Finance

Because Productivity Increases Faster Than Wages

In Sir Arthur Lewis’s seminal work (1954), developing economies are seen as a two sectors: a low-productivity sector with excess labor (agriculture, in China’s case) and a high-productivity sector (manufacturing in China). The high-productivity sector is profitable, partly, because of the surplus of labor it can utilize cheaply because of the reduced wages prevalent in the low-productivity sector. Because efficiency increases faster than income, the high-productivity sector is more profitable than it might be if the economy were at full employment.

It also encourages higher capital development, which drives financial growth. As the number of surplus employees dwindles, however, wages in the high-productivity sector begin to go up, that sector’s earnings are squeezed, and investment falls. At that point, the economy is said to have crossed the Lewis Turning Point. A portion of their argument is based on estimates of just how many employees in China to stay in the low-productivity industries and thus could still transfer to the high-productivity sectors. But such estimates are inevitably a little shaky. Here’s a figure showing the annual growth rate of China’s working-age population. Back in the 1970s and 1980s, the China’s working-age inhabitants were growing at 10-15% per season.

  1. 3 Types of Inventory | Raw Material | WIP | Finished Goods
  2. An investment categorized as held for sale in accordance with IFRS 5. [IAS 28.13(a)]
  3. ► Feb 27 (1)
  4. 15% of amount received
  5. Developer finds customer, indications contract for lease or PPA, and develops system
  6. Incremental rate of come back, at his point, is almost 200%

And when I was speaking with one of these just couple of days ago. I had been talking to this about a developer that a builds huge complexes, thousands of systems at the time. And I had been talking about how good sustainable buildings are and how exactly we can help them provide these units to people, affordable, sustainable housing that will help reduce drinking water and energy usage. And he said, But we don’t want people to use less energy and water.

We generate income from people using energy because we offer electricity and the water privately now and we want them to use more. That makes them use more income for us. Thornburgh: That’s an impressive statement. One more thing that certainly would stand out in the States-being a lady entrepreneur who has begun her own company in executive to go and bang the drums and convince all of the men in power to make these changes.

What is that like for you and how does that affect what you should do or how you should do it? Abdulrahman: Being truly a female business owner? Abdulrahman: It’s offering me somehow more power. You’d be amazed. But people wouldn’t listen. They wouldn’t because maybe from the first aspect, they might think, Oh, that’s a female, going to reveal how we must do things. But, when you’re speaking from knowledge, from expertise, this mask will just disappear-and they’ll just see someone who knows what they are discussing and pay attention.

Surprisingly, I haven’t felt ever that I am judged or not heard because of being female. I believe maybe that is offering me more power and establishing an example for other females to just step forward when they believe in and wish to accomplish something, they have confidence in something and they step up.