Corporate Structures and the Gig Economy Quiz
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Questions and Answers

What concept did Alfred Chandler's work, The Visible Hand of Managers, reference?

  • The economic principles behind market competition
  • The functions of bureaucratic management
  • The influence of shareholders on corporate governance
  • The separation of ownership from control (correct)

How do loyalty shares function in a corporate environment?

  • They give voting rights to all shareholders equally.
  • They are designed to dilute ownership among a larger number of shareholders.
  • They restrict the voting rights of certain shareholders indefinitely.
  • They reward long-term shareholders with increased voting power over time. (correct)

Which criticism did Friedrich Hayek levy against corporate structures?

  • Shareholder activism undermines corporate governance.
  • Corporations create monopolies that hinder free market competition.
  • Managers have too much control over financial decisions in large corporations.
  • Power should ultimately reside with the shareholders, the real owners of the corporations. (correct)

What is a characteristic feature of the 'technostructure' as discussed by John Kenneth Galbraith?

<p>It involves the need for developing countervailing powers to balance corporate power. (B)</p> Signup and view all the answers

What has been a significant trend in shareholder activism since the 1980s?

<p>Shareholder representatives pressuring companies to enhance stock value. (C)</p> Signup and view all the answers

What percentage of unionized jobs have defined benefits according to the content?

<p>80% (D)</p> Signup and view all the answers

How does job misclassification primarily impact workers in the gig economy?

<p>It denies them legal protections and benefits. (B)</p> Signup and view all the answers

What is one consequence of the gig economy on public welfare systems?

<p>Loss of tax revenues, especially payroll taxes. (B)</p> Signup and view all the answers

What is the effect of the absence of social protection highlighted in the content?

<p>It represents a complicated welfare system. (C)</p> Signup and view all the answers

What was observed about the number of employees offered employer-sponsored retirement plans around 2010?

<p>It dropped. (C)</p> Signup and view all the answers

What percentage of the lowest 25% of workers have access to defined benefits?

<p>8% (B)</p> Signup and view all the answers

What dual role does the public welfare system play historically?

<p>Assistance dependent on private employers and universal insurance. (C)</p> Signup and view all the answers

Which group is most likely to have defined benefits?

<p>Unionized workers. (A)</p> Signup and view all the answers

What program was created in 1935 that federalized mothers' pensions?

<p>Aid to Families with Dependent Children (C)</p> Signup and view all the answers

What significant change occurred in welfare under the Clinton administration?

<p>Implementation of Temporary Aid to Needy Families (A)</p> Signup and view all the answers

Which program was associated with a lifetime limit of 5 years for recipients?

<p>Temporary Aid to Needy Families (C)</p> Signup and view all the answers

Which state's adoption of mothers' pensions marked the first statewide initiative in 1911?

<p>Illinois (D)</p> Signup and view all the answers

What program replaced Aid to Dependent Children in 1962?

<p>Aid to Families with Dependent Children (C)</p> Signup and view all the answers

What was introduced to work requirements in the welfare reform of 1996?

<p>Workfare (A)</p> Signup and view all the answers

What significant federal program was established to address workplace accidents in 1911?

<p>Wisconsin workmen compensation law (B)</p> Signup and view all the answers

What was the average monthly payment for Social Security in 2020?

<p>$1,461 (D)</p> Signup and view all the answers

What is the primary aim of the Medicare program initiated in 1965?

<p>To provide health insurance for people over 65 (A)</p> Signup and view all the answers

Which act required penalties for companies with more than 50 employees for not providing healthcare?

<p>Patient Protection and Affordable Care Act (Obamacare) (B)</p> Signup and view all the answers

What is the Earned Income Tax Credit designed to assist?

<p>Wage earners with income below a certain threshold (B)</p> Signup and view all the answers

Which of the following is a characteristic of public regulation of the labor market?

<p>Minimum wage legislation (D)</p> Signup and view all the answers

In what year was the Earned Income Tax Credit created?

