Labor Market Trends

Labor Market Trends Objective: • How do economists define the labor force? • What occupational trends exist in the U.S. economy? • What are the current trends in wages and benefits? *Be sure to leave a couple blank lines under each question and answer the questions at the end of the lesson.

CA Standard(s) Covered 12.4 Students analyze the elements of the U.S. labor market in a global setting. 2. Describe the current economy and labor market, including the types of goods and services produced, the types of skills workers need, the effects of rapid technological change, and the impact of international competition. 3. Discuss wage differences among jobs and professions, using the laws of demand and supply and the concept of productivity.

Employment People are considered employed if they are 16 years or older and meet at least one of the following requirements: They worked at least one hour for pay within the last week; or They worked 15 or more hours without pay in a family business; or They held jobs but did not work due to illness, vacations, labor disputes, or bad weather. Unemployment People are considered unemployed if they are 16 years or older and meet all the following criteria: They do not have a job; and They have actively looked for work in the prior 4 weeks; and They are currently available for work. Current unemployment rate: 9.1% The United States Labor Force Economics defines the labor force as all nonmilitary people who are employed or unemployed.

A Changing Economy The economy of the United States has transformed from a mainly agricultural economy in the 1800s, to an industrial giant in the 1900s. Fewer Goods, More Services Overall, the United States is shifting from a manufacturing economy to a service economy. As service jobs increase, the nation is losing manufacturing jobs to other countries where labor is cheaper. Demand for skilled labor is rising, and the supply of skilled workers is increasing to meet the demand. Occupational Trends

The Changing Labor Force College Graduates at Work • The screening effect theory suggests that the completion of college indicates to employers that a job applicant is intelligent and hard-working. • The learning effect is the theory that education increases productivity and results in higher wages.

Education and Income • Potential earnings increase with increased educational attainment. • Over the past 20 years, earnings for college graduates have increased, while earnings for workers without college degrees have decreased. Source: U.S. Census Bureau

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Section 1 Assessment 1. How have the earnings of U.S. workers changed over the last 20 years? (a) Average wages of all workers have gone up. (b) Average wages of all workers have gone down. (c) Average wages of college graduates have gone up. (d) Average wages of non-college graduates only have gone up. 2. Which of the following is not a reason firms hire temporary workers? (a) Temporary workers sometimes receive lower wages and benefits. (b) Some employees prefer temporary working conditions. (c) Demand for temporary workers is low. (d) Temporary workers usually have more flexible working arrangements. Let’s check out the average weekly earnings in U.S…Click Here!

HW • Read pages 211-217 and complete questions 1-3 p. 217.

Labor and Wages Objective: • How do supply and demand interact in the labor market? • How are wages and skill levels related? • What forms of wage discrimination still exist? *Be sure to leave a couple blank lines under each question and answer the questions at the end of the lesson.

CA Standard(s) Covered 12.4 Students analyze the elements of the U.S. labor market in a global setting. 3. Discuss wage differences among jobs and professions, using the laws of demand and supply and the concept of productivity.

Effects of Wage Increases A new restaurant opens in town, offering higher wages for cooks. Other restaurants must raise wages for cooks in order to compete for scarce labor. Restaurants increase the price of meals to cover their increased labor costs. When the price of meals increases, consumer demand decreases. As business decreases, restaurants’ demand for cooks decreases. Supply and Demand in the Labor Market Labor Demand • The higher the wage rate, the smaller the quantity of labor demanded by firms and government. Labor Supply • As wages increase, the quantity of labor supplied also increases. Equilibrium Wage • The wage rate that produces neither an excess supply of workers nor an excess demand for workers in the labor market is called the equilibrium wage.

Wages and Skill Levels • Wages vary according to workers’ skill levels and education. Jobs are often categorized into the following four groups: Unskilled Labor (lowest wage) • Unskilled labor requires no specialized skills, education, or training. Examples: waiters, messengers, janitors Semi-Skilled Labor • Semi-skilled labor requires minimal specialized skills and education. Example: fork-lift operator Skilled Labor • Skilled labor requires specialized skills and training. Examples: auto mechanics, plumbers Professional Labor(highest wage) • Professional labor demands advanced skills and education. Examples: lawyers, doctors, teachers

Wage Discrimination Laws Against Wage Discrimination • The Equal Pay Act of 1963 declared that male and female employees in the same workplace performing the same job had to receive the same pay. • Title VII of the Civil Rights Act of 1964 forbids job discrimination on the basis of race, sex, color, religion, or nationality. Pay Levels for Women • American women today earn about 80 percent of what men earn. Pay Levels for Minorities • As the figure to the right shows, racial minorities tend to earn lower pay than white men. Chart on p.224

Section 2 Assessment 1. As wages increase, (a) the lower the quantity of labor supplied. (b) the quantity of labor supplied also increases. (c) the lower the quantity of labor demanded. (d) the higher the number of people in the labor force. 2. Which of the following falls in the category of skilled worker? (a) doctor (b) waiter/waitress (c) auto mechanic (d) teacher Let’s look for jobs!!! Click Here!

HW • Read pages 219-226 and complete questions 1-4 p. 226.

Organized Labor Objective: • What is a labor union? • Has union membership declined? • How does collective bargaining work? • What is a strike? *Be sure to leave a couple blank lines under each question and answer the questions at the end of the lesson.

CA Standard(s) Covered 12.4 Students analyze the elements of the U.S. labor market in a global setting. 1. Understand the operations of the labor market, including the circumstances surrounding the establishment of principal American labor unions, procedures that unions use to gain benefits for their members, the effects of unionization, the minimum wage, and unemployment insurance.

Union Membership Trends • Less than 14 percent of U.S. workers belong to a labor union. • Union membership has been declining. A labor union is an organization of workers that tries to improve working conditions, wages, and benefits for its members.

Collective Bargaining Wages and Benefits • The Union negotiates on behalf of all members for wage rate, overtime rates, planned raises, and benefits. Working Conditions • Safety, comfort, worker responsibilities, and other workplace issues are negotiated and written into the final contract. Job Security • One of the union’s primary goals is to secure its members’ jobs. The contract spells out the conditions under which a worker may be fired. Collective bargaining is the process in which union and company representatives meet to negotiate a new labor contract.

Labor Strikes and Settlements Mediation • To avoid the economic losses of a strike, a third party is sometimes called in to settle the dispute. Mediation is a settlement technique in which a neutral mediator meets with each side to try and find an acceptable solution that both sides will accept. Arbitration • If mediation fails, talks may go into arbitration, a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides. Strikes • If no agreement is met between the union and the company, the union may ask its members to vote on a strike. A strike is an organized work stoppage intended to force an employer to address union demands. Strikes can be harmful to both the union and the firm.

Section 3 Assessment 1. Which of the following is not a goal of unions? (a) increase job security (b) take control of company ownership (c) higher wages for employees (d) increase worker benefits 2. What has been the pattern of union membership in recent years? (a) growth of private sector union membership only (b) decline of overall union membership (c) steady increase of overall membership (d) decline of public sector union membership only Let’s play a game!!!Click Here!

HW • Read pages 228-234 and complete questions 1-5 p. 234. • Study flash cards for Jeopardy!

Labor Market Trends