Chapter 9 Honors Economics 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 20th century (manufacturing jobs) By the end of the 20th 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!