Today’s Schedule – 10/10

• PPT: Labor and Wages• WS: Ways to Organize Businesses• HW:– Read 9.3– Finish franchise research ( we will discuss tomorrow in

class)

Why So Much? Why So Little?

• If there is a small supply of workers but a high demand = big paychecks!

Labor Demand• Derived Demand: Demand that is

determined by demand for another good or service–Increasing demand for nurses due to

increasing demand for healthcare• Pay is based on productivity: value of

output–Pay based on profits from output

Labor Supply

• Higher wages = increased supply in labor• Why might this not always be true?

Equilibrium Wages

• Wage where there is neither an excess of supply or demand for workers

Wages and Skill Levels• Unskilled- no special skills required–Janitors–Hourly wages

• Semi-skilled- minimal skills/educated needed–Word Processors–Hourly wages

Wages and Skills

• Skilled- requires specialized abilities to operate complicated equipment; little supervision–Mechanics, Bank tellers–Hourly wages

• Professional- advanced skills and education–Doctors, lawyers, teachers , Managers–Salary

Wages and Working Conditions

• High accident and fatality rate = big money!• Example: Deadliest Catch

Wage Discrimination• When those with same job,

skill, education, performance and seniority receive unequal pay• Reasoning: Women just

want extra cash/will leave when have a baby

Wage Discrimination

• Legislation:–Equal Pay Act of 1963: Equal pay for

men and women–Civil Rights Act of 1964: Prohibits

discrimination–Equal Employment Opportunity

Commission (EEOC)•Processes discrimination claims

Wage Gap- Common Misconceptions• Women’s Work: encouraged into certain

fields such as teaching, nursing and clerical work–High labor supply = low wages

• Human Capital: women have less education• Career Paths: perception of not wanting

career advancement

Wage Discrimination

• Glass ceiling: barrier that prevents women and minorities from advancing in businesses dominated by white men

Factors Affecting Wages

• Minimum Wage Laws• Safety Laws• Subbing machinery for human labor• Unions