House Passes Stimulus Bill, Faces Uncertainty over Minimum Wage

The House of Representatives passed President Biden’s $1.9 trillion stimulus package on Saturday. The bill includes measures related to increased funding for COVID testing, school funding, stimulus checks, and assistance for  rent and food. In addition, it extends unemployment benefits and provides money to states to fund their liabilities.

The bill also contains language to raise the minimum wage to $15 an hour over the next several years. However, this clause will have to be removed if the Senate wishes to pass the bill under reconciliation, which would allow the bill to become law with only 51 votes, rather than the 60 votes needed to end debate and pass the bill. The Senate parliamentarian ruled this past week that the minimum wage increase could not be included in a reconciliation bill because it did not directly affect government revenues and expenses. Proponents of the minimum wage increase, such as Sen. Bernie Sanders (I-VT), argued that the minimum wage increase would increase government revenue through more taxes because of the increased wages paid and is thus eligible.

Republicans in the Senate have signaled opposition to the minimum wage increase, saying it will increase unemployment as employers would lay of workers for whom they could no longer afford their wages. Some moderate Democratic senators have also signaled opposition, such as Joe Manchin of West Virginia, who has said that the $15 minimum is too high for his state’s employers to pay for many of their workers.

President Biden has seemed to concede that the minimum wage clause will not be included in the reconciliation bill, promising to take it up as a stand alone bill in the future.

 

Retail Investors Take Wall Street for a Ride

Several Wall Street firms faced the prospect of massive losses this week as a result of their short positions in several stocks, most notably in GameStop Corporation. Individual investors, encouraged most notably by users on the Reddit forum, or subreddit, WallStreetBets, purchased shares in GameStop and other stocks facing short positions to punish those shorting the stock as well as provide a boost to those companies.

Short selling occurs when an investor borrows a stock from another investor or brokerage, usually for a fee, and sells it immediately after. The investor expects the stock to decrease in price, and the investor hopes to repurchase the stock and return it to the original holder. The profit to the investor is the sale price minus the repurchase price minus the borrowing fee. However, if the stock increases in value, the investor will have to repurchase the stock at a greater price than which he sold it, and the losses can be theoretically unlimited.

Several brokerages, including Robinhood, blocked purchases on Thursday for WallStreetBets’ favored stocks, prompting criticism from investors as well as government officials.

 

Protests Erupt in Russia over Poisoning and Arrest of Opposition Leader

Russian authorities have detained more than 5,000 people after demonstrations erupted across the country after opposition leader, Alexei Nalvany, was poisoned last year and arrested this month. Mysterious poisonings and assassinations have plagued opponents to Russian President Vladimir Putin’s rule in the past.

Nalvany was poisoned with a nerve agent in August 2020, falling ill on a flight. Nalvany recovered but was arrested on January 17 after returning to Russia, accused of violating terms of a suspended jail sentence.