Economic Factors
Economics affects everyone on a day to day bases whether aware of this fact or not. Economics in a nut shell is the branch of study and knowledge concerned with the production, consumption and transfer and allocation of wealth. Specifically we will be looking at the branch of economics known as macroeconomics or the economy as a whole and globally. Every action that involves goods, services, and money affects the economy of a country or nation. Simple actions such as shopping or buying groceries can have a huge effect on an individual, business and governmental level. Other factors that have a huge effect on global economics are layoffs and unemployment, as well as government actions such as tax increases or decreases.
Food is a necessity for the survival and ability for individuals to thrive. Buying groceries is a task that most have come to hate, but realize the need to continue this act. Every time a grocery cart is loaded, paid for and bagged the economy is affected. Households business and even government are affected by the production, distribution and purchasing of groceries.
On an individual and house hold level, families have to budget for groceries. Food is dire for survival, but for some people living pay check to pay check obtaining food can become a constant worry over having the necessary funds. According to “USDA” (2015) “the food-at-home (Grocery store or super market food items) CPI was down 0.5 percent in March and is 1.9 percent higher than last march.” As prices of groceries continue to rise families are having to cut back on the amount of groceries being bought, or buy lower grade and less healthy food.
Businesses are directly affected by the increase in grocery prices as well. Distribution as well as production prices have increased, which means that mixed with a decrease in groceries purchased leaves grocery stores and super markets with a narrower profit margin. Nationwide grocery stores employee 3.4 million people making them one of the largest job assets in the country (:Fmi”, 2015). With falling profit margins employee’s jobs could potentially be at risk if businesses cannot find a way to even out price fluctuations.
One of the biggest groups affected by the purchasing of groceries is the government. Like all things the government taxes the more purchased means the more tax dollars directed to government spending. As prices start to climb and households allocate less funds to the grocery budget, tax dollars and government income decline. Helping to control inflation and flat line grocery prices is an obligation the government needs to see is met.
Unemployment and layoffs are another factor that can greatly affect the economy of individuals, businesses and the government. The dreaded news of a mass lay off can have long reaching effects on all entity’s involved. Household budgets are stretched thin, business output is lowered, and the government has more individual’s welfare to oversee.
Affected most by mass layoffs is the work force, the individuals being laid off. When a lay off occurs, employees go from having a steady income to having nothing unless unemployment insurance and payments are granted. With a sudden cease in funds, individuals are forced to budget even harder and dip into savings if there is any. This then affects the economy because less money is being spent. Though one individual spending less may not have much effect on the economy, a mass layoff can suck a large amount of money out of the economy.
Layoffs also have an effect on businesses even though the business is making the decision to lay employees off. Layoffs do not come without reason, in most cases a mass layoff is due to decreased profit margins, and the inability for employers to fund such a large employee base. After a lay off occurs, employers have to figure out a way to continue production at the same rate even though there is now a smaller employee base. Apart from money and a lack of employees, businesses can suffer a negative public appearance fallowing a layoff, this can lead to decreased customers.
From a mass layoff government may be one of the most affected groups out of the three. Obviously with a mass lay off the unemployment rate is going to increase and cause problems for the government. Because the government has to support more people there is a potential chance for increased taxes to be able to cover costs of the unemployed. In the United States nearly 1/3 of Americans are on some sort of government assistance (“cnsnews.com”, 2015). Mass layoffs only add to the demand for government assistance. Even five years after the 2008 recession people are unemployed or underemployed and in need of assistance from the government.
Economics has a great influence on all aspects of life, individually, corporately and on a government level. In many aspects the government can help to control the state of the economy. Controlling of interest rates, tax rates and monitoring of inflation and deflation are important rolls the government needs to stay on top of.
When taxes are decreased people bring home more money and have more room to budget funds. In a perfect world decreased taxes would lead to increase purchasing and selling and would help to boost the economy. Taxes are more difficult than just lowering or increasing the percentage of taxes. If taxes are lowered in one area, let us say middleclass income taxes, then taxes in another area have to raise to make up for the deficit. One thing that government has to be careful of is tax shifting. An example of this shifting took place when according to “Investopedia” (2015) “the government placed a sales tax on luxury goods in 1991, assuming the rich could afford to pay the tax and would not change their spending habits. Unfortunately, demand for some luxury items dropped and industries such as personal aircraft manufacturing and boat building suffered, causing unemployment for many factory workers.” Decreasing taxes will have a positive effect on an individual level but can be potentially harmful for the government.
Economics effects everyone on a daily basis, where money is earned and spent has an effect on individuals, businesses and the government. Even the smallest of tasks such as purchasing groceries can have a long reaching effect on the global economy.

References cnsnews.com. (2015). Retrieved from http://www.cnsnews.com/commentary/terence-p-jeffrey/354-percent-109631000-welfare
FMI. (2015). Retrieved from http://www.fmi.org/research-resources/supermarket-facts
Investopedia. (2015). Retrieved from http://www.investopedia.com/articles/07/tax_cuts.asp
USDA. (2015). Retrieved from http://www.ers.usda.gov/data-products/food-price-outlook/summary-findings.aspx