Reaction: Low-Paying Jobs

I think that the legal workers refuse to do jobs such as landscaping is because it pays less. Since the legal workers might as well find a better job than to do a low-paying labor intensive job, the illegal workers take up these jobs. But if the illegal workers are stopped from entering the job market, there will be no one to do these jobs. That means the demand for the workers will rise and subsequently the wage for the job will rise too. This will give the legal workers an incentive to take up the labor intensive job that was earlier taken up by the illegal immigrants.

Reaction: Increasing Payrolls

I think a lot of increase in payrolls has to do with education. The college attendance level has been increasing steadily over the years. And that means more and more people have qualifications and are able to perform their duties better. This means better efficiency for the firm, which means higher profits for the firm. And a part of this profit eventually goes back to the workers as a pay rise and therefore the increase in payrolls.
I agree that this is good for the economy since the workers have higher purchasing power which will stimulate the economy, and as long as the increase in purchasing power does not cause inflation.

Reaction: Overpaid and Underpaid jobs

It is surprising that a low profile job like a wedding photographer could be an overpaid jobs. Jobs such as mutual fund managers and pilot was very much expected to be in the list. I do wonder why pop stars category did not make it to the list.
I was looking through the list of the ten most underpaid jobs and surprisingly Medical Residents was on the list. We generally tend to associate medical profession as high earning profession mainly due to the number of years education one had to put in.
Once the medical redisent go on to become a doctor their wage goes form $40,000 to a six-digit figure.

Reaction: Savings

I agree that with rising cost of medicines and dwindling social security it is necessary educate people about the concept of savings so that they may be better planned for the future. Especially since the saving rate in the US has been on the downside. In 1984 the saving rate was 10.8, in 2001 it was 1.8 and only 1.4 in 2003.
Another blog posted by Greg talks about how people nowdays retire at an younger age. This means that people are saving less while working and retiring much earlier. I definitely think that there has to be some sort of eductaion on savings to prevent any sort of bankruptcy later in life.

Reaction: Youth Unemployment

The youth employment law that allowed employers to fire workers without any reason has been scrapped by President Jacques Chirac. Millions of students and union workers had taken off to the streets against the law.
Now Chirac says that government will introduce other measures to tackle the double digit inflation in France. The measures proposed in the parliament includes offering state support for employers hiring young people who face the most difficulties in gaining access to the labor market. This I think will be more effective to combat the job rigidity, but might have some backlash where the employers might be too dependent on the state support. The students and unions have shown appreciation to these new measures.

Debate over jobs Americans just won't do

Many small businesses rely on migrant labor. These jobs are generally low end, labor intensive, like landscaping. These are often jobs that American's do not want to do. These companies are afraid that if congress continues to crack down on immigration, they will lose their employment base. Employers will now have to spend more on advertising to find workers. A reason for the scarce amount of workers is that the labor force is becoming older and better educated, and these jobs usually appeal younger workers with no college education.
The labor field of blue collar jobs such as farming, cleaning, construction, and food preperation has a terrible time immigrant workers. It is estimated that over 70% of the labor force in this industry does not have proper immigration status. There are about 12 million illegal immigrants working the in the US. Employers take advantage of these illegal workers, and pay them less money, which makes it difficult for American's to compete with the workers who get paid less yet do the same amount of work.
When employers pay below market wages, it slices into the American employment rates, and it is not fair to do to the rest of America. To combat this, congress removed the guest/worker program that allowed illegal immigrants to acheive legal status by working. The US is in the process of creating a 700 mile long fence along the US/Mexican border.

Reaction #5-Dean Sbriscia

Reaction to Youth Unemployment in France:

Youth unemployment in France is roughly double that of the youth in the United States. I believe this is due to poor financial practices in Europe. Individuals are too worried about job stability in the market and not worried enough about how the economy is performing. Individuals who know their job is safe after a short time period will do less and less because they know that they will not be fired. There is little initiative to work harder and provide at one’s best because there is little movement in the market. This also leads to less promotions and lower salaries since employees are at the same jobs for years at a time. I believe they went in the right direction in initializing a law to increase employment, but they need to create more laws that directly affect the economy. France needs to be more concerned with financial practices and rates rather than labor movement because if the proper financial practices were set in place, the labor movement would take care of itself. The country needs to take a more direct approach at improving the economy and not relay on the laissez-faire approach they now practice.

