📈 Post haste.

Staff at the Washington Post prepare to walk out

It can’t be easy being Jeff Bezos. Fresh off of Black Friday strikes at Amazon, staff at the Washington Post are set to down tools today. Those pesky unions really are a pain in the backside, eh.

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Comparative advantage

With China’s exports showing some signs of life, let’s look at why it’s sometimes wiser for a country to import a product rather than making it domestically – even if it’s more efficient at making that product than the country it’s buying from.

First, we have to understand the concept of absolute advantage. A country is said to have an absolute advantage over another country if it can make a particular product faster, at a higher quality, and more profitably.

But that’s a narrow view because it doesn’t take into account opportunity cost. In reality, countries manufacture lots of things, some more profitably than others. Time spent making one product means sacrificing the opportunity to make something else.

For example, assume China could produce either laptops or phones. Laptops make a profit of $100 for each unit, while phones make $50. In this case, China should go all in on making laptops and buy its phones from other countries, even if those countries produce phones less efficiently than China does.

While absolute advantage means one country makes something more efficiently than another country, comparative advantage means it can make something for a lower opportunity cost.

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The Washington Post braces for historic 24-hour strike

Hundreds of Washington Post staff are set to strike today over cuts and lack of progress signing a new union contract, in what is thought to be the biggest protest at the newspaper since the 1970s.

The Washington Post Guild, a union which represents roughly 1,000 employees at the newspaper, has been negotiating the contract for 18 months. Members have expressed frustration with management over the process.

The Jeff Bezos-owned Post is also trying to cut costs, with $100 million of losses forecast this year. The newspaper announced in October that it wants to cut 10% of jobs through voluntary redundancies. Last week, management warned that layoffs would start if 240 people didn't volunteer. In a meeting this week, staff were told that 175 had so far taken the buyout offer.

A spokesperson for the Post said the newspaper respects the right of its employees to strike and will make sure readers and customers are as unaffected as possible.

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