Economics 12

Chapter 8

Thu, 22 May 2008 06:23:59 GMT

Chapter 8

http://www.cic.gc.ca/English/department/media/releases/2008/2008-03-14.asp

Summary:

According to the data released by Citizenship and Immigration Canada, last year, we accepted the highest number of immigrants in history. Canada admitted about 230,000 permanent residents, temporary workers and foreign students. According to Census, Canada’s population grew by 1.6 million, with 1.1 million being immigrants. There’s a 12% increase in temporary foreign workers and a 4.6% increase in foreign students. The Minister of Citizenship and Immigration, Diane Finley said that the high number of immigration into Canada is due to our growing economic needs, since there’s a shortage in labour everywhere in Canada.

Relation to Chapter 8:

In chapter 8, we learned that immigration is very important to our economy. Since Canada has a low population, we need a lot of immigrants to fill the gaps. Many workers with needed skills are allowed into Canada to help match the supply of labour with demand. Because of our small population, immigration becomes very important to support Canada’s growth. Immigrants are also needed for underpopulated areas and places that are short of needed human resources to reduce geographic dimension of structural unemployment. We also learned in chapter 8 that for someone to migrate to Canada, they must score at least 75 points based on education, work experience, arranged employment, age, knowledge of English and French, and Adaptability.

Personal Reflection:

I also feel that immigration is very important to Canada’s growing economy. Even though immigrants are admitted because of economic needs, a lot of times, they’re admitted to help reunite the family, and most of these immigrants are old and unable to participate in the work force. Also, a lot of times, these new immigrants can’t adapt to the working conditions in Canada, especially if they don’t speak English or French. Many employers refuse to hire immigrants who can’t speak English or French even though they are fully capable for the job and many of these immigrants are forced to look for other jobs that may not be in their style.

Chapter 7

Mon, 05 May 2008 14:56:41 GMT

Article: http://www.bankofcanada.ca/en/press/2008/pr08-8.html

Summary:

Recently, a bunch of $100 counterfeit bank notes have been released to the public in the greater Toronto area. The Bank of Canada and the police force are reminding people to always check their money before taking them in. According to the article, if you actually check the counterfeit bank notes, you can easily tell that they’re fakes. Statistics say that counterfeiting rates have decreased by over 75% since 2004, but we should always check our money or else it would increase again.

Relation to Chapter 7:

In chapter 7, we talked about why bank notes are created and the characteristics of bank notes that make them a good currency. One of them is of course, that they’re not easily copied. Counterfeit may look like normal money on the outside, but once you check the money, you can easily tell that they’re fakes. The Bank of Canada is always trying to develop new methods to add security to the bank notes and to make it last longer. Paper currency is actually very effective. Its face value is greater than its actual value; it’s recognizable and readily accepted; it’s durable, portable, and divisible. If the Bank of Canada can think of ways to make it harder to copy, then paper money would fully meet all 6 characteristics of money.

My Opinion:

Personally, I don’t think that these counterfeit bills will cause too much problem. People tend to check bills with greater value like the hundreds compared to the fives and tens. Even at the place I work in, the managers always tell us to check any $20 or greater bills no matter how much they look like real money. People just need to develop a habit of checking bills before they take them in.

http://www.bankofcanada.ca/en/banknotes/

The link above teaches us how to check the bills properly.

Chapter 6

Fri, 11 Apr 2008 05:05:24 GMT

Chapter 6

Article: http://news.yahoo.com/s/nm/20080410/bs_nm/usa_economy_outlook_dc;_ylt=ApCcDemyH4NiYuVppa96P3rv5rEF

Summary:

Based on the Blue Chip Economic Indicators Survey, US have already or will soon slip into a recession. Experts say that the recession will not be deep or last a long time. The survey showed that excluding April, there has been a decline in jobs for the past three months, and the growth in gross domestic products have dropped 0.2% compared to last month. Researchers say that the recession will result in a weaker job market and a higher inflation, which will result in a growth in real disposable personal income in 2008. Even though the US economy is in recession, most say that the recession will end by 2009 and the spending will rebound.

Relations to Chapter 6:

In chapter 6, we talked about recessions and the paradox of thrift. The reason why US is entering in a recession is because the consumer spending is slowing down, meaning that people are saving more. The paradox of thrift applies here because even though most think that if everyone saves more money, they will end up with more money, but it will actually result in a lower level of equilibrium RGDP, so people may end up with less money. The government should take in account of Keynes’s theories and take action to help boost the economy by putting more money on businesses.

My opinion

There’s no doubt that US is entering a recession. I’m a bit concerned that Canada may be affected by this because our economy is so closely tied with US’s, and also because signs of inflation are starting to show. But even if Canada and/or U.S. enter into a recession, I don’t think it will cause too much problem as long as the government take action as soon as possible so we won’t fall into a depression. Both Canada and US’s economies are quite stable, so I’m not going to worry about it.

