Unit 5 business and labor


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Unit 5 business and labor

  1. 1. Unit 5 Labor and Business Unit
  2. 2. I. Business Organizations
  3. 3. A. Sole Proprietorship- Description <ul><li>Form of business in which individual owns firm. </li></ul><ul><li>75% of all firms. </li></ul>
  4. 4. 3. Advantages <ul><li>Easy to start. </li></ul><ul><li>Little government involvement. </li></ul><ul><li>All profit goes to owner. </li></ul><ul><li>Complete control. </li></ul><ul><li>Taxes are generally lower. </li></ul>
  5. 5. 4. Disadvantages <ul><li>Unlimited Liability – Responsible for all debts. </li></ul><ul><li>Difficult to raise capital </li></ul><ul><li>Limited Managerial experience is necessary </li></ul><ul><li>Difficulty in finding qualified employees </li></ul>
  6. 6. B. Partnerships - Description <ul><li>General - A business jointly owned by two or more people. </li></ul><ul><li>Limited – one partner only invests money </li></ul>
  7. 7. 3. Advantages <ul><li>Simple to establish and manage </li></ul><ul><li>No special taxes </li></ul><ul><li>Easier to gain capital (bank loans) </li></ul><ul><li>Slightly larger size allows for better efficiency. </li></ul><ul><li>Easier to attract top talent (law firms, accounting firms). </li></ul>
  8. 8. 4. Disadvantages <ul><li>Liability </li></ul><ul><ul><li>General Partnership - Each partner is fully responsible for the acts of other partners. </li></ul></ul><ul><ul><li>Limited Partnership - Investing partner loses only the original investment if it fails, but cannot be involved indecisions </li></ul></ul><ul><li>All partners share the profits </li></ul><ul><li>Limited Life -If a partner dies, business ceases to exist. </li></ul>
  9. 9. C. Corporation <ul><li>A business organization recognized by law as a separate legal entity. </li></ul><ul><li>It can buy and sell property, enter into contracts, sue, and be sued. </li></ul><ul><li>20% of all businesses. </li></ul><ul><li>90% of all products sold in USA. </li></ul>
  10. 10. 5. Advantages <ul><li>Ease in raising capital through sale of stock. </li></ul><ul><li>Board of Directors (elected by stockholders) can hire the best management available to run the company </li></ul><ul><li>Limited Liability --If corporation goes bankrupt. Owners lose original investment. </li></ul><ul><li>Unlimited Life --The business continues to exist even when ownership changes. </li></ul>
  11. 11. 6. Disadvantages <ul><li>Corporate charter may be difficult or expensive to obtain. </li></ul><ul><ul><li>name of company </li></ul></ul><ul><ul><li>Address, purpose of the business </li></ul></ul><ul><li>Investors (owners) have little say in how the business is run. </li></ul><ul><li>It must pay taxes since it is a separate legal entity. </li></ul><ul><li>Subject to more government regulation—Securities and Exchange Commission </li></ul>
  12. 12. II. Labor Market
  13. 13. A. Labor Force <ul><li>Employed </li></ul><ul><li>unemployed </li></ul><ul><li>not </li></ul><ul><ul><li>young children </li></ul></ul><ul><ul><li>adults over 65 </li></ul></ul><ul><ul><li>Military </li></ul></ul><ul><ul><li>Prisoners </li></ul></ul><ul><ul><li>other institutionalized persons. </li></ul></ul>
  14. 14. B. Employed <ul><ul><ul><ul><li>Work at least one hour of pay within the past week </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Worked 15 hours or more without pay in family business. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Held jobs but did not work due to illness, vacations, labor disputes, or bad weather. </li></ul></ul></ul></ul>
  15. 15. C. Unemployed <ul><ul><ul><ul><ul><li>Without work, but has searched for job over the last four weeks. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Waiting to be called back to work from a job they have been laid off from. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Waiting to start a new job in thirty days. </li></ul></ul></ul></ul></ul>
  16. 16. D. Supply and Demand <ul><ul><ul><ul><li>Labor Supply – Households provide labor supply </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Labor Demand – Businesses and government provide demand. </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Productivity – value of output. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Many workers are paid by output, but this is hard to measure in some cases. </li></ul></ul></ul></ul></ul>
