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such. In capitalist economy, trade, industry, services, and resources are controlled by a small
group of rich people (capitalists), who enjoy the high level of profit from what they own.
They also control the organization of work at the organizations they own.
People who do not own any resources (workers), gain access to those resources by
selling their ability to work. This creates labor market where workers and capitalists can
negotiate price for workers’ labor based on the variety of factors. These factors include labor
supply and demand, workers’ qualifications, economic and environmental conditions. This
explains the existence of different classes with different income levels within the capitalist
society. In capitalist society people are motivated by earnings, therefore capitalists are trying
to find cheaper labor that would be bale to do more work allowing the capitalists to gain
higher profits. At the same time, labor has similar interest in mind and tries to negotiate
higher wages whenever possible. Since capitalists dominate the market and there are more
workers than jobs, often capitalists can dictate their rules in labor market.
Inequality exists on different levels: within the same country as well as among
different countries. There are poor and rich countries, they focus on industries, products, and
services specific to their region, their market and economic conditions. Each of these
industries, products, and services bring different levels of profit, and therefore, all classes
within these countries economy enjoy different level of profits and earnings. This means that
worker in poor country won’t be at the same economic level as the worker in rich country.
They will also have different level of access to government provided resources and services,
Inequality is visible within the same country as well. Considering that same levels of
education, healthcare, and social help are available to the citizens of the same country,
capitalists and workers would not have similar opportunities. Different levels of earnings
provide different social classes with different level of access to these services.
Inequality and capitalism are tightly connected because they do not provide same or
similar distribution of power to all classes. In capitalist economy, the power is concentrated
in the hands of capitalists, versus socialist economy government owns most of the assets.
Unemployment is a part of capitalist economy because there are not enough jobs
for everyone in the market. Capitalists own the resources, control the way production is
Rich and poor countries have access to different resources and systems, therefore
rates is not the same. Similarity, in both rich and poor is that not every person who is not
Unemployed are those who are not working and actively looking for work. There
are many people who do not work, would want to work., but for a variety of reasons are
not looking for work. They choose to stay at home to take care of household, children or
elderly relatives; they could be discouraged from looking for for work due to a poor
economic and market conditions; they could take part time occasional jobs and be paid by
cash without being officially registered as employed; they could become students and be
upgrading their qualifications to be able to find work more easily in the future. These
people are underemployed. Country’s economic situation and overall global economy
While rich countries have a long history and good capability of tracking
real picture. Some groups of population voluntarily or not voluntarily become excluded
from the related surveys. Other groups may become unemployed or not work at all due to
the cultural standards. There are groups that move from being unemployed to self-
employed, freelancers or “disabled” because they can’t find jobs and government funds
reduces the real unemployment numbers in rich countries. Additionally, women and
racial minorities are more likely to be unemployed, meaning that countries with higher
Poor countries have limited funds to track unemployment to the same extent rich
countries do. Unemployment in poor countries translates into high level of occasional
part time informal employment, that’s close to impossible to track. It’s easier to find
big numbers of people out of their homes and from their their legitimate earnings.
To conclude, both rich and poor countries have significant issues in tracking
and higher profits, countries reduce number of working places, increasing the surplus of
workers who are being forced to become unemployed or employed informally, i.e.
underemployed. While the numbers are different in rich and poor countries, issues are
3. WHY ARE WAGES FOR MOST WORKERS SO LOW WHILE THEIR HOURS
AEW SO LONG?
capitalists control most of the resources and the way all production they own is done,
they have the capacity of setting the rules in the workplaces they own by minimizing
their labor expenses. They do it in a few ways: division of labor, labor mechanization,
labor outsourcing.
required to perform a complex task. By dividing production process into simple small
tasks, no expensive labor is required and turnover is easily addressed because little
training is required to replace a worker. Ford added more efficiency to the production
process by creating a conveyer line that contributed to the mechanization of labor. Now,
the pace of work can be controlled as well, or in the modern world, production can be
done by machines and controlled by only a few humans. This reduces the possibility of
production interruptions due to illnesses, turnover, strikes, and allows for around the
significantly different. While rich countries regulate employment practices, it’s much less
noticeable in poor countries. Therefore, minimum wages and conditions of work are not
as closely regulated there leading to low wages, high competition for work because of the
workforce surplus, and high interest of rich countries to move their production there.
These developments lead to the reduced need in work force in rich countries,
reduced need in qualified work force, higher competition for work, and lower wages,
forcing many workers to opt for part time, contract, and non-standard work arrangements.
Moreover, it contributes to the production of goods moving to poor countries, and leaving
rich countries with the production of services and some knowledge work. Poor countries
such as China and India have educated so many knowledge workers that this work is
Workers all around the globe are competing for work, the gap between rich and
poor becomes larger allowing capitalists set even tougher rules related to work, work
arrangements, and wages. Workers are forced to agree to these rules in order to be able to
provide to their families. In many instances this means that wages for most workers
Yates, M. (2003). Naming the system: inequality and work in the global economy. New
York: Monthly Review Press.