Issues Affecting the Economy as a Whole
Issues Affecting the Economy as a Whole
Economics is about making the correct financial decisions and how these decision help manifest outcomes and further financial decision making. Economics is not all about money. It is about gathering different options and alternatives to be able to make the appropriate decision.
One thing that is hurting the American as a whole is the rate of profit. This goes for industries as well as consumers.
In 2008 approximately 2.6 million people lost their jobs as a result of the declining automotive market. This set in motion a nearly catastrophic tidal wave ripple of events that financially crushed the American automotive industry as well as automotive manufacturing suppliers and American consumers. The loss of business, mortgages, and peace of mind is in the trillions of dollars.
Nearly eight years later the American economy is attempting a comeback. But for the majority of American’s, the high paying unskilled labor jobs are gone. Unskilled labor is not paying what it use too and many new job seekers are seeing this.
Before the 2008, it would not be uncommon to find an unskilled labor employee making $50,000 per year. But now, these same jobs may be paying just above minimum wage. So the rate of labor profit is much lower than nearly a decade ago.
Economics Principles
The economic principle that governs the above situation is Diminishing Returns. Although I have not seen the automotive industry lower their car prices, most people are not making what they were eight years ago. Granted some people have went unharmed as a result of the 2008 fall out. But the majority rules in case. Maybe it is all of our fault with frugal spending, buying things because of wants rather than needs. Hopefully if the economy recovers, consumers are more responsible this time around and save instead of