Category: Economic Problem

“What is meant by the neoclassical (free-market) approach to business and how does it differ from a Socialist school of economic thought? Discuss their implications for people in contemporary economies.”

Today, the approach a business should take in order to be successful is often debated as it can have an impact on the contemporary economy. It could be said that businesses are the principal driving force in any economy as they encourage growth through job opportunities and the trading of goods and services. Using a range of diversified sources, this essay aims to explore two of the most dominant approaches to business and their significance on the economy. The essay is divided into three parts with the focus of the first part on defining the economic problem of scarcity and the two approaches. The second part of the essay addresses how the two approaches attempt to solve the economic problem of scarcity, whilst the third part investigates the implications that both approaches have on the economy.

A comprehensive definition of economics is ‘the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity’ (Bade and Parkin, 2002 as cited in Backhouse and Medema, 2009). The economic problem of scarcity is a basic yet indispensable challenge for all societies. Scarcity in economics can be defined as ‘the excess of human wants over whatever could be produced’ (Sloman and Norris, 2010 as cited in Osman, 2020). This definition is further supported by Wetherly and Otter (2018) who state that the wants of human beings are unlimited, but at any one moment in time, there is a limit to the resources available to produce the goods and services to satisfy demand. It is regarded as a problem because a society must make decisions about how to allocate resources efficiently. Some examples of scarcity include water, land, gas, and labor.

The neoclassical (free-market) approach is concerned with Adam Smith’s theory of economic activity, specialization of goods, and division of labor. Smith used the metaphor of an invisible hand to represent the instincts of human nature that direct behavior (Wight, 2014). According to Prateek Agarwal (2020), a free-market economy is a type of economy that promotes the production and sale of goods and services with little or no government involvement. Agarwal (2020) also highlights that in a free-market economy order and power are decentralized, with individuals making their own voluntary economic choices. Therefore, society controls the production, allocation, and distribution of goods. Based on the work of Karl Marx, a socialist school of economic thought is quite dissimilar to the neoclassical (free-market) approach. In a socialist economy, the government has control over the production, allocation, and distribution of goods. A key difference between the two approaches is that in a neoclassical (free-market) economy individuals and companies own resources such as land and factories which are known as private ownership, whereas in a socialist economy, there is public ownership of utilities and transport.

In order to create an efficient economic environment, goods and services must be allocated, produced, and distributed correctly. Once all three issues have been addressed appropriately, the economic problem of scarcity will have been improved but not resolved as the desires of society are unlimited. The neoclassical (free-market) system aims to tackle the problem of scarcity by allocating scarce resources to where the highest amount of profit is expected. As a result of more profit being generated, businesses can encourage economies of scale which can lead to lower prices for consumers. Lower prices are incentives for customers to spend more and consequently more wants and desires are fulfilled. The buying habits of consumers impact which goods and services should be produced through their preferences and tastes. On the other hand, a socialist school of economic thought would struggle to identify a solution to the problem of scarcity as there is a lot of government involvement which means that the government would intervene when markets are failing for example. Government intervention is often regarded with contempt as it is susceptible to government failure leading to a counterproductive allocation of scarce resources.

An implication of the neoclassical (free-market) approach for entrepreneurs is that it allows business owners to innovate at any time in order to satisfy the ever-changing needs and wants of consumers. This is due to there being limited government involvement meaning that there is more freedom and an increase in opportunities for private companies to compete against one another. Furthermore, an implication of the free-market approach is that market failure is possible, and without engagement from the government, calamitous consequences can not be ruled out. An example of market failure is the 2008 banking crisis; there was a surge in unemployment as an appreciable amount of businesses collapsed which lead to an escalation in homelessness. On the contrary, a prime implication of the socialist school of economic thought is that individuals are not exploited. Under a socialistic economy, each member of society has access to basic food, healthcare, and education, thus a reduction in poverty levels. However, unlike the free-market approach, socialism lacks innovation. Competitiveness and entrepreneurs are not rewarded resulting in slow economic growth.

In conclusion, the two approaches differ rather a lot with the primary focus of the neoclassical (free-market) approach being on profit and the focus of the socialist approach being on equality. For the purpose of the economy, the neoclassical approach is the preferred system as it stimulates rapid growth and it is the approach that is most likely to improve the economic problem of scarcity.

References

1. Agarwal, P. (2017). Free Market: Advantages & Disadvantages. [online] Intelligent Economist. Available at: https://www.intelligenteconomist.com/free-market/.
2. Backhouse, R.E. and Medema, S.G. (2009). Retrospectives: On the Definition of Economics. Journal of Economic Perspectives, [online] 23(1), pp.221–233. Available at: https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.1.221.
3. Osman, K. (2020). The economic problem. [online] Available at: https://www.researchgate.net/publication/344780754_The_Economic_Problem.
4. Wetherly, P. and Otter, D. (2018). The business environment : themes and issues in a globalizing world. Oxford: Oxford University Press.
5. Wight, J.B. (2007). The Treatment of Smith’s Invisible Hand. The Journal of Economic Education, 38(3), pp.341–358.

The Brusilov Offensive, which lasted from June to September 1916, was the straw that broke the camel’s back for Russia. The war was lost when Russia signed the Treaty of Brest-Litovsk following the 1917 revolutions. This essay will argue that the ‘June Advance’ was not necessarily a military failure since it inflicted enormous losses on the Central Powers; however, when the Russian Imperial army also suffered heavy casualties, the campaign became a disastrous moral failure. Nevertheless, this was only one of the many factors that caused the downfall of the Tsarist regime. Extreme food shortages coupled with devastating economic problems made most Russians very miserable and very hungry. In this situation, one would usually look to the top for aid and inspiration, but all the Russian people could look up to was an incompetent Tsar accompanied by equally inept associates. Hence, the population began to oppose the war, and when the Bolsheviks promised to end the conflict, the people were all too happy to support them and overthrow the Imperial government. This essay will find that the Brusilov Offensive, although significant, was not the main reason Russia lost the war: its failure, however, was a severe blow to an already drained and unhappy population.

