http://www.businessweek.com/articles/2014-04-07/why-education-spending-doesnt-lead-to-economic-growth
In the us today education leads to higher wages. The median weekly earning for someone who has under a high school diploma was about 470 dollars that number rises to a little over a 1000 with a bachelors degree and to 1700 with a professional degree. This shows that schooling is worth it but does all this private investment boost the economy.
In the us public education expenditure takes up about 5% of GDP but in other countries like Kenya and Ghana education takes up nearly 15%. Public education spending is justified that increased education benefits the society. Some experts accountant for a 10% increase in GDP 1915 to 1999 because of increased educational attainment among Americans.
Saturday, April 12, 2014
Pressing Obama’s Agenda, Maryland Lawmakers Raise Minimum Wage
This article reflects on the second state to recognize Obama's push to raise the minimum wage. Maryland announced Monday that they would raise the minimum wage to $10.10 by July 2018. The law gives “... so many Maryland families the raise they deserve". Other legislators, such as Minnesota lawmakers, have agreed to raise the minimum wage to $9.50 by 2016- which may be a safer move, in my opinion. As opposed to the lawmakers in Connecticut who ended the move to raise the minimum wage $10.10 by the year 2017.
Republicans, the minority, believe that Maryland will be at a disadvantage with other states because it will reduce the labor force and force prices to increase. Some believe that this raise would cost over 500,000 jobs nationally; reversing the efforts to reduce unemployment.
Republicans, the minority, believe that Maryland will be at a disadvantage with other states because it will reduce the labor force and force prices to increase. Some believe that this raise would cost over 500,000 jobs nationally; reversing the efforts to reduce unemployment.
Finance Officials Push for Bold Action to Sustain Economic Growth
http://www.nytimes.com/2014/04/13/business/international/finance-officials-push-for-bold-action-to-sustain-economic-growth.html?ref=business&_r=0
At the World Bank and International Monetary Fund annual spring meetings, seeking for "higher growth, better quality growth, more inclusive growth and sustainable growth" is still the supreme topic. Besides the inflation,fiscal balance, interest rates and trade policy, people also focused on Ukraine this year. The fund is preparing a financial rescue package which worth $14 billion to $18 billion of increase in tax and cut in government spending, in case Ukraine problem will escalate, which will leading to a series of serious problem to Europe’s fragile recovery.
Based on the information, the economy is still sluggish with tough job market. The inflation rates are still below target. I.M.F urges Tokyo to "structural reforms to bolster its labor market, by, for instance, bringing women into the work force." This will help the economy growth in Japan a lot.
At the World Bank and International Monetary Fund annual spring meetings, seeking for "higher growth, better quality growth, more inclusive growth and sustainable growth" is still the supreme topic. Besides the inflation,fiscal balance, interest rates and trade policy, people also focused on Ukraine this year. The fund is preparing a financial rescue package which worth $14 billion to $18 billion of increase in tax and cut in government spending, in case Ukraine problem will escalate, which will leading to a series of serious problem to Europe’s fragile recovery.
Based on the information, the economy is still sluggish with tough job market. The inflation rates are still below target. I.M.F urges Tokyo to "structural reforms to bolster its labor market, by, for instance, bringing women into the work force." This will help the economy growth in Japan a lot.
Total Taxes on Wages Are Rising
Due to the financial crisis that has occurred in the past 10 years, many countries have reduced their taxes in order to stimulate economic growth. However, since 2010 concerns about the government debt rising, the government has reversed its effort on reducing taxes in order to alleviate its debt. According to the Organization for Economic Cooperation and Development, 34 countries released their annual taxing wages report. It was to the surprise of many that the average tax rates, which fell from 2007 through 2010, have since bounce back to almost equating 2007 levels. In France for example, the Organization for Economic Cooperation and Development said, “the payroll taxes paid by employers were cut to 28.7% of total labor costs in 2013, from 30.6 percent in 2010. At the same time, income taxes rates and employees payroll taxes were increased.”
http://www.nytimes.com/2014/04/12/business/economy/total-taxes-on-wages-are-rising.html?ref=economy
http://www.nytimes.com/2014/04/12/business/economy/total-taxes-on-wages-are-rising.html?ref=economy
EU takes aim at CEO paychecks
http://money.cnn.com/2014/04/09/news/economy/executive-pay-europe/index.html?iid=SF_E_River
The European Commission released proposals that would require Europe's 10,000 publicly listed companies to hold binding votes, and to say how employee and executive pay compares. Policies at each company will be subject to shareholder approval and must include "a maximum level for executive pay".
