Chapter 12 Problems of Work and the Economy

© 2012 Pearson Education, Inc. All rights reserved. The American Free-Enterprise System: Key Trends Capitalism –Competition among providers of goods and services is a cornerstone of capitalism Markets Limited liability Entrepreneurship Capital

© 2012 Pearson Education, Inc. All rights reserved. Global Markets and Corporate Power Economic globalization Multinational Corporations –Multinational corporations Global Factory, Global Sweatshops –Outsourcing –Multinationals have been transforming the world’s economy

© 2012 Pearson Education, Inc. All rights reserved. Global Markets and Corporate Power –What has made these transformations possible? High speed transportation, component production The global economy of today was brought on by two social forces –Modern speed of communication –Modern speed of transportation

© 2012 Pearson Education, Inc. All rights reserved. Figure 12-1: GDP of Selected Countries/Companies

© 2012 Pearson Education, Inc. All rights reserved. Effects on American Workers From Manufacturing to Services –Decline in farm employment –Decline in blue-collar employment –Growth in white-collar employment Women in the Global Labor Market –Women comprise well over 40 percent of the labor force

© 2012 Pearson Education, Inc. All rights reserved. Effects on American Workers Export of capital and jobs overseas Biggest job losses have been in manufacturing –In industrial cities of the Northeast and Midwest Technology and Specialization –Technology

© 2012 Pearson Education, Inc. All rights reserved. Effects on American Workers There has been a rapid growth in the application of computers to work New technology will lead to job losses in traditional industries –Specialization Decline in employers & concentration of markets by large corporations

© 2012 Pearson Education, Inc. All rights reserved. Problem Aspects of Work The Changing Nature of Employment –Insecurity about Declines in “Good Jobs” –Unemployment –Mass Layoffs and Economic Insecurity –The Intermittently & Chronically Unemployed –Frictional Unemployment & Permanent Displacement

© 2012 Pearson Education, Inc. All rights reserved. Figure 12-6: Unemployment Rates, by Race/Ethnicity and Education

© 2012 Pearson Education, Inc. All rights reserved. Table 12-1: Industries with Largest Mass Layoff Claims in July 2010

© 2012 Pearson Education, Inc. All rights reserved. Figure 12-7: Fatality Rates for Most Dangerous Occupational Categories

© 2012 Pearson Education, Inc. All rights reserved. Consumers and Credit Problems of Debt Entanglement –Transformation from a cash to credit society –Proposed solutions to debt and bankruptcy entanglement Financial Risk, Corporate Crime, Economic Bust

© 2012 Pearson Education, Inc. All rights reserved. Figure 12-8: Total Debt Held by Low- Income Families

© 2012 Pearson Education, Inc. All rights reserved. Social Policy Two major factors have altered the world economy –Global terrorism –Globalization Policies and politics will focus on issues of free-trade and the expansion of markets –NAFTA; Most favored trade status of China