Firstly, the Brusilov Offensive of 1916 was one of the bloodiest conflicts in the First World War due to the sheer number of casualties. Brusilov, along with Evert, was responsible for executing the offensive; however, while the former adapted to modern warfare by attacking in smaller, better-trained units, the latter still fought in the conventional form, with human wave attacks: this was futile and caused considerable casualties. Hence, many believe that the Brusilov Offensive was a disaster for Russia.

In terms of leadership, Russia lost the war because the Tsar and his close associates were very inefficient: Nicholas II had removed the capable Grand Duke Nicholas Nikolaevich and made himself the supreme commander of all Russian forces. The Tsar, who had no experience in war, only acted as a figurehead for the army: thus, he assumed that his presence would boost morale on the battlefield. On the contrary, Nicholas II was blamed for every military defeat since his self-elevation, shattering the divine infallibility many thought he had.

Due to his new post, Nicholas also abandoned the home front, and his wife, Tsarina Alexandra, took over the domestic government. One modern source explains that ‘the Tsar had taken over at this point [on September 15, 1915,] ignoring warnings that he could not be both soldier and statesman’. The Tsarina, who, as historian Jonathan Bromley put it, was an ‘awkward figure’, and was not popular with the people: Alexandra’s German origin did not gain many citizens’ trust (she was often known as ‘nemka’, meaning ‘German woman’). Furthermore, chaos ensued in the Russian government because Alexandra gave people positions based on their loyalty to the regime rather than their competence, so the administration effectively ground to a halt. The Tsarina employed four different Prime Ministers and three different Ministers of War in 16 months which caused inadequate responses to problems such as shortages of material. Hence, many believed that the Tsarina was trying to damage the war effort, and the people began to grow suspicious of Alexandra and the Russian regime more generally.

Therefore, the Tsar’s failures caused the people to be discontent with the government and contributed to Russia’s loss in the East. Support for the Petrograd Soviets skyrocketed since the majority of people wanted stronger leadership. Ultimately, this caused the revolutions of 1917 and the Treaty of Brest-Litovsk. Although the army’s defeat in the Brusilov Offensive made the Tsar even more unpopular, the campaign did not affect how the Russian imperial regime acted.

Economic problems such as food shortages also contributed to Russia’s downfall: a war economy made fewer consumer goods available because most resources went to the war effort. Since most commodities were in short supply, peasants in the countryside hoarded their food: after all, money was practically worthless, so exchanging grain for cash was nonsensical.

Recruitment also affected food supplies as the army had conscripted many peasant farmers, who accounted for 82% of the population. The shortage of workers on the farms caused consumable commodities to be harder to obtain, especially in towns and cities.

Poor infrastructure contributed further to the problem since Russia’s underdeveloped rail system had to transport troops to the front lines and simultaneously keep the cities supplied. The inadequate railways could not keep up with the demand, and there were severe food shortages in many shops.

Therefore, food was difficult to obtain in the cities as less grain was available: Moscow required 120 freight cars of grain a day to sustain itself, but at the start of 1917, the city received just one-sixth of this amount. Food rationing due to the shortages led to protests which sparked the Revolutions of 1917.

The Brusilov Offensive played no part in this as the lack of grain originated from infrastructural and administrative issues rather than from one particular event.

Another economic problem that weakened Russia’s ability to fight in the war was inflation. Initially, the government started to print more money since it lacked funds: this worked out in the short term but was disastrous in the long. The price of goods increased dramatically, whilst wages stayed the roughly same. By late 1916, inflation was up by almost 400 percent, and the rouble was worth a quarter of its pre-war buying power. Life became very challenging for ordinary citizens. The economic problems fuelled discontentment, which helped spark the 1917 revolutions. Alexander Kerensky, the Minister of War, wrote that ‘the Russian people [were] suffering from economic fatigue’, and consequently, ‘the Russian Revolution [was] just beginning’.

Additionally, shortages of equipment were a pressing problem. Russia had begun the war ill-prepared for modern conflict since the country had not yet fully industrialized: at the onset of the war, the artillery was using 45,000 shells a day, but the factories produced only 1,300 in the same period. Although the situation started to improve in 1916, the military still lacked airplanes and heavy guns. Colonel Knox wrote that ‘without airplanes and far more heavy guns and shells and some knowledge of their use, it is butchery, and useless butchery to drive Russian infantry against German lines’. Without good supplies and equipment, Russia could not overcome its enemies.

The Russian population was on the verge of revolt due to inflation: this problem made the Treaty of Brest-Litovsk almost inexorable. The underequipped military could not defeat the Central Powers because of the glaring supply issues: the Imperial Army would find itself on the brink of collapse, creating a military catastrophe for Russia. The Brusilov Offensive was not significant here as the campaign neither changed the Russian economic situation nor affected the equipment shortages.

Russia also capitulated to Germany because of the lack of morale in the army and among the people.

The high casualties from the Brusilov Offensive sparked waves of demoralization: according to General Dukhonin, the commander-in-chief, the campaign caused one million losses. Desertion and dissent became endemic; this led to the collapse of the shrinking Imperial Army in 1917. Without an army, Russia could not fight a war.

The high number of total fatalities, aggravated by the Brusilov Offensive, hit the people hard too: most Russians were appalled at the loss of men and were horrified by the army’s failure: dissent and discontent spread amongst the population. A 21st-century account explains that ‘success on the battlefield would quell dissent at home’. However, the continuous losses and the failure of the Brusilov Offensive made the people desperate for change.

The high death toll, which provoked desertion in the army and dissidence amongst the people, contributed to the 1917 Revolution and obliterated Russia’s shrinking army. The Brusilov Offensive played a substantial part in this, and the campaign exacerbated existing problems with morale.

Ultimately, Russia lost the First World War because the people were incandescent: food shortages, economic problems, and the Tsar’s incompetence made the people despise the imperial regime. The Bolsheviks’ popularity soared, and the slogan ‘peace, land, bread’ effectively guaranteed the Treaty of Brest-Litovsk. The Brusilov Offensive caused high casualties and demoralized both the troops and the people, but the campaign’s failure, although significant, was not the main reason Russia surrendered to Germany. The principal causes of the defeat were the 1917 revolutions and the disintegration of the Imperial Army. The Brusilov Offensive shook a population on the brink of revolt, and the campaign’s failure was nothing less than the straw that broke the camel’s back.

