Free Essay

Why Are Foreign Wages so Low?

In: People

Submitted By mjtaliercio
Words 2220
Pages 9
Mark Taliercio
Professor Skyers
5/10/12
QU301
Why are foreign wages so low? The world is a place populated with a diverse range of individuals. Due to differing backgrounds, individuals tend to have different opinions and different viewpoints towards certain situations. As a citizen of the United States, I have been raised in a society that professes equal freedoms for everyone in the world despite race, religion, gender or any other distinct differences. I feel that no matter where you are born, you are subject to protection under the Universal Declaration of Human Rights. It is the mission of the leaders of a country to ensure to their best ability that everyone is protected under these rights, and that no one is discriminated against. An article that I feel most countries in our global community do not abide by is Article 23. A portion of this article states “Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. Everyone, without any discrimination, has the right to equal pay for equal work.” (Universal Declaration of Human Rights, 2008) In America, for the most part, we see very fair employment conditions and treatment, with specific legislation enacted that protects against discrimination or unlawful termination. As citizens of a global community it is our obligation to respect the freedoms that everyone has the right to. Without equal participation in this community it ceases to exist. I feel that equal freedom is one of the major reasons why we have such universal diversity and fairness amongst our country, because everyone is able to be on the same economic playing field.
Unfortunately, America is the exception to many countries. When doing research, it becomes evident very quickly that we take “fairness” to a new level. The definition of fair in the United States is that everyone is working towards improving the lives of its citizens universally. However, in countries such as China, fair can be understood as any opportunity that is provided is a blessing and should not be taken for granted. This comes as a result of China’s leadership style, which is communistic. As history has shown us, representative democracies are much more practical and sensible then communism-based countries (China Versus US Economy, 2011). These differing mentalities are what create differences in the culture, and therefore differences in the politics and economics of a country.
All of this information compiled together is what led me to investigate the reasoning for differing wages, and thus differing opportunity amongst countries. As we are taught in classes such as macroeconomics and international business, it is often cheaper to do business overseas. Along with natural resources being more vastly present and cheaper, the cost of wages for unskilled workers seems almost negligible. What is the reason for this? Are these people that much more unskilled then the unskilled workforce in America? These are questions that I have always wondered when sitting through class, but never had the interest to pursue. Due to the Quinnipiac seminar classes, however, I have been encouraged to think beyond the scope of America. Why is there no international minimum wage standard, and why do the citizens of these countries accept such low wages? After investigation, these answers became frighteningly obvious.
As one would imagine, the reason for differing minimum wage requirements is largely economic. In China, the minimum wage law is not set for the entire country due to differing economic conditions in regions. Areas that do not have high economic output do not require high minimum wage, even though the cost of living may not necessarily be lower. Research determined that wages varied from as low as $71 US dollars per month in the Sichuan region, and went to as high as $202 US dollars in the Shanghai region, a much more economically stable and populated region. (China Boosts Minimum Wage, 2011) These minimum wage requirements create much more acceptable standards of living in Shanghai then they do in regions such as Jiangxi or Sichuan.
When outsiders look at numbers such as these they may say things such as “How does someone live off of only 71 dollars per month? That’s not even enough to fill my car with gas.” What someone needs to keep in mind is that although they are making less money per month, it is possible that money is more valuable in another country versus their own. What this means is that although a soda might cost a dollar in the United States, it could cost only 25 cents in a foreign region. If items cost only a quarter of as much in one country when compared to another, then money in that country has four times the purchasing power. What helps us determine the difference in purchasing power between differing countries is purchase power parity (PPP), which is the average cost of a basket of goods in one country versus another. When accounting for purchase power parity, the average Chinese citizen makes $8,400 dollars per year, a much more reasonable amount. (CIA World Factbook, 2012) This, however, is not impressive at all when one considers that China has the second largest economy in the world behind only the United States. Along with this, China has a vast dispersion of wealth, something I will go into later. Why does it have such a large and impressive economy, when the standard of living of the people still remains so low?
A major contributor to this is China’s vast population. Although restrictions have been placed on the number of children that a family can have (something culturally shocking for most Americans), due to a population over 1.3 billion the amount of people requiring jobs is outstanding. (CIA World Factbook, 2012) The Chinese market must be able to sustain growth for the tens of millions of new entrants to the agricultural and industrial industries each year. This creates a surplus of workers entering the workforce, while at the same time the average age of the population is increasing. As a result of this vast population, China’s economy is becoming very unbalanced, and efforts to rebalance it are making minimal impact.
