Question Of Income Distribution Research Articles

Employment, welfare support and income distribution in east Germany

This survey seeks to sketch how the income level and income equality both among social groups in the new Länder, and also in relation to the position in west Germany, have evolved as a consequence of the deep restructuring since 1990, as well as a result of the welfare systems put in place by the treaties establishing unification. The paper surveys the macroeconomic evolution and the attendant deep changes in the labour market, focusing in particular on the level of wage catchup with the west and on differentials by firm size, occupation and branch. It addresses initiatives to attack unemployment in the east and assesses the welfare safety net in the form of unemployment benefits and social assistance, as well as the pension system instituted. The relatively favourable pension provision and the broad coverage of the social benefit system have ensured that the deep economic restructuring has not led to widespread poverty, even if there is a pervasive feeling of insecurity. The effectiveness of the housing allowance system in moderating the impact of rent rises is also discussed. The paper finally addresses the question of income distribution in this rapid transition to the market, and shows that ‘income poverty’ has been contained to a level broadly equivalent to that of west Germany.

Purchasing Strategies For Natural Gas In A Deregulating Market

Purchasing Strategies For Natural Gas In A Deregulating Market The market for natural gas is in the continuing process of deregulation. As this process progresses, it changes the cost effectiveness of various purchasing strategies for large-scale users. This article outlines the direction of the deregulation movement and suggests an approach that buyers can use to adapt to the changing market environment. INTRODUCTION The rapidly changing regulatory environment for domestic natural gas, combined with current excess deliverability, provides an opportunity for large-scale industrial users to achieve substantial cost savings. However, decreases in delivered gas costs can only be obtained through a much more aggressive purchasing policy than has been common for this commodity in the past. New policies must sweep away dated conceptions of natural gas as a utility that can only be purchased from a local distribution company (LDC) that has a regional monopoly. Purchasing strategy must consider the strong forces that are moving the market in the direction of competition and, when possible, enhance them to maximize potential cost reductions. This article examines the regulatory and business environments surrounding natural gas from a managerial perspective, discusses purchasing and managerial implications, examines the purchasing objectives of large industrial consumers, and offers some general suggestions that should be helpful in achieving the objectives. THE REGULATORY ENVIRONMENT Historically, the natural gas market has been tightly regulated by both state and federal agencies. The justification for this control has been that: (1) natural gas is a necessity, implying that consumers have little capability to utilize substitute commodities, and (2) the and distribution of natural gas can sometimes result in the generation of excess profits, an element economists refer to as economic rent. Economic rents can occur whenever the potential price of a commodity substantially exceeds its actual cost of production, including a reasonable return on investment. Government regulators tend to view these rents as a question of income distribution. They ask, should these rents accrue to consumers in the form of regulated prices that are below the potential market price, to producers in the form of excess profit, or to citizens in general in the form of reduced taxes? Natural gas regulation prior to the Natural Gas Policy Act (NGPA) of 1978 favored consumers with prices that were held at arbitrarily low levels. As might be expected in a market where prices were held below market levels and a great deal of unutilized capacity existed, natural gas usage increased rapidly. This was especially evident following World War II. Improvements in pipeline technology contributed to the market glut by allowing distant producers to gain access to the major urban consumption centers. An unanticipated result of this long period of regulation was that incentives for exploration declined dramatically. This phenomenon ultimately allowed the growth in demand to overtake the margin of unutilized capacity. By the late 1960s the nation's reserves began to decline, and the critical reserve to production ratio fell rapidly.(1) These data are shown in Figure 1. The NGPA addressed this emerging supply shortage by recognizing the value of allowing market forces to set natural gas prices at the wellhead. The period since 1978 has seen wild gyrations in both the price and supply as the newly decontrolled market has sought to establish a sustainable equilibrium. The economic rent issue - where the dollars generated by this market process will ultimately reside - is still largely undecided. However, mounting evidence suggests that aggressive consumers can obtain a large share of the proceeds if they can maximize the actual and potential competitive forces that exist in the marketplace. …

Questions of Income Distribution in Poland

The breakdown in Poland's economic development has been accompanied by exacerbation of income distribution problems. The agreements between the government and the new trade unions have precipitated a specific wages revolution. Workers' pay has grown much more rapidly than that of salary earners. With changes in pay have gone shifts in incomes between town and country and uncontrolled redistribution stemming from market disorganization. The planned overhaul of retail prices which forms part of a general economic reform requires the creation of a 'welfare screen' to protect the lowest-earning groups.

Full Employment: An Outmoded Objective in a Technological Age

The author argues that pursuit of the full employment objective retards economic progress in technologically advanced countries, It has been suggested that the rate of technological adoption should be retarded where it leads to increases in unemployment. The author argues that technological adoption should be encouraged because it frees people from employment, releasing them for work. A clear distinction is drawn between employment and work. The question of income distribution is briefly addressed.

Is Socialism Really Necessary?

A liberal economist friend of ours, for convenience let us call him Mr. L, recently wrote us a letter about various current and prospective problems of the American economy, from which we quote the following passage: Galbraith's new book [The Affluent Society] provides a very good argument which you can use—probably already are using—for socialism. The danger of serious depression is slight, and the question of income distribution is no longer vital for the great majority of people. But the use we make of our resources is raising increasingly acute problems. As Galbraith points out, there is a strong bias in our system toward the production of private consumer goods, no matter how frivolous, and away from public services. I argue that we could solve the problem without socialism in the sense of public ownership; you, of course, argue that we could but we won't. I'm not sure that the difference is very important. The main thing is to convince people that we need a shift to the public sector. I don't think any of us can predict the paths by which we will get there.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.