Workers left with minimal purchasing power – New York

Here is the latest story of the city of big apple (New York). It may be because of the ongoing tariff war between the U.S and the rest that outsourcing has become expensive and the U.S is left with no other option than in house production of goods and services. Thus giving rise to the falling profit margins of the American corporations. In an import driven economy like the United States where renowned economists like Donovan have hinted towards an economic recession in 2020 such thing is a cause of awe. United States have imposed tariffs on the imports from ally nations like Japan. Even tough due to lack of skilled workforce it may be becoming difficult for the U.S to support its capitalism. Wherein procuring raw materials is itself far from reach one may not be able to think of gaining profits and moreover paying enough salaries and wages. In a laissez-faire economy like the United States the market should always remain open for its growth and development. If this situation continues then it would lead the rise in unemployment in the US. Which would be responsible for recession. Manufacturing activity will collapse because of higher lending rates of the Banks. People will not spend much as their purchasing power will drop down to a great extent. Thus those who wish to pursue business will have to buy an expensive business loan. This recession will then spread to the rest of the world and would severely hit the economies following negative interest rates. Normally the profit margins are high where there is lack of skilled population This may be the collapse of America’s capitalism due to protectionism.

Published by shreyasshamshrikant


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