Another contributor to the low wages in China is the reliance on the agricultural industry. Nearly 30% of China’s workforce is focused on agricultural means to support their living, and unfortunately this is a low-paying industry. (CIA World Factbook) Citizens of China are forced to be much more self-sustained because of low profit rates due to abundant farming throughout the country, which does not stimulate the economy. In order for the economy to allow for higher paying jobs, the focus needs to be taken away from agriculture and into more economically encouraging jobs such that the industrial sector provides. Research has shown that migrant workers who transfer to industrial or service industries have doubled their income, providing much more economic stimulation. Although it is very different to change the mindset of the culture, the citizens must realize that in order to realize economic gains, their everyday actions must be altered.
Building off of this, when compared to the United States, China has 15 times the amount of agricultural production. (Census Bureau, 2012) A more reasonable number for a country of China’s size would be around 10 percent (compared to the current 30). While it may seem easy theoretically to just push those in the agricultural sector to the service and industrial, there must be sufficient creation of jobs in order to sustain the workforce. Along with this, there will be structural unemployment due to the mismatch between workers skills and the skills required of those in the industry. As stated previously, this will lead to a cultural shock that will take tens of years for the population to adjust properly to.
In order to work towards improving these conditions in China, I have created a proposal that I will aim towards Hu Jintao, the paramount leader of the Peoples Republic of China, at the next United Nations General Assembly. It goes as follows:
“The following message has been created in order to bring to light the economic stability and balance issue in China. For hundreds of years, China was an isolated society in which no foreign interaction was made, whether it was for culture, economic, or political reasons. As history has shown us, during the nineteenth and twentieth centuries, their culture opened up in order to achieve economic gain, something that we can all understand and relate to. Although China has opened up, the cultural and political barriers of communism still remain. As a result of this history and current philosophy, China has created a great power distance (recorded as a score of 80 on Geert Hofstede’s scale) that results in people understanding to a degree that inequalities amongst each other are acceptable. (Hofstedes Dimensions, 2012) These are not debatable opinions, but rather facts that its culture has spoken to us.
Relating these facts to the issues of the people, we can see that the culture has accepted a significantly lower standard of living then comparably sized economies, something that I feel with the correct steps can be changed. In order to do this, however, large social barriers must be overcome and some of China’s cultural history must be advanced.
Due to current structure of the economy, China has a very large separation in the distribution of income. This can be seen by the average migrant worker making only $1,500 in China, while the GDP per capita is $8,400. As a result, I see this $8,400 figure as unrepresentative of the actual population because in reality the average peasant worker is making less then $5,000 per year and the wealthy are getting wealthier. (CIA World Factbook, 2012)
Enough with the problems, because I’m sure that is what you guys hear about all day. I have now some clear cut solutions that I feel will move China from a depressed economy to one that produces a GDP that exceeds the United States’ exponentially. The first move that needs to be made is changing the focus of the economy from agricultural to more industrial related. China has shown impressive increases in technology with each year, proving that they have the ability to become an industrial leader. By outsourcing agriculture to other countries and increasing technology, great advances in economic development can be made. Secondly, the wage minimum for all regions should be subject to 10 percent increases every 2 years in order to account for inflation and set recognizable goals for the economy. This percent can be adjusted to what the government feels is feasible, but must create the mindset that economic efficiency must be more highly considered. Third, wage opportunity must be provided to the unskilled workforce in China, as up to 150 million citizens live on less then $1.25 per day. This can be done through more strict foreign direct investment regulations, as we have seen multinational companies take advantage of the opportunities China offers. Distribution of income must be more stable in order to keep increasing GDP at the high rate it has over past years.
These suggestions will not only help the economy as a whole, but will specifically help those that need it most. By improving the poorest of the economy, we will be able to see standard of living improve for people of all economic backgrounds. Due to the size of China and its vast population, outstanding Gross Domestic Product numbers are entirely possible. By applying my three suggestions through fiscal policy and other measures, China will set more definable, more achievable goals. As we are all members of a global community that works together to improve, I feel the need to critique your nation. Do not take these critiques as words of hate, but rather suggestions for improvement.”

