Within Canada and the United States, there has been a very rapid price hike of many pharmaceutical products in the past decade. Primarily in the United States, pharmaceutical companies have drastically increased the prices of many life-saving drugs to nearly unaffordable rates. This has sparked outrage among many people whom are depending on these life-saving drugs, and has raised questions around the ethics regarding this issue.

Calvin Chang’s blog post on Business Ethics, specifically targeting the multi-billion dollar company Mylan, the manufacturer of EpiPen®, captures the severity of the situation in regards to the pharmaceutical industry increasing prices for their consumers, emphasizing the company’s 600% price hike for the life-saving drug. Given this fact, Chang makes a very good point—that the extreme hike of these pharmaceutical products have led to many people with lower incomes to be unable to afford these necessities, asking the question, “can you really put a price on […] anyone’s life?”

Chang also discusses various ethical theories used to evaluate the approach taken by these industries, and refutes Friedman’s ideology that a business is to do whatever is in their power to maximize their profits, which in this case is what wealthy corporations are intending with their large price increases. Instead, Chang believes that Freeman’s Stakeholder Theory upholds a higher moral compass in how a business should conduct itself, by promoting a greater good and taking the interests of all stakeholders—including its consumers—into consideration.

However, it may be too simple of an argument to merely say that people have the right to lower prices of pharmaceutical drugs. As economic theory states, the lower the price of a good, the lower the incentive a firm will have to produce and sell that product. In the case of the pharmaceutical industry, business executives are not the only individuals receiving remunerations for their work, but pharmacists and scientists are also compensated for their work and research in developing new drugs to improve the health and wellbeing for everyone. Given the long and costly process to research, develop and approve a new drug, with lower prices and profit margins for drug companies, there will less of an incentive for drug companies to do so, which will negatively impact society in the long run.

Indeed, it is upsetting to see pharmaceutical companies price-gouging their consumers, and taking advantage of their need for medicine and drugs, which in the case of EpiPen®, is a necessity to life. However, the debate isn’t merely one-sided, and there needs to be discussion into how to effectively address all segments of this issue, because until then, prices will still continue to rise, and pharmaceutical executives will continue to get wealthier.

Word Count: 445

Works Cited:

http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/default.htm – How Drugs are Developed and Approved

http://fortune.com/2016/07/14/big-pharma-drug-prices/ – Big Pharmaceutical Drug Prices

https://blogs.ubc.ca/calvinchang/ – Calvin Chang’s Blog

http://www.nytimes.com/video/business/100000004614154/outrage-over-epipen-pricing.html?smid=pl-share – Outrage Over EpiPen Pricing (video)

http://www.nber.org/digest/may05/w11114.html – The Effect of Price Controls on Pharmaceutical Research

Republican presidential nominee Donald Trump and Democratic presidential nominee Hillary Clinton exchange views during the second presidential debate at Washington University in St. Louis, Sunday, Oct. 9, 2016. (AP Photo/Julio Cortez)

In Response to John Green’s Video Blog Session – Understanding Tax Plans

With the US election coming up in just a ten days, heated discussion over both Hilary Clinton and Donald Trump’s differing policies towards foreign affairs, economic reform, and social justice are a topic of choice, both within the United States and abroad. One topic that is extensively debated and scrutinized are both Trump and Clinton’s plans for taxation reform in the United States.

In response to the Presidential Debates in early October, John Green, in one of his video blogging sessions on VlogBrothers, discussed the two candidates’ income tax provisions. Under Clinton’s plan, the middle and working class would see a reduction in their taxes, as new tax credits such as the Caregiver deduction, and an increased Child tax deduction would be introduced. These tax provisions would also see a greater increase on taxes on the wealthier of Americans. On the other hand, Trump’s plan would see a massive tax cut on the wealthiest of Americans, while leaving the middle and working class relatively unaffected.

Green presents two possible outcomes of the tax policies. Clinton’s plan, he mentions, could potentially reduce the incentive for the wealthy to invest in businesses and corporations, but would coincidentally increase government revenues, and would increase spending for social programs such as health care, and higher education, necessities whose costs are currently on the rise. Trump’s plan on the other hand, although potentially stimulating economic growth, would cut government revenues, and subsequently lead to a reduction in social programs. Furthermore, Trump’s plan could result to a massive increase in the US debt, some speculating adding up to $7.2 trillion to the national debt.

