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Outline Evaluations Of You…Test Feedback? Globalization & the US Economy The Great Doubling Deindustrialization Stakeholders Winners and Loser Video Clip Modernity Unfolds… Market economies develop and spread Modernity Unfolds… From Gemeinschaft to Gesellschaft From rural to urban Modernity Unfolds… Rationalization/McDonaldization of World New Work Routines Bureaucracies develop and spread Modernity Unfolds… Commodification of life and labor New Classes and Class Conflict Modernity Still Unfolding… Part of world are fully modern…while in other parts of world modernity is still trying to take root China, India, Afghanistan, Bolivia…many other places Make for interesting world full of challenges… Cultures shared… Interesting foods…World music…foreign movies…easy travel Cultures clash …Type of market society…role of religion in society…democracy…FGM…sexuality…beauty Past readings… “What type of women’s body type do they prefer in Nigeria?” Note Miss Universe on next slide Globalization and Modernity Globalization…refers to many things… Cultures shared… Interesting foods…World music…foreign movies… Cultures clash …FGM…power of women in society…sexuality…beauty Past readings… “What type of women’s body type do they prefer in Nigeria?” For this class will focus on Globalization as: economic activity spanning many nations of the world with little regard for national borders (D) Note the Simpsons Clip Globalization Richard Freeman titled his chapter “The Great Doubling: Is Your Job Going to Bombay or Beijing?” Anyone recall what Freeman means by the term Great Doubling? Freeman Since the 1990s, the size of the global workforce has effectively doubled Entry of China, India and former Sovie Bloc Countries has moved number from 1.46 billion to 2.93 billion in 2000 “The doubling of the global workforce has presented the US labor system with its greatest challenge since the great Depression” (Freeman 2007: 129) What are some of the challenges that this poses? A Global Labor Market Puts Pressure on US Wages… Hourly Wages, Late 1990s 35 31.54 30 28.08 25 23.61 22.05 20 15 10 8.26 7.22 5 1.75 0 US Germany France Finland Portugal South Korea Mexico 0.06 Bangledesh Globalization and its Challenges Globalization “In China, auto part workers earn about $3 an hour. In the US, they earn $29 an hour in wages and benefits.” (Competition From China, PI 3/26/06) This puts tremendous pressure on US companies and US workers Cheap Labor in the form of Kids International Labor Organization estimates 120 million kids between 8 and 14 currently work full time Turn to your neighbor…check the tags on their shirts…be polite… Global March Against Child Labour - From Exploitation to Education Initially…this cost difference impacted manufacturing in the US Once Bustling Garment District Fades (Philly Inquirer 4/24/01) In the second floor factory of Pincus Brothers Inc., a 65 year old Puerto Rican woman leans over to hand trim gray wool for a sport coat… The women are among the fewer than 4,000 unionized garment industry workers left in Philadelphia, down from 26,000 during the heyday in the 1950s. But come May 4, they too will lose their jobs. That’s when second gneration owner David Pincus starts contracting out the work, most of it overseas. “You just can’t manufacture in the US. You can, but the (buyer) says, ‘This is what I will pay’,” said Pincus, 74, hitting his desk for emphasis. “Nobody cares anymore where it’s made.” Globalization Has Contributed to Deindustrialization of America De-industrialization- Diminishing proportion of production or labor force engaged in industrial production (D) Manufacturing Jobs Lost Between 1967-1987 Pct. Change Total Lost Philadelphia Chicago New York Detroit 64% 60% 58% 51% 160,000 500,000 >500,000 108,000 Since 1976, Philly has lost 200,000 manufacturing jobs…only 31,000 remain “The manufacturing losses in some northern cities have been staggering” (Wilson 1996: 29) You’re currently going to school in a town dealing with the fallout As a society, we have yet to figure out how to deal with the poverty and social dislocation that resulted from these changes Changing Occupational Structure The wage differences have helped reshape the US economy Post Industrial Economy- a productive system based on service work and high technology.(D) 80 70 60 50 Manufacturing Service 40 30 20 10 0 1900 1920 1960 1980 1998 “Offshoring Affects More Complex Jobs” What was this reading about??? Freeman discussed it too? Up the Food Chain… “The practice of transferring American jobs to lower-cost countries, called offshoring, is moving up the food chain. It's no longer just software programming and help desks that are being sent to India and elsewhere in Asia. Increasingly, skilled professional jobs are being sent abroad, including some in architecture, accounting, law, publishing, finance and insurance. “ Experts note: “The practice of transferring American jobs to lower-cost countries, called offshoring, is moving up the food chain.” Work done by junior architects and lawyers can now be done overseas faster or more cheaply. Editors, engineers, radiologists and other jobs (see next slide) Globalization GE shifting output to China & India “The shortage of US engineers and their high salaries, coupled with the huge talent pool in countries such as China and India have prompted GE to increase its manufacturing base outside the US by nearly half over the past three years.” Financial Times, July 27, 2006 Globalization Globalization… Increasingly impacting on white collar jobs “Our competitors are doing it and we have to do it.” IBM Explores (NYT) “You can get crackerjack Java programmers in India right out of college for $5,000 a year versus $60,00- here…” p.3 400,000 to 500,000 job outsourced over past few years (Biz week, 2/23/04) Forrester Research, predicts that 3.3 million white-collar jobs will be shipped to other countries by 2015 (NYT 3/7/04) Accountants, engineers, web design, radiologist, customer service… Globalization…Winners and Losers Stakeholders All the parties that have an interest, financial or otherwise, in a company, including shareholders, creditors, bondholders, employees, customers, management, the community and government. (D) (Economist.com) Once again in this class…interests collide Who benefits when IBM or Mr. Pincus moves an engineering or sewing job from Philadelphia to Bombay? Who loses when IBM or Mr. Pincus moves a job from Philadelphia to Bombay? Globalization Creates Winners Some