Knowt
14.3 Labor and Wealth
Technological innovation, economic globalization, and political laws and policies dramatically reshaped societal structures around the world, and we covered those in 14.1 and 14.2
This led to the global decline of peasantry, and the growth of a class of middle-class professionals.
Decline of Peasantry:
Context:
From the second half of the twentieth century to 2000, the population of farmers decreased by over 40 percent across the world.
In the West, Japan, North Africa, Latin America, and Southwest Asia, peasantry declined significantly.
In the communist blocs of the Soviet Union and its influenced states as well as China, agriculture declined because of the end of collectivization.
Farmers were less populated, but new agricultural innovations of the century enabled them to stay productive.
Factors that influenced this:
Mechanization:
New machines like tractors and combines made farmers more productive in the global north.
Green Revolution innovations.
Innovations like chemical fertilizers, developed between the 1930s and 60s.
These new practices of the century increased agricultural output dramatically compared to the past century, but costs for food still soared due to the common use of machinery, fertilizer, and diesel fuel.
Social effects:
Latin Americans commonly migrated to foreign lands to do labor on mechanized farms in the U.S. that were commonly dependent on the timing of seasonal labor.
They were often undocumented immigrants or workers with temporary visas, as in the US.
Eastern Europeans often migrated to Western Europe as the EU expanded in the early 21st c.
Migrant laborers flowed into mechanized farms and the work was often dangerous due to toxic pesticides from the Green Revolution.
Economic effects:
Trade deals and agreements often exposed small-scale laborers from the Global South to the mechanized industry of the Global North.
An example is NAFTA’s permission of American corn in the Mexican market in 1994, essentially killing off the Mexican cultivation of the plant.
This supports the argument that through international trade agreements, economic globalization negatively affected the economies of the Global South by undermining competition and forcing numerous Mexican laborers to find work on the American farms.
Industrial Developments
Shift in Advertising and Consumption Patterns (1945-1960):
Quadrupling of advertising expenditure in the United States between 1945 and 1960 reflects increased buying power of American workers.
Consumerism:
A culture of leisure and consumption that developed during the past century due to global economic growth and an enlarged middle class.
Europeans consumed more, emphasizing leisure with the standardization of one month of paid annual vacation in many industries.
Communist countries provided job security for large factory workforces but struggled to produce the variety of consumer goods available elsewhere.
Later Twentieth Century Changes:
Liberalization of global trade, automation, and the rise of manufacturing in the Global South led to significant shifts.
Automation and outsourcing led to the decline or closure of many industrial centers in Western Europe and the United States, displacing less-skilled workers.
Closure of factories disrupted communities and led to protests and the displacement of workers seeking better employment opportunities elsewhere.
New factory working class emerged in China's coastal regions due to the influx of foreign investors.
Economic Factors for AP Context: Closure of Factories and Displaced Industrial workers.
Automation and outsourcing resulted in factory closures and job losses, leading to protests.
Workers faced uncertainty and economic hardship due to the closure of the Goodyear tire plant in northern France, which eliminated 1,000 jobs.
Globalization of Manufacturing (1980-2007):
Global manufacturing workforce grew from 1.9 to 3.1 billion people, offering new employment opportunities, especially in the developing world.
Countries competed to attract manufacturers by offering weak labor laws, low wages, tax incentives, and special export-processing zones (EPZs).
EPZ areas provided expedited building permits, tax exemptions, and other benefits to international companies.
Similarities with the First Industrial Revolution:
Child labor persisted in some regions
Particularly in sub-Saharan Africa, South Asia, and Latin America.
Women constituted a significant portion of the global industrial workforce but typically earned less than men, as seen in EPZs like those in the Philippines.
Workers faced dangerous working conditions, leading to tragedies such as the Rana Plaza garment factory collapse in Bangladesh in 2013.
Migrant workers often lacked official residency and work privileges, limiting their ability to oppose employers' demands or access essential services like education and healthcare.
Labor Movements and Dissatisfaction:
Labor movements emerged in regions with major production facilities, such as Brazil, South Africa, and South Korea, as workers sought better pay and working conditions.
The Service Sector and Informal Economy
Shift in Employment Patterns:
Beyond traditional farm and factory jobs, employment opportunities grew in service industries and the knowledge economy.
Service sector growth was driven by consumerism and advancements in communication and computation technologies.
Service sectors: industries like medicine, government, education, finance, and communication.
Race and gender pay inequalities as ‘female’ jobs paid less than ‘male’ jobs.
In the late 20th century, there was a shift towards less stable employment in service industries and knowledge economies of developed nations.
Employers commonly outsourced jobs to freelancers and contract workers.
