http://www2.canada.com/aboutus/help/nortel+cuts+another+jobs/1328160/story.html?id=1328160
Summary
Nortel Network Corp. is one of the biggest ailing telecom equipment makers in the world. This companied employed over 90,000 people in 2000 when technology was booming. But with the recession happening, they have been cutting employees since January. Just last Wednesday they cut another 3,200 workers world wide. But that is not the end of laying off employees according to Zafirovski the Nortel Chief Executive. Duncan Steward who is an analyst at DSAM Consulting analyzed Nortel and said in order for it to keep running it needs to have at least 15,000 to 18,000 people working. Not only are they making cuts, they are also reducing bonuses and cutting equity based compensation plans. Last month Nortel filed bankruptcy protection for Canada and United States.
Connections
In this article it talks about people being cut and being unemployed. Nortel is making big cuts is because the recession rate is the lowest since the Great Depression. The reason why Nortel made abundant of cuts is because the demand for their product has dropped a significance amount. With less demand for their product, it is no surprise they need to cut down on employees in order to make profit. But with cutting down on employees it increases the unemployment rate causing consumers to consume even less. This leads to the CPI rate to be low because people no longer have the money to purchase goods.
Personal Reflections
Nortel is making a decision that many other companies are making in order to save their company’s. I don’t think that it is necessarily a good idea for Nortel or any other companies to cut back on so many employees even if we are in a recession. If less people are being cut then more people will be employed, and less will be unemployed. Which would result with people having money extra money to purchase goods, demands for goods will increase, and employees will be needed again. Also if there are a huge number of unemployed people it can be bad cause there can be structural unemployment.
Thursday, February 26, 2009
Sunday, February 22, 2009
‘Credit card dieting’ latest trend in consumer frugality
http://www.vancouversun.com/business/Credit+card+dieting+latest+trend+consumer+frugality/1317960/story.html
Summary
Credit card dieting is the next big thing that is happening. With more and more people going on the new credit card dieting it can only mean people will be consuming less. With abundant of people consuming less, retail stores know that their sales will slowly drop. This article talks about how the economy is going into a recession, also talks about the cut backs on employee restaurants have to make in order to cover cost and make bare minimal profit. There are also ways people are learning how to save money during the recession. Instead of using their credit card or debit card, people are paying everything by cash. People are also using the quote “Only buy things you need, not want” as their motto to keep save up on their money.
Connections
In this chapter we learn about macroeconomics which is the area of economics that is concerned with the overall economy rather than individuals. In the article it mentions that abundant of employees got cut back on their jobs. With so many unemployed people seeking for jobs, the participation rates slowly decreases. As the participation rate decreases there will be even less consumers purchasing goods, which would slowly cause a recession which is a drop in economic activity. Since the participation rate is low, and a recession is going to happen it will only lead to demand deficient unemployment which results from lack of economic spending.
Personal Reflection
In my opinion the credit card diet is not a bad thing, it can help people save money up. The only reason people are going on this credit card diet is because prices for goods have risen, which caused consumers to consume less amount of goods. Not only has the prices has risen, many people got cut back on their jobs. I think the government should start up more jobs so that the participation rates increases again, therefore it will cause more people to purchase goods. If more people purchase goods, the prices of goods will drop and we will be out of the recession.
Summary
Credit card dieting is the next big thing that is happening. With more and more people going on the new credit card dieting it can only mean people will be consuming less. With abundant of people consuming less, retail stores know that their sales will slowly drop. This article talks about how the economy is going into a recession, also talks about the cut backs on employee restaurants have to make in order to cover cost and make bare minimal profit. There are also ways people are learning how to save money during the recession. Instead of using their credit card or debit card, people are paying everything by cash. People are also using the quote “Only buy things you need, not want” as their motto to keep save up on their money.
Connections
In this chapter we learn about macroeconomics which is the area of economics that is concerned with the overall economy rather than individuals. In the article it mentions that abundant of employees got cut back on their jobs. With so many unemployed people seeking for jobs, the participation rates slowly decreases. As the participation rate decreases there will be even less consumers purchasing goods, which would slowly cause a recession which is a drop in economic activity. Since the participation rate is low, and a recession is going to happen it will only lead to demand deficient unemployment which results from lack of economic spending.
Personal Reflection
In my opinion the credit card diet is not a bad thing, it can help people save money up. The only reason people are going on this credit card diet is because prices for goods have risen, which caused consumers to consume less amount of goods. Not only has the prices has risen, many people got cut back on their jobs. I think the government should start up more jobs so that the participation rates increases again, therefore it will cause more people to purchase goods. If more people purchase goods, the prices of goods will drop and we will be out of the recession.
Subscribe to:
Posts (Atom)
