Archive forlabor markets

China’s Advantages in Production

In our day to day lives, the majority of the things we use are made in China. Whether its a computer, a piece of clothing, or a microwave; its made in China. This is attributed to a number of reasons. In our class, we have seen that understanding labor markets is essential to achieving efficiency. Countries will trade with the countries that produce goods at the cheapest costs that retain quality in their products. China has become the hub of manufacturing because it has cheap labor, low taxes on exports, and an efficient business ecosystem.

Since China is a very populated country, the supply of workers is greater than the demand for labor. As a result, wages are very low and production costs are lower than other countries. Additionally, China is not very strict on things such as child labor, safety regulations, and long shifts regulation. Low tax rates on exports further China’s advantage in manufacturing goods. To conclude, it is likely that China will remain “The world’s factory” due to the many advantages it has in manufacturing.

http://www.investopedia.com/articles/investing/102214/why-china-worlds-factory.asp

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CHOCOLATE SHORTAGE

http://www.theguardian.com/lifeandstyle/2014/nov/21/cocoa-crisis-world-chocolate-stash-melting-away

This article caught my attention since I love chocolate. There is a warning that there will be a global chocolate shortage by 2020. Several cocoa trees have been diseased, and many farmers have sold it at very low prices. This connects to what we learned about there being a point that you will sell something at the lowest cost to continue to stay at the market, but if you sell below that point, you’ll probably exit the market. One farmer stated that he should have gone into the rubber market since it is more profitable. The government of the Cote d’Ivoire tried to fix the price in order to save the market; it did increase income. An externality would be Ebola. Because of Ebola, the exports of cocoa could be affected. So far, they haven’t been, but since the Cote d’Ivoire boarders Liberia and Guinea, there is that threat.

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Obama’s Immigration Plan Seen Affecting Wages, Job Moves

This article is about how President Obama’s plans to offer temporary legal status to 5 million immigrants living in the United States illegally will send unpredictable ripples through the U.S. economy.  Many politicians and economists disagree on the impact this plan will have on the economy and labor markets.  Although the impact will be minimal, supporters of the immigration overhaul estimate that granting legal status will bring more workers into the tax system and boost government revenue whereas critics say it will overwhelm social welfare programs and displace numerous workers.  The supporters believe that this plan will give immigrants mobility and cause them to search for better jobs which will be better for the economy because it will grow more quickly, the labor market will tighten, and it will offer better opportunities.  Critics say that this plan will hurt low skilled Americans because they will be displaced but the opposition is that immigrants already have jobs and only high skilled immigrants will move up, which will open up low skilled jobs.  Overall, the plan to offer temporary legal status to illegal immigrants will increase competition in the labor market, but it is not certain exactly how it will affect the economy.

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Consumers’ market power

Collectively consumers can influence market outcomes by making consumption choices based on factors other than price. If you are informed about the working conditions of people who make your jeans, you can choose to purchase jeans from those companies that provide safer working conditions. Partly in response to such informed buying, Levi Strauss & Co is providing lost cost capital to its suppliers helping them improving working conditions and environmental performance.

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Lets start paying College athletes

College football players need to be paid not just because is morally harsh that athletes are being exploited for their services, however the service provided by the college football athletes is worth more than what they are getting in return. In total profit the division 1 Universities are earning $6 billion dollars only from the men’s basketball and football programs. Football players are not getting the true value of what their worth because they are not getting anything in return. The only compensation athlete received was a $2,000 stipend that didn’t last a year: in “Lets Start Paying College Athletes” Joe Nocera states “college athletic directors and conference commissioners began protesting the new stipend, claiming they couldn’t afford it. Within a month, more than 125 of them had signed an “override request.” And so it was that just a few weeks ago, the N.C.A.A. decided to suspend the payment “(Nocera). The stipend was already an insignificant amount of money and now that their stipend was cancelled they are back to indentured servants that receive no compensation. Football players bring millions of dollars to their individual university, they create value and therefore profit is made so is unjust to the football player that what they are worth is not what they are receiving. These players receive a full scholarship to many of the top universities and they get to take advantage of a great education but a combination of the highest paid college football coaches make $53.4 million dollars. It can be said that the football coaches are getting paid salaries that don’t have any restrictions because it depends on how much the university wants to pay them but college football players can be compared to workers that receive a salary below their minimum wage, not the true value of what their worth.

On behalf of Estiven

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Higher Demand in Employers vs. A Higher Demand in Salary

In present day there is an influx of 9.3 billion people who are unemployed int he United States, which has gone up from 7.6 billion during the “Great Recession”. The National Association of Business Economics did a survey conducting companies of the jobs they have available versus the possible increases that could be made in one’s salary. The amount of jobs available is an all time high in recent years. Some people think that the unemployed people are not qualified for the openings, but the NABE disagrees, saying that salaries would be increased if that was the fact.”

See: http://www.cnbc.com/id/102101347

On behalf of Austin

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