I’ll be honest, walking into my first economics lesson, I was skeptical, questioning if I had made the right choice. Growing up in Hong Kong, the city’s position as a major hub of finance and trade was an unavoidable fact, with both my parents working in the financial sector; the sound of the talking heads on television discussing the housing market and stock prices, one economic problem after the next; providing the soundtrack to my mornings as my parents prepared me for school. I couldn’t understand a word at the time, tuning out the tangle of voices and tucking it into the back of my mind; choosing instead to divert my curiosities elsewhere for the time being. However, when it came time to pick the subjects I would be taking post-iGCSEs, I chose Economics as one of them. During the period of intellectual drought that followed my iGCSEs, I felt aimless. I was yearning for something to fulfill my hunger for knowledge. I recalled the burning frustration of not knowing, of not being able to understand what I had felt growing up. It was then I decided to take up economics, hoping to find answers.

I had held many misconceptions about the nature of Economics going into that first lesson. All of them had been swiftly dispelled by the time it was over. When my teacher introduced economics as a social science, I was surprised, to say the least; curious, and eager for more. As more concepts were introduced, my curiosity only grew, which led me to realize that this subject was the right choice for me. All of the facts and figures I heard on the morning news suddenly started to make more sense, opening my eyes to the economic and political issues around me: Why is housing unaffordable for so many?, What is the root cause of the high level of income inequality? Why do people not always make rational decisions? These were some of the questions I began to ask myself as I progressed further with my studies.

Looking back, I think what ultimately led me to embrace economics as a subject was that it had a human element I thought was lacking in subjects I had previously studied, like maths. While mathematical problems deal in absolutes, economics is mired in uncertainty. There are often many possible solutions to any given economic problem; economics being a field of study that is constantly evolving, with many often contrasting schools of economic thought having been conceived since the inception of the discipline, each with their own flaws and benefits; forming the bedrock for modern economic policy. But despite this progress, there still remains a great many economic problems that lack a definitive answer. Economics, being a study of human problems, perhaps reflects our flaws and imperfections, having inherited both our best and our worst. Like us, “The Dismal Science” has yet to reach its ultimate form and may never do so, but for me at least, that was good enough.

My studies in Computer Science have allowed me to cultivate my problem-solving skills and adopt a logical mindset, which has been useful when considering the various interlocking pieces that make up an economy. It has also granted me insight into the background workings of the internet and computer encryption protocols which may prove useful, given the increasing number of economic transactions that are performed online. Studying English has sharpened my analytical and research skills. Studying texts and exploring their many possible interpretations prepared me for the subjective nature of economic policies. These skills will serve me well as I transition to higher education and beyond, into the world of work, where I aim to build a career in the financial sector.

After years of simply memorizing facts, I found a subject that demanded my effort and encouraged me to think in a more well-rounded way; to understand the multifaceted nature of economic problems. I had been living in a world of black and white. But for the first time, I saw a hint of grey.

Africa is a vast continent in our world, and it is also a continent which our ancestors came from. There is a long history along with Africa, and people here made a lot of miracles like pyramids. Back to today, however, Africa has some complex social issues, and the major one is poverty. I can conclude there are basic three reasons which caused the poverty in Africa.

As we all know, Africa is now the poorest continent in the world. It has 1.1 billion populations, and according to figures released by the World Bank in 2015, 43% of the African population lives below the minimum poverty line of $1.25 a day.

The first reason is a historical reason. The triangular trade, also known as the ‘slave trade’, is a trade form between Africa, Europe and America during 16th century to 19th century. The triangular trade caused profound influences in African, society in many ways, and some of the influences remains today. After European discovered the American continent, they made colonies in the new world to grow crops, tobacco or mine the gold. However, a lot of native Americans were killed directly or indirectly by Europeans, so they had a high demand of labor forces to maintain their plantation estate. The first countries to start the triangular trade were Portugal and Spain, followed by Britain and France. They started from Europe and sailed to the West African coast carrying alcohol, firearms and metal wares. Then, they made trade with the leader of African tribe to get labor force. In America, they sold black people to the owner of planation estate, and carried gold, sugar, and tobacco back to European. The triangular trade is very profitable for the Europeans, it brought enormous wealth to Europe, which was an important step in the primitive accumulation of capital. However, the trade is also bloody, it brings a heavy disaster to the people of Africa. It caused a huge loss of strong labor in Africa as many as 100 million, which is an immeasurable destruction of African society and economy, and this is a big reason why most African countries still stay poor today. Besides the triangular trade, when Europeans first came to this land and tried to colonized it, it caused rebellion. For example, some native people attack a group of Europeans and they almost killed everybody, including the babies. Such a rebellion would cause fight back by Europeans. With powerful guns, Europeans would easily win the war and kill those people who would not agree to accept them. When they take the control of Africa, they blocked the native people from educations, and this influence remains today, nearly 80% people were uneducated.

The second reason is the vast spread of diseases in Africa. Diseases are becoming a serious issue that concerned most people in Africa. Back to the time when Europeans came to Africa, African people suffered great deaths due to smallpox. Smallpox is a representative disease among all of them. Smallpox is a very dangerous disease and it always causes a very high death rate. As for Europeans, they have already contacted with smallpox for centuries, and most of them have some resistance to it. However, for African people, smallpox is a kind of new disease. Most of people have never contacted it, so the majority was less resistant to smallpox, and millions of people died. Due to the big loss of population, Europeans was easy to conquer African land and reign African people. Today although medical developed a lot, Africa still faces the problem of disease. According to a report from WHO, communicable diseases such as malaria, tuberculosis, and HIV/AIDS and other conditions still predominate in sub-Saharan Africa (Musau, 2016). The natural geographical environment in which Africa is located determines the prevalence of infectious diseases in the region. Africa’s climate is particularly suitable for the reproduction of micro-organisms, parasites and harmful vector insects. It is also the living place for non-human primates and other mammals which is the host of many viruses. Zambia suffers from malaria in a serious condition. Malaria is trophic disease passed by parasites because parasites like mosquito are fond of hot, moisture weather, which the weather of Zambia is very similar. A statistic shows that nearly 45% children of Zambia is affected by malaria, and malaria effected one percent net growth over the last 50 years, lots of children died because of malaria. Compared to other tropical area, the poor medical condition is also an important reason. Because medical equipment and sanitary conditions are bad, clean drinking water recourse are insufficient, and the average level of education is low which leads to poor basic medical and self-prevention awareness, once the outbreak occurs, it is difficult to get timely and effective control.

