Topic 10:
The Work Force & Wages
Day 1 Notes
Textbook Chapters-Chapters 9 & 13
Labor Force

All non military people age 16-65 who are
employed or seeking it
What it means to be Employed
•16 yrs.+ working for pay at least 1 hr./wk.
•15 yrs.+ w/o pay for family business
•Held jobs but didn’t work due to illness,
vacation, strike, weather
The US Labor Force
Population and labor force,
1998, 2008, and projected 2018, in millions
Numeric change in
labor force by age,
projected 2008–18,
in thousands
The baby-boom generation—
those born between 1946 and
1964—is expected to remain in
the labor force longer than
previous generations. As this
group ages, the number of
people in the labor force aged
55 to 64 is expected to increase
by more than 7 million during
the projections decade, and the
number of people aged 65 and
older is projected to increase by
almost 5 million. The numbers of
45- to 54-year-olds and 35- to
44-year-olds are expected to
shrink as baby boomers age
and shift into older groups.
Labor force participation rates for men and women,
1958–2008 and projected 2018, in percents
The labor force participation rates for both men and women are expected to decline slightly over the projections
decade. By 2018, about 71 percent of men and 59 percent of women are expected to be in the labor force.The aging of
the population will be a factor driving down labor force participation rates. Despite working longer than previous
generations, baby boomers will still have lower levels of labor force participation than those in younger age groups. The
baby-boom generation is becoming a larger segment of the total population, driving down overall participation in the
labor force.
Percent
distribution of
labor force by
race,
projected
2018
Although whites will
continue to be the
largest racial
category in the labor
force, other racial
groups are projected
to make up 21
percent of the labor
force by 2018.
Percent growth in
labor force by race,
projected 2008–18
Although Asians will
remain a small part of the
labor force, they—along
with the "all other races"
category—will have the
fastest rate of labor force
growth between 2008 and
2018. This growth is due
to increased immigration
and both groups' very high
labor force participation
rates.
The "all other races"
category includes
American Indians and
Alaska Natives, Native
Hawaiians and other
Pacific Islanders,
multiracial individuals, and
any other people who do
not identify themselves as
white, black, or Asian.
Occupational Trends
1800-1900’s: shift from agriculture to
Industrial Revolution which created factory
jobs
 1900’s-1960’s: heavy manufacturing
 1970’s- present: boom in electronics led to
new factory jobs; revolution in computers
created new jobs
 Future: Shift from manufacturing to service
economy

Implications for the Younger
Segment of the Population
(18-24 Year Olds)
 Must
have skills, education, training
and experience
 Manufacturing jobs disappearing
 Most work several jobs before
settling
How are wages determined?
Supply & demand…AGAIN
 Demand for product changes, so does
demand for the labor that produces it

Factors that Affect Wages
Education
 Opportunity
 Initiative
 Discrimination

◦ Women/minorities
◦ Glass ceiling
Laws
 Employers
 Region
 Labor Unions

Education
Highly educated jobs have High Demand,
Low supply Higher salaries
 Impact: education increases productivity &
results in higher wages

Opportunity
Isolated geography
 Job safety

Impact: These factors
hinder chances to
improve salary
 May take dangerous
job

Initiative
Lack of motivation
 Impact: No effort means no high salary

Discrimination
Women & minorities
Glass ceiling: allow women to rise to a
particular place in the company’s hierarchy &
then stop the promotions no matter how
deserving the employee is
 Race & gender keep you from getting a
promotion
 Impact: Pay gap exists between male &
females


Legislation to Prevent
Discrimination (Laws)
Affirmative action programs-insure the equitable
recruitment of workers
 Civil Rights Act of 1964, Equal Pay Act of 1963, &
U.S. Code 1963 prevent gender discrimination
 Rehabilitation Act of 1973: prohibits
discrimination based on handicap
 Age Discrimination in Employment Act of 1967
protects those between 40 & 70

Laws
Against wage
discrimination
 Impact: Prevent
unfair practices

Minimum wage laws
 Fair Labor
Standards Act

Employers
 Impact: Outsource
 Impact: Results
in lay offs & lower wages
Region
Where you live
 Impact: Cost of living determines pay
differences
 NYC vs Ballston Spa

Labor Unions

Impact: Fight for
higher wages and
better working
conditions
Tend to produce
higher wages than
non-union workers
 Strength in
Numbers

Outsourcing and Globalization
Topic 10
Day 2
Key Terms
Outsourcing-Sending jobs from one
nation to another to decrease costs for the
business either through manufacturing
costs, wages, taxes, etc.)
 Globalization-Inter-consecutiveness of
the world’s nations through economic,
social, and political means. Idea merges
theories of cultural diffusion with
interdependence.

