Economics Chapter 9: Labor and Wages

1. Civil War led to

higher prices & greater

demand for goods &

services

2. Manufacturing expanded &

attitudes towards unions began to

soften.

C. Civil War to 1930's

3. Labor force became more unified.

4. 2 types of unions arose

a. trade (craft) unions- labor union

whose members perform the

same kind of work

b. industrial unions- union

whose members perform

different

Union Activities

b. company unions-

unions organized, supported,

or run by employers to head off efforts by others to organize their workers

Ludlow Massacre

7. Ludlow Massacre

a. United Mine Workers of America

(UMWA) organized a strike against a

coal mining co-owned by JD

Rockefeller

b. Co. forced workers out of mining

homes into tents.

c. lasted 14 mos.

d. fighting broke out b/w

miners & co. guards

e. 200 ppl dead

1. Great Depression hits

2. Unemployment hits 25%

3. Once again you have a rise of labor

unions; organized labor

D. Labor Since the 1930's

4. Norris-LaGuardia Act of 1932

a. no rulings against unions engaged in

peaceful strikes, picketing, or

boycotts

b. forced companies to negotiate w/

unions

5. National Labor Relations Act of 1935

a. unions have the right to collective

bargain

b. established the National Labor

Relations Board

6. Created the Taft-Hartley

Act of 1947

1. closed shop-

employers agree to

only hire union

members (SC Ports)

2. union shop- must join the union

after being hired

3. modified union shop- option to join

union after hire (UPS/Teamsters)

4. agency shop- nonunion members

must pay union dues (illegal in US)

E. Organized Labor Today

a. had tough anti-union

legislation

b. allowed states to create right-to-

work laws

c. right-to-work laws- state law making

it illegal to require a worker to join a

union

d. 27 states have right-to-work laws

Right to Work Laws

8. American Federation

of Labor was started

in 1886

9. 8 industrial unions left b/c of

disagreements

10. formed the Congress of

Industrial Organizations (CIO)

8. AFL-CIO

11. 1955, the two unions came back

together to form AFL-CIO

12. Another split happened in 2005;

Change to Win Coalition

Profile of a Union Member

• More males than females
• more workers over 45
• African-Americans are more likely to join union
• government employee

Union Workers

1. Collective bargaining-

process of negotiating b/w

union & management representatives over pay, benefits, & job-related

matters

2. Grievance procedures- provision for

resolving disputes after the union

contract has been finalized

B. Resolving Labor Disputes

3. Mediation- process of resolving a dispute

by bringing in a neutral 3rd party to help

broker a compromise

4. Arbitration- process in which both

sides agree to place their differences

before a 3rd party who makes the

final decision

5. Fact-Finding

a. def- explanation

stating that supply &

demand for a worker's

skills & services determine

the wage/salary

b. a small supply of talent combined with

relatively high demand results in higher

wages.

3. Market Theory of Wage Determination

4. Theory of Negotiated Wages

a. def- explanation of wage rates based

on the bargaining strength of

organized labor

b. strong unions are able to negotiate

higher wages b/c the company can't

afford work interruptions in case

of threatened strike

Union

Graphs

a. def- theory that

employers are willing to pay more for people with certificates, diplomas, degrees, & other indicators of superior ability

b. a degree says superior ability

c. signaling is very important.

5. Signaling Theory

Title

the average worker, there have been efforts to lower their pay.

a. giveback- wage, fringe benefit, or

work rule given up when

renegotiating a contract

A. Decline of Union

Influence

b. two-tier wage system- system that

keeps high wages for current workers,

but lower wages for newly hired

workers

B. Lower Pay

for

Women

C. Federal

Minimum Wage

1. $7.25 is the # today

2. def- lowest legal amt. that

can be paid for work

C. Federal Minimum Wage

Product

Market trend

Case study