SOCY2000 Social Issues. Spring 2011.

Study questions, Chapters 9 - 15

Chapter 9 High Road Capitalism

1. One of Ronald Reagan's lines that is still a favorite among conservatives is, "______is the problem, not the solution." 153 Do the Wright and Rogers tend to agree? (Figure it out by the end of the chapter)

Remember the definition of the affirmative state (a government that does not put markets off limits to intervention) and, more precisely, what Wright and Rogers usually seem to really mean by the phrase, the democratic affirmative state (see p. 44): a government that deliberately uses its power, in markets and elsewhere, to improve market conditions.

2. What has the deregulation of capitalist markets in the US done to the affirmative state, according to Wright and Rogers? 153 On which "road" has that put the economy?

3. From the end of WWII into the early 1970s what happened to incomes in the US? 154-5 How well balanced were the changes in income? What happened from 1980 on? IMPORTANT

4. T F From the late 1940s (the end of WWII) through the early 1970s the economy did not grow very much, and most of its growth was very unbalanced, with percentage growth much higher for the rich than for the rest of American society. 154-5

NOTE the misleading horizontal axis in Figure 9.1. The time between the first two labeled years is 20 years (1947, then 1967), followed by differences of mostly 6 years, though not all (e.g., 1979 followed by 1982). No wonder the rise on the left edge (over 20 years) looks so steep. NOTE that Figure 9.3, from the same source, does much better with its axes. On the other hand, the text referring to the figure talks about median household income while the table title says "Median family income."

5. T F Economic growth from the 1970s into the 2000s was similar to that from the late 1940s through the early 1970s, particularly in terms of whose income in the income distribution grew the fastest. 155-6

6. Such rise as there was in median household income from the 70s on was due largely to ______. 155

7. Who makes more per hour, male employees or female employees? Has the gap between the genders increased or shrunk since the early 1970s? 155-7

8. Earnings ______during the last quarter of the 20th century. a) exploded b) shrank c) fluctuated widely d) stagnated 156

9. Earnings growth during the last quarter of the 20th century was heavily concentrated in ______of the earnings distribution. a) the top b) the middle c) the bottom d) everywhere but the bottom e) everywhere but the top 156

10. Define total employee compensation 156

11. Define productivity 156 IMPORTANT

12. Which grew more from the 1970s into the 2000s, productivity or employee compensation? 156-7

13. What does it mean when employee compensation grows at a slower rate than productivity growth? IMPORTANT 156-7 About when did that start in the US? Is the gap between employee compensation and productivity growth getting smaller these days?

14. The Stratification Principle (see lecture) tells us that social rewards are distributed on the basis of the categories we are associated with. In Wright and Rogers's analysis of job quality quintiles, what social reward are they interested in and what categories do they use? [A: the reward is hourly earnings, and the categories are occupation (people with different jobs get paid differently) and industry (people in certain industries get paid more than people in other industries).] NOTE that "to rank-order" means in this case to put the jobs in order from the lowest median hourly earnings to the highest. 159

15. In establishing the job quality quintiles, what question were Wright and Rogers interested in? [A: as the economy changed, which kinds of jobs grew fastest, high quality, middle quality, or low quality?] 159-162

16. We can think of the economy as doing "job upgrading" when a) low quality jobs grow faster than all the other jobs b) low quality jobs grow more slowly than all the other jobs c) jobs in the middle grow the slowest [the text wants it to be when jobs in the middle are growing fastest, but we could have upgrading going if we saw increases in both middle and high quality jobs] 160

17. Since the nineties do the changes in jobs seem to reflect job upgrading? If not, what do they reflect? If so, which kinds of jobs are getting the most upgrading? 160-1

18. What does a decline in manufacturing mean for wages? 161-2

19. Today the United States exports ______than it imports. This has not always been true. When did the balance between exports and imports reverse itself? What does the recent history of manufacturing growth in the US have to do with the import/export balance? 162-3 IMPORTANT

20. Distinguish between the "real economy" and the financial economy. 162-3

21. How has the importance of making profits from strictly financial transactions as opposed to the real economy changed in recent years? 163

22. What source of private debt do Wright and Rogers emphasize? What source of public debt? 163

23. What is Wright and Rogers's main idea [thesis] about why the long-term performance of the American economy in our lives has been so mediocre? 164

24. Be able to distinguish between the ideal types of low road and high road capitalist firms on five of the following dimensions: competitive strategy, product market, jobs, skill level and scope, training, job autonomy, incentives, hierarchy, wages, environment, and attachment to place. 165

25. In low-road capitalism, the key thing firms compete over is ______. 166

26. T F In mass markets for homogeneous products, the main way customers distinguish between firms is on the basis of price. 166

27. Who is more likely to have jobs for "trained gorillas," high-road or low-road companies? 167

28. Define meta-skill. 167 Where are we more likely to find them, among high road employees or among low roadies?

29. What does "job autonomy" refer to? 168

30. Who is more likely to have negative environmental externalities, a low-road firm or a high - road? 169 List three of the reasons why.

31. Is Wal-Mart more low-road or high-road? What about Google? 170

32. T F Wright and Rogers essentially argue that short-run interests and the interests of individual firms favor the development of low-road firms more than high-road. 170-1

33. Why does globalization have different short-term and long-term effects on the American economy as reflected in the relative desirability of low-road versus high-road strategies? 171

34. Why, in the long run, do Wright and Rogers think firms in rich countries cannot realistically compete globally through a low-wage, low-skill strategy? 171

35. T F Any significant change in strategies and structures of firms involves added costs. 172 IMPORTANT

36. Define "time horizon of investors" 172 (You may need to wiki "rate of return" (http://en.wikipedia.org/wiki/Rate_of_return) if you don't know what the text is talking about.)

