CHAPTER 12The American Labor

Force

CHAPTER 12SECTION 1

Americans at Work

The Civilian Labor Force

Civilian Labor Force: the total number of people 16 years or older who are employed or seeking work.

People not included in the civilian labor force: Mentally or physically disabled people Prisoners People in the armed forces Those not looking for a paying job.

Categories of Workers

Workers in the US are categorized in several ways.

One way to group them is by the type of work they perform.

Another way is by the level of training or education their jobs require.

Categories of Workers

According to the type of work they do: Blue collar- craft workers, manufacturers, and

nonfarm laborers Created due to lack of demand for farmers due

to mechanization. White collar- office workers, salespeople,

highly trained workers Has experienced steady growth throughout the

20th century. Service workers

Largest category of workers.

Categories of Workers

According to skill level: Unskilled (no specialized training) Semiskilled (some training) Skilled (learned trade or craft) Professionals (college degrees and training)

Workers may move from one skill level to another as they gain training and experience.

Supply and Demand in the Labor Market

Factors that affect wages: Skill

Type of job

Location

Skill

Skill is the ability a person brings to a job.

The demand for highly talented individuals is usually high and the supply of such employees is often scarce, causing a shortage. Shortages result in high prices- in this case, high

wages.

A highly educated brain surgeon and a talented Major League home run hitter are paid large sums for their skill.

Type of Job

Jobs that are unpleasant or potentially dangerous often pay higher wages compared to other jobs that require similar equal levels of skill. Coal mining Jobs are plentiful but people wanting to fill

them are scarce. People may take jobs that are enjoyable

or prestigious even at low wages. Demand for these jobs are low, but the supply

of workers are plentiful.

Location

If workers are relatively scarce in an area, companies will have to pay higher wages to attract workers. Alaska has highest wages per person in the

country.

A company in a highly populated area often can hire people at relatively low wages.

Restrictions on Wages

Market failure Workers cannot know exactly what other

employers will pay for their services. Employers cannot know what all workers are

willing to accept. Minimum wage laws

Designed to protect workers. Wage negotiations between organized

labor and management

CHAPTER 12SECTION 2

Organized Labor

Development of Labor Unions

Labor union: association of workers organized to improve wages and working conditions for its members.

In the 1800s working conditions were terrible and unions were often illegal.

Strikes often resulted in violence between workers and the police.

Development of Labor Unions

The first permanent union, The American Federation of Labor (AFL) was made up of craft unions and led by Samuel Gompers. Craft union: union made up of skilled workers in a specific

trade or industry

In 1938, the Congress of Industrial Organizations (CIO) was created, and the automobile and steel industries were the first to be organized.

AFL and CIO joined forces in 1955 because they felt greater gains could be made if the craft and industrial unions worked together.

How Unions are Organized

Organized labor operates at three levels: Local Unions

National Unions

Federation Unions

Local Unions

Local unions have members in a distinct location (one factory, company, or geographical area)

The local deals with a company by negotiating a contract and making sure the terms of the contract are met.

Local Unions

Local union membership and management relationships differ from one shop to another.

Closed shops allow the company to hire only union workers; these were outlawed in 1947.

Union shops require employees to join the union after a specific period of time.

Agency shops require employees to pay union dues whether or not they join the union.

Local Unions

A number of states have passed right-to-work laws that forbid union shops. Right-to-work laws: state laws forbidding unions

from forcing workers to join and pay union dues

Workers are not required to join unions and benefits negotiated by the union must be made available to all employees.

Unions have less power in states with right-to-work laws.

National Unions

National unions represent the local unions nationwide.

Those that include members from Canada and Mexico are known as international unions.

National unions send in organizers to help set up local unions and negotiate contracts, sometimes for whole industries.

Federation Unions

At the federation level of unions is the AFL-CIO, which is made up for national and international unions.

More than 65 unions with about 13 million members are associated with the AFL-CIO.

CHAPTER 12SECTION 3Collective Bargaining

Collective Bargaining

Collective Bargaining: process by which unions and employers negotiate the conditions of employment

Compromise is the most important part of collective bargaining. The company want to keep labor costs down

and remain competitive in the market. The union wants to increase wages and

benefits for its members as much as possible.

Negotiation

Negotiation take place when labor and management meet to discuss contract issues. The most important issues may negotiate include

working hours, fringe benefits, and a cost-of-living adjustment (COLA).

Cost-of-Living Adjustment: provision calling for an additional wage increase each year if the general level of prices rises

Most negotiations are friendly and result in an agreement that satisfies all parties.

Negotiation

Mediation If negotiations become hostile or compromise

breaks down, labor and management may try mediation.

Mediation: a neutral person tries to get both sides to reach an agreement during negotiations

The mediator suggest possible solutions and works to keep the two sides talking with each other.

The Federal Mediation and Conciliation Service (FMCS) provides mediators free of charge upon request of a union or management.

Negotiation

Arbitration Arbitration takes place when mediation fails. Arbitration: union and management submit

the issues they cannot agree on to a third party for a final decision

Labor and management then ask a third party to make a decision, agreeing to unconditionally accept that decision.

The FMCS often helps in these cases by providing labor and management with a list of private arbiters in the area.

Strikes and Management

Most contracts are settled at the bargaining table but sometimes negotiations break down and a strike results. Picketing is when workers carry signs in front

of the place of business until their needs are satisfactorily met in the contract.

Striking unions can also use boycotts to exert more economic pressure on a firm.

Strikes and Management

Lockouts Lockout: situation that occurs when

management prevents workers from returning to work until they agree to a new contract

Management may bring in strikebreakers who will work under the terms of the company.

Injunctions Injunction: court order preventing some

activity Injunctions can be used to limit picketing or

prevent a strike from occurring.

Decline of Unions

As working conditions have improved over the years, nonunion workers see little benefit to belonging to a union.

More jobs are available in white collar and service sectors, blue-collar jobs are decreasing.

Decline of Unions

Critics of the labor movement claim unions are so large they are not in touch with members’ needs, and increased wages given to union workers are passed on to consumers in price increases.

Employers claim union rules decrease productivity, unions make it hard to use new technology that would replace workers, and corruption among labor leaders has damaged union reputation.