Chapter 8 Employment, Labor, and Wages

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Chapter 8Employment, Labor, and Wages
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The Labor Movement

• Early Union Development
• A. The nations first unions ware comprised of
  skilled workers.
• B. After the Civil war, as industry expanded,
  the labor force became more unified.
• C. Two types of unions developed-the trade union
  and the industrial union.
• D. Unions used strikes, pickets, and boycotts to
  help members get better pay, better hours, and
  job security.

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• E. Employers resisted unions through lockouts,
  firings, and even setting up company unions.
• F. Historically, the courts have viewed unions
  with hostility.

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• Labor During the Great Depression
• Unemployment and cut wages marked the decade of
  the Great Depression and encouraged unions to
  organize workers.
• The government began to pass laws protecting
  unions.

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• Labor Since World War II
• After World War II, new laws began to limit union
  activity.
• The AFL-CIO was created when two powerful unions
  joined forces.
• Independent unions are those that do not belong
  to the AFL-CIO.

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Resolving Union and Management Differences

• Kinds of Union Agreements
• In a closed shop, the employer agrees to hire
  only union members.
• In a union shop, most workers belong to a union.
• In a modified union shop, workers cannot be made
  to join the union.
• In an agency shop, workers must pay union dues,
  whether or not they are union members.

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• Collective Bargaining
• When labor and management agree to mediation, a
  neutral person helps settle the dispute.
• With arbitration, labor and management agree to
  abide by a third party decision.
• Disputes also can be resolved through
  fact-finding, in which a neutral third party
  presents non-binding recommendation.
• The government also can get involved in labor
  disputes by issuing injunctions or resorting to
  seizures.
• The President can intervene by publicly appealing
  to both parties to resole their differences, by
  firing federal workers who have broken their oath
  not to strike (1981 air traffic controllers), and
  in some cases by using emergency powers (1997
  American Airline pilots).

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Labor and Wages

• Categories of Labor
• Unskilled laborers make some of the lowest wages.
• Semiskilled workers do jobs that require a
  minimum amount of training.
• Skilled workers hold jobs that require experience
  and training.
• Professional workers do jobs that require a high
  level of knowledge-based education and managerial
  skills.

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• Noncompeting Labor Grades
• A. People must have the ability, the initiative,
  and the money to obtain additional education and
  training.
• B. Sometimes people are faced with a lack of
  opportunity for additional training and
  education.
• C. Sometimes people lack the initiative they
  need to get ahead.

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• Wage Determination
• The traditional theory of wage determination says
  that supply and demand together will determine
  the equilibrium wage rate.
• The theory of negotiated wages uses organized
  labors bargaining strength to help explain wage
  differentials.
• According to the signaling theory, employers are
  willing to pay more for those people with certain
  indicators of superior ability.

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• Regional Wage Differences
• Wages can vary when demand for certain skilled
  positions exceeds supply.
• Employers tend to offer higher wages in areas
  where the cost of living is higher than normal.
• People sometimes are willing to accept lower
  wages if the location of the job is attractive to
  them.

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Employment Trends and Issues

• Decline of Union Influence
• Union membership has declined because of
  unfriendly businesses, new workers with little
  loyalty to organized labor, and cutbacks in
  production by unionized companies.
• Businesses are using givebacks, bankruptcy
  claims, and two-tier wage systems to lower
  union-negotiated wages.

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• Lower Pay for Women
• Women, on the whole, have less experience and
  education to bring to the working world then
  their male counterparts.
• Some higher paying jobs have a larger percentage
  of male workers, while some lower paying jobs
  have a larger percentage of female workers.
• The glass ceiling is an example of the
  discrimination women face in the workplace.
• The Equal Pay Act and the Civil Rights Act both
  work to prevent wage and salary discrimination.
• Some states hope to close the gender income gap
  by defining jobs of comparable worth (equal pay
  for equal work).
• Set-aside contracts are contacts that will be
  made only with a specific group.

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• Part-Time Workers
• A. Part-time workers cost employers less in
  benefits.
• B. Critics say part-time employments low wages
  and lack of benefits make it difficult for
  workers to earn a decent living.

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• The Minimum Wage
• Opponents claim the minimum wage does not promote
  economic freedom.
• In current dollars, the minimum wage appears to
  have risen over time.
• Measurements in real dollars take inflation into
  account.
• The ratio of minimum wage to manufacturing wage
  has been steadily decreasing for the past 30
  years.