<p>1975 (C)</p> Signup and view all the answers

What significant healthcare issue was present before the Affordable Care Act was enacted in 2010?

<p>15% of Americans having no health coverage (C)</p> Signup and view all the answers

What aspect of labor market regulation shows a significant absence in the US?

<p>Parental leave provisions (B)</p> Signup and view all the answers

What does the public regulation concerning pre-existing conditions entail for insurance companies?

<p>They must insure individuals regardless of pre-existing conditions (A)</p> Signup and view all the answers

What major impact did the private system develop after WWII have on access to welfare?

<p>It made access to welfare more unequal. (A)</p> Signup and view all the answers

What was the original meaning of the term 'lobbying' in the 18th century?

<p>Gathering in theaters to chat with important people. (B)</p> Signup and view all the answers

What organization is mentioned as an example of a group that conducts lobbying?

<p>National Rifle Association (A)</p> Signup and view all the answers

How did the budget for corporate lobbying in the early 2000s compare to the US Congress budget?

<p>It exceeded the total budget of the US Congress. (C)</p> Signup and view all the answers

What does the 1st Amendment protect in relation to lobbying?

<p>The right to petition the government. (B)</p> Signup and view all the answers

Which factor has contributed to undermining welfare systems according to the content?

<p>The rise of the gig economy. (D)</p> Signup and view all the answers

What ratio represents the spending on lobbying by large corporations compared to labor unions and public-interest groups in 2015?

<p>1:34 (C)</p> Signup and view all the answers

Who was Sam Ward and what was he known for?

<p>An influential lobbyist who organized dinners for Congress members. (D)</p> Signup and view all the answers

What requirement was established by the Federal Regulation of Lobbying Act of 1946?

<p>Lobbyists must register and report their activities. (B)</p> Signup and view all the answers

Which major event in 2007 influenced lobbying regulations in the U.S.?

<p>The conviction of Jack Abramoff. (D)</p> Signup and view all the answers

How did the Supreme Court decision United States v. Harriss affect the definition of lobbying?

<p>It limited lobbying to only in-person meetings. (D)</p> Signup and view all the answers

What was one of the main shortcomings of the Lobbying Disclosure Act of 1995?

<p>Agencies overseeing lobbying were short-staffed. (A)</p> Signup and view all the answers

What trend occurred regarding lobbying groups after the 1970s?

<p>Unification of lobbying groups became more prominent. (A)</p> Signup and view all the answers

What was a significant outcome of the lobbying practices in the context of financial capitalism after the 1970s?

<p>Greater alignment of lobbying with financial interests. (D)</p> Signup and view all the answers

Which of the following was a requirement set forth by the Honest Leadership and Open Government Act in 2007?

<p>Restrictions on gifts to members of Congress were increased. (C)</p> Signup and view all the answers

What was one of the first explicit regulations of lobbying activities in the U.S. introduced in the 1930s?

<p>The Foreign Agents Registration Act. (B)</p> Signup and view all the answers

Flashcards

Separation of Ownership from Control

A concept referring to the separation of ownership and control in corporations, where shareholders (owners) are not directly managing the corporation but delegate that power to managers.

Technostructure

A group of powerful managers who influence corporate decisions in a corporation, often surpassing the impact of individual shareholders.

Shareholder Activism

A movement advocating for shareholders' rights and influence over corporate decisions, particularly seen in increased pressure on companies to prioritize stock value.

Criticisms of the Managerial Revolution

A critical view of the rising influence of managers in corporations, arguing that their power might be misused and erode shareholders' control.

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Countervailing Powers

The idea that the influence of large corporations needs to be counterbalanced by other powerful groups to prevent abuses.

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Medicare

A program providing health insurance for people over 65 years old.

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Medicaid

A program providing healthcare for low-income individuals.

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The Patient Protection and Affordable Care Act (Obamacare)

A law aiming to provide health insurance to most Americans and regulate the private insurance market.