Works Cited Communism in China . (n.d.). GoWealthy. Retrieved May 9, 2012, fromhttp://www.gowealthy.com/gowealthy/wcms/en/home/articles/travel/culture/Communism-In-china-WBBDG6ZFB4.html

China Facts. (n.d.). The World Factbook. Retrieved May 1, 2012, from https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html

Einhorn, B. (n.d.). China Boosts the Minimum Wage - Businessweek. Businessweek - Business News, Stock Market & Financial Advice. Retrieved May 9, 2012, from http://www.businessweek.com/articles/2012-03-07/china-boosts-the-minimum-wage

Hofstede, G. (n.d.). China - Geert Hofstede. Professor Emeritus - Geert Hofstede. Retrieved May 4, 2012, from http://geert-hofstede.com/china.html

Manufacturing in China. (n.d.). U.S. Bureau of Labor Statistics. Retrieved May 4, 2012, from http://www.bls.gov/fls/china.htm

Recent News Related to Technology. (n.d.). China Technology News. Retrieved May 9, 2012, from http://www.technologynewschina.com/

Scissors, D. (n.d.). Chinese Economic Growth | China Vs. US Economy . Global Economy. Retrieved May 9, 2012, from http://www.heritage.org/research/reports/2011/04/the-united-states-vs-china-which-economy-is-bigger-which-is-better

The Universal Declaration of Human Rights. (n.d.). United Nations: It's Your World. Retrieved May 8, 2012, from http://www.un.org/en/documents/udhr/

← US Agriculture. (n.d.). Census Bureau Homepage. Retrieved May 4, ← 2012, from http://www.census.gov/econ/www/agrimenu.html

Similar Documents

Premium Essay

Labour in Construction Industry

...Causes of “Foreign Labour Access” High demanding from employer Non- limitation supply of foreign labour in Malaysia labour market no matter is legally or illegally borne no doubt giving employer free in bringing foreign labour. It is upon employers’ choice to employ either local or foreign labours. However, some employers highly demanding on foreign workers in times of labour shortage, rather than raising wages and improving working conditions to attract local labours. In such way doing so, employers are strike in good position by minimum wage for construction labourers as this would lead to reduce in total marginal cost for the whole project financing, thereby increase the positivism to the financial health of the particular project). The newly arrived labour are mostly willing to accept lower wages and lower conditions so their paid is less than local labours even though they perform the same jobs (Michael, 2001 cited in Foreign Workers In Malaysia Construction Industry Economics Essay, 2014). This will unintentionally create a strong threat to local labours which having such high requirement for working in construction industry site with poor image in mind. However, according to (Tey, 1997 cited in Foreign Workers In Malaysia Construction Industry Economics Essay, 2014), there is no actual shortage of manpower on locals, it was because most employer prefer foreign labours especially them who came in illegally who easily exploited as they have no recourse to law and......

Words: 1507 - Pages: 7

Premium Essay

Bu204 Unit 2

...result earn higher wages. In order to preserve the dignity of the American workplace, the government should enact legislation banning imports of low-wage Asian clothing.” Answer the following: (10 points) a. Which parts of this quote are positive statements? Which parts are normative statements? b. Would such a policy make some Americans better off without making any other Americans worse off? Explain who and why. c. Would low-wage Asian workers benefit from or be hurt by such a policy and why? 1a. The positive quotes of this statement are that “workers in Asia often work in sweatshops and earn only pennies and hour and American workers are more productive and as a result earn a higher wage. The normative statement of this quote is that “In order to preserve the dignity of the American workplace, the government should enact legislation banning imports of low-wage Asian clothing” 1b. Although such a policy may increase jobs for the American workplace making it better off for certain geographical areas, it may make it worse off for the people who can’t afford the higher priced clothing due to the cost of the production of the clothing cause of the higher priced labor. Upper class families may have no issue to the adjustment, but the lower class families may have a hard time purchasing the clothing. 1c. In my opinion the low wage Asian workers would initially take a hit in the clothing business due to lack of production but where there are so many different......

