1. Brief Response How have labor unions and later government reforms improved the working conditions for most employees? (3) – Higher pay – Better hours – Better/safer working conditions – Job security – Protection from harassment/abuse – Sick leave – Disability – Health/dental/optical insurance 1

2. Macroeconomics Institutions CH 8, 3 & 4 2

3. CH 8, Section 3 p. 205 Terms: Unskilled labor 205 people who work primarily with their hands. Lack training and skills required for other tasks. – Diggers – Pickers – Cleaners Low-wage earners 3

4. Semi-skilled labor 206 workers with enough mechanical or service abilities and skills to operate machines and handle basic operations Require a minimum amount of training – Floor polishers – Fast-food workers – Gardeners Pay is low, but better with skills achieved 4

5. Skilled labor 206 workers able to operate complex equipment or services. High investment of training/education Experienced – Carpenters – Typists – Tool and die makers – Computer technicians – Computer programmers – Chefs Wages low or high depending on job market, complexity and responsibility. A very skilled and dangerous job…..job 5

6. Immigrant labor and US cities (use your current sheet if you have space.) Regard the graph (discussion) – What year is the information from? – What type of immigrant worker does Los Angeles attract? – What percentage of LA’s population is immigrant? – Why do you think LA attracts more immigrants than Baltimore? 6

7. Immigrant labor and US cities (use your current sheet if you have space.) Regard the graph (discussion) – What year is the information from? 2009 – What type of immigrant worker does Los Angeles attract? Low skilled – What percentage of LA’s population is immigrant? 34.4% – Why do you think LA attracts more immigrants than Baltimore? The southeast US historically has not attracted immigrants as it once had a slave population, and since the end of slavery, most labor is still lower-paid/protected working class Whites and Blacks. In the past few decades, however, immigrant populations there have been increasing, mostly in the information technology and medical fields. LA closer to border. LA is growing. Family connections. LA has much the same culture as many of it’s immigrants. 7

8. Professional labor 206 individuals with the highest level of knowledge-based education and managerial skills. – Doctors – Scientists – Lawyers – Corporate executives – Engineers Normally earn highest incomes depending on size of business. 8

9. Non-competing labor grades 206 labor categories that do not directly compete with one another. 9

10. Wage rate 207 A standard amount of pay given for work performed Differ depending on nature of occupation – Skill/experience level – Often hourly Depends on supply and demand for job – Number of workers to job openings offered Based also on union contracts Also based on “signaling theory” 10

11. Traditional theory of wage determination 207 the supply and demand for a worker’s skills and services determine the wage or salary. Equilibrium wage rate 207 The wage rate that leaves neither a surplus or shortage in the labor market. 11

12. Theory of negotiated wages 208 organized labor’s bargaining strength is a factor in determining wages. – Union strength may demand a wage higher than market equilibrium. Seniority 208 The length of time a person has been on the job – Senior workers receive higher wages Also higher job security 12

13. Signaling theory 208 employers are willing to pay more for people with – Certificates – Diplomas – Degrees – Other indicators of experience and superior ability These documents awarded by education/training/government institutions “signal” a worker’s special abilities and superiority to workers who do not have the documents. 13

14. Labor mobility 209 the ability and willingness of workers to relocate in markets where wages are higher. Depends on…. – Relatives – Cost of living – Convenience – location 14

15. Section 4 p. 211 Terms: Giveback 212 something union members give up to the company when their contract is renegotiated: – Wages – Fringe benefit – Work rules 15

16. Two-tier wage system 212 a hiring method that keeps high wages/salaries for current workers, But has lower wages/salaries for newer workers. EC: Why do you think newer workers in this example are willing to accept the lower wage? (2) They need the job and it still pays more than minimum wage. 16

17. Glass ceiling 214 an “invisible” barrier that prevents the advancement of some workers up the corporate ladder. Discriminatory and illegal if it can be proven. – Minority groups – women 17

18. Comparable worth 215 the idea stating that people should receive equal pay for work, skills, effort, knowledge that is different from, but just as demanding as, other types of work. – Ex. Nurses = to road workers – Complicating factors include: Hazards – Educational requirements – Degree of physical difficulty May reduce gender discrimination, but is thought, by some, to also be unfair….. 18

19. Comparable Worth Formula (use your paper) Keep in mind that gender is NOT the main consideration here. Which category is the most effective in equalizing the two jobs? Explain. Which category most shows both jobs as equal naturally? Why do you think responsibility is lower for the one job than the other? (2) 19

20. Comparable Worth Formula (use your paper) Which category as the most effective in equalizing the two jobs? Explain. – Working conditions. – Loading trucks is more physical work with a higher degree of danger. Which category most shows both jobs as equal naturally? – Effort Why do you think responsibility is lower for the one job than the other? (2) – Truck loading work: balancing load weight: is less complicated than library work: cataloguing books, stocking shelves, tracking loaned books, ordering new books and periodicals, reference service, working with the public, computer skills….. 20

