Ch 9 Labor Section 1 Labor Market Trends
Ch. 9: Labor
Section 1: Labor Market Trends • While the technological revolution has replaced many jobs, it has also created new ones.
Labor Force • Labor force- all nonmilitary people who are employed or in search of employment.
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
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)
Occupational Trends • The major labor trend has been… • Fewer goods-sector jobs • More service-sector jobs
Goods-Sector vs. Service Sector. • Goods related jobs: – Manufacturing – Agriculture • Service related jobs: – – – Healthcare Education Accounting Marketing Web Development
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.
Education • Education is critical for developing a strong servicesector 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.
Section 2: Labor and Wages • Wages for labor are determined just like prices for products: supply and demand.
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?
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.
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
Blue Collar v. White Collar • White collar: professional labor • Blue collar: non-professional labor
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.
Earnings Chart
Section 3: Organized Labor • Labor often organizes to collectively negotiate for improved wages and benefits.
Labor Union • Labor unions are organizations of workers that try to improve conditions, wages, and benefits for its members.
Strikes • Labor unions sometimes go on strike, stop working, to put pressure on employers to meet their demands.
Labor Movement • Labor unions grew out of the Industrial Revolution when wages and working conditions were extremely poor.
Collective Bargaining • Collective bargaining is the process in which union and company representatives meet to negotiate new terms.
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.
- Slides: 22