INTRODUCTION TO SOCIOLOGY 3E

Chapter 18 WORK AND THE ECONOMY

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COLLEGE PHYSICS

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FIGURE 18.1

Today, employees are working harder than ever in offices and other places of employement. (Photo courtesy of Juhan Sonin/flickr)

INTRODUCTION TO WORK AND THE ECONOMY

Economy is the social institution through which a society’s resources (goods and services) are managed

Mechanical Solidarity is a form of social cohesion that comes from sharing similar work, education, and religion, as might be found in simpler societies

Organic Solidarity is a form of social cohesion that arises out of the mutual interdependence created by the specialization of work

THE WAGE GAP

Recall discussion during Gender topic:

• In 2013 report, a woman made 77 cents to each dollar a man made.
• In 2020, the number had risen to 81 cents per dollar.

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Among PhDs:

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• Men reported an initial salary average of $92,000 per year.
• Women's was only $72,500.

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• Men with permanent jobs in the life sciences reported an expected median salary of $87,000, compared with $80,000 for women.

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• In mathematics and computer sciences, men reported an expected median salary of $125,000; for women, that figure was $101,500.

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(Woolston 2021)

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THE RECESSION(S)

2008 Recession caused by conditions and risky investment practices:

• Lack of government and financial institution regulation
• Banks issued mortgages and other loans to high-risk borrowers (no down payment, no thorough evaluation, etc.)
• Over-investment in mortgage-backed securities by banks; packages containing the risky mortgages mentioned above.
• Real estate fell and people defaulted on the mortgages: banks’ holdings plummeted. E.g. Lehman Bro’s folded.
• The impact on the banks, their insurers (AIG), and other aspects of the economy sent the entire financial system and economy into a tailspin. Unemployment skyrocketed.
• Govt “bailed out” the banks; infused money into economy

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After the recovery, COVID-19 forced many business to close, lay-off employees, or otherwise reduce operations.

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FIGURE 18.2

Vladimir Ilyich Lenin was one of the founders of Russian communism. J.P. Morgan was one of the most influential capitalists in history. They have very different views on how economies should be run. (Photos (a) and (b) courtesy of Wikimedia Commons)

AGRICULTURAL REVOLUTION

• Bartering is a process where people exchange one form of goods or services for another
• Money is an object that a society agrees to assign a value to so it can be exchanged as payment
• Mercantilism is an economic policy based on national policies of accumulating silver and gold by controlling markets with colonies and other countries through taxes and customs charges

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FIGURE 18.3

Agricultural economies depend on discoveries and technologies to shift from subsistence to prosperity. The Banaue Rice Terraces were carved into the landscape by hand by the ancestors of the Ifugao people. Rice needs flat, completely submerged fields in which to grow, so mountainous areas would not be naturally suited for rice.

By transforming the mountainsides and maintaining a massive irrigation system, these farmer-engineers produced far more rice than the landscape would have normally yielded. Interestingly, the economy of this location is shifting again, as tourism to the terraces grows faster than farming them.

FIGURE 18.4

Agricultural practices have emerged in different societies at different times. (Information courtesy of Wikimedia Commons)

INDUSTRIAL REVOLUTION

Until the end of the eighteenth century, most manufacturing was done by manual labor.

• Relatively small crafting locations (such as a shop or small factory in a city or near a mill) with artisans/apprentices
• Putting out system for low-skilled repetitive work: farming families would work out of the home, e.g. cut pieces for assembly, sew simple pieces together, etc.
• Subsistence Farming is where farmers grow only enough to feed themselves and their families

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Then, new innovations, such as mechanical spinning wheels, coal-fired mills, and steam-powered machines and transport.

• Manufacturing moved to large factories and production went up.
• Urban/centralized living went up.
• Income inequality went up.

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ECONOMIC SYSTEMS

Capitalism is an economic system in which there is private ownership (as opposed to state ownership) and where there is an impetus to produce profit, and thereby wealth

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Socialism is an economic system in which there is government ownership (often referred to as “state run”) of goods and their production, with an impetus to share work and wealth equally among the members of a society

• Market Socialism is a subtype of socialism that adopts certain traits of capitalism, like allowing limited private ownership or consulting market demand
• Mutualism is a form of socialism under which individuals and cooperative groups exchange products with one another on the basis of mutually satisfactory contracts

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FIGURE 18.5

Capitalism enables incredible innovation, but it also empowers employers and owners to make many of their own decisions. This bread company has automated the process of packaging its products and preparing them for shipping. As you can see, the factory floor seems largely devoid of people. (Credit: KUKA Roboter GmbH, Bachmann)

STOCK EXCHANGES

The New York Stock Exchange is where shares of stock in companies that are registered for public trading are traded (Photo courtesy of Ryan Lawler/Wikimedia Commons)

FIGURE 18.6

The economies of China and Russia after World War II are examples of one form of socialism. (Photo courtesy of Wikimedia Commons)

FIGURE 18.7

This map shows countries that have adopted a socialist economy at some point. The colors indicate the duration that socialism prevailed. (Map courtesy of the European Union)

FIGURE 18.8

Sociologists look for signs of convergence and divergence in the societies of countries that have joined and departed the European Union (EU).

