EMPLOYMENT AND WAGES BEFORE YOU BEGIN. Looking at the Chapter. Date Period. Chapter. Fill in the blank spaces with the missing words.

Transcription

1 EMPLOYMENT AND WAGES BEFORE YOU BEGIN Looking at the Fill in the blank spaces with the missing words. of labor of labor What Determines Wages? for labor Demand for the labor produces for labor Practices Control of labor view Labor Unions Two views of labor unions of labor The new view: labor union as a Study Guide 1 NTC/Contemporary Publishing Group, Inc.

2 Outlining the Look over the chapter paying attention to the main topics and concepts. As you look over each section of the chapter, fill in the missing words in the outline below. I. What Determines Wages? A. Supply and demand in the labor market 1. Employers are the people who labor. 2. Employees are the people who labor. 3. The price of labor is the. B. How the equilibrium wage rate is established 1. The equilibrium wage rate is the wage at which the of labor equals the of labor. 2. Surplus of labor means the wage rate. 3. Shortage of labor means the wage rate. C. Why do wage rates differ? 1. Wage rates can differ because for different types of labor are not the same. 2. Wage rates can differ because the conditions for different types of labor are not the same. D. Money benefits and benefits 1. The benefits in a job = money benefits (income) + benefits E. The demand for a good and wage rates 1. Demand for the good (that labor produces) rises demand for the labor _ wages rates. 2. Demand for the good (that labor produces) falls demand for the labor wage rates. 3. Demand for labor is a demand. It is dependent upon the demand for the good or service it produces. F. Factors that determine wage rates 1. The higher the demand for a labor service, the _ the wage rate will be. Study Guide 2 NTC/Contemporary Publishing Group, Inc.

3 2. The greater the demand for the product, the the demand for the labor services that produce the product. 3. The more productive labor is, the the demand for the labor service. 4. The fewer number of people who can do what a job, the will be the wage for that job. G. Government and wages 1. The sets a wage floor, or a level below which wage rates are not allowed to fall. H. Money wages vs. real wages 1. _ wage is a person s wage in terms of actual money, or dollars. 2. wage is a person s wage in terms of what it buys. 3. A is a kind of average price. 4. The, or CPI, is a common price index. 5. The real wage equals the money wage divided by the. II. Labor Unions and the Labor Market A. A labor union is an organization that seeks to increase the _ and improve the of its members. B. Some practices of labor unions increase wages. 1. Labor unions can increase the for union labor in two ways. a. They increase the demand for the that its union members produce. b. They increase the of their membership. 2. Labor unions may want to control the of union labor. a. A is an organization that hires only union members. b. A does not require individuals to be union members in order to be hired, but it requires employees to join the union within a certain period of time after being hired. c. Twenty-one states have passed laws, which make it illegal to require union membership for purposes of employment. C. Most studies show that union labor earns than comparable nonunion labor. D. Two views of labor unions Study Guide 3 NTC/Contemporary Publishing Group, Inc.

4 1. The traditional view says that labor unions are an obstacle to establishing reasonable work standards. 2. The new view is labor as a collective voice for workers. a. There is evidence that in some industries, union firms have a higher rate of than nonunion firms. b. A labor union plays a role as a mechanism for its members. c. Without a labor union, disgruntled workers may feel taken advantage of by their employers, or feel unsafe in their work, and may leave their jobs and seek work elsewhere. d. The labor union makes employees feel more confident, less intimidated, and more secure in their work. E. A brief history of the labor movement 1. The was started in 169. It welcomed anyone who worked for a living farmers, skilled workers, and unskilled workers with a few exceptions, such as liquor dealers. 2. The ( (AFL) was formed in 16 under the leadership of Samuel Gompers. 3. In the early days of the labor union movement, the courts treated unions as conspiracies. 4. The Act declared that workers should be free from the interference, restraint, or coercion of employers in choosing their union representatives. 5. The Act of 1935 required employers to bargain in good faith with workers. 6. The unionized the steel, rubber, textile, meatpacking, and automobile industries along industrial union lines. 7. In 1955, the AFL, a craft union, and the CIO, an industrial union, merged into the.. The _ Act of 1947 gave states the right to pass right-to-work laws. 9. The Act in 1959 called for regular union elections and secret ballots and requires union leaders to report on their unions finances. It also prohibits ex-convicts and communists from holding union office. Study Guide 4 NTC/Contemporary Publishing Group, Inc.

5 10. A union is a union whose members work for the local, state, or federal government. In the 1960s and 1970s there was sharp growth in public employee union membership. III. Measuring Unemployment A. Who are the unemployed? 1. The labor force equals unemployed persons plus employed persons. 2. A person is employed if he or she: a. worked at least one hour as a paid employee during the past ; or b. worked in his or her own business or profession; or c. worked at least hours per week as an unpaid worker on a familyowned farm or business; or d. was temporarily absent from work for reasons of illness, vacation, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or family or personal reasons. 3. A person is if he or she: a. did not work during the past week, actively looked for work within the past four weeks, is currently available for work; or b. is waiting to be called back to a job from which he or she has been laid off; or c. is waiting to report to a job within 30 days. B. The unemployment and employment rates 1. The unemployment rate is the percentage of the civilian labor force that is unemployed. It is equal to the number of persons divided by the labor force. 2. The _ rate is the percentage of the noninstitutional adult civilian population that is employed. It is equal to the number of persons employed divided by the number of persons in the noninstitutional population. Study Guide 5 NTC/Contemporary Publishing Group, Inc.

