Question 1.
There are merits that a company can accrue from paying above minimum wages for workers. The benefits that a firm can accrue from doing so are many. If it is possible, companies that have high revenue turnovers should pay their employees above minimum wages. An employee’s productivity is directly related to pay levels. Staff will be productive and willing to sacrifice their free time to contribute towards the betterment of the company is the pay they are receiving is satisfactory. Therefore, if employees are paid more, they will work harder and produce higher output than if they are paid wages that are determined by demand and supply of labor (Huls). The efficiency wages theory rationalizes why some businesses will choose to pay their workers more than what they need to fill vacant positions. Paying above minimum wage is a good way to attract talented personnel. Individuals are likely to pursue those jobs in there are of specialization that offers the highest remuneration first. Companies offering high wages are in a position of attracting and hiring top talented individuals. It is good to offer high wages as they foster company loyalty. Efficiency wages are known to upsurge employee loyalty (Hamel). Poorly paid employees look for jobs in higher paying companies increasing the costs that are associated with recruiting as well as training of new workers in companies they leave.
Question 2.
The interest rate is one of the factors that can affect economic performance. Reduced interest rates make it cheaper for households or companies to borrow loans encouraging investment by firms and consumers to spend. Increased consumer spending increases aggregate demand for products and services promoting expansion and increased production by firms to supply the demanded goods and services. Investments will increase creating employment opportunities. As a result, the nation will be headed towards full employment which boosts the economy of the country. However, if interest rates are increased unreasonably, the vice versa will happen. Banks are other institutions that can hurt or help the economy (Pettinger). For instance, the credit crunch that took place in 2008 exhibited how banking sector can determine the levels of investment and growth of the economy. In case of lending institutions lose funds are they are no in a position to lend, it becomes hard for companies as well consumers which lead to a reduction in investments thereby hurting the economy. Aggregate demand and aggregate supply of products and services are reduced.
Question 3.
Every employer requires that individuals filling vacant positions in their company have relevant qualifications and experience. Currently, many people are graduating with college degrees every year meaning that competition in the skilled labor is increasing significantly every year. One step that I have made in order to beat the existing competition is getting additional papers through undertaking professional short courses. The courses are relevant as they make me an all-around person who can fit perfectly in various job vacancies. On top of undertaking the short professional courses, I have joined the university again to pursue my masters. This will place me at a better position compared to other college graduates who have not bothered pursuing an extra course in any field. The gained knowledge that will be exhibited by my acquired papers and experience from volunteering and undertaking various internships will assist me in beating the competition and making me a better employee. High school students need to aim higher and take as many courses as possible and secure internships to gain relevant experience to make them better employees. In order to separate myself from others competing for a job I desire I will have to try hard and complete my postgraduate studies within the shortest time possible. This will make me suitable for desired job types.
Work cited
Hamel, Gregory. "Theory of Efficiency Wages". Smallbusiness.chron.com. N.p., 2016. Web. 8 May 2016.
Pettinger, Tejvan. "Factors Affecting Economic Growth | Economics Help".Economicshelp.org. N.p., 2011. Web. 8 May 2016.
Huls, Alexander. "Why Paying More Than Minimum Wage Is Good for Your Business”. SMALL BIZ AHEAD. N.p., 2016. Web. 8 May 2016.
