1. Employment Trends and Issues
Chapter 8, Section 4

2. Decline of Union Influence (pg. 212, Figure 8.7)
Decline of both union membership and influence
Union Membership
1945 – 35.5% of non-agricultural workers
1980 – 21.9% of non-agricultural workers
2002 – 13% of non-agricultural workers
What is the reason for the decline?

3. Reasons for Decline
Employers want to keep unions out of their business
Additions to the labor force
Unions are the victims of their own success

4. Renegotiated Union Wages
Employers want to lower union wages:
Giveback – wage, fringe benefit, or work rule given up when a labor contract is renegotiated
Companies declare bankruptcy to get rid of labor contracts
Two-tier wage system: keep high wages for current workers, but a much lower wage for newly hired workers

5. Lower Pay for Women (pg. 213, Figure 8.8 and pg. 214, Figure 8.9)
Human Capital Differences:
Differences between skills and experience (raise families, lower levels of education)
Gender and Occupation:
uneven distribution of men and women in various occupations
Discrimination:
Glass ceiling – invisible barrier that prevents advancement up the corporate ladder

6. Lower Pay for Women: Solutions – Legal Remedies
Equal Pay Act of 1963
Applies to men and women that work at the same job
Requires equal pay for jobs that require equal skills
Civil Rights Act of 1964:
Title VII – prohibits discrimination in all areas of employment based on the basis of gender, race, color, religion, and national origin.
Equal Employment Opportunity Commission (EEOC) – investigates charges of discrimination, issues guidelines and regulations, conducts hearing and gathers statistics

7. Lower Pay for Women: Solutions – Comparable Worth
The idea that people should receive equal pay for equal work that is different, but just as demanding as, other types of work
Factors:
Occupational hazards
Educational requirements
Degree of physical difficulty

8. Lower Pay for Women: Solutions – Comparable Worth
Most economists believe that fair and unbiased comparisons of occupations are almost impossible to make
Comparable worth is not necessary as long as people are free to obtain training and enter the profession of their choice
Others believe that comparable worth is necessary to remove gender discrimination in the workplace

9. Lower Pay for Women: Solutions – Set-Aside Contract
Guaranteed contract reserved for a targeted group
Certain number of defense contracts be reserved exclusively for minority-owned businesses
1988 – CA required 5% of state’s bond contracts reserved for women lawyers, bankers, and women who place bonds with other investors
Intent of these programs is to “boost” and not provide a permanent subsidy
“graduation” clause

10. Part-Time Workers Workers who regularly work less than 35 hours/week
1 out of 5 jobs in the U.S. Economy are part-time jobs

11. Part-Time Workers: Reasons for Growth
Retail positions are helpful addition family incomes
Allow additional activities (college courses, time with family)
Flexible schedules (lunch rush, seasonal)
Lower cost to businesses (low health, retirement and other benefits)

12. Part-Time Workers: Criticisms
Wages are too low and hours are too few to earn a decent living
Some part-time workers think they are abused by the system and forced to work inconvenient schedules
Others believe the system denies full-time employment to a large number of capable workers
Unions are opposed to part-time workers
1997 – UPS strike

13. Minimum Wage Debate (pg. 217, Figure 8.10A)
Lowest wage than can be paid by law to most workers
Original intent was to prevent exploitation of workers and provide equity and security to unskilled workers
Supporters
Equity and security consistent with U.S. economic goals
Opponents
Object on the grounds of economic freedom
Wage discriminates against young people

14. Minimum Wage: Measured in Current Dollars (pg. 217, Figure 8.10A)
Current dollars are dollars that are not adjusted for inflation
Viewed in this manner, it seems as though minimum wage increased dramatically
Does not take into account inflation

15. Minimum Wage: Adjusted for Inflation (pg. 217, Figure 8.10B)
Real or constant dollars – economists use dollars that are adjusted in a way that removes distortion of inflation
Base year – year that serves as a comparison for all other years
Panel B shows minimum wage had more purchasing power in 1968
Panel B also shows minimum wage increases whenever it increases faster than inflation (1997)

16. Minimum Wage: Compared to Manufacturing Wages (pg. 217, Figure 8.10C)
Panel C – minimum wage as a percent of average manufacturing wage