Topic 10: The Work Force & Wages

Topic 10: Topic 10: The Work Force & WagesThe Work Force & Wages

Day 1 Notes

Textbook Chapters-Chapters 9 & 13

Labor ForceAll non military people age 16-65

who are employed or seeking it

What it means to be Employed

•16 yrs.+ working for pay at least 1 hr./wk.•15 yrs.+ w/o pay for family business•Held jobs but didn’t work due to illness, vacation, strike, weather

The US Labor ForceThe US Labor Force

Population and labor force, 1998, 2008, and projected 2018, in millions

Numeric change in labor force by age, projected 2008–18,

in thousands

The baby-boom generation—those born between 1946 and 1964—is expected to remain in the labor force longer than previous generations. As this group ages, the number of people in the labor force aged 55 to 64 is expected to increase by more than 7 million during the projections decade, and the number of people aged 65 and older is projected to increase by almost 5 million. The numbers of 45- to 54-year-olds and 35- to 44-year-olds are expected to shrink as baby boomers age and shift into older groups.

Labor force participation rates for men and women, 1958–2008 and projected 2018, in percents

The labor force participation rates for both men and women are expected to decline slightly over the projections decade. By 2018, about 71 percent of men and 59 percent of women are expected to be in the labor force.The aging of the population will be a factor driving down labor force participation rates. Despite working longer than previous generations, baby boomers will still have lower levels of labor force participation than those in younger age groups. The baby-boom generation is becoming a larger segment of the total population, driving down overall participation in the labor force.

Percent distribution of labor force by

race, projected

2018

Although whites will continue to be the largest racial category in the labor force, other racial groups are projected to make up 21 percent of the labor force by 2018. 

Percent growth in labor force by race, projected 2008–18 Although Asians will remain a small part of the labor force, they—along with the "all other races" category—will have the fastest rate of labor force growth between 2008 and 2018. This growth is due to increased immigration and both groups' very high labor force participation rates.The "all other races" category includes American Indians and Alaska Natives, Native Hawaiians and other Pacific Islanders, multiracial individuals, and any other people who do not identify themselves as white, black, or Asian. 

Occupational Trends

1800-1900’s: shift from agriculture to Industrial Revolution which created factory jobs

1900’s-1960’s: heavy manufacturing1970’s- present: boom in

electronics led to new factory jobs; revolution in computers created new jobs

Future: Shift from manufacturing to service economy

Implications for the Younger Segment of the Population

(18-24 Year Olds)

Must have skills, education, training and experience

Manufacturing jobs disappearing

Most work several jobs before settling

How are wages determined?Supply & demand…AGAINDemand for product changes, so

does demand for the labor that produces it

Factors that Affect WagesEducationOpportunityInitiativeDiscrimination

◦Women/minorities◦Glass ceiling

LawsEmployersRegionLabor Unions

Education

Highly educated jobs have High Demand, Low supply Higher salaries

Impact: education increases productivity & results in higher wages

Opportunity

Isolated geography

Job safety

Impact: These factors hinder chances to improve salary

May take dangerous job

InitiativeLack of motivationImpact: No effort means no high

salary

Discrimination

Women & minoritiesGlass ceiling: allow women to rise to

a particular place in the company’s hierarchy & then stop the promotions no matter how deserving the employee is

Race & gender keep you from getting a promotion

Impact: Pay gap exists between male & females

Legislation to Prevent Discrimination (Laws)Affirmative action programs-insure the

equitable recruitment of workersCivil Rights Act of 1964, Equal Pay Act of

1963, & U.S. Code 1963 prevent gender discrimination

Rehabilitation Act of 1973: prohibits discrimination based on handicap

Age Discrimination in Employment Act of 1967 protects those between 40 & 70

Laws

Against wage discrimination

Impact: Prevent unfair practices

Minimum wage laws

Fair Labor Standards Act

Employers

Impact: OutsourceImpact: Results in lay offs & lower

wages

Region

Where you liveImpact: Cost of living determines

pay differencesNYC vs Ballston Spa

Labor Unions

Impact: Fight for higher wages and better working conditions

Tend to produce higher wages than non-union workers

Strength in Numbers

Outsourcing and Globalization

Topic 10Day 2

Key Terms

Outsourcing-Sending jobs from one nation to another to decrease costs for the business either through manufacturing costs, wages, taxes, etc.)

Globalization-Inter-consecutiveness of the world’s nations through economic, social, and political means. Idea merges theories of cultural diffusion with interdependence.

