Unit 5 business and labor
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Unit 5 business and labor






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Unit 5 business and labor Unit 5 business and labor Presentation Transcript

  • Unit 5 Labor and Business Unit
  • I. Business Organizations
  • A. Sole Proprietorship- Description
    • Form of business in which individual owns firm.
    • 75% of all firms.
    View slide
  • 3. Advantages
    • Easy to start.
    • Little government involvement.
    • All profit goes to owner.
    • Complete control.
    • Taxes are generally lower.
    View slide
  • 4. Disadvantages
    • Unlimited Liability – Responsible for all debts.
    • Difficult to raise capital
    • Limited Managerial experience is necessary
    • Difficulty in finding qualified employees
  • B. Partnerships - Description
    • General - A business jointly owned by two or more people.
    • Limited – one partner only invests money
  • 3. Advantages
    • Simple to establish and manage
    • No special taxes
    • Easier to gain capital (bank loans)
    • Slightly larger size allows for better efficiency.
    • Easier to attract top talent (law firms, accounting firms).
  • 4. Disadvantages
    • Liability
      • General Partnership - Each partner is fully responsible for the acts of other partners.
      • Limited Partnership - Investing partner loses only the original investment if it fails, but cannot be involved indecisions
    • All partners share the profits
    • Limited Life -If a partner dies, business ceases to exist.
  • C. Corporation
    • A business organization recognized by law as a separate legal entity.
    • It can buy and sell property, enter into contracts, sue, and be sued.
    • 20% of all businesses.
    • 90% of all products sold in USA.
  • 5. Advantages
    • Ease in raising capital through sale of stock.
    • Board of Directors (elected by stockholders) can hire the best management available to run the company
    • Limited Liability --If corporation goes bankrupt. Owners lose original investment.
    • Unlimited Life --The business continues to exist even when ownership changes.
  • 6. Disadvantages
    • Corporate charter may be difficult or expensive to obtain.
      • name of company
      • Address, purpose of the business
    • Investors (owners) have little say in how the business is run.
    • It must pay taxes since it is a separate legal entity.
    • Subject to more government regulation—Securities and Exchange Commission
  • II. Labor Market
  • A. Labor Force
    • Employed
    • unemployed
    • not
      • young children
      • adults over 65
      • Military
      • Prisoners
      • other institutionalized persons.
  • B. Employed
          • Work at least one hour of pay within the past week
          • Worked 15 hours or more without pay in family business.
          • Held jobs but did not work due to illness, vacations, labor disputes, or bad weather.
  • C. Unemployed
            • Without work, but has searched for job over the last four weeks.
            • Waiting to be called back to work from a job they have been laid off from.
            • Waiting to start a new job in thirty days.
  • D. Supply and Demand
          • Labor Supply – Households provide labor supply
          • Labor Demand – Businesses and government provide demand.
            • Productivity – value of output.
            • Many workers are paid by output, but this is hard to measure in some cases.
  • E. High Wages
            • Firms respond by replacing workers with…
            • Cheaper labor elsewhere.
            • Machinery.
            • Employees respond by…
            • Looking elsewhere for a job in a good economy.
            • Forming a union.
  • F. Equilibrium Wage
  • G. Levels of Skill
          • unskilled -no specialized training, work mainly with their hands
          • semi-skilled -operate electric machinery that requires minimum training
          • skilled- trained to operate complex equipment and can work without direct supervision
          • professional -high level skills, usually resulting from extensive education
  • III. Unions
  • A. Why unions are important:
        • Responsible for safety, pay laws.
        • Present in vital industries.
        • 2008, = 21 million workers.
        • Becoming more diverse.
  • B. Early Union Development
        • Immigrants and unskilled workers attempted unionization in mid-1800's.
        • Law and public were against formation.
        • After Civil War, industry expanded
        • Immigrants assimilated.
        • Labor force became more unified.
  • 6. Types of Unions
    • craft (trade) union - skilled workers who do same work (guilds)
    • industrial union -all workers in a given industry regardless
  • C. Union Activities
    • Negotiated for:
      • pay
      • working conditions
      • job security
    • strike –work stoppage
    • picket -parade in front of business boycott- don’t buy products
  • D. Employer Resistance
      • lockout – don’t let employees in workplace
      • Scabs – Hired to replace those on strike
      • Company Unions –organized by employers
  • E. Attitude of the Law
    • Pre Great Depression – law is anti-union
    • Workers united them behind labor unions during Great Depression.
    • Pro-Union Legislation allowed peaceful strikes, pickets, and boycotts
    • Can bargain collectively
  • F. 1938- Fair Labor Standards Act
      • minimum wage
      • 40 hour work week
      • time and a half pay
      • ended child labor
  • G. Post WWII
    • Grows unpopular, too many strikes.
    • Taft-Hartley Act passed
      • Unions can’t donate to parties
      • Right to work – can’t be forced to join unions.
    • American Federation of Labor (trade)
    • Congress of Industrial Organizations (industrial)
    • Merged AFL-CIO
  • 4. No Agreement:
    • Mediation.
    • Arbitration
    • Fact finding – 3 rd party gathers info.
  • d. Government Involvement
    • injunction -court order to stop
    • seizure -when gov’t takes over and runs the business
  • E. Trends in Labor
    • Union Membership declined to 12%
    • Reasons for Decline:
    • Women & teenagers less likely to join.
    • New types of work -service industry & technology replaces manufacturing