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Chapter 8 Employment, Labor and Wages

Chapter 8 Employment, Labor and Wages. The Labor Movement. The study of labor is part of macroeconomics or the branch of economics that deals with the economy as a whole Employment Gross domestic product Inflation Economic growth The distribution of income. The Labor Movement.

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Chapter 8 Employment, Labor and Wages

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  1. Chapter 8Employment, Labor and Wages

  2. The Labor Movement • The study of labor is part of macroeconomics or the branch of economics that deals with the economy as a whole • Employment • Gross domestic product • Inflation • Economic growth • The distribution of income

  3. The Labor Movement • Civilian labor force-men and women 16 and older who are either working or actively looking for a job • 140 million Americans belong • Excludes those in armed forces, prison or other institutions

  4. Early Union Development • The development of unions started in the colonial period • Peaked in the 1930’s What do labor unions do?

  5. Unions • Craft or trade union-association of skilled workers who perform the same kind of work • Industrial union-association of all workers in the same industry, regardless of the job each worker performs • Strike, picket or boycott

  6. The Great Depression • Collapse of the stock market in October 1929 • 1 in 4 workers were jobless • 1929 average manufacturing wage=$0.55/hour • 1933 average manufacturing wage=$0.05/hour

  7. Antiunion Legislation • Right-to-work law-state law making it illegal to force workers to join a union as a condition of employment, even though a union may already exist at the company

  8. The AFL-CIO • 1886 The American Federation of Labor (AFL) was formed • 1935 The Committee for Industrial Organization (CIO) was formed • 1955 the AFL and CIO joined to form The American Federation of Labor and Congress of Industrial Organization (AFL-CIO)

  9. Union Arrangements • Closed Shops- the employer agrees to hire only union members • Union Shops-workers do not have to belong to the union to be hired, but must join to remain employed

  10. Union Arrangements • Modified Union Shops-workers do not have to belong to the union to be hired, and cannot be made to join one to keep their jobs • Agency Shops- does not require workers to join a union as a condition to get or keep a job, but does require them to pay union dues to help pay collective bargaining costs

  11. Collective Bargaining • Mediation-bringing in a neutral 3rd party to help settle a dispute • Arbitration-both sides agree to place their differences before a 3rd party whose decision will be accepted as final • Fact-finding-agreement between union and management to have a 3rd party collect facts about a dispute and provide nonbinding recommendations

  12. Collective Bargaining • Injunction-court order not to act • Seizure-temporary takeover of operations to allow the govt. to negotiate with the union • Presidential Intervention

  13. Categories of Labor • Unskilled Labor (physical labor) • Semiskilled Labor (operate machinery) • Skilled Labor (operate complex machinery) • Professional Labor

  14. Wage Determination • Traditional Theory of Wages • The supply and demand for a worker’s skills and services determine the wage or salary • Theory of Negotiated Wages • Organized labor’s bargaining strength is a factor that helps determine wages • Signaling Theory • Employers are willing to pay more for people with “signals” or superior ability

  15. Labor Today • Decrease in unions • Lower pay for women than men • Increase in part-time employment • Increase in the minimum wage

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