However, neither candidates’ plans for a future America are unrealistic, and tax cuts similar to Trump’s have been previously implemented by Reagan and Bush administrations, and a similar policy to Clinton’s implemented by Roosevelt. However, under a present day America, with unaffordable healthcare expenses and college tuition, and a lack of social programs such as paid maternity leave, in addition to massive wealth inequality amongst American society, many desperately look towards a plan that will benefit all Americans, and not just the wealthy.

Ultimately, this returns to a topic that was discussed early September—business ethics. There is a call for wealthy Americans to bear a fairer share of taxes in the country, and for those in need to get the financial and social support they need. In a society where many live in poverty, and working and middle class families are struggling with debt and living expenses, while the wealthiest of Americans are getting increasingly wealthier and paying little federal taxes, there must be something done to resolve the issue and help millions of Americans seek a better life.

Word Count: 447

Works Cited

John Green’s Video Blog Entry: Understanding Donald Trump and Hillary Clinton’s Tax Plans – https://www.youtube.com/watch?v=SgicDQHbV3M

Tax Cuts of Reagan and Bush – http://www.econdataus.com/taxcuts.html

Roosevelt’s Tax Provisions – http://dailysignal.com/2010/10/20/hoover-fdr-and-clinton-tax-increases-a-brief-historical-lesson/

For more information, please feel free to click below:

With growing questions in today’s society on inflation, living expenses, and the poverty line, a social dilemma around the minimum wage is never too far. Just last month, the province of British Columbia had announced the increase of its minimum wage from $10.45 to $10.85. Though a small incremental increase, BC had just moved from being the province with the lowest minimum wage into middle ground. Other Canadian provinces such as Alberta have even moved forward to promise a $15 minimum wage by 2018.

However, whenever considering the issues over minimum wage, controversy develops over the right plan of action towards a solution, and simply increasing the minimum wage isn’t a perfect resolve. With the US election occurring this fall, many Republicans and Democrats have put forth their bold opinions on the minimum wage issue. Donald Trump, once claiming that wages (including the $7.25 an hour federal minimum wage) were too high, eventually supported an increase to $10 an hour, while Hilary Clinton supported Bernie Sander’s promise to raise to $15 an hour.

Steven Zhao’s recent blog post, evaluating the pros and cons of an increase in minimum wage, presents varying views on the effects of such increases. Some economists, he explains, speculate that the results would cut jobs and increase unemployment, and also hurt small businesses, as labour would cost more, limiting the number of people a business can employ, and also cut profits. Others argue that there is great potential for economic growth with more money circulating the economy, and that spending will increase and will actually help grow small business.

Putting those economic theories to practise, effects can be seen in the example of Seattle’s increase in its minimum wage to $15 an hour approximately two years ago. As a result, there was actually a decrease in unemployment, as profits in local businesses in fact did grow and more workers were employed as a result. Perhaps there may be more confidence in the positive effects of an increased minimum wage, in opposition to those against it.

However, a clear answer still remains hidden amongst the hay stack. As Steven argues, different areas in Canada hold vastly different expenses, and hence a differing demand for wage increases. Urban centres such as Toronto and Vancouver have a much greater living expense compared to smaller municipalities in PEI for instance. Minimum wage is subsequently a much debated topic, with effects that are hard to predict and results that are fairly difficult to quantify.  However, with increasing economic problems in society, there must be more thought put into the picture in order to provide a solution that works for everyone.

Word Count: 441

References:

https://blogs.ubc.ca/zhaosteven/

http://www.cbc.ca/news/canada/british-columbia/mimimum-wage-1.3763226

http://www.cnn.com/2016/07/27/politics/donald-trump-minimum-wage/

http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/#443170b0715a

Pictured above is a beautiful plate of Dim sum—a Shumai and a steamed pork bun. Believe it or not, it comes from UBC’s very own dining hall in Orchard Commons. Despite a mostly empty plate, it all looks very appetizing, until the price to buy a single Shumai, at the size of a ping pong ball, is actually a whopping $1.24.

This is a prime example of UBC’s price-gouging tactics.

Price gouging is typically characterized by a good or service that’s priced high when there are no available alternatives, often taking advantage of their consumers who have little choice. From Shumai priced at $1.24 a piece, $7 pastas and $9 fruit cups, it is quite evident that UBC dining halls are overcharging their residents for their meals – a basic necessity for any university resident.

It doesn’t stop there, UBC also charges $1146.25 as an Overhead Fee, which goes towards dining hall operations, and $350.00 as a Capital Improvement Fund, meaning that up to over a third of what a resident pays for their meal plan actually doesn’t get incorporated into their meal dollar balance.