The third reason caused poverty mainly lies in humans, including disputes among parties, tribes and religions, regional and border issues, as well as the competition for natural resources and wars. According to statistics, over the past 10 years, three quarters of African countries have been involved in wars, which more than 8 million people’s lives were taken, and over 16 million people became refugees, lots of children became orphans. The wars that have lasted for many tears have made it difficult for many African countries to maintain the stability needed for normal economic construction. The infrastructure has also been hit hard, price of normal goods has fluctuated drastically, and investors have been discouraged, which further exacerbated poverty in Africa. Besides, the process of industrial construction in Africa goes very slowly, most African people are still working on farming. This kind of economic developing form can only attribute a very low production to national economy.

In short, wars, unreasonable economic structure, low level of education, technology, and wild spread of diseases, as well as many other factors, all leads to poverty in Africa. And long-term poverty also increase terrorism, which in turn worsen the economic situation. Therefore, when we concern about world peace and development, we need to pay more attention to the development of Africa.

Work Cited

1. Musau, Zipporah. “Lifestyle Diseases Pose New Burden for Africa | Africa Renewal”. United Nations, United Nations, 2016, https://www.un.org/africarenewal/magazine/december-2016-march-2017/lifestyle-diseases-pose-new-burden-africa

Ever wonder why jeans have that little 5th pocket? Well, originally it was for a pocket watch. But it became known as a coin pocket for many decades. This will be hard to believe but there was a time, before cell phones, when these physical phones were placed in public places like street corners, schools, and restaurants and that’s how people keep in touch when they were away from home. Anyway, these phones took coins to make phone calls. It was a dime for a long while then a quarter. Kids would put a coin in that 5th pocket in case of an emergency. Now, money isn’t what it used to be. Just last week, in the lunchroom, I witnessed a classmate drop a quarter on accident, glance at it then decide it wasn’t worth the effort to pick up. The girls at her table saw it and also decided it wasn’t worth the effort. Who knows, maybe it’s still there.

Some of us have after-school or weekend jobs. Imagine getting paid a measly quarter for an hour of work. That was the case in 1938. The minimum hourly wage was only $.25 per hour. Of course, times were different. A quarter in 1938 is about $4.30 today. I would suspect that if offered a $5 bill for an hour of labor, most of us would politely decline. It’s just not worthwhile.

Over time, the minimum wage has grown faster than inflation, but it is enough? We can compare it to a few other measurements to get an idea of its value. We can look at the purchasing power of money in comparison to the minimum wage to get an idea of its value. As an example, the peak purchasing power versus minimum wage was in 1968 when the minimum wage was $1.60. As you probably heard, we recently raised our minimum wage to $15 per hour.

Gross Domestic Product, or GDP, is a measurement we use to express the value of our economy. So, it would follow that if our country is doing better, our laborers should benefit from that as well, right? Wouldn’t that be just? “You will break to pieces many nations; you will devote their spoils to the Lord, their riches to the Lord of the whole earth.” (Micah 4:13). Micah is talking to Israel and pleading for them to share their wealth fairly. So, the country is doing better, money isn’t worth as much as it used to be, wages aren’t high enough. Where’s all the money going? Well, it’s going to a smaller percentage of our workforce. Capitalism and democracy and the opportunity for one person to climb from nothing to everything are what make this country great. I’m not arguing to lessen that, but we should have a safety net. A working-class American deserves to benefit from our country’s prosperity with a wage that earns him or her a comfortable lifestyle. Increasing the minimum wage and investment is also increasing demand and creating more jobs. Workers, therefore, stay longer with employers, reducing the turnover, hiring, and training costs for businesses. Lower unemployment and higher wages just increase money received from taxes.

What can you do? “[For what [else] does the Lord require of you but to do justice.” (Micah 6:8). You’re just a high school kid, right? You’re a voice in the community. Call your congressperson, email them if you don’t have a quarter to make a phone call. You can find email addresses for the CEOs of companies that fight against higher wages or treat workers unfairly and voice your concern because it’s their responsibility as well. As President Franklin once said… “It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.” (President Franklin D. Roosevelt). 

General Purpose: 

To persuade

Specific Purpose: 

To convince my audience that raising the minimum wage is not a good idea.

Central Idea: 

Increasing the minimum wage is not beneficial to the economy.

Introduction

I. Lately a popular source of debate has been the topic of minimum wage. Although there are many who will argue raising the minimum wage will be beneficial to those who are suffering from poverty, there are many statistics and facts that prove otherwise.

II. Raising the minimum wage could actually be more detrimental to the job market than it could be helpful to the poor.

III. An increase in minimum wage will ultimately have a drastic effect on the nation’s economy as a whole, affecting more people than it would help.

Transition-

Body

I. The idea of increasing the minimum wage has been proposed as a way to decrease the number of people suffering from poverty, however, there are many numbers that prove otherwise.

• A. Only 11% of people that would be affected by an increase in the minimum wage are below the poverty line.
• B. Most workers who earn minimum wage are actually from families earning above the median income of $50,000.
• C. 85% of all minimum wage workers are either teens that live with their parents, adults living alone, or adults who have spouses that also work.
• D. 80% do not have kids.
• E. The majority of these workers will receive a raise between a month and a year after being hired.
• F. Roughly 60% of those in poverty don’t even work.

Transition- According to Forbes, the only thing raising the minimum wage will do is make it harder for that 60% to get a job if they ever decide to get one.

II. It all comes down to the simple Law of Demand: the higher the price of anything, the less the demand with be for that particular thing. In this case, the ‘thing’ we are talking about is jobs.

• A. In July 2009, Congress raised the minimum wage by 10.6%. In the 6 months following, 600,000 teens’ jobs were lost.
• B. The higher wages employers are required to pay their workers, the fewer workers they are going to be able to have.
• C. “Firms cannot pay a worker more than the value the worker brings to the firm.” (Forbes)

Transition- In addition to completely destroying the job market, raising the minimum raise could be detrimental to our nation’s economy.

