The Economy and Work

Copyright © 2004 by Nelson, a division of Thomson Canada The Economy  The Sociology of Economic Life  Historical Changes in Economic Systems

Copyright © 2004 by Nelson, a division of Thomson Canada The Economy  Defined: the social institution that ensures the maintenance of society through the production, distribution, and consumption of goods and services  Key Terms: –Goods: tangible objects that are necessary (such as food, clothing and shelter) or desired (DVD players).

Copyright © 2004 by Nelson, a division of Thomson Canada Economy Cont.  Key Terms: –Services: intangible activities for which people are willing to pay (such as entertainment) –Labour: the physical and intellectual services, including training, education, and individuals abilities, that people contribute to the production process –Capital: the wealth (money or property) owned or used in business by person or corporation

Copyright © 2004 by Nelson, a division of Thomson Canada The Sociology of Economic Life  Focus: on economic systems, the link to other social institutions, and the social organization of work  Macro Level: the role on multinational corporations on industrialized and developing nations  Micro Level: a focus on job satisfaction, relationships among workers, the hierarchy of work roles

Copyright © 2004 by Nelson, a division of Thomson Canada Historical Changes  Pre-industrial Economies –Types: hunting/gathering, agrarian (Classical and Medieval) –Most workers engage in primary sector production: the extraction of raw materials and natural resources from the environment  Growth occurs when there is a surplus which frees some people to engage in other activities (like food, clothing and shelter)

Copyright © 2004 by Nelson, a division of Thomson Canada Historical Changes  Industrial Economies –Industrial Revolution in Britain (c 1775), most workers engaged in the secondary sector production: the manufacturing of finished goods.  By the end of the 20 th century, only 3% of Canadian workers were engaged in the primary sector  Elements: –Work was broken into simple tasks repeated over and over again –Workers lost control over their labour –Division of work and family: women were less involved in the secondary sector then men

Copyright © 2004 by Nelson, a division of Thomson Canada Historical Changes  Elements: –Early years of industrialization, the work conditions were very harsh: long hours with little pay and the employment of children –By 1950 (in Canada), unionized industrial workers had gained better working conditions, better wages, and political power

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Historical Changes  Post-Industrial Economies –Shifts began to happen from a primary sector base to an industrial and service base during the first half of the 20 th century –See graphs:

Copyright © 2004 by Nelson, a division of Thomson Canada Canadian Sectors: 1951

Copyright © 2004 by Nelson, a division of Thomson Canada Canadian Sectors: 2000

Copyright © 2004 by Nelson, a division of Thomson Canada Historical Changes  Post-Industrial Economies –Shift towards the production of services rather than goods –Types:  Knowledge workers: based on education and high level skills; well paid. Example: Teachers  Non-Knowledge workers: based on low levels of education and skills. Example: McDonald’s workers –Class conflict and poverty may increase

Copyright © 2004 by Nelson, a division of Thomson Canada Historical Changes  Post-Industrial Economies –As well paid industrial work decreases (many companies have relocated in developing countries to cut labour costs), wages have decreased in service industries –Example: Young men aged 18 to 24 with full time jobs have lost 20% of their incomes from 1977 to 1997 (Statistics Canada)

Copyright © 2004 by Nelson, a division of Thomson Canada Contemporary Economic Systems  Capitalism  Socialism  Mixed Economies

Copyright © 2004 by Nelson, a division of Thomson Canada Capitalism  Defined: an economic system characterized by private ownership of the means of production, from which personal profits can be derived through market competition and without government intervention  Three Elements:

Copyright © 2004 by Nelson, a division of Thomson Canada Capitalism 1. Private ownership of the means of production  Early Capitalism in Canada: based on staples (goods associated with the primary sector)  Commercial Capitalism: trade of raw materials  Industrial Capitalism: with urbanization, nation-state construction  Corporate Capitalism: with corporations

Copyright © 2004 by Nelson, a division of Thomson Canada Capitalism 1. Private ownership of the means of production  Corporate Capitalism: with corporations (large scale organizations that have legal powers, such as the ability to enter into contracts and buy and sell property, separate from their individual owners.  Economic Concentration: the degree that a small number of corporations controls a large number of a nations resources. –top 100 corporations control 67% of business assets  Multinational Corporations: large companies that are head-quartered in one country and have subsidiaries in others

