1. Chapter 9 Honors Economics
Labor
Chapter 9
Honors Economics

2. 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)

3. Unemployment Anyone who is not working and actively looking for work.
“Discouraged workers” are not counted
Statistics from the BLS

4. 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

5. 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”)

6. 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

7. 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.

8. 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.

9. 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

10. 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

11. 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.

12. THE END!