losteenager15
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#1
Report Thread starter 8 months ago
#1
"evaluate how the government can increase employment"
can someone give me a solid evaluation/conclusion paragraph please
things i talked about was
- increasing immigration/ issues with indigenous people
-decreasing mimmum wage/ incentive flaws
-supply side policiy (imporving education)/ opprtunity costs
-LRAS
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aistudent
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#2
Report 8 months ago
#2
I might be able to
What year are you in
And when is it due?
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BenRyan99
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#3
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#3
Surely you can also mention the obvious thing which is demand side policy. Tax breaks for firms, infrastructure investment, etc all create jobs. This creates greater consumption in the economy which in turn creates even more jobs (multiplier effect).
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paula10797
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#4
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#4
Maybe you could look at the short term and long term benefits/drawbacks of your points. And then have a look at assumptions i.e. what does it depend on.
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BenRyan99
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#5
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#5
(Original post by paula10797)
Maybe you could look at the short term and long term benefits/drawbacks of your points. And then have a look at assumptions i.e. what does it depend on.
Yeah this is a good point.

So increasing immigration can do things like depress wages for existing immigrants and would have to met with increases to public services and housing stocks to be a viable policy.

Decreasing minimum wage - I generally wouldn't mention this point, it's a pretty bad one. Firstly no government would ever decrease the minimum wage unless you're simply talking about in real terms so keeping it constant despite inflation. Secondly, there is basically no link between minimum wage changes and unemployment in the academic literature, only in basic a-level textbooks. Most markets aren't perfectly competitive so the theory doesn't really hold IRL. Normally minimum wage rises don't impact employment at all, very occasionally it can harm specific small groups like causing a decrease in hours for middle aged part-time women or teenagers but generally there's no link. You can read Dube (2019) if interested which summarises it.

I'd definitely mention the opportunity costs of supply side policies (could be spent elsewhere). Also if the spending on it is generated by distortionary taxes then even if it can fix a positive externality problem like healthcare/education, it can cause welfare losses in other markets.
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losteenager15
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#6
Report Thread starter 8 months ago
#6
(Original post by aistudent)
I might be able to
What year are you in
And when is it due?
in year 12 and its due wednesday
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losteenager15
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#7
Report Thread starter 8 months ago
#7
(Original post by BenRyan99)
Surely you can also mention the obvious thing which is demand side policy. Tax breaks for firms, infrastructure investment, etc all create jobs. This creates greater consumption in the economy which in turn creates even more jobs (multiplier effect).
whats a flaw of this method
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losteenager15
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#8
Report Thread starter 8 months ago
#8
(Original post by BenRyan99)
Yeah this is a good point.

So increasing immigration can do things like depress wages for existing immigrants and would have to met with increases to public services and housing stocks to be a viable policy.

Decreasing minimum wage - I generally wouldn't mention this point, it's a pretty bad one. Firstly no government would ever decrease the minimum wage unless you're simply talking about in real terms so keeping it constant despite inflation. Secondly, there is basically no link between minimum wage changes and unemployment in the academic literature, only in basic a-level textbooks. Most markets aren't perfectly competitive so the theory doesn't really hold IRL. Normally minimum wage rises don't impact employment at all, very occasionally it can harm specific small groups like causing a decrease in hours for middle aged part-time women or teenagers but generally there's no link. You can read Dube (2019) if interested which summarises it.

I'd definitely mention the opportunity costs of supply side policies (could be spent elsewhere). Also if the spending on it is generated by distortionary taxes then even if it can fix a positive externality problem like healthcare/education, it can cause welfare losses in other markets.
ahh decreasing minimum wage was my strongest point damit lmao
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BenRyan99
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#9
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#9
(Original post by losteenager15)
whats a flaw of this method
Flaw in this point is that is while it can create economic growth and employment, it's likely to be inflationary. If it's too inflationary you'll get the central bank raising interest rates which will increase the size of the debt you'll be building up. There's also the opportunity cost that spending on infrastructure or tax breaks could be spend elsewhere and raising the money through taxation is likely to be distortionary.

One thing that you could mention is to reduce the strictness of employment regulation/legislation/red-tape, could make it easier and less costly for firms to employ people ----> increases employment if employers don't choose to just use the decrease in costs to increase profits. This could be open to abuse tho from employers
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BenRyan99
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#10
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#10
(Original post by losteenager15)
ahh decreasing minimum wage was my strongest point damit lmao
Yeah sorry about that, the link between minimum wages and employment is very very tenuous at best IRL, also have you ever actually heard of a country decreasing the minimum wage? There would be a public outcry.

One thing you could look at tho is that if the market is a monopsony, then increasing the minimum wage will actually increase employment. Not sure if you've covered this yet
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stephsmhb
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#11
Report 8 months ago
#11
(Original post by losteenager15)
ahh decreasing minimum wage was my strongest point damit lmao
Yes in reality minimum wage doesn't really impact employment and it isn't realistic in the real world so I wouldn't use it. However, it is in the alevel spec and i've seen A* essays with this point in it so if you have analysed it well and think it's your best point then maybe keep it in. It's up to you.
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BenRyan99
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#12
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#12
Yeah like you could mention that theoretically it's possible to increase employment by decreasing the minimum wage but then say state it's actual feasibility
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losteenager15
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#13
Report Thread starter 8 months ago
#13
(Original post by BenRyan99)
Yeah like you could mention that theoretically it's possible to increase employment by decreasing the minimum wage but then say state it's actual feasibility
what does that mean
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BenRyan99
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#14
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#14
Like say that decreasing the minimum wage reduces the price floor in the market. Show in a diagram that a lower minimum wage results in an increase in the quantity of labour demanded and a decrease in the quantity of labour supplied, then highlight how the top triangle (unemployment) is now smaller, etc.

But then put a sentence or two evaluating it by saying theoretically this could increase employment as I've shown on the diagram, however in reality governments face political constraints that may make reducing the minimum wage difficult in practice. For example, the UK government has never reduced the minimum wage in nominal terms despite the potential increase in employment that could result from this action. It's also not very equitable is it and is very regressive which is why you never see it in practice.
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