Suppose that the Yankee Company is a profit-maximizing firm that has a monopoly in the production of baseball caps. The firm sells its baseball caps…
September 3, 2020
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September 3, 2020

In the article, “The Wages of Unemployment,” the author, Dr. Richard Vedder, indicated that in recent decades there was a steady rise in the employment-to-population ratio. However he also indicated that in the years since 2000 and until the date of the article, more than two-thirds of that increase in working-age population employed had been erased.

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The Wall Street Journal Wednesday January 16, 2013The Wages of UnemploymentBy Richard VedderLabor- force participation has declined since 2000 , and among the reasons are soaring*Government benefits .From the mid – 17 th century to the late 20 th century , the American economy grew roughly 3. 5%/ ayear . That growth rate has since declined significantly . When the final Figures are in for 2012 , theannual rate of real output growth for the first dozen years of this century is likely to be about1. 817/0 .What accounts for the slowdown ? An important part of the answer is simple : Americans aren’t*working as much today . And this trend reflects more than the recession and sluggish economy ofthe past few years .The national income accounts suggest that about 70%’ Of U. S. output is attributable to the laborof human beings . Yet there has been a decline in the proportion of working – age Americans whoare employed .In recent decades there was a steady rise in the employment – to – population ratio . For every 100working – age Americans , there were eight more workers in 2000′ than in 1960 . The increase*entirely reflects higher female participation in the labor force . Yet in the years since 2010 , more*than two – thirds of that increase in working – age population employed was erased .The decline matters more than you may suppose . If today the country had the same proportion ofpersons of working age employed as it did in 2000 , the U. S. would have almost 1 4 million more*people contributing to the economy . Even assuming that these additional workers would be 25%’less productive on average than the existing labor force , U.S. gross domestic product would stillbe more than 5%/ higher ( $8010 billion , or about $2, 600 more per person ; than it actually is . The*annual growth rate of GDP would be 2. 2%’ , not 1. 817/} . The retreat from working , in short , hashad a real impact .Why are Americans working less ? While there are a number of factors , the phenomenon is duemainly to a variety of public policies that have reduced the incentives to be employed . Thesepolicies include :. Food stamps . Above all else, people work to eat . If the government provides food , then theimperative to work is severely reduced . Since the food- stamp program’s beginning in the 1960s ,it has grown considerably , but especially so in the 2 1 st century : There are over 30 million more*Americans receiving food stamps today than in 2000 .The sharp rise in food – stamp beneficiaries predated the financial crisis of 2008 : From 2000 to2007 , the number of beneficiaries rose from 17 . 1 million to 26. 3 million , according to theDepartment of Agriculture . That number has leaped to $ 7.5 million in October 2012 . The average*benefit per person jumped in 2005 from $ 102 to $125 per month .

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