AdvantagesAdvantagesDisadvantagesDisadvantagesProvides jobs to people Provides jobs to people

in other countriesin other countriesLower prices for Lower prices for

consumersconsumersBigger profit marginsBigger profit marginsLower costs of Lower costs of

productionproductionBetter, higher paying Better, higher paying

corp. jobs in UScorp. jobs in US

Loss of domestic jobsLoss of domestic jobsWeakens strength of Weakens strength of

domestic economydomestic economyLess tax revenue for Less tax revenue for

countrycountryLoss of power/ #’s in Loss of power/ #’s in

unionsunionsPlant ClosingsPlant Closings

Outsourcing Advantages & Disadvantages for the Outsourcing Nation:

Impact of OutsourcingSkilled workers & professionals: Skilled workers & professionals:

increased demand, wages increaseincreased demand, wages increaseUnskilled/lower skilled: Lowered Unskilled/lower skilled: Lowered

Demand, Increased SupplyDemand, Increased Supply Lower Lower PayPay Surplus of unskilled workers Surplus of unskilled workers

Temporary/Contingent workers: Temporary/Contingent workers: People working free lance; as People working free lance; as contracted ex. Engineers, attorneyscontracted ex. Engineers, attorneysIncreased Demand- can adjust for Increased Demand- can adjust for peak seasons, fewer rights, paid less, peak seasons, fewer rights, paid less, flexibleflexible

Directions: In your notebook make a t-chart of the Advantages and Disadvantages that outsourcing has for India.

Advantages Disadvantages

(The Other Side of Outsourcing 44:20)

Topic 10Day 3

I wish I I wish I was in was in

school!!!school!!!

Avondale mine Avondale mine disasterdisaster

Exploitation, long hours, low pay, Exploitation, long hours, low pay, faulty equipment, dirty, poor faulty equipment, dirty, poor

ventilation, poor lighting, ventilation, poor lighting, dull/repetitive tasks, substandard dull/repetitive tasks, substandard

conditionsconditions

12 hours a day, 6 days a week12 hours a day, 6 days a week

1 in 300 killed in Railroad work1 in 300 killed in Railroad work

Organized LaborOrganized Labor

Types of Laborers

Unskilled: requires no specialized skills, education, & training; hrly wage

Semi Skilled: requires minimal specialized skills & education

Skilled: requires specialized abilities & training

Professional: demands advanced skills & education

The Labor Movement: Strength in Numbers

Labor Unions project that no one creates change alone.

Better chances for change come with more people.

Types of UnionsTypes of Unions

Craft Industrial

Craft UnionAssociation of skilled workers

who perform the same kind of work

Ex. NYSUT-teachers

Industrial UnionIndustrial UnionAll workers in a given industry

regardless of what job they perform

Ex. UAW: any worker in the auto industry

Types of Union Activities

Types of Union Activities

Purpose of Union Activity

Strike: Most common; refusal to work until demands are met

slows efficiency; tool used to increase bargaining power

Pickett: Parade vocalize disputed issues; cut off patrons, supplies; intimidate; inform

Boycott Mass refusal to buy product or service from a targetHurts income and reputation

Roles of Labor UnionsRolesCollectively BargainCollectively Bargain Use strength in numbers

Union and company reps meet to negotiate a new labor contract1st steps unions take

Get favorable legislation Get favorable legislation passedpassed

Endorse candidates that will support the unions cause

Secure better working Secure better working conditionsconditions

WagesHoursSeniority Rights (LIFO)Safety and ComfortJob Security

Resolving Differences

ConciliationConciliation 33rdrd party brought in to party brought in to encourageencourage talks between mgmt. talks between mgmt. And workersAnd workers

Role is to bring two sides Role is to bring two sides togethertogether

ArbitrationArbitration Binding decisionBinding decision

Union and mgmt. Turn case Union and mgmt. Turn case over to a 3over to a 3rdrd party to party to resolveresolve disputedispute

Seldom usedSeldom used

MediationMediation Union and mgmt. Union and mgmt. Help settleHelp settle disputedispute

Mediator is neutral and knows Mediator is neutral and knows concessions to agree onconcessions to agree on

Non bindingNon binding

Major Issues in Contract Disputes

Wages and Fringe Benefits

Working ConditionsJob Security

Right to Work LawsBan mandatory union membership.

Unemployment & Poverty

Topic 10

Day 4

UnemploymentUnemployment

One who is actively seeking but not finding a job.

How do we figure out the How do we figure out the unemployment rate?unemployment rate?The total number unemployed in proportion to the total civilian labor force (16-65)

(Percentage)

Problems with Problems with UnemploymentUnemploymentDoesn’t count “drop outs”People are “employed” even with part time jobs (doesn’t give a true measure)

Types of UnemploymentTypes of UnemploymentFrictional UnemploymentFrictional Unemployment

◦Unemployment that comes from moving between careers, jobs and/or relocation.

Types of UnemploymentTypes of UnemploymentSeasonal UnemploymentSeasonal Unemployment

◦Unemployment that occurs when industries slow or shut down for a season or make seasonal changes in production.

Types of UnemploymentTypes of UnemploymentStructural UnemploymentStructural Unemployment

◦Occurs when a worker’s skills do not match the jobs that are available; often occurs because of technological advances.

Types of UnemploymentTypes of UnemploymentCyclical UnemploymentCyclical Unemployment

◦Unemployment that rises during economic downturns and falls during periods of economic growth.

