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Employment, Labor, and Wages. A nation’s _____________________ is an important indicator of the health of the economy. The _________________________ polls a sample of the population to determine how many people are employed and unemployed.

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employment labor and wages
Employment, Labor, and Wages
  • A nation’s _____________________ is an important indicator of the health of the economy.
  • The _________________________ polls a sample of the population to determine how many people are employed and unemployed.
  • The _______________ is the percentage of the nation’s labor force that is unemployed.
  • The unemployment rate is only a ________

_____________. It does not reflect regional economic trends


People are considered employed if they are 16 years or older and meet at least one of the following:

they worked a least one hour for pay within the last week; or

they worked 15 or more hours without pay in a family business; or

they held jobs but did not work due to illness, vacations, labor disputes, or bad weather.


People are counted as unemployed if they are 16 years or older, not institutionalized, not currently working, and meet one of the following criteria:

they are temporarily laid off from their jobs

they will be reporting to new jobs within 30 days

they are not working but have looked for work within the last 4 weeks.

Economists define the ___________________ as all nonmilitary people who are employed or unemployed.

types of unemployment
Types of Unemployment
  • ______________________--Occurs when people change jobs, get laid off from their current jobs, take some time to find the right job after they finish their schooling, or take time off from working for a variety of other reasons
  • _______________________-- Occurs when workers' skills do not match the jobs that are available. Technological advances are one cause of structural unemployment
  • _________________________—0ccurs when industries slow or shut down for a season or make seasonal shifts in their production schedules
  • __________________________--Unemployment that rises during economic downturns and falls when the economy improves
full employment
“Full” Employment
  • Full employment is the level of employment reached when there is no ______________ unemployment
  • Economists generally agree that in an economy that is working properly, an unemployment rate of around ____% is normal.
  • Sometimes people are _________________, that is working a job for which they are over-qualified, or working part-time when they desire full-time work.
  • ________________________ are people who want a job, but have given up looking for one.
labor unions
Labor Unions

A __________________ is an organization of workers that tries to improve working conditions, wages, and benefits for its members.

  • The nation’s first unions were comprised of ________________________. After the Civil War, the labor force became more unified.
  • 2 types of unions developed—the ________ union and the ______________ union.
  • Unions used ___________, ____________, and ______________ to help members get better pay, hours, & job security.
  • Employers resisted with ___________, firings, and even setting up company unions.
  • Now, less than _______ percent of U.S. workers belong to a labor union.
how unions rose to power

Key Events in the U.S. Labor Movement




Knights of Labor founded


Fire in the Triangle Shirtwaist Factory in New York kills 146, spurring action on workplace safety


Norris-La Guardia Act outlaws “yellow dog” contracts, gives other protection to unions


Wagner Act gives workers rights to organize


AFL splinter group becomes the independent Congress of Industrial Organizations (CIO), headed by John L. Lewis


AFL and CIO merge to create AFL-CIO


Rise in anti-union measures by employers


Increase in public-sector unions, including teaching assistants at some universities

How Unions Rose to Power
  • The union movement took shape over the course of more than a _______________.
  • The 1935 National Labor Relations Act, also known as the ___________________, gave workers the right to organize and required companies to bargain in good faith with unions
  • Even so, ____________ usually treat unions with hostility.
why union membership declined
Why Union Membership Declined
  • “_____________________” Laws--The Taft-Hartley Act (1947) allowed states to pass right-to-work laws. These laws ban mandatory union membership at the workplace. Michigan does NOT have one of these—yet. Under Taft-Hartley, the President can enforce an 80-day delay to strikes that could hurt national health or safety (Clinton, 1997 Pilots Strike)
  • Economic Trends--Unions have traditionally been strongest in the _______________ sector, representing blue-collar workers. These jobs have been declining as the economy becomes more ___________-oriented.
  • Fulfillment of Union Goals--With the government setting standards for workplace safety, and with more benefits being provided by both private and government sources, union membership has _______________ because their goals have been fulfilled.
  • New Workers--- Many new workers have little allegiance to unions. Rising Conservatism in the southern United States.
types of union workplaces
Types of Union Workplaces
  • A ______ shop hires only union members. This type of workplace is now illegal.
  • A ________ shop will hire nonunion members but requires them to join the union within a certain period of time.
  • An _______ shopwill hire nonunion workers and does not require them to join the union in order to keep their jobs. However, nonunion workers must pay union dues or similar fees, and they are covered by the union contract. (Teachers at IHS)
collective bargaining
Collective Bargaining
  • _________________________ is the process in which union and company representatives meet to negotiate a new labor contract


    • The union negotiates on behalf of all members for wage rates, overtime rates, planned raises, and benefits.


    • Safety, comfort, worker responsibilities, and other workplace issues are negotiated and written into the final contract.


    • One of the union’s primary goals is to secure its members’ jobs. The contract spells out the conditions under which a worker may be fired.
labor strikes and settlements
Labor Strikes and Settlements


  • If no agreement is met between the union and the company, the union may ask its members to vote on a ____________, an organized work stoppage intended to force an employer to address union demands. Strikes can be harmful to both the union members and the firm.