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Payroll Taxes

A system of taxes that funds social insurance programs like Medicare, Social Security, and unemployment.

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Earned Income Tax Credit

A negative income tax system providing financial aid to low-wage earners.

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Fair Standards Labor Act

A law setting a minimum hourly wage for workers.

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Employee Retirement Income Security Act

A law regulating private pension plans offered by employers.

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Family and Medical Leave Act

A law granting limited rights to unpaid leave for family and medical reasons.

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Worthy/Unworthy Poor

The practice of providing financial assistance to the poor, often through local charities or religious organizations.

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Role of Parishes in Early Aid to the Poor

In the past, churches and local communities played a significant role in providing financial aid to the poor, often through local charities or religious organizations.

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Outdoor Relief

A system of providing assistance to the poor outside of their homes, often through housing and work programs.

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Mothers' Pensions

A type of welfare program designed to provide financial assistance to mothers with dependent children.

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Federal Public Assistance

A system of providing federal financial assistance to states, with the state government administering the program.

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Aid to Dependent Children (ADC)

A federal program established in 1935 to provide financial aid to families with dependent children.

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Social Insurance

A system of social insurance that provides financial support to individuals who have experienced an event like retirement or unemployment.

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Social Security

A type of social insurance program that pays benefits based on the individual's work history and earnings records.

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Job Misclassification

The practice of classifying workers as independent contractors rather than employees, despite their work resembling traditional employee roles.

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Welfare System

A system of social support provided by both government and private entities, including benefits like unemployment insurance, social security, and healthcare.

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Gig Economy

The rise of independent contract work, often through online platforms like Uber or freelance websites.

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Fringe Benefits

Benefits offered by employers, such as health insurance, retirement plans, and paid time off.

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Retirement Plan Decline

Economic situation where the number of employees with employer-sponsored retirement plans is declining.

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Absence of Social Protection = Myth

The idea that the welfare system, both public and private, is essential to ensuring social security.

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Public Welfare System

Government programs funded by payroll taxes, such as unemployment insurance and social security.

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Workfare

A type of welfare program where recipients are required to participate in work activities in exchange for benefits.

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Lobbying

The practice of influencing politicians or decision-making bodies for specific legislation, often by hiring professionals like lawyers.

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The origin of lobbying

In the 18th century, it referred to people who attended events to network and seek favors. In the US, it later gained its political meaning around the 1810s, referring to influencing politicians.

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Lobbying and the 1st Amendment

The act of lobbying is legal in the United States and protected by the First Amendment, which grants the right to petition the government.

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Lobbying by businesses

In the US, a significant majority of lobbying organizations represent businesses.

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The scale of corporate lobbying

Lobbying spending by corporations has significantly surpassed the budget of the US Congress, demonstrating its immense scale.

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Corporate lobbying dominance

As of 2015, for every dollar spent on lobbying by labor unions and public-interest groups together, large corporations and their associations spent $34.

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K Street, DC

K Street in Washington D.C. is known for its association with lobbyists and their activities.

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Lobbying in the Gilded Age

Lobbying was a widespread practice during the Gilded Age, often viewed negatively, with figures like Sam Ward nicknamed the 'King of the Lobby'.

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Lobbyist Registration

The legal act of registering with the government and disclosing lobbying activities.

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Lobbying Disclosure Act (1995)

A legal act that expanded the definition of a lobbyist and increased reporting requirements.

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Honest Leadership and Open Government Act (2007)

A law passed in 2007 that strengthened lobbying regulations and transparency, partly as a response to a high-profile corruption case.

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Lobbying in Financial Capitalism

The increasing importance of lobbying in influencing government policies, especially after the 1970s.

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Unification of Lobbying Groups

Organizations formed by groups of large corporations to collectively lobby for policies that benefit their interests.

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Campaign Finance

The use of financial resources to influence political campaigns and elections.

