the economy and work. copyright © 2004 by nelson, a division of thomson canada the economy the...

The Economy and WorkThe Economy and Work

Copyright © 2004 by Nelson, a division of Thomson CanadaCopyright © 2004 by Nelson, a division of Thomson Canada

The EconomyThe Economy

The Sociology of Economic LifeThe Sociology of Economic Life Historical Changes in Economic SystemsHistorical Changes in Economic Systems


The EconomyThe Economy

DefinedDefined: the social institution that ensures : the social institution that ensures the maintenance of society through the the maintenance of society through the production, distribution, and consumption of production, distribution, and consumption of goods and services goods and services

Key Terms:Key Terms:– GoodsGoods: tangible objects that are necessary : tangible objects that are necessary

(such as food, clothing and shelter) or desired (such as food, clothing and shelter) or desired (DVD players).(DVD players).


Economy Cont.Economy Cont.

Key Terms:Key Terms:– ServicesServices: intangible activities for which people : intangible activities for which people

are willing to pay (such as entertainment)are willing to pay (such as entertainment)– LabourLabour: the physical and intellectual services, : the physical and intellectual services,

including training, education, and individuals including training, education, and individuals abilities, that people contribute to the production abilities, that people contribute to the production processprocess

– CapitalCapital: the wealth (money or property) owned : the wealth (money or property) owned or used in business by person or corporation or used in business by person or corporation


The Sociology of Economic LifeThe Sociology of Economic Life

FocusFocus: on economic systems, the link to : on economic systems, the link to other social institutions, and the social other social institutions, and the social organization of workorganization of work

Macro LevelMacro Level: the role on multinational : the role on multinational corporations on industrialized and corporations on industrialized and developing nationsdeveloping nations

Micro LevelMicro Level: a focus on job satisfaction, : a focus on job satisfaction, relationships among workers, the hierarchy relationships among workers, the hierarchy of work rolesof work roles


Historical ChangesHistorical Changes

Pre-industrial EconomiesPre-industrial Economies– TypesTypes: hunting/gathering, agrarian (Classical and : hunting/gathering, agrarian (Classical and

Medieval)Medieval)– Most workers engage in Most workers engage in primary sector productionprimary sector production: :

the extraction of raw materials and natural resources the extraction of raw materials and natural resources from the environment from the environment Growth occurs when there is Growth occurs when there is a surplus which frees some a surplus which frees some

people to engage in other activities (like food, clothing and people to engage in other activities (like food, clothing and shelter)shelter)



Industrial EconomiesIndustrial Economies– Industrial Revolution in Britain (c 1775), most workers Industrial Revolution in Britain (c 1775), most workers

engaged in the secondary sector production: the engaged in the secondary sector production: the manufacturing of finished goods.manufacturing of finished goods. By the end of the 20By the end of the 20thth century, only 3% of Canadian workers century, only 3% of Canadian workers

were engaged in the primary sectorwere engaged in the primary sector ElementsElements::

– Work was broken into simple tasks repeated over and Work was broken into simple tasks repeated over and over againover again

– Workers lost control over their labourWorkers lost control over their labour– Division of work and family: women were less involved Division of work and family: women were less involved

in the secondary sector then menin the secondary sector then men



ElementsElements::– Early years of industrialization, the work Early years of industrialization, the work

conditions were very harsh: long hours with little conditions were very harsh: long hours with little pay and the employment of childrenpay and the employment of children

– By 1950 (in Canada), unionized industrial By 1950 (in Canada), unionized industrial workers had gained better working conditions, workers had gained better working conditions, better wages, and political powerbetter wages, and political power



Post-Industrial EconomiesPost-Industrial Economies– Shifts began to happen from a primary sector Shifts began to happen from a primary sector

base to an industrial and service base during base to an industrial and service base during the first half of the 20the first half of the 20 thth century century

– See graphs: See graphs:


Canadian Sectors: 1951Canadian Sectors: 1951

22%

31%

47%Primary

Industrial

Service


Canadian Sectors: 2000Canadian Sectors: 2000

5%

21%

74%

Primary

Industrial

Service



Post-Industrial EconomiesPost-Industrial Economies– Shift towards the production of services rather Shift towards the production of services rather

than goods than goods – Types:Types:

Knowledge workersKnowledge workers: based on education and high : based on education and high level skills; well paid. Example: Teacherslevel skills; well paid. Example: Teachers

Non-Knowledge workersNon-Knowledge workers: based on low levels of : based on low levels of education and skills. Example: McDonald’s workerseducation and skills. Example: McDonald’s workers

– Class conflict and poverty may increaseClass conflict and poverty may increase



Post-Industrial EconomiesPost-Industrial Economies– As well paid industrial work decreases (many As well paid industrial work decreases (many

companies have relocated in developing companies have relocated in developing countries to cut labour costs), wages have countries to cut labour costs), wages have decreased in service industriesdecreased in service industries

