Dieter’s Electronics Collective
Bargaining
Management
• Save Money
• Reduce some benefits to
save costs
• More Flexible work hours
from employees
Workers
• Wages
• Benefits
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Medical
Sick leave
Vacation
Dental
Vision
Retirement
• Job Security
• Work Hours
Current pay and Benefits
• Lowest wages range from $12 per hour to $85,000 for
corporate level non management positions.
• Currently a PPO medical plan is offered to all employees
– (PPO is one of the best plans offered alternative is HMO)
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No vision
No dental
2 Weeks Vacation
1 Week worth of Sick leave
All employees must work one weekend day at store locations.
The lower wage workers have the least job security and there
is frequent turn over.
Macroeconomics Institutions
CH 8, 3 & 4
3
CH 8, Section 3:
• Unskilled labor
• people who work primarily with their hands.
• Lack training and skills required for other
tasks.
– Diggers
– Pickers
– Cleaners
• Low-wage earners
4
Semi-skilled labor
• 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
5
Skilled labor
• workers able to operate complex equipment or services.
• High investment of training/education
• Experienced
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Carpenters
Typists
Tool and die makers
Computer technicians
Computer programmers
Chefs
• Wages low or high depending on job market, complexity and
responsibility.
6
Professional labor
• individuals with the highest level of
knowledge-based education and managerial
skills.
– Doctors
– Scientists
– Lawyers
– Corporate executives
• Normally earn highest incomes depending on
size of business.
7
Non-competing labor grades
• labor categories that do not directly compete
with one another.
8
Wage rate
• 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”
9
Traditional theory of wage determination
• the supply and demand for a worker’s skills
and services determine the wage or salary.
Equilibrium wage rate
The wage rate that leaves neither a surplus or
shortage in the labor market.
10
Theory of negotiated wages
• organized labor’s bargaining strength is a
factor in determining wages.
– Union strength may demand a wage higher than
market equilibrium.
• Seniority
• The length of time a person has been on the
job
– Senior workers receive higher wages
• Also higher job security
11
Signaling theory
• employers are willing to pay more for people with
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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.
12
Labor mobility 4/22
• the ability and willingness of workers to
relocate in markets where wages are higher.
• Depends on….
– Relatives
– Cost of living
– Convenience
– location
13
Section 4
• Giveback
• something union members give up to the
company when their contract is renegotiated:
• Wages
• Fringe benefit
• Work rule
14
Two-tier wage system
• a hiring method that keeps high
wages/salaries for current workers,
• But has lower wages/salaries for newer
workers.
15
Glass ceiling
• 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
16
Jon Stewart Equal Pay
• How much do women earn for every $1
earned by a man?
• According to the projections when will women
receive equal pay to men?
• When was the first Equal Pay law passed and
by which president?
• What did the Lilly Ledbetter act do?
• What could be created before women receive
pay equality? (3)
Comparable worth
• the idea stating that people should receive equal pay
for work that is different from, but just as demanding
as, other types of work.
• 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
Set-aside contract
• a guaranteed contract reserved for a targeted
group.
• Government may require that a percentage of
contracts go to
– minority-owned businesses
– Women
19
Part-time workers
• those employees working less than 35 hours a
week.
• One out of five jobs
• Ratio is increasing as companies…..
• Do not have to give benefits
• Usually not unionized.
20
Minimum wage
• the lowest wage can be legally paid to a
worker
• 1939 = US, .25 cents/hour.
• Federal Minimum wage
– $7.25
• California Minimum wage
– $9.00
• Seattle Minimum wage
– $15.00
21
Current dollars
• dollars that are not adjusted for inflation
• 1937 $.10 current dollar was = to 8 2003
dollars.
• Chart 8.10
22
Real or constant dollars
• Dollars that are adjusted in a way that
removes the distortion of inflation.
• Uses a
• Base year
• a year that serves as a comparison for all
other years
23
Assessments: Checking for Understanding
• 1 Explain why wage rates differ among
regions.
• Wage rates differ among regions due to
– lack of labor mobility
– Cost of living
– Attractiveness of location
24
Assessment
•
•
•
•
•
3 List the four categories of labor.
Unskilled labor
Semiskilled labor
Skilled labor
Professional labor
25
Assessment
• 4 Explain the importance of noncompeting
labor grades.
• Individuals with different levels of
– Experience
– Training
– Education
• Do not compete against one another for jobs.
26
Assessment
• 5 Describe three different approaches to wage
determination.
• Traditional Theory of Wages
• Theory of Negotiated Wages
• Signaling Theory
27
Assessments: Checking for Understanding
• 1 Write a definition of comparable worth in
your own words.
• people should receive equal pay for work that
is different from, but just as demanding as,
other types of work.
28
Assessment
• 3 List three reasons for the decline of unions.
• Many employers kept unions out
• Additions to labor force have little loyalty to
organized labor
• Unions are victims own success
29
Assessment
• 4 Describe three reasons for the income gap
between men and women.
• Women tend to fill lower-paying positions
• Discrimination prevents them from getting
promotions
• Career interruptions for child-bearing affect
women’s seniority
30
Assessment
• 5 Describe the current trends in part-time
employment.
• It has been growing due to increasing hours in
retail and the need to fill extra positions
during peak periods.
31
Assessment
• 6 Explain why it is necessary to consider
inflation when examining the minimum wage.
• As prices tend to increase over time,
purchasing power of fixed minimum wage
decreases.
32
Image, p. 206
• Questions
• 1 How do the expenditures in the United States
compare with those in France?
• 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 (not shown) vs 700
million people)
33
Image, p. 207
• How does this theory differ from the theory of
negotiated wages?
• Traditional theory of wage determination:
• Theory of negotiated wages
34
Image, p. 208
• What can you infer about the theory of negotiated
was from the figure?
• 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
35
Image, p. 212
• How would you describe the trend of union
membership during the 1980s and 1990s?
• Steadily decreasing:
• also steadily decreasing
36
Image, p. 213
• When did median female income first reach
70 percent of male median income?
• The late 1980s or 1990
37
Image, p. 214
• In what occupations do women make up between
60-80 percent of the workforce?
• Sales
• Retail and personal services
• Teachers, except college and university
• Health service workers
• Private household service workers
• Secretaries
• Stenographers
• typists
38
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)
39
Quick Write
• What are some of the negative and positive
effects of seniority in the workplace?