  17. 17. E. High Wages <ul><ul><ul><ul><ul><li>Firms respond by replacing workers with… </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Cheaper labor elsewhere. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Machinery. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Employees respond by… </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Looking elsewhere for a job in a good economy. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Forming a union. </li></ul></ul></ul></ul></ul>
  18. 18. F. Equilibrium Wage
  19. 19. G. Levels of Skill <ul><ul><ul><ul><li>unskilled -no specialized training, work mainly with their hands </li></ul></ul></ul></ul><ul><ul><ul><ul><li>semi-skilled -operate electric machinery that requires minimum training </li></ul></ul></ul></ul><ul><ul><ul><ul><li>skilled- trained to operate complex equipment and can work without direct supervision </li></ul></ul></ul></ul><ul><ul><ul><ul><li>professional -high level skills, usually resulting from extensive education </li></ul></ul></ul></ul>
  20. 20. III. Unions
  21. 21. A. Why unions are important: <ul><ul><ul><li>Responsible for safety, pay laws. </li></ul></ul></ul><ul><ul><ul><li>Present in vital industries. </li></ul></ul></ul><ul><ul><ul><li>2008, = 21 million workers. </li></ul></ul></ul><ul><ul><ul><li>Becoming more diverse. </li></ul></ul></ul>
  22. 22. B. Early Union Development <ul><ul><ul><li>Immigrants and unskilled workers attempted unionization in mid-1800's. </li></ul></ul></ul><ul><ul><ul><li>Law and public were against formation. </li></ul></ul></ul><ul><ul><ul><li>After Civil War, industry expanded </li></ul></ul></ul><ul><ul><ul><li>Immigrants assimilated. </li></ul></ul></ul><ul><ul><ul><li>Labor force became more unified. </li></ul></ul></ul>
  23. 23. 6. Types of Unions <ul><li>craft (trade) union - skilled workers who do same work (guilds) </li></ul><ul><li>industrial union -all workers in a given industry regardless </li></ul>
  24. 24. C. Union Activities <ul><li>Negotiated for: </li></ul><ul><ul><li>pay </li></ul></ul><ul><ul><li>working conditions </li></ul></ul><ul><ul><li>job security </li></ul></ul><ul><li>strike –work stoppage </li></ul><ul><li>picket -parade in front of business boycott- don’t buy products </li></ul>
  25. 25. D. Employer Resistance <ul><ul><li>lockout – don’t let employees in workplace </li></ul></ul><ul><ul><li>Scabs – Hired to replace those on strike </li></ul></ul><ul><ul><li>Company Unions –organized by employers </li></ul></ul>
  26. 26. E. Attitude of the Law <ul><li>Pre Great Depression – law is anti-union </li></ul><ul><li>Workers united them behind labor unions during Great Depression. </li></ul><ul><li>Pro-Union Legislation allowed peaceful strikes, pickets, and boycotts </li></ul><ul><li>Can bargain collectively </li></ul>
  27. 27. F. 1938- Fair Labor Standards Act <ul><ul><li>minimum wage </li></ul></ul><ul><ul><li>40 hour work week </li></ul></ul><ul><ul><li>time and a half pay </li></ul></ul><ul><ul><li>ended child labor </li></ul></ul>
  28. 28. G. Post WWII <ul><li>Grows unpopular, too many strikes. </li></ul><ul><li>Taft-Hartley Act passed </li></ul><ul><ul><li>Unions can’t donate to parties </li></ul></ul><ul><ul><li>Right to work – can’t be forced to join unions. </li></ul></ul><ul><li>American Federation of Labor (trade) </li></ul><ul><li>Congress of Industrial Organizations (industrial) </li></ul><ul><li>Merged AFL-CIO </li></ul>
  29. 29. 4. No Agreement: <ul><li>Mediation. </li></ul><ul><li>Arbitration </li></ul><ul><li>Fact finding – 3 rd party gathers info. </li></ul>
  30. 30. d. Government Involvement <ul><li>injunction -court order to stop </li></ul><ul><li>seizure -when gov’t takes over and runs the business </li></ul>
  31. 31. E. Trends in Labor <ul><li>Union Membership declined to 12% </li></ul><ul><li>Reasons for Decline: </li></ul><ul><li>Women & teenagers less likely to join. </li></ul><ul><li>New types of work -service industry & technology replaces manufacturing </li></ul>