Chapter 9 lecture notes
- 1. Labor Market Trends Chapter 9 Section 1
- 2. The Labor Force • Economics define the labor force as all nonmilitary people who are employed or unemployed.
- 3. Employed • Are 16 years or older and meet at least one of the following requirements: – They worked a least one hour for pay within the last week – They worked 15 or more hours without pay in a family business – The held jobs but did not work due to: • • • • Illness Vacations Labor disputes Bad weather.
- 4. Unemployed • Are 16 years or older and meet the following criteria: – They do not have a job – They have actively looked for work in the prior 4 weeks – They are currently available for work
- 5. Temporary Employment • Contingent employment – Temporary or part-time employment. – Flexible work arrangements. – Easy discharge due to the lack of severance pay for temporary workers. – Temporary workers are often paid less and receive fewer benefits than their full-time counterparts. – Some employees prefer temporary arrangements.
- 6. How does being unemployed differ from not being part of the labor force?
- 7. Occupational Trends • The economy of the United States has transformed from a mainly agricultural economy in the 1800s, to an industrial giant in the 1900s. • The computer chip has revolutionized the economy since its introduction in the late 1900s.
- 8. Occupational Trends • Overall, the United States is shifting from a manufacturing economy to a service economy. • As service jobs increase, the nation is losing manufacturing jobs. • Demand for skilled labor is rising, and the supply of skilled workers is increasing to meet the demand.
- 9. Describe the changes in the U.S. economy during the period shown on the graph.
- 10. Women in the Workforce • Overall, the number of women in the work force has increased from about 38 percent of all women in 1960 to about 58 percent of all women in 1995. • More women are: – – – – Getting a college education Not getting married Not having children Working in “Male” jobs
- 11. By what percent will the number of women in the workforce have changed between 1960 and 2006?
- 12. Trends in Wages and Benefits • Earnings for college graduates have increased – Earnings for workers without college degrees have decreased. • Benefits now make up about 28 percent of total compensation in the economy • For employers – Rising benefits costs raise the cost of doing business – Decrease profits. – Turns them to contingent employment to curb benefits costs.
- 13. Why might wages for workers in retail be much lower than those for workers in construction?
- 14. College Education • Getting a college degree greatly is now more of a necessity rather than a luxury • The learning effect – Education increases productivity and results in higher wages. • The screening effect – The completion of college indicates to employers that a job applicant is intelligent and hard-working
- 15. Education and Income • Potential earnings increase with increased educational attainment.
- 16. Disturbing Trends in College Education • High School graduation rate is about 86% • Only 68% of high school students attend college – 6 out of 10 enter a 4 year university – The rest go to a two year community college
- 17. Disturbing Trends in College Education • Only 60 percent of students who start at college finish • Bachelors Degree (4 Years) – 25% of the overall population • Masters Degree (6 Years) – 7% of the overall population • Doctorate or professional degree – 2% of the overall population
- 18. “Outside The Lines”: Florida State • Describe the type of “college athlete” FSU is recruiting? • What “extra” help are these athletes getting? • What were Dr. Brenda Monk’s responsibilities? • How would you describe Paul Griffin? – Was he selected by an NFL team? – What is his profession after he graduates?
- 19. Labor and Wages Chapter 9 Section 2
- 20. Supply and Demand in the Labor Market Labor Demand • The higher the wage rate, the smaller the quantity of labor demanded by firms and government. Labor Supply • As wages increase, the quantity of labor supplied also increases. Equilibrium Wage • The wage rate that produces neither an excess supply of workers nor an excess demand for workers in the labor market is called the equilibrium wage.
- 21. Explain how the outcome of this scenario affects (a) the cooks, (b) the restaurants.
- 22. Explain why a stable wage means stable restaurant prices.
- 23. Wages and Skill Levels • Wages vary according to workers’ skill levels and education. Jobs are often categorized into the following four groups: – – – – Unskilled Semi-skilled Skilled Professional
- 24. Unskilled Labor • Unskilled labor requires: – No specialized skills – Education – Training. • Examples: – Waiters – Messengers – Janitors
- 25. Semi-skilled Labor • Semi-skilled labor requires: – Minimal specialized skills and education. • Example: – Fork-lift operator
- 26. Skilled Labor • Skilled labor requires: – Specialized skills and training. • Examples: – Auto mechanics – Plumbers
- 27. Professional Labor • Professional labor demands: – Advanced skills and education. • Examples: – Lawyers – Doctors – Teachers
- 28. Give reasons to explain why the supply of doctors is low and the supply of construction workers is high?
