Chapter 9 Section 3

Contingent Employment Contingent Employment: Is a temporary or part time job Many modern factories rely on this kind of employment to keep costs of healthcare and retirement wages low.

A Changing Economy At its founding the U.S. was a nation of farmers. In the North the agricultural industry yielded in the 1800’s to the Industrial Revolution The coming machine age energized the economy and created new jobs in the textile mills, shoe factories, and other manufacturing jobs.

A Changing Economy By the early 1900’s heavy manufacturing had become the power house of the American economy. This created Ford, Carnegie’s Steelworks, and Rockefeller's Standard oil. Once again, electronics shifted the labor force with a mid-twentieth century and employment grew in the northeast with GE, Westinghouse, etc.

Changes in Employment by Industry

Fewer Goods, More Services The increase in information management jobs is part of an overall shift in the U.S. from manufacturing economy to a service economy Jobs in the service sector includes financial services, on-line marketing, advertising, consulting services, healthcare, and desktop publishing.

Fewer Goods, More Services (Cont.) As service jobs increase, the nation is losing manufacturing jobs. Much factory work by U.S. firms is now being done overseas, where labor costs are lower. The loss of these unskilled and semi-skilled jobs is forcing workers to go to school or to enter job-training programs to gain skills.

Cost of Benefits Rises For many workers benefits such as pensions and health insurance are a significant share of total compensation The percent of compensation this consumes has risen steadily over this century. Benefits now consume about 28% of total compensation in the economy.

The Changing U.S. Worker In the 1950s, a typical American worker was a white man who had graduated from high school and had found a secure 40-hour-a-week job where he would stay for 10 to 20 years, maybe more. Not anymore The face of the U.S. labor force has changed.

College Graduates at Work To get jobs, people must have human capital---the education, training, and experience that makes them useful in the workplace. Getting a good education, however, is costly.

College Graduates at Work The theory that education increases productivity and results in higher wages is called the learning effect. The statistics in Figure 9.12 support this theory.

Education and Income

Women at Work The changing face of the labor force can be seen right at your local bank. A few decades ago, a row of men greeted customers at the tellers windows. Today, most bank tellers are women.

Women at Work Figure 9.13 shows that in 1960, almost 38 percent of women belonged to the labor force. By 1997, that the rate had jumped to over 60 percent.

Women at Work Other factors include changing roles for women. The stereotype of women as housewives, completely finically supported by their husbands, no longer prevails.

Temporary Workers Some temporary workers come from “temp” agencies such as Manpower. Others are hired directly by firms as contract workers, people hired for a specified time period or to complete a certain task.

Temporary Workers Such highly skilled workers, when hired directly by employers, are well paid. Some earn as much as permanent workers. On the other hand, workers who get their jobs through temp agencies tend to earn less compared to both permanent employees and directly hired temporary workers.

The screening effect Screening effect- the theory that the completion of college indicates to employers that a job applicant is intelligent and hard working.

Who do you think is the largest employer in the United States Who do you think is the largest employer in the United States? General Motors? The Government? Starbucks coffee shops? You might be surprised to hear that the biggest employer is Manpower, a company that provides temporary workers to firms.

What percentage of compensation does benefits now make up? This makes up 28% of today’s compensation.

What is contingent employment? Temporary jobs

What is the screening effect? Taking someone over another just because of a college degree.

What is the learning effect? Theory education increases productivity and high wages.

What gender most likely gets a higher income? males

Demand for what labor is rising? skilled

Demand for what labor is lowering? unskilled

Do temp workers get paid more or less?

Do temp workers get more or less benefits?