Case Study on "International Labour"
Case Study 5 pages (2408 words) Sources: 5
[EXCERPT] . . . .
FranceProvide a statistical profile of your allocated country's labor market and present an overview of the most important trends and developments in this country's labor market over the past decade.
One cannot discuss the country's labor markets without discussing the financial crisis of 2007- 2008. For 6 of the past 10 years, the housing bubble has caused substantial declines in the country's employment and subsequent GDP growth. France continues to suffer substantially as a result of over speculation on the part of international investors.
The financial crisis resulted from a mixture of both bad judgment and unethical decision making. Both of which have had extreme implication on the labor market of France. Frank Vogel, cofounder of Transparency International, a nonprofit organization charged with ranking nations by degree of corruption remarked, "so many people engaged in so many aspects of finance have lost their ethical compass and put short-term personal gains above other considerations" (Francis, 2008). Logically, the more we value something the more risk we are willing to take to attain them, and unfortunately ethical decision making falls to the wayside. Continuing, although the crisis itself is rather complex, the ethical factors surrounding the crisis are far easier to understand. David DeRosa, a Finance Professor at Yale University eloquently stated the "housing problem lies more in reckless unwise decisions on home financing; part of the difficulty arose from poor risk assessment" (Scott, 2008). According to Dane Scott (2008), unwise risk management can be an indication of weakness in moral character. France took part in this poor risk as
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Since 1974, France has utilized a socialist model, which included high cost items such as public sector jobs, social insurance and pensions, has caused them to carry a large deficit. The government has been found to have falsely reported the country's economic status. France is a part of the EU and it is a requirement that any member of the EU not have a deficit greater than 3% of the GDP. Since 1993, the country debt to GDP has been greater than 100%. Since 2000, France's deficit has been greater than the 3% guideline. In 2009, there was a deficit of 15.5% greater than GDP and 10.5% in 2010. With the world economy slowing down, it affected France's 2 main sources of income: shipping and tourism. This means they have a deficit that is only growing as the debt increased and revenues decreased. Partly, due to the economic crisis mentioned above, the government of France is spending more to sustain its already impovished economy. During this same period however, unemployment is reaching high levels which ultimately reduces tax income for the government. Both of these activities work in tandem in creating large amounts of financial deficit for France. Below is a chart depicted deficit numbers for many prominent countries in Europe. Notice how the deficit of France continues to trend upwards. The numbers below are the percentages of debt to GDP. For example in 2010, as a percentage of GDP, France had 67% of it as debt (Organization for Economic Co-operation and Development, 2012).
GDP CHART
Time period
2003
2004
2005
2006
2007
2008
2009
2010
Country
Australia
7.549
6.716
6.312
5.76
5.181
4.922
8.195
10.966
Austria
60.882
62.242
62.116
60.434
57.829
59.319
64.916
65.754
Belgium
95.395
92.763
91.774
87.568
85.295
90.094
94.893
96.789
Canada
35.853
32.109
30.235
27.934
25.183
28.642
35.716
36.073
Chile
13.001
10.684
7.282
5.264
4.097
5.173
6.228
9.185
Czech Republic
As we have seen from the above chart, debt levels are steadily increasing in France. The other half of the equation however is employment. Over the past decade, unemployment in France has increased. This is again due to the economic crisis around the world. Below is a snapshot of the highest unemployment rates among the OECD nations. As you can see from the statistics, France ranks very highly on this table with unemployment at 9.3%. More importantly the trend is actually increasing rather than decreasing in regards to peer nations. Both government debt as a percentage of GDP and unemployment within France are trending upward. As more individuals are unemployed, the government will subsequently collect less tax revenue for the country to spend. This spiral will ultimately create a further deficit unless appropriate action is taken.