- 29. Wage Discrimination • • The Equal Pay Act of 1963 – Declared that male and female employees in the same workplace performing the same job had to receive the same pay. Title VII of the Civil Rights Act of 1964 – Forbids job discrimination on the basis of: • • • • • • • Race Sex Color Religion nationality. Pay Levels for Minorities As the figure to the right shows, racial minorities tend to earn lower pay than white men.
- 30. Pay for Women • Despite these protections – American women today earn about 75 percent of what men earn. • Reasons women don’t get hired include: – – – – Pregnancy Working part-time Distracting to men Lack of cultural respect • Racial ethnicity
- 31. 2006 Basketball Players NBA vs. WNBA Shaq $20 Million Sue Bird $87,000
- 32. 2006 Golf Players PGA vs. LPGA Tiger Woods $11.9 Million Annika Sorenstam $2.5 Million
- 33. 2006 Tennis Players ATP vs. WTA Roger Federer $8.3 Million Maria Sharapova $3.8 Million
- 34. 2006 Football Players NFL vs. WPFL Michael Vick $23.1 Million Stacy Agee $100 Per Game
- 35. According to the graph, which group has the lowest earnings?
- 36. Organized Labor Chapter 9 Section 3
- 37. Occupational Trends • A labor union is an organization of workers that tries to improve: – working conditions – Wages – benefits for its members • Less than 14 percent of U.S. workers belong to a labor union. – This number keeps dropping
- 38. Why Unions Grew • The union movement took shape over the course of more than a century. • The 1935 National Labor Relations Act, also known as the Wagner Act: – Gave workers the right to organize – Required companies to bargain in good faith with unions.
- 39. What is the trend in union membership today?
- 40. Why Unions are Declining • Several factors have led to declines in union membership since the 1950s: – “Right to Work” Laws – Economic Trends – Fulfillment of Union Goals
- 41. “Right to Work” Laws • The Taft-Harlety Act (1947) allowed states to pass rightto-work laws. • These laws ban mandatory union membership at the workplace.
- 42. Economic Activity as Percent of GNP, 1956 and 1998
- 43. Employment in Key Union Industries, 1960-2000
- 44. Gender Makeup of the U.S. Labor Force, 1970 and 1999
- 45. Economic Trends • Unions have traditionally been strongest in the manufacturing sector – Blue-collar workers • Blue-collar jobs have been declining in number – The American economy becomes more serviceoriented. – Globalization – More women in the workforce
- 46. Fulfillment of Union Goals • Union membership has decreased simply because their goals have been fulfilled by other organizations. • The government has set standards for workplace safety – More benefits being provided by both private and government sources
- 47. Unions and Negotiations • Collective bargaining is the process in which union and company representatives meet to negotiate a new labor contract. – Wages and Benefits – Working Conditions – Job Security
- 48. Wages and Benefits • The Union negotiates on behalf of all members for – – – – Wage rate Overtime rates Planned raises Benefits
- 49. Working Conditions • Working conditions include – – – – Safety Comfort Worker responsibilities Other workplace issues • These are all negotiated and written into the final contract
- 50. Job Security • One of the union’s primary goals is to secure its members’ jobs. • The contract spells out the conditions under which a worker may be fired.
- 51. Labor Strike • If no agreement is met between the union and the company – The union may ask its members to vote on a strike. • A strike – An organized work stoppage intended to force an employer to address union demands. – Strikes can be harmful to both the union and the firm.
- 52. Labor Mediation • To avoid the economic losses of a strike, a third party is sometimes called in to settle the dispute. • Mediation – A settlement technique in which a neutral mediator meets with each side to try and find an acceptable solution that both sides will accept.
- 53. Labor Arbitration • If mediation fails, talks may go into arbitration • Arbitration – A settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.