Economic Impact of the Added Worker Effect
1. Income Effect: the income effect is the response of desired hours of leisure to changes in one’s income. If wages are held constant and income increases then the desired hours of work will decrease. The relevance of the income effect in regards to the study of labor economics is very important. Employers, economists and Government institutions have the ability to determine the amount of time workers’ will seek to either choose more hours of work or more hours of leisure. This can be used to estimate the average number of work and leisure hours a sample of workers will utilize in a year or during a trend.
2. Added Worker Effect: The added worker effect occurs when there is a family that has only one bread winner that loses his or her job. Because of the lost income the family may choose for the recently unemployed family member to stay home while the other family member seeks employment. This then produces a new worker in the work force which is the added worker effect because the person was not already in the work force or seeking employment. The added worker effect is crucial to economists and the Government to determine the unemployment rate during times of recession as well as the rate of new entries into the work force.
3. Compensating Wage Differentials: Compensating wage differentials determines the level of risk an employee and employer chooses to offer. If an employer has an unsafe work place then their cost of reducing risk is relatively low compared to an employer who already has a safe work environment. At the same point, a worker chooses the level of risk he/she will assume in relation to the offered rate of pay. This is very important in the study of labor economics as it shows how workers and employers are affected when the state and Federal government pass job safety laws that demand higher levels of safety measures implemented in the workforce.
Short Problems
1.
2. a) Limnologist 472000 = 449523.81-15000 = 434523.81
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Chef 500000 = 476190.48- 40000 = 436190.
Genocide is a pressing issue with a multitude of questions and debates surrounding it. It is the opinion of many people that the United Nations should not get involved with or try to stop ongoing genocide because of costs or impositions on the rights of a country, but what about the rights of an individual? The UN should get involved in human rights crimes that may lead to genocide to prevent millions of deaths, save money on humanitarian aid and clean up, and fulfill their responsibilities to stop such crimes. It is preferable to stop genocide before it occurs through diplomacy, but if necessary, military force may be used as a last resort. Navi Pillay, Human Rights High Commissioner, stated, “Concerted efforts by the international community at critical moments in time could prevent the escalation of violence into genocide, war crimes, crimes against humanity or ethnic cleansing.”
“Franklin Roosevelt’s 1937 impassioned speech calling on Congress to help the one-third of Americans who were “ill-housed, ill-clad, and ill-nourished” heralded in the Fair Labor Standards Act of 1938 and with it a national minimum wage. Echoes of that speech are still heard today. Senator Edward Kennedy (1989: S14707), in his criticism of the most recent increases in the minimum wage, declared:
In 1938, the Fair Labor Standards Act was passed and ever since, the United States has required that all firms that do at least $500,000 worth of business per year pay their workers a minimum wage (“Handy” n.pag.). Because it affects so many workers in so many different aspects of the economy, the minimum wage plays a big part in the cost of labor and how firms deal with those costs. A change in the minimum wage, which would seemingly affect only workers, can actually be felt sometimes all the way down to the consumer, who might end up paying for it in the end—unless the firm finds another way to pay for the mandatory raise for all its workers, such as a decrease in its workforce or a change in the production process. These changes the consumer might not noticeably feel. A change in the minimum wage has several short-term and long-term effects on the economy that can be either beneficial or devastating to society at large.
Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in general. A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects.
President Franklin Roosevelt endorsed the federal minimum wage law in 1938 while the Great Depression was at its utmost insolvent position. Because at this point in time the economy was at its lowest, the sole purpose for its enactment was to keep the majority of Americans out of poverty and increase consumer demand. Following the 1960’s, the minimum wage has had a very gradual increase to the point where it is now at a standby. At this moment with a recession occurring, minimum wages have not brought any benefits to those working for such a limited pay. In fact, it has affected an amount of factors rather than actually keeping the overall population out of impoverishment. Although opponents claim a rise in minimum wages will affect employment, an increase is the key to stimulate the economy and will further reduce those stepping in the poverty line, known as the “working poor.” All in all, raising earnings will be advantageous as a whole.
