Okun Law Unemployment

Okun Law Unemployment Okun Law Unemployment Okun’s Law; an Empirical Test across Countries Abstract Okun’s Law postulates an inverse relationship between the change in the unemployment rate and the difference between actual and potential real output. The relation has proven to be an influential empirical framework in supply-side economics. This paper sets out to empirically test whether or not Okun’s Law holds and how it varies across the UK, US and Japan during the time period 1976-2006. The quarterly data sets are analysed via both OLS Regression estimations over the whole sample period and Rolling Regression estimations over 18 separate subsamples, with the view to infer how stable the relationship has been over the last 30 years. The reasons for these changes and the implications these results can have for policymakers and labour markets are also briefly discussed. In addition, we find that the unemployment rate responds asymmetrically to expansions and contractions in output when the business cycle is considered. There is a considerable amount of evidence that su pports Okun’s Law usefulness as an empirical relationship. Okun’s Law is defined as the ‘relationship between the change in the unemployment rate and the difference between actual and potential real output’. The relationship has had a substantial influence in macroeconomics in so far that the Law is widely used in macro-models as well as providing the theoretical building blocks to contribute to other empirical relationships such as the Aggregate Supply curve and the Phillips Curve. For this reason, Okun’s Law is an important feature of supply-side economics. Okun’s Law also gives policymakers and economists’ an indication of how the economy is performing in regard to both the labour market and the goods market. Furthermore, central banks, primarily monetary policy, use Okun’s Law as a forecasting tool to predict changes in the structure of the economy and aid in the decision-making process. Its effectiveness as a tool is somewhat contentious, since the relation is designed to be utilised as a benchmark or guideline to judge the performance of the economy against, rather than as a stringent policy rule. Additionally, the relationship is frequently used to achieve an optimal growth rate (without adverse effects on the unemployment rate) as well as more significantly measuring the cost of high unemployment which is regarded as both socially undesirable and a waste of human capital. This study specifically attempts to test, using the dynamic version of Okun’s Law, whether or not the relationship holds in the UK, US and Japan and how the relationship varies across these countries over the period 1976-2006. This will be tested via OLS regression analysis. The central research question of this study is to infer from the results how stable the relation i.e. Okun’s Law been over the last 30 years for the UK, US and Japan? This will effectively captured by the sensitivity of unemployment changes when output growth deviates from its equilibrium level, namely the Okun coefficient (The ÃŽ ² term in the relation). Most papers assume a symmetric relationship between output and unemployment. As a secondary objective of the study, an attempt will be made to test whether or not Okun’s Law characterises an asymmetric relationship, in so far that expansions and contractions in output have a different absolute effect on changes in the unemployment rate, an issue pursued by many authors in the forthcoming literature. In addition, the results can be used to interpret to what extent policymakers can predict the performance of output and unemployment in an economy hence the usefulness of Okun’s Law as a forecasting tool, once instability of the relation is taken into account. Overview The study proceeds as follows; Section 1 presents a theoretical background to the Okun’s Law and its significance as an empirical relationship. Section 2 presents a review of the existing empirical literature on Okun’s Law along with discussion of any relevant omissions and contradictions of the respective authors’ findings. Section 3 uses Blanchard (1998) methodology as a basis for the construction of Okun’s Law as well as providing the necessary explanations of the variables used in the model, version of the relation used. The methods of data collection and the limitations of the methodology employed will also be stated. Section 4 presents some preliminary data analysis including descriptive statistics, tests for Stationarity, Heteroskedasticity, Serial Correlation and Chow Test for structural stability. Section 5 presents the empirical results and the subsequent analysis of the techniques used to interpret Okun’s Law. Namely, OLS Regression Analysis over the whole period, Rolling Regressions, Stability Tests, and Dummy Variable analysis based on its use in the model and how the empirical results integrate with the subject matter raised in the literature. The implications of the empirical results for macroeconomic policymakers, the goods and the labour market are also briefly discussed. Section 6 presents a judgement on the overall findings from the analysis of the data as well as providing a critical appraisal of Okun’s Law and its usefulness as an empirical relation across countries. In addition, potential recommendations will be discussed in the context of how the study and/or the model can be improved for further research. Background Theory Okun’s Law – the inverse relationship between unemployment and output is regarded as ‘’one of the most reliable empirical regularities of macroeconomics’’. In recent times, there has been a considerable amount of research into the empirical significance of Okun’s Law. Policymakers are interested in sustaining output growth and achieving a low unemployment rate and the relationship is seen as a fairly good indication of economic performance. The type of unemployment that will prevail depends on how labour supply and demand evolve over time and is the prime reason why Okun’s coefficient has reduced over time. The lack of empirical testing in this area is a major limitation of reliable Okun coefficients. In 1962, Arthur Okun, an American economist, formulated and interpreted this relationship. He suggested a negative relationship between the change in the unemployment rate and the growth of real output. Many economists till this day, view Okun’s Law to be a very useful relation in assessing macroeconomic performance. Okun estimated that in the US; output growth of 3% below equilibrium for one year, leads to an increase in the unemployment rate of one percentage point (reverse case also applies). However, more recent studies have shown that in fact, a 1% increase in output leads to a reduction in the unemployment rate by 2%. The simplicity of Okun’s Law, involving the use of fundamental economic variables (output and unemployment) makes it a striking empirical relationship to study. However, there are a number of forms or versions that Okun’s Law can take. The predominant versions of Okun’s Law are; the difference version, the dynamic version, the gap version and the production-function version. This study will use the dynamic version of Okun’s Law since it is widely used by economists as well as taking into account deviation of output from some equilibrium level, which ultimately creates a more plausible investigation. Although the magnitude of the decrease seems to be declining and with widespread