6 Building Vocabulary Fill in the blanks with the correct term from the list below. closed shop employment rate labor union minimum wage law right-to-work law strike Taft-Hartley Act unemployment rate union shop wage rate derived demand real wage 1. The is equal to the number of persons unemployed divided by the civilian labor force. 2. Organizations that hire only union members are called. 3. The number of persons employed divided by the number of persons in the noninstitutional population is the _. 4. The of 1947 gave states the right to pass. 5. A is a work stoppage called by union employees to put pressure on employers. 6. The price of labor is the _. 7. The demand for labor is dependent on the demand for the good labor produces. This is why the demand for labor is a _.. A wage floor below which hourly wages are not allowed to fall is called the. 9. A _ is an organization that requires employees to join the union within a certain period after being hired. 10. A _ is an organization that seeks to increase the wages and improve the conditions of its members. Study Guide 6 NTC/Contemporary Publishing Group, Inc.

7 AS YOU STUDY Illustrating Economic Concepts The timeline below shows the history of the labor movement in the United States. Complete the time line using the terms from the. 169 was organized. It welcomed anyone who worked for a living farmers, skilled workers, and unskilled workers-with a few exceptions, such as liquor dealers. 16 The American Federation of Labor (AFL) was formed and consisted mainly of _ The stated that workers should be free from the interference, restraint, or coercion of employers in choosing their union representatives The required employers to bargain in good faith with workers 193 The unionized the steel, rubber, textile, meatpacking, and automobile industries along industrial union lines The Taft-Hartley Act gave states the right to pass The AFL, a craft union, and the CIO, an industrial union, merged into the _ The _ called for regular union elections and secret ballots and requires union leaders to report on their unions finances. It also prohibited ex-convicts and communists from holding union office. Study Guide 7 NTC/Contemporary Publishing Group, Inc.

8 Using Economic Concepts Use the data in the chart below to calculate the numbers in the blank spaces. Noninstitutional adult civilian population = 200 million civilian labor force = million persons not in the labor force = 30 million unemployed persons = 10 million employed persons = Unemployment Rate = Employment Rate = _ Study Guide NTC/Contemporary Publishing Group, Inc.

9 AS YOU REVIEW Practicing for the Test Multiple Choice: Choose the letter that best fits the description or answers the question and write the corresponding letter in the space to the left. 1. This Act was passed in 1947 by the U.S. Congress and gave states the right to pass right-to-work laws. a. Taft-Hartley Act b. Wagner Act c. Norris-LaGuardia Act d. Landrum-Griffin Act 2. A will hire nonunion labor, but specifies that persons hired must join the union within a certain period of time. a. closed shop b. right-to-work shop c. open shop d. union shop 3. The number of unemployed persons is 10 million, and the number of employed persons is 70 million. What is the unemployment rate equal to? a percent b percent c percent d. 10 percent 4. According to the, wage rates are not allowed to fall below a certain level. a. union shop b. closed shop c. minimum wage law d. Taft-Hartley Act 5. Sally is a computer software engineer. The demand for the software that she develops has increased. What will be the effect on her wage rate assuming everything else remains the same? a. Her wage rate will increase. b. Her wage rate will decrease. c. Her wage rate will stay the same. d. Her wage rate could increase or decrease. Study Guide 9 NTC/Contemporary Publishing Group, Inc.

10 6. Suppose the minimum wage rate is higher than the equilibrium wage rate. Which of the following is most likely to occur? a. Fewer people will end up working at the minimum wage rate than would like to work. b. Everyone who wants a job will find a job. c. More people will be hired than without the minimum wage. d. Worker productivity will increase. 7. If the demand for labor increases by the same amount as the supply of labor increases, wages will. a. rise b. fall c. remain the same d. could rise or fall. If the demand for labor increases by less than the supply of labor increases, wages will. a. rise b. fall c. remain the same d. could rise or fall 9. Joe earns $50,000 at his present job. Another company offered Joe $75,000 but he turned down their offer. The nonmoney benefits in the lower-paying job equal at least what dollar amount? a. $50,000 b. $25,000 c. $75,000 d. $125, In a competitive labor market, suppose quantity demanded of labor is less than the quantity supplied. What will happen to the wage rate? a. The wage rate will rise. b. The wage rate will fall. c. The wage rate will remain the same. d. The wage rate could rise or fall. Study Guide 90 NTC/Contemporary Publishing Group, Inc.

11 Short Answer: 1. The number of high school students in California is expected to increase by a large amount in the next few years. Use the concept of derived demand for labor to explain how this increase in students could impact teachers wages. 2. Why do professional athletes earn so much money? Explain your answer using the concepts of demand and supply for labor. 3. The three fastest growing occupations are in computer-related fields. Why do you think this is so? Explain using the concepts of supply and demand for labor. Study Guide 91 NTC/Contemporary Publishing Group, Inc.