Words: 779 - Pages: 4

Premium Essay

More Pain Than Gain

...globalisation RICH countries have democratic governments, so continued support for globalisation will depend on how prosperous the average worker feels. Yet workers' share of the cake in rich countries is now the smallest it has been for at least three decades (see chart 5). In many countries average real wages are flat or even falling. Meanwhile, capitalists have rarely had it so good. In America, Japan and the euro area, profits as a share of GDP are at or near all-time highs (see chart 6). Corporate America has increased its share of national income from 7% in mid-2001 to 13% this year. Like so many other current economic puzzles, the redistribution of income from labour to capital can be largely explained by the entry of China, India and other emerging economies into world markets. Globalisation has lifted profits relative to wages in several ways. First, offshoring to low-wage countries has reduced firms' costs. Second, employers' ability to shift production, whether or not they take advantage of it, has curbed the bargaining power of workers in rich countries. In Germany, for example, several big firms have negotiated pay cuts with their workers to avoid moving production to central Europe. And third, increased immigration has depressed wages in sectors such as catering, farming and construction. Most of the fears about emerging economies focus on jobs being lost to low-cost foreign competitors. But the real threat is to wages, not jobs. In the long run, trade and......

Words: 2559 - Pages: 11

Premium Essay

Human Resourses Management

...discussion concentrates on access, labor law, wage rate of workers, private enterprise, and future prospects of living-standards of workers in each country. Seven South Asian countries Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka—launched the economic and political organization SAARC on 8 December 1985. Afghanistan joined it in April 2007. SAARC provides a platform for working together in a spirit of friendship, trust, and understanding to accelerate economic and social development, including education, in South Asian countries. Human resource development is one of five areas of cooperation agreed on by the member countries. In terms of population, the SAARC region covers nearly 1,500 million people, one of the largest such regional organizations. SAARC countries share certain common social and economic problems, including those related comparison between wage rate and living-standards of workers. Raising wages: an urgent imperative A wage that's enough to meet basic needs and to provide some discretionary income - what's not to like? In the past decade, retailers and brands have made some progress in getting their suppliers to pay their workers their statutory entitlements - in other words, the prevailing minimum wage plus any pension contributions, sickness or holiday pay they are entitled to. But in many countries, government-set minimum wages fall far short of what many estimate to be a living wage. The reality is that the vast......

Words: 3845 - Pages: 16

Premium Essay

International Economics

...manner as Table 2-2 in the chapter. | Home Country | Foreign Country | Absolute Advantage | Number of bicycles produced per hour | 4 | 2 | 4/2=2 Home | Number of snowboards produced per hour | 6 | 8 | 6/8=0.75 Foreign | Comparative Advantage | 6/4= 1.5 (snowboards/bicyle) ; to produce one extra bicycles 1.5 snowboard must be given up | 8/2=4to produce one extra bicycle 4 snowboards must be given up | | b) Which country has an absolute advantage in the production of bicycles? Which country has an absolute advantage in the production of snowboards? Home has an absolute advantage in the production of bicycles because it is able to produce bicycles with fewer resources (more per hour) than Foreign. Equivalently, labour requirement to produce one more bicycle in Home is aLS = 1/MPLS = 1/4 – it takes 1/4 hours to produce an extra bicycle, whereas in Foreign it takes 1/2 hours. 1/4 < 1/2 Foreign has an absolute advantage in the production of snowboards because it is able to produce snowboards with fewer resources (more per hour) than Home. Equivalently, labour requirement to produce one more snowboard in Home is aLB = 1/MPLB = 1/6 – it takes 1/6 hours to produce an extra snowboard, whereas in Foreign it takes 1/8 hours. 1/8 < 1/6 c) What is the opportunity cost of bicycles in terms of snowboards at Home? What is the opportunity cost of bicycles in terms of bicycles in terms of snowboards in Foreign? The opportunity cost of B in terms of S is......

