When faced with a recession, there is a great anticipation of a general slowdown in economic activity. During the recession period, people cut off on expenditures and shift to spending exclusively on the necessary items. Expenses during these tough times are aligned to basic human needs such as food, shelter, clothing and education.
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As a businessperson, I would stick to producing foodstuffs (if recession were to occur). Demand for food would always prevail. However, there would be a difference in the volume of purchases as compared to those made in the good economic times. This is a time when people would never indulge in excesses. This includes excessive feeding. People only purchase enough and this applies for those who would be able to do so. This being the situation, I would trade on foodstuff and – just to minimize losses – I would trade in small scale. This is so because of the perishability of most food materials. Product movement would be very slow and this would imply that one either stocks fast-moving goods or deals with goods with longer shelf lives. Food is fast moving but with a short shelf life. Therefore, producing in small quantities would make more business sense.
Immediately after the recession, I would shift to selling products that might have been required by people during the recession and treated as excesses or unnecessary. One such commodity is clothing. By the end of the recession most people would need to replace their worn out clothes and this would present a lucrative business opportunity.
What are elastic and inelastic goods and services?
Services and goods could be either inelastic or elastic. The elastic ones include vehicles, electronics and others. The inelastic ones include water, medicine and electricity. When goods and services show elasticity, the demand for them is likely to go down. The price, on the other hand, increases.
Inelastic items have a comparable demand regardless of the price. For instance, when the price of an elastic product (such as a television) hikes, people simply go for television brands. In the case of inelastic goods such as electricity and water (when there is an increase in costs), people are not presented with options except to cut on usage in order to lower the costs.
The best way to render some inelastic goods and services less inelastic is through de-monopolization. Most of the producers of the inelastic items and services operate as monopolies and therefore consumers do not have other options. The elastic goods and services can be made less elastic through efforts to stabilize their prices and costs.
Workers’ unions today
In the modern day, there are a number of workers or rather trade unions that are purposely instituted to look into the workers’ affairs. One can accurately postulate that every country has a workers’ union of some sorts.
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Unions bring forward the rule of law. They also show the need for human rights as stipulated by law. Based on this, employers are restrained from exploiting or arbitrarily treating their employees by the legal contract. The union, on behalf of the employees and the employer, agrees upon this binding contract. These unions look into all spheres of employment including hiring and firing, job descriptions, promotions, employee benefits and discipline amongst many other areas of the employees’ welfare. In addition, employee benefits not only cover retirement packages but also the employee compensation schemes. In case an employee is hurt during work, then he or she has every right to be sufficiently compensated by the employer. Unions also protect their members by entering into contracts with employers to bargain on work hours, health and safety, non-discrimination clauses, contract lengths and even management rights.
In case of unheard plights voiced by the union, the body undertakes industrial actions to influence fast solution to the workers’ grievances. The actions may include go-slows, demonstrations and even strikes – whereby the workers avoid working completely and put down their tools of trade. The unions, together with the employers also agree on unfair labor practices and on the necessary course of action to take in case of a similar occurrence. The workers’ unions have been proven to promote much efficiency since workers feel secure in their workplaces.
As opposed to conventional striking whereby literary all business comes to a halt, a virtual strike is meant to keep the business going as the negotiations are in progress. Only the players are included in the bargaining table. During a virtual strike, a business stays open while the union keeps working. The only deviation is that neither labor nor the company is paid. The services are either rendered free of charge or are directed to charity organizations. In other cases, the money can be stashed elsewhere to be handed back to the company when the parties arrive at a consensus.
In my opinion, virtual strikes are not practical. This is mainly because the duration that the strike can take is never known or obvious. A company cannot afford to give out its products and services free of charge for a long time. This means that virtual strikes are not factual since most strike occur indefinitely and may take a long time before it ends.