Technological Technological UnemploymentUnemployment

ReplacemeReplacement by nt by machinesmachines

Full EmploymentFull EmploymentLowest possible unemployment

rate with growth & all factors of production used efficiently

ECO. GOAL- between 4 & 6 %

Causes of Income Inequality & Causes of Income Inequality & PovertyPoverty

EducationWealthDiscrimination

AbilityLocationFamily Structure

Income Distribution Income Distribution ProblemProblemRichest 20% have 13x’s the income as the 20% poorest

Uneven Distribution of Wealth

PovertyPoverty

Those living on or below the poverty line or threshold.(Annual dollar amount needed to sustain life with basic needs.)

Poverty RatePoverty Rate% of people who live below the poverty threshold

Differs by race and ethnic origin, type of family, age, residence

Welfare ProgramsWelfare ProgramsIncome Assistance

Direct CashComes with guidelines

General Assistance

Food StampsMedicaidBased on Income

Social Service Family PlanningDaycareChild WelfareJob Training

Workfare Exchange labor for benefitsCommunity service, build skills

TANF: Temporary Assistance for Needy Families

Eliminated abuses of the system (got rid of cash abuses)Limited time to receive benefits to 5 years

The poverty line is an annual dollar amount needed to sustain life with basic needs.

Poverty Line in 2003 for:Single adult: $9,393

Family of 2: $12,490Family of 4: $18,850

Add $3180 for each additional person (less for persons over 65 years old)

Some Interesting Stats: A Closer Look at WHO is in poverty:

RACESTATUSAGEBlacks=22.7%Single Women =26.4%Under 18=16.3% Hispanics=21.4%Single Men =13.1%Whites9.9%Married=4.9%Asians=10.2%Black and Hispanic, Female-headed households = 35+%

http://www.irp.wisc.edu/

The 2009 Poverty Guidelines for the48 Contiguous States and the District of Columbia

Persons in family Poverty guideline

1 $10,830

2 14,570

3 18,310

4 22,050

5 25,790

6 29,530

7 33,270

8 37,010

For families with more than 8 persons, add $3,740 for each additional person.

WorldwideWorldwideDemographics Demographics

Source:www.globalissues.org/print/article/26

PovertyPovertyAlmost half the world-over three

billion people-live on less than $2.50 a day

At least 80% of humanity lives on less than $10 a day

Poverty line-$1.25 a day

ChildrenChildren2.2 billion children in the world1 billion children in poverty10.6 million died in 2003 before age 5 15 million children orphaned due to HIV/AIDS25,000

children each day die due to poverty72 million children of primary school age in the

developing world were not in school in 2005Less than one percent of what the world spent every

year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen

Health Health An estimated 40 million people are

living with HIV/AIDS, with 3 million deaths in 2004

Every year 1 million people die from Malaria

Life expectancy-Reduced for 4 out of 5 groups of countries except for the highest group (69-76 years)

Urbanization-Urbanization-the movement of the movement of people people from the rural countryside into citiesfrom the rural countryside into cities

Half of the world’s population lives in cities or towns

1 billion live in slums

WealthWealth2005-wealthiest 20% accounted for 76.6% total

consumption2005-Poorest 5% accounted for just 1.5%The GDP (Gross Domestic Product) Measures a

countries wealth through imports, exports, spending, investments, etc.-of the 41 heavily indebted poor countries (567 million people) is less than the wealth of the world’s 7 richest people combined.

The wealthiest nation on Earth (US) has the widest gap between rich and poor of any industrialized nation

Consumerism:Definition 1

Organized-efforts by individuals, groups, and governments to help protect consumers from policies and practices that infringe consumer rights to fair business practices.Definition 2Doctrine that ever-increasing consumption of goods and services forms the basis of a sound economy.

Definition 3Continual expansion of one's wants and needs for goods and services.

Global Priority $U.S. Billions

Cosmetics in the United States 8

Ice cream in Europe 11

Perfumes in Europe and the United States 12

Pet foods in Europe and the United States 17

Business entertainment in Japan 35

Cigarettes in Europe 50

Alcoholic drinks in Europe 105

Narcotics drugs in the world 400

Military spending in the world 780

Global Priority $U.S. Billions

Basic education for all 6

Water and sanitation for all 9

Reproductive health for all women 12

Basic health and nutrition 13

Resources Resources 12 percent of the world uses 85% of

the world’s water-none of the 12% live in a third world nation

Water problems affect half of humanity

1.1 billion people have inadequate access to water

2.6 billion lack basic sanitation 1.6 billion (25% of humanity) live

without electricity

Number of people living without electricity

Region Millions without electricity

South Asia 706

Sub-Saharan Africa 547

East Asia 224

Other 101

Growth in goods components of personal consumption expenditures, projected 2008–18, in billions

Consumerism

 http://www.youtube.com/watch?v=hGaOQKJik-s

http://www.youtube.com/watch?v=_nk2_rk0FLw

http://www.youtube.com/watch?v=2N0NHu2GJm8