1. Employment, Labor, Wages
Chapter 8

2. Unions
Unions negotiate for higher pay, better hours and working conditions, and job security.
Unions are important for two reasons
played a major role in promoting legislation that affects pay levels and working conditions today
unions are a force in the economy, with membership of nearly 16.2 million people

4. Types of Unions craft union, or trade union
an association of skilled workers who perform the same kind of work.
Craft unions in the United States include the International Brotherhood of Electrical Workers, the United Auto Workers, and the International Association of Machinists.

5. industrial union
an association of all workers in the same industry, regardless of the job each worker performs.

7. Types of Unions Closed Shops Union Shops
employer agrees to hire only union members.
this allows the union to determine who is hired
Taft-Hartley Act of 1947 made the closed shop illegal
Union Shops
You don’t have to be a member but must join when hired
21 states have right-to-work laws that prohibit mandatory union membership

9. Types of Unions Modified Union Shops
workers do not have to belong to a union to be hired and cannot be made to join one
If workers voluntarily join the union, however, they must remain members for as long as they hold their jobs

10. Types of Unions Agency Shops does not require a worker to join a union
but does require the worker to pay union dues
Nonunion workers are also subject to the contract negotiated by the union,

11. Key Terms macroeconomics company union civilian labor force
trade union
industrial union
strike
picket
boycott
lockout
union shop
mediation
arbitration
injunction
seizure
glass ceiling
comparable worth
part-time worker
minimum wage

12. Collective Bargaining
Representatives from both sides meet.
Collective bargaining requires compromise from both parties
Methods are available to resolve the differences

13. Collective Bargaining
Mediation
the mediator recommends a compromise to both sides.
Neither side has to accept a mediator’s decision
Arbitration
place their differences before a third party whose decision will be accepted as final

14. Collective Bargaining
Injunction
a court order not to act.
Seizure
a temporary takeover of operations
Presidential Intervention
The president of the United States may enter a labor-management dispute
The president also can fire federal workers

15. Categories of Labor Four major categories of labor
Unskilled
Semi-skilled
Skilled
Professional
Based on the general level of knowledge and skills

16. What type of Labor?

17. What type of Labor?

18. What type of Labor?

19. What type of Labor?

20. Unskilled Labor Those who work primarily with their hands
Unskilled workers are likely to have the least amount of human capital invested in them
Therefore they often earn the lowest wages
Example: A Stock Clerk at Trader Joe’s

21. Semiskilled Labor
Workers with enough mechanical abilities and skills to operate machines
These workers may operate basic equipment that call for a minimal amount of training.
Example: The Fork Lift Operator.

22. Skilled Labor
Able to operate complex equipment and can perform their tasks with little supervision
These workers represent a higher investment of human capital
Examples include carpenters, computer technicians, chefs, and computer programmers.

23. Professional Labor
Highest level of knowledge-based education and managerial skills
Doctors, scientists, lawyers, and corporate executives
These people have invested the most in their human capital and earn some of the highest incomes.

24. Noncompeting Labor Grades
Categories of labor do not directly compete with one another
Does not mean that some people in one category can never make it to a higher category
Some individuals have the ability and initiative to obtain additional technical skills

25. Wage Determination
Wage rates usually differ from one occupation to the next
Wages are sometimes different even within the same occupation.

26. Traditional Theory of Wages
Supply and demand for worker’s skills and services determine the wage or salary
Some of the highest paid people are the professional athletes with skills so exceptional that they are above and beyond the norm
In most cases, the higher the level of human capital the higher the average wage rate

29. Theory of Negotiated Wages
Union workers wages are higher than non-unionized workers

30. Theory of Negotiated Wages
Because of seniority, some workers receive higher wages than others who perform similar tasks

31. Signaling Theory
employers are willing to pay more for certificates, diplomas, degrees
“signals” of superior ability.

33. Regional Wage Differences
Skilled workers often are scarce in some parts of the country and abundant in others
causes differences in wage rates.
These differences can be minimized by labor mobility
the ability and willingness of workers to relocate.

35. Key Terms macroeconomics company union civilian labor force
trade union
industrial union
strike
picket
boycott
lockout
union shop
mediation
arbitration
injunction
seizure
glass ceiling
comparable worth
part-time worker
minimum wage