The Economy Overview The Economy as a Social Institution The Modern U S Economy The Economy as a Social Institution 04 01 2014 Social institutions basic modes of social activity followed by vast majority of members of society o Involve norms and values to which large numbers of people conform to o Protected by strong sanctions o Important bedrock in society because it is key in structuring our social behavior Mechanism by which goods and services are distributed in society But also o A powerful agent of socialization o A major source of norms and values o A major source of social solidarity o Tremendous influence on social stratification and life chances The Social Significance of Work Source of income Provides temporal structure of everyday life Provides you with social contacts Personal identity The Social Organization of Work Among the most distinctive characteristics of modern economies are o High complex division of labor o High degree of economic interdependence You need other people for food cleaning teeth shoe making etc World Economic Systems worldwide Capitalism increasingly dominant form of economic organization o Reliance on market versus other means of production and distribution o Private ownership of the means of production and distribution Main incentive is the accumulation of profit Globalization and culture Increasing interdependence of national economies Increasing transnational flows of people goods services capital Having a profound impact on work and culture around the globe The Functionalist Perspective on Globalization The globalization of capitalism is functional for the world system Allows nations to exercise their comparative advantage o Resulting in the most efficient distribution of goods and services worldwide The Conflict Perspective on Globalization Expanding domination of a global corporate elite Does not represent the best interests of the vast majority of people Economic Restructuring in the United States Economic opportunity structure facing American workers is rapidly changing Characterized by two trends o Deindustrialization o Rise in contingent employment relations Deindustrialization Shifts from goods producing to service based economy o Job losses in manufacturing due to increased automation and lower wage rates in less developed countries o Service sector includes wide range of jobs that vary greatly in quality and pay as well The Contingent Workforce A rise in outsourcing subcontracting and temporary work contracts o Increases flexibility for employers and workers o Contingent workers tend to earn less and lack fringe benefits o Most contingent workers indicate that they would rather be regular employees Decline in Unionization Important institutional mechanism for advancing the collective interests of workers Steady decline in recent decades o Loss of blue collar work o Organizing efforts are slow to respond to restructuring Loss of Ground for the Less Educated Increasingly divergent realities among the more and less educated o Primarily driven by changing opportunity structure faced by the less educated Implications of Globalization and Economic Restructuring Uncertainty We don t know where it s going how it will impact our society or what our government s ability is to put their hand in the cookie jar o The reality is one of both displacement and new opportunities o Much will depend on how people collectively respond to and shape economic change 04 01 2014