Understanding Labor Unions: Types, Negotiation, and Impact

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 • 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 • union shop • mediation • arbitration • injunction • seizure • civilian labor force • trade union • industrial union • strike • picket • boycott • lockout • 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 • union shop • mediation • arbitration • injunction • seizure • civilian labor force • trade union • industrial union • strike • picket • boycott • lockout • glass ceiling • comparable worth • part-time worker • minimum wage