1. The Labor Force

2. Essential Standards The student will describe how the earnings of workers are determined in the workplace. The student will identify skills which are required to be successful in the workplace. The student will explain the significance of investment in education, training and skill development.

3. The Labor Force The labor force is made up of all people over the age of 16 who are actively looking for work. The labor force is made up of all people over the age of 16 who are actively looking for work. As you begin looking for work, there are SEVEN things that need to think about: As you begin looking for work, there are SEVEN things that need to think about: 1. Wages. …jobs that require advanced skills pay usually pay high wages… …jobs that have few skill requirements usually pay low wages.

4. Other Considerations… 2.Skills—experience, degrees, abilities, etc. 3.Working conditions—hot, cold, dangerous, etc. 4. Location—commute time, proximity to schools, etc. 5.Intrinsic rewards —rewards other than money. 6.Market trends—typewriter repair, for example, is probably not a good line of work to go into. 7.Fringe benefits —insurance; retirement plans; vacation time.

5. Labor & Wages Demand for labor is a “derived demand”… It is set by the demand for what the worker produces. Demand for cooks depends on demand for restaurant meals. The demand for pharmacists depends on the demand for? Prescription medicines.

6. Wages & Skill Levels Unskilled labor —requires no training; paid hourly wage. Ex.—dishwasher. Unskilled labor —requires no training; paid hourly wage. Ex.—dishwasher. Semi-skilled—requires minimal training; hourly wage. Ex.—short-order cooks. Semi-skilled—requires minimal training; hourly wage. Ex.—short-order cooks. Skilled—requires specialized abilities, need little supervision. Usually paid hourly. Ex.—bank teller. Skilled—requires specialized abilities, need little supervision. Usually paid hourly. Ex.—bank teller. Professional—demands advanced skills. Paid a salary. Ex.—managers, lawyers, doctors. Professional—demands advanced skills. Paid a salary. Ex.—managers, lawyers, doctors.

7. Changes in the US Work Force: Outsourcing ► From the 1800’s to the 1970’s, the US economy gradually became more INDUSTRIALIZED—and based on manufacturing. ► Starting in the 1980’s, US manufacturing jobs began to disappear…WHERE? ► To India, China, Mexico, etc, in a process called OUTSOURCING— ► When companies ship low-skilled jobs overseas. Why do they do this? ► Because foreign labor is CHEAPER.

8. More Changes in the US Workforce As low-skilled manufacturing jobs disappear… As low-skilled manufacturing jobs disappear… Highly-skilled jobs in service and technology have been created… Highly-skilled jobs in service and technology have been created… As a result, the level of education required to make a decent living in the US… As a result, the level of education required to make a decent living in the US… Has DRAMATICALLY increased. Has DRAMATICALLY increased.

9. High School or College? ► High school graduates make approximately $11,800/year less than those with a 4-year bachelor’s degree… ► High school grads divorce at twice the rate of college graduates. ► High school grads are almost twice as likely to be obese than college grads… ► They’re more likely to smoke... ► They’re more likely to contract an STD… ► They get heart disease at twice the rate of college grads… ► They are far less likely to have health insurance… ► And they die, on average, five years earlier than college grads.

10. Education & the Work Force Education is expensive… Education is expensive… But workers are compensated with higher wages. But workers are compensated with higher wages. The Learning Effect —education increases productivity & results in higher wages… The Learning Effect —education increases productivity & results in higher wages… The Screening Effect —completion of college indicates to employers that the applicant is intelligent & hard-working. The Screening Effect —completion of college indicates to employers that the applicant is intelligent & hard-working.

11. Wage Discrimination for Women Women have historically earned less than men for several reasons… 1. “Women’s Work”—women were often pushed into lower wage jobs like nursing & clerical work… 2. Human Capital —women have had less education, training & experience than men—this has made them less valuable… 3. Career Paths—employers assume that women are not interested in career advancement. Glass Ceiling—an unofficial barrier that prevents women from advancing in businesses dominated by men.

12. The Minimum Wage The minimum wage The minimum wage was first established in the United States in 1938… was first established in the United States in 1938… It was raised to $7.25/hour, in 2009. It was raised to $7.25/hour, in 2009. Approximately one million Americans work for minimum wage today. Approximately one million Americans work for minimum wage today. Typically, when the minimum wage goes up… Typically, when the minimum wage goes up… The quantity demanded of labor goes DOWN. The quantity demanded of labor goes DOWN.