Reaction #4-Dean Sbriscia

Reaction to Increating U.S. Payrolle:

The job market in the United States has continued to grow immensely for the past few years. Jobs have been increasing and inflation and unemployment have remained relatively low. Gas prices have risen substantially in the past twelve months, however the stock market is surging along and is at an all time high for the past three years. The article states that jobs are now increasing their hourly rates and individuals are happy with the pay increase, however I believe it really depends on what job sector we are analyzing. The pay rate between the financial industry and the pharmaceutical industry is largely different from that of the manufacturing or food industry. Overall wage rates may increase and job opportunities may increase, but it really depends on what job occupation an individual is geared towards. If the auto industry gets out of its current slump, I believe the U.S. economy will be as strong as ever. There is always going to be weak components in an economy, and these aspects have to be dealt with either through lowering or raising interest rates to stimulate the economy or using a more laissez-faire approach that lets the problem fix itself through time. I hope the job rate growth continues through the year 2007 where I will be looking for a job in the financial sector, which tends to be more limited in job opportunities than certain other sectors. I do agree that with the proper inflationary policies and interest rate changes, the Fed will be able to let the economy continue to grow at a pace that allows for jobs to become created.

Reaction #3-Dean Sbriscia

Reaction to Work or Leisure after Retirement:

Should an individual work or enjoy leisure activity after retirement? This is a question many individuals have to ask themselves that are between the ages of 45 and 60. I agree that most individuals who were in steady jobs for most of their career are financially stable through a 401K plan and also other mutual fund or stock investments, however many individuals who did not save reasonable amounts of income are left with the choice of eating bread and water for the rest of their life, or obtaining another job that provides enough income to live comfortably. I believe too much conspicuous consumption is going on today and individuals are not saving what should be put into their bank account or fund. Savings and investment is a decision of choice, but I think you can never have too much money put away for retirement. Sure, most of these individuals are taking jobs away from graduating college seniors in the job hunt, but many of these individuals are working in lower end jobs that require much less headaches throughout the day. An example would be jobs that produce a sufficient income to live comfortably, but do not require the level of stress that college students are about jump into. Greg also pointed out that these individuals are stimulating the economy because they are out in the workforce generating an income. I agree with this statement because it shows that people are willing to work longer and harder to have the necessary money they need to live. I think most of these individuals who are entering the workforce after retirement are not taking high-end jobs. The debate would arise whether individuals are staying in the same job and prolonging retirement and this could be argued, however I feel that there is not a job shortage that prevents the younger age group from obtaining a job, yet an overall stimulation in the economy is occurring due to the increase in employment.

Reaction #2-Dean Sbriscia

Reaction to Bringing the Jobs Home:

In response to the “Bringing the Jobs Home” article posted by Steve, I find many of the statements to be correct and in accordance with my views. I am somewhat knowledgeable in the subject because my father is a software engineer who has lost many employees to have their jobs replaced by individuals in India. I agree with the fact they may be working for less or substantially less at times, but working overseas does not provide job unity or teamwork at any level. When a problem arises, they are magnified due to the distance between the individuals and often lead to increased costs that require these problems to become fixed. Projects take longer when you are dealing with people thousands and thousands of miles away and with the language barrier a somewhat disadvantage for certain individuals, this is just another obstacle that must be overcome in the workplace. Losing jobs overseas might be inevitable for certain companies, but these job losses have to be minimized. I believe it is understandable for a company to have some jobs overseas, but a large majority of these jobs should remain in the United States where employees can work together in an environment where they are working hand in hand. The article does a terrific job in showing that cheap labor in the short run may look great, but increasing costs and miscommunication actually costs more in the long run.