Outsourcing Advantages & Disadvantages
for the Outsourcing Nation:
Advantages





Disadvantages
Provides jobs to people in  Loss of domestic jobs
other countries
 Weakens strength of
Lower prices for consumers domestic economy
Bigger profit margins
 Less tax revenue for country
Lower costs of production  Loss of power/ #’s in unions
Better, higher paying corp.  Plant Closings
jobs in US
Impact of Outsourcing
 Skilled
workers & professionals: increased
demand, wages increase
 Unskilled/lower skilled: Lowered Demand,
Increased Supply Lower Pay Surplus of
unskilled workers
 Temporary/Contingent workers: People
working free lance; as contracted ex.
Engineers, attorneys
Increased Demand- can adjust for peak
seasons, fewer rights, paid less, flexible
Directions: In your notebook make a t-chart of the Advantages
and Disadvantages that outsourcing has for India.
(The Other Side of Outsourcing 44:20)
Advantages
Disadvantages
Topic 10
Day 3
I wish I
was in
school!!!
Avondale mine
disaster
Exploitation, long hours, low pay,
faulty equipment, dirty, poor
ventilation, poor lighting,
dull/repetitive tasks, substandard
conditions
12 hours a day, 6 days a week
1 in 300 killed in Railroad work
Organized Labor
Types of Laborers
Unskilled: requires no  Skilled: requires
specialized skills,
specialized abilities &
education, & training;
training
hrly wage
 Professional: demands
 Semi Skilled: requires
advanced skills &
minimal specialized
education
skills & education

The Labor Movement:
Strength in Numbers
 Labor
Unions project that no
one creates change alone.
 Better chances for change come
with more people.
Types of Unions
Craft
Industrial
Craft Union
Association of skilled workers who
perform the same kind of work
 Ex. NYSUT-teachers

Industrial Union
All workers in a given industry regardless
of what job they perform
 Ex. UAW: any worker in the auto
industry

Types of Union Activities
Types of Union
Activities
Purpose of Union
Activity
Strike: Most common; refusal to
work until demands are met
slows efficiency; tool used to
increase bargaining power
Pickett: Parade
vocalize disputed issues; cut
off patrons, supplies;
intimidate; inform
Boycott
Mass refusal to buy product
or service from a target
Hurts income and reputation
Roles of Labor Unions
Roles
Collectively Bargain
Use strength in numbers
Union and company reps meet
to negotiate a new labor
contract
1st steps unions take
Get favorable legislation
passed
Endorse candidates that will
support the unions cause
Secure better working
conditions
Wages
Hours
Seniority Rights (LIFO)
Safety and Comfort
Job Security
Resolving Differences
Conciliation
3rd party brought in to encourage
talks between mgmt. And workers
Role is to bring two sides together
Arbitration
Binding decision
Union and mgmt. Turn case over
to a 3rd party to resolve dispute
Seldom used
Mediation
Union and mgmt. Help settle dispute
Mediator is neutral and knows
concessions to agree on
Non binding
Major Issues in Contract
Disputes
Wages and Fringe Benefits
Working Conditions
Job Security
Right to Work Laws
Ban
mandatory union
membership.
Unemployment & Poverty
Topic 10
Day 4
Unemployment

One who is actively seeking but not finding
a job.
How do we figure out the
unemployment rate?
 The total number unemployed in
proportion to the total civilian
labor force (16-65)
(Percentage)
Problems with Unemployment
 Doesn’t
count “drop outs”
 People are “employed” even with
part time jobs (doesn’t give a
true measure)
Types of Unemployment

Frictional Unemployment
◦ Unemployment that comes from moving
between careers, jobs and/or relocation.
Types of Unemployment

Seasonal Unemployment
◦ Unemployment that occurs when industries
slow or shut down for a season or make
seasonal changes in production.
Types of Unemployment

Structural Unemployment
◦ Occurs when a worker’s skills do not match
the jobs that are available; often occurs
because of technological advances.
Types of Unemployment

Cyclical Unemployment
◦ Unemployment that rises during economic
downturns and falls during periods of
economic growth.
Technological Unemployment
 Replacement
by machines
Full Employment
Lowest possible unemployment rate with
growth & all factors of production used
efficiently
 ECO. GOAL- between 4 & 6 %

