There a few things wrong with the phrase “Money for jobs and education, not for banks and corporations!” one is that if you take money away from corporations and put it into education, the extra education that students will receive will not matter because the corporations will have to downgrade to cut costs due to having less money. They will not hire as many workers since they will not have as much money to pay them. If this happens, it doesn’t matter how good your education is, you still might not get a job just because there aren’t enough jobs available since every corporation will have to give some of its money away to schools and people rather than spending it to expand their business. This is an opportunity cost. This is similar to having a college degree in Africa. It doesn’t matter because you can’t get a job that the degree is necessary in since there aren’t enough businesses to use that degree at. This makes the increased education pointless and will only worsen the unemployment rate.
The things wrong with the phrase “These impediments to education are part of a broken economic system in which the wealthiest one percent profit off the labor of the 99 percent.”
Is that we are not a zero sum economy. There is not a winner and loser in trade. The 1% gain from the 99% by having them carry out tasks of their business to make it as efficient as possible. The 99% profit off of the 1% by being paid by the 1%. If the 99% worked and were not paid then this statement will be right, but since both parties help each other, this statement is incorrect.
The students are upset that the rising income inequality is bad. Realistically the rising inequality is good. By these corporations becoming richer, they can offer more services, lower prices, as well as higher more people to work for them. By increasing profit, it means that they are selling more goods and to get more goods, the corporation has to hire more people to fetch them. If you analyze the graphs of this increasing gap. Both the 99% and the 1% are increasing their income. Once again the 1% isn’t gaining at the 99%’s loss. The increased gap is what you want to see in a market economy. It shows an increase in productivity and innovation for companies. They are producing products more efficiently that people want.
With the students saying “However, mounting evidence suggests that “the trade-off between efficiency and equality may not exist” and that excessive inequality leads to negative consequences in the economy over the long run in terms of economic efficiency.” This isn’t as bad as it seems because every decision that is made has unintended consequences that come with it. There will never be a policy that does 100% good for everyone on earth.
With the statement of “Professor Mankiw also presents a biased view on minimum wage. In his textbook, he contends that a minimum wage causes a surplus of labor supply and thereby leads to unemployment. While this statement might seem sensible based on simplified graphs, it is not necessarily true in real life. For instance, a comparative study of the fast-food industry in New Jersey and Pennsylvania found that increasing the minimum wage did not decrease employment levels;” This is just this one industry. If you look at all industries you will see that total employment decreases with an increased minimum wage. A possible reason that unemployment didn’t increase in the fast food industry is because a big part of why the minimum wage is bad is because there are workers who don’t produce the amount of goods in an hour to equal their pay so the company losses money on this person. Fast food is very popular in the US, and so the amount of food that workers at these places worked at had to have sold and made more than their wage in order for these companies to keep them. You also have to factor in that there is always a certain amount of workers that a company has to keep at a minimum to work efficiently. If the minimum wage decreased, maybe these fast foods places would have hired more workers and employment would have increased. Every company tries to be as efficient as possible and if they can cut costs by replacing workers with machines that are more productive and overall cheaper than they will. Though these fast food places haven’t found a way to increase productivity through machinery over the last year in the fast food industry, that isn’t to say that they aren’t now incentivised to create this machinery due to having to pay more for workers. This machine may replace workers next year causing unemployment to rise. By saying that it didn’t increase unemployment in the fast food industries is only talking about the small time frame since the minimum wage has risen. You have to look at the future statistics as well to fully see if the increase in minimum has an affect on employment in fast food industries.
The affects of the increased minimum wage may have gone somewhere else also. Maybe instead of cutting employees, these fast food restaurants cut their costs some where else. Maybe they use cheaper soap in the bathrooms or don’t put as many fries in each order. Or maybe the price of everything on the menu rises 10 cents. The increased wage will have an affect somewhere in the business since the business will have less money to spend on goods and services.
With the sentence, “By neglecting to mention the real-world effects of free trade policies, Professor Mankiw encourages students to view economics in terms of oversimplified models rather than in terms of actual people and issues.” The problem with this is an information issue. No one can know how to benefit every single person with their policies. By people acting in their own self interest it will better them and the economy off. Corporation owners make decisions based on what will help their company over a extended period of time. They aren’t going to do something unjust that will help their company over a one year period if it ends up hurting them for the next 20 years. Every person is different and it is impossible to accommodate every one of them which is why you can’t view economics solely in terms of actual people and issues because though something you do might help some people, it may hurt others worse than the satisfaction that some gained.
With the sentence of “Students should be encouraged to learn about and debate important issues, develop a vision of a better world, and then, as Mahatma Gandhi said, “be the change they seek.” Thus, we hope that the Ec 10 walkout, a political action with its roots in intellectual concerns, will help advance the causes of economic justice and open discussion.” Ec 10 is not a debate class. If a student wants to debate a professor on his teachings, he can do so privately. Just because a few students are against the teacher’s teachings doesn’t mean that every student is. They also had the choice to take the class when they signed up for it. If they didn’t like or agree with it, than they could have dropped it. The professor should not waist valuable class time debating his students when other students are there to learn. This goes with the silver rule. The professor would be screwing other students out of valuable information that they want to hear if he has an open debate in class about economics that many times will go no where.
Here is the link to the article
http://www.thecrimson.com/article/2011/11/8/pay-mankiw-walk-out/
This is fantastic Sam! I owe you a response and more and one is forthcoming.
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