Brief Response
• How have labor unions and later government
reforms improved the working conditions for
most employees? (3)
–
–
–
–
–
–
–
–
Higher pay
Better hours
Better/safer working conditions
Job security
Protection from harassment/abuse
Sick leave
Disability
Health/dental/optical insurance
1
Macroeconomics Institutions
CH 8, 3 & 4
2
CH 8, Section 3 p. 205 Terms:
• Unskilled labor
• 205 people who work primarily with their
hands.
• Lack training and skills required for other
tasks.
– Diggers
– Pickers
– Cleaners
• Low-wage earners
3
Semi-skilled labor
• 206 workers with enough mechanical or
service abilities and skills to operate machines
and handle basic operations
• Require a minimum amount of training
– Floor polishers
– Fast-food workers
– Gardeners
• Pay is low, but better with skills achieved
4
Skilled labor
• 206 workers able to operate complex equipment or services.
• High investment of training/education
• Experienced
–
–
–
–
–
–
Carpenters
Typists
Tool and die makers
Computer technicians
Computer programmers
Chefs
• Wages low or high depending on job market, complexity and
responsibility.
• A very skilled and dangerous job…..
5
Immigrant labor and US cities
(use your current sheet if you have space.)
• Regard the graph (discussion)
– What year is the information from?
– What type of immigrant worker does Los Angeles
attract?
– What percentage of LA’s population is immigrant?
– Why do you think LA attracts more immigrants
than Baltimore?
6
Immigrant labor and US cities
(use your current sheet if you have space.)
• Regard the graph (discussion)
– What year is the information from?
• 2009
– What type of immigrant worker does Los Angeles attract?
• Low skilled
– What percentage of LA’s population is immigrant?
• 34.4%
– Why do you think LA attracts more immigrants than Baltimore?
• The southeast US historically has not attracted immigrants as it once
had a slave population, and since the end of slavery, most labor is still
lower-paid/protected working class Whites and Blacks. In the past
few decades, however, immigrant populations there have been
increasing, mostly in the information technology and medical fields.
LA closer to border. LA is growing. Family connections. LA has much
the same culture as many of it’s immigrants.
7
Professional labor
• 206 individuals with the highest level of
knowledge-based education and managerial
skills.
– Doctors
– Scientists
– Lawyers
– Corporate executives
– Engineers
• Normally earn highest incomes depending on
size of business.
8
Non-competing labor grades
• 206 labor categories that do not directly
compete with one another.
9
Wage rate
• 207 A standard amount of pay given for work
performed
• Differ depending on nature of occupation
– Skill/experience level
– Often hourly
• Depends on supply and demand for job
– Number of workers to job openings offered
• Based also on union contracts
• Also based on “signaling theory”
10
Traditional theory of wage determination
• 207 the supply and demand for a worker’s
skills and services determine the wage or
salary.
Equilibrium wage rate
207 The wage rate that leaves neither a surplus
or shortage in the labor market.
11
Theory of negotiated wages
• 208 organized labor’s bargaining strength is a factor
in determining wages.
– Union strength may demand a wage higher than market
equilibrium.
• Seniority
• 208
• The length of time a person has been on the job
– Senior workers receive higher wages
• Also higher job security
12
Signaling theory
• 208 employers are willing to pay more for people
with
–
–
–
–
Certificates
Diplomas
Degrees
Other indicators of experience and superior ability
• These documents awarded by
education/training/government institutions “signal”
a worker’s special abilities and superiority to workers
who do not have the documents.
13
Labor mobility
• 209 the ability and willingness of workers to
relocate in markets where wages are higher.
• Depends on….
– Relatives
– Cost of living
– Convenience
– location
14
Section 4 p. 211 Terms:
• Giveback
• 212 something union members give up to the
company when their contract is renegotiated:
– Wages
– Fringe benefit
– Work rules
15
Two-tier wage system
• 212 a hiring method that keeps high
wages/salaries for current workers,
• But has lower wages/salaries for newer workers.
• EC: Why do you think newer workers in this
example are willing to accept the lower wage? (2)
• They need the job and it still pays more than
minimum wage.
16
Glass ceiling
• 214 an “invisible” barrier that prevents the
advancement of some workers up the
corporate ladder.
• Discriminatory and illegal if it can be proven.
– Minority groups
– women
17
Comparable worth
• 215 the idea stating that people should receive equal
pay for work, skills, effort, knowledge that is different
from, but just as demanding as, other types of work.
– Ex. Nurses = to road workers
– Complicating factors include:
• Hazards
– Educational requirements
– Degree of physical difficulty
• May reduce gender discrimination, but is thought, by
some, to also be unfair…..
18
Comparable Worth Formula
(use your paper)
• Keep in mind that gender is NOT the main
consideration here.
• Which category is the most effective in
equalizing the two jobs? Explain.
• Which category most shows both jobs as
equal naturally?
• Why do you think responsibility is lower for
the one job than the other? (2)
19
Comparable Worth Formula
(use your paper)
• Which category as the most effective in equalizing the
two jobs? Explain.
– Working conditions.
– Loading trucks is more physical work with a higher degree of
danger.
• Which category most shows both jobs as equal naturally?
– Effort
• Why do you think responsibility is lower for the one job
than the other? (2)
– Truck loading work: balancing load weight: is less complicated
than library work: cataloguing books, stocking shelves, tracking
loaned books, ordering new books and periodicals, reference
service, working with the public, computer skills…..
20
Set-aside contract
• 215 a guaranteed contract reserved for a
targeted group.