UNEMPLOYMENT CHART
Time
2011
2011
2012
Q2-2011
Q3-2011
Q4-2011
Q1-2012
Country
Spain
i
21.6
20.9
21.5
22.9
Ireland
i
14.4
14.4
14.9
14.3
Slovak Republic
i
13.5
13.2
13.1
14
Portugal
i
12.7
12.1
12.4
14
Estonia
12.5
13.3
10.9
11.4
Hungary
i
10.9
10.8
10.7
10.7
Turkey
i
9.8
9.4
9.2
9.1
Poland
i
9.6
9.5
9.3
9.7
France
i
9.3
8.8
9.1
9.7
United States
i
9
8.9
9.1
8.3
8.6
Italy
i
8.4
7.8
7.6
9.6
Slovenia
i
8.2
7.7
7.9
8.7
United Kingdom
i
8.1
7.8
8.4
8.3
Finland
i
7.8
8.8
6.8
6.9
Denmark
i
7.6
7.3
7.5
7.4
Canada
i
7.5
7.5
7.4
6.9
7.8
Sweden
i
7.5
8.2
6.8
6.9
Belgium
i
7.2
6.6
7.8
7.1
Iceland
i
7.1
8.5
5.9
6
Chile
i
7.1
7.2
7.4
6.6
Furthermore, key indicators of economic growth within France are decreasing or remain stagnant. Components such as national savings rates, investment rates, and capital formation rates have all decreased in the last two years. In fact, many of these metrics have yet to eclipse their 2005 levels nearly a decade later. This is a direct result of a stagnant labor market as individuals have less money to spend. With the countries austerity measures, the country and its labor market will be in a further economic bind (Key Indicators of the Labour, 2012).
SAVINGS METRICS
2000
2005
2008
2009
2010
Real GDP growth
3.6801117
1.8265045
-0.0806681
-2.7297852
1.4799614
Gross national income per capita
25673.014
29968.026
34763.851
34253.955
34771.959
Gross and net national income per capita
22689.083
26269.242
30179.896
29569.754
30064.865
Real household disposable income
3.0932375
1.1454798
0.2302596
1.323319
0.8882244
Household net saving rates
11.008073
11.08717
11.705905
12.700807
12.28823
Gross fixed capital formation
6.7780731
4.4064701
0.3120458
-9.0402764
-1.1559786
Elect one particular aspect of this country's labor market (this might be focused on unemployment, education, inequality, immigration, welfare, discrimination or other relevant labor market indicator) and using relevant economic concepts and models present a critical analysis of developments in this area.
To summarize this research, first, individual who are not employed are saving as much as possible in an effort to maintain their current lifestyle, albeit savings rates overall are declining. As a percentage of income, savings rates are increasing in France. Likewise those who are employed are saving more of their income in the event of sudden unemployment. This actually is counterproductive to economic growth, which relies primarily on the purchase of goods and services. As a result of this behavior Gross Domestic Product, a highly coveted measure of economic growth, fell far short of analyst expectations in the first quarter of 2011. This, in my opinion is a direct result of lack of confidence. Individuals are in fear in regards to their own personal finances. Unemployment is high, individuals are saving more, and the future is very unlikely in regards to economic prosperity. This is in turn beyond the control of the current legislation and can not be altered unless a subsequent change in consumer sentiments is enacted.
What policy solutions have been applied in relation to the topic in 2 above? Evaluate these and make relevant proposals for future policy improvements or reforms.
On May 9, 2010, the European Union passed the European Financial Stability Facility, which is a comprehensive rescue package of almost a Trillion dollars. On May 2, 2010, the IMF agreed to a 10 billion Euro loan to Greece provided they implement several "austerity" measures. Most of these measures we in an effort to reduce many of the costs related to the social programs implement in 1974. After several protests, and some deaths, Greece has implemented there "Austerity program" which is geared at increasing taxes, reducing government obligation. At this point, to get the additional portion of the loan from IMF, Greece had to implement the "austerity plan" and is being observed as to economic reporting in the future. The country has some incentive to maintaining the plan as, if they do not, the EU can remove then as a member of the EU. At this point, we will have to wait and see what happens. I believe the same situation will occur… READ MORE
Quoted Instructions for "International Labour" Assignment:
You are required to write a 2000 word report which provides a critical assessment of the labour market of a particular country. You will be allocated the country in the seminar in week 1. If you have not attended this seminar, then you need to consult the module leader to obtain the country you will cover.
Specifically you are required to:
1. Provide a statistical profile of your allocated country*****s labour market and present an overview of the most important trends and developments in this country*****s labour market over the past decade.
2. Select one particular aspect of this country*****s labour market (this might be focused on unemployment, education, inequality, immigration, welfare, discrimination or other relevant labour market indicator) and using relevant economic concepts and models present a critical analysis of developments in this area.
3. What policy solutions have been applied in relation to the topic in 2. above? Evaluate these and make relevant proposals for future policy improvements or reforms.
*****
How to Reference "International Labour" Case Study in a Bibliography
“International Labour.” A1-TermPaper.com, 2012, https://www.a1-termpaper.com/topics/essay/france-provide-statistical-profile/59034. Accessed 3 Jul 2024.
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