Chapter 3
Economic Security
Economic security is when you have enough income to meet your needs and still
have money left over to meet some of our wants.
Why
do people need Economic Security?
Needs and Wants
In our economic society most needs and wants can be met by money (i.e. new
However, there are needs and wants in our society that money cannot buy.
people need to feel safe, cared for, loved and have a sense of belonging.
clothes, house, car, etc.).
Workers and Employees
In a capitalist economy, most of the goods people need and want are produced by private companies.
The main goal of companies is to make a profit for the people who own the company.
In a capitalist economy most people get what they need and want by buying it.
Most people also get their money by owning or working for a business.
How Money Moves through the Canadian Economy
Workers
buy
goods and services
Wages go
Money goes
to Workers
to Businesses
Businesses make goods
or provide services
Capitalism versus Socialism
Capitalism
Socialism
A. Individual Freedom is highly
regarded
A. Whats best for the group is more
important than the individual
B. Production of goods and
services is in the hand of the
individuals
B. Production of goods and services is
in the hand of the government
C. Wealth determines whether
needs and wants are met.
C. Every person should receive enough
to meet his/her needs
D. Competition is important to
create wealth and improve
society
D. Co-operation is important to create
wealth improve society
Capitalism example
A person purchases a Tim’s store from the Tim Horton’s Franchise
He or she will hire individuals to produce the goods and services (i.e. donuts, coffee,
sandwiches).
The greater the business and the greater amount of money made by the owner the more
needs and wants he/she can afford (big or small car; big or small house)
Competition with places like Dunkin Donuts, and Irving is important to help create wealth.
Owners may have to upgrade to keep up with the times.
B. Socialism Example
The government is responsible for the services and goods provided. They can
increase/decrease tuition fees or add programs that may be necessary to the economy (New
Police Studies Program)
Government in cooperation with financial institutions makes sure that students receive
enough financial assistance to meet his/her needs as a student.
Government cooperates with committees at M.U.N to help improve scholastic programs and
meet new economic demands to help improve society.
**Few countries have an entirely capitalist or socialist economy.
For example, the Canadian economy is based on capitalism, but we
also have government programs that make sure people can get
medical care whether or not they can afford it (MCP)**
Businesses and Community Wealth
The term Capitalism comes from the word capital.
Capital is the money that goes into starting a business and maintaining it
Profit is the money that business owners make after paying their expenses (investment,
salaries, supplies, etc)
There are many different kinds of business in our economy:
Personal/Private Ownership: Home-repairs and gardening
Family Business: Can be a group of family members working together to operate a business
or a business passed down from generations (O’Brien’s Music Store; F.J Wadden and Sons).
Larger Corporate Business: Can be owned by big companies based in other parts of Canada
or part of the world (i.e Nissan; MacDonalds Restaurants).
New businesses help create wealth in an economy.
The first people to benefit are the hired workers before the owners see
any profit.
It may take years before a great deal of profit is made.
As well, other businesses see profit when the workers get their
paychecks and start spending money on the things they need and want
Chris Griffith’s Garrison Guitars (St. John’s, NL)
Chris is an entrepreneur from St. John’s who got an idea to start up his own guitar
business (guitar repairs and building). He did great research, study and put in a lot of
hard work into his ideas.
His big breakthrough was an idea to perfect a new type of acoustic guitar made out of
fiberglass rather than pieces of wood. This guitar was quickly in demand in countries all over
the world.
By 2002, his company, Garrison Guitars, was employing 57 people and business was booming.
Read page 48 and discuss the Millbrook First Nation Co-operative Project
The Cause and Effect Chain
Explains why certain things take place
The cause is what made a change happen. The effect is the change that resulted.
Cause
Mill Closes
Effect
Workers become Unemployed
However, real life is more complicated than this resulting in a chain of events caused by a trigger. For
example we can go further to understand the effects of the workers becoming unemployed.
Cause and Effect Chain
Trigger
POVERTY
Poverty – when basic needs cannot be met with the amount of money you make
Getting by – when the cost of basic needs is the same as the amount earned
A chance to get ahead – when more money is earned than is needed for basic needs
If you have more money than you need, you can use this money to get ahead
o
Things you want
o
Buy things on sale
o
Invest for the future
Poverty Cycle
a CYCLE is when things keep happening over and over
If you fall into poverty, you may have trouble getting out
o
Poor Health – can’t eat healthy to get healthier – can’t work if sick
o
No Transportation – can’t get to a job interview or to a job – can’t get a job if can’t get there
o
No Education – if not trained, can’t get job – can’t afford to go to college
BUILDING PERSONAL CAPITAL
Using Money Wisely
Personal capital includes anything you have that can help you improve your economic
situation.
Some examples of types of personal capital might include:
Savings in the bank
Property
Skills
Willingness to work hard
Once you have extra income you can take advantage of things on sale.
Example:
When there’s a sale on soup you will be able to save money by buying more cans on special
instead of just one. This money can then be used to help you
save even more money.
Rather than
Owning a Home
A family’s home is usually its biggest capital investment.
The portion of a home that a family pays to start off is called a downpayment
A mortgage is the money you would borrow to buy the home.
Each month, the family makes a payment that increases the amount of the house that it owns.
A mortgage increases a family’s capital.
First year owning home
5 years
owning home
10 years owning home
15 years owning home
20 years owning home
Breaking the Poverty Cycle
People who are caught in the poverty cycle have little chance to increase their
personal capital
People can break the poverty cycle in many ways.
One way a person can break the poverty cycle is to get training or further education.
Sometimes there is funding available through government or scholarships.
The poverty cycle can also be broken when people work together to help each other.
Habitat for Humanity
Habitat for Humanity International is a nonprofit, nondenominational Christian housing
ministry.
Habitat welcomes all people—regardless of race, religion, ethnicity or any other difference—
to build and repair simple, decent, affordable houses with those who lack adequate
shelter.
Why they build
Nearly 2 billion people around the world live in slum housing and over 100 million are
homeless. Habitat for Humanity is needed to help eliminate poverty by providing simple, decent shelter to
those in need.
Families left homeless by natural disasters, war and civil unrest often face dire housing
situations as they struggle to rebuild their lives. Habitat for Humanity’s Disaster Response program provides
shelter and housing solutions to help these families recover.
Read articles pg 56-57
Analyse the News
You need to think critically when you read and hear the news
(or any media text).
Look for bias and stereotyping.
Bias is a ‘hidden’ point of view’.
Usually in editorial or feature column in the newspaper is supposed to express a point of view.
Ex: “This is my opinion and here’s why I think that”
A news report however should present a fair explanation of all points of view.
If the issue isn’t presented fairly then the report is biased.
Two clues to spot bias:
Seems you’re only hearing one side of the story.
Language is emotional rather than factual.
Stereotyping is an unfair generalization about a group of people or a place.
Ex: dumb jock or dumb blond
Two clues to spot stereotyping:
You’ve heard the term or comment before and it seems biased.
The description does not show respect for differences.