Question

Income Determinants

Some politicians have recently proposed ideas that would encourage or require more businesses to operate as “co-ops” or “worker-owned” businesses. In such businesses, the workers and the bosses get paid the same amount of money and have an equal say in the management of the business.

1. Do you believe that more businesses should be run in such a manner, as cooperatives in which the owner and employees make roughly the same amount of money?

2. What are the potential drawbacks to the owners of such an idea? What about drawbacks to the workers?

3. If you like the idea of “worker-owned” businesses, should the government require businesses to operate in such a manner? Why or why not?

4. Why do you think some politicians may want to pass laws that would require more businesses to become cooperatives?

Answer 1

Workers owned business are those in which the workers and the employers ger near about same amount remuneration.there are several ways which leads to ownership of employees.this type of business ensures sustainability of good job quality also helps in creating a comparatively stronger business and moreover preserves or protects the legacy of the company.these are democratic business.it also ensures equality among all.the profit is equally distributed among owners and workers.the set up cost and administrative cost is comparatively low.
The drawbacks of workers owned business to the owners of the business are:
1) financial risks.as the business expanded, resources increased.henceforth the financial risks also increases which is mainly borne by the owners.
2)being the business owner,stress have to be taken by the owners.
3) owners have comparatively less time to commit to their families.
4) owners perform duties which are mostly undesirable.
The drawbacks of workers owned business faced by the workers are:
1) little control.workers have comparatively low control on the management decisions and administrative affairs.
2) workers have very few tax benefits than the owners of the business.
3) workers are prone to risks of loosing jobs.their job security is very low compared to the owners.
4) workers do not have the right on equity shares of the company.
5) workers have a target of meeting the production target.
government might face difficulties in starting the workers owned business.instead government organisations have workers cooperative which look after the right and issues of the workers.