1. Labor, Employment, and Wages Warm Up: 1.How many of you are interested in the amount of money you will earn on a job? 2.Why is it that professional athletes and movie stars get paid so much?

2. What is The Civilian Labor Force?

3. Men and women over the age of 16 Working or actively searching for work

4. Supply & Demand You’ve learned about Supply and Demand How they affect prices of goods Supply and Demand can also be used to analyze how we determine price of a resource or factor of production (such as labor)

5. People who demand labor = employers People who supply labor = employees We can create a supply and demand curve showing the price of labor The price of labor is called wages (wage rate)

6. Using Supply/Demand Concepts With a partner Create 2 graphs – Supply curve for labor – Demand curve for labor Quantity = the number of your workers Price = wage rate

7. Supply & Demand in the Labor Market Downward sloping demand curve for labor – Employers are willing and able to hire more people at lower wages that at higher ones Upward sloping supply curve for labor – More people are willing and able to work at higher wages than at lower ones

8. Equilibrium Wage at which the quantity demanded of labor equals the quantity supplied It is the wage rate at which the number of people employers are willing and able to hire is the same as the number of people who are willing and able to work

9. Surplus? Shortage? Sure! When the market has a surplus of labor, the wage falls When the market has a shortage of labor, the wage rises

10. Why do some people earn more than others? Supply of different labor types is not the same Demand for different labor types is not the same 2003 – Construction $18.95 – Manufacturing $15.74 – Financial Activities $17.13 – Leisure and hospitality $8.76 – Business and professionals $17.20

11. Are Money Benefits the only thing that matters? ??? What is important to you???

12. What will you earn? Depends on how much your field is demanded, how many people can do the same thing you can do, and how productive you are US Dept of Labor Occupational Outlook Handbook – Median salary, job growth, education required – Every 2 years

13. OccupationGrowth rate 2002-2012 Medical Assistants59% Physician Assistants49% Social and Human Service Assistants49% Home Health Aides48% Medical Records and Health Information Technicians 47% Physical Therapist Aids46% Computer Software Engineers46%

14. EducationUnemployment RateMedian WEEKLY earnings (2003) Doctoral Degree2.1$1,349 Master’s Degree2.9$1,064 Bachelor’s Degree3.3$900 Associate’s Degree4.0$672 Some college, no degree5.2$622 High School graduate5.5$554 Some High School8.8$396

15. Two types of Wages Money or nominal wage ($7/hr) Real – how much the way will buy Consumer price index (CPI) – average costs of goods Real wage = money wage/CPI

16. Questions If the quantity demanded of labor is greater than the quantity supplied, what will happen to the wage? Rachel’s money wage increased by 10% and prices increased by 13%. Has Rachel’s real wage increased? Decreased? Stayed the same?