Who has the power?

- The money

“Power is money” is an article posted in 2nd June, in “The Economsit” online newspaper. This
article talks about productivity and the influence of wages on employees’s performance and
productivity itself. So productivity is the focus of the economy, the point that really matters.
Also, the text discusses, mainly, the power of money, the labor market struggle for the labor
force, obtaining maximum results with the least investment and effort. There are presented
numerous ways in which the work of the employees can be improved and the productivity
reaches the highest peaks. Furthermore, there is talked about the importance of introducing
workers into different unions and about how the wage gap influences their belonging to such
groups.

In the first paragraph, the author illustrates the way in which real pay has increased since
2000-little by litte- , in contrast to the low-wage workers who have underwent prolonged and
rather tendious stagnation in terms of their financial motivation over a period of almost 4
decades . However, this stagnation seems to be helpful in establishing connections between
productivity, pay, and power- important factors that are the basis of the economy throughout the
entire world. Also, in this paragraph, the head of Coca Cola company- Troy Taylor-makes
meaningful remarks about widespread pay, in a rational and realistic way.

In a case study, Drew Desilver analyzes wage stagnation and emphasizes that not only money
is a reward for employees. For example, the health insurance, retirement account contribution,
tuition reimbursment provided by the employer can constrain him to increase the cash salary, but
compensates for the lack of it.

I, Dorobantu Marina, notice that progress in reducing poverty has been painfully slow
despite significant gains in economic productivity and average incomes. Thus, between 1979-
2013 the wages of the majority of workers did not suffer major changes, but on the contrary, they
remained the same for more than three decades, which has led to a lack of progress on poverty
reduction.
I, Ioana Dobrica, think that the period between 1979 and 2016 was very difficult for people who
wanted to get rid of poverty. During this time the salaries did not increase, they remained
constant. This has made poverty remain present although productivity has increased
significantly.

In the second paragraph, it is presented the term productivity as the central point of the
economy and how people's wages are proportionate to the work they make and the benefits they
bring to employers.

In an article reviewed by Investopedia Staff, the author says that the key of economic growth
and competitivness is productivity. Thus, the capacity of a country depends on how it increases
the yield on the worker, ie. to produce more goods and services for a given hours of work.
Economists use productivity growth to model the productive capacity of the economy and to
determine its utilization rates.

Me, Dorobantu Marina, I believe workers' wages can lead to confrontations between
employers, each of them struggling to have the best team of workers to succeed in achieving the
highest productivity.

Ioana Dobrica- In my opinion, productivity is one of the most important factors in a company
with a large number of workers but also in a company with a lower number of workers. I think it
is very important for employers to be paid exactly and precisely in accordance with their
contribution to the company's production. If they were not paid in this way, they are seeking
another company for which to work.

In the third paragraph, the author talks about ways in which workers can be improved, the
government having a major contribution to their rise, and so on productivity itself. Thus,
investing in education and training workers, eliminating,as much as possible the move from one
employer to another and laws which apply noncompetitive clauses in employment contracts,
means motivation, which leads to the achievement of goals by both sides. When productivity-
enhancing strategies are not enough, the government needs to fill in the reduced revenues as
efficiently as possible. Economists, on the other hand, support wage subsidies, such as the
negative income tax, because it determines employees to stay in work to qualify and makes them
much easier to administer.

In an article reviewed by Investopedia Staff, both proponents 'and opponents'of negative

income tax (NIT) opinions are presented. So, proponents see NIT as a mirror of the existing tax
system in which taxpayers' tax liabilities that divide the threshold vary positively with revenues.
On the other hand, opponents consider that NIT would cause the poor to work less or even to
give up definitively to the detriment of other activities.

I, Dorobantu Marina, think that in order to have quality workers, both employers and the
government need to prepare and optimize all their skills and qualities. Thus, the work done by
such people will be excellent, and employers will enjoy impeccable results.

I, Ioana Dobrica, believe that investing in employee education and training is one of the best
investments the government can make for companies. Thus, the productivity of that company
will grow significantly and the quality of work will be much better.

In the next paragraph, the author depicts the reality of salary organization as being much more
complicated than the patterns look like. Figures show that, although productivity in America
grew by 75%, median pay barely increased by 10% and the average wage increased by less than
50 %. In addition, raising the minimum wage would immediately reduce the employment and
overpaid workers will become unemployed.

Contrary to this algorithm, both Anna Stansbury and Lawrence Summers consider that a
rise in wages leads to an increase in productivity, which would appear to be the closest to reality.

Me, Dorobantu Marina, I think it is very difficult to achieve a balance between productivity
and fair pay for those who work to achieve it. Always an extreme will pull more than the other
and there will be a significant distance between the two economic constants. I do not think it will
ever be possible to reach a point where productivity is maximum, and workers will be paid for
their work without being too much paid and then fired.

