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  1. Welfare: elements.

Minimum annual income – government provide if the family has no earned income.

Benefit- reduction rate- rate at which benefits are reduced as a result of earned income.

The break-even income – level of earned income at which the transfer payments disappear.


  1. With low minimum income and high benefit – reduction rate keep cost down

  2. With a lower benefit-reduction rate and stronger work incentives

  3. Has a higher minimum income and is more effectiveness in eleminating poverty.

  1. The health care industry: elements and problem.

Includes: services provided in hospitals, nursing home,dentists offices., perscription and nonprescription drugs, artifical limbs

Main problems:

  • The cost of health care is high and has increased rapidly

  • Limited access to health care

  1. Health care reform 2011. Russia


  • Over 30% of the country`s medical institutions are hazardous or in need of major repairs

  • Many hospitals and polyclinics don`t have the necessary equipment to provide the kind of medical help that needs modern requirements

  • Low level of salaries of medical personel

Instruments: Russian government should allocate:

  • 300 billion rubles for the modernization of medical institutes over the next 2 years

  • 24 b.r. to improve spending efficiency and public access to medical services

  1. Unionism. The rate of unionism.

In the world unions generally have adhered a philosophy of business unions. It`s concerned with the practical short-run economic objectives. Usually they have no long-run idealistic schemes aimed at modifying or overthrouwing the capitalistic system. Objectives of business unionism: higher pay, shorter hours, improving working conditions.

Rate of unionism

  • Percentage of workers unionised

  • Generally rate is: high in dransportation construction, manifacturing, low in agriculture, finance.

  1. Collective bargaining: goals and structure.-the negotiation of labour contracts


  • To establish “a work agreement” between two firm and the union

The main topics of collective bargaining:

  • Union status and manage-rial prerogative

  • Wages and hours – the arguments

Seniority and job production: unions want the worker with the longest continuous service to be the last one laid off, and be the first one recalled from lay off.

  • Grievance procedures- the offical way to make a complainty.

  1. Efficiency and productivity of unionism

Negative view:

  • Losses via. Some unions resist the intriduction of output increasing machinery and equipment

  • Strickes- the firm`s production will cease for the strike`s duration. Workers will sacrifice income and economy may lose output

  • On the other hand cost of strikes may be less than in implied by the work time lost by strikes if non strikes firms increase their output. As a result little or no decline in employment real output and income.

Positive view:

  • The shock effect – a wage increase may have on effect on firms causing them in the long-run to substitude capital for labour and to implement productivity – increasing technology

  • Increased informal training – a more skilled worker may want to conceal his knowledge from less skilled juniour workers.

  • Reduced worker – union can provide workers with a collective voice to communicate problems.

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