acceptance of the relationship being pervasive, structural differences in an economy’s product and labour markets coupled with the difficulty that national governments face in managing the economy, highlights the need to rigorously investigate Okun’s Law still further. Literature Review This section examines the existing empirical literature concerning Okun’s Law and the most significant findings. The purpose of this section in particular is to evaluate the usefulness of Okun’s Law as an empirical relation against a number of criteria. Additional focus will be placed on how the relationship varies across both differing time periods and different countries as well as the techniques used in the literature. Using the original formulation of Okun’s Law Equation (1) Blanchard (1998) estimated the relation across both countries and time. The time periods the author used were 1960-2003. (1960-1980 and 1981-2003). The author estimated the coefficient for the United States, the UK, Germany and Japan. According to the reports, as expected, the law does hold in all of these countries. The econometric techniques used by Blanchard in constructing these results involve the use of standard regression analysis. It was brought to our attention that the US had the highest response (-0.39), whilst Japan the lowest (-0.12). This is in part explained by the differences in structure within each country’s respective labour markets. The study made 2 plausible yet restrictive assumptions. The first being that ‘’Output moved one for one with employment’’. This is an important point to note since economic theory suggests that an expansion in an economy’s output, ceteris paribus (an increase in productive capacity) will require an equal increase in the amount of labour (workers) needed to produce that additional output. The second assumption is that of ‘’A constant labour force’’. This assumption follows on from the first in that changes in employment are reflected in opposite changes in unemployment. A major critique of these assumptions is the fact that in absolute terms, the rise/fall in the unemployment rate may not be proportional to the rise/fall in the employment rate due to labour force participation. Blanchard also brought to our attention that in the Medium Run the relationship may differ due to both equilibrium values of output and unemployment returning to their natural levels. This adjustment of the variables means that certain macroeconomic policies cannot influence output growth or unemployment rates. However, earlier formulations assumed any increase or decrease in the unemployment rate relative to the rate of output growth to be in equal absolute proportions. The revised equation (below) rectifies this simplistic assumption by involving the actual deviation of output growth from its equilibrium, where the Beta coefficient measures the responsiveness of unemployment rate changes to deviations of output from equilibrium output. Ut Ut-1 = -ÃŽ ² (gyt – Ä y) (1) Potential Rate of Output Growth Unemployment rate at t-1 periods Output Growth at t periods Unemployment rate at t periods Beta/Impact Coefficient Sogner, L and Stiassny, A, (2000) investigated Okun’s Law for 15 OECD countries to deduce whether structural instability originates from the demand or supply-side of the economy. The Keynesian viewpoint was found to hold little empirical validity in contrast to that of the neoclassical one. This is in part down to the ‘’assumption of fixed prices and wages.’’ This is unrealistic to assume particularly in a world where inflation is everywhere a monetary phenomenon. Although firms do change their output plans according to changes in growth, both changes in wages and prices will determine the underlying unemployment rate and any estimates based on such assumptions will derive incorrect results. Economic agents expect certain activities to occur in the future based on either past or current activities. The most crucial finding of this paper is that the persistence in the unemployment is strongest in countries that have a highly protected labour market. A lthough this is inconclusive in contrast to other studies, it implies to a certain extent that variations in real output only have a small effect on employment levels which needs to be accounted for especially when revisions of the relation are considered. Most Okun’s Law stipulations tend to assume a symmetric relationship between unemployment and output growth. In other words, output growth for instance produces the same absolute effect on unemployment. Harris and Silverstone (2000) managed to test this assumption using hypothesis tests for New Zealand over the period 1979-1999. They discovered that Okun’s Law does hold by means of regression analysis over this period. The most essential insight which can be extended across many countries if need be, is the Okun coefficient which they estimated based on their regression results. In New Zealand, ‘’a one percent change in output growth is associated with a 0.4% change in the unemployment rate.’’ This is in fact due to changes in labour force participation, labour hours and capital utilization. The strength of this particular study was the use of labour supply analysis which contributed in supporting Okun’s Law and its role on the supply s ide of the economy. The authors do however, wrongly assume a symmetric assumption throughout the paper and this is not plausible, especially in the long-run. Productivity gains and the structure of the labour market play a vital contribution to the outcome of any relationship between unemployment and output. Walterskirchen (1999) proposed this argument to his study. This particular study generates differing perspectives to those posed by both Harris and Silverstone (2000) and thus varies greatly in terms of empirical results. The author does support Blanchard’s view concerning the existence of a ‘’strong positive correlation between GDP growth and change in the employment rate.’’ However, the additional emphasis placed by Walterskirchen is that of productivity gains and labour supply and demand in the context of each country’s individual labour market. The fact that the author cites demographic influences as well as economic is vital to the building blocks of empirical results and whether or not they are consistent with economic theory. The author carried out this particular focus of the study thro ugh two predominant methods; Time-series data analysis for each individual EU country and cross-country data analysis for the period 1988-1998. In both methods there appears to be a strong negative correlation between output growth and the resulting change in the unemployment rate. Walterskirchen highlighted the difficulty in the calculation of potential output in order to estimate Okun’s Law and thus disregarded this method in his empirical analysis, focusing instead on the change in the rate of output and unemployment. He did however, attempt to correct another ambiguity in the fact that the relation overlooks the ‘’influence of investment activity and technical progress on labour productivity.’’ The results clearly show the rate of productivity to be approximately 2% in the EU, representing a constant figure. In times of high unemployment, Okun’s coefficient will tend to also be high (1980’s). In contrast, demographics explain the contribution of the rise in population growth on the employment rate. It was found that an increase in population growth puts considerable pressure on employment to increase and as a consequence labour productivity diminishes. This is relevant since ‘’employment will only grow if economic growth rates are outstripping productivity’’. This adds further weight to the claims of productivity on the supply-side of the economy and the role it plays in determining the rate of unemployment. ‘’The hi gher the Okun coefficient (usually 0.3 to 0.5), i.e., the elasticity of unemployment rates with respect to GDP growth, the better the chances for reducing unemployment through growth and demand policies’’. This aspect of the study is of great importance to policymakers. The author ensured that the significance of Okun’s Law at the government level is not disregarded and hence plays a role in the effectiveness of policy at the macro level. Schnabel (2002) investigated whether Okun’s Law can be used to derive estimates of trend output growth but more importantly to focus on whether to use the trend rates derived in constructing measures of the output gap. It is a key concept in the construction of Okun’s Law and the subsequent tests. The author pointed out the difficulties of estimating trend output, mostly in part to the numerous methods which can cause ‘’biases and problems of interpretation’’. This is regarded as a major flaw of Okun’s Law and Schnabel emphasizes this in his study. The interesting aspect of his econometric methods to test for the Okun coefficient was by use of Rolling Regressions for the G7 countries he intended to estimate. This technique aimed to test how the actual coefficients change or vary over time (many sample periods), in order to capture the dynamic changes which an economy undergoes over a shorter time horizon. The authors’ estimates i nvolve the G7 countries as well as the US, Japan and Canada, with each country’s coefficients being significantly different than those of the next. Schnabel found out that the full sample had similar coefficients with that of the sub sample. This indicates that the relationship was relatively stable and accurate with the actual rates providing a sound benchmark to be compared against. A remarkable addition to the overall model was using business cycle stages as measures against the obtained trend values. This allowed the author to test the significance of the coefficients within different stages of growth, recovery or depressions. This is directly attributable to the case of UK, which had robust coefficients of 2.2 for growth an estimate taken from the period 1980-1990. During the 1990’s labour market flexibility played vital a role in increasing participation rates within the labour market. This would suggest that as potential output grows, actual positive output grow th exists. This is not a viable view since cyclical unemployment is not constant in all countries. The author, from the results, cited that sophisticated econometric techniques by use of filters may produce more accurate results and less ‘’shifting of parameters which are not deemed to be constant’’. In addition, the trend rates obtained should ‘’not be interpreted as the rates of growth compatible with stable inflation’’. By introducing inflation into these estimates would complicate the estimations since such changes are reflected in the intensity of the business cycle, which the author correctly cites as a major limitation of his study. Harris and Silverstone (2001) in their second study examine how upturns and downturns have a direct impact on Okun’s Law. A test which detects how unemployment and output growth react (proportionally) to changes in the business cycle is known as Asymmetry. Earlier, Blanchard made the view that Okun’s Law is symmetrical and many economists make this wrong assumption. The adjustment process in the real world follows different paths and involves many complex factors. Both Harris and Silverstone appreciate the need to test for asymmetry and ignoring this would see the hypothesis that there exists an inverse relationship between output and unemployment rejected, as well as numerous forecasting errors being made in the decision making process that policymakers go through. Output growth (yt) was found to be weakly exogenous and this was true for all the OECD countries tested. Co integration Tests (were undertaken through Engle-Granger Two-Step method and Johansen Procedure) we re calculated by Harris and Silverstone in an attempt to observe how the coefficients differed asymmetrically when the phase of the business cycle was considered. It was discovered that adjustments to disequilibrium are not prevalent in the downturn phase of the business cycle but in the upturn phase they are more volatile due to the nature of both the goods and labour market which is consistent with economic theory. This is not the case for the UK and Japan since results indicated that they in fact move in opposite directions. Although, not explicitly stated the author manages to highlight the importance of this test as a benchmark for other relations such as the Philips Curve, AS curve and Taylor-Rule seemingly also strengthening the case for pursuing more in depth study of relationships and their responses in different countries. Kosfeld and Dreger (1992-2000) investigated the German Labour Market and their study stressed the notion that ‘’changes in production and employment are closely related’’. This gave rise to the Threshold concept, which in basic terms refers to there being a finite amount of capacity both in the economy and at firm-level. Any output growth above this specified capacity will tend to create new jobs and a fall in the unemployment rate over time. This serves as an important guideline to policymakers, albeit a different one to that specified by Walterskirchen. The thresholds in fact act as a determinant for both employment and unemployment. The authors’ application of Okun’s law is from both the demand and supply-side although Okun’s law is usually approached from the supply-side due to the operation of labour markets. Instead of supporting Walterskirchen’s view on demographics and other factors, the authors in this study believe that they in fact weaken the relationship. This arose due to the complexity of structural developments in the economy. The overall results followed on with the negative relationship between unemployment and output existing in Germany. However the unemployment benefit system in Germany led to employment and unemployment responding differently to changes in output. This response was detected in the 1990’s by a method known as spatial correlation equal to 0.2, which was regarded as relatively weak. This method is regarded as unsatisfactory since the results derived do not make a credible contribution to the study. Huang and Chang (2005) proposed to evaluate the empirical validity of Okun’s Law via structural change using the threshold approach in Canada. This supports Kosfeld’s and Dreger’s previous study. The empirical models used are far accurate than previous standard linear equations. This highlights the difficulty in conducting accurate Okun’s Law estimations. The study also takes into account the presence of serial correlation and this is embedded into the following autoregressive model; Uct = ÃŽ ±0 + ∑ ÃŽ ±i uct-i + ÃŽ ² yct + Єt In order to obtain both the unemployment rate and real output growth (GDP) the author has used the Hodrick-Prescott filter (HP) and the Band-Pass filter (BP). Both filters are widely used and results of the study show that Okun’s Law