spending, Congress must authorize additional borrowing. (Remember that the government is now forced to borrow billions of extra dollars to pay for tax cuts for the wealthy, which Republicans insisted on.) If the ceiling isn't raised, the United States will be forced to default on its debts, with catastrophic consequences.

Why would default be catastrophic? The principle is the same for countries and consumers alike: If you have a good track record of paying your bills, lenders will lend you money at lower interest rates. If you don't pay your bills on time, or default on your obligations altogether, lenders will demand higher interest rates.

Congressional Republicans say they oppose raising the debt ceiling because they favor fiscal responsibility. This kind of rhetoric is the height of recklessness. The interest on our debts is a big part of government spending. Even idle talk about defaults could spook some creditors into raising interest rates on U.S. debt and cost taxpayers dearly.

Steve Benen of the Washington Monthly quotes Austan Goolsbee, chair of the White House's Council of Economic Advisers, who says that congressional GOP members are flirting with the "the first default in history caused purely by insanity."

Making work pay (for real)

An astonishing 80% of full-time minimum wage workers can't afford the necessities of life, according to new research by labor economist Jeannette Wicks-Lim of the Political Economy Research Institute, featured on the Real News Network.

Wicks-Lim argues for a two-part solution to the crisis of working poverty in America: i) raising the federal minimum wage to $12.30/hr from $7.50/hr; ii) Increasing the earned income tax credit to 40% of income. She estimates that these two policy changes would raise the income of a minimum wage worker from $15,000 to about $36,000 at a manageable cost to employers and taxpayers.

Her proposal is a revamp of President Bill Clinton's attempt to "reform" welfare by cutting social service benefits and shifting government spending to tax credits. Currently, the Earned Income Tax Credit is a subsidy for the working poor that is designed to "make work pay"--i.e., if workers aren't making enough in wages to secure a decent standard of living, the government provides an income subsidy to reward them for working.

However, if a decent standard of living remains out of reach for 80% of full-time minimum wage workers, Wicks-Lim argues that the minimum wage is too low and the subsidies are too modest to achieve the stated goal of making work pay.

Colorado minimum wage inches up

Speaking of minimum wage issues, Scot Kersgaard of the Colorado Independent reports that the minimum wage in the state ticked up from $7.25 an hour to $7.36 on January 1. The modest increase represents the annual adjustment for inflation. Every bit counts, but Colorado families are falling further behind. According to a new report by the Denver-based Bell Policy Center, 8.3% of working families in Colorado live below the federal poverty line, which is $22,050 for a family of four. Fully one-fourth of Colorado families do not earn enough to meet their basic needs, which requires an income approximately twice the FPL, according to the report.

Colorado is one of only 10 states that automatically adjust their minimum wages for inflation.

Wage theft epidemic

Unscrupulous employers are stealing untold millions of dollars from hardworking Americans, Dick Meister reports in AlterNet:

The cheating bosses don't take the money directly from their employees. No, nothing as obvious as that. The employers practice their thievery by underpaying workers, sometimes by paying them less than the legal minimum wage. Or they fail to pay employees extra for overtime work, or even force them to work for nothing before or after their regular work shifts or at other times. Some employers make illegal deductions from employee wages. And some withhold the final paycheck due employees who quit.

In New York City alone, an estimated $18 million worth of wages is stolen every week. Workers in the restaurant, construction, and retail sectors are at increased risk of wage theft. Wage thieves disproportionately target undocumented workers because they assume that these employees will be less likely to report the crime.

Debt collection from beyond the grave

The dead don't tell tales, but they have been known to sign debt collection papers, Andy Kroll reports in Mother Jones. Martha Kunkle died in 1995, but her printed name and signature appear on paperwork filed by the debt collection agency Portfolio Recovery Associates as late as 2006 and 2007. The ruse was discovered and PRA, facing a fraud lawsuit, agreed in 2008 that the "Kunkle's" documents couldn't be used in court. That didn't stop the agency from trying to use them again in 2009.