The federal minimum wage has been an ongoing debated topic since first established in America. Within the federal minimum wage bill, there are many different aspects, or sides, to look upon when arguing about the amount. Economic activity is negatively affected by the increase in minimum wage. One aspect afflicted within economic activity is poverty rate. The poverty rate is affected by the minimum wage through the welfare spending either increasing or decreasing or the unemployment levels rising or falling. Other sides of economic activity that a minimum wage increase would affect is the poor, the crime rate, and employee affiliations.
Jennifer, a young woman who grew up in New York moved to a different state by herself to attend college. She attended Boston University and was fresh out of college with $30,000 in debt. She graduated during middle of the recession, so it was difficult to find a job anywhere. She took the offer for a minimum wage internship after she graduated from Boston University to help her stay afloat and pay the bills as she continued her search for other jobs. One day she was at the pharmacy debating whether she should spend her last eighty dollars to fill her prescription or buy a bus ticket so she was able to get to work during the week. The minimum wage in 2000 was $5.15 and in 2020 we can expect it to rise to $15.00 which is a dramatic increase in
The legalization of marijuana would help get the economy. The war against marijuana is doing nothing and is just widening our debt. If we were to legalize and tax it, the government would make tons of money and we could reduce the debt we now have. Also, release people in prison for marijuana crimes and the jail system would not have to spend so much money. “In a country with only 5% of the earth's population, the United States holds 25% of the world's prisoners” (Archibold). Many of these criminals are in prison for marijuana related crimes. With the release of these criminals, that money could be spent on cases involving much more serious criminals such as murderers and rapists. This would make the United States a much safer place because everyone would have a stronger sense of security knowing that many more of these felons are off the street. This wonderful action can be put into effect if the simple act of legalizing marijuana passed.
Various schools of thought exist as to why genocide continues at this deplorable rate and what must be done in order to uphold our promise. There are those who believe it is inaction by the international community which allows for massacres and tragedies to occur - equating apathy or neutrality with complicity to evil. Although other nations may play a part in the solution to genocide, the absolute reliance on others is part of the problem. No one nation or group of nations can be given such a respo...
Hemp a derivative of marijuana that does not produce the get high chemical most marijuana plants create is the fastest growing resource crop. Did you know eighty percent of all clothes made in the 1900 was made from hemp string. We can make paper, medicine, oil, fuel, food, and mulch out of hemp, that of course only being the tip of the iceberg in utilization of the plant. Imagine the world harvesting hemp instead of tree’s for paper. This of course would be the bandaid that heals the world. back into environmental stability. Of the topic of the we can directly talk about what marijuana legalization will do for the people. With shops pooping up around the world we can open a new market of jobs for people to commit and make a living. In Colorado alone an estimated seven million dollars was made in tax revenue for the state, instead for example the eight million New York spends on enforcing
our solar system, but they are unimportant compared to the nine major planets. In this paper I will discuss the planets and how they are each unique.
The issue of whether or not to raise the minimum wage has been a subject that has been in the forefront both politically and socially as of late. A minimum wage is the lowest hourly rate of pay that employers must pay their workers and is mandated by the federal government. Raising the minimum wage would actually hurt the economy because doing so would do little to lower the poverty rate, would increase unemployment for less-skilled workers and result in higher prices for goods and services.
The first type of unemployment is frictional unemployment. Mankiw (2008) says that frictional unemployment is “unemployment that results because it takes time for the workers to search for the jobs that best suit their tastes and skills” (p. 601). The rate of frictional unemployment will never be zero so the full employment never reached. The new entrants like fresh graduates and re-entrants like housewives will also lead to frictional unemployment. The period of frictional unemployment is determined by the unemployment insurance benefits and the speed of the information (Mouhammed, 2011). According to Arnold (2011), the major cause of frictional unemployment is imperfect information, which means that the lacking of information required in matching a job applicant immediately with a job vacancy. T...
Unemployment issue can lead to a lot of impacts to the economic growth. Higher unemployment rate will lead to increase government borrowing. When people are without their job, they would paid less in the income tax. So, it will cause a drop in tax revenue because there are lesser people paying income tax and spending less. Due to the loss of earnings to the unemployed, the government need to spend more subsidy for them in housing benefits and income support.