Causes of Income Inequality & Poverty
 Education
 Ability
 Wealth
 Location
 Discrimination
 Family
Structure
Income Distribution Problem
 Richest
20% have 13x’s the
income as the 20% poorest
 Uneven Distribution of Wealth
Poverty
 Those
living on or below the
poverty line or threshold.
(Annual dollar amount needed to
sustain life with basic needs.)
Poverty Rate
%
of people who live below the
poverty threshold
 Differs by race and ethnic origin, type
of family, age, residence
Welfare Programs
Income
Assistance
Direct Cash
Comes with guidelines
General
Assistance
Food Stamps
Medicaid
Based on Income
Social Service
Family Planning
Daycare
Child Welfare
Job Training
Workfare
Exchange labor for benefits
Community service, build skills
TANF: Temporary
Assistance for
Needy Families
Eliminated abuses of the system (got rid of cash
abuses)
Limited time to receive benefits to 5 years
The poverty line is an annual dollar amount needed to sustain life with basic
needs.
Poverty Line in 2003 for:
Single adult: $9,393
Family of 2: $12,490
Family of 4: $18,850
Add $3180 for each additional person (less for persons over 65 years old)
Some Interesting Stats: A Closer Look at WHO is in poverty:
RACESTATUSAGE
Blacks=22.7%
Single Women =26.4%
Under 18=16.3%
Hispanics=21.4%
Single Men =13.1%
Whites9.9%Married=4.9%
Asians=10.2%
Black and Hispanic, Female-headed households = 35+%
The 2009 Poverty Guidelines for the48 Contiguous States and the District of Columbia
Persons in family
Poverty guideline
1
$10,830
2
14,570
3
18,310
4
22,050
5
25,790
6
29,530
7
33,270
8
37,010
For families with more than 8 persons, add $3,740 for each additional person.
http://www.irp.wisc.edu/
Worldwide
Demographics
Source:www.globalissues.org/print/article/26
Poverty
Almost half the world-over three billion
people-live on less than $2.50 a day
 At least 80% of humanity lives on less than
$10 a day
 Poverty line-$1.25 a day

Children
2.2 billion children in the world
 1 billion children in poverty
 10.6 million died in 2003 before age 5
 15 million children orphaned due to HIV/AIDS25,000
children each day die due to poverty
 72 million children of primary school age in the
developing world were not in school in 2005
 Less than one percent of what the world spent every
year on weapons was needed to put every child into
school by the year 2000 and yet it didn’t happen

Health
An estimated 40 million people are living with
HIV/AIDS, with 3 million deaths in 2004
 Every year 1 million people die from Malaria


Life expectancy-Reduced for 4 out of 5
groups of countries except for the highest
group (69-76 years)
Urbanization-the movement of people
from the rural countryside into cities
Half of the world’s population lives in cities
or towns
 1 billion live in slums

Wealth




2005-wealthiest 20% accounted for 76.6% total
consumption
2005-Poorest 5% accounted for just 1.5%
The GDP (Gross Domestic Product) Measures a
countries wealth through imports, exports, spending,
investments, etc.-of the 41 heavily indebted poor countries
(567 million people) is less than the wealth of the world’s
7 richest people combined.
The wealthiest nation on Earth (US) has the widest gap
between rich and poor of any industrialized nation
Consumerism:
Definition 1
Organized-efforts by individuals, groups, and governments to
help protect consumers from policies and practices that
infringe consumer rights to fair business practices.
Definition 2
Doctrine that ever-increasing consumption of goods and
services forms the basis of a sound economy.
Definition 3
Continual expansion of one's wants and needs for goods
and services.
Global Priority
Cosmetics in the United States
Ice cream in Europe
Perfumes in Europe and the United States
Pet foods in Europe and the United States
Business entertainment in Japan
Cigarettes in Europe
Alcoholic drinks in Europe
Narcotics drugs in the world
Military spending in the world
$U.S. Billions
8
11
12
17
35
50
105
400
780
Global Priority
Basic education for all
Water and sanitation for all
Reproductive health for all women
Basic health and nutrition
$U.S. Billions
6
9
12
13
Resources





12 percent of the world uses 85% of the world’s
water-none of the 12% live in a third world
nation
Water problems affect half of humanity
1.1 billion people have inadequate access to
water
2.6 billion lack basic sanitation
1.6 billion (25% of humanity) live without
electricity
Number of people living without electricity
Region
South Asia
Sub-Saharan Africa
Millions without electricity
706
547
East Asia
Other
224
101
Growth in goods components of personal consumption
expenditures, projected 2008–18, in billions
Consumerism
http://www.youtube.com/watch?v=hGaOQKJik-s
http://www.youtube.com/watch?v=_nk2_rk0FLw
http://www.youtube.com/watch?v=2N0NHu2GJm8