Reference no: EM133300709

Topic: You are HR director for a growing architecture firm in Minneapolis, Minnesota, which currently has need of drafting 12 blueprints every hour. Each of your company's architects can create on average two blueprints per hour. You are considering hiring four drafters to shoulder the load; each drafter is slower than the architects and can create on average only one blueprint per hour. You scan the current wages in the Minneapolis area and notice that the architects in your company earn the local occupational median wage of $38.37 per hour, but that the prospective four drafters will likely want to get paid their local occupational median wage of $29.91 per hour.

Question 1: Would your company save money in the creation of the 12 blueprints by hiring the four new drafters and firing some architects?

Question 2: The Bureau of Labor Statistics projects that employment of drafters over the next decade will drop by 1.2%, compared to an increase of 2.7% for architects; your company assumes that this will reduce the number of lower-skilled drafters, resulting in a higher productivity (now 1.5 blueprints per hour instead of one) and that reduced demand will lower wages slightly (forecast to be $27.40). If the other values remain the same (architect wage and speed, need for 12 blueprints per hour), would the company save money in the creation of the 12 blueprints by hiring four drafters and firing some architects?