Affluence, Inequality and the Transformation of Work

Covering Assessment Criterion 1.4 of 7CO01, this video addresses the long-run economic forces that have reshaped work, employment and management practice across developed economies over the past half-century. The central tension examined is the paradox of rising GDP per capita and improving aggregate living standards sitting alongside marked increases in both income inequality and wealth inequality since the 1980s. The video looks at how the distribution of national income has shifted toward higher earners while real wages for middle and lower earners have stagnated, and it considers what that divergence means for organisations operating in that environment.

From there, the video turns to de-industrialisation — the structural decline of manufacturing and heavy industry as primary sources of employment — and traces the forces behind it, including technological automation, globalisation, and offshoring of production. It maps the rise of the service-based economy and the knowledge economy in place of the industrial model, examining how value creation, skills requirements, career structures and management approaches have all been altered as a result. The concept of labour market polarisation features prominently here, with the video examining the simultaneous growth of high-skill, high-wage roles and low-skill, low-wage roles and the corresponding erosion of middle-tier employment.

Throughout, the video grounds these macro-economic trends in concrete organisational implications across recruitment, pay strategy, executive-to-median pay ratios, employee financial wellbeing, and workforce diversity pipelines. It considers how financial precarity shapes engagement and turnover patterns differently across the income spectrum, and why organisations face growing pressure around pay transparency and the justification of pay differentials. Together these threads illustrate why an understanding of long-term economic transformation is central to designing people strategies at a strategic level within 7CO01.