Technological advancements, especially in telecommunications and the Internet, facilitated jobs in less economically privileged countries.
Zero-hour contracts became more common, particularly in retail.
The gig economy provided flexibility but less security and fewer benefits.
Informal Economy Growth:
The informal economy expanded globally, operating outside government regulation and taxation.
Refers to the unofficial, unregulated, and untaxed economic activity.
Growth was particularly notable in the Global South where new immigrants to expanding cities found employment as day laborers.
Informal economies also expanded in the Global North, with countries like Greece and the United States experiencing substantial growth in their black markets and unreported income.
Global Middle Classes
General theme: At the start of the 21st century, humans had amassed huge amounts of wealth due to globalization and the deregulation of global finance, but much of the wealth ended up in the hands of elites.
In the Global North:
By the 1950s, factory workers, tradesmen, and other specialized workers were defined as a middle class as they could live comfortably with access to commodities, and the consumer goods like entertainment, and travel.
Challenges:
Since the 1970s, the Northern middle class faced shrinking proportions for economic equality and social mobility, due to factors like rising living costs and lowered access to life services
Experienced less secure employment, with many jobs ending due to automation, outsourcing, and globalization.
Decline of labor unions made it difficult for workers to protect their rights.
Populist movements from Britain’s 2016 exit of EU and Donald Trump’s election
In the Global South:
People that worked with relative income levels lower than the richest but higher than the poorest.
Had access to amenities like education, healthcare, and consumer goods that were consistently higher than those in poverty.
Challenges:
Lack of stability: They were more vulnerable to economic declines as they lacked the stability of middle classes in the Global North, and had limited access to healthcare and education.
Income inequality: While the middle class did expand significantly, income inequality between the middle class and the wealthy elite remained wide.
Corruption and bad governance: hindered economic growth and limited opportunities for upward mobility in the middle and lower classes.
Top 1 percent:
The richest 1 percent amassed huge amounts of wealth by 2000.
Economic winners benefited from globalization, deregulation of global finance, and the growth of high-tech industry
Wealth concentration reached extreme levels, with some 8 individuals possessing as much as the poorest 3.5 billion people in 2016.
Some individuals in the Global South made their fortune by carving out the resources of the state: In Nigeria, billions in oil revenues were given to only the state officials. After the fall of the USSR, individuals purchased state assets for cheap.
14.3 Labor and Wealth
Technological innovation, economic globalization, and political laws and policies dramatically reshaped societal structures around the world, and we covered those in 14.1 and 14.2
This led to the global decline of peasantry, and the growth of a class of middle-class professionals.
Decline of Peasantry:
Context:
From the second half of the twentieth century to 2000, the population of farmers decreased by over 40 percent across the world.
In the West, Japan, North Africa, Latin America, and Southwest Asia, peasantry declined significantly.
In the communist blocs of the Soviet Union and its influenced states as well as China, agriculture declined because of the end of collectivization.
Farmers were less populated, but new agricultural innovations of the century enabled them to stay productive.
Factors that influenced this:
Mechanization:
New machines like tractors and combines made farmers more productive in the global north.
Green Revolution innovations.
Innovations like chemical fertilizers, developed between the 1930s and 60s.
These new practices of the century increased agricultural output dramatically compared to the past century, but costs for food still soared due to the common use of machinery, fertilizer, and diesel fuel.
Social effects:
Latin Americans commonly migrated to foreign lands to do labor on mechanized farms in the U.S. that were commonly dependent on the timing of seasonal labor.
They were often undocumented immigrants or workers with temporary visas, as in the US.
Eastern Europeans often migrated to Western Europe as the EU expanded in the early 21st c.
Migrant laborers flowed into mechanized farms and the work was often dangerous due to toxic pesticides from the Green Revolution.
Economic effects:
Trade deals and agreements often exposed small-scale laborers from the Global South to the mechanized industry of the Global North.
An example is NAFTA’s permission of American corn in the Mexican market in 1994, essentially killing off the Mexican cultivation of the plant.
This supports the argument that through international trade agreements, economic globalization negatively affected the economies of the Global South by undermining competition and forcing numerous Mexican laborers to find work on the American farms.
Industrial Developments
Shift in Advertising and Consumption Patterns (1945-1960):
Quadrupling of advertising expenditure in the United States between 1945 and 1960 reflects increased buying power of American workers.
Consumerism:
A culture of leisure and consumption that developed during the past century due to global economic growth and an enlarged middle class.
Europeans consumed more, emphasizing leisure with the standardization of one month of paid annual vacation in many industries.
Communist countries provided job security for large factory workforces but struggled to produce the variety of consumer goods available elsewhere.
