O'Connor's Sectoral Model of the United States Economy: Examining Some Political Consequences

During the past fifteen years, several economists, historians and sociologists have propounded a sectoral model of economic growth and change in the United States. According to this analysis, as large-scale, monopolistic enterprises began to emerge in the late nineteenth century, different investment considerations and labour market requirements were also evolving. A dual economy was beginning to be formed. The large-scale capital sector, and the small-scale capital sector each had its own economic environment of conduct. Each sector tended, too, to develop its own corresponding labour market, with monopoly sector or ‘core’ firms holding out certain economic advantages for employees: money, job security, benefits, and opportunities for advancement within the firm. Thus, the work experience in these two sectors increasingly diverged. Even if the large-scale capital sector did offer economic advantages, growth tended to be capital-intensive, and the growth of employment in this sector slowed down, and then stopped by the end of the Second World War. Employment shifted to trades and services, with lower wage rates, and, of course, to the public sector, which currently employs nearly a third of the American workforce.