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ChapterChapter
LaborLabor
MarketsMarkets10
Who is in the Labor Force?
• Labor force = total number of people willing and able to work (16 or older)
Types of Work
• Sector=part of the economy; type of work• 3 main sectors:
– Farming• Many left to join manufacturing/construction in early 1900s
– Manufacturing/Construction• Largest sector by 1920
– Service Industries• Once the smallest, now the largest• Ex: Computers Technicians, Hairdressers, Scientists,
Teachers, Cooks, Bankers
Which Sector do they Work In?
Skill Levels
• Unskilled– No special training– Quickly learned skills– Easy to hire and replace
• Semiskilled– More training– Narrow range of skills, short
amount of time• Skilled
– Extensive training and experience– Specialized knowledge
• Professionals– College degree + specialized
training– White-collar professions– Difficult to replace– Ongoing education
• Unskilled– Store Clerk– Ditch Digger– Receptionist
• Semiskilled– Telephone operator– Small Store Manager– Nurse’s aides
• Skilled– Plumber– Electrician– Police Officer– Dental Assistant
• Professionals– Lawyer– Teacher– Engineer– Dentist– Doctor
Skill Levels
• Types of labor do not directly compete with one another
• Each type of labor is essential to the economy
• Education allows people to progress from one skill level to another
Categorize the Following Jobs:
• Carpenter• Secretary• Accountant• Professional Quarterback• Waiter• Toll Collector• Scientist• Professor
Manufacturing/construction; semiskilled
Service; semiskilled
Service; skilled
Service; skilled
Service; unskilled
Service; unskilled
Service; professional
Service; professional
The Demand for Labor
• Value of labor is derived from the value attached to the product or service a worker helps produce
• Derived demand= demand for one thing arises from a demand for something else
• Wages= price paid for labor
The Supply of Labor
• What affects the supply of labor?– Population– Wages– Elasticity/Inelasticity
• Location• Skill Level Required
Wages
• Why can a rise in wages have a negative effect on supply?– Substitution Effect– Income Effect
Wages: Supply & Demand
Remember: Wages are a Price!
How are wages
determined?
Collective Bargaining:
Tools:• Labor Unions• Negotiation• Labor Contract• Strike• Lockout
Preferences & Discrimination:
• Why are employers willing to pay more for an employee with a college degree than one with a high school degree if both employees will do the same work?
• How businesspeople view college degrees:– Sign of intelligence– Hard work– Willingness to complete a long term goal
• These are qualities valued in an employee.
Preferences & Discrimination:
Preference based on race, religion, national origin, or gender
(EE0) Equal Employment Opportunity: Treating an
employee differently based on anything other than job
performance or character is illegal
Education & Earnings
Define the Following Terms:Define the Following Terms:
1.Civilian Labor Force2.Substitution effect3. Income effect4.Equilibrium wage rate5.Labor union6.Collective bargaining7.Strike