1. Tuesday, April 21 Welcome back! Please submit your web diagram on the front table. Thank you! Bellringer: – Think about your job (or any work you may have done for pay). How are/were your wages determined? Who decided how much you would be paid? Was negotiation involved? Have you ever had a raise? Why or why not?

2. Labor market trends How many people are working? What are they doing? How have their occupations changed? What changes can we expect in the future?

3. Labor market trends Bureau of Labor Statistics (BLS) in the U.S. Department of Labor conducts a monthly survey – Labor force: all nonmilitary people who are employed or unemployed

4. Who is employed? For economists’ purposes: Are you 16 or older? And: – Did you work at least one hour for pay within the last week? OR – Did you work 15 or more hours without pay in a family business, like a farm? OR – Do you have a job, but you missed work due to illness, vacation, labor disputes, or bad weather? If yes, you are considered employed!

5. Who is unemployed? If you do not meet those criteria, you are considered to be unemployed* Includes people who are temporarily without work Includes people who have looked for jobs within the last four weeks * Does not include full-time students, stay-at-home parents, retirees, and others “waiting to work”

6. How is the job market changing? Occupational trends – A changing economy Agriculture Industrial Revolution Heavy manufacturing Electronics Computers

7. How is the job market changing? Occupational trends – Fewer goods, more services – Effects of international competition: Manufacturing jobs have left the U.S. and are unlikely to come back

8. Typical American worker of the 1950s White man High school graduate Secure 40 hr./wk job Would hope to stay until 65

9. Today’s worker On average: – An employee can expect to have five different jobs throughout his working life – Retirement can come at age 62 or younger

10. The changing labor force College graduates – A high school GED won’t get it done anymore – Education comes with training and experience – Downside: Education is expensive, in money, time, and effort

11. The changing labor force Women at work – Bank tellers and loan officers … – Women in the workforce

12. The changing labor force Temporary workers – Contract workers – Contingent employment: a temporary or part-time job Example:

13. The changing labor force Temporary workers – Advantages for firms: More flexible work arrangements; hours, etc. Easier to let go of Contract workers are paid less and have fewer benefits on average Some workers prefer this freedom over a long- term “attachment”

14. Trends in wages and benefits Earnings up for some, down for others – Steady average earnings over past 20 years – More employees are paid in added benefits Stock options, bonuses, flex time, etc. Cost of benefits – 28 percent of total compensation – Social Security, health insurance, pensions, etc. – Rising expense motivates employers to offset it Cutting benefits Moving production overseas

15. Labor and wages Employment or unemployment in a labor market depends on how closely the demand for workers – the number of available jobs – meets the supply of workers In a competitive labor market, workers are usually paid according to the value of what they produce Productivity: value of output

16. Labor and wages Demand: The higher the price of labor, the smaller the quantity of labor demanded by firms and government Supply: The higher the wage, the larger the quantity of labor supplied

17. Labor and wages Equilibrium wage: the wage rate that produces neither an excess supply of workers nor an excess demand for workers in the labor market

18. Wages and skill level Wages vary according to workers’ skill levels and education, along with supply and demand Four skill levels: – Unskilled labor – Semi-skilled labor – Skilled labor – Professional labor

19. Wages and skill level Unskilled labor: requires no specialized skills, education, or training; like dishwashers

20. Wages and skill level Semi-skilled labor: requires minimal specialized training and education; like lifeguards

21. Wages and skill level Skilled labor: requires specialized skills and training; like firefighters and auto mechanics

22. Wages and skill level Professional labor: requires advanced skills and education; like teachers, managers, bankers, doctors, computer programmers

23. Wage discrimination Sometimes, equilibrium wage doesn’t happendoesn’t happen Wage discrimination is when people with the same job, skills, education, performance, and seniority receive unequal pay – Women – Minorities Equal Pay Act of 1963 Civil Rights Act of 1964, Title VII – Equal Employment Opportunity Commission (EEOC)

24. Wage discrimination Why are women paid less? – “Women’s work”: Teaching, nursing, and clerical work don’t pay as well as medicine, law, or management – Human capital: Less education, training, and experience on average; fewer women are eligible for higher-paying, male-dominated jobs – Women’s career paths: Assumption that women aren’t interested in advancing; balancing kids and family

25. Wage discrimination Why are women paid less? Glass ceiling: an unofficial, invisible barrier that prevents women and minorities from advancing in businesses dominated by white men – Phrase is used in other fields, like politics

26. Wage discrimination Why are minorities paid less? – Minorities have historically had difficulties accessing education to build human capital – Non-discrimination laws are built in part to help minorities increase access to job opportunities where they can improve their skills and build experience – The goal is that over time, these workers will be able to compete equally in the labor market

27. Other factors affecting wages Minimum wage laws – Fair Labor Standards Act, 1938 Overtime States can have higher wage floors, but not lower ones – Safety laws More safety = lower wages Offset by cost of compliance – Replacing human workers with technology – Unions Labor union: an organization of workers that tries to improve working conditions, wages, and benefits for its members

28. Questions Answer the following questions on your own paper. Submit it for credit when you are done. – What is Alabama’s minimum wage? – When is the last time it was changed? – Who is Lilly Ledbetter? What happened to her, and what happened as a result? – Fast-food workers have gone on strike to get their minimum wage raised to $15/hour. Write a paragraph in which you explain the arguments FOR AND AGAINST this move, and articulate which side you agree with.

29. Homework, part 2 Write a paragraph spotlighting a business operating here in Auburn. Make at least three specific references to material we have covered over the past two lessons. Consider: – Is the business for-profit or nonprofit? – What sort of business organization is it? How do you know? – What goods and/or services are offered? – Advertising, branches, liability, management, ownership, etc. This part is due TOMORROW.