MAN 3240 Exam 1 Study Guide 1 Understand how the ripple effect has impacted businesses and families Know the video https www youtube com watch v UMqyi6s41iE Jason Lost his six figure job as a Bank Manager The loss of his six figure salary has taken a toll on both his family and local businesses The first cost that Jason s family eliminated was going out to eat at their favorite local restaurant the Red Stone Grill They used to go to the restaurant every week now they go once a month Red Stone Grill Like Jason s family many other people have been negatively affected by the recession Less people are going out to eat so the Red Stone Grill is serving fewer customers than they did before the recession which means fewer tips for employees Heather Heather is a bartender at the Red Stone Grill and she is receiving fewer tips than usual due to the lack of business that the restaurant is experiencing Heather can t afford to go out as much or hire a pet sitter for her two dogs Allen Brothers Allen Brothers is a premium meat supplier Their sales have gone down forcing them to lay off 5 of their employees Due to the lack of business that restaurants like the Red Stone Grill are having restaurants are ordering less meat from Allen Brothers The ripple effect has impacted businesses and families because businesses have to make budget cutbacks forcing them to lay off employees About 800 people are losing their job every hour in the US More than 500 000 people became unemployed in January which is the largest monthly loss since World War Two 2 What caused the recession as noted Know the first causes in a nutshell slide Irrational Exuberance in the housing market led many people to buy houses that they could not afford 2006 The bubble burst as housing prices started to decline Homeowners who had taken loans with little money down were caught off guard After homeowners realized that they would lose money by selling the house for less than their mortgage they foreclosed Escalating foreclosure rates panicked banks and hedge funds secondary markets They realized they were facing huge losses August 2007 Banks became afraid to lend to each other because they didn t want these toxic loans as collateral This led to the 700 000 000 000 bailout and bankruptcies or government nationalization of Bear Stearns AIG Fannie Mae Freddie Mac IndyMac Bank and Washington Mutual December 2008 Employment was declining badly As soon as the layoffs started more people couldn t pay for their mortgages and this caused more defaults and foreclosures The consumers stopped buying and construction halted on the building of new homes Metaphor When things get moving downhill they get faster and bad things happen much more quickly due to Impaired Decision Making 3 Understand the specifics of Chicago s recession driven economic difficulties In the 2010 Fiscal Year Chicago s Projected Shortfall was 519 700 000 Chicago is one of the Top 7 Foreclosure State in the US Chicago s economic difficulties have been driven by o The housing collapse o Excessive debt for Chicago Families in Chicago have had to cut back on spending and this decreased tax revenues 4 What factors have caused the city of Detroit to have such a difficult time financially Described Detroit s unsecured debt specifics https www youtube com watch v 7rrovd0 8v4 The Factors Higher taxes Borrowing more and more money Failing to act appropriately to the rising debt Detroit s Unsecured Debt Specifies 11 08 billion in unsecured debt In 2013 the city of Detroit stopped making payments on these debts to avoid bankruptcy 5 Understand Looking Back in terms of the middle class s views of opportunity and security today relative to the past Know specifics opportunity to get etc Americans say that the middle class has less opportunity and security today than before Compared to the middle class of your parent s generation do you think the middle class today has Opportunity to Get Ahead More 26 About the Same 21 Less 52 Job and Financial Security More 16 About the Same 17 Less 65 Expendable Income after paying for Expenses More 20 About the Same 18 Less 60 6 What are the factors that have causes many middle class to go from working to homeless Contributing Factors 1 Layoff for jobs with few alternatives 2 Multiple family commitments divorce kids 3 Most people don t have enough savings for the rough patches 4 Perceived as overqualified for many jobs 5 Used to have decent insurance not now 6 Kids daycare expenses 50 a day don t do it 7 Gimme that house back the one that you couldn t afford in the first place 7 How have companies contributed to the flat paycheck recovery What consolations were noted in the article with respect to wages http blogs marketwatch com capitolreport 2014 08 19 your paycheck has been shrinking for 5 years tab print Companies have contributed to the flat paycheck recovery because companies have relied on temps and part timers especially in faster growing industries such as retail that don t pay very much in the first place The consolations noted were in the wage outlook the improving economy is keeping workers on the job a bit longer The average weekly paycheck has risen 1 7 overall since the recession ended adjusted for inflation It s not much but it s better than nothing 8 Major finding of the attached article were what How did men and women respond differently to questions posed by the researchers http www csmonitor com Business Latest News Wires 2010 1026 In US a job means less than it used to The major finding by the researchers was that rather than causing Americans to put a greater emphasis on the importance of having a job the recession and high unemployment have instead shifted workers focus toward home and family Men and women responded differently to the questions because there was a disparity in the way women and men have handled the pressures of work during the recession 9 Describe the salary disparity documented to exist in the state of Florida Women in FL fare slightly better than the US national average earning 80 Cents rather than 77 Cents to a man s dollar Regardless women working full time in Florida earn less than their male counterparts Salary Disparity White Man 1 White Woman 78 cents African American Woman 61 cents Hispanic Woman 57 cents 10 Why do male nurses often make more than female nurses according to the research Know the factors Male Nurses Men are more concentrated in the highest earning segments of the field Men make up 41 of
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