  • To avoid the economic losses of a strike, a third party is sometimes called in to settle the dispute. ________________ is a settlement technique in which a neutral mediator meets with both sides to try and find an acceptable solution for both sides.


  • If mediation fails, talks may go into ____________, a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.
who may not strike
Who May NOT Strike?
  • Generally, teachers, police officers, and firefighters may not strike, since they are _______________________.
  • If workers in ____________________ strike, the government can seek injunctions in court, which order workers back to work. The government can also seize vital industries (coal mines, etc).
  • PATCO, 1981: 1935 Wagner Act also says you can __________________________ striking workers. See debate articles. In 1981, President Reagan fired the strikers and had PATCO decertified.
supply demand in the labor market
Supply & Demand in the Labor Market

Labor Demand

  • The higher the _________ rate, the smaller the quantity of labor demanded by firms and government.

Labor Supply

  • As wages increase, the quantity of labor supplied also ______________.

Equilibrium Wage

  • The wage rate that produces neither an excess supply of workers nor an excess demand for workers in the labor market is called the ____________________.
wage determination
Wage Determination
  • The traditional theory of wage determination says that _______________________ determine an equilibrium wage rate.
  • The theory of ________________ uses organized labor’s bargaining strength to help explain wage differentials from the “market clearing price”
  • According to the the _____________________, employers are more willing to pay for those people with certain indicators of superior ability.
  • Wages vary according to workers’ _______________________. They can also vary regionally; areas with high costs of living have higher wages and vice versa. People sometimes accept lower wages if the location of the job is attractive to them (and vice versa there too).
jobs are often categorized into the following 4 groups
Jobs are often categorized into the following 4 groups:
  • _______________________--requires no specialized skills, education, or training. Examples: waiters, messengers, janitors
  • ________________________--requires minimal specialized skills and education. Example: fork-lift operator
  • ________________________--requires specialized skills and training. Examples: auto mechanics, plumbers
  • ________________________--demands advanced skills and education. Examples: lawyers, doctors, teachers

Median Earnings for U.S. Workers, by Sex and Ethnicity, 1998

Hispanic women


African American women


White women


Hispanic men


African American men



White men




Median annual earnings

Source: U.S. Census Bureau

Laws Against Wage Discrimination

  • The ________________ of 1963 declared that male and female employees in the same workplace performing the same job had to receive equal pay.
  • Title VII of the __________

______ Act of 1964 forbids job discrimination on the basis of race, sex, color, religion, or nationality.

  • Despite these protections, American women today earn about _______% of what men earn. Racial minorities tend to earn lower pay than whites.
why less pay for women
Why Less Pay for Women?
  • The average woman has _______ experience and education to bring to the working world than the average male (changing)
  • Some higher paying jobs have more males (___________________, “Old Boys Networks”)
  • Women take time off to ___________________.
  • In perspective, however, more than half of professional jobs go to women—so they’re doing ok
labor market trends
A Changing Economy

The economy of the United States has transformed from a mainly ____________ economy in the 1800s, to an ______________ giant in the 1900s.

The _______________ has revolutionized the economy since its introduction in the later 1900s.

Fewer Goods, More Services

Overall, the United States is shifting from a _____________________ economy to a ___________ economy. As service jobs increase, the nation is losing manufacturing jobs.

Demand for skilled labor is __________, and the supply of skilled workers is ________________ to meet the demand.

Labor Market Trends
labor force trends
College Graduates at Work

The ________________ is the theory that education increases productivity and results in higher wages.

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

Women at Work

Overall, the number of women in the work force has increased from about ______% of all women in 1960 to about _______% of all women in 1997.

Labor Force Trends

Education and Income, 1998











Median annual earnings

Less than 9th grade

9th to 12th grade

(no diploma)

High school graduate

(includes GED)

Some college, no degree

Associate degree

Bachelor’s degree

Master’s degree

Doctorate degree

Education level

Source: U.S. Census Bureau

Potential earnings increase with increased educational attainment.

temporary unemployment
Temporary Unemployment
  • ____________________ employment is temporary or part-time employment
  • _________________ employees offer firms some of the following benefits:
    • Flexible work arrangements.
    • Easy discharge due to the lack of severance pay for temporary workers.
    • Temporary workers are often paid less and receive fewer benefits than their full-time counterparts.
    • Some employees prefer temporary arrangements.
trends in wages and benefits
Trends in Wages and Benefits

Earnings Up for Some, Down for Others

  • Earnings for college graduates have ____________, while earnings for workers without college degrees have _____________.
  • The Real Minimum wage has ______ over time.
  • Average weekly earnings in the United States _________ from $275 in 1980 to $261 in 1997, as measured in inflation-adjusted dollars.

Cost of Benefits Rises

  • Benefits now make up about _______% of total compensation in the economy.
  • For employers, rising benefits costs raise the cost of doing business and decrease profits. Many firms are turning to ________________ employment to curb benefits costs.