III. An increase in minimum wage could cause inflation and have other negative effects on the economy.

• A. The state of Michigan raise the minimum wage from $7.40 to $8.15, just 75 cents, and we immediately saw the effects in pricing at some of our everyday business locations.
• B. McDonald’s alone made many major price changes due to the increase in the minimum wage. Pops are no longer just a dollar, and many of the items on the dollar menu, such as the McDouble, are now roughly a dollar more.
• C. Increasing the minimum wage for entry-level jobs will eliminate many of those jobs as well as eliminate the incentive to advance beyond those jobs.

Transition- Overall, an increase in the minimum wage is more likely to cause more bad than good.

Conclusion

I. Many argue that raising the minimum wage will help those in poverty, however in all reality it is actually a terrible idea.

• A. Studies and statistics prove that an increase in minimum wage will not benefit those in poverty.
• B. Raising the minimum wage would cause a loss of many of those jobs, so an increase will likely hurt more people than help them.
• C. An increase in minimum wage will also cause inflation, making the standard of living in the country to increase substantially, hurting the lower and middle classes drastically.

II. When it comes down to the cold, hard facts, an increase in the minimum wage is not the way to go in trying to better our economy, as it will cause more problems than it is intended to fix.

Works Cited

1. Dunkelberg, William. ‘Why Raising The Minimum Wage Kills Jobs.’ Forbes. Forbes Magazine, 31 Dec. 2012. Web. 04 Nov. 2014.
2. O’Leary, Lizzie. ‘Raising the Minimum Wage: Good Idea or Bad Idea?’ Marketplace.org. N.p., 04 Apr. 2014. Web. 04 Nov. 2014.
3. Ponnuru, Ramesh. ‘Raising the Minimum Wage Is Still a Bad Idea.’ BloombergView.com. BloombergView, 18 Feb. 2014. Web. 04 Nov. 2014.
4. Stoll, Ira. ‘9 Reasons Why Raising the Minimum Wage Is a Terrible Idea.’ Reason.com. N.p., 03 Mar. 2014. Web. 04 Nov. 2014.
5. ’15 Reasons Raising Minimum Wage Is Bad.’ Republican Reader. N.p., n.d. Web. 04 Nov. 2014.

Black and White Flashbacks: Looking Our Racist in the Eye

In the film, American History X, he portrays the profound message of how prejudice and hatred can change people and bring them closer together. Shows how “hate is baggage and life’s too short to be pissed off all the time.” Although hard to watch the film American History X, the realism of the movie sends a powerful message of hatred and violence.

Derek who had joined the neo-Nazi movement soon after the death of his father became imprisoned for killing two black men trying to steal his truck. Derek felt betrayed by his fellow white inmates while in prison and reluctantly befriends an African-American named Lamont. During his time in prison, Derek realizes that all the anger and hatred has gotten him, nowhere in life. Not all, white people have the same beliefs of hatred towards the black, brown, or yellow race.

Although Derek’s beliefs by his father and the neo-Nazi make him think it’s ok to murder the two black men he soon discovers in prison that it wasn’t. Derek tries to fit in with the white gang and sees that their beliefs are not quite what he believes and ventures out on his own. His fellow white inmates soon turn on him, and he realizes then that it’s not just black, brown, or yellow-skinned people that are bad, and that’s when it hits him, and his eyes open to a whole new world. He receives a visit from his high school teacher who makes him question his beliefs and shows him the teacher wasn’t the person his dad made him out to be. While working in the laundry room during his prison sentence, he becomes friends with a black male named Lamont who he soon discovers is the one person who turned out to be his friend and had been the one who protected him until his release.

His attempts to honor his father and the neo-Nazi with their beliefs ultimately lead to his brother’s death, which reveals that hatred, prejudice, and violence are a waste of time and get you nowhere.

The realism of, American History X touches on real-life events and issues that we, as a society address constantly. It demonstrates how hatred and prejudice affect so many lives, not only the people it’s geared toward but their own lives as well. The writer of American History X uses black-and-white flashbacks to tell the story through Danny’s eyes.

The startling black-and-white kickoff scene shows Derek without hesitation brutally murdering two black men with such hatred, one of them by curb-stomping his head, briefly showing it but letting us hear the act. American History X probes into the sensitive side of racism, sexism, and violence but its messages are those of change and the redemptive power of personal integrity. An intense prison scene shows a graphic rap scene complete with blood and full-frontal male nudity and violence.

Though most films steer clear of difficult subjects and unhappy endings, American History X jumps right into the deep end. Shows Derek curb-stomp a black male at the beginning of the film to set the stage for the reality of hatred and prejudice. The violent scenes that bring you to the edge of your seat make you feel anger, and sadness, and ask yourself why? Showing us that hatred and prejudice ultimately will have a price to pay in the end. Touches on the prison scene to show the reality of prison life, and that even the same race doesn’t always think alike. Shows that people do what they need to do to survive and when you don’t agree with their ways that sometimes comes with consequences, which leads to the scene where Derek suffers a brutal rape at the hands of his former neo-Nazi.

Today the realism of gang violence and hate crimes still exist, sadly American History X shows what life was like back then and what it still is somewhat like today. Although the neo-Nazi and white supremacist gangs don’t exist anymore the hatred, prejudice, and gang crimes still do. The reality is, prejudice and violence touch us all in many ways, and the film American History X shows that racism leads to nothing but hatred and violence.

The storytelling is violent and quite disturbing at times, but it is also powerful and moving, an important part of the film because it shows how racism can be overcome through education and sometimes severe consequences.

The story makes you feel so many different emotions, it’s a story that has a good ending, not making you feel like something was left unsaid. It tells the story of how different races are and shows their true colors without attacking or bashing the races. The writer of American history x set out to show the audience that hatred and prejudice itself is wrong and how it caused Derek to become not only distant with his family but from himself as well

The film does not offer much in terms of developed black characters and, as such, has received tons of criticism, most of the black characters, except for a couple, are represented as mindless thugs who antagonize Derek and his family. However, the film does not set out to present white people as being just as victimized as black people but instead presents how racism and hatred in all its forms are destructive and lead to no resolution. Derek’s mother Doris invites Murray, whom she is dating, home for dinner, which turns into a full-blown argument between Derek and Murray, with Derek assaulting their sister Davina, Murray leaving, and Doris kicking Derek out. Derek knows the breakdown of his family is his fault and the only way to fix it is to become a better person.

