Month: July 2014

WAC 1.0

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The effect of the minimum wage on the fast-food Industry

Abstract

      This paper presents new evidence on the effect of minimum wages on establishment level employment outcomes.
      How do employers in a low wage labor market respond to an increase in the minimum wage? The prediction from conventional economic theory is unambiguous; arise in the minimum wage leads perfectly competitive employers to cut employment (George J. Stigler, 1946). Although studies in the 1970’s based on aggregate teenage employment rates usually confirmed this prediction, earlier studies based on comparisons of employment at affected and unaffected establishments often did not.   Analyses of the 1990-1991 increases in the federal minimum wage (Lawrence F. Katz and Krueger, 1992; Card, 1992a) of an earlier increase of the minimum wage in California (Card, 1992b) find no adverse employment impact.
Key words: Minimum wage, Aggregate teenage employment, Unambiguous, Competitive labor market.

Introduction

     Comparisons of employment, wages, and prices at stores in New Jersey and Pennsylvania before and after the rise offer a simple method for evaluating the effects of the minimum wage. 410 fast-food restaurants in New Jersey and Pennsylvania following the increase in New Jersey’s minimum wage from $4.25 to $5.05 per hour. Comparisons within New Jersey between initially high-wage stores and other stores provide an alternative estimate of the impact of the new law.

Hypothesis

  1. Minimum wage causes unemployment.
  2. The higher the wage an establishment pays relative to other firms, the more diligent and loyal its employees, and the less likely they are to quit.
  3. The resulting high turnover of employees makes unionization more difficult.
  4. Employers routinely violate current minimum wages, federal and state.
  5. A big increase in minimum wages makes a hollow victory without enforcement.

Methodology

  • The rise in minimum wage occurred during a recession.
  • The increase had been legislated two years earlier when the state economy was relatively healthy.

By the time of actual increase, the unemployment rate in New Jersey had risen substantially and last-minute political action almost succeeded in reducing the minimum wage increase. It is unlikely that the effects of the higher minimum wage were obscured by a rising tide of general economic conditions.

  • New Jersey is a relatively small state  with an economy that is closely linked to nearby states.

Fast-food stores in eastern Pennsylvania  forms a natural basis for comparison withe experiences of restaurants in New Jersey, however, allows us to compare the experiences of high-wage and low-wage stores within New Jersey and to test the validity of the Pennsylvania control group. Since, seasonal pattern are similar in New Jersey and eastern Pennsylvania, as well as across high- and low wage stores within New Jersey, Comparative methodology effectively “differences out” any seasonal employment effects.

  • Successfully  followed nearly 100 percent of stores from a first wave of interviews conducted just before the rise in the minimum wage (in February and March 1992)

Results

    Early in 1992 the impending increase in the New Jersey minimum wage by surveying fast-food restaurants in New Jersey and eastern Pennsylvania. Fast-food industry was driven by several factors. First, fast-food stores are a leading employer of law-wage workers: in 1987, franchised restaurants employed 25 percent of all workers in the restaurant industry. The restriction  results in a slightly smaller estimate of the relative increase  in employment in New Jersey.

Analysis

     An alternative possibility is that seasonal factors produce higher employment at fast-food restaurants in February and March than in November and December. An analysis of national employment data for food reparation and service workers, however, shows higher average employment. Analysis of the 1991 Current Population Survey reveals that part-time workers in the restaurant  industry work about 46 percent as many hours as full-time workers. Katz and Krueger (1992) report that the ratio of part-time workers hours to full-time workers’ hours in the fast-food industry is 0.57.

Conclusions

     The authors examine the impact of recent changes in the federal minimum wage on a low-wage labor market The authors draw four main conclusions. First, the survey results indicate that less than 5 percent of fast food restaurants use the new youth sub-minimum wage even though the vast majority paid a starting wage below the new hourly minimum wage immediately before the new minimum went into effect. Second, although some restaurants increased wages by an amount exceeding that necessary to comply with higher minimum wages in both 1990 and 1991, recent increases in the federal minimum wage have greatly compressed the distribution of starting wages in the New Jersey fast food industry. Third, employment increased relatively in those firms likely to have been most affected by the 1991 minimum wage increase. Fourth, changes in the prices of meals appear to be unrelated to mandated wage changes. These employment and price changes do not seem consistent with conventional views of the effects of increases in a binding minimum wage.

