Chapter 9 - LaborChapter 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 unionAbout 42 Million people
3 Types of Unions 1. Closed Shop
Hires only union workers Illegal today
2. Union ShopWill hire non-Union workers, but will
require them to join the union within a certain amount of time
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 organizationAn 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 mov’tWanted three things
Higher wages Shorter hours Safer work environment
Federation of Craft workers Organization of workers in a single/similar occupation 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 strikes 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/bargainNational Labor Relations Board
Congress and Unions 1938 - Fair Labor Standards Act
Created minimum wageOutlawed child laborOvertime for over 40 hours of workFirst Nationwide mandatory regulation of
wages and hours 1950’s saw a peak in union membership
Nearly 30% of employeesGained Billions in duesBecame very powerful groups
Decline of Unions With this new power came abuse
In order to protect jobs (technology) Corruption – Teamsters
Decline of Unions1. 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 fulfilledOSHA and other Govt programs
Collective Bargaining Process by which union and company
representatives meet to negotiate a new labor contract
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 BargainingWorking Conditions
Safety, comfort
Job Security What can get an employee fired Grievances
StrikesGenerally occurs when there is a deadlock
Strikes Members will vote Can be bad for both sides
“strikebreakers” No pay checksDon’t normally happen until contract expires
MediationNeutral third party comes in to find solutionNonbinding agreement
ArbitrationThird 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 following
Work at least one hour for pay within the last week 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 following 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
Unemployed? Retired Grandfather?
Stay at home mom?
Thief serving time in prison
Friend in the military?
Full Time College Student?
NONO
NONONO
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 elsewhereThreaten to or actually strikeFind a new career
Labor SupplyHigher wagers will draw more workersEquilibrium Wage
No excess and no shortage of workers
Wages and Skill level Unskilled Labor - no specialization, education or
skills Usually will earn an hourly wage
Semi-Skilled - minimal special skills or education Usually get an Hourly Wage
Skilled Labor - Special skills and training Usually earn an Hourly Wage
Professional Labor - advanced skills and education Generally salaried positions
Wage Discrimination
Part of our nation’s historyMen need more money to support familyWomen work for extra money
Racial and ethnic prejudices as wellAfrican 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 nationality
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?
Women’s Work - encouraged to find jobs in lower paying fields
Human Capital - generally less educated or experience
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 down
Featherbedding
Keeping unnecessary workers on company payroll Caboose-men
Ch 9.3 Labor Market Trends
Occupational trendsUS - farming to manufacturing to information
age
Shift from manufacturing to service industryBanking, insurance, investmentOnline/InternetHealth care
More service jobs, less manufacturing jobsNeed for a more educated work forceLess unskilled and semi-skilled jobs
High school education will not go as far today as it used to
1950’s typical workers only had HS education
College and work A college education is unattainable for many
Americans 64% go to College, only 29% earn a bachelor
degree 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 school
Women’s labor trends 1960 - 38% of women worked 1997 - 60% +
More women encouraged to go to college Gender roles have changed Households have changed
Households 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
Temps Contingent employment
Hired to perform a specific job, then releasedUsually earn less than permanent employees,
but can be successful1.9 - 4.4% of workersBenefits 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
jobs Deregulation has driven wages down Benefits are expensive - costs more, pay less
Social Security matched by employers