I, Ioana Dobrica, believe that every employer must be paid according to the effort he is
making for the company. So, if the company's productivity grows and employee wages have to
grow. But if the company's productivity drops, employers need to be motivated or replaced.
 In the fifth paragraph, the author talks about the employers' power and the surpluses that occur
in a normal economy. Both employees and employers expect to receive the maximum from a
transaction, but the employers’power create a gap between the real value of workers and how
they are paid, because “firms have the upper hand, […] a new job is harder to find than a new
worker, employers capture most of the surplus”. Thus, a solution represents to rise up the
workers’salary without causing demage to company.

In the article “Whistling In The Wind”, it is discussed the differences between the employee
and the employer and why employers have the power. There are some logical and obvious
reasons for the reality we live in. Firstly, the number of the employers will be always higher than
the number of the employees; secondly, even in the best of times there are people who are not
employed, and they are willing to do any kind of work to survive; thirdly employers have the
greatest resources and can last longer than anyone else.

I, Marina Dorobantu, believe that workers should be paid according to their labour and skills.
Employers should distribute the profit in such a way that employees have financial and
professional satisfaction but without any harm to the whole business. To maintain an economic
harmony is extremely difficult, almost impossible, but sacrifices coming from both sides can
make things much lighter and long-lasting.

I, Ioana Dobrica, think that every person at the moment of employment must be aware of her
own intelligence and of the power she can have on that company. Thus, the new employee can
negotiate the salary he is going to receive. But she needs to know that she is not the only person
who wants that job and to be aware that it is more difficult to find a new job. Companies need to
find a balance between their own interest and the employee's interest.

Moreover, the article explains how the imbalance of power affects the evolution of salaries in
the rich world, implicity their stagnation. As a result, we can see how the product market has
become more compact, “meaning that fewer firms account for a larger share of output “.This
greatly increases the power of the companies on the sales market and employees have fewer
alternatives in terms of employment, because there is no more talk of such rivalry between
employers.

Suresh Naidu, Eric Posner and Glen Weyl highlight how the growth in firms' power affects
the share of the workforce, dropping it by more than 50%. They support antitrust policies,
because in this way the markets become more competitive and the workers are prepared to fight
much more for the positions they occupy.

I, Marina Dorobantu, think the power imbalance has adverse effects in the world, in many
areas, for example the global financial crisis and the euro zone crisis. In economic terms, this is
an important point, regarding the work of employees and employers. Practic, when power is on
one side, the benefits go to those there, ie employers, the others being subject to certain
limitations and restrictions, in this case, of course, employees, according to the studied article.

Ioana Dobrica- In my opinion, power imbalances play a very important role in stagnating
wages that exceed the average wage. The fact that employers are less able to find jobs in
different areas leads to an increase in the power of companies on the labor market.

In the penultimate paragraph, it is supported the increase in workers' power and how over the
years this has been best done by integrating most of them into unions. However, advanced
economies explain the inverse proportionality between wage inequality and the number of trade
union members. So, when the wage inequality rises, the number of workers involved into unions
declines.

In a recent article, Henry Farber, Daniel Herbst, Ilyana Kuziemko and Mr Naidu have
analyzed the evolution of trade unions and those who were part of them. If in the post-war
period, the trade unionists' prize was constant, after the 50s, when the number of unions
increased, it has bought less-skilled workers, reducing inequality and wrecking the wage
distribution. Another ways to boost worker power are the universal basic income or jobs
guarantee; they have the role of increasing the welfare of workers, getting salaries more
satisfying, but companies have to work harder to keep their employees.

I, Marina Dorobantu, think that universal income is not the best idea, because it does not
take into account the status of the employee. However, a job guarantee I consider to be
appropriate so that employees do not have to live permanently with the stress that they can
unemployed in every moment.
I, Ioana Dobrica, think that every employer needs: a salary with which he can support his
family, safety at work, understanding and harmony in the team to which he belongs. When the
employer has all these things, the interest grows to increase production in that company.

In the last paragraph they are summarized the most important ideas of economy nowadays.
So, a world in which work is widely guaranteed is a utopia, just as the universal income, because
it would be costly and unusual. Strong post-war unions are still the fastest in terms of
productivity growth, despite the most modern economies of our day.

I, Marina Dorobantu, I believe that the evolution that comes with the time should be available
on all areas including the economic one. So I argue that there must be a balance for everyone to
achieve the results they want and feel the fulfillment on the professional level, irrespective of
their status and function.

I, Ioana Dobrica, believe that economists need to strike a balance between employers and
companies so that workers and firms have their own advantage. If all wages would grow in a
short period, companies would be left without the necessary resources. But if employers knew
that it was impossible for their wages to rise significantly, they would no longer give interest and
their work would not be better more useful.

Conclusions :

-Ioana Dobrica- In conclusion, this article summarizes the evolution of salary increases in
different companies and explains the power of money on people. It presents how economists
contribute to finding the necessary balance between employers and bosses and explains the needs
of each employer regardless of the field in which they work.