Chapter 3

1. Chapter 3 Economic Security

2. Economic Security Issues such as the hiring or laying off of workers, the rising cost of food or petroleum products, and other such issues can affect people’s feelings of economic security

3. This chapter looks at both capitalism and socialism which are two economic systems used throughout the world

4. The issue of poverty and how it disempowers people is also discussed

5. The idea of a consumer culture is one way of describing how Canada’s economic system works today

6. Consumer culture is one in which people are encouraged to own many things - buying new things is seen as desirable

7. A consumer in economic terms is a person who buys things

8. At the time of European contact European economics was based on 1 Goods and services are distributed through buying and selling 2 Individuals should be free to become as wealthy as they can

9. Over time a kind of economy called capitalism evolved

10. Needs and Wants In modern economic systems most needs and wants are bought and sold for money

11. In a capitalist economic system most of the goods and services are produced by private companies

12. The main goal of this system is to make profits for company owners See Capitalist System Handout and Capitalism vs. Socialism Handout

13. Capitalist System Handout In a capitalist system   1. People make money by owning or working for a business 2. People spend money buying goods and services • Money goes to businesses • Businesses make more goods or provide more services • This continues in a continuous cycle

14. In this system people who are good at running businesses or have skills that are in demand make the most money and are wealthiest

15. Capitalism vs Socialism - Handout • Individual freedom is highly valued  • Production of goods and services is carried out by individuals • People must have wealth to meet their needs and wants • Competition is important to help create wealth and improve society • What is good for the group is more important than individual freedom • Production of goods and services is controlled by government • Every person should receive enough to meet his or hers needs • Cooperation is important to help create wealth and improve society

16. There is no one right way to distribute wealth

17. There are no (or few) purely capitalistic or socialistic economic systems in the world today. Although Canada is considered a capitalistic society medicare, free health care for all citizens is a socialistic idea.

18. Business and Community Wealth The term capitalism comes from the word capital

19. Capital can be defined as the money(and other things) that have to be invested or put into a business venture to start it up and keep it operating

20. Why might it be called a business venture?

21. Profit is the money the business owner makes after being repaid for the investment and paying other expenses • See Business type Handout

22. Business Type Handout There are various different types of businesses 1 One person business e.g. lawn mowing, babysitting

23. 2 Family Business e.g. Fishing, farming, convenience store

24. 3 Small or medium business - usually develop when a person/persons see a need in their community e.g. grocery store, hardware store, catering business

25. 4 Large businesses owned by big companies which may be from Canada or other countries e.g. Oil companies, mining companies, department stores

26. Wealth Creation and Distribution When a new business starts it helps create wealth

27. The owner hopes to make a profit 2 Workers get hired and earn wages 3 Other businesses benefit from the workers spending their paychecks on their needs and wants 4 Wealth is distributed throughout the community

28. Read Millbrook First Nation: A Co-operative Project and study the cause-and-effect chain on page 49

29. Cause is what made the change happen

30. Effect is the change that resulted

31. The first cause may be called the trigger since it started the process moving • *Note that in each case the effect becomes a cause which triggers another effect which also becomes a cause and so on

32. Read Chris Griffiths: Entrepreneur • Develop your own cause and effect chain for this selection. • An entrepreneur is a person who turns an idea into a business

33. Chris Griffiths: Entrepreneur • 12 year old Chris became interested in guitars • He learned how to fix guitars • Worked in a guitar store repairing guitars  • Realized there was no where in Newfoundland and Labrador to do major repairs • He saw this as a business opportunity • Went to Michigan to train in repair and building 7.  Was laid off from his job 8. Decided to start his own guitar manufacturing business 9. Did 6 years of research on guitar construction 10. Came up with a design using fibreglass rather than wood • Guitar became in demand all over the world 12. In 2002 the company employed 57 people

34. Homework Assignment Do a cause and effect chain on the Millbrook First Nation selection on page 48

35. Read the reading hint on page 50 and follow the directions

36. Read the section “What is Poverty” pages 50 -51. Read the section through once and then reread it and record 2 or 3 main ideas in point form

37. Meeting Basic Needs Some people in Canada have trouble meeting their basic needs and rarely get the things they want economically

38. In 2000 it was estimated that one out of five(20%) of children in Canada live in poverty

39. One way to define poverty is in terms of standard of living

40. Standard of Living is a measure of how much buying power a family has - the money to spend on food, clothing, a home, transportation and entertainment

41. A family is living in poverty when it has a lower standard of living than most people in society

42. In some parts of the world all members of society have a low standard of living as compared to ours and all members are living in poverty

43. Poverty can also be determined by calculating if your family is receiving enough income to meet your basic needs

44. If the cost of basic needs is higher than family income than the family is living in poverty

45. When expenses are higher than income families may need to turn to government or other support groups for help

46. When income matches expenses economic insecurity may be felt by people who worry about dealing with emergencies

47. When income is greater than expenses you have economic security and can make choices about what to do with the extra money

48. Economic Security is only one part of life. There are many other factors that determine our Quality of Life

49. Quality of life is defined as a standard of living based on criteria such as GDP per person, birth rate, life expectancy. Literacy and equality

50. Read page 52: Why do we have poverty