Critics of capitalism say that many problems of work and economy arise from the nature of capitalism. According to this way of thinking, capitalism as an economic system emphasizes competition and a 'winner takes all' mentality. In this kind of system, there are many losers (in contrast to the few winners), and there is also unbridled greed for greater wealth. In the US system, because there is relatively little government regulation in the free-market system that is a hallmark of capitalism, large corporations are left relatively free to engage in behavior that advances their profits but that also stifles competition, harms the environment, exploits their workers, and causes other social ills. Thus, stronger protections for workers, small businesses, and the environment may alleviate some of the harms of capitalism, from this perspective.
Any improvement in work and economy must stem from social reforms based on sound social research. This chapter’s discussion points to several social problems that must be addressed. One problem is discrimination in hiring and employment. Several kinds of studies, but especially field experiments involving job applicants who are similar except for their race or gender, provide powerful evidence of continuing discrimination despite federal and state laws banning it. This evidence certainly suggests the need for stronger enforcement of existing laws against racial bias in employment and for public education campaigns to alert workers to signs of this type of discrimination. One set of policies has focused on reducing discrimination against people of color and women in employment, as well as in education. We turn to that set of policies next before shifting attention to other policies and practices that may help address social problems of work and economy.
Affirmative Action
Affirmative action refers to a set of policies and practices designed to promote equal opportunity. It involves special consideration for people of color and women in the institutions of work and education to compensate for the centuries of discrimination and lack of opportunities that they've experienced. Affirmative action programs began in the 1960s to provide Black people and later other people of color and women access to jobs and schooling to make up for past discrimination. President John F. Kennedy was the first known official to use the term, when he signed an Executive Order in 1961 ordering federal contractors to “take affirmative action” in ensuring that applicants are hired and treated without regard to their race and national origin. Six years later, President Lyndon B. Johnson added sex as a category for which affirmative action should be used.
Although many affirmative action programs remain in effect today, court rulings, state legislation, and other efforts have limited their number and scope. We discuss some of the Supreme Court cases in the Education chapter, as many of them have involved colleges and universities. For instance, cases involving the University of California, the University of Michigan, Harvard University, and the University of North Carolina weakened affirmative action.
Though Supreme Court cases have reduced affirmative Action in the institution of education, fewer cases have involved the institution of work. However, these policies have been targeted by the Trump presidential administration. Strengthening the initial Executive Order in 1961, another Executive Order (11246) was issued in 1965 requiring employers contracted with the government to document their affirmative action programs including their policies, practices, and programs as well as demographic statistics. However, the second Trump administration in January 2025 revoked that Order in favor of "Restoring Merit-Based Opportunity" (Legal Information Institute, Cornell Law School 2025). Thus, federal contractors are no longer required to report on their affirmative action plan for people of color and women.
John F. Kennedy signed an Executive Order in 1961 which ordered federal contractors to "take affirmative action" in treating applicants and workers in nondiscriminatory ways.
John F. Kennedy Signs Bills 1961 by the Associated Press is in the public domain
Despite its curtailment, affirmative action continues to spark controversy, with scholars, members of the public, and elected officials all holding strong views on the issue. Opponents of affirmative action cite several reasons for opposing it (Connors 2009). Affirmative action, they say, is "reverse discrimination" and, as such, is both illegal and immoral. They claim that people benefiting from affirmative action are less qualified than many of the white men with whom they compete for employment and college admissions. Opponents also say, perhaps contradictorily, that affirmative action implies that the people benefiting from it need extra help and thus are indeed less qualified.
