1. Employment, Labor and Wages

2.  “Labor” refers to people with all their abilities and efforts; one of four factors of production, does not include the entrepreneur.  A labor market is a market like any other, consisting of buyers and sellers and governed by the laws of supply and demand.

3.  Labor Unions are organizations that work for its members’ interests concerning pay, working hours, health coverage, fringe benefits and other job related matters.  Small, unsuccessful labor unions existed during colonial times.  The Knights of Labor, founded in 1869 was the first successful labor union. It was a union of railroad workers and eventually failed.  The American Federation of Labor (AFL) was founded by cigar maker Samuel Gompers in 1881. It was a union of skilled workers.

4.  The Congress of Industrial Organizations (CIO) was founded by John L. Lewis in 1938 for semi-skilled and unskilled workers.  The AFL and CIO merged in 1955, creating the organization known today as the AFL-CIO.  Business and government have historically been opposed to unions.  Today, approximately 14% of American workers belong to unions.

5.  Collective Bargaining  fact finding  mediation  arbitration  Strike  Picketing  Boycott  Slowdown  Sick-out

6.  Lockout  Injunction  Strikebreakers, “Scabs”  Political Activity  Public Relations

7.  Clayton Antitrust Act (1914): exempts unions from antitrust suits and gives labor the right to strike, picket, and organize a boycott.  Norris-La Guardia Act (1932): guarantees the right of a worker to join a union and engage in normal union activities; outlaws contracts prohibiting employees from joining unions.

8.  Wagner Act/National Labor Relations Act (1935): guarantees workers the right to form unions and bargain collectively; established the National Labor Relations Board (NLRB.)  Fair Labor Standards Act (1938): established minimum wage, maximum workweek and restricts child labor.  Taft-Hartley Act/ Labor Management Relations Act (1947): reversed some earlier union gains by prohibiting closed shops; allows states to enact right-to-work laws.  Landrum-Griffin Act (1959): passed in an effort to prevent corrupt union practices.

9.  Decline in Union membership due to an increase in white collar workers  A decrease in blue collar jobs  Strikes  Layoffs  Corruption  Political Activity

10.  The Traditional Theory of Wages states that the supply and demand for a worker’s skills and services determines the wage or salary.  The Theory of Negotiated Wages states that organized labor’s bargaining strength is a factor that helps determine wages.  The Signaling Theory states that employers are willing to pay more for people with certificates, diplomas, degrees and other indicators, or “signals” of superior ability.  Minimum wage and regional wage differences also affect how much people earn.  There is a clear relationship between education and earnings.