http://www.vancouversun.com/Business/Catalyst+Paper+lays+workers+shuts+down+Campbell+River+mill/1307347/story.html
This article from The Vancouver Sun talks about Catalyst Paper, a paper mill company, that is to shut down its Campbell River paper mill along with laying off more than 525 people at two different mills. The layoffs and closure are due to the fact that the company might not get relief on its municipal taxes, which are $23 million a year. Approximately 350 people work at the paper mill and if the markets don't recover within the next six weeks, then one of its mills may be eliminated. Catalyst Paper is experiencing declining prices and volumes in all of their major markets, and a big issue for the company is taxes.
The concept that relates to Chapter 5 from this article is demand-deficient unemployment. Demand-deficient unemployment results when there is a lack of overall spending in the economy. Although Catalyst Paper is not an actual store and does not sell directly to customers, it can be affected by demand-deficient unemployment. Even though taxes are one of the main issues of the layoffs, it is probably safe to say that the economic recession has a part in this. The businesses that Catalyst Paper sends their products to probably aren't selling very well; therefore they wouldn't need as many workers at the paper mill to make their products.
Pretty much the whole world has seen some form of recession in the last year or so. Many companies from all over are laying off workers and having to shut down various stores. Personally, I don't feel too much of a difference even with the recession. Day-to-day life seems the same, but that's probably because I'm not in the workforce. However, it seems that most if not all of my relatives are doing relatively fine as well. There may be layoffs here and there but none of them affecting the part of the company that they work for. We can only hope that this "economic crisis" will soon be lifted.
4 comments:
Being a student and aren't in the workforce yet, I feel the same way as you. Pretty much everything is the same for me from day to day except when I go to malls, I realized the malls aren't as busy as usual. I agree that the main reason for the layoffs aren't exactly because of the taxes charged but instead it's mainly affected by the economic recession. Companies have always been changed taxes in the past but rarely would they layoff so many employees at a time. Ever since being in the recession, I have been hearing complaints from my parents about their work and how the recession is affecting the number of customers they have compare to previous years. I hope that this recession would soon end and that companies would end the numbers of layoff within a few months because sooner or later, it’ll definitely affect me when it’s time for me to enter the workforce.
Sara Wong
Block F
I must admit, the connection I made to your article wasn't so much about Economics as it was about stocks, which I'm learning about in Money Management. Catalyst Paper Corporation was a stock I made money off of in an assignment, and the funny thing is that the day I made $6000 from sales of my shares, Catalyst also made an annoucement that I would have considered discouraging - they were curtailing production at all of their six mills during the "seasonally slow" Christmas period - yet stock prices rose dramatically. This article that you've chosen is fairly recent, and I see that Catalyst's stock is up ~9% today, when the only news was the indefinite closure of a pulp mill. Recessions are a funny thing because - although you'd expect their effect to be entirely negative - I've definitely seen others stocks, just like Catalyst, that seem to do better in bad times, as opposed to doing worse. I suppose the reason is that stock prices are affected by public opinion, above all.
- Krista Wong
(I always forget)
We are living in the sad reality where the economy is down. It makes sense for the Catalyst Paper Company to be shutting down paper mills and laying off their workers. Although it would be better if they didn't do so, it is important for them to take into consideration the whole company rather than just the workers. But, unlike you, I am a student working part-time. Even though the economic crisis does not directly have any effect on my job, I have seen ways that it has affected people around me. Because of this crisis, a lot of companies are obviously not going to hire new staff but rather they are considering laying off some workers to lessen their burden. This may be beneficial to the company, but it does not help with our economy at all. But then again, most people are self-fish.
K. Li
Block F
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