7.3 Division of Labour Advantages Flashcards
What are the advantages of division of labor in terms of worker productivity and wages?
Workers become very good at their job because they repeat tasks numerous times with no other responsibilities, which increases productivity translating into greater production, potentially higher quality products, and higher wages, making workers feel valued.
How does having more production lines benefit businesses?
With more production lines, there will be significant time savings because workers will be focusing on their specific part of the production process with very high productivity. As a consequence, productive efficiency for the businesses improves, reducing their costs of production.
What is the benefit of giving specialist capital to workers who are very good at specific tasks?
Workers that are very good at specific tasks can be given specialist capital (machines) which is cost-effective. As a consequence, the productivity of workers can increase even more, translating into greater production, higher quality products, and higher wages. Revenues and profitability for the business will increase in the long term.
How do consumers benefit from division of labor?
Consumers benefit with lower prices of goods produced where labor is divided. This is because with higher labor productivity, time savings, and effective capital machinery going to the right workers, costs of production will decrease for the firm. As a consequence, the firm may transfer some of these lower costs via lower prices, increasing consumer surplus and affordability to consumers.
What is a disadvantage of division of labor in terms of worker motivation and productivity?
Product quality suffers because workers value their work less. This is because workers often have to work long hours and for relatively low pay where their work is repetitive and requires low skill. As a consequence, motivation, and therefore labor productivity is hit with perhaps absenteeism and lateness at work creeping in, reducing profitability for the business, resulting in higher prices for the consumer.
What is a potential issue with high worker turnover in professions that utilize division of labor?
There could be an issue of high worker turnover for a business. This is because workers, getting bored by performing the same task repeatedly and valuing their job less in professions such as retail, leisure, and call centers, will look to move to a profession that offers them more. As a consequence, firms will suffer from constantly having to recruit new workers, which increases their administration costs and will lose out on productivity from the workers who left.
What is a potential consequence of over-specialization for workers who perform division of labor tasks?
Workers may end up being long-term unemployed if they lose their job. This is because having over-specialized with such job-specific skills, they make themselves occupationally immobile if they lose their job due to technology replacing their job or another country gaining the cost advantage in the industry. As a consequence, structural unemployment will increase with governments having to bear the cost of re-training programs to get such workers back into work.
What is a potential consequence of too much division of labor for consumers?
The more division of labor there is, the more consumers will receive heavily standardized goods and services. This is because repetitive tasks with little innovation and change in processes will not deliver differences in final output. As a consequence, the variety of goods and services in the market will be low for consumers, reducing choice.
