Econo

mics
Group 5
 Economics is the study of the allocation of scarce
means to satisfy competing ends (Becker, 2011).
Basically, economics deals with the management of
limited resources as well as decision making in
order to satisfy unlimited wants and needs.

Economics
Issues

Economics
Transport Strike
I. Cause/s
One reason for the transport groups’ protest is the
government's plan of phasing out old jeepneys in the Philippines
(Remitio, 2017). Majority of the people living in the cities
especially the ones in Metro Manila were affected by the strike
and will be affected if the plan is implemented. According to CNN
News, the livelihood of more than six hundred thousand drivers
and two hundred thousand operators will also be affected
because of this. Other than that, the increase in oil price (Rivera,
2017) which results to higher fare price (Cabrera, 2017) also
triggered the transport groups to protest against the government.
II. Impact
According to Whalen (1996), transport strikes affect the travel behavior of commuters
in different ways. Because of the lack of services due to the strike commuters are forced
to look at alternative modes to suffice the need to go from one place or another.
Congestion levels also increase by 15% during transportation strikes based on the Dutch
public. Businesses are also affected especially the small ones. It results into lower
turnover, less cash generation from the disruption to their trade (Roberston, 1990).
Urbanization
I. Cause/s
Cities help firms to match their unique requirements for
labor, material inputs and premises better than towns,
because markets are larger and there is more choice available.
A bigger pool of providers also lowers costs and improves
variety through competition and specialization. In volatile
market conditions there is a premium on being adaptable, and
companies tend to be leaner, more focused on core
competences, and more reliant on buying-in goods and
services than in-house production. (Duranton et al., 2004).
 Cities afford firms access to a wider range of
shared services and infrastructure because of the
scale of activity. Cities offer better external
connectivity to customers and suppliers through
more frequent transport links to more destinations
and more efficient logistics systems to handle
imports and exports.(Buck et al., 2005).
II. Impact
Urbanization has been a catalyst for progress
in developed countries for the last three
centuries. Indeed, the maxim that cities are
engines of economic growth and development
dates back to the Industrial Revolution (KACYIRA,
2017).
 Tourism is also one of the major sectors of the
economy, contributing a large share to the
National income and generating huge
employment opportunities. It has become the
fastest growing service industry in the country
with great potential for its further expansion and
diversification (Palamalai & Kalaivani, 2016).
 In addition to advancing economic progress,
urbanization provides the foundation and momentum
for global change. Cities are taking the lead in
addressing many global challenges of the twenty-first
century that also call for solutions at the local level,
including people-centered, inclusive socioeconomic
growth, environmental governance, and climate
change (KACYIRA ,2017).
 Socially, the current model of urbanization
generates multiple forms of inequality,
exclusion, and deprivation, hampering
inclusive development. The model creates
spatial inequalities and divided cities typified
by gated communities, slums, and poor
neighborhoods (KACYIRA, 2017).
 Economically, the current model of
urbanization is unsustainable due to the
existence of widespread unemployment,
especially among youth, and the
predominance of unstable, low-paying, and
largely informal jobs (KACYIRA, 2017).
Higher Minimum
Wage
I. Cause/s
The idea of a higher minimum wage (along with
a citizen's income) is getting more momentum, as
governments grapple with the rise in inequality
over recent decades (Leonard, 2000). Minimum
wages were connected to mid-Victorian-era trade
union and were an important item on the Fabian
socialist agenda to "democratize" unregulated
industries and improve working conditions.
II. Impact
According to Kalenkoski (2016), evidence shows
that minimum wages reduce employment and
create unemployment among young unskilled
workers. While some youths will benefit from higher
current earnings, others will not need work, delaying
labor market entry and reducing lifetime incomes.
 According to Lemos (2004), firms respond to these
higher labor costs by reducing employment,
reducing profits, or raising prices. With employment
and profits not significantly affected, higher prices is
an obvious response to a minimum wage increase.
References:
Becker, G. (2011). Economic Theory. New York: Transaction Publishers.
Buck et al., (2005). Changing Cities: Re-thinking Urban Competitiveness, Cohesion and Governance. Urbanization and
economic growth: the arguments and evidence for Africa and Asia, 25(2), 317.
Cabrera, R. (2017). LTFRB approves P1 jeepney fare hike. Retrieved from
http://www.philstar.com/headlines/2017/02/07/1669882/ltfrb-approves-p1-jeepney- farehike?nomobile=1
Duranton et al., (2004). Micro foundations of urban agglomeration economies. Urbanization and economic growth: the
arguments and evidence for Africa and Asia. 25(2), 2063−2117.
Kacyira, A. K. (2017). Urbanization: Emerging Challenges and a New Global Urban Agenda. Brown Journal Of World
Affairs, 23(2), 87-102.
Kalenkoski, C. (2016). The effects of minimum wages on youth employment and income. Retrieved from
https://wol.iza.org/uploads/articles/243/pdfs/effects-of-minimum-wages-on-youth-employment- and-income.pdf
Lemos, S. (2004). The Effect of the Minimum Wage on Price. Retrieved from http://ftp.iza.org/dp1072.pdf
Leonard, T. C. (2000). The Very Idea of Applying Economics: The Modern Minimum-Wage Controversy and Its
Antecedents. History Of Political Economy, 32(4), 117-144.
Palamalai, S., & Kalaivani, M. (2016). Tourism Expansion, Urbanization and Economic Growth in India: An Empirical
Analysis. IUP Journal Of Business Strategy, 13(4), 36-49.
Remitio, R. (2017). Jeepney groups to stage national day of protest today. Retrieved from
http://cnnphilippines.com/news/2017/07/17/jeepney-groups-to-stage-national-day-of-protest- today.html
Rivera, D. (2017). Oil price hike greets consumers in 2017. Retrieved from
http://www.philstar.com/headlines/2017/01/03/1659178/oil-price-hike-greets-consumers-2017
Robertson, J. (1990). Future Wealth A New Economics for the 21st Century. New York: The Bootstrap Press.
Scott et al., (2006). Geography and Economy: Three Lectures, Clarendon Press, Oxford. Urbanization and economic
growth: the arguments and evidence for Africa and Asia, 25(2), 192.
Whalen, C. (1996). Political Economy for the 21st Century: Contemporary Views on the Trend of Economics. Armonk,
New York: M.E. Sharpe.
Thank
you !