1. Ch. 9: Labor

2. Section 1: Labor Market Trends
While the technological revolution has replaced many jobs, it has also created new ones.

3. Labor Force
Labor force- all nonmilitary people who are employed or in search of employment.

4. Employment Economists consider people employed if they are…
16 years or older
They worked at least one hour for pay within the past week
They worked 15+ hours without pay in a family business
They held jobs they didn’t work due to vacations, illness, or labor disputes

5. Unemployment
People are counted as unemployed if they are actively searching for work without success.
Does NOT include…
People less than 18 years old
College students
Voluntary stay-at-home parents
Retirees
“Discouraged workers” (people who want to work but have given up looking for a job)

6. Occupational Trends The major labor trend has been…
Fewer goods-sector jobs
More service-sector jobs

7. Goods-Sector vs. Service Sector.
Goods related jobs:
Manufacturing
Agriculture
Service related jobs:
Healthcare
Education
Accounting
Marketing
Web Development

8. Goods-Sector vs. Service Sector.
Goods related jobs:
Often require minimal training.
Service related jobs:
Often require extensive training and a high degree of specific skills.

9. Education
Education is critical for developing a strong service-sector work force.
Learning Effect Theory: Education increases workers productivity and wages.
Screening Effect Theory: The completion of a college degree indicates an intelligent, hardworking candidate for any job.

10. Section 2: Labor and Wages
Wages for labor are determined just like prices for products: supply and demand.

11. Wages: Supply and Demand
List some high paying jobs. Why, according to supply and demand, are they highly paid? List some low paying jobs. Why are they low paying?

12. Wages: Supply and Demand
If there is excess demand for a job, wages will rise.
If there is excess supply for a job, wages will fall.

13. Skill Levels Supply of labor is determined by skill level
Unskilled labor: requires no specialized skills
Semi-skilled labor: requires minimal training
Skilled labor: requires specialized abilities and training
Professional labor: demands advanced skills and education. White-collar workers who receive a salary

14. Blue Collar v. White Collar
White collar: professional labor
Blue collar: non-professional labor

15. Wage Discrimination
Average wages are higher for men and whites than for women and minorities.
Causation or Correlation?
Glass Ceiling: an unofficial, invisible barrier that keeps women and minorities from advancing to top ranks of business.

16. Earnings Chart

17. Section 3: Organized Labor
Labor often organizes to collectively negotiate for improved wages and benefits.

18. Labor Union
Labor unions are organizations of workers that try to improve conditions, wages, and benefits for its members.

19. Strikes
Labor unions sometimes go on strike, stop working, to put pressure on employers to meet their demands.

20. Labor Movement
Labor unions grew out of the Industrial Revolution when wages and working conditions were extremely poor.

21. Collective Bargaining
Collective bargaining is the process in which union and company representatives meet to negotiate new terms.

22. Settlements
Strikes are sometimes settled through mediation and arbitration
Mediation- a third party helps the two sides reach an agreement.
Arbitration- a third party reviews the case and delivers a ruling that is legally binding.