Sample Annotated Bibliography on Labor and the Environment as Social Costs

Labor and the Environment as Social Costs

Ackerman, Frank, and Elizabeth Stanton. “Climate risks and carbon prices: Revising the social cost of carbon.” Economics: The Open-Access, Open-Assessment E-Journal 6 (2012): 1-25.

This article explains the magnitude of the social cost of carbon as estimated by the US government. According to Ackman, an environmental economist, and Stanton, an economist at Synapse, the latest social cost estimates by the US Environmental Protection Agency (EPA) do not incorporate the effects of climate change. Thus, the authors wanted to re-analyze the uncertainties that result from climate change to minimize risks and damages to environment. This article tends to portray that human effort has played a role in the damage of environment, leading to climate change while Ackman and Stanton wanted to inform individuals that even a small climatic change can result in social cost. The four areas that the authors pinpointed as reasons for uncertainties include the sensitivity of the climate due to greenhouse gases; the extent of damages that could result from low temperatures; the damages that occur due to high temperature; and finally the discount rate. While measuring long-term temperature changes, uncertainty on climate sensitivity is unavoidable. The relation between rise in temperatures and economic damage is vague. The Working Group’s analysis concerning the social cost of carbon projects costs and benefits to 300 years, and this may create controversy as well as lack of compromise about the right discount rate. Thus, the two authors concluded that the US government estimates concerning the social cost resulting from carbon are faulty.

Bartik, Timothy J. “Social Costs of Jobs Lost Due to Environmental Regulations.” (2013).

Social costs can emerge from job loss owing to environmental regulation. According to this article, social costs are likely to be high for old workers or high-wage jobs. Bartik, an economist, is a specialist in regional economics, labor economic and policies, and urban studies. According to Bartik, environmental regulation led to loss of some jobs as well as gain for others. However, this study is about social costs incurred from job loss. Job losses due to pollution control lead to a decline in demand for labor and reduction in production of goods. This study asserts that regulation may have an effect on the quality and the quantity of labor supply. When the quality of labor is compromised, the quality of products may also be compromised, leading to influx of unhealthy products in the market. Regulation may come with taxation where firms increase the prices of their products to cover their expense on taxation. This is a social cost to society, as every individual who uses the products has to pay for the extra charges. The author has incorporated tables to compare social costs resulting from different regulations. The conclusion is that although the level of damage is quite low, job loss also influences social costs.

Dau-Schmidt, Kenneth G, Seth D. Harris, and Orly Lobel. Labor and Employment Law and Economics. Cheltenham, U.K: Edward Elgar, 2009. Internet resource.

According to this study, neoclassical economists argued that externalities offer a public interest justification for employment regulation. Externalities emerge when no proper contract exist, thus allowing some costs to be shifted to a third party. When this happens, a divergence occurs between the private cost and social cost that are realized by all the affected parties. Dau-Schmidt, a labor law expert, and Harris, a former US Deputy Secretary of Labor, together with Lobel, a professor of law, asserted that even though externalities have effects on both sides of the labor workers heavily feel market, their effect. In a free labor market, costs of injuries and illnesses are included in the higher wages, but in imperfect market, firms and consumers shift some costs to a third party. In this case, social costs include poor health and disabilities. The authors suggested that employment regulation could prevent cost shifting, or offer the effected parties an opportunity to receive compensation. They also proposed for a minimum wage that can cover the opportunity cost for leisure, maintenance, as well as depreciation of human capital.

LaJeunesse, Robert. Work Time Regulation As a Sustainable Full Employment Strategy: The Social Effort Bargain. London: Routledge, 2009. Print.