37. The United States has one of the ______rates of unionization among economically advanced countries. 173 IMPORTANT

38. T F Wright and Rogers argue that the stronger the workers’ organizations [unions] are in a company, the less competitive the company tends to be. 174

39. "The first goal of the union movement is to 'take wages out of competition' between firms." What does this mean? 174

40. In terms of its real value (for instance, in 2007 dollars) the minimum wage in the years since 1960 a) has gotten lower every year since it was introduced b) has increased every year c) was worth more in most years before 1980 than in most years after 1980 d) was worth less in most years before 1980 than in most years after 1980 e) has kept pretty much the same due to an inflation multiplier that adjusts the minimum wage to reflect changes in the Consumer Price Index 176-7

41. If the minimum wage had grown since 1968 at the same rate as private worker productivity, it would now be ______per hour. a) $6.20 b) $7.25 c) $8.00 d) $12.50 e) $18.30 176

42. Today in the US about half of workers who are paid by the hour are paid the minimum wage. 177

43. What kinds of public policies would encourage companies to avoid the low road? 176-8

44. What kinds of public policies would encourage companies to follow the high road? 178-9

Chapter 10 Thinking about Fairness and Inequality

1. Define (as Wright and Rogers do) social injustice 183, oppression 184, fair play 186-7, fair shares 186-7, pragmatic argument 189, trickle-down economics 190

2. The “moral intuition” that Wright and Rogers say most people have, people should get what they deserve and deserve what they get, reflects most directly which of the principles of distributive justice introduced in lecture (equity, equality, need, and procedure)? (At some level all four principles address this issue; which is most directly at issue?)

3. When Wright and Rogers say that it was perhaps not politically possible in the 1920s and 1930s to remedy race-based inequalities in education (183), which of our principles of stratification from lecture are they using (though they don’t use my terms for the principles). (Figure it out)

4. Contrast fair play and fair share conceptions of fairness in the distribution of what people get. 185-6 IMPORTANT How do these two ideas relate to the principles of distributive justice introduced in lecture (equity, equality, need, and procedure)? Which most reflects the value of compassion? Why do you think so? Which most reflects the value of individualism? Why do you think so?

5. What difficulties for the fair play approach do children pose? 188 Are there other kinds of people who would pose similar challenges?

6. What two kinds of arguments do Wright and Rogers claim one might make against using redistribution of wealth and income to remedy the problem of inequality even if one agreed that the inequality was unjust? 188 Give an example of each kind of argument. 188-191

4. How is it that being serious about the fair play approach can interfere with our value for parental autonomy? 188

8. What do Wright and Rogers argue is essential to equality of opportunity in American society? 188

9. Make the pragmatic argument based on incentives for the poor that redistribution of wealth or income to the poor will make them worse off. 190

10. Make the pragmatic argument based on incentives for the more affluent that redistribution of wealth or income to the poor will make the poor worse off. 191

11. One of the great clichés of political discussions of economics is “a rising tide lifts all boats.” [I’m not sure why the authors used “raises” instead of the more usual “lifts.”] What does this metaphor mean in the context of the chapter? 190-1

12. T F Defenders of current levels of inequality who argue that inequality is necessary to give people incentives to work and invest also tend to argue that the amount of inequality should be left to the market. 191

13. T F CEOs in the United States make more money than their Japanese and German counterparts. 192 IMPORTANT

14. What is the pragmatic argument against high inequality based on the costs of social control? [Remember that “social control” is the term sociologists use for the whole range of ways “society” keeps people behaving the way they are supposed to.] 193

15. T F Wright and Rogers note that some people who agree that high levels of inequality constitute a violation of moral principles of fairness and justice still are not willing to pay for remedies to inequality because doing so would violate their self-interest. 194

Chapter 11 Class

NOTE: the subject of this chapter, class, has been author Erik Olin Wright’s obsession for many years.

1. Define (as Wright and Rogers do) underclass 196, social closure 197, opportunity hoarding 197, human capital 198 (wiki it http://en.wikipedia.org/wiki/Human_capital) IMPORTANT, domination 200, exploitation 210

2. Distinguish between the individual attributes, opportunity-hoarding, and domination and exploitation approaches to class. 195 IMPORTANT

3. How do most people understand the concept of class? 195-6

4. In the individual attributes approach to class, what do Wright and Rogers state is the key individual attribute in contemporary American society? [Are these guys teachers or what!?] 196

5. A focus on how individuals acquire resources that will affect their occupation would be typical of which approach to class? a) individual attributes b) opportunity hoarding c) domination and exploitation 196-7

6. The argument, “There is a range of skill among individuals in socially/economically important things, and classes and economic inequality in general are fairly direct reflections of this range of skills,” would most reflect which approach to class? a) individual attributes b) opportunity hoarding c) domination and exploitation 196-7

7. Describe several ways to limit access to an occupation. 197 What methods did we discuss in lecture that were used by doctors in America?

8. Credentialing, licensing, color bars, marriage bars and gender exclusions, religion, cultural style, manner, and accent have all constituted mechanisms of ______. 198

9. How are private property rights exclusionary mechanisms? What "job" do they limit access to? 198

10. T F Unions can function as exclusionary mechanisms. 198-9

11. What are the "classes" identified in the opportunity hoarding approach? 199

12. In the individual attributes approach, the rich are rich because ______. In the opportunity hoarding conception of class, the rich are rich because ______. 199 IMPORTANT Which approach is more a zero-sum game?

13. What is it beyond access to desirable positions that the folks at the top in the domination and exploitation approach to class control? 200 IMPORTANT