Goals:

• describe the changing status of U.S. employment
• discuss the role of business in the U.S. economy
• describe three major types of businesses

Key Terms:

• contingent worker
• intermediary
• service worker

Business in the U.S. Economy

• The Changing U.S. Job Market  – as the 21^stcentury begins there is a striking change in employment and careers in the United State. The beginning of this century saw many new career prospects in the dot-com world. It also saw the decline of some traditionally important jobs in manufacturing and agriculture.
• Employment Data – from 1996 to 2006 total employment grew by nearly 14%. In 2007, 144 million people held jobs. That number was projected to reach 165 million by 2014, an increase of 13%.
• “Baby Boomers” refers to the large number of people who were born between 1946 and 1964. They have dominated the work force since they began working in the 1960s. They will continue to do so until they begin retiring in the 2010s. The average age of the US worker in 2010 was over 50.
• A mini-boom of younger workers will cause the 20 to 30 year old group to grow faster than the overall labor force for the first time in 25 years. .
• Other groups that will go through higher employment growth rates are Asian, Hispanic and African American workers. Currently non-white workers make up 70% of the labor force.
• Over the last 50 years, one of the most striking trends of employment has been the participation of women. In the early 1960s, 35% of women were working outside the home. That number had doubled by the year 2000.By 2014, it is predicted that nearly half of all jobs (47%) in the United States will be held by women.
• Pressures on Employees – at one time, it was thought that technology would allow people to work fewer hours. This has not happened.
• Economic stress has led to downsizing the number of people employed by many companies.
• Companies streamlined production and implemented other cost-cutting procedures. Businesses have requires employees to take on new tasks and work longer hours. Some full-time jobs were reduced to part-time.
• Wages decreased.
• Many people were forced to find second jobs to meet their economic needs.
• According to a recent survey, 70% of parents feel that they were not able to spend enough time with their children.
• Children are seeing their parents changing jobs, taking on new responsibilities, completing additional education to improve career opportunities and making important decisions to balance work and family life. These experiences will likely shape the career and family decisions of the next generation.
• Contingent Worker – a worker who has no explicit or implicit contract for long-term employment
  • About 5% of the US workforce (nearly 6 million people) are contingient workers
  • Estimated this number will double in the next 10 years
  • Some people take contingent work because they cannot find permanent employment
  • Others choose contingent work because they like the flexibility it offers
• Business and the Economy – businesses make the goods and services you use each day. This includes products and services used by other businesses as well as individual consumers. In 2002, all businesses world-wide produced more than $40 trillion of goods and services. Businesses in the US were responsible for nearly 29% of that production. Nearly 24 million full- and part-time businesses produce those goods and services.
• Size of Businesses
• Most US businesses are quiet small.
• Nearly 19.5 million businesses have no employees other than the owner.
• 4.5 million businesses have fewer than 20 employees
• Just over 26,000 employee 20-100 people
• About 107,000 US businesses employ 100 or more workers
• Of those large companies, 890 employ more than 10,000 people
• Roles of Business
• Businesses provide employment for millions of people
• Employees wages are used to purchase goods and services
• Profits earned by businesses are used to pay owners and investors
• Most businesses pay federal, state and local taxes
• Governments spend these taxes to provide services such as clean water, well-maintained streets, police and fire protection, hospitals and schools
• The most important role of businesses is to make and distribute products and services needed by consumers, government and  other businesses
• Impact on a Community
• A business can have an important impact on the community in which it operates
  • Pays wages
  • Buys goods and services
  • This is “new” money in the community
  • Employees and businesses spend much of what they earn to purchase things in the community
  • Resulting in the need for more employees, housing, automobiles, food and entertainment
  • Pay taxes to support needed community services
  • When a large business opens in an area, other businesses will often locate there to support the larger businesses.
• Business Activities – all businesses perform six basic activities
• Generating Ideas
  • A business begins with a new idea
  • Some new product or service
  • Must continue to improve and develop new ideas to remain successful
  • Must remain competitive
  • Many companies have research and development departments
• Raising Capital
  • Businesses need financial resources to operate
  • Resources are used to buy buildings and equipment, hire and train workers
  • Large amounts of money are needed to start a new business
  • Some capital comes from the owners
  • Most is obtained through loans from investors and from financial institutions
  • Need capital to grow
  • Some comes from reinvestment of profits
  • Continued relationship with banks and investors
• Employing and Training Personnel
  • Businesses need human resources
  • Businesses add employees as they grow
  • Businesses recruit, hire and train employees
  • Businesses pay wages, benefits and employment taxes
• Buying Goods and Services
  • All businesses buy goods and services
  • Many purchases are used within the business
  • Some purchases are resold
  • Businesses use services
  • Accounting
  • Legal
  • Maintenance
  • Security
• Marketing Goods and Services
  • Marketing - refers to activities directed at providing the goods and services wanted by a businesses’ customers
  • Without marketing, even the best products may remain unsold
  • Must satisfy customers who can choose to buy from competitions
• Maintaining Business Records
  • All businesses must have some type of record-keeping system
  • Track performance and make decisions
  • Information about orders and payments
  • Keep required government records and submit information
• Types of Businesses – three major types
• Producers – create the products and services used by individuals and other businesses. Business activities start with the producers
  • Use resources to make something that is needed by others
  • Takes resources from nature for direct consumption or for use in developing other products is an extractor.
  • Pump oil
  • Mine coal
  • Cut timber
  • Farmers cultivate land and use other natural resources to grow crops and raise livestock for consumption.
  • Manufacturers –get supplies from other producers and convert them into products. They sell their products to consumers and other businesses
• Intermediaries – are businesses involved in selling goods and services of producers to consumers and other businesses
  • Retailers and wholesalers
  • Many other businesses focus on one or a few activities that assist in distributing and selling products and services
  • Transportation companies
  • Advertising agencies
  • Storage centers
  • Sales offices
  • Data processing centers
• Service Businesses – many businesses do not make products. They offer something intangible – it has no physical qualities.  A service business carries out activities that are consumed by its customers. Does not offer a product for sale
  • Dentists
  • Physicians
  • Lawyers
  • Painters
  • Furniture movers
  • Internet Service Providers
  • Web Designers
  • The fastest growing part of the economy
  • 60% of all US employment is now in service producing businesses
  • High pay, high skill jobs

Assignment:

In a Word document,  

1 - Identify local businesses that fit into each of the three major types of businesses.

2 - Describe a service business with which you are familiar.

3 - 5-1 Assessment - Questions 1-5