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Chapter 9: Labor
Sections 1: Labor Market TrendsAnd Section 2: Labor and Wages .
Labor Force – all NON-MILITARY people who are employed or unemployed
Employed People◦ Worked at least one hour for pay in the past
week◦ Worked 15 hours or more without pay in a
family business◦ Held jobs but didn’t work
Illness Vacation Labor disputes Bad weather
Defining the Labor Force
International Competition◦ Outsourcing
Contracting with another company To do a specific job Using the other company’s workers instead of their
own workers◦ Offshoring
Moving the entire company or parts of the company to another country
Hire their people for less money
Labor Force
Labor and Education◦ College and Post-high school training
It DOES matter Learning Effect
You learn specific skills that employers look for Screening Effect
You show that you can finish what you start
Labor Force
Derived Demand◦ Labor is DERIVED from the need to create a
different good or service Productivity of Labor
◦ The Quantity of a product made by one laborer
Labor and Wages
Workers SUPPLY labor Employers DEMAND labor Equilibrium Wage
◦ Workers are happy with the pay◦ Employers are happy with the pay
Supply and Demand for Labor
of labor
for labor
Unskilled Labor◦ No specialized skills◦ HUGE supply of capable workers◦ Low hourly wages
Semi-skilled Labor◦ Minimal specialized skills◦ Large supply of workers◦ Middle hourly wages
Wages and Skill Levels
Skilled Labor◦ Requires special skills and training◦ Often make hourly wages◦ Wages may be very high
Professional Labor◦ Requires advanced skills and education◦ White collar workers◦ Make a salary
Wages and Skill Levels
Labor Union◦ Organization of workers that tries to improve
Wages Benefits Working conditions
◦ Methods of reaching a labor agreement Union Actions
Strikes Labor slowdown
Outside help Mediation Arbitration
Unions and Labor