1. Chapter 8

2. 8-3 Labor and Wages

3. Categories of Labor
A .Unskilled laborers work primarily with their hands because they lack the training and skills required for other tasks -They also make some of the lowest wages B. Semiskilled workers do jobs that require a minimum amount of training C. Skilled workers hold jobs that require experience and training D. Professional workers do jobs that require a high level of knowledge-based education and managerial skills

4. Review Questions
What is human capital? Sum of peoples’ skills, abilities, health, and education How do employers and employees improve their human capital? Education, training, health care, etc…

5. Individual Question
In your opinion, should a higher investment in human capital be rewarded with higher wages? Why or why not?

6. Noncompeting Labor Grade
People must have the ability, the initiative, and the money to obtain additional education and training.
Sometimes people are faced with a lack of opportunity for additional training and education
Sometimes people lack the initiative they need to get ahead

7. Wage Determination
The traditional theory of wage determination says that supply and demand together will determine the equilibrium wage rate.
The theory of negotiated wages uses organized labor’s bargaining strength to help explain wage differentials
According to the signal theory, employers are willing to pay more for those people with certain indicators of superior ability

8. Discussion Question
Do you think that it is fair that professional athletes have one of the nation’s highest wage rates? Why or why not?

9. Regional Wage Differences
Wages can vary when demand for certain skilled positions exceed supply
Employers tend to offer higher wages in areas where the cost of living is higher than normal
People sometimes are willing to accept lower wages if the location of the job is attractive to them.

10. 8-3 Essential Question
What are some of the reasons that wages differ? -skills -type of job -location

11. 8-1 The Labor Movement

12. I. Early Union Development
The nations first unions were comprised of skilled workers
After the civil war, as industry expanded, the labor force became more unified
Two types of Unions developed– the trade union and the industrial union

13. Differing Opinions…

14. D. Unions used strikes, pickets and boycotts to help members get better pay, better hours, and job security. E. Employers resisted unions through lockouts, firings, and even setting up company unions F. Historically, the courts have viewed unions with hostility.

15. Labor Unions during the Great Depression
Employment and cut wages marked the decade of the Great Depression and encourages unions and workers to organize.
The government began to pass laws protecting unions.

16. Labor Since WWII After WWII, new laws began to limit union activity
The AFL-CIO was created when two powerful unions joined forces
Independent unions are those that do not belong to the AFL-CIO

17. Individual Question
Why do you think the government began to protect unions during the Great Depression? -Workers suffered during the great depression and the unions promised some relief

18. 8-1 Essential Question
What are labor unions and what purpose do they serve? -Labor unions are organizations that attempt to improve the working conditions of their members through joint action.

19. 8-2 Resolving Union and Management Differences

20. Kinds of Union Arrangements
In a closed shop, the employer agrees to hire only union members
In a union shop, most workers belong to a union
In a modified union shop, workers cannot be made to join the union
In an agency shop, workers must pay union dues, whether or not they are union members

21. Collective Bargaining
When labor and management agree to mediation, a neutral person helps to settle the dispute.
With arbitration, labor and management agree to abide by a third party’s decision
Disputes can also be resolved through fact-finding, in which a neutral third party presents non-binding recommendations
The government also can get involved in labor disputes by issuing injunctions or resorting to seizures.

22. Individual Question
Imagine that you are a union member. Which form of collective bargaining do you think would be the most effective? Why?

23. 8-2 Essential Question
What is collective bargaining? -a process that allows union and management to negotiate contract

24. 8-4 Employment Trends and Issues

25. Decline of Union Influence
Union membership has declined because of unfriendly businesses, new workers with little loyalty to organized labor, and cutbacks in production by unionized companies
Businesses are using givebacks,
bankruptcy claims, and two-tier
wage systems to lower
union-negotiated wages.

26. Lower Pay for Women
Some higher paying jobs have larger percentage of male workers, while some lower paying jobs have a larger percentage of female workers.
The glass ceiling is an example of the discrimination women face in the workplace.

27. D. The Equal Pay Act and the Civil Rights Acts both work to prevent wage and salary discrimination. E. Some states hope to close the gender income gap by defining jobs of comparable worth (equal pay for equal work). F. Set-aside contracts are contracts that will be made only with a specific group

28. Part-Time Workers Part-time workers cost less in benefits
Critics say part-time low wages and lack of benefits make it difficult for workers to earn a decent living.

29. Individual Question
Read ‘Debate Over the Minimum Wage’ on page 216 in your textbook. Do you support or oppose minimum wage? Justify your answer.

30. Minimum Wage
Opponents claim the minimum wage does not promote economic freedom
In current dollars, the minimum wage appears to have risen over time
Measurements in real dollars take inflation into account
The ratio of minimum wage to manufacturing wage has been steadily decreasing over the past 30 years.

31. 8-4 Essential Question
Why is it necessary to consider inflation when examining the minimum wage? - As prices tend to increase over time, purchasing power of fixed minimum wage decreases