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Corporations' Political Rights

The rights and influence that corporations have in the political sphere, including the ability to contribute to campaigns and lobby for policies.

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Study Notes

Week 8: Power Within the Firm: Corporate Governance

  • Stakeholders are parties with an interest in a company, impacting or being impacted by the business.
  • Corporate Governance focuses on relationships between different groups with power in businesses, primarily shareholders (owners) and managers (day-to-day operators).
  • Key questions surround the composition of these groups since the 1800s, their roles, and relative power shifts over time.
  • Public authorities, especially the federal government, regulate the relationship between shareholders and managers.
  • Corporations are distinct legal entities with rights/responsibilities separate from their owners. Limited liability protects shareholders from personal responsibility for company debts.

Annual Meeting Voting Rights

  • Shareholders vote at annual meetings to elect the Board of Directors, who then elect the Chief Executive Officer.
  • Corporate laws (vary by state) define if shareholder votes are binding.
  • Company bylaws outline the rights of different stakeholder representatives (investors, unions, etc.).

Power Relations Among Shareholders: Focus on Voting Rights

  • Early 19th century voting rights were often tied to Republican/Democratic ideals.
  • Voting rights evolved into a "plutocracy" (wealth) focus and then "oligarchy" (elite control) during later portions of the 19th and 20th centuries.
  • One vote per share is a common modern standard, but was not always the case.

Managers in US Corporations

  • "The Managerial Revolution" describes the rise of managers' power in corporations, often disconnected from direct shareholder ownership.
  • Ownership and control became increasingly separate in US companies.
  • Critics like John Kenneth Galbraith noted this disconnect and the impact of "technostructures."

Recent Evolutions: Financial Capitalism and Corporate Governance

  • Shareholder Activism began in the 1980s as a campaign to defend shareholder interests.
  • Institutional Investors (like banks and pension funds) now control a significant portion of shares, which impacts their power in corporate governance.
  • Corporate executives' compensation increased, potentially at the expense of shareholder value and firm performance, leading to calls for reforms.

Changes in Corporate Structures and Executive Compensation

  • Changes in corporate structures (e.g., downsizing, spinoffs) and strategies impact executive roles/power.
  • Compensation packages like stock options for executives saw rapid growth in the late 20th and early 21st centuries.

Social Protection in the US

  • Social protections involve navigating private and public contributions; the mix of systems varies.
  • Public welfare programs (like Social Security and Medicaid) have been established and expanded, with various reforms enacted (like the Personal Responsibility and Work Opportunities Reconciliation Act).
  • Social insurance, offering safety nets related to income, unemployment, or healthcare, have expanded over the 20th and 21st centuries.

Social Insurance

  • Social Security Act (1935) introduced retirement insurance and unemployment insurance.
  • It's still the most significant social program; however, there are various payment and coverage limitations.
  • Medicare and Medicaid, healthcare benefits for the elderly and disabled, came about in the 1960s.
  • Recent improvements (like the Affordable Care Act) have contributed to greater access but still face challenges.

Healthcare and Pensions

  • The US has a mix of private and public healthcare systems, with private systems having greater prevalence.
  • Health insurance coverage is often directly tied to employment, creating issues for those who lose or change jobs.
  • There's a long history of pension plans in the US (defined benefits).
  • Newer defined contributions models (such as a 401(k)) require active participation and risk assessment to maximize benefits.

Campaign Finance: 2024 Election and Corporate Rights

  • Campaign finance regulations are directly impacted by legal challenges about corporate political rights.

Business and Politics

  • Lobbying is a significant aspect of US business influence.
  • Lobbying activities have seen consistent public scrutiny and regulation, but remain potent tools for influencing governmental decision-making.

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Description

This quiz explores key concepts related to corporate structures, shareholder activism, and the gig economy. It covers influential theories from notable economists and the impact of labor policies on workers and public welfare systems. Test your knowledge on these important economic themes.

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