Download Employment, Labor, Wages

Employment, Labor,
Wages
Chapter 8
Goals & Objectives
1.
2.
3.
4.
5.
6.
7.
Development & importance of labor unions.
Great Depression & Post WWII labor laws.
Kinds of union arrangements.
Collective Bargaining & Right-to-work laws.
4 main categories of labor.
Wage determination. Causes & Effects.
Equal Pay Act laws & regulations.
The Labor Movement
► Macroeconomics:
Employment, GDP,
inflation, income distribution, monetary
policy, fiscal & supply-side policies.
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1.
2.
3.
4.
GDP:
inflation (federal reserve)
economic growth
distribution of income
Civilian Labor Force
► 16
years or older working or “looking” for
work
► Excludes:
 Military, prisoners, mentally disabled,
unemployment benefits, SSI benefits welfare.
► Unemployment
Rate vs.
Underemployed Rate
Unemployment Rate
Underemployment Rate
Early Union Development
• 1778-1820’s Farmers, small business,
self-employed
– Trade or Craft Unions:
• Early Unions: comprised of “skilled” labor
with good collective bargaining power.
– Trade or Craft Unions:
Early Unions
• Immigrants? Unskilled, cheap labor posed
a threat to the existing wages.
• Anti-Immigrant feelings
– Competition and Wages?
– Competition and Supply?
• Chinese Exclusion Act: Gentleman’s
Agreement, Anti-Irish, Anti-Black, Scabs:
Civil War to 1930’s

Attitudes toward unions changed:
• 1. Why?
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A. higher prices
B. shortage of workers
C. greater demand for goods and services
D. United Labor Force of newly arrived
immigrants.
Types of Unions
 1. Craft unions: (trade unions) skilled
workers who perform the same task.
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AMA
ABA
NEA ?? Why not??
Writers Guild
Types of Unions
 2. Industrial Unions: organization of
workers in the same union regardless of
job performed.
 Goodyear: Engineers, Operators, Line
workers, fork lift operators, janitors all in the
same union.
Union Activities
• 1. Strike: Can the federal government
prevent you from striking or force you to
work?
• 2. Picket: Can the federal government
prevent you from picketing?
• 3. Boycott: Can the federal government
prevent you from boycotting?
Strikes, Boycotts & Pickets
Employer Resistance
► 1. Lockouts: must have “scabs”; must have
access to a supply of labor at a cheap cost to the
company
► 2. Company Unions: Human Resources are
company unions…. File a complaint and what
happens?
► 3. 1902-1914: Boycotts illegal
► Sherman Antitrust Act 1890: Anti-union/monopoly
► Clayton Antitrust Act 1914: Exempted unions
Lockouts & Labor Union Decline
Labor Union Great Depression
Pro-Union Laws
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
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1. Norris LaGuardia Act of 1932:
ended court involvement against unions in
peaceable pickets and boycotts.
2. National Labor Relations Act: 1935,
right of unions to collectively bargain.
3. Fair Labor Standards Act: 1938,
interstate commerce an minimum wage
requirements, overtime, time-and-a-half
Labor since WWII
Anti-Union Laws
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1. Taft-Hartley Act: 1947, employers right to
sue unions for breaking contract.
80 day cooling off period? What?
2. Right-to-work laws: eliminated the
requirement that forced workers to join the
unions.
Right-to-work States
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American Federation of Labor/
Committee for Industrial
AFL/CIO: Organization
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AFL:1886
CIO: 1935
AFL/CIO: 1955
2006 split apart: Why? Teachers (NEA) union
joined
Labor Unions & Bankruptcy
Kinds of union arrangements
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1. closed shop: pg.200 hire only union
members.
2. union shop: employees must join
union after being hired.
3. modified union shop: no requirement
to join, but can not quit union if joined
4. agency shops: requires workers to
pay union dues even if not a member
Collective Bargaining
► Labor
and Management compromise.
 grievance procedure: issues arriving before
contract renewal.
 1. Mediation: 3rd person into collective
bargaining procedure. Court mandated in
Alabama before filing a civil lawsuit.
 2. Arbitration: 3rd party decision maker which
will be final decision. BBB?
Arbitration &
th
13
Amendment
Collective Bargaining
► 3.
Fact-Finding: neutral 3rd party finds
facts outside of management and
labor…example. DHR department of human
resources
► 4. Injunction-Seizure: court order not to
act (forced labor). 1995 baseball, 1982
airline pilots, Seizure: gov’t takeover of
operations (AYP in public schools)
Presidential Intervention
► 1981:
Air traffic controllers (FAA) R.Reagan
► 1997: Air line pilots B.Clinton, 1926 federal
law Railway Labor Relations Act
 Professional Baseball: Ordered baseball players
back to work: Why?
►Interstate
Commerce-jurisdiction
►Interstate Costs to a baseball strike: Municipal, State,
and Federal losses due to a strike?
Categories of Labor
• 1. unskilled labor: ditch diggers, fruit pickers,
custodians = equal low wages
• 2. semiskilled labor: machine operators,
electric dishwashers, floor polishers,
lawnmowers.
• 3. skilled labor: carpenters, typists, computers,
chefs, programmers
• 4. professional labor: high level of education,
managerial skills, doctors, scientists, lawyers,
dentists.
Wage Determination
• 1. Traditional Theory of Wages:
•
Supply and Demand for a worker’s
skills and services determine wages
• How can government protect the
traditional theory of wages? Supply of
labor
• Equilibrium wage rate: no shortage, no
surplus of workers….how has illegal
immigration effected this theory?
Market Wage Rate vs. Minimum
Wage Requirement & Prices
Wage Determination
• 2. Theory of Negotiated Wages:
•
organized labor’s collective bargaining
strength, strong unions,
– Seniority: how it affects wages and
productivity?
– Signaling theory: merit, certificates, specific
skills bring higher wages
Minimum Wage Requirements &
Unemployment/Underemployment Rates
Regional Wage Differences
• Labor Mobility: moving to higher paying
jobs.
• Location, Location, Location:
– North Dakota oil fields and wage rates
• Federal Entitlements & Labor immobility
Decline of Union Influence
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1. Keep unions out of business. Wal-Mart
2. Profit sharing plans (401k’s)
3. Management teams
4. Women and Teens who are less loyal to
unions.
5. Unions are victims of their own success.

