Copyright 2011 The McGraw-Hill Companies 9-1 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- tion Policies and Issues Immigration Last Word Key Terms End Show 9 Labor Market Institutions and Issues: Unionism, Discrimination, and Immigration

Copyright 2011 The McGraw-Hill Companies 9-2 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Chapter Objectives Who Belongs to S.A. Unions; 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 Immigration

Copyright 2011 The McGraw-Hill Companies 9-3 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Unionism In South Africa COSATU Independent Unions Union Membership Mediation and Arbitration Labour and HIV/AIDS Bargaining Councils Agency Shops Closed Shops

Copyright 2011 The McGraw-Hill Companies 9-4 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 Labour Misallocation Graphically…

Copyright 2011 The McGraw-Hill Companies 9-5 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 Labour 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 Labour and Decline IN Economic Efficiency

Copyright 2011 The McGraw-Hill Companies 9-6 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 2011 The McGraw-Hill Companies 9-7 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 2011 The McGraw-Hill Companies 9-8 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 2011 The McGraw-Hill Companies 9-9 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 O9.1

Copyright 2011 The McGraw-Hill Companies 9-10 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Economic Analysis of Discrimination Taste for Discrimination Model Woman Wage Rate (Rand) Woman Employment (Millions) 0 D3D3 D2D2 D1D1 S R9 8 More Discrimination Less Discrimination

Copyright 2011 The McGraw-Hill Companies 9-11 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 2011 The McGraw-Hill Companies 9-12 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 Labour (Millions) Quantity of Labour (Millions) Quantity of Labour (Millions) By Crowding Women Into One Occupation (Z)… Men Enjoy Higher Wages in the Other Occupations (X and Y) 000 Eliminating Occupational Segregation

Copyright 2011 The McGraw-Hill Companies 9-13 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Antidiscrimination Policies and Issues South African Employment Equity Act Affirmative Action Requirement –Supportive View –Opposing View Reverse Discrimination

Copyright 2011 The McGraw-Hill Companies 9-14 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 9.1

Copyright 2011 The McGraw-Hill Companies 9-15 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Immigration The Simple Economics of Immigration Wage Rate South Africa Zimbabwe Quantity of Labour (Millions) Quantity of Labour (Millions) DuDu DmDm a A b d D B WeWe Wage Rate WeWe cfFC WuWu 00 WmWm Immigration to South Africa Impacts Jobs and Wage Rates

Copyright 2011 The McGraw-Hill Companies 9-16 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 2011 The McGraw-Hill Companies 9-17 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- 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 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 2011 The McGraw-Hill Companies 9-18 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Key Terms COSATU independent unions agency shop strike lockout CCMA Employment and Equity ActEmploymentand Equity Act exit mechanism voice mechanism labor market discriminationlabor market discrimination wage discrimination employment discriminationemployment discrimination occupational discriminationoccupational discrimination human capital discriminationhuman capital discrimination taste-for- discrimination modeltaste-for- discrimination model discrimination coefficientdiscrimination coefficient statistical discriminationstatistical discrimination occupational segregationoccupational segregation affirmative action reverse discriminationreverse discrimination legal immigrants unauthorized immigrantsunauthorized immigrants

Copyright 2011 The McGraw-Hill Companies 9-19 Unionism in South Africa Collective Bargaining Economic Effects of Unions Labour Market Discrimination Economic Analysis of Discrimination Anti-discrimina- tion Policies and Issues Immigration Last Word Key Terms End Show Next Chapter Preview… Wage Determination