Chapter 5

Wed, 26 Mar 2008 05:56:11 GMT

Chapter 5
Article: http://www.fraserinstitute.org/COMMERCE.WEB/article_details.aspx?pubID=3478

Summary

David Baxter, and the people who studied the issue with him, think that since the immigration rates are falling, we would face a labor shortage problem. Many people, like the Conference Board of Canada, Canadian demographers, and the BC Business Council, all disagree with him. They say that not only will Canada not face a labor shortage, since there’s an increase in participation rate and the population is also growing steadily, it might be a problem to find work for the huge amount of people entering the work force. Even construction, which should be the major sector that lacks employees, doesn’t seem to face much problem.

Relation to Chap. 5

Chapter 5 talks about the economic indicators, and the article talks about how the immigration rate might lower the amount of people available for jobs, which will affect the economy. We learned that to calculate the participation rate, we have to divide the labor force by the population. It’s shown by research that the participation rate in Canada is increasing, so we probably shouldn’t be facing a labor shortage. David Baxter probably looked at all the economic indicators like employment and unemployment rates, inflations, etc to come to a conclusion that we will face a labor shortage.

My Opinions

I don’t think Canada will face a labor shortage. I’m not sure about other provinces, but in Vancouver, there seem to be a lack of jobs because I always hear people complaining about how they can’t find a job. In general, there doesn’t seem to be a shortage in employees. I also don’t agree with David Baxter about how “we didn’t have immigration, we’d stop regenerating our labor force in about four years”. I don’t think that immigration is the only factor that would determine the size of our labor force. And a high immigration rate is not exactly good for the economy either because immigrants tend to be getting lower paying jobs and it might also create a shortage of jobs.

Chapter 4

Wed, 20 Feb 2008 05:27:04 GMT

Chapter 4

News Article

http://www.bloomberg.com/apps/news?pid=20601082&sid=aEg6jS1nF5Z0&refer=canada

Summary

British Columbia is thinking of imposing a tax on fossil fuels to both businesses and individuals to cut our greenhouse gas emissions by a third by 2020. If approved, the tax will start on July 1 and the B.C. Ministry of Finance assumed it will generate about $1.85 billion for government revenue in the next 3 years. The tax is said to begin at a low rate and slowly then gradually increase. The government will provide tax credits for people with lower incomes and cuts in income tax rates. B.C. Finance Minister believe that by imposing a tax on fossil fuels, it will discourage their use, and people will have more money left over from it, so the people have control on how much tax they would pay. The plan will not start until it’s been approved and right now, Canada’s Environmental Minister has rejected the offer.

Relation to Chap. 4

If the government allow this tax to pass, it’s most likely that the tax would be governed at a provincial level. This tax could service our country in several ways. The most obvious one would be the effect it would have on greenhouse gas emissions. This tax could decrease the amount of fossil fuels emitted or convince people to use fuel saving appliances. Another advantage of the tax would be the amount of money the government receives from this tax to pay for our social services or to pay off debt. People with lower income can use tax credits (a deduction in the tax paid) to help pay for it.

My opinion

I think that having this tax is a good idea. The tax will only affect those who use a lot of fossil fuels, so the amount of tax a person pays does depend on how much greenhouse gases they emit. I do believe that this tax will have a much greater impact on businesses than individuals, but perhaps this will help people find ways to use fuel saving equipments and to reuse the fuels. Global warming is the #1 environmental concern and we should start taking action to help stop it before it’s too late.

Chapter 3

Thu, 17 Jan 2008 06:23:38 GMT

Chapter 3

News article:

http://www.cbc.ca/canada/new-brunswick/story/2007/11/13/wage-increase.html

Summary:
At the end of March 2008, New Brunswick has decided to increase their minimum wage from the original $7.25 to $7.75. New Brunswick has been increasing their minimum wage quite often lately, it’s already been increased 3 times since October of 2006, and this is the largest one time change of the minimum wage in the province's history. The purpose for the sudden drastic changes is to get New Brunswick’s minimum wage closer to the average minimum wage of Canada, which is $7.85, and to help those who are in need of money.

Relation to Chapter 3:

Most of us barely have contact with minimum wage, perhaps only the first few jobs at a fast food restaurant as a kid. After, most can find better paying jobs. Regardless, many still earn only minimum wage. A lot of people never managed to escape the entry-level positions in the work force, and it’s impossible to support a family with an annual income around $16,000. This is one of the reasons why the government’s trying to steadily increase the rate of minimum wage. The minimum wage was designed to guarantee a minimum amount of money an unskilled person can receive, and to stop people from trying to undercut others by willing to work for less than others. Because our society has a conscience about these matters, our government has intervened in the free market system in order to achieve a more equitable distribution of income. Not only that, the minimum wage also sets a benchmark for better-paid employees. These people often see their wages increase when the minimum wage increases. Even though an increase in minimum wage means that some employees are able to earn more, it also means that companies will eliminate employment or reduce the working hours for certain individuals to make up for their loss of money.