strongly holds, with results support the Law with high negative correlations of -0.7967 and -0.8062. However, the most crucial finding was that of a high Okun coefficient in the recession phase of the business cycle, this further supports Harris and Silverstone’s notion that cyclical output’s effect on cyclical unemployment is asymmetric. A high Beta coefficient acts as a signal to policymakers that unemployment is highly responsive to output gap deviations and thus provides a call for actions in the form of controlling the level of AD in the economy stimulating labour participation rates in the labour market. Weber, C.E (1995) study takes a similar direction to that of Huang and Chang however, the element is more specific and thus more precise. His purpose was to test Okun’s Law post-war USA, to see if the relationship has been stable after this period. The interesting aspect of this particular study is that there was an apparent oil shock in the 1970’s, which affects the supply-side of the economy. Weber focused on the periods both after and before the oil shock. The econometric method used for this test was predominantly OLS estimates via some from of Chow Test, using Dummy Variables (below); Uct = ÃŽ ±1yct + ÃŽ ±2Dtyct + ÃŽ µ1t The empirical results for the OLS estimations were -0.314 which surprisingly turned out to be close to Okun’s original estimate of -0.32. However, parameter constancy was rejected due to the high variation in the high t-statistic of -0.277 and –0.402. Weber did leave scope for further future developments with reference being made to the importance of the initial source of the shock (supply or demand) in the outcome of changes in cyclical unemployment/output. On the basis of the existing literature, it is clear to see that Okun’s Law does hold across a number of different countries and time periods. The ability to infer how stable the relationship is over both the long-run as well as the short-run proves vital in any empirical analysis undertaken. However, due to some of the components of the model being difficult to estimate as well as other factors such as productivity and inflation affecting output growth, doubts remain over the usefulness or reliability of Okun’s Law as a benchmark for policymakers. Research Methodology Modelling Economic Theory This sub section will provide the theoretical basis of Okun’s Law as well as the major underlying assumptions of the model. In addition, brief explanations of the techniques employed and the justification for their use will be included. Although, using almost the same methodology as Blanchard (1998) the estimates may vary considerably. Firstly, the most significant reason is that Blanchard (1998) tests Okun’s Law across a number of different countries including the G7 countries. This study looks predominantly at the UK, US and Japan with the emphasis being placed on the former. Secondly, both studies look at different time periods and different frequency of data. Blanchard (1998) tested the relationship from 1960-2003 using monthly data, while this study will test the relationship with a technique called rolling regressions, using quarterly data from 1976-2006, giving us a more up to date inspection of Okun’s Law. Another essential issue which could cause the results to differ is the estimation of potential output; needed to compute the output gap term in Okun’s Law. Although both studies use this variable, the technique used to measure potential output is different. (1) ΔUt = ÃŽ ² (yt – Ã… ·) (2) Re-arranging Ut = Ut-1 ÃŽ ² (yt – Ã… ·) Pre-Analysis of the Data Since specific data will be used to build an econometric model and test whether the model has theoretical validity, it is important to determine the properties of the variables in question. Description of Data To generate the model for Okun’s Law as well as test it for each country (UK, US, Japan) this study uses the 124 quarterly data points for the Unemployment Rate (%), Real GDP and Potential GDP (GDP) for the period 1976-2006. The latter two are used to compute the Output Gap term in Okun’s Law. To ensure reliability whilst contrasting and analysing time series data all the variables are logged. Shortcomings of the Data The estimation method of potential output is an approximate when generated from the Hodrick-Prescott Filter and thus the computation of the output gap term is not always accurate. Many authors use the Band-Pass Filter and this may lead to discrepancies of the estimations in this study. There may also be bias in the sample, since different countries use different measures to determine the unemployment rate. This study has used percentage unemployment as per the Claimant Count, Bureau of Labour Statistics and Statistics Bureau. Trend Analysis In Appendix A, a graphical account of each variable across the UK, US and Japan is given. It is apparent that over time Real GDP has an upward trend which indicates an expanding economy, at the general level. This study makes three crucial assumptions building on from similar assumptions made by Blanchard (1998). Firstly, we assume that changes in output lead to changes of equal magnitude with changes in employment levels. Secondly, we assume that firms adjust their employment levels in response to labour-productivity growth and this has no bearing on the rate of unemployment. In other words, higher induced labour-force participation rates do not have a detrimental impact of the rate of unemployment, ceteris paribus. Thirdly, we assume that output in the long-run will grow at its underlying rate. In other words y = Ã… · (In equilibrium as the trend rate suggests in Appendix A). The relationship being estimated is the one between the unemployment rate and real output. Equation (2) is essentially a dynamic version (short-run) version of Okun’s Law. The dynamic element stems from the fact that the economy adjusts towards equilibrium over time, hence the use of the output gap term (yt – Ã… ·t). The ÃŽ ² coefficient measures the responsiveness of unemployment changes to changes in output growth from equilibrium (which is denoted by a minus sign in Okun’s Law due to the inverse relationship it implies). The equation (2) provides the framework model which will be utilised throughout this study. Economic modelling proposes that Equation (2) is not plausible under the conditions of assuming that last years’ unemployment rate and potential output (natural rate of output) don’t change. I.e. are observed into the constant. To correct this we introduce lags into the model as well as assuming that potential output is absorbed into the c onstant. Under this new assumption the unemployment rate is derived from the unemployment rate in the previous period. The model thus becomes; (3) Ut = ÃŽ ²0 + ÃŽ ²1Ut-1 + ÃŽ ²2yt + ÃŽ µt In an expanding economy, real output increases at a stable rate, therefore putting pressure on the economy’s idle resources. Okun’s Law thus predicts that any increases in real output above some underlying trend coincide with falling unemployment. Additionally, potential output (Ã… ·t) is an unobservable variable. In order to derive Okun’s Law; an empirical estimation of potential output is needed. Potential output (Ã… ·t) is generated from the Hodrick-Prescott Filter function in EViews. (Appendix A). Potential output is regarded as the underlying trend rate of output. This effectively is the level of output that the economy would produce if it utilised all of its resources. In order to allow for