Copyright 2008 The McGraw-Hill Companies 22-1 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show 22 Labor Market Institutions and Issues: Unionism, Discrimination, and Immigration

Copyright 2008 The McGraw-Hill Companies 22-2 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Chapter Objectives Who Belongs to U.S. Unions; the Basics of Collective Bargaining; Why Unions are in Decline; and the Effects of Unions on Wages, Efficiency and Productivity The Types and Costs of Discrimination, Economic Theories of Discrimination, and Current Antidiscrimination Issues The Extent and Effects of U.S. Immigration

Copyright 2008 The McGraw-Hill Companies 22-3 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Unionism In America AFL-CIO Independent Unions Business Unionism Union Membership The Decline of Unionism –Structural-Change Hypothesis –Managerial-Opposition Hypothesis

Copyright 2008 The McGraw-Hill Companies 22-4 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Unionism In America Union Membership as a Percentage of the Employed Labor Force, Selected Nations Denmark Sweden Italy Australia Germany United Kingdom Hungary United States South Korea France Source: Statistical Agencies in Individual Countries, Latest Data 12.5%

Copyright 2008 The McGraw-Hill Companies 22-5 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Unionism In America Percentage Unionized by Industry in 2005 Government Transportation Telecommunications Construction Manufacturing Mining Retail Trade Agriculture Finance Total U.S. Workers Source: Bureau of Labor Statistics 2.7% 1.6% 5.2% 8.0% 13.0% 13.1% 21.4% 23.4% 36.5% 12.5%

Copyright 2008 The McGraw-Hill Companies 22-6 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Unionism In America Percentage Unionized by Occupation in 2005 Teachers Protective Services Transportation Workers Production Workers Social Workers Legal Workers Managers Food Workers Sales Workers Total U.S. Workers Source: Bureau of Labor Statistics 4.3% 3.3% 4.4% 5.6% 16.5% 17.1% 19.0% 37.0% 38.5% 12.5%

Copyright 2008 The McGraw-Hill Companies 22-7 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Collective Bargaining The Work Agreement –Union Status and Management Prerogatives Closed Shop Union Shop Agency Shop Right-to-Work Laws Open Shop –Wage and Hours Cost of Living Adjustments (COLAs) Seniority and Job Protection Grievance Procedures

Copyright 2008 The McGraw-Hill Companies 22-8 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Collective Bargaining The Bargaining Process –Demands –Bargaining in Good Faith –Strike –Lockout –National Labor Relations Act (NLRA) –National Labor Relations Board (NLRB)

Copyright 2008 The McGraw-Hill Companies 22-9 Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show 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 Graphically…

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Economic Effects of Unions Effects of the Union Wage Advantage on the Allocation of Labor Sector 1 Union Sector 2 Nonunion Employment Wage Rate D u = MRP D n = MRP WuWu WnWn WnWn WsWs Wage Rate N1N1 N2N2 N1N1 N3N3 00 A B C D E Area B Represents Misallocation of Labor and Decline IN Economic Efficiency

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Economic Effects of Unions Efficiency and Productivity –Positive View Longer-Run Positive Impacts: The Shock-Effect Reduced Worker Turnover –Exit Mechanism –Voice Mechanism Increased Informal Training Mixed Research Findings

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Labor Market Discrimination Types of Discrimination –Wage Discrimination –Employment Discrimination –Occupational Discrimination –Human Capital Discrimination Costs of Discrimination

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Labor Market Discrimination Discrimination and Production Possibilities Capital Goods Consumer Goods 0 KdKd CdCd X Y Z Discrimination Causes a Failure to Achieve Productive Efficiency Efficient Combinations D

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Economic Analysis of Discrimination Taste-for-Discrimination Model –Discrimination Coefficient –Prejudice and the Market African-American-White Wage Ratio –Competition and Discrimination O22.1

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Economic Analysis of Discrimination Taste for Discrimination Model African-American Wage Rate (Dollars) African-American Employment (Millions) 0 D3D3 D2D2 D1D1 S $9 8 More Discrimination Less Discrimination

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Economic Analysis of Discrimination Statistical Discrimination –Labor Market Example –Profitable, Undesirable, but Not Malicious Occupational Segregation: The Crowding Model –The Model –Effects of Crowding Graphically…

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Economic Analysis of Discrimination Wage Rate BBB M M W DxDx DyDy DzDz Occupation X Occupation Y Occupation Z Economics of Occupational Segregation Quantity of Labor (Millions) Quantity of Labor (Millions) Quantity of Labor (Millions) By Crowding Women Into One Occupation (Z)… Men Enjoy Higher Wages in the Other Occupations (X and Y) 000 Eliminating Occupational Segregation

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Antidiscrimination Policies and Issues Equal Pay Act 1963 Title VII of the Civil Rights Act of 1964 Affirmative Action Requirement –Supportive View –Opposing View Reverse Discrimination Recent Developments

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Immigration Legal Immigrants Unauthorized Immigrants Economics of Immigration –Wage Rates and World Output –Income Shares G22.1

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show GLOBAL PERSPECTIVE Immigration U.S. Immigrants by Country of Origin, 2004 Mexico India Philippines China Russia Vietnam Dominican Republic El Salvador Canada South Korea ,472 54,632 45,942 36,646 30,064 30,049 29,285 23,437 19, ,664 Source: U.S. Citizenship and Immigration Services

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Immigration The Simple Economics of Immigration Wage Rate United States Mexico Quantity of Labor (Millions) Quantity of Labor (Millions) DuDu DmDm a A b d D B WeWe Wage Rate WeWe cfFC WuWu 00 WmWm Immigration to the United States Impacts Jobs and Wage Rates

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Immigration Complications and Modifications –Costs of Migration –Remittances and Backflows –Full Employment versus Unemployment –Fiscal Impacts Immigration: Two Views

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Allegations of Discrimination in Hiring of Women in Major Symphony Orchestras Orchestrating Impartiality “Blind” Auditions by Hiding Candidates behind Screens 1970 Only 5% Were Women Screened Auditions Increased Probability of a Woman Hiring by 50% Without Screens Was Only 10% But With the Screens 35% Today About 25% of Top Orchestra Members Are Women Directors Demonstrated a Clear Bias Toward Men in Hiring Last Word

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Key Terms American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) independent unions business unionism structural-change hypothesisstructural-change hypothesis managerial-opposition hypothesismanagerial-opposition hypothesis collective bargaining closed shop union shop agency shop right-to-work laws open shop cost-of-living adjustments (COLA)cost-of-living adjustments (COLA) strike lockout National Labor Relations Act (NLRA)National Labor Relations Act (NLRA) National Labor Relations Board (NLRB)National Labor Relations Board (NLRB) exit mechanism voice mechanism labor market discrimination wage discrimination employment discrimination occupational discrimination human capital discriminationhuman capital discrimination taste-for-discrimination modeltaste-for-discrimination model discrimination coefficient statistical discrimination occupational segregation affirmative action reverse discrimination legal immigrants unauthorized immigrants

Copyright 2008 The McGraw-Hill Companies Unionism in America Collective Bargaining Economic Effects of Unions Labor Market Discrimination Economic Analysis of Discrimination Antidiscrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Next Chapter Preview… International Trade