21. Set-aside contract 215 a guaranteed contract reserved for a targeted group. Government may require that a percentage of contracts go to – minority-owned businesses – Women 21

22. Part-time workers 216 those employees working less than 35 hours a week. – One out of five jobs – Companies prefer them for lower level work Employers not have to give benefits – Medical, dental, optical – Paid sick leave – Maternity leave – Job security – Usually not unionized. 22

23. Minimum wage 216 the lowest wage can be legally paid to a worker – 1939 = US,.25 cents/hour. EC: How much was that in today’s money? = @$4.00/hour – 2015 = US, $7.25/hour – 2015 = CA, $9.00/hour 23

24. Current dollars 218 dollars that are not adjusted for inflation What does one dollar buy in Tujunga, in 2015? (Discussion) – At our school machines? snacks, bottled water (subsidized? Yes). – At Von’s? 24

25. Real or constant dollars 218 Dollars that are adjusted in a way that removes the distortion of inflation. Uses a Base year 218 a year that serves as a comparison for all other years In the previous slide: 1937? current dollar was = 16 2014 dollars. What do sixteen dollars buy in Tujunga, in 2015? – At Von’s? – A few Starbuck’s/soda’s, sandwiches, 25

26. Investment Project Place where needed Making an Excel spread sheetsheet Making a graph using your datadata 26

27. Hwk Assessments, Class Work, to Know 27

28. Assessments: Checking for Understanding CH 8, S3 1 Wage rates differ among regions due to – lack of labor mobility – Cost of living – Attractiveness of location 28

29. CH 8, S3 Assessment 3 Unskilled labor Semiskilled labor Skilled labor Professional labor 29

30. CH 8, S3 Assessment 4 Individuals with different levels of – Experience – Training – Education Do not compete against one another for jobs. 30

31. CH 8, S3 Assessment 5 (just list them, we have descriptions already) Traditional Theory of Wages Theory of Negotiated Wages Signaling Theory 31

32. Assessments: Checking for Understanding CH 8, S4 1 people should receive equal pay for work that is different from, but just as demanding (skills, knowledge, working conditions, effort) as, other types of work. 32

33. CH 8, S4 Assessment 3 Many employers kept unions out Additions to labor force have little loyalty to organized labor Unions are victims own success 33

34. CH 8, S4 Assessment 4 Women tend to fill lower-paying positions Discrimination prevents them from getting promotions Career interruptions for child-bearing affect women’s seniority 34

35. CH 8, S4 Assessment 5 It has been growing due to increasing hours in retail and the need to fill extra positions during peak periods. 35

36. CH 8, S4 Assessment 6 As prices tend to increase over time, purchasing power of fixed minimum wage decreases. 36

37. Image, p. 206 Questions 1 the United States spends about 5% less than France. 2 No, clearly many nations in the sample are below 20% Yes, on the average, the sample runs close to 20% (average considering 6.3 billion people (not shown) vs 700 million people) 37

38. +why do you think Americans spend less money (especially lower income people) on food AND have a growing obesity problem? US produces large surpluses of foods, making food cheaper to buy. Foods are processed in factories using mass-production techniques allowing longer storage of food. – also keep prices low Chemically or genetically modified, which often adds weight, even faster than fresh food. – Also designed to make people eat more, making them buy more. Americans are encouraged by corporate media to eat plenty, super- size, and have seconds (even thirds). American regional eating traditions: Southerners fry food, use a lot of sugar and are generous with portions. – American parents in general tend to overfeed their children. Image, p. 206 Extra 38

39. Why are Japanese food prices higher than British food prices? (consider: both are island nations with limited land; Japan’s population is twice that of Britain’s) Japanese prefer fresher foods – Will pay more for them on a daily basis. Japanese do not like chemicals or most processes used by Western nations like the US and Britain. Japan must import more food items than Britain (livestock/marine and fruits and vegetables not grown in Japan). Image, p. 206 Extra 39

40. Image, p. 207 Question Traditional theory of wage determination: Theory of negotiated wages 40

41. Image, p. 208 Question That unionization does help determine wages and can help make wages higher. +is there a downside to this? Junior workers do not get raises – May be laid off so company can save money New workers may not be hired. – May get hired but on different contract terms than older workers Usually with less benefits 41

42. Image, p. 212 Question Steadily decreasing: also steadily decreasing 42

43. Image, p. 213 Question The late 1980s or 1990 43

44. Image, p. 214 Question Sales Retail and personal services Teachers, except college and university Health service workers Private household service workers Secretaries Stenographers typists 44

45. Image, p. 217 Because prices increased during that period the purchasing power of the minimum wage declined. + in what two years was the minimum wage, as a percent of the average manufacturing wage, the highest? 1950, 1968 Approximately what was the minimum wage adjusted for inflation in those years? 1950: About $4.95 (2003) 1968: About $2.60 (2003) 45

46. Brief Response Wal-mart is a profitable business with many outlets that require a lot of floor employees. Their selling-point is low prices. Which group do you think is the majority of their labor force, full-time employees or part-time employees? Explain. (2) 46