this in the model for Okun’s Law we substitute the output gap term (yt – Ã… ·t) into yt from Equation (3). This yields the following; (4) Ut = ÃŽ ²0 + ÃŽ ²1 Ut-1 + ÃŽ ²2 (yt yt) + ÃŽ µt Policymakers are concerned with attaining explicit policy objectives and in order to achieve this they are interested in how the characteristics of a variable have changed over the course of time. In this study, the key variable examined is unemployment, whereby achieving a low unemployment rate is desirable; many national governments pursue this policy objective. The fundamental basis for Okun’s Law was discovering the cost of excessive unemployment to an economy when real output grows. In an ideal world, the rate of unemployment would be low and an economy’s growth rate to be expanding at a sustained level. Typically, unemployment is considerably unstable in the short run which is clear to see in the graphical representation (Appendix B) of the unemployment rates of the respective countries; The UK, US and Japan. The primary problem with running a regression over a whole sample period using time-series data is that the relationship does vary in the short-run sometimes more often than the variations in the long-

Blue-Collar Brilliance Essay

Blue collar workers are the backbone of America. In the article, â€Å"Blue-Collar Brilliance†, author Mike Rose emphasizes his belief that blue collar jobs should not be viewed as mindless tasks, but rather should be acknowledged for the amount of skills and intelligence these tasks truly require. What the author essentially means is that blue collar workers acquire knowledge, intuition, and skills from the social dynamics of their workplace itself. Rose argues that we often make mistakes by judging people based on their level of education and thereby not giving them the recognition they deserve. Through observation, trial and error, and often physical and verbal assistance from others, blue collar workers develop their skills. â€Å"Blue-Collar Brilliance† is an article that makes us realize that formal education does not always measure the level of intelligence of a person. Blue Collar jobs require just as much intelligence as jobs that require formal academic credentials (e.g. a College Diploma) and hence should be recognized for their work. In the article, â€Å"Blue-Collar Brilliance†, Mike Rose disagrees with the assumption that â€Å"Intelligence is closely associated with formal education† (Mike, 247). Although the aforesaid assumption has been absorbed throughout history, Rose believes that more readings occur in the blue collar workplace than what society gives credit for. I agree with Mike Rose when he argues that although society often defines one’s IQ based on school grades, blue-collar workers develop intelligence and skills in workplace through proper planning, problem solving, and social interactions. Most blue collar Mehreen jobs are constantly faced with new problems every day, in the midst of grueling schedules, that demand instant resolution. Blue collar workers acquire intelligence, wisdom, and skills from the technological and social dynamics of their workplace. In the article, Mike Rose supports this view  by describing what he learned as a child observing how his mother was shaping her identity as a waitress in the coffee and family shops. Since then he came to realize that his mother’s work required both mental and physical strengths. In the midst of grueling work schedule, Mike’s mother learned not only how to work fast but smart as well. She acquired her knowledge and skills by studying human behavior. In her busy work schedules, she memorized tactfully who ordered what by devising mental strategies. Besides working as a waitress, Mike’s mother constantly tried to understand the psychology of her customers in an effort to provide customized services to meet their specific needs. Her experience reminds me of the time when I worked as a sales representative at an AT&T retail store in Alabama. The thought processes involved in my work was very similar to the work that Mike’s mother did. Like Mike’s mom, I devised my own mental strategy to respond to customer queries and concerns more effectively in order to satisfy demands. I often made decisions on whether or not to sell a product by observing, understanding, and interpreting the behavior of the customers. In the article, the author emphasizes that most blue color jobs require significant amount of judgment and reading than white color jobs. The author supports his views by saying, â€Å"Carpenters have an eye for length, line, and angle; mechanics troubleshoot by listening; hair stylists are attuned to shape, texture, and motion† (Mike, 251). Mike argues that the use of a tool requires motor skills to perform, because a person needs to know the main purpose of the  tool for a particular situation. By working with a tool for a long period of time, the worker becomes attuned to every aspects of the environment that enhances knowledge and perception of the job at hand. As a result, workers get more trained and disciplined. In the routine tasks of most blue collar jobs, reading is integral to workers to understand production quotas, and learn how to use an instrument. Although formal education is important, but learning how to use those skills is more important. I agree with Mike Rose’s perception of how modern day society is often reluctant to bestow upon the blue collar workers the recognition they deserve. However, I’m a strong proponent of availing every human being, regardless of their race, gender, or social status, the access to a decent education. I support the  author’s claim that people should not be judged only by the kind of work they do. While most white collar workers have higher levels of education as compared to their blue collar counterparts, they may not necessarily be more intelligent or savvy at the jobs they perform on a day to day basis. Mike is not saying that education is not important but he argues that many of the tools to become successful in the work place become routine with observation and trial and error. Education is still a very important tool but learning how to manipulate that tool and use the skills learned in the working environment to make plans and solve problems is more crucial for success. Although formal education is important, the skills and wisdom we acquire through direct experience in life are the true indicators of how intelligent a person is. Blue collar workers should be acknowledged for the work they do because they demand the same level of intelligence as jobs that require academic credentials. They perform routine tasks in the midst of difficult work schedules by reading and making proper judgment, which affects the ways they   perform their work. Regardless of the fact that most white collar workers are more educated as compared to their blue collar counterparts, they are not necessarily more intelligent at the jobs they perform. The skills which we develop through formal education are important tools but knowing how to apply those tools in real life circumstance are more important. Through social interactions, observations, and trial and error, blue collar workers learn how to successfully accomplish their tasks every day. Works Cited Graff, Gerald, Cathy Birkenstein, and Russel K. Durst. â€Å"Blue Collar Brilliance.† â€Å"They Say/I Say†: The Moves That Matter in Academic Writing: With Readings. 2nd ed. New York: W.W. Norton & Company, 2012. Print.