Words: 3613 - Pages: 15

Premium Essay

Fin 535 Paper

...12. International Investments. U.S.-based MNCs commonly invest in foreign securities. a. Assume that the dollar is presently weak and is expected to strengthen over time. How will these expectations affect the tendency of U.S. investors to invest in foreign securities? ANSWER: It can be suggested that if the dollar is strong, we get more shares for the same amount of dollars than before. so the good choice of us is when dollar is weak and is expected to strengthen then investments will increase when dollars strengthens. b. Explain how low U.S. interest rates can affect the tendency of U.S.-based MNCs to invest abroad. ANSWER: The level of economic activity will be higher when the interest rate is low, which is same as fund are available at lower interest rates. so depends on this situation, the investors may prefer to invest in Us firms which have more chances of growth. c. In general terms, what is the attraction of foreign investments to U.S. investors? ANSWER: The main attraction is potentially higher returns. The international stock scan outperforms U.S. stocks, and international bonds can outperform U.S.bonds. However, there is no guarantee that the returns on international investments will be so favorable. Some investors may also pursue international investments to diversify their investment portfolio, which can possibly reduce risk. 14. Impact of Government Policies on Trade Governments of many countries enact policies that can have a major impact on......

Words: 1287 - Pages: 6

Premium Essay

Paper

...weren't entrepreneurial, but because they didn’t have property rights. So a three part question here: a) what is dead capital? b) how big a problem is it? c) provide an example of dead capital. ( … text Ch 18 and internet) A. Dead Capital- Any capital resources that lacks clear title of ownership. B. It's so hard to know. It's a resource that people cannot allocate to it's use. It among the top impediments of growth per each capita. C. Poor Businesses… Different Assets and Liabilities.. De Soto 2. In 2006, the Nobel Peace Prize went to Mohammad Yunus of Bangladesh for his efforts to create microlenders in the third world (3W). So a two part question: a) what is a microlender and b) why are they needed (… text Ch 18 and internet) A. Microlender is a organization group that creates loans to people who can not obtain finical lenders. B. They are need to provide people with small amounts of capital. They try to help people who can't get it. 3. Does international free trade and foreign direct investment (FDI) take jobs from U.S workers? And if so, what sort of jobs? ( … my lecture) Yes...they do take jobs from workers. They will give them to the poorer nations. Low skilled, low wage, and routine jobs basically. 4. Does international free trade and foreign direct investment (FDI) provide American families with more goods and services for their disposable income? How is this so? And how much extra purchasing power does this represent? (… my......

Words: 766 - Pages: 4

Premium Essay

Human Resource Notes

...The Changing Context of Employment Relations 1 The population in Singapore is aging. Why should a human resource manager worry about such a trend? What is the implication of this trend to trade union leaders? There will be a shortage of workers when these mature employees reach retirement age which is also fuel by the shrinking population. Trade unions leaders and government are promoting lifelong learning and retraining to increase older workforce employability. 2 The workers of today are better educated. What is the implication of this trend for the human resource manager in a company? Better education has led to an occupational shift in the workforce. The number of people in the higher occupation groups has increased over the last decade. This resulted in an increase in occupation types for professional and manager while a decrease in occupation types for production workers and labourers. 3 There is a large pool of mid-career workers in Singapore labour market. What are their characteristics? How can an employer encourage these workers to continue contribution to the company? Mid-career workers were born during the 1930s to 1940s and educated in the 1940s to 1960s. These were periods of political uncertainty. The standard of living was low and many of these people had to drop out of school to look for jobs. Educational opportunities then were limited. Many of these mid-career workers are educated in non-English schools and thus most of them are not highly competent......