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The United Kingdom voted to leave the EU, and after years of policy shifts, several new Prime Ministers, and negotiations, it formally departed in 2020 and ended most trade agreements in 2021.

Note that the U.K.'s departure means that Britain, Scotland, Northern Ireland, and the 6.7 square kilometer territory of Gibraltar also departed.

(Credit: Hogweard/Wikimedia Commons)

THEORETICAL PERSPECTIVES

Convergence Theory is a sociological theory to explain how and why societies move toward similarity over time as their economies develop

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Functionalism: The functionalist perspective would assume that the continued health of the economy is vital to the health of the nation, as it ensures the distribution of goods and services.

However, sometimes a dysfunction––a function with the potential to disrupt social institutions or organization (Merton 1968)––in the economy occurs, usually because some institutions fail to adapt quickly enough.

• Recession refers to two or more consecutive quarters of economic decline
• Depression refers to a sustained recession across several economic sectors

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THEORETICAL PERSPECTIVES

Conflict Theory:

• The economy reflects and reproduces economic inequality, particularly in a capitalist marketplace.
• The conflict perspective is classically Marxist, with the bourgeoisie (ruling class) accumulating wealth and power by exploiting and perhaps oppressing the proletariat (workers), and regulating those who cannot work (the aged, the infirm) into the great mass of unemployed (Marx and Engels 1848).

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Symbolic interactionism:  Career inheritance: children tend to enter the same or similar occupation as their parents, which is a correlation that has been demonstrated in research studies (Antony 1998).

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FIGURE 18.9

Instant communications have allowed many international corporations to move parts of their businesses to countries such as India, where their costs are lowest.

(Photo courtesy of Wikimedia Commons)

GLOBALIZATION

• Globalization refers to the process of integrating governments, cultures, and financial markets through international trade into a single world market
• Global Assembly Lines refers to a practice where products are assembled over the course of several international transactions
• Global Commodity Chains are internationally integrated economic links that connect workers and corporations for the purpose of manufacture and marketing
• Xenophobia: illogical fear and hatred of foreigners and foreign goods.

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FIGURE 18.10

Many college students and others attend job fairs looking for their first job or for a better one. (Credit: COD Newsroom/flickr)�

FIGURE 18.11

In a virtual world, living the good life still costs real money. (Photo courtesy of Juan Pablo Amo/flickr)

GLOBALIZATION

• Outsourcing is a practice where jobs are contracted to an outside source, often in another country
• Automation refers to workers being replaced by technology
• Polarization is a practice where the differences between low-end and high-end jobs become greater and the number of people in the middle levels decreases

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FIGURE 18.12

Projected Percent Change, by Selected Occupational Groups, 2019-29 — This chart shows the projected growth of several occupational groups. (Credit: Bureau of Labor Statistics)

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EDUCATION AND EMPLOYMENT IMPACT

POVERTY IN THE UNITED STATES

Underemployment is a state in which a person accepts a lower paying, lower status job than his or her education and experience qualifies him or her to perform

Structural Unemployment is a societal level of disjuncture between people seeking jobs and the jobs that are available

High cost of being poor: People with more money on hand, better credit, a more stable income, and reliable insurance can purchase items or services in different ways than people who lack those things.

• Someone with a higher income has more credit extended to them through credit cards or loans, and can likely negotiate a lower monthly payment or less money down.
• People in poverty pay significantly more for their housing/cars than others – sometimes 70-80 percent of their total income. Those with fewer resources are also more likely to rent rather than own, so they do not build credit in the same way, nor do they have the opportunity to sell the property later and utilize their equity (Nobles 2019).

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FIGURE 18.13

Working Poverty vs. Nonworking Poverty Rates, Circa 2000 — A higher percentage of the people living in poverty in the United States have jobs compared to other developed nations.

FIGURE 18.14

Poverty rates vary by states and region. As you can see, areas with the highest level of poverty are relatively tightly clustered, but the second-highest rates of poverty occur in states across the nation, from Nevada and Arizona in the Southwest to New York in the Northeast. (Credit: U.S. Census Bureau)

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