1. Chapter 8 – The Labor Force in Our Economy
Lesson 1 – Labor Force Characteristics
Lesson 2 – How Wages Are Determined

2. Lesson 1 – Labor Force Characteristics: Key Terms
Automation
Blue-collar worker
Career
Educational attainment
Labor force
Median retirement age
paralegal
Rate of population growth
Service worker
Technological revolution
White-collar worker

3. Lesson 1 Major Concepts
In recent years jobs in white-collar occupations have become more numerous than blue-collar jobs
Since 1950, the % of farm workers in the labor force has steadily declined, while the % of women who work has increased dramatically.

4. Lesson 1 Major Concepts cont…
In the post-WW II period, consumer demand for new goods and services has changed the demands of employers for personnel. In response to this derived demand, the labor force is changing from manufacturing to service occupations.
The employment rate of a group is often related to the group’s educational attainment.

5. Lesson Opener
A recession is when your neighbor is out of work. A depression is when you’re out of work.
Harry S. Truman

6. Lesson Opener #2

7. Overview Composition of the Labor Force – pg. 212-213
The number and variety of jobs in our economy is staggering
How many occupations can you name?
The labor force is far larger in numbers and more complex in range of occupations than most people imagine.
Occupational Outlook Handbook

8. Labor Force Trends
Labor force also called workforce is made up of all persons 16 years of age or older who are either working or looking for work.
Today – 155 million, half the population
The labor force changes as the country’s population changes and as the kinds of work people do change

9. The Labor Force by Occupation
As the labor force has grown, occupations have changed.
White-collar workers – professional, technical, clerical, sales, and managerial categories
Blue-collar workers – those who have a craft, operative, and laboring jobs.
Service workers – government employees, fire fighters, hospital employees, building maintenance workers, workers in restaurants, beauticians etc.
Farmworkers – farmers, farm operators, and farm laborers.

10. Wages and Skill Levels Unskilled Semi-skilled Skilled Professional
Dishwashers, messengers, etc etc
Hourly wage, low
Semi-skilled
Lifeguards, short-order cooks
Hourly wage, low to medium
Skilled
Auto mechanics, bank tellers
Hourly wage, medium to high
Professional
Doctors, teachers
Salary for pay

11. Lesson 1 Occupational Outlook Handbook
Find 2 jobs you want as a career
Why you want that job
The median pay
The minimum education needed
What kind of on the job training
The percent growth
Explain the overall job outlook
Do on a Google Doc and share with me

12. The U.S. Population in Growing
As the country’s population grows, so does the labor force.
Rate of population growth – has been slowing in recent decades
the labor force increased 21%
estimated at 19%
Despite a slowdown in the rate of growth, the labor force will continue to grow
More people will want more things
Demand for workers is directly related to consumer demand for goods and services.

13. The Population is Getting Older
The % of our population that is age 65 and older is expected to increase.
The % of our population that is 17 years or younger is expected to remain the same.
Average age of the labor force in 1992 – 37, 2005 – 41

14. Earlier Retirement Age
Americans are living longer, retired people are getting younger.
Median Retirement Age – men 66.9 years of age, women 67.7 in 1950
62.7 for men, 62.9 for women in 1994.
61.7 for men, 61.2 for women in 2005.
The Golden Handshake and early retirement
Early retirement means job opportunity for younger (you!) workers
Those 85 years and older will increase 4x as fast as the general population, creating demand in the healthcare industry
What kinds of jobs are in demand in the A.V?

15. The Population is Becoming More Varied
1979 – women made up 42% of the labor force
2000 – 50% of the labor force
Pg. 215 – figure 9.4
Have grabbed a big % of jobs, once considered “men’s work”
Nonwhite workers are also becoming a larger part of the labor force.
Pg. 217 – figure 9.11

16. Most New Jobs Are in the Service Industries
Jobs have been shifting from goods-producing industries (manufacturing, construction, and ag) to the service industries (transportation, trade, finance and government)
Service workers category is the fastest growing
White-collar workers represent half of the labor force
Fewer farmers have been needed over the years
4 of 5 workers in 2005 are in the service industry

17. The Role of Technology
Technological Revolution – the rapid changes in ways of producing goods and services
What new technologies have you seen in the last 10 years?
Use of robots, automated machinery, satellites, fiber optic wires etc…

18. Losses of Jobs Many workers lose jobs because of automation
Automation – the use of machines to operate other machines
Bottling plants, automobile plants, oil refineries, and other factories are examples of where automation has been used
the 400 largest U.S. corporations reduced employment by 4 million
GM in the 1980s – 369,000 workers at 130 facilities to make 4.5 million vehicles/year
After downsizing in the early 1990s – 250,000 people at 120 facilities to produce roughly 4.5 million vehicles/year

19. Gains in Jobs
Though the largest 400 corps. From cut 4 million jobs, nationwide jobs went up 6 million in the same period.
Many of these in new industries
Demand for highly specialized workers that some employers have difficulty filling jobs.

