EMPLOYMENT, LABOR, AND WAGES

1. EMPLOYMENT, LABOR, AND WAGES CHAPTER 8

2. Warm up Question: April 4th, 2017 Have you ever convinced a person in authority to do something differently than before? Would it work better if only one person in the group made the attempt? What does this teach you about strength in numbers?

3. Introduction Labor- macroeconomics (economy as a whole) Civilian labor force men and women 16 years or older who are working or looking for a job Unions are important: • Pushed for laws affect pay levels and working conditions for all people • Over 16 million members,force in economy

4. Reflection Question Why are unions important even though the percentage of workers are small?

6. Early Union Development Began in colonial times, public opinion against unions until Civil War After Civil War: craft or trade unions (skill workers in same trade) and industrial unions (workers specific industries). Unions help workers: Higher pay, better hours, and job security Management and unions not agree: workers could strike (refuse to work). Striking workers could picket (parade in front of business carrying signs) Union could boycott (people refuse buy products from employer or company). Employer fought lockouts (lock doors no employees work) Company unions (organized, supported and run by employers) Clayton Act 1914: Companies could not sue labor unions

7. Labor During Great Depression Great Depression: Bad economic problems began in 1929. 1933 factory wages fell from 55 to 5 cents an hour Norris-LaGuardia Act of 1932 forced companies work with unions to solve problems instead of going to court. 1935, National Labor Relations Act (Wagner Act) gave unions right to collective bargaining (union members talk to manager to improve working conditions) Wagner Act created board stop unfair labor practices (treating union member poorly). Fair Labor Standards Act (1938) fixed minimum wage for workers (lowest wage company can pay a worker). Illegal hire children under 16. Over 40 hours a week companies had pay workers 1 ½ times usual wage for extra hours

8. Reflection Questions Why did the government support unions during the Great Depression?

9. Labor Since World War II Management not labor was the victim. Taft-Hartley Act of 1947 limited unions in labor-management disagreements Right-to-work-laws: Illegal make workers join a union to be hired 1959: Landrum-Griffith Act tried protect unions from unfair treatment by union officials. Law made unions report to government how managed money. Union officials had to be elected by secret ballot, so union leaders could not tell how each member voted American Federation of Labor and Congress of Industrial Unions (AFL-CIO) major force in economy today. Example: Independent unions and Brotherhood of Locomotive Engineers

10. Closure Question What have you learned today about the labor movement in America?

11. Warm up Question: April 5th, 2017 Imagine that your favorite sports team refuses to play in a game because of bad team management (very late payments, extra late night team practices). How can these issues be resolved?

12. Union Arrangements Labor movement organizes workers deal with management Closed shop: Employers hire only union members Union shop: Workers not have to belong to union to be hired, join union after hired and be members to keep jobs Modified union shop: Workers do not have to belong to union to be hired or keep jobs, if join union, they must remain as long as they keep jobs Agency shop: Workers do not have to join union, pay union dues to cover collective bargaining

13. Reflection Question Why are nonunion workers in an agency shop required to share the cost of collective bargaining?

14. Collective Bargaining Collective bargaining: representatives from labor and management meet Successful: Both parties agree on pay, working conditions, and fringe benefits Final agreement include grievance procedure (steps to follow to solve disagreements that may arise)

15. If labor and management can’t agree: • Mediation: Third party (“outside” group not affected by decision). Looks at both sides of argument and helps settle differences • Arbitration: Both sides agree to place differences before third party whose decision will be accepted as final • Fact-finding: Agreement between union and management to have third party collect facts about a disagreement and offer solutions

16. D. Injunction: Order from law court not to take action. Example: management gets injunction ordering labor not to strike, making it illegal if they do E. Seizures: Government takeovers of operations. Helps government work with union F. President step in to help both parties settle problems. President use emergency powers end strikes

17. Reflection Question Why is there a long process to settle a dispute between a union and management?

19. Closure Question What have you learned today about how unions and manager settle disputes?

20. Warm up Question: April 7th, 2017 What kind of job do you hope to have someday? What do you think you need to qualify for that job?