     Similarly, regressions including the gap variable provide no evidence that the minimum-wage increase led to a systematic change. One explanation of our finding that a rise in the minimum wage does not lower employment is that restaurants can offset the effect of the minimum wage by reducing non-wage compensation. For example, if workers value fringe benefits and wages equally, employers can simply reduce the level of fringe benefits by the amount of the minimum-wage increase, leaving their employment costs unchanged. The main fringe benefits for fast-food employees are free and reduced-price meals.

References

      http://davidcard.berkeley.edu/papers/njmin-aer.pdf

      http://dollarsandsense.org/blog/2014/02/increasing-minimum-wage-can-actually-create-jobs-its-enforced.html

      http://www.google.com.ph/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&docid=rpg7upfZkc2SNM&tbnid=y6pR0V_lmiletM:&ved=&url=http%3A%2F%2Fwww.downsizinggovernment.org%2Flabor%2Fnegative-effects-minimum-wage-laws&ei=6hXaU-fxMpHg8AWc84KQBQ&bvm=bv.72185853,d.dGc&psig=AFQjCNHXlcCDl8x3ZFcXJn463oWzHnnQwg&ust=1406887786951257

Acknowledgement

     Part of this work was completed Katz and Krueger 1992. I am very grateful David Card for helping in constructing the data.
David Autor, Lawrence Katz and Alan Krueger

Appendix

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HW 4.0

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1. Give at least five known local brands and top 1o international brands. Include a brief company overview for each brand.

    Top 5 Local brands

  • SILVER SWAN
        Silver Swan Manufacturing Company is the country’s leading provider of high-quality condiments and food products.
 
Company Overview

         Silver Swan Manufacturing Company, Inc. is the country’s leading provider of high-quality condiments and food products such as its popular soy sauce and vinegar.

Over the years, Silver Swan has strives to provide only the best products that exceed the culinary needs and expectations of its customers.

Silver Swan has sought to actively pursue different tastes, sauces, and techniques to raise the bar for the industry as a whole through innovation, product development, and advancement.

  • SKYFLAKES (CRACKERS)

M.Y. SAN SKYFLAKES CRACKERS

         Betty Ang studied in The University of the Philippines, Los Baños.

Monde Nissin Corporation was originally incorporated as Monde Denmark Nissin Biscuit Corporation in 1980 and started out manufacturing biscuits. Among its products were Nissin Butter Coconut and Nissin Wafer.

In 1989, the company ventured into the instant noodle segment under the Lucky Me! brand, marketed mainly for members of the lower class. It has become the leading brand of instant noodles in the Philippines. The company later launched the very first dry noodle in pouches, the Lucky Me! Pancit Canton; and the first bowl noodle, Lucky Me! Supreme La Paz Batchoy.

In 2002, the company acquired M.Y. San Corporation, the manufacturer of the popular brands, Sky Flakes, M.Y. San Graham Crackers and Fita. Subsequently, the company changed its name to Monde Nissin Corporation. The Lucky Me! brand currently accounts for 64% of the retail sales.

  •   CHAMPION (Detergent)

          Champion laundry detergent has been around for a while. The brand was launched with very little fanfare, if there was any, in 1997 and has since made its way into the hearts of millions of Filipino consumers, even without mainstream advertising.

From the very start, Peerless Products Manufacturing Corp.—the maker of Champion—focused on winning the trust of Filipino consumers by addressing their need for quality products at affordable prices.

It invested heavily in technology, research and development and its people.

Peerless uses one of the best European detergent making technologies, which costs double that of the ordinary technology, but guarantees efficient performance and quality output.

The first Champion production plant was built in Bulacan.