– Example: Young men aged 18 to 24 with full Example: Young men aged 18 to 24 with full time jobs have lost 20% of their incomes from time jobs have lost 20% of their incomes from 1977 to 1997 (Statistics Canada)1977 to 1997 (Statistics Canada)


Contemporary Economic SystemsContemporary Economic Systems

CapitalismCapitalism SocialismSocialism Mixed EconomiesMixed Economies


CapitalismCapitalism

DefinedDefined: an economic system characterized : an economic system characterized by private ownership of the means of by private ownership of the means of production, from which personal profits can production, from which personal profits can be derived through market competition and be derived through market competition and without government intervention without government intervention

Three ElementsThree Elements::



1. Private ownership of the means of 1. Private ownership of the means of productionproduction

Early Capitalism in Canada: based on staples (goods Early Capitalism in Canada: based on staples (goods associated with the primary sector)associated with the primary sector)

Commercial Capitalism: trade of raw materialsCommercial Capitalism: trade of raw materials Industrial Capitalism: with urbanization, nation-state Industrial Capitalism: with urbanization, nation-state

constructionconstruction Corporate Capitalism: with corporations Corporate Capitalism: with corporations



1. Private ownership of the means of production1. Private ownership of the means of production Corporate CapitalismCorporate Capitalism: with corporations (large scale : with corporations (large scale

organizations that have legal powers, such as the organizations that have legal powers, such as the ability to enter into contracts and buy and sell ability to enter into contracts and buy and sell property, separate from their individual owners. property, separate from their individual owners.

Economic Concentration: the degree that a small Economic Concentration: the degree that a small number of corporations controls a large number of a number of corporations controls a large number of a nations resources.nations resources.

– top 100 corporations control 67% of business assetstop 100 corporations control 67% of business assets Multinational Corporations: large companies that are Multinational Corporations: large companies that are

head-quartered in one country and have subsidiaries head-quartered in one country and have subsidiaries in othersin others



2. Pursuit of Personal Profit 2. Pursuit of Personal Profit Tenet in CapitalismTenet in Capitalism: that individuals are free to maximize their : that individuals are free to maximize their

individual gain through personal profit and, in turn, all people individual gain through personal profit and, in turn, all people will benefit (from Adam Smith, will benefit (from Adam Smith, An Inquiry into the Nature and An Inquiry into the Nature and Causes of the Wealth of NationsCauses of the Wealth of Nations))

3. Competition3. Competition Early capitalism thrived on this; late capitalism has moved to Early capitalism thrived on this; late capitalism has moved to

monopolies:monopolies: OligopolyOligopoly: when several (or one) company control an entire : when several (or one) company control an entire

industry (example Microsoft with no competitors)industry (example Microsoft with no competitors)


SocialismSocialism

DefinedDefined: an economic system characterized : an economic system characterized by public ownership of the means of by public ownership of the means of production, the pursuit of collective goals, production, the pursuit of collective goals, and centralized decision making and centralized decision making – Karl Marx: His vision was that all people would Karl Marx: His vision was that all people would

own the means of production; the former Soviet own the means of production; the former Soviet Union, Cuba and China are examples of State Union, Cuba and China are examples of State ownershipownership


SocialismSocialism

ElementsElements::3. Centralized Decision Making: a hierarchical 3. Centralized Decision Making: a hierarchical

system; in the former Soviet Union, top levels of system; in the former Soviet Union, top levels of the Communist party made these decisionsthe Communist party made these decisions

– A cause of the fall of Communism in Russia A cause of the fall of Communism in Russia may have been because of this issuemay have been because of this issue


Mixed EconomiesMixed Economies

DefinedDefined: combines elements of a market : combines elements of a market economy with elements of a socialist economy with elements of a socialist economy. economy.

Democratic SocialismDemocratic Socialism: an economic : an economic system that combines private ownership of system that combines private ownership of some of the means of production, some of the means of production, governmental distribution of some essential governmental distribution of some essential goods and services, and free elections. goods and services, and free elections. (examples: Sweden and France)(examples: Sweden and France)


The Social Organization of WorkThe Social Organization of Work

OccupationsOccupations ProfessionsProfessions Upper-Tier JobsUpper-Tier Jobs Lower-Tier and Marginal JobsLower-Tier and Marginal Jobs Contingent WorkContingent Work UnemploymentUnemployment Labour UnionsLabour Unions


OccupationsOccupations

DefinedDefined: categories of jobs that involve : categories of jobs that involve similar activities at different work sites similar activities at different work sites VariationsVariations– Blue Collar: factory, craft-workers and manual Blue Collar: factory, craft-workers and manual

labourlabour– White Collar: office and professionalWhite Collar: office and professional


