1. Employment, Labor, and Wages
Chapter 8

2. THE LABOR MOVEMENT

3. Part of: MACROECONOMICS
CIVILIAN LABOR FORCE –
MEN AND WOMEN 16 YR AND OVER
WHO ARE EITHER WORKING OR ACTIVELY LOOKING FOR A JOB.
(EXCLUDES ARMED FORCES, PRISON POP. & INSTITUTIONALIZED PERSONS)

4. Labor Markets
Local Market Service & Construction National Market Either Labor and/or Production are “footloose” International Market Labor exceeds transportation costs “out sourcing”

6. Internal labor market A firm uses an internal labor market if:
external hiring is used primarily for entry-level jobs, and
higher level positions are filled by promotion from within the firm.

7. Internal labor market reduces hiring and training costs,
Internal labor markets exist because the use of such markets:
reduces hiring and training costs,
improves employee morale and motivation, and
reduces the effect of uncertainty.

8. unions Why are Unions Important?
first, they played an important role in promoting legislation that affects pay levels and working conditions today
- second, unions are a force in the economy, with membership of over 16 million people

10. EARLY UNION DEVELOPMENT
COLONIAL TIMES TO THE CIVIL WAR
SMALL AMOUNT OF PEOPLE JOINED UNIONS
COMPRISED OF SKILLED WORKERS AND POSSESSED STRONG BARGAINING POWER
PUBLIC - AGAINST LABOR UNIONS

11. CIVIL WAR TO THE 1930S
By end of civil war two types of labor unions had come into existence
Craft Union or Trade Union, an association of skilled workers who perform the same kind of work
Industrial Union – an association of all workers in the same industry, regardless of the job each worker performs

12. Union Activities
Collective Bargaining – Negotiate wages & conditions as a signal unit rather than as individuals.
STRIKE – REFUSE TO WORK
Picket – parade in front of the employer’s business carrying signs about the dispute
Boycott – a mass refusal to buy products from targeted employers or companies.

14. Employer resistance
Lockout – a refusal to let the employees work until management demands were met.
Company Unions – a union organized, supported, or run by employers – to head off efforts by others to organize workers
Hiring non-union workers to replace striking workers (Scabs)

16. Attitude of the courts
At the start of unions, the court historically favored businesses
Sherman Antitrust Act of 1890 – aimed at curbing monopolies, was used to keep labor unions in line (Danbury court case)
Clayton Antitrust Act stated that labor unions could not be prosecuted under the Sherman Antitrust Act

17. Labor Union – Great Depression
Common problems united factory workers, and union promoters renewed their efforts to organize workers
Pro Union Legislation – Norris-LaGuardia Act 1932 – prevented courts from issuing rulings against unions engaged in peaceful strikes, picketing, or boycotts. – forcing companies to negotiate

18. National Labor Relations Act (NLRA) or Wagner Act, 1935 – established the right of unions to collective bargaining. It also created the National Labor Relations Board – to police unfair labor practices
Fair Labor Standards Act 1938 – applies to interstate trade companies – fixes a federal minimum wage and establishes time-an-a-half pay and defines a work week as 40 hr.

19. Labor Since WWII Antiunion Legislation
Labor Management Relations Act or Taft-Hartley Act – puts limits on what unions can do in labor/management disputes, companies can sue unions for breaking contracts, and prohibits unions from making union membership a condition for hiring
80 day cooling off period to delay a strike
Right-to-work law – state law making it illegal to force workers to join a union as a condition of employment

20. Labor-Management Reporting and Disclosure act or Landrum-Griffin Act, 1959 – requires unions to file regular financial reports with the government, and it limits the amount of money officials can borrow from the union

21. The AFL-CIO American Federation of Labor – craft union
Committee for Industrial Organization – industry union
AFL – CIO joined forces in 1955 and is still a major force in society today
Independent Unions – a Union that does not belong to AFL - CIO

24. RESOLVING UNION AND MANAGEMENT DIFFERENCES
CLOSED SHOPS – A SITUATION IN WHICH THE EMPLOYER AGREES TO HIRE ONLY UNION MEMBERS
UNION SHOPS – AN EMPLOYMENT SITUATION WHERE WORKERS DO NOT HAVE TO BELONG TO THE UNION TO BE HIRED, BUT MUST JOIN SOON AFTER AND REMAIN A MEMBER FOR AS LONG AS THEY KEEP THEIR JOBS

25. MODIFIED UNION SHOPS – WORKERS DO NOT HAVE TO BELONG TO A UNION TO BE HIRED AND CANNOT BE MADE TO JOIN ONE TO KEEP THEIR JOBS. IF WORKERS VOLUNTARILY JOIN THE UNION, HOWEVER, THEY MUST REMAIN MEMBERS FOR AS LONG AS THEY HOLD THEIR JOBS.
AGENCY SHOPS – AN AGREEMENT THAT DOES NOT REQUIRE A WORKER TO JOIN A UNION AS A CONDITION TO GET OR KEEP A JOB BUT DOES REQUIRE THE WORKER TO PAY DUES TO HELP PAY COLLECTIVE BARGAINING COSTS.

