Walmart Raises Employee Wages

 An article in the New York Times illustrates that Walmart is working to raise wages for their employees. This is due to the fact that many employees are leaving and their hope is that they will retain the employees that they have already. The wages are said to change from $12-$18 an hour to $14-$19 an hour. These changes will be taken into effect in March 2023. Some challenges that can arise from this pay increase could worsen the company. There are risks of a recession that could end up financially hurting the employees and company. The generation shift from the baby boomers leaving the workforce could result in loss of employment. Another issue that arises is that the wage increase will help Walmart lower their inflation strain however, this could prolong inflation throughout the economy. Overall, there are benefits to the rising pay for Walmart employees however there are also future challenges that could greatly impact the community. 

This article corresponds with what we talked about in class with incentives. Walmart was struggling to keep their employees therefore they gave them higher wages to incentivize them to stay and work for them. This type of incentive is called: Material incentive. 

Article: https://www.nytimes.com/2023/01/24/business/walmart-minimum-wage.html

Why Apple Isn't Cutting Its Workforce

Recently, major tech companies such as Google, Meta, Microsoft, and Amazon have all been laying-off large parts of their workforce. There are two main reasons why these big tech companies have had to drastically reduce their workforce. Firstly, between September 2019 and September 2022, most tech companies saw the economic boom as an opportunity to expand their workforce. For reference, Amazon’s workforce doubled, Microsoft’s grew 53%, Google’s went up 57%, and Meta’s drastically increased by 94%. However, due to the current economic downturn it has become unsustainable to maintain current workforce numbers. Secondly, a lot of tech companies invested in very speculative projects such as self-driving technology and the metaverse. These job cuts have caused substantial losses for the big tech companies. In the past year, Meta (Nasdaq:META) fell 54%, Amazon's is down roughly 33%, Alphabet (Nasdaq:GOOGL) has dropped 25% and Microsoft (Nasdaq:MSFT) dipped 18.7%.

Apple has been able to avoid the large layoffs and is only down 13.4% (Nasdaq:AAPL) in the past year. Apple has avoided the large layoffs by not following the actions of its tech counterparts. Specifically, when other big tech companies were rapidly expanding their workforce, Apple only grew its workforce by 20%. Additionally, Apple avoided the speculative investing other big tech companies were doing at the time. Despite Apple remaining stronger than other big tech companies, it has had to make some changes. Apple has slowed hiring and CEO Tim Cook has taken a voluntary 40% cut in salary. 

Article: https://www.bizjournals.com/sanjose/news/2023/01/23/heres-how-apple-has-avoided-big-layoffs-so-far.html

China's population drop impacts the economy drastically

 Last week Paul Krugman posted an opinion piece in The New York Times entitled The Problem(s) With China’s Population Drop. In the article, Krugman begins by pointing out that there are some discrepancies in knowing if what the Chinese say is true or not. He says "Many observers are skeptical about Chinese data; I’ve been at conferences when China released, say, new data on economic growth, and many people responded by asking not “Why was growth 7.3 percent?” but rather “Why did the Chinese government decide to say that it was 7.3 percent?”

As the article continues, Krugman talks about the issues that arise in China's population decline, despite overpopulation being a prevalent topic in the 1960s and 70s. With this fear, the Chinese government enacted the now-famous one-child policy, which was a catalyst for the two major issues facing the Chinese economy.

One of the first major issues is that the Chinese population is aging. The problem arising from this is that the dependency ratio on government aid is skyrocketing, with relatively small younger generations having to back this up by working and paying taxes. This is also an issue that we are seeing in the United States as well.

 Another issue is that due to the aging population, the overall spending curve is shifted to the right drastically. This is done in order to keep the Chinese at the Full-Employment point. Doing this hinders the amount of spending that can be set aside for investments. 

Despite this issue though the Chinese government has been able to stabilize this issue by creating extremely high rates of investment, which has allowed them to grow from being "a poor, developing nation into an economic superpower in just a few decades."

https://www.nytimes.com/2023/01/17/opinion/china-population-economy.html