ProfessionsProfessions

DefinedDefined: high-status, knowledge based occupations : high-status, knowledge based occupations ElementsElements

1. Abstract, specialized knowledge1. Abstract, specialized knowledge

2. Autonomy2. Autonomy

3. Self-regulation3. Self-regulation

4. Authority4. Authority

5. Altruism5. Altruism Women: Made significant gains into the professions (see Women: Made significant gains into the professions (see

graph)graph)


Canadian Women’s Share in Law Canadian Women’s Share in Law and Medicineand Medicine

0

5

10

15

20

25

30

1971 2001

Law

Medicine


Upper Tier Upper Tier

Kinds: Administrators, Managers and Kinds: Administrators, Managers and SupervisorsSupervisors

Administrators: For government Administrators: For government bureaucracies like hospitals, and collegesbureaucracies like hospitals, and colleges

Managers and Supervisors: leaders in Managers and Supervisors: leaders in businessbusiness

Increase of women (see graph)Increase of women (see graph)


Canadian Women’s Share in Canadian Women’s Share in Management Management

0

5

10

15

20

25

30

35

40

45

1971 1982 1993

Managers


Lower TierLower Tier

Elements:Elements:– Low payLow pay– Little securityLittle security– Few chances for advancementFew chances for advancement– Higher unemployment ratesHigher unemployment rates– Marginal: those jobs which differ from the employment Marginal: those jobs which differ from the employment

norms of a societynorms of a society Examples:Examples:

– Janitors, restaurant servers, farm workersJanitors, restaurant servers, farm workers



Service and Household WorkersService and Household Workers– Viewed as servantsViewed as servants– In 1991, about 3 million workersIn 1991, about 3 million workers– Occupational segregation by gender and ageOccupational segregation by gender and age

Globalization of Marginal JobsGlobalization of Marginal Jobs– Many companies (like Nike and IBM) have Many companies (like Nike and IBM) have

moved to developing countries where workers moved to developing countries where workers get paid very poorlyget paid very poorly



Contingent WorkContingent Work– Defined: part-time work or temporary work Defined: part-time work or temporary work – Elements:Elements:

No benefitsNo benefits No pensionsNo pensions Lower wagesLower wages Most are youngMost are young About 1 million Canadian workersAbout 1 million Canadian workers


UnemploymentUnemployment

Types of Unemployment:Types of Unemployment:1. Cyclical: according to the peaks and troughs of the 1. Cyclical: according to the peaks and troughs of the

economic cycleeconomic cycle

2. Seasonal: according to seasons (like tourism)2. Seasonal: according to seasons (like tourism)

3. Structural: because the skills demanded by employers 3. Structural: because the skills demanded by employers do not match the skills of the unemployed or because do not match the skills of the unemployed or because the unemployed to not live where the jobs are locatedthe unemployed to not live where the jobs are located

Effects: lack of identity, pain, suicide, broken Effects: lack of identity, pain, suicide, broken relationships relationships


UnemploymentUnemployment

Unemployment RateUnemployment Rate: the percentage of : the percentage of unemployed persons in the labour force actively unemployed persons in the labour force actively seeking jobsseeking jobs

Variations of Unemployment ratesVariations of Unemployment rates– YearlyYearly– RegionalRegional– GenderGender– RaceRace– AgeAge– Presence of DisabilityPresence of Disability


Labour UnionsLabour Unions

Defined: a group of employees who join together Defined: a group of employees who join together to bargain with an employer or a group of to bargain with an employer or a group of employers over wages, benefits, and working employers over wages, benefits, and working conditionsconditions

Canadian examples: the Winnipeg General Strike Canadian examples: the Winnipeg General Strike of 1919; against General Motors in 1937.of 1919; against General Motors in 1937.

Increase until 1980 and since then a decline; only Increase until 1980 and since then a decline; only 4% of workers in banks belong to unions4% of workers in banks belong to unions

International Variation: See graphInternational Variation: See graph


International Variations on Union International Variations on Union Membership Membership

0102030405060708090

Percentages


Global Economy in the FutureGlobal Economy in the Future

PredictionsPredictions More and more a Post-Industrial worldMore and more a Post-Industrial world Knowledge workers will increaseKnowledge workers will increase The digital divideThe digital divide Reduction of the work weekReduction of the work week Increased inequality may destabilize societyIncreased inequality may destabilize society Decline of labour unionsDecline of labour unions Borderless economiesBorderless economies Increased chasm between rich and poor both within and Increased chasm between rich and poor both within and

across countriesacross countries


Global Economy in the FutureGlobal Economy in the Future

Predictions:Predictions: Closing of plants in Canada and moving Closing of plants in Canada and moving

them to developing countriesthem to developing countries Need for Corporations to become more Need for Corporations to become more

responsibleresponsible

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