Economic Problems notes outline - Salisbury University



Economic Problems -- Lecture outline (& Group Discussion Pts.)

Income vs. Wealth –definitions of each (Mooney et al., ch 6 & more so lecture).

Lots of data given in lecture on growing Economic Inequality Income & Wealth) of each in recent decades – know the general patterns of data, not have to know exact %s, etc. Middle class is shrinking & debts are increasing. (Most of data is lecture only, but some from Picketty et al. web rdg. and Tankersley et al web rdg. This is also similar to much of data in Mooney et al. chs. 6 & 7.)

Video “Inequality for All” & how too much inequality harms US economy and undermines Middle-class-

Key role of consumer demand as making up 70% of US economy. (Consumers as “job creators”),

Middle class struggles & widening economic inequality since late 1970s,

Rising Econ. Growth and labor productivity, but flat / stagnant wages for most workers, many in middle class have struggled and fallen out of middle class. [Tankersley et al. web rdg.]

70% of US Economy is based on consumer demand – The great widening of economic inequality in recent decades is bad for economy. Need strong middle class for strong consumer demand.

Why rising inequality since late 1970s? Globalization, Technology/automation, Unions decline.

Why Increasing Inequality:

Increasing Globalization /relocation of factories & jobs abroad as key factor in rising economic inequality (deindustrialization in US and moving manufacturing abroad.). (Mooney et al., ch. 7)

Off-Shoring –moving production abroad (Mooney et al., ch. 7), like Apple did (Duhigg web rdg.)

Increasing technology (& automation) – can displace workers, and makes globalization & global communication easy. (Mooney et al., ch. 7)

Decline of Unionization over time -- & unions jobs pay better, but are under attack (Mooney et al., ch. 7)

All of this especially hurts working class and middle class, esp. those without higher Ed... (Mooney Ch. 7, and Tankersley et al web rdg., and Piketty et al web rdg.)

Problem with most new jobs created in last 8 years? Rise of Contractual / Temporary workers (Tankersley et al web rdg.)

What caused 2008-09 recession? – Big banks made risky lending and investing decisions and were “too big to fail” (& rich bankers have lots of political influence) so US govt. bailed them out / loaned them billions to keep from collapsing (Popper et al. web rdg) -- but Govt. did not prevent 9 million homeowners from losing their homes during economic crisis (Tankersley et al. web rdg.)

Poverty – US poverty line /definition, which age, gender, and racial/ethnic groups have higher and lower poverty (Mooney Ch 6) & who benefits most from govt. anti-poverty program (lecture)

Explanations / Theories for Economic Inequality & Work and the Economy

Explanations for Inequality, Work, and the Economy (theory sections in Mooney et al., Chs. 6 & 7) [Know at least 1 idea for each]

Functionalist Perspective -- Economy as Institution & functions of it, though some dysfunctions (such as poverty), Functions of inequality.

Symbolic Interactionism—. Importance of economic Labels and meanings of work & poverty. Work as key to identity. Interactions reproduce inequality, esp. manger –worker interactions.

Conflict Theory – Workers vs. Owners, role of $ in politics / corporatocracy, wealthfare and corporate welfare. Students Against Sweatshops as counter-example, helping workers (Ch.7)

Wealthfare and Corporate Welfare -- Govt. assistance for corporations for wealthy individuals, very costly, but we pay a lot less attention to this than to welfare programs for the poor (Mooney et al., ch. 6)

Examples-- Profitable US corporations paying very low taxes, getting tax breaks (Tankersley et al web rdg. & Mooney et al., ch. 6)

Labor Theory of Value (LTV) – (A type of Conflict Theory explanation for Economic Inequality) [lecture only]

What creates all wealth / value? Labor by creating products…

Value of product split 3 ways –

Fixed costs, Variable costs & Surplus Value. (define each)

Exploitation (define) is key concept also, & degree of it makes economic inequality greater or lesser

Examples: Shoes made in Indonesia cost $2.60, workers make 13 cents per hour (Mooney et al. ch. 7); Apple computers made overseas vs. in US (Duhigg web rdg.), sweatshop labor in US (in Los Angeles) & abroad including child labor (Bangladesh, Indonesia, etc.) [& Students Against Sweatshops fight this, with some success] (Mooney et al. ch. 7).

Commodity Fetishism – definition and how Apple’s products & our fascination with them fits that idea (what about workers who made these products & labor-management systems used? (Duhigg web rdg) Do we think of that much?)

Crisis of Over-production in Capitalism & how that relates to current economic crisis: Consumer demand key to economy. When workers are poorly paid they can’t afford products, demand goes down… Too Much inequality is bad for economy

Poverty – in US compared to in developing countries, & how poverty can make natural disasters worse -- e.g., Haiti vs. Chile earthquakes (Mooney Ch. 6)

SNAP / Food Stamp program – food assistance for low-income families, mostly children benefit. Public fears lots of fraud in program, but there is relatively little (Mooney Ch. 6)

& Childcare costs as barrier to work for poor (Mooney Ch. 6)

Increasing minimum wage & “living wage” as Solutions to Poverty (class examples & Mooney et al. Ch 6)

Other key Issues not covered in class, but that you should know about:

Problems in Production of Mac IPhones, etc. in China and advantages for the company as well as problems for workers—hours, working conditions, pay, mental health of worker, etc. Compared to production in US. (Duhigg et al. web rdg.) How fits with labor Theory of value…

--This is an example of Power of Transnational / Multinational Corporations (Mooney et al, Ch. 7)

Consequences of poverty & economic Inequality – in health, hunger, housing, legal system, education, family problems, etc.) (Mooney et al., ch. 6)

What is the Occupy Wall Street Movement, what is their main grievance? (Mooney Ch. 6)

Key myths vs. reality of US welfare system (lack work ethic, large families, extent of fraud, immigrant burden). (Mooney Ch. 6)

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