POSC138S; I. Labor Patterns, Definitions, and Productivity

In which sector (agriculture, manufacturing, or services) are most workers in the US employed today?

• Most workers are employed in the service sector (healthcare, education, finance, retail, etc.).

• This is characteristic of post-industrial economies.

What did employment by sector look like in the past?

• In the 19th century, most Americans worked in agriculture.

• By the mid-20th century, manufacturing dominated (industrial era).

• Since the late 20th century, services have overtaken both

Do all countries follow the same labor patterns in terms of agriculture, manufacturing, and services?

• Not all follow the same path. Developing countries often still have large agricultural sectors; newly industrializing countries (e.g., Vietnam, Mexico) are more manufacturing-based.

• The pattern often reflects stages of development — industrialization shifts workers from farms to factories, and later to services.

What is labor?

• Human work or effort (physical and mental) used to produce goods and services.

• It’s one of the factors of production, alongside capital and land.

What is the informal economy?

• Economic activity not regulated or protected by the state (no contracts, taxes, or benefits).

• Examples: street vending, domestic work, unregistered small businesses.

• Common in developing countries and among marginalized groups.

What does the official unemployment rate measure?

• Measures those actively seeking work but not currently employed.

• Excludes “discouraged workers” (those who gave up looking) and part-timers who want full-time jobs.

What is underemployment?

• When workers have jobs below their skill level or fewer hours than they want.

  • Example: a trained engineer driving for Uber.

Globally, do young people, on average, experience lower or higher unemployment rates in comparison with the adult population?

Young people generally face higher unemployment rates than adults.

• Reasons: lack of experience, unstable entry-level jobs, and education–skills mismatch.

What is productivity?

• The output per unit of input, often measured as output per worker or output per hour worked.

• Indicates efficiency and technological advancement.

In which era did wages generally keep pace with productivity increases in the US?

From 1945–1973 (Golden Age of Capitalism), wages generally rose with productivity — workers shared in economic growth

In which era did this stop?

After the 1970s, this link broke down: productivity continued rising, but real wages stagnated, leading to inequality growth.