Introduction to Business

Lesson 5-1
Business in the U.S. Economy
The Changing U.S. Job Market
End of 20th century saw many new career
prospects in dot.com world.
From 1992 to 2002 – employment grew
nearly 17%.
In 2002, 144 million people held jobs.
By 2012, employment will reach 165
million, a 15% increase
By 2010, average age of worker will be
over 40 years.
Workers in age group 16-24 will grow
faster than overall labor force for first time
in 25 years.
Hispanics, Asians, and African-American
workers will also experience growth in the
job force.
More women are in the work force (48%
by 2012 as compared to 35% in 1960s).
 Pressures on Employees
Downsizing by companies caused employees to
learn new jobs and work extra hours
In survey, 7 out of 10 parents felt they were not
able to spend enough time with children.
Children see parents
 Change jobs
 Take on more responsibility, work longer hours
 Complete additional education to improve career
opportunities
 Balance work and family
Contingent Worker – one who has no
explicit or implicit contract for long-term
employment
Nearly 6 million (5%) of U.S. workforce is
made up of contingent workers
Estimates project that number will double
in ten years
 Business and the Economy
Most U.S. businesses are quite small.
 18 million businesses have no employees
other than the owner
 5 million companies employ less than 20
people
 Just over 500,000 employ 20-100 people
 About 103,000 large businesses employ 100
or more
Of these large companies, 930 employ over
10,000 people
What are several groups that will increase
as a percentage of the total U.S.
workforce in the next decade (20 years)?

Younger Workers (16-24

years of age)
Asian, Hispanic,
African-American groups

Women
 Roles of Business
Provide employment
 Wages are used to purchase goods and
services
Profits earned by business are used to
compensate owners and investors
Businesses pay taxes to federal, state,
and local governments
Governments spend taxes to provide
services
Most important role of business to make and
distribute products and services needed
by consumers, government, and other
businesses.
 Impact on a Community
A New business
 pays wages to workers
employees spend money to purchase things
employees will need housing, cars, food,
entertainment
employees will pay taxes
 buys goods and services from other
businesses
 pays taxes
 may attract other businesses to community
 Business Activities
Generate Ideas
Raising Capital (money)
Employing and Training Personnel (Using
human resources)
Buying Goods and Services
Marketing Goods and Services
Maintaining Business Records
 Types of Businesses

Producers
Intermediaries
Service Businesses
PRODUCERS – create the products and services
used by individuals and other businesses

Extractors – takes resources from nature for direct

consumption or for use in developing other
products
Examples: miners, loggers

Farmers – cultivate land and use other natural

resources to grow crops and livestock for
consumption

Manufacturers – get supplies from other producers

and convert them into products
Intermediaries (Marketers)– businesses
involved in selling the goods and services
of producers to consumers and other
businesses.

Retailers – sell directly to consumers

Wholesalers – sell to retailers
Service Businesses – Carries out activities
that are consumed by its customers.
It does not offer a product for sale.
THE
END