Chapter Nine The Labor Force Labor Market Trends
Chapter Nine The Labor Force
Labor Market Trends Section One:
Tracking the Labor Force Employment You are employed if you are 16 or over and meet one of the following criteria Worked one hour for pay in the last week Worked 15 hours in a family business Held jobs but did not work for other reasons Unemployment If you do not meet these criteria, you are counted as unemployed You must have looked for a job in the past four weeks You must either have work lined up or be actively searching a new job Does not count retirees, disabled, full time students or stay at home moms
The Bureau of Labor Statistics The BLS is charged with tracking the labor force They look at overall employment in the economy and historical trends and predict future employment. Annually, the BLS publishes the Occupational Outlook Handbook
US Unemployment Current Unemployment Rate – 3. 8% Historic High – 29% 1931 Historic Low – 4. 1% 2000 (After Adjustment) Current Underemployment Rate - ? ? ?
Occupational Trends The U. S. Economy is in a constant state of flux – We’ve gone from an agrarian to industrial to information based economy More services fewer goods – Because of new technology and increased foreign competition, the number of services produced in the U. S. has far outpaced the production of goods. A steady decline in manufacturing – Since the 1970 s, the U. S. economy has employed fewer and fewer people in manufacturing.
The Changing Labor Force Increasing Levels of education – The average worker is more educated today than 50 years ago. College education – Getting a good education is costly and time consuming Learning effect – Idea that higher levels of education lead to better, more productive and more efficient workers Screening effect – Completion of college indicates to future employers that a job candidate is intelligent and hard working.
Education and Income Levels Higher education levels create wide income disparity
Women in the Work Force Since the 1920 s , the number of women in the work force has increased exponentially. What are some reasons you think women are entering the work force in such large numbers?
Wages and Benefits Over the past 20 years, wages have increased for high skill workers while remaining stagnant for the vast majority of workers. Income disparity has steadily increased since 1980 The number one determinant of wages is education level The cost of FRINGE BENEFITS has been rapidly increasing causing some firms to control costs by lowering wages, out sourcing and hiring more temporary workers
$60, 000 $61, 500 +2. 5% $63, 150 +2. 6 %
Labor and Wages Section Two
Supply and Demand for Labor Demand Labor Supply The demand for labor comes from The supply for labor comes from Workers are paid based on their As wages rise, more people are As profits increase, new firms As wages fall, the amount of private firms and government agencies productivity enter the market and drive up demand for labor people seeking to sell their labor in the factor market willing to work in a specific industry workers in an industry decreases
Equilibrium Wage The equilibrium wage is the wage rate that produces neither an excess supply or excess demand for labor
Wages and Skill Levels Unskilled Labor – Requires no skills, education or training Semi-skilled Labor – Requires minimal skills or training. Often in the use of specialized equipment Skilled Labor- Requires specialized training to do the job Professional Labor – Requires advanced skills and education. Professionals usually receive a salary
Wage Discriminations Laws against wage Discrimination Pay Levels for Women Since the 1960 s, the US has passed The average female makes 73% of the The Equal Pay Act of 1963 ‘Women’s Work’ Title VII of the Civil Rights Act of 1964 Human Capital The Equal Opportunity Employment Career Paths several anti-discrimination lawsuits Commission average male The Glass Ceiling
Pay Levels By Gender and Ethnicity
Other Factors Affecting Wages Minimum Wage Safety Laws Minimum Wage laws tend to keep When employers are required to abide by The first minimum wage was created in Workers are willing to accept lower wages and unemployment artificially high. 1938 by the Fair Labor Standards Act. The first minimum wage was $0. 25. strict safety regulations, wages tend to fall. wages because the jobs are now deemed safer. Additionally, the cost of implementing the regulations drives down wages.
Organized Labor Section Three
Labor Unions are organizations the try to improve working conditions, wages and benefits for its members Nationally labor union members make about 17% more than nonunion workers
Labor Unions Enrollment in Labor Unions peaked in 1947 and has been falling steadily since. Decline of Manufacturing Foreign Competition Relocation of jobs to the South.
Power Of Unions Collective Bargaining – Union and Management Meet To Find Solutions Mediation- A Third Party Helps To Resolve Differences Between The Union and Management Arbitration- A Third Party That Has The Ability To Make Legally Binding Decisions.
Union Tactics Strike- Refusal To Work Picketing- Parading In Front Of The Company To Express Grievances Boycott- Stop Purchase Of Products Made By The Company
Management Strikes Back Replacement Workers (Scabs)- Replace Striking Workers Lockouts- Doors Are Closed/No Workers At All May Enter The Company Injunctions- A Court Order To Stop A Strike Taft-Hartely Act- Stops Strikes That Threaten The Health and Safety Of The Public
Labor Legislation 1914 Clayton Antitrust Act- Gives Labor Unions The Right To Strike 1935 Wagner Act- Guarantees Unions The Right To Strike/National Labor Relations Board Formed 1947 Taft-Hartely Act- Stops Strikes That Threaten The Health and Safety Of The Public
1964 Civil Rights Act Employers May Not Discriminate Based On Race, Color, Religion, National Origin, or Sex
Pay Levels By Gender and Ethnicity
Affirmative Action Aimed At Eliminating Racial and Gender Prejudice In The Work Force Quotas- Established To Provide A Percentage Of The Work Force That Must Be From A Minority Group All Hired Employees Must Meet The Qualifications For The Job
The Types of Unemployment
The Four Types of Unemployment Frictional Occurs even during periods of economic expansion. Happens because people are laid off or looking for work. Unemployment insurance may add to frictional unemployment Structural Upheaval in the labor market creates structural unemployment. Workers skills do not match the skills need by employers. Ex. A laid off steel worker trying to switch to a tech job.
The Four Types of Unemployment Seasonal unemployment occurs when industries slow down or make changes base on time of year. Ex. Retail during the holidays vs. the summer Ex. Illinois construction workers in the winter. Cyclical The result of fluctuations of the business cycle. During recession unemployment rises and then tends to fall during boom times. Ex. The Great Depression.
Other Factors Natural disasters can cause spikes in unemployment. Hurricane Katrina – Hit the market for oil workers very hard. War or Terrorism – The Sept 11 th terrorist attacks hit the market for airline workers very hard.
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