Shareholders having a vote on employee and manager salaries in a company will, theoretically, raise morale and productivity and decrease the inequality gap between CEOs and lower-paid employees. I think fair pay, for both employees and managers, is important for the structure of a business however I am reluctant to believe that shareholders know what these numbers should be. Shareholders only real involvement in the company is what they have invested in for their share due to their faith in the company. Being a shareholder is voluntary and is not permanent and so I wonder what the cap is on what sort of shareholders will be making such a vote on such an important aspect of the business structure of a company.
The European Commission released proposals that would require Europe's 10,000 publicly listed companies to hold binding votes, and to say how employee and executive pay compares. Policies at each company will be subject to shareholder approval and must include "a maximum level for executive pay".
Shareholders having a vote on employee and manager salaries in a company will, theoretically, raise morale and productivity and decrease the inequality gap between CEOs and lower-paid employees. I think fair pay, for both employees and managers, is important for the structure of a business however I am reluctant to believe that shareholders know what these numbers should be. Shareholders only real involvement in the company is what they have invested in for their share due to their faith in the company. Being a shareholder is voluntary and is not permanent and so I wonder what the cap is on what sort of shareholders will be making such a vote on such an important aspect of the business structure of a company.
China takes on big risks in its push for shale gas
http://www.nytimes.com/2014/04/12/business/international/china-takes-on-big-risks-in-its-push-for-shale-gas.html?ref=international&_r=0
China is tapping into the shale gas that their natural environment have. This being so the Chinese government policies are not preventing large scale digging which is three times more that United States regulation. There are safety concerns revolving around this issue being that the state owned companies are allowed to dig deeper. The government will be using small villages to build high rises that will house the workers for fracking. In theory, this will increase the aggregate supply in the long run resulting in economic growth which will improve standards of living per capita. However, there are environmental concerns that will greatly affect people in certain areas.
China is tapping into the shale gas that their natural environment have. This being so the Chinese government policies are not preventing large scale digging which is three times more that United States regulation. There are safety concerns revolving around this issue being that the state owned companies are allowed to dig deeper. The government will be using small villages to build high rises that will house the workers for fracking. In theory, this will increase the aggregate supply in the long run resulting in economic growth which will improve standards of living per capita. However, there are environmental concerns that will greatly affect people in certain areas.
Friday, April 11, 2014
JPMorgan Profit Falls 19% on trading Mortage Declines
http://www.bloomberg.com/news/2014-04-11/jpmorgan-profit-falls-19-on-trading-mortgage-declines.html
JPMorgan Chase & Co, the largest bank in the US, experienced a 19% drop in fixed income trading and mortgages during their first quarter of 2014. Net income dropped from 6.53 billion to 5.27 billion. Net income from consumer and commuting banking declined by 25%. Also revenue was 10% less than the previous year. They faced loses in almost every department. As profit decreases, the interest rate rises. In result, JPMorgan has seen a decrease in investment. As one of their top executives, Blythe Masters, leaves the company, it will be interesting to see if their numbers will improve in the next quarter.
JPMorgan Chase & Co, the largest bank in the US, experienced a 19% drop in fixed income trading and mortgages during their first quarter of 2014. Net income dropped from 6.53 billion to 5.27 billion. Net income from consumer and commuting banking declined by 25%. Also revenue was 10% less than the previous year. They faced loses in almost every department. As profit decreases, the interest rate rises. In result, JPMorgan has seen a decrease in investment. As one of their top executives, Blythe Masters, leaves the company, it will be interesting to see if their numbers will improve in the next quarter.
Thursday, April 10, 2014
Sign of Spring on Pay: Real Wage Growth
http://www.nytimes.com/2014/04/05/business/economy/sign-of-spring-for-pay-real-wage-growth-in-some-places.html?ref=economy
There are signs that the real wage is growing, indicating an improvement in the economy. After inflation, there was .8 percent growth last year, 1 percent growth this year, and a predicted 1.1 percent growth in 2015 according to Mark Zandi of Moody's. This is very encouraging. In some industries the rate of wage growth has been very dramatic such as home construction, where the wage has increased 20-25 percent. Hopefully this economic growth can keep up.