Furthermore, at UBC, there isn’t much competition, and hence selection for UBC residents when it comes to places to eat. Arguably, UBC’s market for places to dine is monopolistic, as there really aren’t many options for residents to spend meal dollars. With UBC’s meal plan being mandatory for most first year residents, it gives the few available vendors the ability to set high prices for their meals.

One could certainly argue that UBC has regulations and costs in place, and would therefore need to hike prices and instate extra fees in order to ensure best delivery of their services. However, an excellent example of another institution with a highly effective dining cafeteria goes to Simon Fraser University. SFU offers a meal plan at an affordable $1910.00 per academic term, featuring a dining hall that is open 24/7, and offers students a wide selection of food at an all-you-can-eat rate, meaning no declining meal dollars. This greatly contrasts UBC’s meal plan which charges a minimum of $4249.86 for two academic terms, subtracting over a third of it, leaving the rest as meal dollars for students to purchase overpriced food.

Of course, UBC should be applauded for their well-established dining halls, offering a wide cultural variety of nutritious options. However, with prices currently too high, and with very few options for many UBC residents, UBC Housing should be encouraged to look into reforms to further improve their service, and provide meals at a more reasonable and affordable price for their students.

Word Count: 434

References:

http://www.investopedia.com/terms/m/monopolymarket.asp – Investopedia Monopoly Markets

https://www.sfu.ca/students/residences/residences/towers/fees.html – SFU Residence Fees

https://www.sfu.ca/students/residences/current-residents/maintenance-and-services/services/meal_plans.html – SFU Meal Plan

http://vancouver.housing.ubc.ca/applications/fees-payments/meal-plan/ – UBC Meal Plan Fees

http://economics.fundamentalfinance.com/price-gouging.php – Fundamental Finance Price Gouging

A look into Offshore Shell Companies and Tax Havens

With many corporations and business executives looking to maximize profits and cut expenses, at times the idea of business ethics comes to question. With the purpose of analyzing and ensuring ethical and moral practises amongst business professionals with the use of laws, guidelines and regulations, business ethics are from time to time disregarded by companies through financial loopholes, which becomes damaging to society.

With the recent conclusion of the Democratic Nominee Race, part of Bernie Sanders’s campaign as a “Democratic Socialist” was his boldness around business ethics. An article published in April 2016, by Vox – Policy and Politics explains one example that Sanders brought up in his presidential campaign on the use of the Cayman Islands and Panama as offshore shell companies and tax havens. Both countries are two that have weak or non-existent regulations for money travelling in and out of the country, and have virtually no income, property or corporate taxes. Due to these regulations, wealthy corporations and politicians have used it to their advantage by moving large sums of money into offshore shell companies in these countries. Companies essentially stash their money in these hidden bank accounts, allowing them to hide assets, cover up scandals, and most importantly, evade taxes.

With the recent leak of the Panama Papers, it has been estimated that $7.6 trillion was stashed away in these offshore shell companies. Not only has the use of these offshore shell companies opened opportunity for business executives and politicians to scandalous activity, but it has allowed many wealthy corporations, including many American, to do as Vox describes, “exploit loopholes to minimize [their] tax bill”.

This certainly is an ethical infringement, as a large portion of America’s tax revenue is being evaded by this financial loophole. This keeps wealthy business executives stay wealthy, while many social programs and services are inadequately funded and unable to help the remaining American population. As Matt Gardner, a Washington tax analyst described, “the heart of our social contract is tax revenues”, emphasizing the negative impact that the manipulation of this loophole has caused on American society.

However, due to the nature of the offshore bank accounts and trade agreements with these countries, it makes it nearly impossible to monitor. Since the government have limited ability to intervene, and as long as American corporations are kept wealthy, there really is no incentive to act ethically at all. Ultimately, the issue for today’s economy and society is the expectation for people to have the integrity to do what’s right for all people, and not just their wealthy associates.

Word Count: 434

Works Cited

Business Ethics, Investopedia http://www.investopedia.com/terms/b/business-ethics.asp Accessed Sept 12, 2016

Guy Murfey, The Rise of Bernie Sanders and What it Says About Business Ethics, 8 Feb 2016, Kogan Page, https://www.koganpage.com/article/the-rise-of-bernie-sanders-and-what-it-says-about-business-ethics# Accessed 12 Sep 2016

Matthew Yglesias, Panama Papers: a massive document leak reveals a global web of corruption and tax avoidance, 3 Apr 2016, Vox – Policy and Politics, http://www.vox.com/2016/4/3/11356326/panama-papers Accessed 12 Sep 2016