Labor Is A Driving Force - 921 Words

Lauren Lawson Dr. Scott Testa EC201.3 December 1, 2014 Unemployment in America Labor is a driving force in every economy. Wages paid for labor helps increase consumer spending and is essential for companies. Unemployed workers represent wasted potential inside an economy. Unemployment arises when factors of production that are willing and able to produce goods and services are not actively engaged in production. Unemployment means that the economy isn’t meeting its goal of full employment. There are four basic causes for unemployment in a working economy. These reasons are: minimum wage lages, labor unions, efficiency wages, and job search. The labor market is just like any other market. If there are a lot of unemployed workers who want jobs, the price of labor will drop until all that force is employed. In order to keep a certain standard of living, the government implements a minimum wage. However, raising the minimum wage can increase unemployment. The second reason for unemployment is based on efficiency wages. Firms benefit by paying their workers above the minimum wage so they can produce happier, healthier, and more productive workers. In turn, more people want to work for that position than there are actually seats for that position. Therefore, efficiency wages can increase the wages for workers who are employed but increase overall unemployment. Job search isn’t similar to the other causes of unemployment. When a person decides that they want to work, t hen heShow MoreRelatedAn Analysis of Uk’s Business Environment1018 Words   |  5 PagesAn Analysis of UK’s Business Environment 1. Introduction United Kingdom (UK) stands at No. 12 in ranking out of 134 countries from 2008 to 2011, and has a very good ranking on Infrastructure, Labor market efficiency, Technological readiness and Market size according to GCR (2011). 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This economic growthRead MoreSmith s Vision : Division Of Labor1330 Words   |  6 PagesSmith’s Vision: Division of Labor in the Workplace Versus Society In Wealth of Nations, Smith posits that that division of labor, both in society and the workplace, is the driving force behind increased production (Smith, 1), and that individual self-interest motivates people to specialize (15), both within a society and in the workplace. Through the examples of a hypothetical pre-modern arrow-maker (16) and pin-makers from his own time (7), Smith presents the ever-increasing specialization withinRead MoreEssay on Chiquita Brands - Porters Five Forces803 Words   |  4 Pagesï » ¿Case Analysis Outline Case Name: Chiquita Brands International SECTION 2 Industry Analysis: Tools for assessing opportunities and threats in the industry (task) environment. Porter’s 5 Forces Driving Industry Competition: 1. Threat of New Entrants It has proved to be difficult for new companies to enter the banana industry. 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Similarly, unemployed workers represent wasted potential production in the economy. Therefore, individuals are directly affected by unemployment and it is a significant economic concern.† (Simpson, 2011) Because most people rely on income generated by â€Å"working†