Employment, Labor, and
Wages
• A nation’s _____________________ is an
important indicator of the health of the
economy.
• The _________________________ polls a
sample of the population to determine how
many people are employed and unemployed.
• The _______________ is the percentage
of the nation’s labor force that is
unemployed.
• The unemployment rate is only a ________
_____________. It does not reflect regional
economic trends
Economists define the ___________________ as all
nonmilitary people who are employed or unemployed.
___________________ _______________
People are considered
People are counted as
employed if they are 16
unemployed if they are 16
years or older and meet at
years or older, not
least one of the following:
institutionalized, not
• they worked a least one
currently working, and
hour for pay within the last meet one of the following
week; or
criteria:
• they worked 15 or more • they are temporarily laid
hours without pay in a
off from their jobs
family business; or
• they will be reporting to
• they held jobs but did not
new jobs within 30 days
work due to illness,
• they are not working but
vacations, labor disputes,
have looked for work
or bad weather.
within the last 4 weeks.
Types of Unemployment
• ______________________--Occurs when people
change jobs, get laid off from their current jobs,
take some time to find the right job after they
finish their schooling, or take time off from
working for a variety of other reasons
• _______________________-- Occurs when
workers' skills do not match the jobs that are
available. Technological advances are one cause
of structural unemployment
• _________________________—0ccurs when
industries slow or shut down for a season or make
seasonal shifts in their production schedules
• __________________________--Unemployment
that rises during economic downturns and falls
when the economy improves
“Full” Employment
• Full employment is the level of employment
reached when there is no ______________
unemployment
• Economists generally agree that in an economy
that is working properly, an unemployment rate
of around ____% is normal.
• Sometimes people are _________________,
that is working a job for which they are overqualified, or working part-time when they desire
full-time work.
• ________________________ are people who
want a job, but have given up looking for one.
Labor Unions
A __________________ is an organization of
workers that tries to improve working conditions,
wages, and benefits for its members.
• The nation’s first unions were comprised of
________________________. After the Civil War,
the labor force became more unified.
• 2 types of unions developed—the ________ union
and the ______________ union.
• Unions used ___________, ____________, and
______________ to help members get better pay,
hours, & job security.
• Employers resisted with ___________, firings,
and even setting up company unions.
• Now, less than _______ percent of U.S. workers
belong to a labor union.
How Unions Rose to Power
• The union movement
took shape over the
course of more than a
_______________.
• The 1935 National Labor
Relations Act, also
known as the
___________________,
gave workers the right to
organize and required
companies to bargain in
good faith with unions
• Even so, ____________
usually treat unions with
hostility.
Key Events in the U.S. Labor
Movement
Year
Event
1869
Knights of Labor founded
1911
Fire in the Triangle Shirtwaist Factory in New
York kills 146, spurring action on workplace
safety
1932
Norris-La Guardia Act outlaws “yellow dog”
contracts, gives other protection to unions
1935
Wagner Act gives workers rights to organize
1938
AFL splinter group becomes the independent
Congress of Industrial Organizations (CIO),
headed by John L. Lewis
1955
AFL and CIO merge to create AFL-CIO
1970s
Rise in anti-union measures by employers
1990s
Increase in public-sector unions, including
teaching assistants at some universities
Why Union Membership Declined
• “_____________________” Laws--The Taft-Hartley Act
(1947) allowed states to pass right-to-work laws. These
laws ban mandatory union membership at the
workplace. Michigan does NOT have one of these—yet.
Under Taft-Hartley, the President can enforce an 80-day
delay to strikes that could hurt national health or safety
(Clinton, 1997 Pilots Strike)
• Economic Trends--Unions have traditionally been
strongest in the _______________ sector, representing
blue-collar workers. These jobs have been declining as
the economy becomes more ___________-oriented.
• Fulfillment of Union Goals--With the government setting
standards for workplace safety, and with more benefits
being provided by both private and government sources,
union membership has _______________ because their
goals have been fulfilled.
• New Workers--- Many new workers have little allegiance
to unions. Rising Conservatism in the southern United
States.
Types of Union Workplaces
• A ______ shop hires only union members.
This type of workplace is now illegal.
• A ________ shop will hire nonunion
members but requires them to join the union
within a certain period of time.
• An _______ shop will hire nonunion
workers and does not require them to join
the union in order to keep their jobs.
However, nonunion workers must pay union
dues or similar fees, and they are covered
by the union contract. (Teachers at IHS)
Collective Bargaining
• _________________________ is the process in
which union and company representatives meet
to negotiate a new labor contract
____________________________
– The union negotiates on behalf of all members
for wage rates, overtime rates, planned raises,
and benefits.
____________________________
– Safety, comfort, worker responsibilities, and
other workplace issues are negotiated and
written into the final contract.
_____________________________
– 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.
Labor Strikes and Settlements
Strikes
– If no agreement is met between the union and the
company, the union may ask its members to vote on
a ____________, an organized work stoppage
intended to force an employer to address union
demands. Strikes can be harmful to both the union
members and the firm.
Mediation
– To avoid the economic losses of a strike, a third
party is sometimes called in to settle the dispute.
