Specification detail The extremes of income distribution internationally The effect of import protection and export subsidy on businesses
Average weekly pay Country Weekly Pay (£) Brazil 58 Bulgaria 25 China 23 Germany 392 India 15 Latvia 46 Slovakia 76 UK 447 • Not only wages but the cost of petrol for transport and rent are much cheaper. • If you owned a store that produced sporting equipment, what would this information tell you?
Good business or exploitation? IndianGarment Factory : Here Working in the Thai rice industry: Here Supplying our chocolate: Here
Local effects of globalbusiness Quotas: only allowing a certain amount of any product to be sold in a country Taxation: making business pay to import products. Subsidy: Paying local people a sum of money which allows them to compete globally.
1. Import protectionQuotas: A government can impose an import quota on any commodity. Customers will then have less choice and local producers have no incentive to reduce their price. Those wanting to import their product will often bid/pay for their right to sell their item in this country. In turn, this will make the item more expensive.
2. Import protection Taxation Governments can make business pay a certain amount of tax for each unit they want to import. Local producers do not need to pay this tax. This makes imported items more expensive Are imported items cheaper? Why/Why not?
Export subsidySubsidy : Here Businesses may receive a payment to export what they produce. The money they earns means they can sell their product for less and still make enough to compete. The World Trade Commission has put pressure on governments to cease this funding. Bad news for local farmers, great news for international farmers. An Argument in economics exists: If it can be sold at a price that the markets wants, it shouldn’t be part of the market.