Work and the Economy

1
Work and the Economy
2
The Social Significance of Work

• In modern societies, paid work is important for
  several reasons
• money
• activity
• variety
• a way to structure time
• social contacts
• personal identity

3
The Social Significance of Work

• Work means performing tasks to produce goods and
  perform services that cater to human needs.
• Work is done in exchange for a regular wage.
• The economy consists of institutions that provide
  for the production and distribution of goods and
  services.

4
The Economy

• Labor - the group of people who contribute their
  physical and intellectual services to the
  production process in return for wages.
• Capital - wealth owned or used in business by a
  person or corporation.

5
The Economy

• Primary Sector extraction of raw materials and
  natural resources from the environment
  (pre-industrial)
• Secondary Sector processing of raw materials
  into finished goods (industrial)
• Tertiary Sector provision of services, rather
  than goods (post-industrial)

6
Informal Economy

• Transactions outside the sphere of regular
  employment and includes the exchange of cash for
  services provided and the direct exchange of
  goods or services.

7
Characteristics of the Industrial Economy

• New forms of energy, mechanization, and the
  growth of the factory system.
• Increased division of labor and specialization
  among workers.
• Universal application of scientific methods to
  problem solving and profit making.
• Introduction of wage labor, time discipline, and
  workers deferred gratification.
• Strengthening of bureaucratic organizational
  structure.

8
Characteristics of the Postindustrial Economy

• Information displaces property as the central
  preoccupation in the economy.
• Workplace culture shifts away from factories and
  toward diverse work settings, the employee, and
  the manager.
• The conventional boundaries between work and home
  are breached.

9
Work in a Postindustrial SocietyLabor
Participation by Sector

• Primary - extracting material goods from nature -
  farming, mining, etc.
• Secondary - goods manufactured - products such as
  automobiles and appliances
• Tertiary - provision of services - broad area,
  ranging from physicians to housekeepers

10
Economic Systems Capitalism

• Four distinctive features
• Private ownership of the means of production.
• Pursuit of personal profit.
• Competition and consumer choice.
• Lack of government intervention.

11
Economic Systems Capitalism

• United States, Western Europe, Japan
• Based on private ownership of the means of
  production
• Laissez-faire/Adam SmithGovernment should play a
  minor or no role at all in the market
• Reality (Great Depression) has shown that the
  state does need to play an active role in
  Capitalist systems

12
Economic Systems Socialism

• Three distinctive features
• Collective ownership of the means of production.
• Pursuit of collective goals.
• Centralized decision-making (government control
  of economy).

13
Economic Systems Socialism

• China, Cuba, North Korea
• Traditionally viewed as a transition stage
  between the movement from capitalism to communism
• State controls significant elements of the means
  of production
• The state dictates the direction and level of
  production
• Private property still exists but in small
  quantities

14
Economic Systems Mixed

• Sweden, much of northern Europe, Canada
• Also known as social democracies
• Elements of capitalism and socialism
• Major institutions (education, health, utilities)
  run by the state to guarantee access for all
• High taxes but virtual absence of poverty

15
The Modern Economy

• Capitalist system with
• Private ownership of the means of production
• Profit as incentive
• Free competition for markets to sell goods
• Acquisition of cheap materials
• Utilization of cheap labor
• Restless expansion investment to accumulate
  capital

16
Unemployment

• Unemployment has been a recurrent problem in the
  industrialized countries in the twentieth
  century.
• Because work is a structuring element in a
  person's psychological makeup, the experience of
  unemployment is often disorienting.

17
Types of Unemployment

• Cyclical - result of lower rates of production
  during recessions.
• Seasonal - result of shifts in the demand for
  workers based on holidays.
• Structural - skills needed by employers do not
  match skills of unemployed.

18
Labor Markets

• Primary labor market high-paying jobs with good
  benefits, some degree of security, and the
  possibility for future advancement
• Secondary labor market low-paying jobs with few
  benefits, very little job security, and very
  little possibility for future advancement

19
Race and Labor Markets

• Are racial minorities channeled into the
  secondary labor market?
• How do inequalities in education perpetuate this
  cycle?
• Poorer schools less scholarships and poorer
  parents means have to work through college
  poorer grades than students who dont have to
  work less attractive job offers

20
The Changing Nature of Work

• The globalizing of economic production, together
  with the spread of information technology, is
  altering the nature of the jobs most people do.
• Over the past 20 years, in all industrialized
  countries except for the United States, the
  average length of the workweek has been reduced.

21
Technology and Work

• Computers are deskilling labor
• Computers are making work more abstract
• Computers limit workplace interaction
• Computers increase employers control of workers
• Create more options for working from remote
  locations

22
Corporations

• Corporation an organization with a legal
  existence, including rights and liabilities,
  apart from that of its members
• Incorporating protects wealth of individual
  owners from lawsuits affecting the business
• Of over 24 million businesses in the U.S., 5
  million are incorporated

23
Corporate Capitalism

• With the globalizing of the economy, most large
  corporations have become transnational, or
  multinational, companies.          

24
Largest Nonfinancial U.S. Transnational
Corporations
25
Competition

• Shared Monopoly when four or fewer companies
  supply 50 of more of a particular market
• Oligopoly when several companies overwhelmingly
  control an entire industry
• What are some examples in the U.S.?
• Corporate Conglomerates

26
Increasing Competition in a Global Economy

• Outsourcing
• American companies may outsource jobs in order to
  reduce production costs by utilizing cheaper
  labor in other countries
• Enables American companies to compete in a global
  market, but takes jobs out of domestic job market

27
Unions and Strikes

• Unions - defensive organizations, providing a
  measure of control for workers over their
  conditions of labor.
• Strike
• a temporary stoppage of work by a group of
  employees to express a grievance or enforce a
  demand.
• the source of major industrial conflict.

28
Unions and Strikes

• In recent years, strike activity has diminished
  as workers fear losing their jobs.
• In 2000 only 39 strikes involving more than 1,000
  workers were reported.
• Number of workers involved in the actions
  declined from more than 2.5 million in 1971 to
  339,000 in 1997.

29
Unions and Strikes

• Labor unions in Western countries are facing a
  threat from three related changes
• The recession in world economic activity
• The rise to power of rightist governments in many
  countries that launched anti-union assaults
• The decline of the older manufacturing industries