The attorney general of Missouri has announced that he will investigate whether any of Kunkle's handiwork was used to support debt collection in his state. The attorney general of Minnesota is already investigating whether debt collectors have used fraudulent paperwork in court.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Everyone wants to know the secrets of the YouTube stars—how did they make successful careers out of YouTube, how do they make money and what advice do they have for hopefuls looking to follow in their footsteps?  Tubefilter’s ‘Secrets if YouTube Superstars’ panel at CES shed some light on these questions. Tubefilter’s editor and co-founder, Marc Hustvedt, moderated the panel, which was made up of YouTube megastars iJustine, Joe Penna (aka MysteryGuitarMan), Phil DeFranco, Freddie Wong and Brandon Laatsch.

You can watch the full thirty-seven minute panel in the video below, but I’d like to take a little time to recap some of the most interesting points that were brought up.  I think that Hustvedt asked great questions, leading the panelists to shed some very interesting light on the world of YouTube as a business.

Putting In The Work

I think that the most important thing that can be gleaned from the ‘Secrets Of The YouTube Stars’ CES panel is that you can’t go anywhere on YouTube without putting in lots and lots and lots of work.  There was a general consensus that these guys work an average of about 80 hours a week.  That’s an average of about 11.5 hours a day with no weekend!  And these guys have already made their YouTube channels a success, so just imagine how much work goes in to making a name for yourself when you’re starting out at the bottom.

iJustine says, “This is our life.  Every second of the day you’re working, essentially.  If you’re not posting videos you’re still tweeting, your updating Facebook or you’re updating all these social networks to tie back to your videos and keep people updated on what you’re doing.”  YouTube stars never sleep—it’s a 24/7 job.  Brandon Laatsch says, “We’ve pulled more all nighters in the last year than we did all throughout college.”  But what’s important to note is that these guys love their job.  If you have the passion and the drive, and you’re willing to put in the hours it can be incredibly rewarding.

Bringing Home The Bacon

The question on everyone’s mind is, how do YouTube stars make money?  The panelists are all paying the bills with money they make from YouTube videos, but how do they do it?

Joe Penna explains the two major ways that YouTube stars make money, in addition to the revenue that they earn through YouTube advertising.  One of these ways is through working with brands.  The other is through merchandising.

Penna, iJustine and DeFranco all have quite a lot of experience working with brands.  They seem to agree that working with brands is fantastic, as brands trust them to take creative control and allow them the budget to make bigger, better videos than they could otherwise.  Laatsch also pointed out that over the last year or so viewers have become a lot more accepting of brand deals.  At first there was a lot of name calling (i.e. “You’re a sell out!”), but now that viewers understand that this is what these guys are doing for a living they get that branding is a good thing as it enables them to make better videos.  All the YouTubers stressed that they incorporated branding into their videos in an unobtrusive way as to not freak their viewers out.

YouTube also helps with revenue through grant programs.  They helped DeFranco branch his single channel out into the six-channel DeFranco Inc. and they also sponsored Freddie and Brandon in a project in which they drove around in an RV for a month, making videos with their fans.

Personality

The most important thing that I think can be gleaned from this panel for wannabe YouTube stars is the importance of personality.  If you take a look at the top YouTube channels nearly all of them are supported by a personality.  MysteryGuitarMan makes music videos, but he’s sure to speak directly to his viewers in each and every one of his videos as well.  If you have a strong personality your viewers feel like they know you personally and this is one of the biggest keys to YouTube success.

DeFranco says that YouTube stars are different from television or movie stars because you may want to catch a glimpse of a television star but you’d like to sit and chat over a beer with a YouTube star.  You feel like you are friends with them, they influence you and they can’t wait for you to put out another video.

I’d also like to point out that this is fantastic for branding.  Brands can tap into an audience of millions when they turn to YouTube stars for promotional purposes and these millions trust these stars and are completely engaged and influenced by them.  This is much more direct and effective advertising that television advertising, and cheaper.  It’s a lot more bang for your buck!

Check out the full panel below to find out more from five of YouTube’s biggest stars.  What did you find most interesting about the panel?

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