Meaning of life †Anthropology Essay

The Meaning of Life and Cultural Relativism –What is the meaning of life? –â€Å"What’s the meaning of life? † is today a question generally meant as a joke. This apparently wasn’t true in the past. Religious teachers, from Jesus to Buddha to Mohammed, offered a clear meaning of life. Philosophers from Plato to Augustine to Voltaire to Nietzsche to William James also offered such a meaning, although in progressively less certain ways. –Today, however, philosophers have mostly turned away from questions of the meaning of life (or when they discuss it, they may proclaim life’s meaninglessness, as does Nagel in this week’s reading). A big reason for this is that there are so many different beliefs in the world today: they relativize all beliefs, and make certainty problematic. –A key principle of anthropology is â€Å"cultural relativism†: this has become a central principle in today’s world at large. How can you know that your sense of â€Å"the meaning of life† is truer than someone else’s sense of â€Å"the meaning of life†? This is why it may be difficult to be both a Christian and an anthropologist. And this is why this course cannot offer much advice as to â€Å"the meaning of life. † Meanings of Life in Anthropology –Anthropologists thus can’t discuss â€Å"the meaning of life†; but they can analyze people’s personal meanings of life, as a way of better understanding how people are culturally and socially shaped. There is a fundamental difference between â€Å"the meaning of life† and â€Å"meanings of life,† and only the latter can be fully explored by anthropologists. –Anthropologists explore culture: the ways of thinking by which people live. Anthropologists study a range of different culturally-shaped fields, from economics to politics to religion to gender in different societies. However, few anthropologists have directly studied â€Å"meanings of life† (maybe none, except for me! ) This is because in most societies that anthropologists study, there is no ordinary word that people use to describe what’s most important to them in their lives. –However, the Japanese language has such a term: ikigai. Ikigai means â€Å"that which makes your life worth living,† or, more practically speaking, â€Å"what’s most important to you in your life. † Common ikigai are work, family, religious belief, creative endeavor, or personal dream. 1 –Why does only Japanese have the term ikigai? Why don’t other languages have ikigai? In any case, even if other languages don’t have the term ikigai, people everywhere can understand what ikigai means. It is â€Å"what’s most important to you in life,† â€Å"what makes your life worth living. † –What is your ikigai? This is difficult for students, because you haven’t yet made the life choices of work and family that you probably will make over the next few years. But you can get some idea: Is it pleasing your parents? Finding a boyfriend/girlfriend? Gaining knowledge? Getting good grades and a good future job? Helping the world become better? Pursuing creativity? Being close to God? The Sociocultural Analysis of Ikigai . –Most Japanese books about ikigai talk about it in a psychological sense: how individuals seek and find and lose ikigai. However, ikigai is also social: all ikigai involve us in the world of other people: whether you live for family, for your personal dream, for God, or for alcohol, all of these are social. –Ikigai in this sense I define as â€Å"that which most deeply links the self to the social world†: ikigai is what ties you to the world around you. This can take two broad forms: ikigai as self-realization, and ikigai as commitment to one’s group: both are fundamentally social. –Here is a one-sentence cross-cultural theory of ikigai: â€Å"On the basis of culturally and personally-shaped fate, individuals strategically formulate and interpret their ikigai from an array of cultural conceptions, negotiate these ikigai within their circles of immediate others, and pursue their ikigai as channeled by their society’s institutional structures so as to attain and maintain a sense of the personal significance of their lives. † We have ikigai because ikigai gives us a sense of the purpose and significance and worth of our lives; but we necessarily hold these ikigai within the context of the society around us, with which we constantly interact in forming and maintaining ikigai.

Matrimonial Regimes - Free Essay Example

Sample details Pages: 8 Words: 2406 Downloads: 6 Date added: 2017/06/26 Category Law Essay Type Analytical essay Did you like this example? Matrimonial Regimes Keith and Erika have been married for the last five years. Before they married they decided that their future common property should be governed by the Community of Acquests regime. Keith was never a good administrator of his own money and during the last months, Erika found out that Keith had invested community money in unsecure businesses. Don’t waste time! Our writers will create an original "Matrimonial Regimes" essay for you Create order Moreover, he has lent money to his friends and has spent a considerable amount of money in futile objects in order to pursue his hobbies. Erika is very angry with her husband and although she does not wish to separate from him, she intends to safeguard her property, monies and any future money that the couple may earn. She is pregnant with their first child and has left her job to bring up the baby. Advise Erika as to her remedies at law. Introduction: The Community of Acquests regime was primarily introduced in order to ensure the economical protection of the weaker spouse, i.e., women'[1], and to equalize the position of women and men in the traditional sense of marriage with a male breadswinner and a female housewife'[2]. Through this system, all property enlisted under article 1320 of the Civil Code forms a part of a common pool, over which both spouses may exercise acts of ordinary administration a right which previously appertained solely to the husband: Mà ¢Ã¢â€š ¬Ã¢â€ž ¢hemmx dubju li qabel l-1993, ir-rapprezentanza legali u guridika tal-komunjoni taà ¢Ã¢â€š ¬Ã¢â€ž ¢ l-akkwisti kienet vestita fà ¢Ã¢â€š ¬Ã¢â€ž ¢idejn ir-ragel biss, li wahdu setaà ¢Ã¢â€š ¬Ã¢â€ž ¢ jagixxi u jiddisponi mill-assi tal-komunjoni kwazi bla xkiel. Bl-Att XXI tal-1993, li emenda l-Kodici Civili, il-posizzjoni inbiddlet u r-rapprezentanza tal-komunjoni taà ¢Ã¢â€š ¬Ã¢â€ž ¢ l-akkwisti giet affdata fil-koppja mizzewga[3] Therefore, the wife now enjoys an undisputed legal right to contribute to the administration of the community property. Indeed, she has a vested interest to ensure that their money is well managed and if her personal or family interests are being jeopardised, she is granted remedies to protect them. Administration of Property: L-Artikolu 1322(1) tal-Kodici Civili jiddisponi li l-amministrazzjoni ordinarja taà ¢Ã¢â€š ¬Ã¢â€ž ¢ l-akkwisti u l-jedd li wiehed iharrek jew jigi mharrek dwar dik l-amministrazzjoni ordinarja imissu lil kull wahda m ill-partijiet mizzewga. Min-naha l-ohra, l-Artikolu 1322(2) jipprovdi li l-jedd li jitwettqu l-atti taà ¢Ã¢â€š ¬Ã¢â€ž ¢ amministrazzjoni straordinarja, u l-jedd li wiehed iharrek jew jigi mharrek dwar dawk l-atti imissu liz-zewg mizzewgin flimkien.