Saturday, February 10, 2018

Work force

People in Europe have seen their birthrates decline and many in Eastern Europe are not interested in bringing in immigrants so the governments of these countries offer incentives for natives to have more children. In Estonia they have something called, ““mother’s salary”. A woman who has a baby receives up to $1,500 per month for 14 months which is substantial in a country where the average salary is $650 per month. Then the child is eligible for nursery school and then pre-kinder garden for $40 per month after which they attend free public schools. In the United States we are not faced with this problem because we allow immigration. There are 43 million Americans living here who were not born here and 400,000 new immigrants enter each year. In addition to that there are 20 million people born here who could work but choose not to work. With this work force the GDP can grow. It is estimated that it takes one million new jobs to maintain a one percent increase in GDP. This is in addition to the almost 2 million jobs needed to maintain the current growth rate. Higher wages will encourage those not seeking work to join the work force. With these extra workers there will be less pressure on wage/price inflation.

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