 

  • GREAT TASTE (Instant Coffee)

        

        Great Taste was known to be a blockbuster and powerhouse team to those who got to watch the game in the early 1980s, this team was also one of the ragtag and also-ran teams of the 1970s. Not exactly blessed with the biggest names among the present set of players then, they did become competitive owing more on the sheer hearts of their players rather than talents.

 

  • DATU PUTI (Condiments)

  

          It has come to our attention recently that there has been a malicious attempt to ruin our reputation as a leading manufacturer of quality condiments under the Datu Puti brand name. We condemn this act and categorically deny this baseless claim.

Nutri-Asia, Inc., maker of Datu Puti, has been consistently the No. 1 manufacturer of condiments and sauces because it has earned the trust of the public through the years with its leading brands. We are proud to say that our production processes and facilities have been certified to comply with FSSC (Food Safety System Certification 22000), the highest and strictest global accreditation body for food manufacturing companies. In fact, to date, we are the only liquid condiments manufacturer in the Philippines that has earned this highly coveted worldwide accreditation. Stringent manufacturing practice is a pillar of our business operations and we take pride in this commitment. Thus, we will not allow anyone to tarnish our good reputation.

We stand firm on our commitment to quality and our doors are open to our valued consumers who would like to visit our manufacturing facilities.

 

References

http://www.kantarworldpanel.com/vn/news/Top-10-Most-Chosen-FMCG-Brands-by-Sector-in-Urban-and-Rural

 

    Top 10 International brands

  • APPLE

top brands

Brand value: $185 billion
Sector: Technology
2012 rank: 1

        It may have been a lost year for the tech titan in many respects, but Apple’s (AAPL) position as the world’s most valuable brand remains undisputed.

Still, rivals are gaining share of the smartphone market, profits and margins have been squeezed, Apple stock is 30% off its 2012 peak, and the company hasn’t unveiled a major new product since the iPad mini last October.

 

  • GOOGLE

top brands

Brand value: $114 billion
Sector: Technology
2012 rank: 3

      Google’s (GOOG) share price chart has been almost the mirror image of Apple’s (AAPL) since last October, and it’s been busy on the product and innovation front.

Developers, and a few in the media, have been given Google Glass to play with. The company has refashioned chat with Hangouts and launched a significant challenge to Spotify and other rivals with Google Play Music All Access.

 

  • IBM

top brands

Brand value: $113 billion
Sector: Technology
2012 rank: 2

         It may have slipped a place but the biggest name in “old tech” has had a pretty good year. Big Blue’s shares are not far off their all-time high, and while first-quarter earnings weren’t great, the previous quarter beat all expectations.

IBM is still reaping the rewards of selling its PC unit to Lenovo in 2005 and focusing more on software and services such as analytics and cloud computing. The drive to exit low-margin businesses took a knock earlier this month when talks on selling its x86 server business — again to Lenovo — broke down over price.

With its vast size and global footprint, investors still tend to view the company’s earnings as an indicator of overall corporate technology spending and demand.

 

  • McDONALD’S

top brands

Brand value: $90 billion
Sector: Fast food
2012 rank: 4

        The fast-food giant saw its brand value slip 5%, but held on to fourth place.

McDonald’s (MCD) has spent years beefing up its premium line to boost profits and attract parents as much as children. There are signs it may be returning to its focus on value, though, after customers resisted the introduction of a one-third-pound Angus burger.

It’s been adding more salads and other foods with less fat, salt and sugar, too, in response to growing public concerns about diet. Last year, it opened a vegetarian restaurant in India.

 

  • COCA-COLA

top brands

Brand value: $78 billion
Sector: Soft drinks
2012 rank: 6

        Coca-Cola’s (KO) brand value rose by 6%, pushing it one place higher in the rankings this year.

The company reported better-than-expected earnings last month, showing consumers still like their fizzy drinks. Emerging markets such as Brazil, Russia and India made up for some slack in China, and Coke continues to generate slow and steady growth in developed economies.

 

  •  AT&T

top brands

Brand value: $76 billion
Sector: Telecom
2012 rank: 8

      The Dallas-based telecom giant has grown from its humble beginnings in the 1870s to become an international heavyweight in high-speed Internet, Wi-Fi and wireless communications. Its share price has been rising, and is now hitting levels last seen in early 2008.