Minimum wages doesn’t apply to everyone, self-employed workers, independent contractors, students in training program, and salespeople who get paid by commission get paid very differently than the rest of us. Not only that, some of our provinces exclude some kinds of workers from minimum wages or allow lower minimum wages for a certain job. For example, some provinces allow waiters and waitresses get paid less, although they usually make up the difference in pay by tips. Ontario gives young workers lower minimum wage than adults.

Just because the government sets a minimum wage up for us doesn’t mean that it actually prevents poverty. Minimum wage is not a living wage, it’s almost impossible to support a person alone with only minimum wage. Research shows that an average person working fulltime needs at least $10/hr to fully support oneself. Some suggest raising the minimum wages up to $10/hr, but as mentioned, higher minimum wages would cost jobs for unskilled workers. Some suggest wage supplements for the working poor and others think that better salary will come with better quality jobs.

Personal Reflection:

Personally, at my age, most work I can find are minimum paid jobs, so I like the idea of increasing minimum wage, even though it might result in less employment opportunities because of it. I am also I’m living in BC because BC’s minimum wage is considered high compared to other provinces, and is above the average $7.85.

Hourly minimum pay for adults (as of Feb. 1, 2007)
Province	Wage
B.C.	$8.00
Alberta	$7.00
Saskatchewan	$7.55
Manitoba	$7.60
Ontario	$8.00
Quebec	$7.75
New Brunswick	$7.00
Nova Scotia	$7.15
P.E.I.	$7.15
Newfoundland	$7.00
Northwest Territories	$8.25
Nunavut	$8.50
Yukon	$8.25

I understand that poverty is one of the major problems in Canada, even with a minimum wage, and that there are many Canadians working below minimum wage, but I’m surprised by research shown in 2005, that 587,000 (4.3%) of all employees are working below minimum wage. Also, in 2002, 45% of all low income children lived in families where at least one parent worked full-time. This is one of the reasons why many kids never bother finishing their high school education, and would drop out of school to start working fulltime to earn some money to try to support their families.

Chapter 2

Mon, 19 Nov 2007 04:22:34 GMT

News article

http://news.bbc.co.uk/2/hi/business/7098431.stm

Summary

The US industrial production rate dropped by 0.5%, which is the biggest fall since the Hurricane Katrina incident. Electricity and natural gas output declined due to falling demands during the mild weather. House-related industries, and motor vehicle & parts production are also dropping.

Relation to Chapter 2

The decline in production rate is a sign that the US economy is slowing down. Some factors can’t be prevented, such as the unusual mild season. This is complementary to electricity and gas demands, with the mild weather, more people find it unnecessary to use up as much energy, therefore, eased demand for gases and electricity. Other factors, such as a decrease in motor vehicle and parts production, would probably be affected from a change in price of substitute products. Cars from other countries like Japan are much cheaper and more efficient- this can change the buyers’ decision in which types of cars to purchase. The industrial production may receive a boost from the low US currency, which can help encourage international demands for US goods. The drop in US currency also contributes to the problem. Since their money is worth less, it’s like a drop in income for many, and therefore, people would decide to choose a cheaper alternative to their usual demands, or they may buy less. Even though, the industrial production will get a boost from the weaker currency, which encourages international demands for US goods.

♣ Cathy Pan

Chapter one

Wed, 03 Oct 2007 01:21:48 GMT

news article: http://www.canada.com/vancouversun/news/business/story.html?id=5314b8d9-336d-4e59-afbc-c5ee3ac6dc66&k=35935

Summary
Pitt Meadows will soon have 3 ten-storey condo towers build on it. The entire project will take $80 million dollars and will be completed by late 2009. This will lead to a drastic change in the community’s skyline. The towers will contain 241 housing units, taking up 20,000 square feet of space. The construction on the site, which is currently a vacant and run-down shopping plaza, is going to start in December. The housing units are already being booked and will cost from $220,000, to more than $500,000.

Relationship to Chapter 1 - Opportunity Cost
It's obvious that the sudden new developments are happening because of the up coming winter Olympics hosted in Vancouver, 2010. Vancouver, and the rest of Canada, has already made many changes because of this event. The direct cost for the project would be the $80 million used to build the towers (including labor, materials, machinery, etc), and the space and land used up to build these towers. The opportunity cost would be having the money and effort being used in more effective areas, for example, improving the health industry, trying to have homeless people off our streets, the education system, etc. Also, the construction field, which attracts many young workers, is very dangerous and many lives were lost in building. If we’re not going to build these towers, we don’t need people to come to work in such dangerous conditions. The land used for building the towers could also be used in other areas. They could build a museum, schools, hospitals, etc. Of course, we must not forget that we could benefit from this as well. We could make a lot of profits from the winter Olympics, despite all the money and labor works we’ve used to get our country ready for the event. Even after the Olympics, Canada can still profit from it by attracting tourists by having our city being acknowledged as a host for a winter Olympics game.

♠ Cathy Pan