35 C H A P T E R LABOR MARKET INSTITUTIONS AND ISSUES: UNIONISM, DISCRIMINATION, IMMIGRATION

Managerial Opposition UNIONISM IN AMERICA AFL - CIO Independent Unions Business Unionism Union Membership Decline of Unionism Structural Changes Structural-change hypothesis Managerial Opposition Managerial-opposition hypothesis

GLOBAL PERSPECTIVE 13.2% Denmark Sweden Italy Australia Germany Union Membership as a Percentage of the Employed Labor Force, Selected Nations 0 20 40 60 80 100 Denmark Sweden Italy Australia Germany United Kingdom Hungary United States South Korea France 13.2% Source: International Labour Organization

Union Status & Managerial Prerogatives Closed Shop Union Shop COLLECTIVE BARGAINING The Work Agreement Union Status & Managerial Prerogatives Closed Shop Union Shop Agency Shop Right-to-Work Laws Open Shop

Seniority & Job Protection COLLECTIVE BARGAINING The Work Agreement Wages and Hours Cost-of-Living Adjustment (COLA) Seniority & Job Protection Layoffs Sub-Contractors and Overseas Workers Grievance Procedures

National Labor Relations Act (NLRA) THE BARGAINING PROCESS Demands & Offers Strike Lockout National Labor Relations Act (NLRA) Wagner Act 1935 Taft-Hartley Act 1947 Landrum-Griffin Act 1959 National Labor Relations Board (NLRB)

ECONOMIC EFFECTS OF UNIONS The Union Wage Advantage Efficiency and Productivity Negative View Losses via Featherbedding and Work Rules Losses via Strikes Losses via Labor Misallocation

ECONOMIC EFFECTS OF UNIONS The Union Wage Advantage Efficiency and Productivity Positive View Longer-Run Positive Impacts: Shock Effect Reduced Worker Turnover Exit Mechanism Voice Mechanism Increased Informal Training

LABOR MARKET DISCRIMINATION Types of Discrimination Wage Discrimination Employment Discrimination Occupational Discrimination Human Capital Discrimination Costs of Discrimination

COSTS OF DISCRIMINATION Taste-for-Discrimination Model Discrimination Coefficient Prejudice and the Market Black/White Wage Ratio Competition & Discrimination Statistical Discrimination Occupational Segregation The Crowding Model Effects of Crowding Eliminating the Occurrence

ANTIDISCRIMINATION POLICY Equal Pay Act 1963 Title VII of the Civil Rights Act of 1964 Affirmative Action Requirement Affirmative Action Controversy Reverse Discrimination Recent Developments

IMMIGRATION Number of Immigrants 850,000 per year Legal Immigration Illegal Immigration Economics of Immigration Wage Rates and World Output Income Shares

IMMIGRATION Complications and Modifications Costs of Migration Remittances and Backflows Full Employment versus Unemployment Fiscal Impacts Immigration: Two Views

GLOBAL PERSPECTIVE U.S. Immigrants by Country of Origin Mexico India Thousands of Immigrants 0 30 60 90 120 150 180 210 Mexico India China Philippines Vietnam El Salvador Cuba Haiti Bosnia-Herzegovina Canada 2001 DATA Source: Immigration & Naturalization Service

THE SIMPLE ECONOMICS OF IMMIGRATION United States Mexico Wu Wm Du Dm Quantity of labor (millions) Quantity of labor (millions)

THE SIMPLE ECONOMICS OF IMMIGRATION United States Mexico High United States wages attract Mexican immigration. Wu Wm Du Dm Quantity of labor (millions) Quantity of labor (millions)

THE SIMPLE ECONOMICS OF IMMIGRATION United States Mexico Wu We We Wm Du Dm Quantity of labor (millions) Quantity of labor (millions)

KEY TERMS exit mechanism voice mechanism labor market discrimination American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) independent unions business unionism structural-change hypothesis managerial-opposition hypothesis collective bargaining closed shop union shop agency shop right-to-work laws open shop cost-of-living adjustment (COLA) strike lockout National Labor Relations Act (NLRA) National Labor Relations Board (NLRB) exit mechanism voice mechanism labor market discrimination wage discrimination employment discrimination occupational discrimination human capital discrimination taste-for-discrimination model discrimination coefficient statistical discrimination occupational segregation affirmative action reverse discrimination legal immigrants illegal immigrants Copyright McGraw-Hill/Irwin, 2005 BACK END

Coming next: The Economics of Healthcare Chapter 36