Copyright © 2004 by Nelson, a division of Thomson Canada Capitalism 2. Pursuit of Personal Profit  Tenet in Capitalism: that individuals are free to maximize their individual gain through personal profit and, in turn, all people will benefit (from Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations) 3. Competition  Early capitalism thrived on this; late capitalism has moved to monopolies:  Oligopoly: when several (or one) company control an entire industry (example Microsoft with no competitors)

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Socialism  Defined: an economic system characterized by public ownership of the means of production, the pursuit of collective goals, and centralized decision making –Karl Marx: His vision was that all people would own the means of production; the former Soviet Union, Cuba and China are examples of State ownership

Copyright © 2004 by Nelson, a division of Thomson Canada Socialism  Elements: 3. Centralized Decision Making: a hierarchical system; in the former Soviet Union, top levels of the Communist party made these decisions –A cause of the fall of Communism in Russia may have been because of this issue

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Mixed Economies  Defined: combines elements of a market economy with elements of a socialist economy.  Democratic Socialism: an economic system that combines private ownership of some of the means of production, governmental distribution of some essential goods and services, and free elections. (examples: Sweden and France)

Copyright © 2004 by Nelson, a division of Thomson Canada The Social Organization of Work  Occupations  Professions  Upper-Tier Jobs  Lower-Tier and Marginal Jobs  Contingent Work  Unemployment  Labour Unions

Copyright © 2004 by Nelson, a division of Thomson Canada Occupations  Defined: categories of jobs that involve similar activities at different work sites Variations –Blue Collar: factory, craft-workers and manual labour –White Collar: office and professional

Copyright © 2004 by Nelson, a division of Thomson Canada Professions  Defined: high-status, knowledge based occupations Elements 1. Abstract, specialized knowledge 2. Autonomy 3. Self-regulation 4. Authority 5. Altruism  Women: Made significant gains into the professions (see graph)

Copyright © 2004 by Nelson, a division of Thomson Canada Canadian Women’s Share in Law and Medicine

Copyright © 2004 by Nelson, a division of Thomson Canada Upper Tier  Kinds: Administrators, Managers and Supervisors  Administrators: For government bureaucracies like hospitals, and colleges  Managers and Supervisors: leaders in business  Increase of women (see graph)

Copyright © 2004 by Nelson, a division of Thomson Canada Canadian Women’s Share in Management

Copyright © 2004 by Nelson, a division of Thomson Canada Lower Tier  Elements: –Low pay –Little security –Few chances for advancement –Higher unemployment rates –Marginal: those jobs which differ from the employment norms of a society  Examples: –Janitors, restaurant servers, farm workers

Copyright © 2004 by Nelson, a division of Thomson Canada Lower Tier  Service and Household Workers –Viewed as servants –In 1991, about 3 million workers –Occupational segregation by gender and age  Globalization of Marginal Jobs –Many companies (like Nike and IBM) have moved to developing countries where workers get paid very poorly

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Lower Tier  Contingent Work –Defined: part-time work or temporary work –Elements:  No benefits  No pensions  Lower wages  Most are young  About 1 million Canadian workers

Copyright © 2004 by Nelson, a division of Thomson Canada Unemployment  Types of Unemployment: 1. Cyclical: according to the peaks and troughs of the economic cycle 2. Seasonal: according to seasons (like tourism) 3. Structural: because the skills demanded by employers do not match the skills of the unemployed or because the unemployed to not live where the jobs are located  Effects: lack of identity, pain, suicide, broken relationships

Copyright © 2004 by Nelson, a division of Thomson Canada Unemployment  Unemployment Rate: the percentage of unemployed persons in the labour force actively seeking jobs  Variations of Unemployment rates –Yearly –Regional –Gender –Race –Age –Presence of Disability

Copyright © 2004 by Nelson, a division of Thomson Canada Labour Unions  Defined: a group of employees who join together to bargain with an employer or a group of employers over wages, benefits, and working conditions  Canadian examples: the Winnipeg General Strike of 1919; against General Motors in  Increase until 1980 and since then a decline; only 4% of workers in banks belong to unions  International Variation: See graph

Copyright © 2004 by Nelson, a division of Thomson Canada International Variations on Union Membership

Copyright © 2004 by Nelson, a division of Thomson Canada Global Economy in the Future  Predictions  More and more a Post-Industrial world  Knowledge workers will increase  The digital divide  Reduction of the work week  Increased inequality may destabilize society  Decline of labour unions  Borderless economies  Increased chasm between rich and poor both within and across countries

Copyright © 2004 by Nelson, a division of Thomson Canada Global Economy in the Future Predictions:  Closing of plants in Canada and moving them to developing countries  Need for Corporations to become more responsible