Ch. 9. Work & the Economy Handouts

Exam 3

Full-Time Employment

Roughly 134.34 million people.

Unemployment Rate:

4.4%. (as of March 2026)

Work

Underwent major changes in the 20th century.

The Changing Nature of Work:

—

2 major structural changes have reshaped the economy:

• The Industrial Revolution (IR)

• Service/Information revolution (1960s -Present)

The Industrial Revolution (IR) before IR and its shift

Before IR: Work centered on the Primary Sector(farming, mining, forestry) IR- shift to the Secondary Sector

- Turning raw materials into finished products.

-Automobiles, machines, furniture.

The Structural Shift:

Market Production: Replaced family-based production with wage labor.

Urbanization: Attracted immigrants to growing industrial cities

Service/Information revolution (1960s -Present)

Information Revolution: Computer technology fueled the transition from manufacturing to services.

Tertiary Sector:

An economy dominated by service and information-based occupations

: A shift from blue-collar to white-collar service work.

The Impact of the Information Revolution

Changed the nature of work through: Deindustrialization

Deindustrialization

A systematic decline in the industrial base and manufacturing

jobs.

• loss of factory jobs and plant closings

Job displacement

• From skilled industrial workers to clerical, maintenance, and other unskilled jobs

• Decline in pay and benefits

Information Revolution & deindustrialization are tied up with…

economic globalization.

Globalization

• The growing economic, social, and political interconnectedness among societies worldwide

• Economic globalization: expansion of economic activity around the world

Outsourcing

Contracting work to external organizations to reduce costs or increase efficiency.

Outsourcing in India and Indian force:

India: A leading global hub for outsourced IT and business services.

Indian labor- Referred to as “back office” work

“Back office” work

Handle over 50% of global outsourced service and IT roles

A result of these economic shifts is the emergence of a…

Dual Market Economy

Today’s market consists of

Today’s labor market involves 2 categories of jobs:

1. Primary labor market

2. Secondary labor market

Primary labor market

Jobs that provide workers with good pay & extensive benefits.

Jobs:

- Challenging & rewarding

- More secure

Examples: Doctors, Lawyers, Engineers

Secondary labor market:

Jobs that provide workers with low pay & few benefits.

Jobs:

- less secure

- less schooling & fewer skills

Examples: janitors, Secretary, Restaurant, Construction workers

Key Demographic Shifts in the Modern Labor Force

—

Who is doing the work?

1. Record number of women in workforce

2. Record numbers of elderly returning to work

3. The number of foreign-born workers rose

• An immigration boom from Latin America and Asia contributed to workforce changes (1996–2000)

As of early 2026…

foreign-born workers make up nearly 19-20% of the total U.S. labor force

Characteristics of Foreign-Born Workers:

Employment Type: More likely to work in service occupations

Occupational Representation: Less likely to be in management, professional roles.

Income Levels: Overrepresented in low-paying occupations.

Regional concentration - Higher concentration in the West & Northeast.

Unemployment rate

4.4%

Why is the office rate not accurate and misleading?

1. To be counted as unemployed, a person must:

• One must register with unemployment office and actively looking for a job. Many never register

2. Unemployment figures do not include:

• Discouraged Workers:

• Initially look for work but give up without finding a job

3. Marginally Attached Workers:

• Not currently working or searching

• Want a job and have looked for work in the past 12 months

Normal Unemployment rate

between 4 & 5%

*Economists describe this situation as “full employment.” Why?

* Some people have been laid off.

* Some--new to the labor force & looking for work,

*Others – transitioning between jobs

Reasons/causes for unemployment:

a. Lack of available jobs.

b. Job exportation

c. Automation

d. Increased global & domestic competition

e. Mass layoffs-downsize, go out of business.

Who are at risk for unemployment?

1. Unemployment rates - same for both women (4.1%) & men (4.1%) (March 2026)

2. African Americans (7.7%): highest rates of unemployment, followed by Hispanics (5.2%), then

Asian Americans (4.8%), & White 3.7%) s (March 2026)

3. High for high school dropouts ((12%) )- 3 times higher than college graduates

Underemployment

Number of employed individuals who are working in a job that:

a. underpays them

b. not equal to their skill level

c. involves fewer working hours than they would prefer.

There are higher underemployment rates for who?

People who are young, non-college educated and ethnic/racial minorities, recent immigrants

Contingent/Temporary Workforce:

Composed of full time or part time temporary workers who don’t expect their jobs to last

Companies use temporary workers for:

- Short term projects

- Work overloads

-Fill employees who are vacationing, sick, on family leave,

- To eliminate positions & reduce costs.

A livable wage

In 1990- federal minimum wage - $3.80, 1997 - $5.15, 2026 (March) ): $7.25 per hour

2 labor issues continue to be debated in Congress:

1. Raising the minimum wage

2. Workplace discrimination

Raising the minimum wage

: “Give America a raise” President Obama.

Unions and poverty organizations support raising minimum wage. Help poor or low-income families.

* Members of business community oppose it.

What is the raising the minimum wage argument?

Argue: It would put an unnecessary stress on medium or small businesses & would not decrease poverty.

How many states have a minimum wages higher than the federal $7.25 per

hour(as of March 2026)?

30 states and the District of Columbia (D.C.)

1st state to require a living wage (enough to maintain a normal standard of living).

Maryland

Hazardous and Stressful Workplaces

Every year, more than 2 million US workers suffer disabling accidents on the job.

: 4,500 to 5,000 workers die annually due to workplace injuries in recent years.

Areas: in mining, agriculture, construction.

The Fair Labor Standards Act- (1938)

which establishes federal minimum wage, overtime pay, child labor regulations.

1970- The Occupational Safety and Health Administration (OSHA)

-Regulate workplace health and safety.

1970- The National Institute for occupational Safety and Health

Conducts research on workplace hazards