Words: 5670 - Pages: 23

Free Essay

Outsourcing in Poland and Romania

...Significant savings costs 5 Ability and quality of resources 5 Low risk location 5 Culture Similarity 6 Investment Climate 6 article 7 Romania 8 Government support and business environment 9 Quality of the language and educational skills 9 Low labor costs 10 Culture 10 Intellectual property security and privacy 10 article 11 Comparison 12 Cost competiveness 12 Resources and skills 13 Economic competitiveness 13 Regulation 13 Corruption perception 14 Legal protection 14 Conclusion 14 References 14 Abstract In this paper, we discuss why are the Eastern European countries like Romania and Poland potential destination for outsourcing. Given an economic condition, Geographical advantage, business environment and quality issue explanation of each country. Both countries are economically competitive in outsourcing market in Eastern Europe, promptly emerging as a favorite destination. Introduction Outsourcing is a practice used externally in order to reduce costs by transferring works to outside of suppliers that it considered as an effective cost-saving strategy within a country’s borders and popular as doing so internationally. On the other hand, Offshoring is......

Words: 3215 - Pages: 13

Premium Essay

Foreign Workers, Low Wages

...Is it fair to workers of developed countries when companies shift work to lower wage countries? The main reason companies shift work to lower wage countries is to reduce operating costs. Low labour, production, and energy costs in countries such as China, Japan, India, and Mexico is causing companies to shut their factories within the United States and open new factories in those foreign countries. This leads to the loss of jobs within the United States, a lower standard of quality, and resentment by those who are living within the United seeing more and more of their jobs going overseas. In 1994, NAFTA (North American Free Trade Agreement) was passed by then President Bill Clinton. His goal was to open the trade routes to all countries. Unfortunately, it led to many plants moving across the borders to Canada and Mexico. While outsourcing had begun in the 1980s, it grew by leaps and bounds in the latter part of the 1990s. Jobs went overseas to China, Japan, and India and the economy began to falter as American's lost their jobs and suddenly faced living on minimum wage as higher paying jobs went to these other countries. By looking at the average annual salaries in these other countries, it is easy to understand why companies find it appealing to outsource their business. Especially in China where the average yearly salary is significantly lower than their American and European counterparts. • China - $1,290 • India - $14,500 • Japan - $17,000......

Words: 1099 - Pages: 5

Premium Essay

The Impact of Ib

...EAST WEST UNIVERSITY EMBA Program MKT502/EMBA_591: International Business /Business in the Global Environment Spring-2016 Group Assignment: Analysis of Selected Case Studies Instructions 1. Each group (six students, max.) will analyze the four cases attached herewith by answering the cases related questions. 2. Students are advised to apply relevant concept available in lecture materials, textbook, and/or any related sources while answering case related questions. 3. Length of each case analysis must be 2-5 pages including explanations, related charts, and images, if any. 4. The deadline of submission is April 05, 2016. Don’t miss the deadline. However, early submission is acceptable. 5. Each group must submit both hard and soft copies of the assigned work. 6. Please make sure that all group members’ names and IDs are on the cover page. Nevertheless, group leaders are advised to exclude the particulars of the group members who are free-rider in nature. 7. Last but not least, be cautious about plagiarism!!!!!!! 1/9 Case study 1: The Globalization of Starbucks Thirty years ago, Starbucks was a single store in Seattle's Pike Place Market selling premiumroasted coffee. Today it is a global roaster and retailer of coffee with some 16,700 stores, 40 percent of which are in 50 countries outside of the United States. Starbucks set out on its current course in the 1980s when the company's director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the......

Words: 3400 - Pages: 14

Free Essay

Expectations of Foreign Investors in Terms of Labor Laws

...Expectations of Foreign Investors in terms of Labor Laws India, like other countries worldwide, is experiencing the effects of globalization. In order to make conditions friendlier for investors, there is a need for adaptability. Labor legislation, such as the Indian Disputes Act and Contract Labor (Regulation and Abolition) Act, are now under debate, along with issues concerning special economic zones. Submitted by: Introduction There has been a steady expansion of foreign investment in recent decades. The upward trend is particularly strong for less developed countries, signifying the increased importance for these countries of FDI, as well as the increased presence of multinational firms. Alongside the expansion of FDI have risen concerns regarding competition between countries or regions to attract FDI. After adopting new economic policy by government of India in July 1991 many foreign investors came in the Indian economic scene because the government of India gave many incentives to the foreign investors. So it is clear that government opened the doors of Indian market to foreign investors. With more companies operating internationally, the impact on various business functions and labour laws in India is becoming more pronounced. Globalization, and the need to attract foreign......