Later Twentieth Century Changes:
Liberalization of global trade, automation, and the rise of manufacturing in the Global South led to significant shifts.
Automation and outsourcing led to the decline or closure of many industrial centers in Western Europe and the United States, displacing less-skilled workers.
Closure of factories disrupted communities and led to protests and the displacement of workers seeking better employment opportunities elsewhere.
New factory working class emerged in China's coastal regions due to the influx of foreign investors.
Economic Factors for AP Context: Closure of Factories and Displaced Industrial workers.
Automation and outsourcing resulted in factory closures and job losses, leading to protests.
Workers faced uncertainty and economic hardship due to the closure of the Goodyear tire plant in northern France, which eliminated 1,000 jobs.
Globalization of Manufacturing (1980-2007):
Global manufacturing workforce grew from 1.9 to 3.1 billion people, offering new employment opportunities, especially in the developing world.
Countries competed to attract manufacturers by offering weak labor laws, low wages, tax incentives, and special export-processing zones (EPZs).
EPZ areas provided expedited building permits, tax exemptions, and other benefits to international companies.
Similarities with the First Industrial Revolution:
Child labor persisted in some regions
Particularly in sub-Saharan Africa, South Asia, and Latin America.
Women constituted a significant portion of the global industrial workforce but typically earned less than men, as seen in EPZs like those in the Philippines.
Workers faced dangerous working conditions, leading to tragedies such as the Rana Plaza garment factory collapse in Bangladesh in 2013.
Migrant workers often lacked official residency and work privileges, limiting their ability to oppose employers' demands or access essential services like education and healthcare.
Labor Movements and Dissatisfaction:
Labor movements emerged in regions with major production facilities, such as Brazil, South Africa, and South Korea, as workers sought better pay and working conditions.
The Service Sector and Informal Economy
Shift in Employment Patterns:
Beyond traditional farm and factory jobs, employment opportunities grew in service industries and the knowledge economy.
Service sector growth was driven by consumerism and advancements in communication and computation technologies.
Service sectors: industries like medicine, government, education, finance, and communication.
Race and gender pay inequalities as ‘female’ jobs paid less than ‘male’ jobs.
In the late 20th century, there was a shift towards less stable employment in service industries and knowledge economies of developed nations.
Employers commonly outsourced jobs to freelancers and contract workers.
Technological advancements, especially in telecommunications and the Internet, facilitated jobs in less economically privileged countries.
Zero-hour contracts became more common, particularly in retail.
The gig economy provided flexibility but less security and fewer benefits.
Informal Economy Growth:
The informal economy expanded globally, operating outside government regulation and taxation.
Refers to the unofficial, unregulated, and untaxed economic activity.
Growth was particularly notable in the Global South where new immigrants to expanding cities found employment as day laborers.
Informal economies also expanded in the Global North, with countries like Greece and the United States experiencing substantial growth in their black markets and unreported income.
Global Middle Classes
General theme: At the start of the 21st century, humans had amassed huge amounts of wealth due to globalization and the deregulation of global finance, but much of the wealth ended up in the hands of elites.
In the Global North:
By the 1950s, factory workers, tradesmen, and other specialized workers were defined as a middle class as they could live comfortably with access to commodities, and the consumer goods like entertainment, and travel.
Challenges:
Since the 1970s, the Northern middle class faced shrinking proportions for economic equality and social mobility, due to factors like rising living costs and lowered access to life services
Experienced less secure employment, with many jobs ending due to automation, outsourcing, and globalization.
Decline of labor unions made it difficult for workers to protect their rights.
Populist movements from Britain’s 2016 exit of EU and Donald Trump’s election
In the Global South:
People that worked with relative income levels lower than the richest but higher than the poorest.
Had access to amenities like education, healthcare, and consumer goods that were consistently higher than those in poverty.
Challenges:
Lack of stability: They were more vulnerable to economic declines as they lacked the stability of middle classes in the Global North, and had limited access to healthcare and education.
Income inequality: While the middle class did expand significantly, income inequality between the middle class and the wealthy elite remained wide.
Corruption and bad governance: hindered economic growth and limited opportunities for upward mobility in the middle and lower classes.
Top 1 percent:
The richest 1 percent amassed huge amounts of wealth by 2000.
Economic winners benefited from globalization, deregulation of global finance, and the growth of high-tech industry
Wealth concentration reached extreme levels, with some 8 individuals possessing as much as the poorest 3.5 billion people in 2016.
Some individuals in the Global South made their fortune by carving out the resources of the state: In Nigeria, billions in oil revenues were given to only the state officials. After the fall of the USSR, individuals purchased state assets for cheap.