With the fight for equal civil rights still an ongoing struggle in modern society, American History X still serves as an important film. American History X shows that the transition from bad to good is a lengthy process and that it isn’t always pretty and sometimes sacrifices must be made, but ultimately hate does not solve problems and it does not fix anything. Instead, it only adds further pain and suffering.

The two characters that stand out the most are Derek and Danny. The characters tell the story of not only the consequences of racism but also its beginnings.

Derek was good at basketball and school. He starts out as a normal teenager with a loving family. He is a violent racist but an intelligent one. Justifies murdering two men as revenge for the murder of his father. In the end, Derek realizes the error of his ways and is reformed. Danny is represented as an innocent, frustrated, and confused kid. Danny has a great love for his family, especially his younger sister. Looks up to his brother Derek as his role model. Danny was shot and killed by a black student in the end.

The two brothers were orphaned when their father was murdered while fighting a fire at a drug den, and Danny grew up with a racist brother, whose neo-Nazi views influenced him. Derek starts out acting like your normal teenager coming from a good home. Danny starts out your normal teenager but with a smug side to him who blows smoke in someone’s face. Being raised in a prejudiced home eventually causes Derek to take his anger out on black people after the murder of his father. When Derek was sent to prison Danny, despite his strong love for his family and the fact that he’s not really prejudiced follows in his brother’s footsteps and joins the Disciples of Christ gang while his brother was in prison. Derek even though very intelligent shows no remorse for and justifies murdering two men as the revenge of his father’s death. While serving his prison sentence Derek realizes the wrong he was doing and, in the end, is reformed. Towards the end, Derek realizes the effects he had on his younger brother and sets out to save him from the path he went down. Danny was convinced by his brother to leave the gang after hearing the tragic story about his prison time. Danny would later write a paper about his brother as a special assignment for principal Bob Sweeney, who had received a complaint from the history teacher. Tragically despite Derek’s current efforts, sometimes what people set in motion cannot be stopped, and Danny was shot by a black student and died in the end.

Setting out to send a powerful message of the consequence of hatred and prejudice, Derek and Danny delivered what the audience would expect.

Democrats introduced a bill last month to gradually raise the federal minimum wage to $15 per hour by 2024. The new House Democratic majority sees this as an attempt to live low-wage workers and boost the economy. and focus on policy priorities.

If implemented, this bill will significantly affect the lives of many college-aged students in the workforce, as workers under age 25 represent almost 50% of all minimum wage earners, according to the Bureau of Labor Statistics. With the challenge of covering tuition bills and many other new expenses that come with living independently, many college students struggle to keep up with a minimum wage salary. The wage increase would ease the pressure and lessen this burden placed on working students, some say.

Stacy Hickox, assistant professor at Michigan State University’s School of Labor Relations, is one of the many in favor of the raise. With minimum wage frozen at $7.25 per hour since 2009, Hickox says that minimum wage is no longer enough for students to live off of, as inflation continues to rise.

“Minimum wage just doesn’t meet the criteria for a living wage anymore,” Hickox says.

To compensate for low wages, many students are forced to cram many hours of work into their busy class schedules. Hickox supports the raise because the higher paychecks will serve as beneficial to students balancing work and school.

“I hate to hear that students are working 30 hours per week and don’t have time for class work and homework, yet they still aren’t making that much,” Hickox says. “So, yes, I think (the raise) is very important for students.”

While raising the minimum wage would help the economy as consumers are able to spend more with their increased paychecks, many are concerned with the possible effects it will have on inflation and employment.

MSU sophomore Nick Moscone is pursuing a degree in mechanical engineering and is currently working a minimum-wage job. Despite the immediate benefits of extra income due to the raise, Moscone said that the bad outweighs the good due to increased inflation.

“I know most students are broke, and yes, they will make more money,” Moscone said. “But, over time, I think this will cancel out as prices go up and inflation increases due to the raise.”

The increase in federal minimum wage will force many local businesses to compensate for higher wage bills by raising prices and cutting expenses in other areas in order to maintain a corporate profit. According to the Bureau of Labor Statistics, raising the minimum wage to $15 would cause prices to rise an estimated 4.3 percent.

Because the goods and services offered by most companies will become more expensive, the raise may not be enough to propel a consumer’s purchasing power.

Raising the federal minimum wage may also pose a threat to the budgets of many businesses in rural areas in which their local economy may be unable to support it.

President and Chairman of the MSU College Republicans, Aleks Oslapas, says that raising the minimum wage is not an issue the federal government should be looking at due to the inability to take local conditions into account.

“If you look at places a half mile outside of Lansing, or other rural areas, there are businesses that can’t afford to pay people more than minimum wage, which is already probably pushing their budgets pretty high,” Oslapas said. “What works in New York City definitely won’t work in Wyoming.”

Whether the effects of the raise will be beneficial or detrimental is still up for debate due to the fact that our country has never seen an increase of this magnitude. The significance of the proposed increase means that past minimum wage research, though not lacking in quality, may not necessarily be a reliable tool for discovering the most accurate outcome.

Dale Belman is an author and professor in MSU’s School of Human Resources and Labor Relations. In one of his published books, What Does the Minimum Wage Do? He reviews the empirical research on the effects of minimum wage and says it is a very successful aspect of public policy. However, Belman does not think the government should raise the federal minimum wage to $15 per hour.

“Even raising the minimum wage to $15, it would barely make it over a living wage for most single adults,” Belman said.

Many economists have a widespread agreement that the raise will have generally small effects on employment and a small effect on poverty levels. Most who support the proposal argue that it will still serve as beneficial for college-aged workers.

“Money is a clear and guaranteed return to going to work and raising the minimum wage will further establish work as a good thing,” said Steven Haider, a professor at Michigan State University Department of Economics. “I think it would help students because the mindset behind the connection it establishes between work and pay is good.”

The exact effects the raise will have on our local economy are subject to debate, however, insight from people like Haider and many other economists reminds us of the indisputable ways the raise will serve as beneficial to college students.   

Issues

Employees

Employees are vastly affected by the changes in the minimum wage. This is because what they earn has a drastic effect on their living such as choices in financial expenses. Through the perspective of the employees, the standard economic model of supply and demand suggests that the higher the wages for a job are, the more of the workforce is willing to work the job thus increasing supply (McGuinness, Freebairn and Mavromaras 2008). Therefore, the conclusion can be made that employees would rather have higher wages.

