Download economy: the world of work

Chapter 9 (Book 16)
ECONOMY: THE WORLD OF
WORK
Economy: The World of Work
Learning Objectives
• LO 9.1 Summarize historical changes to the
economy.
• LO 9.2 Assess the operation of capitalist and
socialist economies.
• LO 9.3 Analyze patterns of employment and
unemployment in the United States.
• LO 9.4 Discuss the importance of corporations
to the U.S. economy.
The Power of Society
Will the jobs you
take throughout
your life reflect
choices you
make based on
your personal
abilities and
interests?
A Quick Quiz:
Which U.S. business do more than 200 million people around the
world visit each week?
Which business sells products made by more than 100,000
companies?
Which U.S. company, on average, opens three new stores
somewhere in the world every day?
Which U.S. company buys more than $25 billion worth of goods
each year from China, making it a larger trading partner for China
than the United Kingdom?
Which U.S. company employs 2.2 million people around the
world, including approximately 1.4 million in the United States?
The Economy: What Is…?
The Economy: What Is…?
Historical Overview
Overview
• The economy operates in a predictable
manner.
• Goods and services ensure survival, make life
easier, and contribute to social identity.
• Economies of modern high-income nations
are the result of centuries of social change.
Agricultural Revolution
The earliest societies
• Hunters and gatherers
with no distinct
economy.
With surplus, the
economy was a distinct
social institution
• Agricultural
technology
• Job specialization
• Permanent
settlements
• Trade
LO 9.1 Summarize historical changes to the economy.
Industrial Revolution
Industrialization created
economic change in five ways.
•
•
•
•
•
New sources of energies
Centralization of work in factories
Manufacturing and mass production
Specialization
Wage labor
Information Revolution and Postindustrial
Society
Postindustrial
economy
• Productive system of
service work and high
technology
Information revolution
altered fundamental
character of work in
three ways
• From tangible products
to intangible ideas
• From mechanical skills
to literacy skills
• From factories to
almost anywhere
The Size of Economic Sectors, Income
Level of Country
• As countries become
richer, the primary
sector becomes a
smaller part of the
economy and the
tertiary or service
sector becomes
larger.
•
Source: Estimates based on
World Bank (2012).
The Global Economy
Global economy
Expanding economic activity that crosses national
borders
Sectors of the Economy
Primary sector
Secondary sector
Tertiary sector
Generates raw
materials from
environment
Transforms raw
materials into
manufactured goods
Generates services
rather than goods
The Global Economy Development
More products
pass through
many nations
Global division
of labor
National
governments no
longer control
the economic
activity within
their borders
Development
of a global
economy has
five major
consequence
s
Small number
of businesses
control a vast
share of the
world's wealth
Concerns
raised about the
rights and
opportunities of
workers
Capitalism
• “Justice” in a capitalist
system amounts to
marketplace freedom.
• Features
– Private ownership of
property
– Pursuit of personal
profit
– Competition and
consumer choice
LO 9.2 Assess the operation of
capitalist and socialist economies.
Capitalism still thrives in Hong
Kong (above), evident in streets
choked with advertising and
shoppers.
Socialism
• “Justice” in a socialist
context is meeting
everyone's needs in
roughly equal manner.
• Features
– Collective ownership of
property
– Pursuit of collective
goals
– Government control of
the economy
Socialism is more the rule in
China's capital, Beijing (above),
a city dominated by government
buildings rather than a
downtown business district.
Socialism and Communism: What Is…?
Alternative Systems: What Is…?
Capitalism and Socialism
North Korea
South Korea
Directly comparing the
economic performance of
capitalism socialism is
difficult because nations
differ in many ways.
But a satellite image
of socialist North Korea
and capitalist dramatically
different electrical output of
the two nations, one
indication of economic
activity.