[4] With regard to the case at hand, Erika cannot be expected to rely on the belief that her spouse will request her consent before performing the limited number of acts under article 1322(3), that although relate to major decisions affecting community property, are exhaustive[5]. Whilst lack of consent may lead to the annulment of certain acts[6], still, few of the acts she complained of may be classified as extraordinary. Under their current regime, it would be unlawful for the spouses to enter into a post-nuptial agreement whereby administration is vested solely in the wife article 1318 specifically bans the spouses from derogating from the provisions under sub-title III[7]. Nonetheless, this may be done through court authorisat ion. Article 1325 allows Erika to request the court to order the exclusion of her husband, either generally or limitedly, from the administration of the community of acquests. She must prove, on a balance of probabilities, that he either: (a) is not competent to administer, or (b) has mismanaged the community. This request was upheld in the case of Mary Grech vs. Reno Grech[8], whereby the court argued that this remedy was merited due to the intense disinterest that the husband had towards his business, a quality mirrored in his lack of participation in the judicial proceedings[9]. The court noted that in absence of specific requirements in the law[10], the spouse may proceed by any application, sworn or not. Furthermore, it recognised that such a request need not be accompanied by a case of personal separation: il-qorti ma tarax li ngabulha ragunijiet sufficjenti ghax ghandha tillimita l-applikazzjoni ta dan l-Artikolu'[11]. Finally, the court ordered that the Registrar is noti fied of the decision, a vital requirement as per article 1325(3) so that third parties are informed. Consequently, this remedy appears to be very favourable for Erika if it is successful, the administration of the community shall, to the extent to which Keith has been excluded, vest exclusively with her. There exist very similar provisions under Italian[12] and French[13] law. Interestingly, the grounds enlisted in the French text are drafted in a more specific manner than the Maltese equivalent: Si lun des ÃÆ' ©poux se trouve, dune maniÃÆ' ¨re durable, hors dÃÆ' ©tat de manifester sa volontÃÆ' ©, ou sil met en pÃÆ' ©ril les intÃÆ' ©rÃÆ' ªts de la famille, soit en laissant dÃÆ' ©pÃÆ' ©rir ses propres, soit en dissipant ou dÃÆ' ©tournant les revenus quil en retire.[14] Thus, fortunately for the requesting spouse, article 1325 is open to wider judicial interpretation. The French court may nominate an administrateur judiciaire[15] a figure absen t in our code and one worth considering in future amendments defined by Dyson as a person nominated by the court to administer assets in an estate when the need arises[16]. Although not specified in the French code, his responsibility presumably arises pendente lite and ceases after judgement is passed. Allowing the possibility to appoint a permanent or temporary administrator to manage the spouses property is another option for legislators to consider. In serious cases of dead lock between the spouses, it would be ideal to have their property administrated by a trusted professional this would remove future hostility between the spouses all the while safeguarding their assets. Separation of Property: Erika may also resort to a complete judicial separation of their property, and from the acts complained of, she could have an action under 1332(1)(b)[17]. In Angeline Schembri vs. Francis Schembri, described by the First court as kaz klassiku taà ¢Ã¢â€š ¬Ã¢â€ž ¢ dilapidazzjoni tal-beni minn wiehed mill-konjugi'[18], it was held that in order to apply 1332(1)(b) one need not prove that damage has actually occurred, nor did the husband need to be affected by some uncontrollable vice: hu bizzejjed imgieba li tipperikola l-interess tal-konjugi l-iehor, tal-komunjoni tal-akkwisti, jew tal-familja'[19] a test which is at the courts discretion. The fact that the husbands conduct was wholly egoistic, lead to the termination of their regime and the separation of acquests, to be effective from the date when the judgement became final. In AB vs. CB[20], the court noted that traditionally, the husband was the head of the familys finances yet, even prior to the 1993 amendments, this did not entitle him to conceal all financial information from his wife. Interestingly, the court upheld plaintiffs plea under 1332(1)(d) where one of the spouses has been excluded from the administration in terms of article 1325, either generally or to a great extent; albeit no refere nce was made to article 1325. In the former case, the court quoted Italian jurisprudence[21] and article 193 of the Italian Civil Code. With a difference to our code, the latter clarifies which regime is to regulate the property of the spouses after judicial separation is pronounced that of separazione dei beni. One would assume that in Malta, the same would apply since upon partition, one half of the community is acquired by each spouse[22]. This property, not being community or dotal, becomes paraphernal and is retained and administered by the exclusive owner thereof. This regime does not offer protection to the wife in the traditional breadwinner and housewife scenario. If Erika opted for a separation of estates upon dissolution of the community property, her assets, even if properly administered, would eventually run out as she has no income. Her situation would be the same under CORSA[23]. A spouse may appoint the other as his agent[24] however, this would not necessaril y exclude the former from administration. Furthermore, Keith would have to agree to this, it cannot be done unilaterally by Erika. Conclusion: An ideal remedy would be the fondo patrimoniale found under Italian law. This may be established alongside another regime a far fronte ai bisogni della famiglia'[25]. The assets that form part of the fund are subject to strict rules on administration, use, disposal and creditor claims securing assets available for the interests of the family. Nonetheless, there is no equivalent option under Maltese law. Erika may apply to the court under article 6A[26] for its assistance in order to reach an amicable settlement, or provide the most fitting solution in the interest of the family. For instance, the court may recommend the separation of their community property, together with an agreement whereby administration of income generated by either, is in