20. The Emphasis on Education Will Continue
Educational attainment – years of schooling
In 1975 – 67% of workers between ages of 25 and 64 had completed only 4 years or less of high school
1990 – the number dropped to 53%
% of workers with four or more years of a college education increased from 18% to 26%

21. It Pays to Stay in School
As of 1993:
Elementary school:
$13,920 – average salary
13% - unemployment rate
High School
$28,700 – average salary
7.3% - unemployment rate
College
$56,116 – average salary
3.2% - unemployment rate
Page 214 figure 9.3

22. Lesson 2 – How Wages Are Determined Key Terms
Derived demand
Discrimination
Job outlook
Marginal productivity
On-the-job training
Worker mobility

23. Lesson 2 Major Concepts
The size of a worker’s paycheck (in the form of a wage or salary) is directly related to the demand for that kind of worker
The demand for a worker is directly related to consumer demand for the product or service that the worker helps produce
In practice, other factors, such as discrimination also enter into the determination of wages

24. Why do Some Jobs Pay More Than Others?
All people and jobs are not alike, therefore wages are different for different jobs
Athletes in the US vs. rest of the world
4 major sports vs. volleyball, water polo, or badminton
The difference between wages comes down to market forces of supply and demand, and nonmarket forces

25. Median Weekly Earnings, 1996
Secretaries 406
Janitors 301
Gas stations emp. 275
Waiters 271
Apparel sales 265
Cashiers 247
Child-care 198
Physicians $1,199
Lawyers 1,149
Aerospace 1,097
Comp. Analyst 891
Electricians 811
Rail workers 740
Aircraft mechanics 720
HS Teachers 697

26. Median, Mean, Mode
Median – the medium or middle point; half of the given scores of numbers (test scores, wages, batting averages) are higher than the median point, while the other half are lower
Mean – the average, obtained by adding up a column of numbers and dividing the entries.
Mode – the number in a series that is reached more often than any other number
(if 11 students score 82 on a test, while 8 score 78 and 3 score 67, the mode is 82

27. Market Forces in Action: How Supply and Demand Affect Wages
Millions of fans watch sports
Only a handful of athletes are able to compete on that high stage
This creates a market situation that pays athletes high wages
Salespeople v. Plumbers
Supply of salespeople greater than plumbers
Try finding a plumber in an emergency!
Because of the demand for plumbers, they get paid a higher hourly wage than salespeople

28. What Factors Affect the Demand for Labor?
the demand for the firm's products and services
The productivity of each additional worker in the firm

29. Demand for Goods and Services
If consumers buy less of a good or service, the demand for workers in that industry will decline
Change from US electronics to Japanese electronics
If consumers buy more of a good service, the demand for workers in that industry will increase
Increase in a sport would increase that sports athletes pay
The number of workers that a firm hires, or fires, depends upon a firms expected sales and output

30. Productivity
Productivity of each additional worker hired is the 2nd factor affecting demand
A workers wage includes taxes, insurance, and other expenses
Marginal productivity – the value of the output of the last worker hired by a company
The demand for labor varies inversely (opposite) with wages
if employers reduce wages, employers can afford to hire more workers

31. Factors Affecting the Supply of Labor
Supply of Labor – number of workers available to perform a job at a wage
The number of workers will increase when wages increase

32. Other Factors: Attractiveness of the Job
Some jobs carry more prestige or are more appealing than other jobs paying similar wages

33. Other Factors: Skill Required
Only a limited number of people have the skill or talent required for certain jobs.
If you cant sing or hit a 95 mph fastball, your not going to be a singer or ballplayer

34. Other Factors: Required Training
Some jobs have long training periods
Doctors (8-10 years) Lawyers (4-6 years) teachers (1-2 years)
Can you afford the extra time and money now, for more salary later

35. Other Factors: Worker Mobility
Mobility – willingness of workers to move where the jobs are

36. Choosing Your Career Read page 187-188
What is most important thing to you in choosing your career?
What is the first thing you should consider when choosing your career?
What are some options to help you decide what career to pick?
Once your done with high school, what are your next options?

37. Statistical Abstract – 2006 Census Bureau

38. Nonmarket Forces in Determining Wages
Labor Unions – the strength of the union or management will determine wages, not supply and demand
Government Legislation – minimum wage is not affected by supply and demand; overtime rates, banning employing children; workers must receive equal pay for equal work

39. Weekly Earnings of Full-time workers, 1994
Discrimination – Favoring one group over another for wages, job promotions, etc…
White Males
$547
White Females
$408
African-American males
$400
African-American females
346
Hispanic-American males
$343
Hispanic-American females
305

40. Average Annual Pay of Workers, by State, 1994 - Geography
Connecticut
$33,811 2
New York
33,439 3
New Jersey 4
Alaska
32,657 5
Massachusetts
31,024 46
Arkansas
20,898 47
Mississippi
20,380 48
Montana
20,218 49
North Dakota
19,893 50
South Dakota
19,255

41. Educational Attainment
MALES
1970
1980
1995
Elementary School
$5,400
$8,900
$11,723
High school
8,800
14,600
23,365
4 yrs. College
12,100
22,200
39,040
5+ yrs. College
13,400
26,900
49,076
FEMALES
$1,800
$4,200
$7,096
3,400
6,100
12,046
5,400
11,700
24,065
7,900
15,100
33,509

42. Lesson 2 Bookwork Page 236-237 Key Terms 2,4,6
Using Graphic Organizers 8
Reviewing Main Ideas 10,12,14,16