THEORECTICAL PERSPECTIVES - WEBER

Basic Assumption:

• Poverty results from deep structural sources of inequality tied to capitalism.

Weber’s Theory on Poverty:

• A person’s class position depends on their market situation which is further dependent on their ability to influence the labor market to favour them by maximizing rewards.

• He states that some groups in society due to their level of skills are able to manipulate the labor market in their favor, securing high salaries due to demand for their skills.

• Weber argues that the labor market is structured in such a way that people become trapped in an underprivileged group known as the underclass.

Impact of Structural Changes:

• Technological advances (mechanization & automation) reduce the need for unskilled labor.

• Unskilled workers become vulnerable to job loss, redundancy, rotation, and temporary contracts.

• Multi-national and transnational companies (MNCs & TNCs):

  • Invited by governments to provide employment.

  • Due to competition between developing countries, these corporations offer low wages and poor working conditions.

Subcontracting and Poverty:

• Large companies subcontract work to smaller firms.

• Subcontracted workers:

  • Often lack permanent jobs.

  • Typically cannot join unions.

  • Face job insecurity and risk of poverty.

Criticisms of Weber’s Theory:

• Overlooks worker protections:

  • International organizations (e.g., International Labour Organization (ILO)) regulate MNCs and TNCs to protect worker rights.

• Not all subcontracted workers are underpaid:

  • Example: Oil companies in Trinidad and Tobago pay subcontracted workers the same as regular workers.

• Poverty is not inescapable:

  • The theory suggests the poor are trapped and hopeless.

  • Many people born in poverty escape poverty in adulthood through education, jobs, and social mobility.