1. THE ECONOMY AND ITS IMPACTS
MGMT 329
THE ECONOMY AND ITS IMPACTS

2. BASIC DYNAMICS Economy is critical to the functioning of the IR system
Inflation impacts wage expectations
During rough economic times, unions less likely to strike or strike for a lengthy period
During periods of high inflation, union membership has increased

3. TODAY’S ECONOMY Relatively high unemployment and low inflation
Low end of business cycles
Employers have more power than workers and their unions
Structural change in economy resulting from trade liberalization and shift to service economy

4. TODAY’S ECONOMY (continued)
Shift from full-time work to part-time work
More self-employment and home-based work
Service economy tends to pay less than industrial economy
Less job security even for people with education and experience
Continuous restructuring and downsizing

5. CHANGING WORKFORCE (continued)
More part-time workers
One-third of part-time work is involuntary
Benefits
Provide work for people with family responsibilities and students
May lower person’s stress level
Less cost to employers

6. CHANGING WORKFORCE (continued)
More part-time workers (continued)
Concerns
Wages tend to be lower
Fewer people covered by health and welfare plans
Lower tax returns for economy
May be less committed workers
More difficult to schedule
Difficult to unionize
Tend to work in smaller organizations

7. CHANGING WORKFORCE (continued)
Other trends
Increase in home-based work
Increase in flexible work schedules
More temporary, casual and contract work
Moonlighting changed to more people having a series of part-time jobs

8. CHANGING WORKFORCE (continued)
Implications
Fewer people have steady, well-paying jobs
More work for themselves
Less job security and benefits
Growing economic uncertainty
Difficult to unionize

9. EFFECTS OF GLOBIZATION AND TRADE LIBERALIZATION
Growing emphasis on international trade
Return to more competitive labour markets
Easy for capital, labour, knowledge, information, goods to flow across borders
More emphasis on costs rather than tariffs
Increase in free trade agreements

10. Different ways of measuring unemployment
Types
Frictional--period of time between jobs
Structural--mismatch of available jobs and skills
Demand-deficient--overall lack of jobs
Different ways of measuring unemployment