1. [ 5.6 ] Labor and Wages

2. [ 5.6 ] Labor and Wages Learning Objectives
Analyze how supply and demand in the labor market affect wage levels.
Describe how skill levels and education affect wages.
Explain how laws against wage discrimination affect wage levels.
Identify other factors affecting wage levels, such as minimum wage and workplace safety laws.

3. [ 5.6 ] Labor and Wages Key Terms derived demand,
Productivity of labor
equilibrium wage
Unskilled labor
Semi-skilled labor
Skilled labor
Professional labor
glass ceiling.
labor union
featherbedding,

4. Supply, Demand, and the Labor Market
How important is it to you to make a lot of money? If it is very important, then you had better think carefully about what you want to do for a living. Some jobs and professions are very well paid. In 2012, the mean annual salary for surgeons was about $230,000; but surgeons may earn much more. A lawyer might make $600 for a one-hour consultation, while the clerk at the local convenience store might make $8.00 an hour. What will determine the size of your paycheck?

5. Supply, Demand, and the Labor Market
Labor Demand
Labor Supply
Equilibrium Wage

6. Supply, Demand, and the Labor Market
A highly skilled neurosurgeon can earn over $500,000 per year. Neurosurgeons must complete four years of medical school and several more years of residency training.

7. Supply, Demand, and the Labor Market
Analyze Information Based on the information, what do you predict is likely to happen to the number of workers if customer demand for the toy decreases?

8. Supply, Demand, and the Labor Market
The graph shows a demand curve for restaurant cooks. Analyze Graphs If each cook works a 40-hour workweek, how many cooks will be hired at $12 an hour and at $16 an hour?

9. Labor and Skills
Why do lawyers earn more money than carpenters, and carpenters more than cashiers? Wages vary according to workers’ skill levels and education, as well as according to supply and demand. Jobs are often categorized into four skill levels:

10. Labor and Skills
Auto mechanics like this one are part of the skilled labor force. Prospective auto mechanics often attend a technical college for specialized training and then gain experience on the job.

11. Labor and Skills
The graphs show how wages compare for similar jobs with different degrees of risk. Analyze Graphs How do the demand curves in the two graphs compare? What can you conclude?

12. Discrimination in the Labor Market
As we have seen, wages for a particular job should end up at the equilibrium price of labor for that job. However, some people are paid less because of the social group they belong to. For instance, in the past, women and members of minority groups often received lower wages than white male workers for the same work. This practice is wage discrimination.

13. Discrimination in the Labor Market
Laws Against Wage Discrimination
Pay Levels for Women
Pay Levels Across Society

14. Discrimination in the Labor Market
Analyze Graphs How did the gap in earnings between men and women change between 1980 and 2012?

15. Discrimination in the Labor Market
An EEOC official gives a news conference about a lawsuit carried out on behalf of workers whose employer illegally required them to reveal confidential information when taking sick leave.

16. Additional Factors Affecting Wages
In addition to laws forbidding discrimination, several other factors can affect wages. These include minimum wage laws, workplace safety laws, employer actions, and labor unions.

17. Additional Factors Affecting Wages
Minimum Wage Laws
Safety Laws
Employers Respond to Wage Levels
Unions

18. Additional Factors Affecting Wages
In 1938, unionized garment workers in San Francisco went on a strike that resulted in their obtaining higher wages, better hours, and improved working conditions.

19. Quiz: Supply, Demand, and the Labor Market
What determines the equilibrium wage of labor?
A. The demand for workers in a labor market is less than the supply.
B. The supply of workers in a labor market meets the demand for workers.
C. The supply of workers in a labor market exceeds the demand for workers.
D. The demand for workers in a labor market exceeds the supply.

20. Quiz: Labor and Skills Which is an example of a semi-skilled laborer?
A. a worker in a food-processing plant
B. an auto mechanic
C. a hotel manager
D. a dishwasher

21. Quiz: Discrimination in the Labor Market
Which law requires that men and women performing the same job receive the same pay?
A. Civil Rights Act of 1964
B. Fair Labor Standards Act of 1938
C. Equal Pay Act of 1963
D. Federal Employees’ Compensation Act

22. Quiz: Additional Factors Affecting Wages
Which of these describes an action an employer may take to reduce the cost of wages?
A. hiring permanent, rather than temporary, workers
B. including featherbedding jobs in union contracts
C. substituting workers for machines
D. outsourcing jobs to another country