27. COLLECTIVE BARGAINING
REPRESENTATIVES FROM BOTH SIDES MEET AND COMPROMISE ON THE MAJOR ISSUES
GRIEVANCE PROCEDURE – A PROVISION FOR RESOLVING ISSUES THAT MAY COME UP LATER – MAY ALSO BE INCLUDED IN THE FINAL CONTRACT

28. If COLLECTIVE BARGAINING hits a deadend
MEDIATION – THE PROCESS OF BRINGING IN A NEUTRAL THIRD PERSON, OR PERSONS TO HELP SETTLE THE DISPUTE
ARBITRATION – A PROCESS IN WHICH BOTH SIDES AGREE TO PLACE THEIR DIFFERENCE BEFORE A THIRD PARTY WHOSE DECISION WILL BE ACCETED AS FINAL

29. Fact – finding – an agreement between union and management to have a neutral third party collect facts about a dispute and present nonbinding recommendations
Injunction – a court order not to act - can be issued to the union or the company
Seizure – a temporary takeover of operation to allow the government to negotiate
Presidential Intervention – publicly appealing to both parties to resolve their differences

30. Labor and wages
Unskilled Labor – work with hands, lack training and skill – ex: dig ditches, pick fruit, mop floors
Semiskilled Labor – operate machines that require a minimum amount of training – ex: floor polishers, dishwashers, lawnmowers

31. Skilled Labor – workers who are able to operate complex equipment and can perform their tasks with little supervision – ex: carpenters, typists, computer tech., chefs, computer programmers
Professional Labor – individuals with the highest level of knowledge-based education (usually at least 4 years of college) and managerial skills – ex: doctors, lawyers, corporate executives

32. NONCOMPETING LABOR GRADES – broad categories of labor that do not directly compete with one another because of experience, training, education, and other human capital investments

33. Rostow’s Development Index

34. “The Collars” Blue Collar- manual labor, work with hands
White Collar- intellectual labor, work with head, office jobs
Pink Collar- Traditionally female jobs, usually lower paying mostly White collar jobs.

35. It is difficult to move from one category to another. Why?
Cost – people don’t have the money to gain the extra training
Lack of opportunity
Lack of initiative

36. Wage Determination
Wage Rate – a standard amount of pay given for work performed
Differences in wage rates can be explained in three ways.
Traditional tools of supply and demand
Influence of unions
Signaling Theory

37. Traditional Theory Of Wage determination
The theory states that the supply and demand for a worker’s skills and services determine the wage or salary.

38. Theory of Negotiated Wages
Unions bargain for better wages
Seniority – the length of time a person has been on the job – effects a persons wages

39. Signaling Theory
Employers are willing to pay more for people with certificates, diplomas, degrees, and other indicators or “signals” of superior ability

40. Regional Wage Differences
Labor mobility (the ability and willingness of workers to relocate in markets where wages are higher), cost of living differences, attractiveness of location can make a difference.

41. EMPLOYMENT TRENDS AND ISSUES
REASONS FOR DECLINE
MANY EMPLOYERS MADE A DETERMINED EFFORT TO KEEP UNIONS OUT OF THEIR BUSINESSES
NEW ADDITIONS TO THE LABOR FORCE – ESPECIALLY WOMEN AND TEENAGERS – TRADITIONALLY HAD LITTLE LOYALTY TO ORGANIZED LABOR
UNIONS ARE THE VICTIMS OF THEIR ON SUCCESS

42. RENEGOTIATING UNION WAGES
GIVE BACK – IS A WAGE, FRINGE BENEFIT, OR WORK RULE GIVEN UP WHEN LABOR CONTRACTS IS RENEGOTIATED
TWO-TIER WAGE SYSTEM – A SYSTEM THAT KEEPS HIGH WAGES FOR CURRENT WORKERS, BUT HAS A MUCH LOWER WAGE FOR NEWLY HIRED WORKERS.

43. Even today – women struggle for equal pay – why?
Differences in skills and experience
Uneven distribution of men and women among the various occupations
Discrimination – glass ceiling – an invisible barrier that obstructs their advancement up the corporate ladder

44. Pay gap

45. Legal Remedies – Equal Pay Act of 1963
Civil Rights Act of 1964, Title VII – prohibits discrimination in all areas of employment on the bases of gender, race, color, religion, and national origin and the Equal Employment Opportunity Commission (EEOC) investigates charges of discrimination

46. Comparable Worth – the principle stating that people should receive equal pay for work that is different from, but just as demanding as, other types of work.
Set-Aside Contracts – a guaranteed contract reserved exclusively for a targeted group.

47. part-time workers – work less than 35 hr. a week –reasons for growth
Change in economy
Gives employers more flexibility to schedule workers for peak periods
Receive few benefit
Critics of Part-time employment – think that wages are low and hours are too few for workers to earn a decent living

48. Minimum wage – the lowest wage that can be paid by law to most workers

49. The Pay Check Gross, Net, Deductions, FICA, YTD…
(Health Insurance: a week)

50. What Factors Affect Your Income?
The Level of education, training, and experience that is required to do a particular job
Level of demand that exists for the type of labor you are skilled/trained/educated to provide
Number of others who have similar or better skills who can compete for the job
How good you are at what you do
How long you have been working-experience/seniority
Work habits, reliability
The state of the economy
Region in which you work and the labor market conditions in that region
Profitability and success of the organization for which you work
Chance-being at the right place at the right time or the wrong place at the wrong time