In response, proponents of affirmative action give several reasons for favoring it (Connors 2009). Many say that it is needed to make up not only for past discrimination and a lack of opportunities for people of color and women but also for ongoing discrimination and a lack of opportunity. For example, because of their social networks, white job-seekers are better able than people of color to find out about and to get jobs (Reskin 1998). If phenomena such as this occur, people of color are at a disadvantage in the job market, and some form of affirmative action is needed to give them an equal chance at employment. Proponents also say that affirmative action helps add diversity to the workplace and college, which strengthens innovation among other benefits. Many colleges, they note, give some preference to high school students who live in a distant state in order to add needed diversity to the student body, to 'legacy' students (those with a parent who went to the same institution) to reinforce alumni loyalty and donations, and to athletes, musicians, and other applicants with certain specialized talents and skills. If all these forms of preferential admission make sense, proponents say, it also makes sense to take students’ racial backgrounds into account as admissions officers strive to have a diverse student body.
Proponents add that affirmative action has indeed succeeded in expanding employment and educational opportunities for people of color, that individuals benefiting from affirmative action have generally fared well in the workplace or on campus, and that consideration of people of color and women has not resulted in their being advantaged over white men. For instance, scholars argue that people of color and women have improved access to public employment and would be worse off without these policies in regard to employment status (Harris 2009; Tsang & Dietz 2001), and even white employees may benefit from affirmative action as companies with these polices (that employ over 100 employees) raise wages for white workers (Pincus 2003).
A cautious view is that affirmative action may not be perfect but that some form of it is needed to make up for past and ongoing discrimination and lack of opportunity in the workplace and on the campus. Without the considerations that affirmative action programs give people of color and women, the institutionalized discrimination and other challenges they face in work and education are likely to continue.
Other Policies and Practices
The Equal Employment Opportunity Commission (EEOC) was established under President Johnson's Executive Order 11246, described above. It is a federal agency responsible for enforcing anti-discrimination law in the institution of work, with the goal of ending employment discrimination. According to the EEOC (n.d.), they are:
"responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, childbirth, or related conditions, transgender status, and sexual orientation), national origin, age (40 or older), disability or genetic information. ... The laws apply to all types of work situations, including hiring, firing, promotions, harassment, training, wages, and benefits."
They enforce Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the characteristics named above, though the first iteration included only race, color, religion, sex, and national origin. In practice, the EEOC investigates claims of discrimination against employers who are covered by the law, and most employers with 15 or more employees are covered. The EEOC received over 88,000 charges of discrimination in (fiscal year) 2024, which represented an increase of over 9% from the prior year. Race discrimination is one of the most frequent charges that they receive, with 38% of cases involving race (32.7%) or color (5.3%) (EEOC 2020).
It's worth noting a recommendation of many observers concerning the federal government’s role in the economy. These observers say the government must take a more active role in improving the national infrastructure, job training, and research and development, and in more generally providing incentives for large corporations to invest their resources in job creation. In this regard, they cite the recent experience of Germany, which has recovered faster than the US from the worldwide recession in the late 2000s (Jacobs 2012).
To improve the economy and create many jobs, many observers say the federal government needs to follow the example of Western Europe by expanding its role in the economy.
Diego Cambiaso – White House – CC BY-SA 2.0
The federal government could implement a job guarantee program to address the problem of unemployment, which have been helpful in the past. For instance, the government instituted programs such as the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA) to boost employment levels during the Great Depression. The institution of the state (whether the federal government or state governments) could also strengthen policies that help individuals, particularly from underrepresented groups, access higher education and occupational training programs, to help them become qualified job applicants or meet minimum educational requirements. The consequences of unemployment sometimes seem forgotten in national debates over whether to extend unemployment insurance benefits, which state governments have the agency to decide.
Lessons from Other Societies
Women in Nordic Nations
The United Nations Development Programme ranked nations on a “gender empowerment measure” of women’s involvement in their nation’s economy and political life (United Nations Development Programme 2009). Of the 109 nations included in the measure, Sweden ranked first, followed by Norway, Finland, and Denmark. The remaining Nordic nation, Iceland, ranked eighth. The other nations in the top ten were the Netherlands, Belgium, Australia, Germany, and New Zealand. Canada ranked twelfth, and the United States ranked only eighteenth. In trying to understand why the US ranks this low and what it might be able to do to increase its empowerment of women, the experience of the Nordic nations provides some important lessons.
