Capital Formation

Read the section on capital formation on page 55 of your textbook.

Watch the following 2 videos to get an understanding of capital investment. First, learn what a Production Possibilities Frontier is.

Next, how can companies grow through capital investment?

Read this article by Peter Thiel, co-founder of Paypal.

Discuss: Why does he think that businesses have not invested in capital goods? Why do companies buy back stock? What is the downside of this practice?

Read the following article concerning stock buy backs. 

Assignment: After reading the above article, write a paper answering the following questions:
1. What are the benefits of a stock buyback?
2. Does a buyback indicate that a company is healthy or is it an indication that a company has run out of ideas? Explain your answer.

Your paper may be hand written or typed. Either way, submit your paper by the end of class.

Chapter 3 games

Use these games to review concepts from chapter 3.

Utility

Utility is the ability of a good or service to satisfy a want. Watch this episode of Shark Tank. Can you identify the utility of the products that are being proposed?

Assignment:

Take handwritten notes on the utility of each product proposed. Some of these are pretty straightforward but one is a but tricky. Turn your notes in at the end of class for your participation grade today.

25 Trends

USA Today outlined 25 trends that would shape the United States. Some of these trends we have discussed and others we have not. Read over this list and note which ones we have discussed and which ones we have not. Note which trends you think will be the most important over the next decade. How will businesses need to respond in terms of managing their employees and meeting their customers' needs?

http://usatoday30.usatoday.com/news/top25-trends.htm

Assignment: Select your top three. For each topic, write down how businesses will need to change in dealing with employees and customers in the coming years. Be ready to discuss these in class.

Closng the gender pay gap

Discuss: Why do you believe the gender pay gap persists? Is it because women choose to leave the work force or is it due to discrimination ofr some combination of the two? What could or should be done to correct this problem?

The shrinking middle class

Last December, the President called income inequality the "defining challenge of our time."

Read the following articles:

http://www.huffingtonpost.com/2013/12/04/obama-income-inequality_n_4384843.html

http://www.nytimes.com/2014/02/03/business/the-middle-class-is-steadily-eroding-just-ask-the-business-world.html 

http://www.forbes.com/sites/joelkotkin/2014/01/30/blue-collar-hot-spots-the-cities-creating-the-most-high-paying-working-class-jobs/

...and this video from Richard Wilkinson.

Assignment:

Discuss: What is income inequality? What causes it? Why would the President elevate it to a "defining issue"? Should we really be that concerned with inequality? What happens to countries with extreme income inequality? Is there anything we can do to lessen inequality in our nation?

Write:  After thinking about the causes of income inequality, write a paper explaining why income inequality might be a problem.  Provide at least 3 ways income inequality could be lessened through public policy. You may use any of the three resources provided. Place it on your Google Drive and share it with me at the end of class. You paper will be graded on grammar, spelling and content.

Quotable

"It is not that I'm so smart. But I stay with the questions much longer."

-Albert Einstein

Understanding the Labor Force

Read the section on the Labor Force in your text book beginning on page 31 and ending on page 35. Note the difference in the terms "labor force" and "labor participation rate."

Read the following article:

http://www.bloomberg.com/news/2014-05-02/workforce-participation-at-36-year-low-even-as-more-jobs-beckon.html

Assignment: Write a paper answering the following questions:

1. How does the labor participation rate affect the unemployment rate? Does the unemployment rate really reflect the number of people out of work? How?

2. Why do you believe the size of the workforce is decreasing? Cite evidence from the article or your textbook for your answer.

3. Why do you believe people are delaying entering the workforce? Read the following article:

http://www.usatoday.com/story/news/nation/2013/10/31/more-than-a-college-degree/3324303/

Do you believe that education plays a role in people delaying entering the workforce? Why or why not?

4. Think of yourself as a unique set of skills, what skills will you have when you enter the work force? What skills have you already attained? What level of education (College degree, technical certification, etc.) will you need to land the job you want?

5. How could high schools change their curriculum to better prepare students for the workforce? How could students be encouraged to work harder in school?

Title your paper Labor Force. After writing your paper, share it with me on your Google Drive. Your paper is due at the end of class. See me if you have questions.

A poplulation on the move.

Your textbook points out the the US population is quite mobile. In fact, Americans are more than twice as likely to move as people from Canada or Europe.

Read "Moving Population" in your textbook (p.31). Note, what percentage of Americans move every year?
 
Specifically, the population is generally moving from the Rust Belt and Frost Belt to the Sun Belt. Companies often move their operations south for a number of reasons including the following:

• Lower labor costs
• Lower cost of living
• More advantageous labor laws

Gross migration, the percentage of people moving in any given year peaked around 3% in 1991 has fallen to about 1.5% today. Note the difference between Gross and Net migration in the chart below.

Think: Given what you know about other changes in society (ie immigration, aging baby boomers, technological, cultural changes, etc.), what do you think could explain the decline in the number of people who move from state to state?

Read this article. What does the author think could be the cause of the decrease in mobility?

Note the two reasons that the authors give for the decrease in mobility. Do you think these reasons are valid?

This article offers another reason. What is it?

Discuss: Would you travel to another state to live? Why or why not? Why might someone move to West Tennessee? Why might a business relocate to West Tennessee?

The Changing US Job Market

The US job market is changing. Learn about the latest changes here:

http://money.cnn.com/video/news/economy/2014/08/29/5-surprising-labor-market-facts-labor-day.cnnmoney/

And here...

http://youtu.be/vUCotgXCJws?list=PLsmO3ylbLc5I41xgF2OqSPbRnib253DAP

The Challenge of the Baby Bust

Read pages 29-31 of your textbook.  Your textbook states that "people are a firm's most important resource."

Think: Why do you think managers would rank this aspect of business higher than finance, marketing, technology, or product innovation?

How is the population of the United States changing? Read about the Baby Bust here.

Analyze: Why would a falling birth rate in the United States be a problem? How is the demographic makeup of the nation changing?

Assignment: Read the article carefully and write a one page paper answering the following questions:

1. What are some of the causes of the Baby Bust? How is the population of the United States continuing to grow despite the decrease in family size?

2. What are the effects of a low fertility rate and immigration on the business community? What will be the changes in demand for goods and services in the future? How will business need to change and adapt to the changing population?

3. How will the changing population affect public policy in the coming years? What (if anything) d you believe government do to fix this problem?

Provide evidence from the article for your answers! Title your paper Baby Bust and place it in a folder titled Human Resources. This paper is due at the end of class and is worth 10 points.