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CHAPTER 9 LABORLabor-human resourcesWages the price paid for laborSupply and demand determine wages in a free enterprise economyAt the equilibrium wage rate the supply of works = the demand for workers

The demand for labor is a derived demand- meaning it is dependent on something else

Consumer demand production levels demand for labor

How does the price of labor figure into the above equation?

1Wage rateDemand for laborSupply of labor$16.002001000$14.00400800$12.00600600$10.00800400$8.001000200Wage ratequantity2Wage rateDemand for laborSupply of labor$16.002001000$14.00400800$12.00600600$10.00800400$8.001000200Exit exerciseGraph the data in the table, label the demand curve (d) and the supply curve( s). If the demand for labor increased by 100 units at each wage rate and the supply of workers remained constant graph the new demand curve and label it d1 and answer the following question. What happens to the equilibrium wage and why? _____________3SUPPLY AND Demand determine wages in a free enterprise economy, but they are influenced by four factors

Human Capital- The amount of education and training a worker has invested in himself. Page 261 text Working conditions Discrimination- race, ethnicity, gender, occupational segregation, jobs viewed as womens jobs is an example.Legislation has been passed in an attempt to lessen occupational segregationEqual Pay Act 1963Civil Rights Act 1964Government actions- such as minimum wage, Fair Labor Standards Act 1938

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5The 1964 Civil Rights Act made racial discrimination in public places, such as theaters, restaurants and hotels, illegal. It also required employers to provide equal employment opportunities. Projects involving federal funds could now be cut off if there was evidence of discriminated based on race or national origin.

6The Labor Force- Includes all people who are 16 years and older who are working or actively seeking work2005-150 million2020- 165 million members in the civilian labor force7Total populationUnder 16In Armed ForcesInstitutionalizedNon-institutionalizedAdult civilian populationNot in theLabor forceCivilianLabor forceemployedunemployed8Changes in the U.S. labor forceMore women have entered the labor forceBetter educated labor forceProductivity has increasedChanging occupationsPrimary sector- jobs related directly to natural resourcesSecondary sector related to the production of goodTertiary sector- service related jobs. Page 268 textTechnology- 50% of workers use computers on the jobOutsourcingInsourcingMore technology and service related jobsTechnology has both positive and negative impact on the job market-Work from home- telecommutingLess full time work more part time positions- in what ways could this benefit companies?Independent contractors-Benefits? Negatives?More changes of career in your work lifetime

9ORGANIZED LABORIN THE UNITED STATESIn the 1800s workers worked an average of 60 hours per week for low wagesDangerous working conditionsIf workers complained they were firedWorkers were easily replaced the supply of workers was greater than the demand for workers.Large numbers of Immigrants were willing to work for low wages in order to survive.Muckrakers attempt to expose the unsafe working conditions in factories and mines. Workers start to organize and important labor leaders emerge.10Muckrakers and Labor Organizers

JOHN SPARGO-THE BITTER CRY OF CHILDREN

Mary Harris Jones-labor organizer11Work in the coal breakers is exceedingly hard and dangerous. Crouched over the chutes, the boys sit hour after hour, picking out the pieces of slate and other refuse from the coal as it rushes past to the washers. From the cramped position they have to assume, most of them become more or less deformed and bent-backed like old men. When a boy has been working for some time and begins to get round-shouldered, his fellows say that "He's got his boy to carry around whenever he goes."The coal is hard, and accidents to the hands, such as cut, broken, or crushed fingers, are common among the boys. Sometimes there is a worse accident: a terrified shriek is heard, and a boy is mangled and torn in the machinery, or disappears in the chute to be picked out later smothered and dead.