Inflation=less production=fewer jobs=fewer union
members=outsourcing.
Renegotiating Union Wages

1. Givebacks: Wages, fringe benefits, or rules
given up by union to employers.
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UAW: the big 3
2. two-tier wage system: high wages for older
workers lower wages for new workers.
Lower Pay for Women
1. Human Capital Differences: skills,
experience, less education.
 Traditionalism vs. Feminism
 2. Gender and Occupation: uneven
distribution of professionals
 3. Discrimination: glass ceiling:

Equal Pay Act 1963
 Jobs requiring equivalent skills and
responsibilities must be uniform in
public sector.
 1. Civil Rights Act 1964: prohibits
discrimination….EEOC “the
government can sue without a
complaint from anyone”? The 10%
quota rule (Affirmative Action).
Comparable Worth

Highway workers vs. Nurses (Illinois)

Federal Contracts (Public): $10.10
minimum wage requirement

Worth/Value decided by the State.
Set-Aside Contracts

Guaranteed government contract for a
targeted minority group.
–
Affirmative Action: White males excluded.
Price-Wage Spiral
► 1939:
► 1986:
► 1997:
► 2009:
► 2014:
.25 hour
$3.15 hour
$5.15 hour
$7.25 hour
$7.25 hour
► Price-Wage
Spiral:
As wages increase so
do prices.
► 1939:
.05 milk gallon
► 1986: .96 milk gallon
► 1997: $2.67 milk gal.
► 2009: $3.58 milk gal.
► 2014: $4.29 milk gal.
► What will happen to
the price of a gallon of
milk with an increase
in the minimum wage?