There are signs that the real wage is growing, indicating an improvement in the economy. After inflation, there was .8 percent growth last year, 1 percent growth this year, and a predicted 1.1 percent growth in 2015 according to Mark Zandi of Moody's. This is very encouraging. In some industries the rate of wage growth has been very dramatic such as home construction, where the wage has increased 20-25 percent. Hopefully this economic growth can keep up.
Nigeria's GDP Significantly Increases
The statistician general of Nigeria, Yemi Kale, claims the Nigeria GDP in 2013 rose from 42.4 trillion naire to 80.4 trillion naire ($510 billion), which is approximately an 89% increase. A lot of economists believe the first number may have been fiddled, but that the 2nd number is correct.
Implications of this mean that Nigeria has climbed to the highest sub-saharan economy, moving past South Africa who had approximately $350 million GDP in 2013. Nigerian statisticians improved their gathering and calculations of GDP. For example, the old GDP in Nigeria was solely based on output. Now, this country has added in spending and income as well, increase the GDP exponentially.
This number may seem misleading, to show as if the economy grew, when in reality, they just added in other components that GDP contains. The economy probably didn't grow too much, but due to the extreme adjustment of GDP, it looks as if it had.
Nigeria also increased their sample size of firms from 85,000 to approximately 850,000, including a lot of small firms. The numbers actually show that Nigeria's economy has grown manufacturing from less than 2% to 7% of GDP. Film-making never showed up as a category of Nigeria's GDP, but it is now at 1.4%.
Although this GDP seems impressive, Nigerians aren't richer than they were before at all. The majority of the 170 million residents in the country survive on less than $1.25 a day. Most of Nigeria is just an oil enclave, being 14% of GDP. However, the service industry is booming.
http://www.economist.com/news/finance-and-economics/21600734-revised-figures-show-nigeria-africas-largest-economy-step-change
Implications of this mean that Nigeria has climbed to the highest sub-saharan economy, moving past South Africa who had approximately $350 million GDP in 2013. Nigerian statisticians improved their gathering and calculations of GDP. For example, the old GDP in Nigeria was solely based on output. Now, this country has added in spending and income as well, increase the GDP exponentially.
This number may seem misleading, to show as if the economy grew, when in reality, they just added in other components that GDP contains. The economy probably didn't grow too much, but due to the extreme adjustment of GDP, it looks as if it had.
Nigeria also increased their sample size of firms from 85,000 to approximately 850,000, including a lot of small firms. The numbers actually show that Nigeria's economy has grown manufacturing from less than 2% to 7% of GDP. Film-making never showed up as a category of Nigeria's GDP, but it is now at 1.4%.
Although this GDP seems impressive, Nigerians aren't richer than they were before at all. The majority of the 170 million residents in the country survive on less than $1.25 a day. Most of Nigeria is just an oil enclave, being 14% of GDP. However, the service industry is booming.
http://www.economist.com/news/finance-and-economics/21600734-revised-figures-show-nigeria-africas-largest-economy-step-change
Unemployment Increment
http://www.reuters.com/article/2014/04/10/us-usa-economy-idUSBREA390UQ20140410
The unemployment level measured in April 4th, 2014, is as high as May 2007, which was the lowest amount in the past seven years. State unemployment benefits declined 32000 to a seasonally adjusted 300000. Assumption of the reasons are such as severe weather and stocks that were from the second half of 2013 were accumulated but not sold as much, thus making businesses order less from manufacturers. Moreover the growth slowed down as well, since long term unemployment benefits got expired. The number of people receiving unemployment benefits reduced, starting from 2008.
Job growth was an average of 195000 per month but unemployment was around 6.7 percent, nearly a five-year low rate. However inflation pressures seem to have no effect on unemployment. The price increase was barely 1 percent.
The unemployment level measured in April 4th, 2014, is as high as May 2007, which was the lowest amount in the past seven years. State unemployment benefits declined 32000 to a seasonally adjusted 300000. Assumption of the reasons are such as severe weather and stocks that were from the second half of 2013 were accumulated but not sold as much, thus making businesses order less from manufacturers. Moreover the growth slowed down as well, since long term unemployment benefits got expired. The number of people receiving unemployment benefits reduced, starting from 2008.
Job growth was an average of 195000 per month but unemployment was around 6.7 percent, nearly a five-year low rate. However inflation pressures seem to have no effect on unemployment. The price increase was barely 1 percent.
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