1. ECONOMY: THE WORLD OF WORK
Chapter 9 (Book 16)
ECONOMY: THE WORLD OF WORK

2. 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.

3. The Power of Society
Will the jobs you take throughout your life reflect choices you make based on your personal abilities and interests?

4. Which business sells products made by more than 100,000 companies?
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?

5. The Economy: What Is…?
Economy
Social institution that organizes a society's production, distribution, and consumption of goods and services

6. The Economy: What Is…? Goods
Commodities ranging from necessities to luxury items
Services
Activities that benefit others
The Economy: What Is…?

7. 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.

8. 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.

9. 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

10. 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

11. 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).

12. The Global Economy
Global economy
Expanding economic activity that crosses national borders

13. Sectors of the Economy Primary sector
Generates raw materials from environment
Secondary sector
Transforms raw materials into manufactured goods
Tertiary sector
Generates services rather than goods

15. The Global Economy Development
Development of a global economy has five major consequences
Global division of labor
More products pass through many nations
National governments no longer control the economic activity within their borders
Small number of businesses control a vast share of the world's wealth
Concerns raised about the rights and opportunities of workers

17. Capitalism
“Justice” in a capitalist system amounts to marketplace freedom.
Features
Private ownership of property
Pursuit of personal profit
Competition and consumer choice
Capitalism still thrives in Hong Kong (above), evident in streets choked with advertising and shoppers.
LO 9.2 Assess the operation of capitalist and socialist economies.

18. 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.

19. Socialism and Communism: What Is…?
Economic system in which natural resources and means of producing goods and services are collectively owned
Communism
Hypothetical economic and political system; all members of a society are socially equal

20. Alternative Systems: What Is…?
Welfare capitalism
Economic and political system that combines market-based economy and social welfare programs
State capitalism
Economic and political system in which companies are privately owned but cooperate closely with government

21. Capitalism and Socialism
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.
North Korea
South Korea

22. Relative Advantages Capitalism Socialism Economic productivity
GDP is $13,500
Economic equality
More income disparity
Personal freedom
Emphasizes freedom to pursue personal self-interest
Economic productivity
GDP is $5,000
Economic equality
Less income disparity
Personal freedom
Emphasizes freedom from basic want

23. 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

24. 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 white-collar service jobs.
Source: Estimates based on U.S. Department of Labor (2012).

25. 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

26. 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.

28. Work in the Postindustrial Economy
Labor unions
Organizations of workers that seek to improve wages and conditions through various strategies
Decline of unions
Shrinking industrial sector
Service jobs are unlikely to be unionized

30. Professions: What Is…?
Profession
Prestigious white-collar occupation that requires extensive formal education

31. Basic Characteristics of Professions
Theoretical knowledge
Self-regulated practice
Authority over clients
Orientation to community rather than self-interest

32. Self-Employment, Unemployment, and Underemployment
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

33. 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)

34. Self-Employment, Unemployment, and Underemployment
Lower salaries, fewer benefits, and reduced/no pensions
Many workers agree to cuts in pay and/or benefits

35. 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

36. The Underground Economy
Segments
Occasional participation in small ways
Criminal activity
Failure to report legally earned income on tax returns

37. Race and Gender in the Workplace
Do these matter?
In the past, white men have been the mainstay of the US labor force
In the future, more workers will be women and minorities
Development of programs/policies to meet needs of socially diverse workforce needed

38. Diversity 2020: Changes Coming to the Workplace
Strategies for dealing with increase in U.S. minority workers
Recruiting diverse, talented workers
Developing effective ways to deal with socially motivated tensions in the workplace
Rethinking current promotion practices

39. 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.

40. Corporations: Are They Competitive?
Few large corporations dominate economy.
Economic concentration has created the conglomerate.
Federal law forbids monopoly, but allows oligopoly.

41. 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.

42. The Economy: Looking Ahead
Economic future of the U.S. and other nations will occur in a global arena.
Related issues of global inequality and population increase must be addressed.

43. GLOSSARY Corporation Commodity Range Manner Surplus Wage Alter
Fundamental
Literacy
Tertiary
Investment
Marketplace
Amount to
Property
Thrive
Choke
Roughly
Hypothetical
Disparity
Corporate
Agribusiness
Modest
Enact
Shrink
Legislatures
Payroll
Obsolute
Pension
Mainstay
Recruit
De-skilling
Conglomente
Oligopoly
Output