A merican C ivicsHOLT HOLT, RINEHART AND WINSTON1 Chapter 20 Economic Challenges Section 1:The Business Cycle Section 2:Coping with Economic Challenges Section 3:Labor and Management

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON2 Chapter 20 OBJECTIVES  What are the different parts of the business cycle?  What are the old theories of the business cycle, and when did they exist?  How did the Great Depression change the government’s role in the economy? Section 1:The Business Cycle

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON3 Chapter 20 Different parts of the business cycle:  Expansion  Peak prosperity  Contraction or recession  Trough or depression  Expansion Section 1:The Business Cycle

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON4 Chapter 20 Old theories of the business cycle prior to the Great Depression:  Business cycle should be left alone: problems cure themselves.  Recessions could not last long: workers would accept lower wages, thus lowering costs of production.  Expanding businesses would help other businesses expand. Section 1:The Business Cycle

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON5 Chapter 20 The Great Depression and the government’s role:  New Deal—designed to provide jobs and create financial stability.  Civilian Conservation Corps—young people were to restore natural resources  FDIC and SEC created to insure funds and inhibit fraud Section 1:The Business Cycle

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON6 Chapter 20 The Great Depression and the government’s role: (continued)  Social Security System set up to provide funds for retirees  Unemployment compensation established Section 1:The Business Cycle Government intervention in the economy remains a matter of dispute.

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON7 Chapter 20 OBJECTIVES  What economic problems exist, and what causes them?  How does the government address economic problems?  How can citizens work to improve the economy? Section 2:Coping with Economic Challenges

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON8 Chapter 20 Economic problems and their causes:  Inflation—prices increase faster than wages;  Unemployment—unemployed workers cannot pay bills or purchase goods  Recession—production, spending, and consumer demand decline  Money and loans—too much money in circulation leads to inflation Section 2:Coping with Economic Challenges

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON9 Chapter 20 Economic problems and their causes: (continued)  Government and consumer spending—over- borrowing reduces savings, increases debt; helps raise prices  Productivity—foreign productivity hurts American businesses; contributes to unemployment Section 2:Coping with Economic Challenges

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON10 Chapter 20 The government addresses economic problems through  Changes in fiscal policy—in a recession, government may lower taxes and increase government spending.  Changes in monetary policy—in a recession, the Federal Reserve may increase the money supply or lower interest rates.  Actions may be reversed in boom periods. Section 2:Coping with Economic Challenges

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON11 Chapter 20 Citizens can aid the economy by  Increasing savings—consumer savings give banks more money to lend to business.  Reducing credit debt—reduced debt can lead to more savings.  Buying American-made products, which preserves and creates jobs in America.  Increasing productivity—efficient management and workers aid business and may increase wages. Section 2:Coping with Economic Challenges

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON12 Chapter 20 OBJECTIVES  What conditions led to the rise of labor unions in the 1800s?  What methods do labor and employers use to negotiate with one another, and what major labor laws protect them?  What is the state of labor relations today? Section 3:Labor and Management

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON13 Chapter 20 The rise of labor unions in the 1800s:  Large factories used machines and employed hundreds of workers.  Factory managers and owners had little contact with workers.  Heavy immigration led to too many available workers. Section 3:Labor and Management

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON14 Chapter 20 The rise of labor unions in the 1800s: (continued)  Workers were forced to accept long working days, low wages, and harsh conditions.  Workers organized unions to improve conditions.  Collective bargaining was used to reach agreements with employers. Section 3:Labor and Management

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON15 Chapter 20 Methods of negotiation and major labor laws:  Workers’ methods: strikes, picketers, job actions  Employers’ methods: blacklists and lockdowns  Right-to-work laws—no one is forced to join a union  1935—National Labor Relations Act or Wagner Act  1947—Labor-Management Relations Act or Taft- Hartley Act  1959—Landrum-Griffin Act Section 3:Labor and Management

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON16 Chapter 20 The state of labor relations today:  Union leaders know companies must make profits to ensure jobs.  Companies know workers must have suitable conditions and reasonable wages.  Modern unions cooperate with companies to run efficient businesses.  Compromises help settle strikes when they occur. Section 3:Labor and Management

A merican C ivicsHOLT HOLT, RINEHART AND WINSTON17 Chapter 20 The state of labor relations today: (continued)  Mediators make nonbinding recommendations to end a strike.  Arbitrators make binding decisions to end a strike. Section 3:Labor and Management