Reaction #1-Dean Sbriscia

Reaction to Minimum Wage Debate:


The minimum wage debate is very interesting because it makes you question whether or not raising the minimum wage rate would produce an efficient outcome in the economy. As a New Jersey resident who would see a minimum wage increase in my home state, I believe it would stimulate the economy because people would be more tempted to take a job that is more lower level verses sitting at home and saying it is not worth the time for the money. $5.15 an hour is an extremely small number and $7.15 is more rewarding for an hour of labor. Sachhyam did a good job at showing the number might be increasing, but the purchasing power is actually decreasing and many individuals fail to recognize this statistic in analyzing the wage rate. The unemployment rate may rise initially, but like he said, it will level out over time and in the long run it will stimulate more job opportunities for individuals. Increasing the wage rate provides more initiative for people who might have before looked at jobs such as fast food restaurants as cheap labor.

The Minimum-wage debate

This article from MSNBC (msnbc.msn.com/id/11060191)says that the gap between the rich and the poor has increased in the US. The minimum wage is one of the various reasons that the rich-poor disparity has increased. The current minimum wage ($5.15 per hour) is much lower than what it was during the 50's and 60s’(purchasing power was highest in 1968, where it was 8.8 2005 dollars per hour). Just for comparison the Australia’s minimum-wage is almost 9 USD per hour.
There has been a lot of debate about whether the minimum wage should be increased or not. It is established that in a monopsonist firm workers will be better off. But, the economist are split over whether an increase in minimum-wage has negative effects (such as increase in unemployment, slow economic growth due to higher labor cost) or positive effects (such as economic growth due to rise in purchasing power, better standard of living) in general and in monopolists or perfectly competitive firms.
In a survey in the 2005 issue of the Journal of Economic Perspectives two-thirds of academic economists at top universities agreed with the statement, "a minimum wage increases unemployment among young and unskilled." While a lot of people base their opinion on an empirical research by David Card and Alan Krueger, which said that the increase in minimum wage has minimal effect on the market.
Bill Clinton had passed the law allowing states to set the minimum wage higher than that of the federal. As of now, 18 states have their wage set above the federal’s. Even some counties and cities have increased the minimum wage higher than that of its state. The highest minimum wage level is in Santa Fe with 9.5 per hour, even though the minimum wage in New Mexico is only $5.15 per hour.
The research is still going on whether it is good or bad for economy. With New Jersey planning to increase the minimum wage to $7.15 in October 2006, it will be interesting to see what will follow.
I think that in long/medium run, the minimum wage increment will benefit people, since the unemployment rate will eventually be equal to the natural rate. The rise in the unemployment rate may be inevitable right after the wage is increased but eventually it will smooth out. Also, I think the rise in the wage will stimulate economy since the purchasing power of the labor will increase. Besides, the firm will be focus more on being a capital intensive rather than a labor intensive firm i.e. more money will be spent in capital and training.

Workers have retirement ‘overconfidence’

The following article from MSNBC talks about the issue that people are not saving enough for retirement. They say that 68 percent of workers feel they are confident with how much they have saved which is up from 65percent last year. More than half of all workers say they have saved less than $25,000. The study feels that people are overconfident with how much they have saved and this will end up leading to trouble later on. Companies today are cutting back on pension plans or eliminating them totally so workers will need to rely solely on their savings and social security. The article feels that if workers entering at today at 25 years old would start saving 15 percent of their income would be able to retire at the age of 60 and live comfortably.

I feel this is a great issue with today’s economy and the cut back on social security. Social Security may run out by the time I am able to claim for it so I will need to look for other sources of income or have saved enough to stay stable. The rising costs of health care are also another issue that is causing controversy and that people need to account for the steep rise in that. Health care prices have risen much faster than inflation. I feel that people should have to be educated in this subject before they enter the work force. This should be a requirement for college students over them having to take other electives that do not pertain to life ahead, but that just culture them.

Ten most overpaid jobs in the U.S.

Ten most overpaid jobs in the U.S.