12From the breakers the boys graduate to the mine depths, where they become door tenders, switch boys, or mule drivers. Here, far below the surface, work is still more dangerous. At fourteen and fifteen the boys assume the same risks as the men, and are surrounded by the same perils. Nor is it in Pennsylvania only that these conditions exist. In the bituminous mines of West Virginia, boys of nine or ten are frequently employed. I met one little fellow ten years old in Mt. Carbon, W. Va., last year, who was employed as a "trap boy." Think of what it means to be a trap boy at ten years of age. It means to sit alone in a dark mine passage hour after hour, with no human soul near; to see no living creature except the mules as they pass with their loads, or a rat or two seeking to share one's meal; to stand in water or mud that covers the ankles, chilled to the marrow by the cold draughts that rush in when you open the trap door for the mules to pass through; to work for fourteen hours-waiting-opening and shutting a door-then waiting again-for sixty cents

13 Triangle Factory Fire

Pauline NewmanAnd the ILGWU14

15The JungleAmong Sinclair's most famous books is THE JUNGLE (1906). It launched a government investigation of the meatpacking plants of Chicago, and changed the food laws of America.

16"There was never the least bit attention paid to what was cut up for sausage; there would come all the way back from Europe old sausage that had been rejected, and that was moldy and white - it would be dosed with borax and glycerin, and dumped into the hoppers, and made over again for home consumption. There would be meat that had tumbled out on the floor, in the dirt and sawdust, where the workers had trampled and spit uncounted billions of consumption germs. There would be meat stored in great piles in rooms; and the water from leaky roofs would drip over it, and thousands of rats would race about on it. It was too dark in these storage places to see well, but a man could run his hand over piles of meat and sweep off handfuls of the dried dung of rats. These rats were nuisances, and the packers would put poisoned bread out for them; they would die, and then rats, bread and meat would go into the hoppers together."Excerpt From The Jungle

17Making literary connectionsSinclair and SchlosserSchlossers searing portrayal of the industry in his book Fast Food Nation is disturbingly similar to Upton Sinclair's The Jungle, written in 1906: nightmare working conditions, union busting, and unsanitary practices that introduce E. coli and other pathogens into restaurants, public schools, and homes.

18Fast Food NationOn any given day, one out of four Americans opts for a quick and cheap meal at a fast-food restaurant, without giving either its speed or its thriftiness a secondthought.

19Economic connections

Thirty years ago, Americans spent about $6 billion on fast food; in the year 2000, they spent about $110 billion, Schlosser reveals.

Americans spend 134 billion dollars on fast foods annually. Fast food is the term given to food that can be made and served very quickly. While any meal with low cooking time can be thought to be fast food, typically the term refers to food sold in a restaurant or store with preheated or precooked ingredients, and served to the customer in a packaged form for take-out/take-away.About 50,000,000 Americans eat at fast food restaurants daily. That is about 1/8 of the American population.Adults spend $1,200 a year on consumer electronics and own, on average, 25 CE products per household, according to a study by the CEA.The study also found that teens spend $350 a year on gadgets, roughly half of their discretionary money, and adults with teens living in the home, spend $500 more than the national average of $1,200.20David Graham PhilipsTreason of the U.S. Senate- Topic- Bribery and Graft in the U.S. Senate. Reduce influence of corporations and financial institutions on government policy.

Led to the passage of the 17th Amendment.

A Short History Of Labor UnionsLabor Union-is an organization of workers who collectively seek to improve wages, working conditions, benefits, job security and other work related matters.1869 Uriah Stevens founded the Knights of Labor, it organized workers by industry not trade.Platform8 hour dayEnd to child laborOwners worked hard against union organization and some labor protests turned violentHaymarket Square- Haymarket Riot Chicago 1886Homestead Steel Strike 1892Railroad Strike 1894

1886- Sam Gompers founded the AFof L American Federation of Labor it was a craft union. Merged in 1955 with the CIO Congress of Industrial Organization23The AF of L organized auto workers under the UAW in 1935. After a sit down strike in Flint Michigan in 1937 General Motors recognized the UAW Under the leadership of Walter Ruther auto workers became one of the highest paid groups of industrial workers.John L. Lewis led the United Mine Workers and Steel Workers in the 1940s.

