Foundations in Macroeconomics for Job Growth- myassignmenthelp

Question: Discuss about theFoundations in Macroeconomics for Job Growth and Wages. Answer: Introduction The aim of this study is to analyse a news article that is related to macroeconomic concepts. The chosen news article talks about the key to job growth and the wages in the Australian economy. Key points of the article The key points of the article are, According to the economists, free market or the laissez-faire is not prevalent in the economy. The treasury contradicts in the context saying that it is the free market which is to be blamed for the low job and the wages in the Australian economy. The corporate tax rate in the country is 30% which is relatively high as compared to the taxes in the other countries (Wild, 2018). The regulations and the strict licensing system of the country are creating a problem for new business development and hence inflow of foreign investment. Analysis of the news Two of the major points, as have been pointed in the article for the, plummeted job opportunity and the wage are high corporate tax and stricter official bureaucracy or the red-tapism. The high rate of tax on the business is directly impacting on the inflow of the foreign investment in the company (Buch, Martinsen Kuvaas, 2015). As per the data of the article, the business investment in the country is only 12% of the overall GDP. This is reducing the likeliness of the investors to invest in the businesses of Australia as higher tax rate would result in a lower return from the business. In addition to that, the higher tax rate on a corporation is also resulting in lower returns to the shareholders and the reduced wages of the workers as well (Hu, Zhang Ganesan, 2015). The 30% tax rate is reducing the revenue of the company and they are immediately reacting with a reduction in the wage of the workers in the short run. Apart from that, lack of margin is also discouraging the companies to start up with a new project creating more employment for the people of the country (Nel Stevenson, 2014). This lack of interest of the business owners to start something new has been amplified by the excessive bureaucratic system of the country. As per the data presented in the article, there need to be 4697 licenses that need to be signed to operate an iron mine in Pilbara, Western Australia (Wild, 2018). Therefore, the potential economic performance and the growth are foregone due to the bureaucracy and systems which could have generated more work opportunities for the people of the country (Glambek, Skogstad Einarsen, 2018). This reduced bureaucracy and the reduced tax rate can be effective in increasing the number of jobs and the wages of the workers in the co untry. Conclusion Therefore, as per the analysis, the economic concepts such as the free market is absent in the economy of Australia. This, coupled with the excessive intervention from the side of the government is reducing the business opportunity and inflow of foreign investment in the country thereby leading to low level of job and wages in the economy of Australia. Reference Buch, R., Martinsen, . L., Kuvaas, B. (2015). The destructiveness of laissez-faire leadership behavior: The mediating role of economic leadermember exchange relationships.Journal of Leadership Organizational Studies,22(1), 115-124. Glambek, M., Skogstad, A., Einarsen, S. (2018). Workplace bullying, the development of job insecurity and the role of laissez-faire leadership: A two-wave moderated mediation study.Work Stress, 1-16. Hu, P., Zhang, P., Ganesan, D. (2015, August). Laissez-faire: Fully asymmetric backscatter communication. InACM SIGCOMM Computer Communication Review(Vol. 45, No. 4, pp. 255-267). ACM. Nel, E., Stevenson, T. (2014). The catalysts of small town economic development in a free market economy: A case study of New Zealand.Local Economy,29(4-5), 486-502. Wild, D. (2018). Cutting company tax and red tape are key to jobs and wage growth. ABC News. Retrieved from https://www.abc.net.au/news/2018-03-25/free-up-the-market-for-economic-growth/9580198