Question

• 1.The San Jose Mercury News reported that the current administration is expected to suspend H-1B visas for highly skilled workers, among others, until the end of 2020. This program allows firms to hire up to 85,000 highly skilled foreign professionals each year (SJMN 6\24\20). Please discuss the potential costs and benefits of this policy.  

• 2. In theory, what are some of the benefits, and costs, of unions?

• 3. Would you ever consider applying for, and working in, a job that is unionized? Why or why not?

Answer 1

1. Potential costs of this policy are that it takes away the jobs from that of the local labour force, reduces the income earning capacity and increases population which leads to larger strain on resources as costs increase because of greater demand. Plus most of the income is sent back home, to foreign countries which reduces the multiplier effect in the economy.

Potential benefits of this are that it increases demand for goods and services as greater money flows in the economy because more number of consumers are prevalent as the population increases. It also leads to the best human capital in the world being acquired by the country and thus output increases because of this.

2. Benefits of unions are that it leads to labourers voices being heard and less discrimination of the labourers as unions unite labourers and enhance their power of negotiation. It leads to benefits for the labourers working conditions.

The costs of unions are that unregulated strikes lead to reduction in output and thus GDP of the economy. Ask for extremely high minimum wages leads to firms not being able to recover their costs of production.

3. I would consider working in a job which is unionized as it will be safer and my concerns will be heard. It will help increase my power as an employee and seek accurate remuneration for the tasks which I have undertaken.