Increasing Paid Employment

Increasing Paid Employment - Prof compa corporate social...

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Prof. compa – corporate social responsibility Review sessions: Mon – 6:30 Tues – 4:30 Wed. – 4:30 Exam will be in Ives 305 Tuesday, April 14 th : U.S Trade Commission Readings: Excerpts from growth Commission Stiglitz, Chp. 7 Tonight’s handouts Increasing Paid Employment, Raising Earnings in Self-Employment (brand new lecture) We talked before about the various aspects of income distribution and saw the importance of the labor market for changes in poverty and… Paid employment – work for wages or salaries Other category: Self employment – get paid according to what they sell or produce Wage – can be thought of as a payment per hour People who are paid per hour are called wage employees People who are paid per month or per nine months or per whatever and do not receive extra pay for extra work are called salaried employees In India, the labor force = 470 million people Those who are in the formal sector (called the organized sector in India) = 35 million people Of the 35 million people, 21 are employed by the government. That leaves 14 million who are private, formal sector workers. The country has more than 1 billion people…so only 1% of citizens are wage or salary employees for private companies, registered with the government. Increasing paid employment: 1) Stimulating economic growth – the belief is, when econ. Growth takes place, poverty falls and labor market conditions are likely to improve. And when economic recession is taking place, everything goes into reverse 2) Harnessing the energies of private companies – in order to increase paid employment Is this the wrong place to be looking? If we’re concerned about having more jobs and better jobs…some people might think it’s the opposite of what should be done, because some people think in terms of the economy and labor-management relations as something zero-sum. a. Increasing employment is something companies do that is important to econ. Development; companies also pay taxes, which can contribute to better conditions. For example, minimum wage systems, employment insurance systems, employment training systems. The money for these comes from taxes…unless they run deficits b. Companies pay taxes because it would probably be worse if they did not…with fines and etc. c. Why are companies hiring workers? Companies hire workers to maximize profits. It is in their profit-maximizing interest to do so.
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d. Business environment and investment climate: The world that we live in is getting more globalized all the time. Companies have a choice of where they are going to operate and which workers they are going to hire to produce which kinds of roducts. There is an enormous amount of competition among countries, regions within countries, and sometimes localities within regions in order to attract businesses that will hire workers, pay taxes, and do other things that businesses do. This competition has only grown. It could be that one response to the current econ. Crisis could be protectionism: the US will say that a substantial fraction of the stimulus funds should be used for steel produced in the United States. If that
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