What role should government play in the global work environm

What role should government play in the global work environment?

Solution

ANSWER:

Government regulatory policies and investments are a significantly important, and often create positive influence in the global work environment and economic development of any industrialized nation. The following are the ways by which the government regulatory policies affect an industry\'s global competitiveness:

--Real exchange rate

A decline in the real exchange rate will cause an rise in the competitiveness of a country’s goods

--Nominal exchange rate

An increase in the nominal exchange rate or a fall the price of foreign goods relative to the domestic price of goods, then real exchange rate will increase. This will cause a fall in the competitiveness of a country’s goods

-- Wage costs and non-wage costs

Wage costs are very important cost of production for many industries. Consequently, if wages are higher in the United States than in China, it is likely that the prices of goods in the United States will be higher than those in China if productivity is ignored.

Non-wage costs are also vital for global competitiveness. These include:

Environmental regulations

National insurance contributions paid by employers

Employment protection and anti-discrimination laws

Heath and safety regulations

Contributions into company pension schemes

-- Infrastructure: The infrastructure of a nation, for example road, rail, telecoms, power generation, water supply have major impact on industry\'s international competitiveness

--Technology development: The nature of government regulations on support for generic technology development, research, and programs too large for single firms or too uncertain to attract private capital or with payoffs too far in the future

--Structure of taxes: The legal environment of operating an industry encompassing, among other concerns, the protection of intellectual property rights and the handling of liability claims