Economics

Organized Labor

Union

Collective BargainingStrike

MediationArbitration

Economics

In the early years of the IndustrialRevolution, workers were frequently

exploited.

Economics

Union• Workers realized that united workers had more

power than a worker alone. Therefore, workers formed unions.

• A union is an organization of workers which tries to improve wages, working conditions, and benefits for their members.

• Bosses tried to break unions but unions survived.

Economics

Union Tactics• A strike is an organized work stoppage.

Sometimes union members go on strike to improve their working conditions or wages.

• When union and company representatives meet to negotiate a new contract, collective bargaining occurs.

• Unions use many tactics to improve the lives of their members.

Economics

When union and company representativesmeet to negotiate a new contract, collectivebargaining occurs.

Economics

Mediation and Arbitration• Sometimes union and company representatives

cannot agree on the terms of a new contract. To ensure a new contract, mediation or arbitration can occur.

• In mediation, a neutral party tries to find a mutually beneficial solution. The solution can be rejected.

• In arbitration, a neutral party imposes a solution. It must be accepted. It is legally binding.

Economics

Employment and Unions• Eventually, unions gained power. Though

it is illegal today, unions forced employers to use closed shops.

• A closed shop is a business that only hires union members.

• A union shop is a business that will hire nonunion members but requires them to join the union once they are hired.

Economics

As unions becamemore powerful,employers were

pressured to onlyhire union members.Today, however, the

closed shop isillegal.

Economics

The Agency Shop

• An agency shop is a business that does not require workers to join the union but does require all workers to pay union dues.

• Even nonunion members must pay union dues to prevent the problem of the free rider.

• A free rider is a person who would not pay for a particular service but would nonetheless benefit from the service.

Economics

While union membership has fluctuatedover the years, unions are still important.

Economics

Questions for Reflection:

• What is a union and how do unions benefit their members?

• List two significant union tactics. Define each tactic.

• What is the difference between mediation and arbitration?

• How do closed shops, union shops, and agency shops differ?

Economics

Labor and WagesLabor Force

Four Kinds of Workers

Glass Ceiling

Affirmative Action

Economics

The labor force is defined as all nonmilitaryworkers over 16 who are employed or

unemployed (but looking for work).

Economics

Four Kinds of Workers• Unskilled workers possess no specialized

skills or training.• Semi-skilled workers have minimal skills.• Skilled workers have specialized skills and

training.• Professional workers have advanced

education.

Economics

A restaurant server is an unskilled worker.

Economics

A lifeguard is a semi-skilled worker.

Economics

An electricianis a

skilled worker.

Economics

A doctor is a professional

worker.

Economics

The moreeducated a

worker is, thehigher theworker’swage.

Economics

The Glass Ceiling

• Sometimes gender discrimination prevents female employees from advancing.

• Economists speak of a glass ceiling.

• A glass ceiling is an invisible barrier that prevents women from advancing in the workplace.

Gender discrimination prevents women from advancing in the workplace. A glass ceiling

exists.

Economics

Affirmative Action• Affirmative action promotes the hiring of

women and minorities.• Affirmative action policies recognize that

women and minorities have historically been denied access to certain jobs.

• Affirmative action policies seek to remedy past injustices and promote diversity in the workplace. Affirmative action policies are frequently debated.

Economics

Questions for Reflection:

• Who is considered part of the labor force?

• How does education affect wages?

• What is the difference between unskilled workers, semi-skilled workers, skilled workers, and professional workers?

• How does the glass ceiling affect women?

• Why do affirmative action policies exist?

Economics

Labor Market Trends

Historical Changes Affecting the Labor Market

Women and the Labor Market

Contingent Employment

The Learning Effect

The Screening Effect

Economics

From Farms to Factories

• At the time of the American Revolution, most Americans were farmers.

• However, in the North, agriculture yielded to the Industrial Revolution in the early 1800s.

• Eventually, manufacturing jobs replaced many agricultural jobs.

Economics

With the coming of the Industrial Revolution,many Americans became factory workers.

Economics

From Radio to Computers

• By the mid-twentieth century, the United States experienced a boom in electronics, radio, and television. Many Americans found work in this new arena.

• However, by the 1970s, the personal computer revolution began.

• The labor market is continually changing.

Economics

Computers revolutionized work and theworkplace. The production of serviceshas increased while manufacturing has

decreased.

Economics

Women and Work

• Women have greatly increased their participation in the workforce.

• There are many reasons for the increased participation of women in the workforce.

• Increased education, higher divorce rates, and the need for two salaries has led many women into the workforce.

Economics

Contingent Employment

• There has also been a rise in contingent employment.

• Contingent employment is a temporary job.

• A worker is hired for a specific project or a specific period of time. Employers typically do not provide fringe benefits.

Economics

Theories Concerning Education

• There are two theories as to why educated workers make more money.

• The Learning effect states that education increases productivity.

• The Screening effect states that completing college indicates intelligence.

Economics

Questions for Reflection:

• How has the labor market changed over the course of time?

• Why do more women work?• What is an advantage and a disadvantage

of contingent employment?• How does the learning effect differ from

the screening affect?• Why has manufacturing decreased and

the production of services increased?