How Does The Division Of Labor Increase Productivity

The Partition of and Specialization of Labor

The formal study of economics began when Adam Smith (1723–1790) published his famous bookThe Wealth of Nations in 1776. Many authors had written on economics in the centuries earlier Smith, but he was the first to address the field of study in a comprehensive way. In the first chapter, Smith introduces the division of labor, which means that the way a adept or service is produced is divided into a number of tasks that are performed by different workers, instead of all the tasks being done by the same person.

To illustrate the partitioning of labor, Smith counted how many tasks went into making a pin: cartoon out a piece of wire, cutting it to the right length, straightening information technology, putting a caput on i end and a point on the other, and packaging pins for sale, to name just a few. Smith counted 18 singled-out tasks that were oft done by different people—all for a pin, believe information technology or not!

The image is a photograph of factory workers for a shoe company working separately on individualized tasks.

Figure 3. Workers on an associates line are an example of the divisions of labor. (Credit: Nina Hale/Flickr Artistic Commons)

Mod businesses carve up tasks as well. Fifty-fifty a relatively simple business like a restaurant divides up the task of serving meals into a range of jobs like height chef, sous chefs, less-skilled kitchen help, servers to expect on the tables, a greeter at the door, janitors to clean upwards, and a concern director to handle paychecks and bills—non to mention the economic connections a restaurant has with suppliers of food, article of furniture, kitchen equipment, and the building where it is located. A circuitous business organization, similar a large manufacturing factory such equally the shoe factory shown in Figure 3, or a hospital, tin can accept hundreds of job classifications.

Why the Division of Labor Increases Production

When the tasks involved with producing a good or service are divided and subdivided, workers and businesses can produce a greater quantity of output. In his observations of pin factories, Smith observed that one worker lonely might make twenty pins in a day, only that a small business concern of 10 workers (some of whom would need to practice two or three of the xviii tasks involved with pin-making), could brand 48,000 pins in a day. How can a group of workers, each specializing in certain tasks, produce so much more than the same number of workers who try to produce the unabridged practiced or service past themselves? Smith offered three reasons.

First,specialization in a particular modest job allows workers to focus on the parts of the production process where they have an advantage. People accept different skills, talents, and interests, so they will be ameliorate at some jobs than at others. The particular advantages may exist based on educational choices, which are in turn shaped by interests and talents. Only those with medical degrees authorize to go doctors, for instance. For some goods, specialization will be affected past geography—information technology is easier to exist a wheat farmer in Northward Dakota than in Florida, simply easier to run a tourist hotel in Florida than in Northward Dakota. If you lot live in or near a big city, it is easier to concenter enough customers to operate a successful dry cleaning business or movie house than if you alive in a sparsely populated rural area. Whatever the reason, if people specialize in the product of what they exercise best, they will be more productive than if they produce a combination of things, some of which they are good at and some of which they are non.

Second, workers who specialize in certain tasks often learn to produce more quickly and with higher quality. This design holds truthful for many workers, including assembly line laborers who build cars, stylists who cut pilus, and doctors who perform heart surgery. In fact, specialized workers frequently know their jobs well enough to suggest innovative means to do their work faster and better.

A like pattern often operates within businesses. In many cases, a business that focuses on i or a few products (sometimes called its "cadre competency") is more than successful than firms that effort to make a wide range of products.

Third, specialization allows businesses to accept advantage of economies of calibration, which ways that for many goods, every bit the level of production increases, the average price of producing each individual unit declines. For example, if a manufactory produces only 100 cars per year, each auto will be quite expensive to make on average. However, if a factory produces 50,000 cars each year, then it can fix up an assembly line with huge machines and workers performing specialized tasks, and the average price of product per automobile will exist lower. The ultimate outcome of workers who can focus on their preferences and talents, learn to do their specialized jobs better, and work in larger organizations is that lodge as a whole can produce and swallow far more than if each person tried to produce all of their ain goods and services. The division and specialization of labor has been a strength confronting the trouble of scarcity.

Merchandise and Markets

Specialization merely makes sense, though, if workers can use the pay they receive for doing their jobs to buy the other goods and services that they demand. In short, specialization requires trade.

You do not have to know annihilation about electronics or sound systems to play music—you just purchase an iPod or MP3 role player, download the music and heed. You do not have to know anything most artificial fibers or the construction of sewing machines if you need a jacket—you only buy the jacket and clothing it. You practice not demand to know anything most internal combustion engines to operate a car—yous just arrive and drive. Instead of trying to larn all the knowledge and skills involved in producing all of the appurtenances and services that you wish to consume, the market allows y'all to larn a specialized set of skills and then use the pay you receive to buy the goods and services you lot need or want. This is how our modern lodge has evolved into a stiff economy.

Why Written report Economic science?

Now that we have gotten an overview on what economics studies, allow's quickly hash out why yous are correct to study it. Economics is not primarily a drove of facts to be memorized, though there are plenty of of import concepts to be learned. Instead, economics is improve thought of as a collection of questions to be answered or puzzles to be worked out. Most important, economics provides the tools to work out those puzzles. If yous have nevertheless to be been bitten by the economics "bug," there are other reasons why you should study economics.

Well-nigh every major problem facing the world today, from global warming, to world poverty, to the conflicts in Syrian arab republic, Transitional islamic state of afghanistan, and Somalia, has an economic dimension. If you are going to be office of solving those bug, you lot need to be able to sympathise them. Economics is crucial.
Information technology is difficult to enlarge the importance of economic science to good citizenship. You need to be able to vote intelligently on budgets, regulations, and laws in full general. When the U.S. government came shut to a standstill at the end of 2022 due to the "fiscal cliff," what were the bug involved? Did you know?
A basic understanding of economic science makes you a well-rounded thinker. When you read articles almost economic issues, you lot will understand and be able to evaluate the writer's statement. When you hear classmates, co-workers, or political candidates talking about economic science, you will be able to distinguish between mutual sense and nonsense. You volition find new ways of thinking about current events and virtually personal and business organisation decisions, too equally electric current events and politics.

The study of economics does not dictate the answers, but it can illuminate the different choices.

Key Concepts and Summary

Economics seeks to solve the trouble of scarcity, which is when human wants for goods and services exceed the available supply. A modern economy displays a partition of labor, in which people earn income by specializing in what they produce so use that income to buy the products they demand or want. The division of labor allows individuals and firms to specialize and to produce more for several reasons: a) It allows the agents to focus on areas of advantage due to natural factors and skill levels; b) It encourages the agents to learn and invent; c) It allows agents to take advantage of economies of scale. Division and specialization of labor just work when individuals tin buy what they do not produce in markets. Learning most economic science helps yous understand the major issues facing the world today, prepares you to exist a good denizen, and helps you go a well-rounded thinker.