Government

The Government is a key stakeholder when it comes to the minimum wage debate. It is the government’s job to ensure that both employers and employees are treated fairly. In their perspective they must operate as such in regard to employees so that the workforce is at a healthy level and that there is a low amount of unemployment (Card and Krueger 2015) – which will help the socioeconomic landscape as more individuals have access to a job which will provide them income in turn decreasing the poverty scale and also the economic landscape as there will:

1. Be more spending as individuals have access to more funds
2. More production in the economy due to increased employment.

 

Both of the above reasons will lead to higher economic growth.

Industrial Tribunals

The role of industrial tribunals as industrial relations stakeholders is to provide a platform to resolve disputes between employees and their employers in the workplace. The perspective of the industrial tribunals such as the Fair Work Commission when it comes to minimum wage is it enforces the minimum wage laws, introduced by the government. This ensures that both employees and employers are on the same path and one is not being treated unfairly than the other (Dickens 2008). This allows for less illegal activity to occur such as an employee getting paid below the minimum wage.

Employer Associations

The role of employer associations as non-profit organization industrial relations stakeholders is to support its member employers. These associations’ perspective on the minimum wage is to ensure that its members are up to date with the laws and make sure that they are being treated fairly in their industry (Barry and Wilkinson 2011).

Trade Unions

The role of trade unions is the perspective minimum wages to ensure the welfare of its employee members, trying their best to achieve the interests of its members in achieving higher wages by safeguarding economic benefits (Gumbrell-McCormick and Hyman 2013). Unlike Employer associations, trade unions provide support for employees.

Employers

Employers are affected majorly by the minimum wage debate. One of the key perspectives of an employer is to ensure that production and growth are in a positive state. This is done by ensuring all their resources which including labor are being utilized effectively. A set minimum wage can help keep the employer’s costs of production lower (Meer and West 2016). An increase in this causes a higher cost of production which could cause the employer to have to reduce their labor costs.

Analysis of Employers through the lens of sustainability

Economic

The economic lens of sustainability refers to the perspective of employers on minimum wage and how it affects their ability to keep sustainable growth in profit. As shown by the increases in the minimum wage in Australia recently, there have been increases in the youth unemployment rate. This means that more employers have had to let go of their lower-skilled employees to lower production costs. This links back to economic sustainability – employers have to look at how they can sustain profit and be building their business; and by saying that, paying more to their employees will do nothing but hurt that growth economically speaking.

However – through the perspective of an employer an increase in minimum wages increases the supply of workers willing to take the job for a more attractive wage. This means that for an employer actually looking for more labor, they will have it easier to come by and achieve this as more workers in the workforce are willing to take the cake. But on the other hand, employers may offset this increase in job competition between unskilled employees by reducing employee benefits or hours worked, whilst requiring employees to maintain high rates of production (Willard 2012). This reduced time of increased production puts strain on production; which can result in the production of inferior products or services therefore affecting the demand and decreasing sustainable profit.

Social

Employers must look through the lens of social sustainability in their workplace. This means that employers must act with wage changes in such a way that their employees have a healthy relationship with everyone in the workforce, show good morale, and actually want to be at work (Slaper and Hall 2011).

An increase in the minimum wage also increases employee ‘loyalty’. Workers will tend to remain with employers longer rather than seeking out jobs with better pay from other companies, which thus reduces businesses’ turnover, and costs of training, and also hiring, whilst increasing morale and healthy relationships between employers and their employees.

Increased wages also can tie along with more production and efficiency. Even if this makes no sense economically speaking, looking at this through a lens of social sustainability, if an employee is satisfied with their job which includes their wage; job performance is positively increased (Wright, Cropanzano, and Bonett 2007), which leads to more production and efficiency hence affecting the economic sustainability of the firm.

Position and Critique

Youth employees are one of the main groups of employees that are able to reap the benefits of a minimum wage. This is due to their inexperience in the workforce and therefore employers will be more inclined to pay them a lower wage as they have lesser experience than a more seasoned employee meaning the youth would be of less value to the firm.

There have been increases in the minimum wage as of recently in Australia; the current minimum wage is $19.49 per hour or $740.80 per 38-hour week (before tax) (Fairwork 2019).

However, the main issue is that with this increase in minimum wage every year, there have been continuous decreases in youth employment. There is consistently more youth employment with the following evidence being taken into account:

• One-third of young people are either underemployed or unemployed. Having this much of Australian Youth unemployed costs the economy just over three-quarters of a million hours of loss of work every year which in turn causes 16 billion dollars AUD worth of lost GDP annually in the Australian economy [1]
• In the past year, out of all the jobs advertised online only 0.5% were available as entry-level. [2]

The bottom line is that although the idea of raising the minimum wage to reduce unemployment makes theoretical sense, evidence shows that this has the opposite effect; unemployment is actually increased among the unskilled workforce. There are always exceptions however as some youths will benefit from the wage increase but as evidence suggests most will struggle and this will only increase their delay into the entrance of the workforce and in turn reduced income over the rest of their lives.

The Australian minimum wage has been increasing – this means employers will incur higher labor costs. The above evidence claims that there are been increases in employers under-employing the workforce (reducing the hours worked by individual employees) and also reducing their labor. Policies that raise costs of labor for employers can either increase the workforce employment in total or they can increase the total hours worked per worker, but they cannot, however, do both. The minimum wage as evidence shows, has caused employers to reduce employment within their business to sustain their profit margins thus increasing the unemployment rate amongst unskilled workers in the workforce.

Government should look to create policies that improve and increase opportunities for youth/low-income families while still not increasing the cost of employment for employers as this is one of the main reasons why increases in minimum wage cause unemployment amongst the unskilled and low-income workforce. Both objectives can be achieved through:

• Policies that provide welfare payments to low-income/youth workers if their income falls below the rate of what it should be to prevent poverty (due to economic forces such as inflation). So instead of making the employer pay more to the employee, the government bridges that gap by providing welfare payments. This ensures that poverty is prevented while not having an adverse effect on employers.
• Provide more support such as housing and food assistance.
• Improved monitoring of minimum wage laws compliance
• Providing better social safety nets for employees affected by an increase in the minimum wage.