Relative Advantages
Capitalism
Socialism
• Economic productivity
• Economic productivity
– GDP is $13,500
• Economic equality
– More income disparity
• Personal freedom
– Emphasizes freedom to
pursue personal selfinterest
– GDP is $5,000
• Economic equality
– Less income disparity
• Personal freedom
– Emphasizes freedom from
basic want
Work in the Postindustrial Economy
Decline of
agriculture
work
• In 1900, roughly
40% of U.S.
workers were
farmers.
• In 2011, just 1.6%
were in agriculture
• Family farm
replaced by
corporate
agribusinesses
The Changing Pattern of Work in the United
States, 1900–2011
• Compared to a century
ago, when the economy
involved a larger share of
factory and farm work,
making a living in the
United States now
involves mostly whitecollar service jobs.
• Source: Estimates based on
U.S. Department of Labor
(2012).
Work in the Postindustrial Economy
Shift from
factory
work to
service
work
• By 2011, more
than 80% of labor
force worked in
service sector.
• Only modest
standard of living
earned
• Lowest salaries
earned by women
and other
minorities
Work in the Postindustrial Economy: Dual
Labor Market
Categories
of today's
economy
• Primary labor
market: Jobs that
provide extensive
benefits to
workers
• Secondary labor
market: Jobs that
provide minimal
benefits to
workers
LO 9.3 Analyze patterns of employment and unemployment in the United States.
Work in the Postindustrial Economy
Labor
unions
Decline
of unions
• Organizations of
workers that seek to
improve wages and
conditions through
various strategies
• Shrinking industrial
sector
• Service jobs are
unlikely to be
unionized
Professions: What Is…?
Basic Characteristics of Professions
Characteristics
Orientation
to community
rather than
self-interest
Authority
over clients
Theoretical
knowledge
Selfregulated
practice
Self-Employment, Unemployment, and
Underemployment
Self-employment
• Earning a living without being
on the payroll of a large
organization
Unemployment
• Jobs disappear as occupations
become obsolete, businesses
change operational plans, and
companies downsize or close
Although college
graduates have a low
risk of unemployment,
race is related to
unemployment for all
categories of people.
Source: U.S. Department of
Labor (2013)
Self-Employment, Unemployment, and
Underemployment
Underemployment
• Lower salaries, fewer
benefits, and
reduced/no pensions
• Many workers agree to
cuts in pay and/or
benefits
The “Jobless Recovery”
Slower recovery in jobs
•
•
•
•
•
•
Computer technology
Increased workload for existing workers
More temporary workers
More jobs abroad
Slower rate of growth in U.S. economy
Cost of U.S. workers or lack of high level
skills in global terms
The Underground Economy
Race and Gender in the Workplace
In the past, white men
have been the mainstay
of the US labor force
Do these
matter?
In the future, more
workers will be women
and minorities
Development of
programs/policies to
meet needs of socially
diverse workforce
needed
Diversity 2020: Changes Coming to the
Workplace
Recruiting diverse,
talented workers
Strategies for
dealing with
increase in U.S.
minority workers
Developing effective
ways to dear with
socially motivated
tensions in the
workplace
Rethinking current
promotion practices
New Information Technology and Work
AAMOI
Computers are de-skilling labor.
Computers are making work more abstract.
Computers limit workplace interaction.
Computers increase employers' control of workers.
Computers allow companies to relocate work.
Corporations: Are They Competitive?
Corporations
• Few large corporations dominate
economy.
• Economic concentration has created
the conglomerate.
• Federal law forbids monopoly, but
allows oligopoly.
Corporations and Global Economy
In the world
• Corporations account for most of the world's
economic output.
• Biggest corporations are based in the U.S.,
Japan, and Western Europe, but their
marketplace is the entire world.
• Low-income countries contain most of world's
population, natural resources, and cheap labor.
The Economy: Looking Ahead
Related
Economic
issues of
future of
global
the U.S.
inequality and other
and
nations will
population occur in a
increase
global
must be
arena.
addressed.