Supply and Demand in the Supply and Demand in the Labor force Labor force

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 MarketSupply and Demand in the Labor Market

Labor DemandLabor Demand The higher the wage rate, the smaller The higher the wage rate, the smaller

the quantity of labor demanded by the quantity of labor demanded by firms and government.firms and government.

Labor SupplyLabor Supply As wages increase, the quantity of As wages increase, the quantity of

labor supplied also increases.labor supplied also increases.

Equilibrium WageEquilibrium Wage The wage rate that produces neither an The wage rate that produces neither an

excess supply of workers nor an excess supply of workers nor an excess demand for workers in the labor excess demand for workers in the labor market is called the equilibrium wage. market is called the equilibrium wage.

Contingent employment is temporary or part-time employment.

Temporary employees offer firms some of the following Temporary employees offer firms some of the following benefits:benefits:

1. Flexible work arrangements.1. Flexible work arrangements.

2. Temporary workers are often paid less and receive fewer 2. Temporary workers are often paid less and receive fewer benefits than their full-time counterparts.benefits than their full-time counterparts.

3. Some employees prefer temporary arrangements.3. Some employees prefer temporary arrangements.

The Changing Labor ForceThe Changing Labor Force

College Graduates at WorkCollege Graduates at Work The The learning effectlearning effect is the is the

theory that education theory that education increases productivity and increases productivity and results in higher wages.results in higher wages.

The The screening effectscreening effect theory theory suggests that the completion suggests that the completion of college indicates to of college indicates to employers that a job applicant employers that a job applicant is intelligent and hard-working.is intelligent and hard-working.

Women at WorkWomen at Work Overall, the number Overall, the number

of women in the work of women in the work force has increased force has increased from about 38 percent from about 38 percent of all women in 1960 of all women in 1960 to about 58 percent of to about 58 percent of all women in 1995.all women in 1995.

Wages and Skill LevelsWages and Skill Levels• Wages vary according to workers’ skill levels and Wages vary according to workers’ skill levels and

education. Jobs are often categorized into the following education. Jobs are often categorized into the following four groupsfour groups::

Unskilled Labor• 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• Professional labor demands

advanced skills and education. Examples: lawyers, doctors, teachers

The Role of UnionsThe Role of Unions Most workers in Canada have the right to strike, except Most workers in Canada have the right to strike, except

firefighters, policefirefighters, police, some , some hospitalhospital workers, and workers, and others who perform essential services. Those others who perform essential services. Those employees normally have another recourse to settle employees normally have another recourse to settle disputes such as disputes such as binding arbitrationbinding arbitration. In binding . In binding arbitration, an outside arbitrator hears the arguments arbitration, an outside arbitrator hears the arguments of the parties involved and issues a decision that the of the parties involved and issues a decision that the parties parties must acceptmust accept..

Union OrganizationUnion Organization At the local level, workers in a particular workplace can At the local level, workers in a particular workplace can

join a local union. Before a union can represent a group join a local union. Before a union can represent a group of employees at a workplace, it must apply to the of employees at a workplace, it must apply to the provincial provincial labour boardlabour board, a government agency, to be , a government agency, to be certifiedcertified as the bargaining representative. as the bargaining representative.

To determine whether the union should be certified, the To determine whether the union should be certified, the labour board either counts union labour board either counts union membership cardsmembership cards or or holds a holds a votevote to determine if the union has the support of to determine if the union has the support of the the majority of workersmajority of workers at the workplace. at the workplace.

If a majority supports the union, the board determines the If a majority supports the union, the board determines the appropriate appropriate bargaining unitbargaining unit (the group of workers that is (the group of workers that is represented in a specific collective agreement) at the represented in a specific collective agreement) at the workplace and certifies the union. workplace and certifies the union.

Union OrganizationUnion Organization Once certified, a local union seeks to negotiate a Once certified, a local union seeks to negotiate a

collective agreement with the employer to determine the collective agreement with the employer to determine the terms and conditions of employment. terms and conditions of employment.

Workers in local unions elect local executives to Workers in local unions elect local executives to supervisesupervise the work of the union. They also elect officials the work of the union. They also elect officials known as known as shop stewardsshop stewards to handle grievances that arise to handle grievances that arise on the job. on the job.

Before collective bargaining begins, workers elect a Before collective bargaining begins, workers elect a bargaining committeebargaining committee. The bargaining committee . The bargaining committee determines the workers’ demands and strategy in determines the workers’ demands and strategy in negotiations with the employer.negotiations with the employer.

Why do Employees Join Why do Employees Join Unions?Unions?

Reasons for Reasons for JoiningJoining

Job dissatisfactionJob dissatisfaction Individual attitudes Individual attitudes

toward unionstoward unions Perceived union Perceived union

instrumentalityinstrumentality

Reasons for Not Reasons for Not

JoiningJoining Belief that union Belief that union

membership may harm membership may harm chances for promotionchances for promotion

Extra costs for union Extra costs for union dues or strikesdues or strikes

Negative opinions Negative opinions toward unionstoward unions

Fair supervisory Fair supervisory treatment/policiestreatment/policies

Unfair Labour PracticesUnfair Labour Practices

ManagementManagement UnionsUnions

Interfering in the formation Interfering in the formation of a union or contributing of a union or contributing financiallyfinancially

Discriminating based on Discriminating based on union membership or union membership or because employee because employee exercises rightsexercises rights

Intimidating or coercing an Intimidating or coercing an employee to join/not joinemployee to join/not join

Trying to bargain when the Trying to bargain when the union is not the certified union is not the certified agent agent

Persuading employees Persuading employees during working hours, or at during working hours, or at the workplacethe workplace

Illegal strikesIllegal strikes Failing to represent Failing to represent

employees fairlyemployees fairly

3 Phases of Collective 3 Phases of Collective BargainingBargaining

Phase 1Phase 1

PreparationPreparationforfor

negotiationsnegotiations

Phase 2Phase 2

Face-to-face Face-to-face negotiationsnegotiations

Phase 3Phase 3

Approving Approving the the

proposed proposed agreementagreement