the hands of the wife. Both spouses have a lawful duty to maintain the family[27]. The refore, if the husband is incapable of managing their assets as a bonus pater familias, there is a great risk that the court will order his exclusion from exercising rights over the community of acquests. Consequently, in light of the circumstances, article 1325 is, in my opinion, the best available option for Erika. Bibliography Books and Journals Dyson H, French Property and Inheritance Law: Principles and Practice (Oxford University Press 2003) Raoila V and Salomone L, Il regime patrimoniale della famiglia (Cedam 2008) ReÃ…Â ¡etar B, Matrimonial Property in Europe: A Link between Sociology and Family Law (2008) 12.3 EJCL Thesis Muscat M, Marriage Contracts and Matrimonial Regimes: A Local and European Perspective (LL.D. thesis, University of Malta 2011) Table of Legislation The Civil Code (Chapter 16 of the Laws of Malta) The Code of Organisation and Civil Procedure (Chapter 12 of the Laws of Malta) The French Civil Code The Italian Civil C ode Table of Case law AB vs. CB [2011] Civil Court Family Section 2806/1997/1 Alfred Brown et vs. John Mifsud [2005] Court of Appeal (Civil Superior) 134/2001/1 Angeline Schembri vs. Francis Schembri [2009] Civil Court Family Section 17/2006; [2011] Court of Appeal 17/2006/1 Elmo Insurance Services Ltd vs. Edwin Pace et. [2003] Court of Appeal (Civil Superior) 122/1998/1. Jennifer Debono pro et vs. Rohan Debono [2000] Mary Grech vs. Reno Grech [2001] First Court Civil Hall 271/1996/2 Salvatore Cilia vs. Gaetana Cilia. [1955] Court of Appeal (Civil, Superior) vol. 39B part I 212 [1] Branka ReÃ…Â ¡etar, Matrimonial Property in Europe: A Link between Sociology and Family Law (2008) 12.3 EJCL lt;https://www.ejcl.org/123/art123-4.pdfgt; accessed 11 March 2014. [2] ReÃ…Â ¡etar (no 2). [3] Alfred Brown et vs. John Mifsud [2005] Court of Appeal (Civil Superior) 134/2001/1; See also Salvatore Cilia vs. Gaetana Cilia. [1955] Court of Appeal (Civil, Superior) vol. 39B part I 212: l-amministrazzjoni taà ¢Ã¢â€š ¬Ã¢â€ž ¢ lÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ akkwisti konjugali tmiss lirÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ raÃÆ'„ ¡el, illi quddiem it-terzi, jistaà ¢Ã¢â€š ¬Ã¢â€ž ¢ jaghmel minnhom daqs li kieki kienu hwejjgu. [4] Brown vs. Mifsud (no 3). [5] see Elmo Insurance Services Ltd vs. Edwin Pace et. [2003] Court of Appeal (Civil Superior) 122/1998/1. [6] Article 1326(1) of the Civil Code (CC): Acts which require the consent of both spouses but which are performed by one spouse without the consent of the other spouse may be annulled at the request of the latter spouse where such acts relate to the alienation or constitution of a real or personal right over immovable property; and where such acts relate to movable property they may only be annulled where the rights over them have been conferred by gratuitous title. [7] Thereby including article 1322 CC relating to the joint right of administration. [8] [2001] First Court Civil Hall 271/1996/2. [9] Grech vs. Grech (no 8): Illi n-nuqqas ta interess li wera l-konvenut fdawn il-proceduri huwa ssorpassat biss bin-nuqqas ta interess li jidher li wera fit-tmexxija tan-negozju tieghu stess. [10] Here the court made reference to article 125(1) of the Code of Organisation and Civil Procedure. [11] Here the court was making reference to the case of Jennifer Debono pro et vs. Rohan Debono [2000] which dealt with article 1323 yet the former court applied the concept mutatis mutandis to article 1325. [12] see Article 183 Italian Civil Code. [13] see Arti cle 1429 French Civil Code. The French Code also contains a similar provision under article 1426, the equivalent of which is not found under Maltese law. The latter relates to the request for substitution a spouse is granted the right to exercise powers which previously appertained to the other spouse due to maladministration by the latter. [14] Article 1429 French CC: Si lun des ÃÆ' ©poux se trouve, dune maniÃÆ' ¨re durable, hors dÃÆ' ©tat de manifester sa volontÃÆ' ©, ou sil met en pÃÆ' ©ril les intÃÆ' ©rÃÆ' ªts de la famille, soit en laissant dÃÆ' ©pÃÆ' ©rir ses propres, soit en dissipant ou dÃÆ' ©tournant les revenus quil en retire, il peut, ÃÆ'   la demande de son conjoint, ÃÆ' ªtre dessaisi des droits dadministration et de jouissance qui lui sont reconnus par larticle prÃÆ' ©cÃÆ' ©dent. Les dispositions des articles 1445 ÃÆ'   1447sont applicables ÃÆ'   cette demande. [15] Article 1429 French CC: A moins que la nomination dun administrateur judiciaire napparaisse nÃÆ' ©cessaire, le jugement confÃÆ' ¨re au conjoint demandeur le pouvoir dadministrer les propres de lÃÆ' ©poux dessaisi, ainsi que den percevoir les fruits, qui devront ÃÆ' ªtre appliquÃÆ' ©s par lui aux charges du mariage et lexcÃÆ' ©dent employÃÆ' © au profit de la communautÃÆ' ©. [16] Henry Dyson, French Property and Inheritance Law: Principles and Practice (Oxford University Press 2003) 422. [17] Article 1332(1)(b) CC: where the disordered state of affairs of one spouse or his or her conduct in relation to the administration of the acquests jeopardises the interest of the community of acquests, or of the family or of the spouse requesting the judicial separation of property. [18] [2009] Civil Court Family Section 17/2006. [19] Schembri vs. Schembri (no 18) confirmed by Court of Appeal [2011] 17/2006/1. [20] [2011] Civil Court Family Section 2806/1997/1. Interestingly, both in this case and in Schem bri vs. Schembri, the courts emphasized that this action is distinct from the existence of separation proceedings between the spouses: hi ndipendenti mill-krizi matrimonjali li jistghu jkunu ghaddejjin minnha l-konjugi [Schembri (no 18)]. [21] V Raoila and L Salomone, Il regime patrimoniale della famiglia (Cedam 2008) 138: La cattiva amministrazione della comunione intendendosi come cattiva amministrazione non solo quella compiuta in mala fede o con semplice negligenza ma anche quella che integra gli estremi di abuso dei diritti di amministrazione, ad esempio alienazioni a titolo gratuito di beni della comunione e il compimento, in genere, di atti di straordinaria amministrazione senza il necessario assenso dellà ¢Ã¢â€š ¬Ã¢â€ž ¢altro coniuge, allorcheà ¢Ã¢â€š ¬Ã¢â€ž ¢ tali atti per la loro importanza, siano tali da essere di grave pregiudizio per la comunione medesima. [22] Article 1333 CC. [23] Article 1339(1) CC: Under the system of community of residue under separate a dministration the acquisitions made by each of the spouses during the marriage shall be held and administered by the spouse by whom such acquisitions are made [à ¢Ã¢â€š ¬Ã‚ ¦]. [24] Article 1335 CC. [25] Article 167 Italian CC. [26] Article 6A is an innovative and opportune provision in theory, yet continues to gather dust in practice as it has rarely been resorted to since its enactment in 1993. [27] see Article 3B(1) CC.