Chapter 9 - Labor Chapter 9 Section 1 Organized Labor Labor Unions in the US Labor union decline lately Types of unions Collective Bargaining/ Strikes

Labor and Labor Unions Labor powers the US economy Most people are employees, not employers Employees have little control over conditions of their work Hours Wages Safety

Labor Unions Organization of workers that tries to improve working conditions, wages, and benefits When employees get together, they can bring their concerns to management Less than 14% of workers in the US belong to a union About 42 Million people

3 Types of Unions 1. Closed Shop 2. Union Shop Hires only union workers Illegal today 2. Union Shop Will hire non-Union workers, but will require them to join the union within a certain amount of time

Types of Unions 3. Agency Shops Will hire non-union workers and will not require them to join in order to keep their jobs Still must pay fees similar to the dues Covered by the contract as well Free Rider problem? Join the union for the protection and benefits, and not have to pay

Rise of the Labor Unions The plight of Workers Labor unions sprung from Industrial Revolution 12-16 hour days, 7 days a week Long days at dangerous machines Many lost sight, hearing, fingers, limbs, lives To protect their interests workers started banding together Striking - organized work stoppages in order to get their demands met

Knights of Labor 1869 Garment workers in Philadelphia Grew to be a powerful organization An industrial union Workers in a single industry who perform a variety of jobs 1880s disputes over strategy started the decline

American Federation of Labor 1886 - Samuel Gompers Considered the father of American labor mov’t Wanted three things Higher wages Shorter hours Safer work environment Federation of Craft workers Organization of workers in a single/similar occupation Trade Union

Resistance to Unions Viewed as threats to free enterprise early Sherman Antitrust Act? Union workers were often fired Yellow dog contracts Injunctions were used to get workers to end strikes Militias hired

Congress and Unions Until the 1930s, unions had no real protection 1935 - National Labor Relations Act (Wagner Act) Gave labor the right to organize/bargain National Labor Relations Board

Congress and Unions 1938 - Fair Labor Standards Act Created minimum wage Outlawed child labor Overtime for over 40 hours of work First Nationwide mandatory regulation of wages and hours 1950’s saw a peak in union membership Nearly 30% of employees Gained Billions in dues Became very powerful groups

Decline of Unions With this new power came abuse In order to protect jobs (technology) Corruption – Teamsters

Decline of Unions 1. Structural changes in US economy? Blue collar vs White collar (Hourly vs salary) 2. Manufacturing over seas 3. Women in the workforce Statistically less in blue collar jobs 4. Movt of company to different areas of the country (Less union activity in the South) 5. Goals fulfilled OSHA and other Govt programs

Collective Bargaining Process by which union and company representatives meet to negotiate a new labor contract Contracts last 2-5 years Union will usually come with goals Wages Overtime, raises, benefits Ask for too much, company may have lay offs Seniority

Collective Bargaining Working Conditions Safety, comfort Job Security What can get an employee fired Grievances Strikes Generally occurs when there is a deadlock

Strikes Members will vote Can be bad for both sides Mediation “strikebreakers” No pay checks Don’t normally happen until contract expires Mediation Neutral third party comes in to find solution Nonbinding agreement Arbitration Third party decision that is legally binding

9.2 Labor and Wages Who makes up the labor force Supply/Demand and Labor Wages and skill level

Labor Force Labor force is made up of all nonmilitary people who are employed or unemployed Employed - must be 16 and meet one of the following Work at least one hour for pay within the last week Worked 15 or more w/o pay in a family business Have a job, but did not work due to illness, vacation, labor disputes, or bad weather

Labor Force Unemployed - 16 or older, not institutionalized, not currently working and meet one of the following Temporarily laid off Will report to work a new job within 30 days Not working but have looked for work within the last 4 weeks To be counted as unemployed, you must actively be looking for a job People who do not want jobs (stay at home parents, retirees) are not considered unemployed

NO NO NO NO NO Unemployed? Retired Grandfather? Stay at home mom? Thief serving time in prison Friend in the military? Full Time College Student? NO NO NO NO

Supply/Demand and Labor Labor demand Govt and private industries that produce goods and services Provide the jobs to workers, along with pay based on productivity (value of output) If one company pays more for the same work? Pay More – or - Buy more machines ATM Assembly Lines Self Service Gas Stations

Supply/Demand Labor Workers response to low wages Labor Supply Look elsewhere Threaten to or actually strike Find a new career Labor Supply Higher wagers will draw more workers Equilibrium Wage No excess and no shortage of workers

Wages and Skill level Unskilled Labor - no specialization, education or skills Usually will earn an hourly wage Semi-Skilled - minimal special skills or education Usually get an Hourly Wage Skilled Labor - Special skills and training Usually earn an Hourly Wage Professional Labor - advanced skills and education Generally salaried positions

Wage Discrimination Part of our nation’s history Men need more money to support family Women work for extra money Racial and ethnic prejudices as well African Americans and other minorities paid less Equal Pay Act of 1963 Male and Female workers must be paid the same

Wage Discrimination Civil Rights Act 1964- Title VIII of the Act forbids job discrimination based on race, sex, color, religion, or nationality Affirmative Action Policies to ensure inclusion of minorities and women in hiring, college admission, and issuing of govt contracts Equal Employment Opportunity Commission Handles complaints of discrimination

Women and Wages Women still earn about 75% of what men earn Why? Women’s Work - encouraged to find jobs in lower paying fields Human Capital - generally less educated or experience Career paths offered - many companies do not feel that women really want to be managers

Women and Wages Glass ceiling - unofficial, invisible barriers that exist which limit opportunities for women Lily Ledbetter Paid anywhere from $500 - $1500/month less than her male counterparts

Minorities and wages Make less than whites Less access to education? Less work experience? Denied entrance to jobs (discrimination)

Wages and Unions Union members do make more than nonunion 1998 - made $160 more/week Pensions and medical benefits Unions drive wages down? Unions demand raises Quantity of labor demanded goes down Union workers laid off, have to go look for nonunion jobs Bigger supply of nonunion workers makes wages go down

Featherbedding Keeping unnecessary workers on company payroll Caboose-men

Ch 9.3 Labor Market Trends Occupational trends US - farming to manufacturing to information age Shift from manufacturing to service industry Banking, insurance, investment Online/Internet Health care

More service jobs, less manufacturing jobs Need for a more educated work force Less unskilled and semi-skilled jobs High school education will not go as far today as it used to 1950’s typical workers only had HS education

College and work A college education is unattainable for many Americans 64% go to College, only 29% earn a bachelor degree College degree can double your earning potential Higher education = higher wages Learning effect - education increases productivity and wages Screening effect - completing college proves intelligence and work ethic. People with these attributes do well in school and keep going to school

Women’s labor trends 1960 - 38% of women worked 1997 - 60% + More women encouraged to go to college Gender roles have changed Households have changed

Households Higher education = More income, more incentive for women to continue education Housework is easier with new technology Less time needed to take care of the house More income needed to live comfortably Costs increase faster than wages Divorce rate

Temps Contingent employment Hired to perform a specific job, then released Usually earn less than permanent employees, but can be successful 1.9 - 4.4% of workers Benefits to hiring temps Flexible lay offs - no severance pay/less rights Cheaper - $ and benefits More freedom as a temp Move around to different jobs

Earnings have actually gone down 1980 - $275/week* 1997 - $261/week* Average* College grads earnings have increased No college - decreased Competition from overseas has taken low skilled jobs Deregulation has driven wages down Benefits are expensive - costs more, pay less Social Security matched by employers