Trades, Outsourcing and Jobs Economics Challenge

3 06 2011

 

Key Concerns/Issues

Trade

– Strong Canadian dollar results in more expensive exports for other countries.

– China is becoming the centre of the international trade, and many countries are trying to take advantage of this

– Limited natural resources to export to other countries

– Not much diversity to whom we are exporting to (75% of exported goods is to US)

– Due to the financial crisis and other unforeseen natural disasters around the world, Canada’s ability to export have been hindered

Outsourcing

– Jobs from our country are being offshored to other nations due to the low wages that exist for workers in other counties (i.e. China, Mexico)

– Outsourcing of government services may increase cost to consumers

Jobs
– Unemployment rates is still very high

– The quality of the jobs being created now are inferior compared to the jobs we lost during the recession

 

Resulting Challenges to Canadians

– The strong Canadian dollar makes Canadian goods are not as attractive as they were before in the international market – this may bring huge losses to Canada’s GDP. Canada must find a way to remedy the detrimental effects of the strong dollar.

– As China is rapidly growing economically, it will become the centre of the international trade. If Canada does take action now, Canadian goods will not be competitive in the Chinese market

– Resources are becoming scarcer. If we run out of limited natural resources due to over exhaustion, we will have huge problems with trading with other countries

– If we continue to export most of our goods to US, and if the US suffers another serious recession, Canada will lose a lot of money in exports.

– Offshoring takes away many important manufacturing jobs from the Canadian economy. Therefore, Canada must seek to create different types of jobs in order to increase our economic welfare.

– There was a massive loss of jobs because of the recession. As a result, it has caused less revenue for the government, increasing their debts

– The types of jobs created should be redirected into manufacturing or some other sector instead than government that generates little or no wealth.

 

Statistics

Trade
Falling Pork Export Market -(Dropped from $125 mil to $100 mil)

Potential Oil Exports to China – (Net profits approximately $ 270 billion)

Decreasing Oil Exports -(Expected surplus $500 million, actual surplus $382 million)

USA as Top Canadian Export Market -(USA will have approximately 75% of Canadian export market until 2040)

Outsourcing

Consequences of Outsourcing Garbage Collection  – (Increased cost to consumers in the long run)

Offshoring and Inshoring of Jobs Balances Out -(1.9% of companies moved work out of Canada, while 1.8% moved work in)

Jobs

Future Unemployment Rates -(Down from 7.7% in 2010 to 7% in 2014)

TD Forecasted Future Job Creations -(Forecasts decreased job creation in 2011 before it can increases in 2012)

 

Possible Solutions

Trade

– Government can intervene and weaken Canadian dollar on purpose to make importing from Canada by other counties cheaper and thus making Canadian exports more popular

– Canada should realize China’s economical potential and should start exporting competitive goods to China

Outsourcing

– Currently, there is also a significant amount of inshoring to restore our number of jobs.

Jobs

– Unemployment can naturally recover to its natural state since the economy is recovering

– Lower the value of the dollar to attract other companies to Canada. This would encourage businesses to expand in Canada, creating more jobs for Canadians, stimulating the economy, and generating wealth for the government through sales tax.





The Future of Laptops

7 03 2011

According to this Globe and Mail article, PCs are losing the interest of the public.

Gartner Inc. cut it’s forecast for the sale of PCs in the future after global sales failed to reach the projected preliminary forecast. The IT-research company attributes their adjusted forecast to markets over the world exhibiting less demand for the traditional PC, particularly the ever-growing market of China. The company attributes this decline in demand to the tablet PC. Since the explosive launch of the iPad, consumers “appear to be hesitating” to buy traditional PCs, but instead await new tablet computers. This decline also comes amid the announcement of the launch of the new and improved iPad 2.0, the anticipated launch of Blackberry’s playbook, and the proclaimed “iPad Killer” – the Motorola Xoom. These are the newest and hottest “fashions” of technology that everyone wants to get their hands on.


Consumer taste’s are changing, and thus the demand of tablets rise, stealing customers from PCs. The less buyers there are the more the demand will drop. China’s giant population also contributes to the giant change in demand. More and more Chinese consumers are emerging in the middle class, with more money and buying power. Tablet computers definitely cost more than PCs do, but with the stronger spending power will cover the gap.

The manufacturers of PCs will lower the amount produced because they expect the price of PCs to drop. The seller’s expectations will lower supply so that they will not have a surplus in the future. IT companies also realize that these tablet computers will be the next big driving force in the sector and see it as a profit of another good. They will shift their resources to adapt to the changing market. This will also decrease the supply produced.

Also note that on the graph, demand is shown as decreasing more than supply. The reason for this is because most IT companies have not developed advanced enough tablet computers to sell competitively with market leaders Apple, Motorola, and Blackberry. They are forced to continue marketing their PCs until they are able to enter the tablet computer market.