Eco 12/1Eco 12/1

Americans at WorkAmericans at Work

The Civilian Labor ForceThe Civilian Labor Force

Civilian labor force-Civilian labor force- total number total number of people 16 yrs. or older who of people 16 yrs. or older who are employed or seeking work.are employed or seeking work.

Those not able to work- disabled Those not able to work- disabled or in prison- are or in prison- are notnot included included

Military personnelMilitary personnel and those and those notnot looking for worklooking for work are also not are also not included.included.

Categories of WorkersCategories of Workers

Blue collar. Work in Blue collar. Work in crafts, manufacturing, crafts, manufacturing, non-farm labor.non-farm labor.

Categories of WorkersCategories of Workers

White collar- workers employed White collar- workers employed in offices, sales, professional in offices, sales, professional positions. Largest sector, positions. Largest sector, including doctors, engineers, including doctors, engineers, teachers, etc.teachers, etc.

Categories of WorkersCategories of Workers

Service sector- People whoService sector- People who provide services directly toprovide services directly to individuals. Cooks, piano individuals. Cooks, piano tuners, hair stylists…tuners, hair stylists…

Jobs Categorized by Skill Jobs Categorized by Skill LevelLevel Unskilled workers- Unskilled workers- jobs need jobs need

no specialized training. (Waiting no specialized training. (Waiting tables, custodial work.)tables, custodial work.)

Semiskilled workers- Semiskilled workers- jobs jobs require some training. ( Nurse’s require some training. ( Nurse’s aid)aid)

Skilled workers- Skilled workers- learned trade learned trade or craft, vocational school, or craft, vocational school, apprenticeship. (Cops, masons)apprenticeship. (Cops, masons)

ProfessionalsProfessionals

Need college degrees, Need college degrees, additional training, education. additional training, education. (Teachers, lawyers, (Teachers, lawyers, accountants.)accountants.)

Supply and Demand in the Supply and Demand in the Labor MarketLabor Market

Suppliers are the workers who Suppliers are the workers who offer their services.offer their services.

Demand comes from employers Demand comes from employers who need workers.who need workers.

Supply and Demand in the Supply and Demand in the Labor MarketLabor Market

Three factors affect how supply Three factors affect how supply and demand determine prices:and demand determine prices:

1.1. Skill/ initiative/ productivitySkill/ initiative/ productivity

2.2. Type of jobType of job

3.3. LocationLocation

Skill/ ProductivitySkill/ Productivity

Demand for good workers is Demand for good workers is high and supply is low, creating high and supply is low, creating a shortage. Shortage leads to a shortage. Shortage leads to high salaries.high salaries.

(Brain surgeons, NBA, etc.)(Brain surgeons, NBA, etc.)

Type of JobType of Job

Unpleasant, dangerous jobs pay Unpleasant, dangerous jobs pay more, because there’s less more, because there’s less supply- fewer people who’ll do supply- fewer people who’ll do them. (Coal mining)them. (Coal mining)

Desirable jobs…Desirable jobs…

sometimes make little money. sometimes make little money. Supply is high (many people Supply is high (many people want them.)want them.)

So there is a SURPLUS of So there is a SURPLUS of workers who want them, workers who want them, pushing wages DOWN.pushing wages DOWN.

LocationLocation

If workers are relatively scarce If workers are relatively scarce in an area, wages will be high.in an area, wages will be high.

Alaska has highest wages per Alaska has highest wages per person in country. (Shortage)person in country. (Shortage)

Restrictions on WagesRestrictions on Wages

Labor market is not perfectly Labor market is not perfectly competitive. competitive.

The flow of information is The flow of information is imperfect, so workers can’t imperfect, so workers can’t know what other employers are know what other employers are willing to pay. Employers can’t willing to pay. Employers can’t know what workers are willing to know what workers are willing to accept.accept.

Lack of info- Lack of info- “market failure”“market failure”

Other Restrictions on WagesOther Restrictions on Wages

Minimum wage laws- set lowest Minimum wage laws- set lowest legal hourly wage rate that may legal hourly wage rate that may be paid.be paid.

They often hurt workers. Some They often hurt workers. Some firms hire fewer workers. That firms hire fewer workers. That delays their getting job skills, delays their getting job skills, and reduces their value later.and reduces their value later.

Restrictions on WagesRestrictions on Wages

Wage negotiations between Wage negotiations between labor (unions) and management.labor (unions) and management.

Supply and demand have less Supply and demand have less influence on wages than influence on wages than seniority, length of the contract, seniority, length of the contract, and company’s ability to pay and company’s ability to pay higher wages.higher wages.