Wage increases will tighten in 2009: Think-tank

Economics Chapter Two

Link: http://www.canada.com/vancouversun/news/story.html?id=761a4157-fe36-4fe3-a423-59302674e935

Summary

This article is about how the financial crisis would affect the increase wages of workers in 2009. Their planned increase wage will be cut back by a half and is said that the "employers [will] focus on cost-cutting and efficiency drives in an uncertain economic environment". The lowest increases are said to be in the manufacturing sector, and in the communications and telecommunications industry. Prem Benimadhu, the board's vice-president, governance and human resources management, stated that organizations were projecting lower increases for 2009 before the current recession began in september.

Connection

The connection between this article and the concepts in chapter two is the factors of affecting demand. As the recession is taking place, many organizations are cutting down job opportunities and even some businesses are about to face bankruptcy. On top of that, in Ottawa, the future incomes for individuals are not what they expected. They are getting less than what they thought to receive and this affects the purchases of these people. They would not buy the things that they were going to buy and perhaps postpone the purchases.

Reflection

The current global economic recession is affecting everyone. Because of this recession, people are already planning for what to do in the future but maybe not trying to solve this problem that’s happening in the present. I find it funny how some employers would guarantee a possible increase in employees’ payroll if they work for a certain amount of time but now that this wage-cutting is happening, I think people would still work because a recession is happening. If this was happening to me, I would surely postpone my purchase of a car in the future because I would be worried if I could pay the monthly debts.