Labor Chapter 9 Honors Economics Labor Force The

Labor Chapter 9 Honors Economics

Labor Force • The human effort used to produce goods & services • Includes all non-military people over age 16 who are employed or unemployed & looking for work • Information collected by the Bureau of Labor Statistics (BLS)

Unemployment • Anyone who is not working and actively looking for work. • “Discouraged workers” are not counted • Statistics from the BLS

Occupational Trends • The U. S. economy was originally agricultural (most were farmers) • Shifted to an industrial economy in the 20 th century (manufacturing jobs) • By the end of the 20 th century, it shifted again to the computer and information age (service economy jobs) • Global economy is causing less skilled jobs to go abroad where labor is cheap

Occupational Trends (continued) • U. S. workers now need more technical skills • U. S. workers now need more education college degrees • Women are now over 60% of the workforce • Business are hiring more temporary workers instead of full time (“contract labor” & “consultants”)

Labor and Wages • Supply and demand for labor (& wages) is affected by: • Skill of workers • Society’s value for this skill • Number of workers in this field • Location of workers • Risk involved in job

Labor & Wages • Equilibrium wage is the price at which there is no excess supply of workers nor an excess demand for workers. • Productivity is the value of output (divide output by hours of work) • Wages vary by skill levels • Wages are affected by discrimination, minimum wage laws, safety requirements, labor unions and other factors.

Labor Unions • Organization of workers who have united to be more powerful in dealing with their employers • Unions can represent all workers to obtain better wages, benefits and working conditions • However, unions tend to cause nonunion workers to make lower wages • Some unions cause “featherbedding”- force companies to keep unnecessary workers on the payroll.

Labor Unions Decline • Many problems were solved • Manufacturing jobs have decreased • Union reputations suffered as corruption & organized crime connections increased • Unions abused their power & prevented businesses from being efficient & competitive. • Right to work laws ban mandatory unions

Labor & Management Negotiations • Collective Bargaining – process in which the union & company management meet to negotiate a new contract. • Disputes cause: strikes, picketing, boycotts on the union side OR • Management can lockout, hires strike breakers (scabs), or get a legal injunction

Labor & Management Negotiations • To settle disputes – • MEDIATION – neutral third party listens to both sides, advises both and helps them reach a compromise solution • ARBITRATION – neutral third party reviews the case, & gives a decision. Employer & workers are legally bound to accept the decision.

THE END!