The Economy

1
The Economy

• Principle function
• The production, distribution, and consumption of
  goods and services

2
Three Basic Resources Are Transformed

• Land and the resources of the land
• Labor
• Mental and manual

3
Varieties of Economic Systems

• Pre-Agriculture
• Hunting and gathering
• Pastoral/horticultural
• Agricultural
• Industrial
• Post-Industrial

4
Industrial Economies

• More capital intensive
• Harnessed science for economic advantage

5
Kinds of Industrial Economies

• Capitalism
• Mixture
• All industrial societies today are on a continuum
  between capitalism and socialism

6
Capitalism

• Ideological Basis
• Private property
• Free and open competition

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• Together these factors ---- invisible hand
• Law of supply and demand
• Ensure quality of product/services
• Labor market wages/distribution
• Must be continuous

8
Consequences of Capitalism

• 1. The nature and quality of work changed in
  industrial economies
• Mental and manual work separated

9
Taylorization of Work

• Frederick Taylor Scientific Management
• Usually combined with Fords assembly line
• Tasks are broken down into parts
• Then workers are selected and trained to perform
  each component of the job.

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Taylorization in Non-Manufacturing Organizations

• Service industry
• Insurance claims

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Consequences of Capitalism

• 2.
• 3. Drastic transformation of the environment

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• 4. Tremendous efficiency
• 5.
• Recently more inequality
• Materialism

13
Contemporary Issues

• Contingent Work
• Overwork
• Shrinking marketplace

14
Contingent Work

• Temporary and contract workers
• Manpower and Robert Half are among fastest
  growing Fortune 500 employers
• Up to 10 of work force  

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• Most contingent work is in
• New high growth areas
• Health care and high technology occupations

16

• Robert Half Legal provides project teams for a
  wide range of initiatives, including litigation
  support and discovery.
• Accounting, information technology, public
  relations, marketing, web design, nursing

17
The Ground War at FedEx

• Several dozen lawsuits against FedEx by angry
  drivers claiming it classifies 14,000 of its
  drivers as independent contractors
• Wear FedEx uniforms, work routines, no benefits
  or security
• (Business Week, Nov. 28, 2005)

18

• Chrysler hires all-temps third shift at its
  Illinois plant
• The Detroit News (Friday, June 16, 2006)

19
Americans OverWork!

• Longer hours on the job today than in the 1950s
• 9 full weeks more each year than our peers in
  Western Europe

20
Addiction to Work -- Karoshi

• Taking work home, cell phone or pager on 24/7
• You have to be busy to show you have a right to
  exist.

21
The Shrinking Marketplace

• The Beer Industry in the U.S.

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Breweries in U.S.

• Breweries Jobs
• 1880 2741
• 1935 750
• 1967 125 60,000
• 1985 35 43,000 (1980)
• 2000 1698 incl micros 39,500
• 4 brewers have 79 of sales

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How Consolidation Occurred

• Large firm facilities automated..lower labor
  costs
• Greater profit.more money available for
  advertising and predatory buy outs

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Advertising

• 700 million in 1997

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• Philip Morris acquisition of Miller in 1970
  brought deep pockets to beer advertising
• Miller changed from being the champagne of
  bottled beers to the beer for rugged men and
  athletes.
• Lite beer is advertising heavy
• Tastes great, less filling

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Consequences of Beer Industry Consolidation

• Loss of jobs
• Lower quality beer?
• ESPN, ESPN II, Huge sports salaries

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What Ever Happened to Schlitz Beer?
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Schlitz The Beer that Made Milwaukee Famous
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