This study explains that laborers have not realized that working long hours is overworking themselves, which consequently result to loss of strength and poor health. LaJeunesse, a consultant on environmental sustainability, claimed that extensive connection to the workplace may tend to benefit both the laborers and employers, but it has been proved to cause physical, as well as social costs. The effect of long hours is first felt in terms of health of an individual, but in the long run, it will take a toll to the families, communities, as well as healthcare systems. In many countries, health care provision is collectively financed, and when some members become ill due to working long hours, they become social burden. Just like pollution, it is quite hard to come up with the costs of excessive work, as employers are benefiting from high productivity in the short-run, but in the long-run, workaholism could be perceived as an addiction that demand an attention before it becomes worse. The study asserts that if long hours are capable of decreasing the well-being of workers, then society is compelled to bear the costs imposed by workers, in addition to taking care of family members of the workers.

Low, Pak Sum. “Economic and Social impacts of desertification, land degradation and drought.” White Paper I. UNCCD 2nd Scientific Conference (2013): 1-79.

In this article, dry land degradation may lead to indirect economic costs where impacts of such costs are felt over a long distance away from where the incidence of degradation occurred. Human activities contribute vastly to land degradation. According to Low, a renowned environmentalist from Malaysia, transportation of soil through water erosion causes siltation in rivers and reservoirs. This type of erosion usually causes flooding on the lowlands. In Australia and Central Asia, salinization and alkalinization result from improper use of water, which bring health hazards. These activities lead to social costs as areas that were once productive become unproductive. Although social costs from land degradation are less than direct costs in the US, the country can do better if they are fully eliminated. According to Low, estimation of social costs from land degradation are limited by having unreliable biophysical information while some do not have market prices.

Swaney, James A., and Martin A. Evers. “The Social Cost Concepts of K. William Kapp and Karl Polanyi.” Journal of Economic Issues (Association for Evolutionary Economics) 23.1 (1989): 7. Business Source Complete. Web. 24 Feb. 2015.

This study focuses on works of William Kapp and Karl Polanyi in explaining social cost. Kapp’s definition of social cost resembles the definition of externality, which revolves around uncompensated side effects. To Kapp, social costs go beyond the third-party spillover effects where workers and other people as well as the environment are affected by the market system. Social costs result in chronic health effects due to prolonged exposure to harmful chemicals, or engaging in routinized tasks. The second-hand effects that result from social costs include customers purchasing contaminated products. Cost shifting is closely related to social cost because entrepreneurs tend to avoid operating costs at the expense of employees, the environment, and the community. Kapp began his theory as a conventional economist, and later retrieved matters of social policy to incorporate social costs in his analysis. Polanyi brought anthropology aspects to economics by stating that labor and land could not be trusted to run the market. He came up with commodity fiction, which he claimed was unsustainable. Allowing the market to control the outcome of human beings as well as their environment is a destruction of society. Polanyi asserted that liberal democratic states tend to prevent occurrence of social costs, but adopting preventive measures has led to the incidences of social costs mainly in the competitive market economies. Both Kapp and Polanyi concluded that cost shifting was linked to commodity fictions and market approach.

 

 

Works Cited

Ackerman, Frank, and Elizabeth Stanton. “Climate risks and carbon prices: Revising the social cost of carbon.” Economics: The Open-Access, Open-Assessment E-Journal 6 (2012): 1-25.

Bartik, Timothy J. “Social Costs of Jobs Lost Due to Environmental Regulations.” (2013).

Dau-Schmidt, Kenneth G, Seth D. Harris, and Orly Lobel. Labor and Employment Law and Economics. Cheltenham, U.K: Edward Elgar, 2009. Internet resource.

LaJeunesse, Robert. Work Time Regulation As a Sustainable Full Employment Strategy: The Social Effort Bargain. London: Routledge, 2009. Print.

Low, Pak Sum. “Economic and Social impacts of desertification, land degradation and drought.” White Paper I. UNCCD 2nd Scientific Conference (2013): 1-79.

Swaney, James A., and Martin A. Evers. “The Social Cost Concepts of K. William Kapp and Karl Polanyi.” Journal of Economic Issues (Association for Evolutionary Economics) 23.1 (1989): 7. Business Source Complete. Web. 24 Feb. 2015.