Your weekly money scoop: December 22, 2016

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Your weekly money scoop: December 22, 2016

By JENNIFER WILLIAMS

We're serving you our weekly bite-sized roundup of the stories you need to know. This week, read about how Finland is paying some of its unemployed and which U.S. cities and states are getting a higher minimum wage.

Finland is planning to offer experimental income to approximately 2,000 unemployed citizens. In Finland's shaky start-up economy, living on regular unemployment checks from the government sometimes offers a more stable income than working for companies with uncertain futures. The Scandinavian country hopes to get people back in the workface with a basic income. As opposed to unemployment benefits, a universal basic income involves the government regularly paying all citizens enough to cover their basic living expenses, regardless of whether they are earning income from a job or not. For Finland, the goal is to give these individuals enough stability to find work, start new companies or contribute to society in other ways without the risk of running out of money. The experiment will take place over two years, and the results could inform how a universal basic income can apply in an increasingly globalized and automated job market.

Parents tend to make less money while raising children, until school starts, according to new study. Taking time off from work to take care of a child is costing the average American household tens of thousands of dollars per year. Even households with two adults, where one parent stays home with the child while the other goes to work, sees an average income drop of 14 percent. Single mothers, especially single women of color, have an average household income drop of 36 percent. Once children reach five-years-old, however, household income increases by around $25,000-$29,000. One of the study's authors suggested that the government could be doing more to financially support families with children, such as encouraging or requiring more paid maternity leave and more affordable child-care.

Congress could consider curbing federal student loans. According to Rep. Virginia Foxx of North Carolina, it is currently too easy for students and their families to borrow more than they need, which in turn enables schools to boost tuition. Foxx is especially critical of PLUS loan programs, comparing their tactics to the mortgages that led to the 2008 recession. Such loans generally have no lending limit and offer to cover all of tuition, minus financial aid, as long as borrowers have a good credit score. This has left many students and families with staggering debt: As of June, approximately one million recipients of Grad PLUS loans owed $50 billion in debt.

Higher minimum wages are coming to 21 states, plus some cities and counties. Come January 1st, the biggest increases will be in Arizona, Maine and some cities in the Silicon Valley, with new minimum wages of $10, $9 and $12 respectively. Arizona, Colorado, Maine and Washington state's minimum wage will gradually increase between 43 and 60 percent. There has been debate over the effectiveness of higher wages, though - critics believe higher wages will hurt small businesses who might have to cut staff as a result, while supporters argue that higher wages can result in less employee turnover and higher productivity. What we do know is that millions of the lowest-wage workers across the country will get a raise in 2017.

If the holidays have you feeling generous, check this list to see if a gift may be more appropriate than a tip. According to a survey by Care.com, one in four people spend at least $250 in extra tips during the holiday season. A little over 10 percent of Americans spend over $400. Although a nice gesture, tipping isn't always appropriate. Small gifts, even gift cards, are best for thanking some of the professionals in your life, such as teachers, accountants and lawyers. But some workers may not be allowed to accept tips, so save the money and the awkward interaction.

About the Author: Jennifer Williams is a QA Specialist in Member Support at Credit Karma. She has her MFA in Fiction, and puts her skills to use helping members. When she's off the clock, she can be found editing her novel, playing guitar, or hiking with her dog in the hills.

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