There are certain jobs in the United States that produce large paychecks. Chris Plummer, of CBS MarketWatch, lists a few occupations where people are heavily compensated for their job. He insists they do not deserve the money they are earning and that while they are earning hundreds, perhaps thousands of dollars per hour, there is that waitress out there who is earning a few dollars an hour for hard work and labor.
Most individuals know that athletes and movie stars can be characterized as overpaid, however fail to recognize other occupations such as wedding photographers, airline pilots, longshoremen, skycaps, motivational speakers, orthodontists, CEO’s of bad companies, washed up athletes, and mutual fund managers. While many of these jobs differ in nature and salary, one common characteristic is that these people are important. When something is important to an individual, they are willing to pay the top dollar to see the job get completed. The pilot, orthodontist, money manager, etc have a skill that not many individuals have in society. It is really a matter of supply and demand, and the value of trust. How much does your trust cost? That is a great question that is perhaps left unanswered, yet if put in nominal terms can be stated as $200,000 a year to fly an airplane, $350,000 to fix your teeth, or $10 million a year to watch an athlete play basketball on television while laying in bed at night. The individual values their entertainment, their teeth, and their life and they are willing to pay the top dollar for these activities and tasks. Why do we only pay the person at McDonald’s $5 an hour, because anyone can perform this task and we have other places we can go to eat. The limited availability of certain professions in medicine, sports, and money management allows us to pay the top dollar and be satisfied.

Bringing the Jobs Homes

Many large US software companies have been releasing a large portion of their jobs off shore to countries like India, and the trend has become larger of the past few years. It is estimated that almost a million jobs, which has tripled in size since 2003. The reasons why companies do this, is because it is often cheaper to hire labor overseas.
On the contrary, Michael Fields, former president of Oracle USA and currently the owner of a software company named Kana, has brought jobs back to the US with a technique called "backshoring." Although Fields' company brings in over 60 million dollars a year he claims that software companies of his size should not send jobs to India because it does not make economic sense. Smaller software companies are not able to open their own large facilities, and must give their work to outside contractors. The problem with this is that there is no loyalty with the contractors and the company at home. Now the company at home has little control of what actually happens overseas. Many of the larger firms are finding this out, and many of their techniques are being released because there is no form of privacy.
Another reason that Fields would rather have the jobs stay at home, is that with the software industry, it is a team effort to reach the final goal, and he feels that it is best when his entire team can work together under one roof. The team builds relationships and Fields finds much less mistakes and better performance. When sending jobs off shore, Fields has found there to be much higher costs and longer delivery times. Also, when keeping the team together, Fields has found there to be higher productivity, while only needing about a quarter of the engineers as needed before. With this recent success of backshoring, Fields predicts that this may become a new method for software companies to explore to help raise productivity and lower costs throughout Silicon Valley.

College costs going nowhere but up

The cost of financing an individual’s education has continually increased each and every year for the past decade. This increase is seen in both public and private colleges and shows no sign of slowing down. The average college shows an annual increase in tuition of approximately six percent every year. The average private college is $29,026, while the average public school will cost a student $12,127.
Most students do not pay this full price in order to attend. There are deductions in a student’s tuition, such as grants, scholarships, income based financial aid, and loans. The average college increase is growing faster than the average increase in inflation and students are graduating with more debt and loans to pay off than ever before. Due to ongoing complaints pertaining to large tuition increases, some colleges have offered a constant rate of tuition for four years of study. Researchers say that even this rate is inflated to compensate for the annual increase, and if a student decides to transfer after just one year or two, they would have overpaid for the education that they received in that short period of time.
College costs are increasing each and every year and there is no reason or economic data to show that this will change anytime in the near future. Individual’s who earn a bachelors degree make an average of $49,900, compared to the average high school graduate who compiles an average of $30,800 a year. Over a 40 year period the student with a bachelor’s degree will make 73 percent more. The results are very different and easy to see, however one must take into consideration the amount an individual has to pay back in student loans, and how much they receive in grants and financial aid. The college student is in substantial debt in the beginning, yet in the long run they should earn much more than they would have earned without going to college. If they can earn close to the same salary or more without a college degree, then the college education is not reasonable or to their benefit.