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Chapter 9 - Labor


Chapter 9 - Labor Section 1 Organized Labor Labor Unions in the US Labor union decline lately Types of unions Collective Bargaining/ Strikes Women s labor trends ... – PowerPoint PPT presentation

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Title: Chapter 9 - Labor

Chapter 9 - Labor
  • Chapter 9 Section 1
  • Organized Labor
  • Labor Unions in the US
  • Labor union decline lately
  • Types of unions
  • Collective Bargaining/ Strikes

Labor and Labor Unions
  • Labor powers the US economy
  • Most people are employees, not employers
  • Employees have little control over conditions of
    their work
  • Hours
  • Wages
  • Safety

Labor Unions
  • Organization of workers that tries to improve
    working conditions, wages, and benefits
  • When employees get together, they can bring their
    concerns to management
  • Less than 14 of workers in the US belong to a
  • About 42 Million people

3 Types of Unions
  • 1. Closed Shop
  • Hires only union workers
  • Illegal today
  • 2. Union Shop
  • Will hire non-Union workers, but will require
    them to join the union within a certain amount of

Types of Unions
  • 3. Agency Shops
  • Will hire non-union workers and will not require
    them to join in order to keep their jobs
  • Still must pay fees similar to the dues
  • Covered by the contract as well
  • Free Rider problem?
  • Join the union for the protection and benefits,
    and not have to pay

Rise of the Labor Unions
  • The plight of Workers
  • Labor unions sprung from Industrial Revolution
  • 12-16 hour days, 7 days a week
  • Long days at dangerous machines
  • Many lost sight, hearing, fingers, limbs, lives
  • To protect their interests workers started
    banding together
  • Striking - organized work stoppages in order to
    get their demands met

Knights of Labor
  • 1869 Garment workers in Philadelphia
  • Grew to be a powerful organization
  • An industrial union
  • Workers in a single industry who perform a
    variety of jobs
  • 1880s disputes over strategy started the decline

American Federation of Labor
  • 1886 - Samuel Gompers
  • Considered the father of American labor movt
  • Wanted three things
  • Higher wages
  • Shorter hours
  • Safer work environment
  • Federation of Craft workers
  • Organization of workers in a single/similar
  • Trade Union

Resistance to Unions
  • Viewed as threats to free enterprise early
  • Sherman Antitrust Act?
  • Union workers were often fired
  • Yellow dog contracts
  • Injunctions were used to get workers to end
  • Militias hired

Congress and Unions
  • Until the 1930s, unions had no real protection
  • 1935 - National Labor Relations Act (Wagner Act)
  • Gave labor the right to organize/bargain
  • National Labor Relations Board

Congress and Unions
  • 1938 - Fair Labor Standards Act
  • Created minimum wage
  • Outlawed child labor
  • Overtime for over 40 hours of work
  • First Nationwide mandatory regulation of wages
    and hours
  • 1950s saw a peak in union membership
  • Nearly 30 of employees
  • Gained Billions in dues
  • Became very powerful groups

Decline of Unions
  • With this new power came abuse
  • In order to protect jobs (technology)
  • Corruption Teamsters

Decline of Unions
  • 1. Structural changes in US economy?
  • Blue collar vs White collar
  • (Hourly vs salary)
  • 2. Manufacturing over seas
  • 3. Women in the workforce
  • Statistically less in blue collar jobs
  • 4. Movt of company to different areas of the
    country (Less union activity in the South)
  • 5. Goals fulfilled
  • OSHA and other Govt programs

Collective Bargaining
  • Process by which union and company
    representatives meet to negotiate a new labor
  • Contracts last 2-5 years
  • Union will usually come with goals
  • Wages
  • Overtime, raises, benefits
  • Ask for too much, company may have lay offs
  • Seniority

Collective Bargaining
  • Working Conditions
  • Safety, comfort
  • Job Security
  • What can get an employee fired
  • Grievances
  • Strikes
  • Generally occurs when there is a deadlock

  • Members will vote
  • Can be bad for both sides
  • strikebreakers
  • No pay checks
  • Dont normally happen until contract expires
  • Mediation
  • Neutral third party comes in to find solution
  • Nonbinding agreement
  • Arbitration
  • Third party decision that is legally binding

9.2 Labor and Wages
  • Who makes up the labor force
  • Supply/Demand and Labor
  • Wages and skill level

Labor Force
  • Labor force is made up of all nonmilitary people
    who are employed or unemployed
  • Employed - must be 16 and meet one of the
  • Work at least one hour for pay within the last
  • Worked 15 or more w/o pay in a family business
  • Have a job, but did not work due to illness,
    vacation, labor disputes, or bad weather

Labor Force
  • Unemployed - 16 or older, not institutionalized,
    not currently working and meet one of the
  • Temporarily laid off
  • Will report to work a new job within 30 days
  • Not working but have looked for work within the
    last 4 weeks
  • To be counted as unemployed, you must actively be
    looking for a job
  • People who do not want jobs (stay at home
    parents, retirees) are not considered unemployed

  • Retired Grandfather?
  • Stay at home mom?
  • Thief serving time in prison
  • Friend in the military?
  • Full Time College Student?