AT&T (T) has made the top 50 in Fortune’s list of America’s Most Admired Companies and has the largest 4G network in the United States.

 

  • MICROSOFT

top brands

Brand value: $70 billion
Sector: Technology
2012 rank: 5

        The tech giant has been battered, bruised and clearly beaten up by Apple in terms of brand name. But Microsoft (MSFT) still maintains a commanding presence in its home market — the United States — and around the world.

Shares in the software titan have recently hit their highest level since early 2008, and the company’s smartphone operating system just surpassed Blackberry to take third place behind Google’s Android and Apple’s iOS, according to researcher IDC.

 

  • MARLBORO

top brands

Brand value: $69 billion
Sector: Tobacco
2012 rank: 7

        In a world that is growing increasingly hostile towards Big Tobacco, the Marlboro name stands strong. True, its brand value slid by 6% since 2012, but Marlboro still holds a place in our collective psyche as a manly, rugged cigarette brand that has withstood the test of time.

Marlboro is the only brand in the top 10 that’s not a standalone company. The Marlboro brand is owned by both Altria (MO) in the U.S. and Philip Morris International (PM), which operates in non-U.S. markets.

 

  • VISA

top brands

Brand value: $56 billion
Sector: Financial services
2012 rank: 15

         Visa (V) has made significant progress over the past year, with the company’s brand value skyrocketing nearly 50%. Visa prides itself on being a market leader in global payments and is recognized by hundreds of millions of people around the world.

According to Visa, its brand is able to “transcends the common barriers of language, culture and geography to establish a common payment mark that has come to symbolize acceptance, convenience and security.

 

  • CHINA MOBILE

top brands

Brand value: $55 billion
Sector: Telecom
2012 rank: 10

       China Mobile is one of the world’s largest wireless providers, serving more than 730 million customers. With 1.3 billion potential customers in China, it’s easy to see the opportunities for growth.

References

© 2014 Cable News Network. A Time Warner Company. All Rights Reserved.

Synthesis

         Aside from your personal brand comes to life in how you consistently behave, promote yourself and present yourself to others. When you show up in person, others judge you by your non-verbal attributes, and the way you communicate creates an impression of who you are and what you value. It may not feel fair, to be judged based on how you look, but it is real to others.

         Some logos and brands have become so  embedded in our culture and everyday life that we can recognize them even if we see just a small portion.When designing a logo or even when creating an important document or proposal, a business card or brochure it is essential to know what colors to add and which ones to stay away from. In order to do that you must know what the different colors mean in the business world. What do consumers expect of global brands? We found that it simply didn’t matter to consumers whether the global brands they bought were American.

        Such people may value global brands particularly highly because they represent a way of life that they cherish—a way of life that may be under threat from religious fundamentalism.What we look for is quality in their products. Since people’s concerns with U.S. foreign policy have little impact on brand preferences, American companies should manage brands just as rivals from other countries do.

 

 

HW 3.0

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1. Identify one fad product and show how it could be maintained on the market past its fad stage.

Kisses/Star balls

  

These product entered the market quickly, created a consumer obsession, sold million of units in a short amount of time, and declined just as rapidly.

References:

https://www.google.com.ph/?gws_rd=ssl#q=fad+product+in+the+philippines+images

Synthesis:

Like what I said, Fad products are things that becomes very popular then suddenly forgotten at the same speed. But as you can see, this product are not totally forgotten, there are some people who are still using/ buying this product as a signed that it created a name the market. This past years, they are actually promoting their products by means of advertising. As of now kisses/ Star balls are still competing in the market place. Maybe others are just lowering the prices to attracts the customers or new customers.

Sales slow and profits drop in the decline stage, usually because of advances in technology, a shift in consumer taste, or increased competition. Distribution becomes exclusive, and sales promotions are developed. Products in the decline stage should have their sales, market share, costs, and profit trends regularly reviewed so that managers can decide whether to maintain the product, harvest the product  or drop the product from the product line.