Decline of Union Influence Union membership is rapidly declining Union membership is rapidly declining Reasons for Decline Reasons for Decline Many employers have tried to keep unions out of business Many employers have tried to keep unions out of business Hired consultants to help battle unions in courts Hired consultants to help battle unions in courts Gave employees incentives not to join unions Gave employees incentives not to join unions New additions to the labor force have fewer ties to unions New additions to the labor force have fewer ties to unions Teenagers and women Teenagers and women Unions hurt themselves in the process of helping Unions hurt themselves in the process of helping They raised their wages, thus raising the prices of the goods their workers produce They raised their wages, thus raising the prices of the goods their workers produce

Renegotiating Union Wages Foreign competition threatened industries Foreign competition threatened industries Unions agreed to decrease wages Unions agreed to decrease wages Giveback – wage or benefit given up when contracts are renegotiated Giveback – wage or benefit given up when contracts are renegotiated Companies claim bankruptcy and get rid of labor contracts Companies claim bankruptcy and get rid of labor contracts Courts will allow them to terminate contracts and establish lower wages Courts will allow them to terminate contracts and establish lower wages Two-tier wage system Two-tier wage system Keeps high wages for current workers, decreases starting salary Keeps high wages for current workers, decreases starting salary

Lower Pay for Women Causes of Inequality Causes of Inequality Men and women are not evenly distributed among occupations Men and women are not evenly distributed among occupations Men enter higher paying fields Men enter higher paying fields Childbearing interrupts seniority for women Childbearing interrupts seniority for women Discrimination Discrimination Women feel they can only climb so high up the corporate ladder Women feel they can only climb so high up the corporate ladder Equal Pay Act of 1963 Equal Pay Act of 1963 Prohibits wage and salary discrimination Prohibits wage and salary discrimination Civil Rights Act of 1964 Civil Rights Act of 1964 Prohibits discrimination in all areas of employment Prohibits discrimination in all areas of employment

Lower Pay for Women Corrective Measures Corrective Measures Comparable worth – people receive equal pay for equal work Comparable worth – people receive equal pay for equal work If the job is different, but just as demanding If the job is different, but just as demanding Comparable worth is difficult to decide Comparable worth is difficult to decide Factor in education, occupational hazards, and degree of physical difficulty Factor in education, occupational hazards, and degree of physical difficulty Set-Aside Contracts Set-Aside Contracts Guaranteed contract reserved exclusively for a targeted group Guaranteed contract reserved exclusively for a targeted group

The Minimum Wage Debate Over the Minimum Wage Debate Over the Minimum Wage Supporters – equity and security are common objectives with America’s goals Supporters – equity and security are common objectives with America’s goals Opponents – goes against economic freedom Opponents – goes against economic freedom Measurements of Minimum Wage Measurements of Minimum Wage In real dollars, minimum wage has risen significantly In real dollars, minimum wage has risen significantly In constant dollars minimum wage has gone up and down In constant dollars minimum wage has gone up and down Compared to manufacturing wages it has remained mostly steady Compared to manufacturing wages it has remained mostly steady