Ch. 9: Labor
Section 1: Labor Market Trends While the technological revolution has replaced many jobs, it has also created new ones.
Labor Force Labor force- all nonmilitary people who are employed or in search of employment.
Employment Economists consider people employed if they are… 16 years or older They worked at least one hour for pay within the past week They worked 15+ hours without pay in a family business They held jobs they didn’t work due to vacations, illness, or labor disputes
Unemployment People are counted as unemployed if they are actively searching for work without success. Does NOT include… People less than 18 years old College students Voluntary stay-at-home parents Retirees “Discouraged workers” (people who want to work but have given up looking for a job)
Occupational Trends The major labor trend has been… Fewer goods-sector jobs More service-sector jobs
Goods-Sector vs. Service Sector. Goods related jobs: Manufacturing Agriculture Service related jobs: Healthcare Education Accounting Marketing Web Development
Goods-Sector vs. Service Sector. Goods related jobs: Often require minimal training. Service related jobs: Often require extensive training and a high degree of specific skills.
Education Education is critical for developing a strong service-sector work force. Learning Effect Theory: Education increases workers productivity and wages. Screening Effect Theory: The completion of a college degree indicates an intelligent, hardworking candidate for any job.
Section 2: Labor and Wages Wages for labor are determined just like prices for products: supply and demand.
Wages: Supply and Demand List some high paying jobs. Why, according to supply and demand, are they highly paid? List some low paying jobs. Why are they low paying?
Wages: Supply and Demand If there is excess demand for a job, wages will rise. If there is excess supply for a job, wages will fall.
Skill Levels Supply of labor is determined by skill level Unskilled labor: requires no specialized skills Semi-skilled labor: requires minimal training Skilled labor: requires specialized abilities and training Professional labor: demands advanced skills and education. White-collar workers who receive a salary
Blue Collar v. White Collar White collar: professional labor Blue collar: non-professional labor
Wage Discrimination Average wages are higher for men and whites than for women and minorities. Causation or Correlation? Glass Ceiling: an unofficial, invisible barrier that keeps women and minorities from advancing to top ranks of business.
Earnings Chart
Section 3: Organized Labor Labor often organizes to collectively negotiate for improved wages and benefits.
Labor Union Labor unions are organizations of workers that try to improve conditions, wages, and benefits for its members.
Strikes Labor unions sometimes go on strike, stop working, to put pressure on employers to meet their demands.
Labor Movement Labor unions grew out of the Industrial Revolution when wages and working conditions were extremely poor.
Collective Bargaining Collective bargaining is the process in which union and company representatives meet to negotiate new terms.
Settlements Strikes are sometimes settled through mediation and arbitration Mediation- a third party helps the two sides reach an agreement. Arbitration- a third party reviews the case and delivers a ruling that is legally binding.