Post on 25-Dec-2015
WAGES IN LABOR
Wages
The price of labor Payments workers receive in return
for work Governed by the forces of supply &
demand
http://www.classzone.com/cz/books/econ_cnc/resources/htmls/animated_economics/ec09_anim_labor.html
3 4 5 6 7 8 9 100
5
10
15
20
25
Demand Curve
Demand Curve
The restaurant is willing to hire more chefs if the hourly wage is
lower.
Number of workers
Hou
rly w
ag
e (
in d
olla
rs)
1 2 3 4 5 6 7 8 90
5
10
15
20
25
Supply Curve
Supply CurveLinear (Supply Curve)
As the wage increases, so does the number of workers willing to work as
fast food chefs.
Equilibrium Wage
The wage at which the quantity of workers demanded equals the quantity of workers supplied; the market price for labor
3 4 5 6 7 8 9 1005
10152025
Equilibrium Wage
Demand CurveSupply Curve
Why Do Wage Rates Differ?
The rates of pay for specific jobs or work performed
Human Capital
Unskilled Workers No training needed. House
cleaners & Sanitation workers
Semi-skilled Workers Received some training
(Construction & Clerical workers)
Skilled Workers Significant investment in training
(Plumbers, electricians, mechanics )
Professional Workers Doctors, lawyers Jobs with intensive specialized
training
Working Conditions
Higher wages are often paid to workers in dangerous and unpleasant occupations in order to attract qualified people
Discrimination in the Workplace
Glass Ceiling – Women can see the top but never attain the top levels of
management.
http://mediamatters.org/blog/2012/09/27/fox-news-women-earning-less-than-men-is-not-a-n/190161
http://www.bloomberg.com/news/2013-08-13/best-paid-women-in-s-p-500-settle-for-less-with-18-gender-gap.html
Government Actions
Minimum wage – the lowest wage legally allowed for one hour of work
Minimum wage acts like a price floor, designed to boost wages for low – income workers
http://www.dol.gov/whd/minwage/america.htm
Civilian Labor Force
People 16 & up who are employed or actively looking for and available for work
DOES NOT include military, prison, or people in mental hospitals.
Three Economic Sectors
Primary Sector Made up of jobs related directly to
natural resources Examples: Farming, forestry,
fishing, mining
Secondary Sector
Jobs related to the production of goods, including the materials and energy needed to produce them
Examples: welders, truck drivers, & construction workers
Tertiary Sector
Made up of service – related jobs Examples: Banking, insurance, retail,
education
14%
35%
53%
Employment in 1950
Primary SectorSecondary SectorTertiary Sector
3%
18%
79%
Employment in 2000
Primary SectorSecondary SectorTertiary Sector
http://www.bls.gov/news.release/empsit.nr0.htm
WHAT IS HAPPENING TO AMERICAN JOBS DUE TO
GLOBALIZATION?
Changes in Labor
Telecommuting Doing office work somewhere other
than a traditional office
Contingent Employment Temporary or part-time work
Independent Contractors People who sell their services to
businesses on a contract basis
OUTSOURCING:The practice of contracting with an outside company, often in a foreign country, to provide goods or services
There are many reasons this is done:1. Many other countries have much cheaper labor
available.2. If corporations want to expand into other
markets, sometimes it helps to do business in those markets.
3. You can cut down on shipping costs if you have a business located where the goods are going to be sold.
http://abcnews.go.com/WNT/video/world-news-fact-checks-outsourcing-overseas-jobs-steal-stolen-US-workers-12092146
Insourcing
The practice of foreign companies establishing operations in, and therefore bringing jobs to the U.S.
http://www.youtube.com/watch?v=LGIgJWvt6fw
http://abcnews.go.com/WNT/video/jobs-call-centers-back-us-14243481?playlist=1363932§ion=1206834&tab=9482931
8/5/11
IIT – Imported from India