24Today Bob King is the president of the UAW

25Union membership decline

Reputation- featherbedding, wastefulness ,supposed connections to organized crime. Changes in the work forceClosed shops outlawed by the Taft Hartley ActUnion ShopsRight to work laws Map page 279

26Labor and management negotiations27Contract negotiationsCollective bargaining- Labor and management meet to discuss terms of a labor agreement. Hopefully they reach an agreement if not they move to the next stepMediation- a third party is called in to offer non binding suggestions to both labor and managementThe Taft Hartley Act of 1947 established the FMCS Federal Mediation and conciliation service. This service mediates disputesArbitration- 3rd party makes binding decisions on both parties28Labor and management tactics if mediation does not workStrike- Work stoppagePicketing- carry signs telling of grievencesBoycott stop buying products from companies accused of unfair labor practicesSecondary Boycott- stop doing business with companies that do business with a company whose employees are on strike.Coordinating campaigning use of boycotts and pickets together.

29Management tacticsHire replacement workersLockoutInjunction- court order stopping a strike

30 CHAPTER 13 UNEMPLOYMENT, POVERTY AND INFLATIONUnemployment rate-the percentage of the labor force that is jobless and actively seeking work.

The Bureau of Labor Statistics calculates the unemployment rate.31The unemployment rate does not account forDiscouraged workers who have given up looking for a jobUnderemployed workers, working part-time because they cannot find full time employment or people who work jobs below their skill levels.

Unemployment rate is calculated by

Dividing the number of unemployed persons by the total number of people in the Civilian Labor Force32FULL Employment does not mean Zero Unemployment4 to 6 % unemployment is full employment in the United States due to Frictional Unemployment

Types of UnemploymentFrictional-temporary unemployment experienced by people who are changing jobs.Frictional unemployment is a sign of a healthy economy it is normal.

Seasonal unemployment- Outdoor construction workers in Northeastern Ohio. Other examples

Structural Unemployment- TriggersNew technologyNew industries requiring specialized educationChange in Consumer demandOutsourcing

Cyclical unemployment- business cycles low point in a business cycle (recession)33

34 Impact of Unemployment

Unemployment is inefficient it wastes human resources.

Inequality graphs page 386

Discouraged workers35POVERTY AND INCOME DISTRIBUTION

37What is poverty?Lack of income or resources to achieve a minimum standard of living. In the United States the government has established a poverty threshold( poverty line). Official minimum income needed for the basic necessities. The poverty line was calculated in 1964 by The Agricultural Department, based on the cost of a nutritionally sound diet, then multiplying by three.

The poverty rate-The % of people living in households that have incomes below the poverty line.About 50% of people across the globe live in povertyIn the U.S. 40 million people live in poverty. Table page 39538FACTORS AFFECTING POVERTYLevel of education DiscriminationDemographic trends-Single Parent familiesChange in the labor force- move from manufacturing to service related economy39Measuring Income DistributionLorenz Curve of Income DistributionMeasures inequality in income distribution40Exit exercise- Lorenz curveUsing the following data construct a Lorenz Curve. You will have two lines. Be sure to label the x and y axis correctly. Label the two curves Remember this is cumulative.

% of households. % of aggregate income% of Households%of aggregate income20202010404040206060603080808040100100100What % of income does the top 20% of households hold on the line of inequality that you Constructed? _________

41INFLATION Inflation- a sustained rise in the level of prices (fall in the purchasing power of money.)Price Deflation- A decrease in the average price level of all products in an economy.42CPI-(consumer price index)The average change overtime in the price of a fixed group of productsusing the market basket to calculate rate of inflationFood and drinkHousingClothesTransportationMedical careEntertainmentEducation/communication 8. Other goods/services43BLS- Bureau of Labor Statistics determines the CPIBLS establishes a base period. The cost of the market basket is assigned an index number of 100.The BLS checks the cost of the market basket each month and year. The updated cost is compared to the base period cost to determine the index for that month/yearCPI= Updated cost divided by base period cost times 100Inflation rate= CPI current year- CPI previous year divided by CPI previous year times 1002011 base year cost $24,263.182012 cost year one $ 40,439.532013 Cost year two $ 39,762.61Calculate the rate of inflation between 2012 and 201344

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