Question

Each of the following is a means of increasing productivity . Discuss which groups in a society might oppose each one. a. A labour-saving invention that permits all goods to be manufactured with less labour than before. b. The removal of all government production safety rules. c. A reduction in corporate income taxes. d. A reduction in the stringency of environmental standards for new factories.

Answer 1

a. Using less labor will decrease the demand for labor and thus lead to surplus of labor which will increase unemployment rate in the economy. Thus, labor unions will oppose such a labor saving invention that permits goods to be manufactures with less labor than before.

b. This will be opposed by all the socialists, government bodies, quasi government bodies, NGOs etc as the production will become risky in the economy. The regulators will also oppose such an increase in productivity.

c. Government will oppose reduction in corporate income taxes as it will lead to fall in the tax revenue collected by the government. Thus, budget surplus will fall and government will oppose such a change.

d. This will be opposed by environmentalists and regulators as it will increase pollution of the country.