21. Categories of Labor Unskilled labor: People work with hands, no other training, earned lowest wage Semiskilled labor: Some training operate machines (dishwashers) Skilled labor: Operate complex equipment (typists, computer technicians) Professional labor: Highest level of education and management skills (doctors, lawyers), highest incomes

22. Reflection Question In which categories of labor would you place chefs, cleaning crews, and scientists?

23. Noncompeting Labor Grades Categories of workers who don’t compete with one another for jobs Unskilled workers don’t compete with skilled workers Most people don’t move categories: A.Cost of education and training B. Lack of opportunity (No colleges available) C. Not willing to put in effort

24. Reflection Question Why would a dishwasher in a restaurant not go to college to become a doctor?

25. Wage Determination Wage rate base amount given for a job • Theory of wage determination: Supply and demand decide what workers earn. High salaries of professional athletes. Teams have a high demand for talented players and the supply of good athletes is small. Professional athletes earn a lot of money. Equilibrium wage rate: pay rate neither too many or too few people in the labor market

28. B. Theory of negotiated wages: Organized labor’s bargaining strength helps decide wages. Seniority (time a person works on the job) Workers with more seniority receive higher negotiated wages than others

29. C. Signaling theory: Employers pay more when people have certificates, diplomas, and degrees. Give impression or “signal” person has good ability to learn things and work hard

30. Reflection Question Why would Oscar, a college graduate receive a promotion and pay raise before George, who has a high school diploma and has served five years longer?

33. Regional Wage Differences Wages for the same job can be different in different part of the country. There are more skilled workers in some parts of the country than in others Labor mobility: The ability and willingness to move to different areas for higher wages. Cost of living: Higher in Alaska than southern states, employers pay more in Alaska. Workers think certain places attractive, work for less to live there.

37. Reflection Question What is the most likely reason a worker who enjoys fishing would leave a high paying job in New York for a low paying job in Montana?

38. Warm up Question: April 19th, 2017 Do you know people who earn higher allowances than you for the same amount of chores? Do you think this is fair? Why or why not?

39. Decline of Union Influence Membership and influence of labor unions going down: • Employers tried hard keep unions out of businesses • New workers (women and teenagers) not interested in unions.Not main source of family income. Work for low pay • Unions raise wages high, companies charge high prices for products that workers make. Expensive products sell less than cheap products. Companies cut back on production and lay off workers

40. Employers reduce money pay union workers asking givebacks (wages and benefits union members agree to give up when asking for new agreement) Union workers agree givebacks because afraid if don’t agree, company go out of business Employers get rid of labor contracts providing company bankrupt (company can’t pay bills) Company prove union wages helped bankrupt, federal courts let company go back on its agreements with union workers Two-tier wage system- Keep wages high for people working in company

41. Reflection Question How do employers today lower union salaries?

42. Lower Pay for Women Women earn less than men, women have fewer skills and less job experience than men More men than women look for higher paying jobs (construction) Discrimination in labor market, women and minorities hit glass ceiling (keeps them moving up in companies)

47. Federal government tried end discrimination in workplace Equal Pay Act of 1963: Companies give same pay different people in same job Civil Rights Act of 1964: Equal Employment Commission, investigate job discrimination Comparable worth: People receive equal pay for work different but demanding as other types of work Set-aside contracts: Job contracts set aside for certiain group (minority owned businesses)

48. Reflection Question Why are women today still paid less than men?

49. Part-time workers Work less than 35 hours per week Attend college during day. Flexibility in scheduling Wages and benefits average more $10 per hour, less ½ amount per hour spent on full-time workers Unions against part-time jobs because workers who want to work full time are scheduled for part-time and get less pay

50. Reflection Question What are the advantages and disadvantages of part-time work?