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Chapter 9: Labor Sections 1: Labor Market Trends And Section 2: Labor and Wages .

Sections 1: Labor Market Trends And Section 2: Labor and Wages

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Page 1: Sections 1: Labor Market Trends And Section 2: Labor and Wages

Chapter 9: Labor

Sections 1: Labor Market TrendsAnd Section 2: Labor and Wages .

Page 2: Sections 1: Labor Market Trends And 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

Page 3: Sections 1: Labor Market Trends And Section 2: Labor and Wages

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

Page 4: Sections 1: Labor Market Trends And Section 2: Labor and Wages

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

Page 5: Sections 1: Labor Market Trends And Section 2: Labor and Wages

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

Page 6: Sections 1: Labor Market Trends And Section 2: 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

Page 7: Sections 1: Labor Market Trends And Section 2: Labor and Wages

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

Page 8: Sections 1: Labor Market Trends And Section 2: Labor and Wages

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

Page 9: Sections 1: Labor Market Trends And Section 2: Labor and Wages

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