Professor Marshall

LESSON 18: Work and the Economy

Lesson 18

Target Competencies (Outcomes)

Explain different types of economies

Understand the impacts of globalization

Examine issues related to the American workforce

You will demonstrate your competence by:

Completing the learning activities in this Learning Plan

Your performance will be successful when:

You can describe major economic systems around the world

You can define globalization historically and contemporarily

You can discuss the benefits and drawbacks of globalization

You can characterize trends in the American workforce

You can articulate an understanding of poverty in the United States

You can apply major theoretical perspectives to the economy of the United States

You can apply major theoretical perspectives to the workforce of the United States

Learning Activities

1. If you have not yet done so, READ Chapter 18 of your text.

2. COMPLETE the lesson below.

Workplace and Economy

It's definitely important to remember that, when discussing economic systems, no system is perfect. While we can use the concept of Weber's ideal types to help us understand economic systems, the ideal type is not reality. It is a measuring tool that researchers use to figure out what reality is and how far away reality is from being perfect.

The economic system of the United States is capitalism, and we probably tend to think that this is the "best" economic system in which to live. Socialism is also one of the major contemporary economic systems. In the United States we often hear the word "socialism" and think of something that might be less than appealing. In order to make assessments about economic systems we have to understand a little bit about how they work today and how they came to dominate the economic landscape of our world today.

Pure capitalism is an ideal as much as pure socialism is also an ideal. This means that there are certain ideal characteristics inherent in each system however neither of these systems exists in a perfect state. Both capitalism and socialism (which are the primary economic systems in our world today) exist in a less than ideal state. Both have beneficial and problematic aspects for the average citizen.

Capitalism: essentially, capitalism is defined as a system which allows significant private ownership of the means of production along with the investment of capital and the accumulation of wealth for some members of that society.

Socialism: socialism is defined as a system in which there is government ownership of the primary means of production along with the sharing of capital and wealth among members of that society.

Differences between Capitalism and Socialism

Neither of these extreme views exist in reality; in reality, most countries exist somewhere in between these two economic states. And, each system has limitations.

Drawbacks of Capitalism and Socialism

One of the biggest arguments in the United States today is whether or not capitalism as we administer it is sustainable over the long run. However this is not a new question for sociologists and economists. Since one of the primary goals of capitalism is the accumulation of wealth for some members of society what does this mean for those who get "left out?"

In his recent book Capitalism in the 21st Century French economistThomas Pikkety theorizes that unchecked capitalism cannot be sustained over time. He uses over 200 years of data collected in Western Europe and the United States and Canada to prove his point. By drawing on various data sets is able to show that for most of the history of capitalism economic conditions have not been good for most people – in fact, he's able to show that while we have had some decades of sustained economic growth which have helped to lift most people economically, these periods of time have been the exception rather than the rule. For most of the history of capitalism, only a few very fortunate people have been able to accumulate wealth while most others have struggled to stay afloat. Pikkety makes the statement that this is a difficult concept for us to understand — he asserts that the period of time after the Great Depression and through the 1970s was a period of sustained economic growth for the United States (and for the West in general) and so we draw on this as proof that capitalism is a "rising tide lifts all boats" (a memorable phrase that has been used by politicians and economists since the 1960s). But when he pieces together the last few hundred years of capitalism he is able to make a convincing argument that the several fruitful decades from the 1930s through the 1970s were an exception rather than the rule.

What does this mean for you? Based on the evidence that has been presented to you throughout this semester, you should begin to see a pattern emerging that tells you it's going to be more challenging for you, economically speaking, than it was for your parents or grandparents.

Read this article titled "Executive Pay is an Insult to Working Families" by David Lazarus of the Los Angeles Times.

For you, it is important to understand that the economy is always changing and fluctuating. This affects your life, and the economy of your family. One point that researchers try to stress is that while power in the US is concentrated in the hands of a few very powerful people, we still have the opportunity (today, at least) to impact change in our political system.

21st Century Jobs

There is a long history of study in the field of sociology about how work impacts people and society. From the early days of sociology and Emile Durkheim's interest in the division of labor in society, work and issues related to work have been a topic of research which has yielded interesting findings that relate to all aspects of social life in contemporary society.

As Kalleberg notes in his article on work and the workplace, Durkheim, Marx, and Weber all had an early interest in "[e]xplaining the consequences for work and society of rapid social change that was associated with the emergence of the market economy in the 19th century…" In today's contemporary society the interest in the workplace from a sociological point of view is no less important – in fact, it could be argued that it is essential for us to understand the connections between work, labor, society, and the individual.