________________ is a settlement technique in
which a neutral mediator meets with both sides to
try and find an acceptable solution for both sides.
Arbitration
– If mediation fails, talks may go into ____________,
a settlement technique in which a third party
reviews the case and imposes a decision that is
legally binding for both sides.
Who May NOT Strike?
• Generally, teachers, police officers, and
firefighters may not strike, since they are
_______________________.
• If workers in ____________________ strike,
the government can seek injunctions in
court, which order workers back to work.
The government can also seize vital
industries (coal mines, etc).
• PATCO, 1981: 1935 Wagner Act also says
you can __________________________
striking workers. See debate articles. In
1981, President Reagan fired the strikers
and had PATCO decertified.
Supply & Demand in the Labor Market
Labor Demand
• The higher the _________ rate, the smaller the
quantity of labor demanded by firms and
government.
Labor Supply
• As wages increase, the quantity of labor
supplied also ______________.
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
____________________.
Wage Determination
• The traditional theory of wage determination
says that _______________________ determine
an equilibrium wage rate.
• The theory of ________________ uses organized
labor’s bargaining strength to help explain wage
differentials from the “market clearing price”
• According to the the _____________________,
employers are more willing to pay for those
people with certain indicators of superior ability.
• Wages vary according to workers’
_______________________. They can also vary
regionally; areas with high costs of living have
higher wages and vice versa. People sometimes
accept lower wages if the location of the job is
attractive to them (and vice versa there too).
Jobs are often categorized into the following 4
groups:
• _______________________--requires no
specialized skills, education, or training.
Examples: waiters, messengers, janitors
• ________________________--requires
minimal specialized skills and education.
Example: fork-lift operator
• ________________________--requires
specialized skills and training. Examples: auto
mechanics, plumbers
• ________________________--demands
advanced skills and education. Examples:
lawyers, doctors, teachers
Laws Against Wage
Discrimination
• The ________________ of
1963 declared that male
and female employees in
the same workplace
performing the same job
had to receive equal pay.
• Title VII of the __________
______ Act of 1964 forbids
job discrimination on the
basis of race, sex, color,
religion, or nationality.
• Despite these protections,
American women today
earn about _______% of
what men earn. Racial
minorities tend to earn
lower pay than whites.
Median Earnings for U.S. Workers,
by Sex and Ethnicity, 1998
Hispanic women
$10,862
African American
women
$13,137
White women
$14,617
Hispanic men
$17,257
African American
men
$19,321
$27,646
White men
$10,000
Source: U.S. Census Bureau
$20,000
Median annual earnings
$30,000
Why Less Pay for Women?
• The average woman has _______ experience and
education to bring to the working world than the
average male (changing)
• Some higher paying jobs have more males
(___________________, “Old Boys Networks”)
• Women take time off to ___________________.
• In perspective, however, more than half of
professional jobs go to women—so they’re doing
ok
Labor Market Trends
A Changing Economy
• The economy of the
United States has
transformed from a
mainly ____________
economy in the 1800s,
to an ______________
giant in the 1900s.
• The _______________
has revolutionized the
economy since its
introduction in the later
1900s.
Fewer Goods, More Services
• Overall, the United States is
shifting from a
_____________________
economy to a ___________
economy. As service jobs
increase, the nation is losing
manufacturing jobs.
• Demand for skilled labor is
__________, and the supply
of skilled workers is
________________ to meet
the demand.
Labor Force Trends
College Graduates at Work Women at Work
• The ________________ • Overall, the number of
is the theory that
women in the work
education increases
force has increased
productivity and results
from about ______%
in higher wages.
of all women in 1960
to about _______% of
• The ________________
all women in 1997.
theory suggests that the
completion of college
indicates to employers
that a job applicant is
intelligent and hardworking.
Potential earnings increase with increased
educational attainment.
Education and Income, 1998
$70,000
Median annual earnings
$60,000
Women
Men
$50,000
$40,000
$30,000
$20,000
$10,000
0
Less than
9th grade
9th to 12th
grade
(no diploma)
High school
Some college,
graduate
no degree
(includes GED)
Associate
degree
Education level
Source: U.S. Census Bureau
Bachelor’s
degree
Master’s
degree
Doctorate
degree
Temporary Unemployment
•
____________________ employment is
temporary or part-time employment
•
_________________ employees offer firms
some of the following benefits:
1. Flexible work arrangements.
2. Easy discharge due to the lack of
severance pay for temporary workers.
3. Temporary workers are often paid less
and receive fewer benefits than their
full-time counterparts.
4. Some employees prefer temporary
arrangements.
Trends in Wages and Benefits
Earnings Up for Some, Down for Others
• Earnings for college graduates have
____________, while earnings for workers
without college degrees have _____________.
• The Real Minimum wage has ______ over time.
• Average weekly earnings in the United States
_________ from $275 in 1980 to $261 in 1997,
as measured in inflation-adjusted dollars.
Cost of Benefits Rises
• Benefits now make up about _______% of
total compensation in the economy.
• For employers, rising benefits costs raise the
cost of doing business and decrease profits.
Many firms are turning to ________________
employment to curb benefits costs.