The Nordic nations ranked at the top of the gender empowerment measure largely because they have made a concerted effort to boost women’s involvement in the business and political worlds (Sumer, Smithson, Guerreiro, & Granlund 2008). They are all social democratic welfare states characterized by extensive government programs and other efforts to promote full economic and gender equality.
For example, Norway’s government provides day care for children and adult care for older or disabled individuals, and it also provides forty-four weeks of paid parental leave after the birth of a child. Parents can also work fewer hours without losing income until their child is two years of age. All these provisions mean that women are much more likely than their American counterparts to have the freedom and economic means to work outside the home, and they have taken advantage of this opportunity. As a recent analysis concluded, “It has been extremely important for women that social rights have been extended to cover such things as the caring of young children and elderly, sick and disabled members of society. In the Nordic countries, women have been more successful than elsewhere in combining their dual role as mothers and workers, and social policy arrangements are an integral part of the gender equality policy” (Kangas & Palme 2009: 565). Of course, this does not address the unjust gender expectation that women be disproportionately responsible for unpaid domestic labor, though it does help alleviate the burden of that role.
The lesson for the US is clear: An important reason for the Nordic nations’ high gender empowerment ranking is government policy that enables women to work outside the home if they want to do so. The experience of these nations indicates that greater gender equality might be achieved in the US if it adopted policies similar to those found in these nations that make it easier for women to join and stay in the labor force.
Employers themselves can write their own policy related to nondiscrimination, to protect workers in marginalized groups from harassment, pay gaps, and other forms of discrimination. They may also choose to engage in fairer wage practices, raising wages and reducing the CEO-to-average-worker-pay ratio in large corporations. To address the concern of alienation and boost worker morale, employers may offer programs to strengthen community in the workplace, such as 'affinity groups' that connect people with similar backgrounds, identities, or interests. If coworker friendships or connections are central to workers’ satisfaction with their jobs and general well-being, employers could make special efforts to promote these ties.
Individual Agency and Collective Action
In addition to employer agency, individual workers can engage in efforts to improve work conditions and wages as well as nondiscrimination policies and practices in their own workplaces and the institution of work more broadly. For instance, in 2001 women came together in a class-action lawsuit against Walmart for sex discrimination after learning that they were systematically paid less than men employees. The claim also charged that women received fewer opportunities for promotion and faced sexual harassment. Unfortunately, 10 years later the Supreme Court's interpretation of 'women' as not a 'class' resulted in the case being blocked from moving forward, despite that sex discrimination had been recognized. Nevertheless, the case brought attention to gendered workplace discrimination and sparked more national conversation on workplace policies. In a quite different example, in 1996 members of the National Committee on Pay Equity (NCPE) established Equal Pay Day, which is intended to raise awareness about the gender pay gap, including how it varies by race. In 2025 Equal Pay Day was on March 25, which represents that women workers would have to work nearly three additional months to catch up with what men earned the year prior.
One of the most successful efforts to create social change in the institution of work came from the Labor Movement of the late-nineteenth and early-twentieth centuries. This movement involved organized strikes and protests, the formation of labor unions, and other forms of pressure for the government to enact stronger laws to protect workers in terms of labor conditions, hours, and wages, as well as to promote changes in employer practices that would drive competition in ways beneficial to workers (e.g., if one company in town increases their wages, requires fewer hours, and provides protective equipment, others often follow suit). The National Park Service (2025) offers an extensive list of some of these efforts on their page 200 Years of Labor History.
Though many women were locked out of the labor force in the 1800s and early-to-mid 1900s, others were working toward fairer workplace practices such as in agricultural work. In 1908, Amanda Bates became the first woman president of a Farmers Union in the US (Kansas Farmer’s Union n.d.). Women also organized and participated in labor strikes and other collective action to force social change in the institution of work.
Farm Labor Union, Galena, Kansas by Arthur Rothstein via the George Eastman House Collection is in the public domain