While initially called industrial sociology, today this field study is more commonly called the sociology of work. In his report Rethinking the Sociology of Work, Workers and the Workplace Kalleberg outlines some of the main phases in the historical study of the workplace in the field of sociology:

  • PHASE 1--Industrial Sociology: historically, the era of time in the United States that spanned the 1940s through the 1960s. Sociologists who studied work-related issues during this time usually concentrated their efforts on trying to understand the organization of the workplace, specifically how large corporations function and how labor and corporate structure worked together. The worker and issues related to the worker (such as for example wages) were not the primary focus of study during this era. There was a reliance on the historical concept of the characteristics of the bureaucracy as outlined in the work of Max Weber.
  • PHASE 2-- By the end of the 1960s, the prior era came to an end and due to increasing social stressors in society (and within the field of sociology with increased demands for specialization) the study of the workplace also became more topical. More areas of interest cropped up in the research related to work and society, and just as social movements were happening in broader society they were also being examined and research in the workplace. Issues related to race, gender, and micro level economic forces become a focus of research interest during this phase.
  • PHASE 3--Increased globalization restructures work as it was previously envisioned. Technology makes it easy to locate the cheapest labor and for businesses to react accordingly, relocating factories and plants to places where profits can be maximized by employing those who will work for less. The bureaucracy of the workplace is challenged and changed with outsourcing and non-standard employer-employee relations. Union membership declines and workers find themselves (particularly in developed nations) making stringent concesssions in order to keep their jobs.

Kalleberg's work has significant meaning for you as you begin your career. What will the future workplace in America look like and how will you fit into it?

Work is such an essential and invisible component of the structure of our society that we rarely stop to take into consideration its impacts on us. Think about what your life might be like without work. Consider that we have constructed a society that relies on paid work (consider that not all societies have to function this way—remember that the Hippies tried to completely upend the paid work structure of contemporary American society and replace it with communal living). It is a hallmark of capitalist societies that paid work exists—and you, the worker, are essential to the smooth functioning of this type of society. Marx cautioned that this was a dangerous place for a worker to exist in as it allowed for the exploitation of his labor:

So, does the ideology of capitalism, as Marx stated, alienate people from society? Does the structure of capitalist society help those in power maintain their place over others? And, how does the workplace contribute to the maintenance of this relationship?

As Steele and Price point out, many of us get a lot of satisfaction out of our paid labor. We've selected careers which complement our own personal ideas and goals. We are intellectually stimulated by the work that we do on the job. We are respected by our colleagues. Our jobs add meaning to our lives.

But could there be something to what Marx was saying so many years ago? For many people in the workplace in American society, things are not as rosy. For many people, work is simply something that allows them to keep a roof over their heads and food on the table. Increasingly, due to issues such as off shoring and globalization, salaries do not keep pace with inflation, and American workers find themselves struggling to make ends meet.

So, how can you be sure that the career you choose will be one in which you can be personally and economically satisfied throughout your life? Well, you really can't. The best you can do is hope that you choose a career which is at least, in the near future, personally satisfying and economically viable. While this might sound easy, there are many things that you must consider – some of these things are within your control and others are not. You can certainly control what you study. You cannot however control the economy of the marketplace, the availability of jobs in your geographic location, the salaries of specific jobs where you live, and so on. Kalleberg's article The Mismatched Worker: Why People Don't Fit Their Jobs gives an excellent explanation of the disconnect between workers' expectations and industry needs and standards.

As sociology has grown, so has the study of the workplace. Sociologists today recognize that there are distinct areas of study both at the micro and the macro level which need to be considered when studying the workplace. From the micro perspective perhaps the most important consideration is understanding how the individual is influenced by work, choice of career, employer, salary, and economic environment. From the macro perspective, sociologists to study work are probably still concerned with the same types of issues that concerned Marx so many years ago – how does a worker protect him or herself against alienation? How does a worker protect against exploitation of labor? How does the structure of a capitalist economy influence the conditions of the worker? Today these are questions that validate the sociology of work as an important academic field of inquiry.


You are encouraged to consider how work and choice of career will impact your life as you move forward. Considering what you'll do, how you will do it, when you will do it, and its impacts on you over the course of your adult life will help you to understand why it's important for sociologists to research this often neglected and overlooked facet of American social life.


Kalleberg, Arne. Rethinking the Sociology of Work, Workers and the Workplace. Labour and Industry 19:3. 2009. Print

Kalleberg, Arne. The Mismatched Worker: When People Don't Fit Their Jobs. Academy of Management Perspectives 22:1.2008. Print.

Steele, Stephen F., Jammie Price. Applied Sociology. Belmont: Thomson Wadsworth, 2008. Print.