Joel Garcia & David Rodriguez

The Changing Labor Force  Different from 60 years ago.  People expect to retire earlier  Human Capital is needed to achieve a job  Better education is needed for better jobs  Better education, more money spent

The Learning Effect  Theory stating that education increases productivity and results in higher wages.  The greater your education the better you’re paid.

The Screening Effect  Theory suggesting that the completion of college is an indication to employers that the job applicant is worthy and skillful for the job.  College degrees do not signify increases in productivity for employers, it only identifies good employees with skills.

Women Working  Women growing within the work force.  Reason is because they were encouraged to seek higher education and thus increased in productivity.  Many jobs and services do not require physical labor and this field appealed to women.

Temporary Workers  Known as contingent employment.  Seen very much in white-collar occupations.  Accessed through agencies, firms, or companies.  At times earns better than permanent jobs.

Why have temps?  More flexible than permanent workers  Easier to discharge  Have less legal rights in the work place  Sometimes paid less and have fewer benefits  Preferable then permanent workers

Trends in Wages and Benefits  Wages earned in the last twenty years have not increased much.  Reason for this is the provision of benefits within the work force.  Greater competition from foreign countries have lowered the demand of low-skilled workers.  This caused the cutting of wages.

Cost of Benefits  The benefits employer’s offer their workers costs them heavily.  Social system taxes on employees and employers contribute to their retirement compensation or if they become disabled.  These costs cut into the profit of the employer.  Contingent workers are an answer to eluding the costs of benefits.  Carrying their business is another way of eluding benefit costs. Overseas benefits don’t exist.

GAME TIME! Silent Dynamite!!!

The Quiz of Doom! 1. What is the learning effect? Explain its reasoning. 2. What is the screening effect? Explain how it would appeal to employers. 3. What contributing factor placed men and women within equal footing of the Labor Market? 4. Name three benefits employers receive from temporary workers. 5. Give two ways an employer can cut the costs of providing benefits.

Answers 1. The learning effect is the theory that states that education increases productivity and results in higher wages. This is rational because as one learns one acquires better skills in a particular trade, thus maximizing efficiency in producing a product or service which would result in a higher compensation. 2. The screening effect is the theory that suggests that the completion of college indicates to employers that a job applicant is intelligent and hard-working. This would appeal to employers in a positive manner because this would suggest that they are hiring an employee that would work efficiently in maximizing their profit. 3. The fact that jobs are now calling for brain power and not as much physical power. The demand for personal skills in intangible trades caused for women to be able to compete on an even playing field. 4. Benefits of temporary workers include the flexibility they have in adjusting to demands, easy to lay off, they have fewer legal rights in the workplace, they are paid less, and have fewer benefits. 5. An employer can cut benefit costs by resorting to contingent employment or moving their production facilities overseas. A result of capitalism.