Chapter Ten:

Markets for Labor

Labor in the Traditional Neoclassical Model

Figure 10.1: Upward-Sloping Labor Supply Curve

Figure 10.2: Backward-Bending Individual Labor Supply Curve

Figure 10.3: Median Weekly Earnings of U.S. Workers, by Educational Attainment, 2012

Source: U.S. Bureau of Labor Statistics, “Employment Projections,” www.bls.gov/emp/ep_chart_001.htm, May 22, 2013

Labor Supply and Demand at the Market Level

Figure 10.4: The Market for Website Designers

Changes in Jobs and in the Labor Market

Figure 10.5: Average Annual Hours Worked, Select OECD Countries, 2012

Source: OECD Employment Outlook 2013, Statistical Annex, Table K.

Alternative Explanations for Variations in Wages

Figure 10.6: Union Membership in the U.S., 1940-2012

Source: U.S. Bureau of Labor Statistics, Union Membership Data from the National Directory Series and Union AffiliationData from the Current Population Survey.

Figure 10.7: Median Weekly Earnings, Select Groups of U.S. Workers Age 25-54, 2013

Source: U.S. Bureau of Labor Statistics, “Usual Weekly Earnings of Wage and Salary Workers,” Economic News Release, July 18, 2013.

Wages and Economic Power

Figure 10.8: Real Median Weekly Wages Versus Real Corporate Profits, United States, 1980-2012

Sources: U.S. Bureau of Economic Analysis, National Income and Product Accounts Tables; U.S. Bureau of Labor Statistics, Weekly and Hourly Earnings Data from the Current Population Survey.

Appendix: A Formal Model of a Firm’s Hiring Decision

Figure 10.9: Marginal Revenue Product of Labor and Marginal Factor Cost of Labor