Supply/Demand and Labor
  • Labor demand
  • Govt and private industries that produce goods
    and services
  • Provide the jobs to workers, along with pay based
    on productivity (value of output)
  • If one company pays more for the same work?
  • Pay More or -
  • Buy more machines
  • ATM
  • Assembly Lines
  • Self Service Gas Stations

Supply/Demand Labor
  • Workers response to low wages
  • Look elsewhere
  • Threaten to or actually strike
  • Find a new career
  • Labor Supply
  • Higher wagers will draw more workers
  • Equilibrium Wage
  • No excess and no shortage of workers

Wages and Skill level
  • Unskilled Labor - no specialization, education or
  • Usually will earn an hourly wage
  • Semi-Skilled - minimal special skills or
  • Usually get an Hourly Wage
  • Skilled Labor - Special skills and training
  • Usually earn an Hourly Wage
  • Professional Labor - advanced skills and
  • Generally salaried positions

Wage Discrimination
  • Part of our nations history
  • Men need more money to support family
  • Women work for extra money
  • Racial and ethnic prejudices as well
  • African Americans and other minorities paid less
  • Equal Pay Act of 1963
  • Male and Female workers must be paid the same

Wage Discrimination
  • Civil Rights Act 1964-
  • Title VIII of the Act forbids job discrimination
    based on race, sex, color, religion, or
  • Affirmative Action
  • Policies to ensure inclusion of minorities and
    women in hiring, college admission, and issuing
    of govt contracts
  • Equal Employment Opportunity Commission
  • Handles complaints of discrimination

Women and Wages
  • Women still earn about 75 of what men earn
  • Why?
  • Womens Work - encouraged to find jobs in lower
    paying fields
  • Human Capital - generally less educated or
  • Career paths offered - many companies do not feel
    that women really want to be managers

Women and Wages
  • Glass ceiling - unofficial, invisible barriers
    that exist which limit opportunities for women
  • Lily Ledbetter
  • Paid anywhere from 500 - 1500/month less than
    her male counterparts

Minorities and wages
  • Make less than whites
  • Less access to education?
  • Less work experience?
  • Denied entrance to jobs (discrimination)

Wages and Unions
  • Union members do make more than nonunion
  • 1998 - made 160 more/week
  • Pensions and medical benefits
  • Unions drive wages down?
  • Unions demand raises
  • Quantity of labor demanded goes down
  • Union workers laid off, have to go look for
    nonunion jobs
  • Bigger supply of nonunion workers makes wages go

  • Keeping unnecessary workers on company payroll
  • Caboose-men

Ch 9.3 Labor Market Trends
  • Occupational trends
  • US - farming to manufacturing to information
  • Shift from manufacturing to service industry
  • Banking, insurance, investment
  • Online/Internet
  • Health care

  • More service jobs, less manufacturing jobs
  • Need for a more educated work force
  • Less unskilled and semi-skilled jobs
  • High school education will not go as far today as
    it used to
  • 1950s typical workers only had HS education

College and work
  • A college education is unattainable for many
  • 64 go to College, only 29 earn a bachelor
  • College degree can double your earning potential
  • Higher education higher wages
  • Learning effect - education increases
    productivity and wages
  • Screening effect - completing college proves
    intelligence and work ethic. People with these
    attributes do well in school and keep going to

Womens labor trends
  • 1960 - 38 of women worked
  • 1997 - 60
  • More women encouraged to go to college
  • Gender roles have changed
  • Households have changed

  • Higher education More income, more incentive
    for women to continue education
  • Housework is easier with new technology
  • Less time needed to take care of the house
  • More income needed to live comfortably
  • Costs increase faster than wages
  • Divorce rate

  • Contingent employment
  • Hired to perform a specific job, then released
  • Usually earn less than permanent employees, but
    can be successful
  • 1.9 - 4.4 of workers
  • Benefits to hiring temps
  • Flexible lay offs - no severance pay/less rights
  • Cheaper - and benefits
  • More freedom as a temp
  • Move around to different jobs

  • Earnings have actually gone down
  • 1980 - 275/week
  • 1997 - 261/week
  • Average
  • College grads earnings have increased
  • No college - decreased
  • Competition from overseas has taken low skilled
  • Deregulation has driven wages down
  • Benefits are expensive - costs more, pay less
  • Social Security matched by employers