Labor Forces and Business modes

Labor Force

All nonmilitary people who are employed or unemployed.

Unemployed

People without work or not working but have looked for a job within the past 4 weeks.

Outsourcing

When a company contracts another company to do a specific job that would otherwise be done by company workers.

Offshoring

The movement of some of a company's operations to another country.

Learning Effect

Theory that education increases production efficiency leading to higher wages.

Screening Effect

Theory that a college degree signals to employers that an applicant is hardworking and intelligent.

Temporary Workers

Part-time and temporary workers replacing full-time employees, known as contingent employment.

Labor Demand

Comes from private firms or government, ideally paid according to productivity of labor.

Labor Supply

Determined by how many people are willing to do a job for a particular wage.

Equilibrium Wage

The wage rate at which demand is met by supply.

Unskilled Labor

No specific skills, education, or training beyond what the usual individual has.

Semi-Skilled Labor

Minimal specialized skills and education, like operating some equipment.

Skilled Labor

Requires specialized skills and training.

Professional Labor

Demands advanced skills and training.

Sole Proprietorship

A business owned and managed by a single individual.

Partnerships

Owned by 2 or more people who agree on a specific division of responsibility and profits.

Franchise

A type of partnership where a party acts semi-independently, paying fees to a parent company for exclusive rights to sell a product or service.

Corporation

A joint-stock company where stockholders have limited liability and the company has a separate legal identity from its owners.

Cooperatives

Organized and owned by a group of individuals for their shared benefit.

Nonprofits

Operated like other businesses but without the purpose of generating profit.

Frictional

a type of unemployment when workers leave their old jobs but haven’t found new ones

Structural

a type of unemployment when shifts in the economy create a mismatch between the skills worked have and the skills needed by the employers

Cyclical

a type of unemployment caused by contraction phase of the business cycle