Words: 4053 - Pages: 17

Premium Essay

Economic Principals

...AN INTRODUCTION TO ECONOMICS IN 5,000 WORDS Authors Note. Many years ago when I was doing research as a Visiting Associate Member at St. Antony’s College, Oxford, I shared a house with several grad students from various different disciplines who were studying for their D.Phil. I was struck by the number who asked me what economics was about and would I please write an elementary book some day, so that an intelligent and welleducated person could learn about it. I never forgot. This article is a simple introduction to the discipline, or at least as simple as I can make it. Economics courses tend to contain a lot of mathematics or a lot of diagrams, or both. This article uses neither. It might be useful to you if you are similarly intellectually curious; or if you are just starting a course in economics and looking for an easy overview; or perhaps are contemplating studying the subject and wondering what the heck you might be getting into. If the article interests you and you would like to learn more, please check out the link at the end. This takes you to a free book of economics notes that sticks to using diagrams (lots!), with only the tiniest bit of algebra in one small section. The notes explain this article in more detail. Not counting these notes, I have written 5 books, the latest of which is Going to University: the Secrets of Success, Exposure Publishing, UK, 2007. This is designed to help sixth formers (grades 11-12) and assist you to adjust quickly and easily to...

Words: 5089 - Pages: 21

Premium Essay

Project Macroeconomics

...measure real income? When prices change we measure real income with 3. What is unemployment? Why can’t it be driven down to zero? Unemployment is when you don’t have a job. Unemployed people are those who don’t have a job but are actively looking for work. Unemployment cannot be driven down to zero because the lower the unemployment rate is, the harder it will be for businesses to hire new employees. The harder it is to find qualified employees, the more competitive businesses will be, causing wages to increase. When wages increase, prices will increase for the whole economy. 4. What is the Consumer Price Index and how is it related to the cost of living? The Consumer Price Index measures the cost of a fixed basket of goods chosen to represent the consumption pattern of a typical consumer. Economists use the Consumer Price Index when prices change to measure the cost of living. They will compare the price certain goods from one year to another, measuring the change in price to determine how much money you would need to uphold your previous standard of living. 5. How does increased immigration affect wages and the level of output in the economy? Increased immigration actually increases wages for American workers with a high school education or higher because the labor supply increases, so business owners can afford to add on their business and employ the immigrant workers. Wages for high-school dropouts decrease because they compete with the immigrant workers for jobs......

Words: 1161 - Pages: 5

Free Essay

Payroll Related Study

...Review of Related Literature This chapter includes foreign literatures and foreign studies taken from the internet, other unpublished thesis, and studies conducted by other research groups. This chapter also includes local literatures, taken from local published books and materials, and local studies, taken from research works and studies related to the subject matter. Related foreign and local literature and studies that dealt with theories, principles, concepts, approaches and techniques are reviewed which contributed a lot towards the enrichment of knowledge, deeper understanding and insight of the researchers. Foreign Literature One of the more significant economic statistics to be released of late concerns labor productivity. This is an interesting topic and widely non-understood concept -- very few people understand either what it is or why it really matters. Simply stated, labor productivity measures the amount (or value) of output generated per hour worked. Why does it matter? Greater labor productivity enables firms to produce a given amount of goods or services with a smaller number of labor hours. And, since payroll cost is related to the number of hours they use, this helps firms control their costs, making their enterprises more profitable.  Wages are not the correct measure the cost of labor to a firm. In economics, it doesn’t just focus on the costs of an activity, such as wages here. It looks at both costs and benefits and their......

Words: 2238 - Pages: 9