It can be argued that some of these policies will cause their own issues such as people not choosing to work and just living off welfare payments however this will not cause a decrease in jobs and job opportunities.

In conclusion, the recommendation that this report gives is

• not to change the minimum wage for 5 years. Instead as inflation increases and the cost of living increases – calculate how much exactly the minimum wage was to increase.

Instead of increasing the minimum wage:

• bridge the gap between the current minimum wage and the prospected minimum wage using payments.

This will create more jobs for the future generation as well as low-income earners.

References

1. Wright, T.A., Cropanzano, R. and Bonett, D.G., 2007. The moderating role of employee positive well-being on the relation between job satisfaction and job performance. Journal of occupational health psychology, 12(2), p.93.
2. McGuinness, S., Freebairn, J.W. and Mavromaras, K.G., 2008. Characteristics of minimum wage employees. Australian Fair Pay Commission.
3. Card, D. and Krueger, A.B., 2015. Myth and Measurement: The New Economics of the Minimum Wage-Twentieth-Anniversary Edition. Princeton University Press.
4. Dickens, L., 2008. Legal regulation, institutions and industrial relations (No. 89). Warwick Papers in Industrial Relations.
5. Barry, M. and Wilkinson, A., 2011. Reconceptualizing employer associations under evolving employment relations: countervailing power revisited. Work, employment and Society, 25(1), pp.149-162.
6. Gumbrell-McCormick, R. and Hyman, R., 2013. Trade unions in Western Europe: hard times, hard choices. Oxford University Press.
7. Meer, J. and West, J., 2016. Effects of the minimum wage on employment dynamics. Journal of Human Resources, 51(2), pp.500-522.
8. Willard, B., 2012. The new sustainability advantage: seven business case benefits of a triple bottom line. New Society Publishers.
9. Slaper, T.F. and Hall, T.J., 2011. The triple bottom line: What is it and how does it work? Indiana business review, 86(1), pp.4-8.

Indices

1. Davidson H, 2017, ‘Third of Australian youth have no job or are underemployed, report finds, The Guardian, 27 March 2017, accessed via: https://www.theguardian.com/business/2017/mar/27/third-of-australian-youth-have-no-job-or-are-underemployed-report-finds
2. Foundation for Young Australians (FYA), 2018, Report reveals full-time work by 25 no longer a reality for 50% of young Australians, media release, FYA, Melbourne, 14 June 2018, accessed via: https://www.fya.org.au/2018/06/14/media-release-report-reveals-full-time-work-by-25-no-longer-a-reality-for-50-of-young-australians/    

The minimum wage is the least amount of payment an employer is required to pay his or her employee. It is paid after completing a number of tasks the employer gives his or her employee. It can be hourly, daily, weekly, or monthly as per the contract agreement between the two parties. Minimum wage refers to the binding nature of minimum wages, despite the strategy of fixing them. Minimum wages may be set by statute, call of a competent authority, a wage board, a wage council, or by industrial or labor courts or tribunals. Minimum wages also can be set by giving the force of law to provisions of collective agreements.

The purpose of minimum wages is to safeguard employees against unduly low pay. They assist in guaranteeing a simple and evenhanded share of the fruits to all. Minimum wages also can be one part of a policy to beat financial conditions and scale back differences, as well as those between men and girls, by promoting the proper equal remuneration for work of equal price.

Minimum wage systems must not be seen or employed in isolation. They, however, ought to be designed thanks to supplementing and reinforcing alternative social and employment policies. Many forms of measures are meant to tackle financial gain and labor market differences, as well as pre-employment policies and social transfers. Supporting low-paid staff could be a key objective for governments around the world, notably, once the money crisis exacerbated differences in several countries. Whereas minimum wages supply one route out of impoverishment, they aren’t usually sparking politically charged debates and generating headlines.

Recently, Spain’s government aforementioned its remuneration can jump by 22% in 2019, the most important annual increase in more than forty years. French President Emmanuel mentioned his nation’s threshold can increase additionally. Even in Australia, which has one of the very best levels, there’s tension between the Truthful Work Commission that sets the speed. Those in favor say businesses have a responsibility to pay their employees enough to measure on, whereas those against argue that high earnings destroy jobs and hampers entrepreneurship. A report earlier this year by the Institute for Financial Studies warned that an increase in earnings might expose additional jobs to automation.

Academic studies are mixed, line of work into question long-held concepts that minimum pay thresholds result in job cuts and fewer hours offered to staff, whereas conjointly harming little businesses and pushing up costs.

“Thirty years past, most economists expressed confidence in surveys that minimum wages had a transparent negative impact on jobs. that’s not true nowadays,” Arindrajit Dube, a professor of social science at the University of Massachusetts at Amherst aforementioned in an NPR podcast. “The weight of the proof thus far suggests the utilization effects from earnings will increase within the US is pretty small; abundant smaller than the wage increases.”

In reality, several minimum-wage earners in developed nations add the service sector, wherever it is often easier to pass pay will increase on to customers via higher costs. And a few firms don’t mind paying additional as a result of it lowers employee turnover, and alteration outlay on enlisting and coaching.

The hourly wage in Australia is US$14.14, Luxembourg at US$13.14 per hour, New Zealand at US$11.28 per hour, France at US$11.24 per hour, whereas the Netherlands offers US$11.01.The hourly rate within the USA yields the equivalent of US$6.63 of buying power, in step with the report, virtually fourfold that of Russia’s, that is value solely $1.87 in buying power terms.

Purchasing Power Standard (PPS) is a synthetic common reference currency unit utilized in the European Union that eliminates the variations of value levels between countries.

Theoretically, one PPS should buy a constant quantity of products and services in every country. The aggregates expressed in PPS are calculated by dividing the aggregates expressed in current costs and in national currency by the Purchasing Power Parities (PPP).

The top eleven countries with the highest minimum wage are:

• Australia – $14.14
• Luxembourg – $13.14
• New Zealand – $11.28
• France – $11.24
• Netherlands – $11.01
• Ireland – $10.87
• Belgium – $10.78
• Germany – $10.06
• United Kingdom – $9.74
• Canada – $9.06
• Japan – $7.61