• Government may require that a percentage of
contracts go to
– minority-owned businesses
– Women
21
Part-time workers
• 216 those employees working less than 35
hours a week.
– One out of five jobs
– Companies prefer them for lower level work
• Employers not have to give benefits
–
–
–
–
Medical, dental, optical
Paid sick leave
Maternity leave
Job security
– Usually not unionized.
22
Minimum wage
• 216 the lowest wage can be legally paid to a
worker
– 1939 = US, .25 cents/hour.
• EC: How much was that in today’s money?
= @$4.00/hour
– 2015 = US, $7.25/hour
– 2015 = CA, $9.00/hour
23
Current dollars
• 218 dollars that are not adjusted for
inflation
• What does one dollar buy in Tujunga, in
2015? (Discussion)
– At our school machines? snacks, bottled water
(subsidized? Yes).
– At Von’s?
24
Real or constant dollars
• 218 Dollars that are adjusted in a way that removes the
distortion of inflation.
• Uses a
• Base year
• 218 a year that serves as a comparison for all other years
• In the previous slide:
• 1937? current dollar was = 16 2014 dollars.
• What do sixteen dollars buy in Tujunga, in 2015?
– At Von’s?
– A few Starbuck’s/soda’s, sandwiches,
25
Investment Project
Place where needed
• Making an Excel spread sheet
• Making a graph using your data
26
Hwk Assessments, Class Work,
to Know
27
Assessments: Checking for Understanding
CH 8, S3
• 1
• Wage rates differ among regions due to
– lack of labor mobility
– Cost of living
– Attractiveness of location
28
CH 8, S3 Assessment
•
•
•
•
•
3
Unskilled labor
Semiskilled labor
Skilled labor
Professional labor
29
CH 8, S3 Assessment
• 4
• Individuals with different levels of
– Experience
– Training
– Education
• Do not compete against one another for jobs.
30
CH 8, S3 Assessment
•
•
•
•
5 (just list them, we have descriptions already)
Traditional Theory of Wages
Theory of Negotiated Wages
Signaling Theory
31
Assessments: Checking for Understanding
CH 8, S4
• 1
• people should receive equal pay for work that
is different from, but just as demanding (skills,
knowledge, working conditions, effort) as,
other types of work.
32
CH 8, S4 Assessment
• 3
• Many employers kept unions out
• Additions to labor force have little loyalty to
organized labor
• Unions are victims own success
33
CH 8, S4 Assessment
• 4
• Women tend to fill lower-paying positions
• Discrimination prevents them from getting
promotions
• Career interruptions for child-bearing affect
women’s seniority
34
CH 8, S4 Assessment
• 5
• It has been growing due to increasing hours in
retail and the need to fill extra positions
during peak periods.
35
CH 8, S4 Assessment
• 6
• As prices tend to increase over time,
purchasing power of fixed minimum wage
decreases.
36
Image, p. 206
• Questions
• 1
• the United States spends about 5% less than
France.
• 2
• No, clearly many nations in the sample are
below 20%
• Yes, on the average, the sample runs close to
20% (average considering 6.3 billion people
(not shown) vs 700 million people)
37
Image, p. 206 Extra
• +why do you think Americans spend less money (especially lower
income people) on food AND have a growing obesity problem?
• US produces large surpluses of foods, making food cheaper to buy.
• Foods are processed in factories using mass-production techniques
allowing longer storage of food.
– also keep prices low
• Chemically or genetically modified, which often adds weight, even faster
than fresh food.
– Also designed to make people eat more, making them buy more.
• Americans are encouraged by corporate media to eat plenty, supersize, and have seconds (even thirds).
• American regional eating traditions: Southerners fry food, use a lot
of sugar and are generous with portions.
– American parents in general tend to overfeed their children.
38
Image, p. 206 Extra
• Why are Japanese food prices higher than British
food prices? (consider: both are island nations
with limited land; Japan’s population is twice that
of Britain’s)
• Japanese prefer fresher foods
– Will pay more for them on a daily basis.
• Japanese do not like chemicals or most processes
used by Western nations like the US and Britain.
• Japan must import more food items than Britain
(livestock/marine and fruits and vegetables not
grown in Japan).
39
Image, p. 207
• Question
• Traditional theory of wage determination:
• Theory of negotiated wages
40
Image, p. 208
• Question
• That unionization does help determine wages and
can help make wages higher.
• +is there a downside to this?
• Junior workers do not get raises
– May be laid off so company can save money
• New workers may not be hired.
– May get hired but on different contract terms than older
workers
• Usually with less benefits
41
Image, p. 212
• Question
• Steadily decreasing:
• also steadily decreasing
42
Image, p. 213
• Question
• The late 1980s or 1990
43
Image, p. 214
•
•
•
•
•
•
•
•
•
Question
Sales
Retail and personal services
Teachers, except college and university
Health service workers
Private household service workers
Secretaries
Stenographers
typists
44
Image, p. 217
• Because prices increased during that period the
purchasing power of the minimum wage declined.
• + in what two years was the minimum wage, as a
percent of the average manufacturing wage, the
highest?
• 1950, 1968
• Approximately what was the minimum wage
adjusted for inflation in those years?
• 1950: About $4.95 (2003)
• 1968: About $2.60 (2003)
45
Brief Response
• Wal-mart is a profitable business with
many outlets that require a lot of floor
employees. Their selling-point is low
prices.
• Which group do you think is the majority
of their labor force, full-time employees
or part-time employees? Explain. (2)
46