stakeholders win (Owners, Shareholders, Bondholders) Some stakeholders win (Customers): The things we buy at are cheap Other firms might win Indian engineer performs task for a fraction of the cost allowing greater profits Acme sewing machines in Ohio gets contracts for new shop in India Foreign workers/nations win: Indian engineer gets a good job…community benefits Chinese garment worker gets a job…though maybe not a good one Some stakeholders lose Current employees lose jobs Community members where jobs disappear Loss of jobs, tax base, new social problems…take a walk around Chester, Camden, Detroit, Flint… Local governments lose tax base and inherit problems Future employees face changed economy Unemployment, social welfare costs, training, social problems Other firms who supplied Mr. Pincus Cleaning service, machine repair, laundry, etc. Social Class in America: Winners and Losers Globalization has profoundly impacted our economy and society Economic restructuring has led to the loss of many good paying jobs Huge impact on the middle class, inequality and poverty in America Now: Pennsylvania and Globalization Jot down answers for assignment credit… Doze or daydream about donuts for none… Winners and Losers 1. Briefly explain what is happening to the manufacturing jobs seen in the video. What are some of the reasons given for what has happened to these jobs? 2. The video suggests that there “offshoring” brings a number of problems for our society. Please briefly describe one of them. Also problems for some of the workers in other nations Note next slide on conditions…. Business Week Report on Sweatshops A study commissioned by Nike last year covered 569 factories it uses in China and around the world that employ more than 300,000 workers. It found labor-code violations in every single one. employees at garment, electronics, and other export factories typically work more than 80 hours a week and make only 42 cents an hour… …when auditors interviewed workers in one section, some said that they were paid less than the minimum wage and that most of them were obliged to work an extra three to five hours a day, without overtime pay, the report shows. Most toiled an entire month without a day off. Workers told auditors that the factory had a different set of records showing actual overtime hours, the report says… Winners and Losers Stakeholders All the parties that have an interest, financial or otherwise, in a company, including shareholders, creditors, bondholders, employees, customers, management, the community and government. (D) (Economist.com) 3. One women says she felt kind of left out when it came to government aid. Briefly explain what she meant by this? Many Government Programs are Means Tested Means tested (D) income tested… “person or family has to earn below a certain amount to qualify” (Iceland 2003: 126) Examples: Pell Grants; Head Start Pre-School Program for poor children; Food Stamps; Free School Lunch; Means Tested programs differ from Universal Programs Means tested (D) income tested… “person or family has to earn below a certain amount to qualify” (Iceland 2003: 126) Examples; Pell Grants; Head Start; Food Stamps Universal Program (D) all citizens qualify for benefits as right of citizenship Examples of such programs Social Security, Medicare Means tested programs are cheaper to fund…but they also prevent people who might need help from getting help Winners and Losers 4. Robert Polliln suggests that there is no reason that a Walmart type job needs to be a bad job. What sorts of things does he suggest can turn “bad” jobs into “good jobs?” Can the same thing happen to Walmart? Should it? This wage would not have lifted a family of four above the poverty level Poverty Threshold for family of 4 in 2004 was $19,484 Annual salary based on $7.62 would be $15,850 for a 52 week work year This wage lifts a family of four into the middle class $66,789 a year Winners and Losers 5. Globalization creates winners and losers. What type of aid does our society currently provide to the “losers?” What would an advocate of a laissez faire society say about providing such aid to the “losers?” Winners and Losers 5. Globalization creates winners and losers. What type of aid does our society currently provide to the “losers?” What would an advocate of a laissez faire society say about providing such aid to the “losers?” Mentioned in video: Unemployment Insurance, money for retraining Others: food stamps, medic-aid, temporary aid for needy families Laissez Faire advocate would not support Freeman and Globalization “The doubling of the global workforce has presented the US labor system with its greatest challenge since the great Depression” (Freeman 2007: 129) Good Scenario “Winners” help compensate “losers” Indian and Chinese wages move up and middle class consumers emerge “The US…retains comparative advantage in enough leading sectors or niches of sectors to remain a global hub in the development of technology…As US GDP grows, the country distributes some of the growth in national output through increased social services and social infrastructure – national health insurance for instance – or through earned income tax credits so that living standards rise even for workers whose wages are constrained by low-wage competitors”(Freeman 2007: 139) Freeman and Globalization “The doubling of the global workforce has presented the US labor system with its greatest challenge since the great Depression” (Freeman 2007: 129) Bad Scenario In the bad transition, Chinese and Indian development continue to put pressure on labor markets in the US US citizens blame globalization for economic woes and introduce trade barriers Few benefit, but most continue to languish in bad jobs AFL-CIO and others want trade deals modified Inequality in China and India grow and produce social disorder and chaos that gets suppressed by the “super elite use their wealth and power to control a mass of struggling poor”(Freeman 2007: 140) Freeman notes this scenario resembles Marx’s vision of how capitalism would develop Globalization Brings Winners and Losers As consumers Many of the products we like to use are cheaper As workers We may lose our jobs or be forced to work for less As shareholders We enjoy the rewards of increased profits As citizens we face challenges in dealing with those displaced by globalization Unemployment, training, social welfare, As morally concerned citizens We may be uncomfortable with some ramifications of globalization…Note the Simpsons Next…America’s Class Structure