Labor, wages, and organized labor

Chapter 9 Sections 2 &3 Labor, wages, and organized labor

Productivity: value of output Chef is paid $15 hr, but able to generate $20 hr in revenue. Will his productivity be desired by other restaurants? Supply and Demand for Labor

What will happen to the wages of chefs? Supply and Demand for Labor

Supply and demand for labor follow the laws for supply and demand. If pay were high enough for chefs more people would be willing to invest in their human capital to earn that pay. Supply and Demand for Labor

This point exists when there is neither an excess supply of workers, nor excess demand for workers in the labor market. Equilibrium Wage

Unskilled Labor: no special skills, hourly wage • Semi-Skilled Labor: minimal skills, hourly wage • Skilled Labor: skills without supervision, hourly wage • Professional Labor: advanced skills and education, receives salary. • Examples of each Wages and Skill Levels

This occurs when people with the same job, same skills and education, same job performance, and same seniority receive unequal pay. Wage Discrimination

The Equal Pay Act 1963: required equal pay for men and women at same workplace. • Title VII of Civil Rights Act of 1964: prohibits job discrimination on the basis of race, sex, color, religion, or nationality. Laws against wage discrimination

The civil rights act also created the Equal Employment Opportunity Commission (EEOC) Laws against wage discrimination

“Women’s Work” Human Capital Women’s Career Paths Common Excuses for wage discrimination

Minimum Wage Laws • Safety Laws • Employers Respond to Wage Levels • Outsourcing, machines for people • Unions Other Factors Affecting Wages

Less popular today, peaked during heavy industry. • Average union salary is higher • $5 an hour more, equals $200 a week. Unions

Unions press employers to raise wages Wages up, labor demanded goes down, therefore union jobs decrease More workers then forced to seek nonunion jobs Increase in nonunion labor supply forces those wages to go down Unions depress Wages for nonunion

Also guilty of featherbedding, the practice of negotiating contracts that keep unnecessary workers on the company’s payroll. Unions

Section 3 Organized Labor

Unions begin to pop up in response to working conditions brought on by the industrial revolution. 1869 the Knights of Labor are founded. History of the Labor Movement

1886 Samuel Gompers founds the American Federation of Labor (AFL) History of the Labor Movement

Some companies forced employees to sign yellow-dog contracts, promising they would not join unions. Congress passes many pro-union policies during the great depression to help with recovery. History of the Labor Movement

1940s unions hit their peak with about 35% of workforce as members. History of the Labor Movement

Reputation of unions suffer because of links to organized crime and featherbedding. Inefficient Decline of the Labor Movement

These were laws that banned mandatory membership in the unions. • Passed by Congress in 1947 as the Taft-Hartley Act. • By 2000 union membership down to 13.5% Right to Work Laws

Decline of blue-collar manufacturing jobs. Foreign competition. Increase of females in workforce. Relocation, and reduction of production costs. Loss of traditional strongholds

Collective Bargaining: the process in which union and company representatives meet to negotiate a new labor contract • Wages and benefits • Working conditions • Job security Labor and Management

A strike is the unions ultimate weapon Strikes and Settlements

Mediation: A settlement technique in which a neutral mediator meets with each side to try to find a solution that both sides will accept. • Arbitration: A settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides. Strikes and Settlements

Labor, wages, and organized labor