Chapter Introduction
Section 1: Americans at Work
Section 2: Organized Labor
Section 3: Collective Bargaining
Visual Summary
The labor market, like other
markets, is determined by supply
and demand.
In this chapter, read to learn
about the major categories of the
labor force, the role of unions in
today’s work force, and the
factors that affect wages.
Section Preview
In this section, you will learn how workers
are categorized and how their wages are
determined.
Do you know what kind of work you
want to do as an adult?
A. Yes
B. Somewhat
C. Not at all
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
The Civilian Labor Force
Workers can be categorized by the type
of work they perform and by skill level.
The Civilian Labor Force (cont.)
• Labor is an important part of the four
factors of production.
• All individuals employed or actively
seeking paid work over the age of 16
make up our civilian labor force.
View: Employment Status of U.S. Population
The Civilian Labor Force (cont.)
• Workers in the U.S. are categorized by
type of work they perform and the level of
training or education their jobs require.
• Types of labor:
– Blue-collar workers
– White-collar workers
– Service workers
The Civilian Labor Force (cont.)
• Skill level:
– Unskilled workers
– Semiskilled workers
– Skilled workers
– Professionals
Supply and Demand in the Labor
Market
In labor markets, wages are influenced
by factors affecting supply and
demand, such as variations in skill
levels, job conditions, and work
locations.
Supply and Demand in the Labor
Market (cont.)
• Suppliers are the workers who offer their
services to employers.
• Demand comes from the employers who
require workers.
Supply and Demand in the Labor
Market (cont.)
• Three major factors affect how supply and
demand determine wages in the labor
market:
– Skill—this may come from talent,
initiative, education and/or training, or
experience.
• Demand for skill is high or scarce and
therefore pays higher wages.
Supply and Demand in the Labor
Market (cont.)
– Type of job—this affects the amount an
employer is willing to pay and a potential
employee is willing to accept.
– Location—if workers are scarce in an
area, companies pay high wages to
attract workers to move there and vice
versa.
View: Location
Supply and Demand in the Labor
Market (cont.)
• Two factors restrict supply and demand in
terms of their influence on wages:
– The federal minimum wage law
– The process of wage negotiations
between organized labor (unions) and
management.
Do you feel that most people who
work make what they deserve?
A. Definitely
B. Sometimes
C. Not at all
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
Section Preview
In this section, you will learn about the
history of labor unions and how they are
organized.
Content Vocabulary
• labor union
• closed shop
• strike
• union shop
• craft union
• agency shop
• industrial union
• right-to-work laws
• local union
Do you know much information about
labor unions?
A. Lots of information
B. Some information
C. No information
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
Development of Labor Unions
Labor unions developed to attempt to
improve working conditions and wages
for their members.
Development of Labor Unions (cont.)
• American workers began to form labor
unions in an attempt to gain some control
over their wages and working conditions in
the 1800s.
• Unionism met with strong resistance.
• As a result, many workers had to strike
which often resulted in violence.
View: Labor’s Early Struggle for Recognition
View: Labor-Management Legislation
Development of Labor Unions (cont.)
• Organized labor in the United States has
been split into two groups for much of
history:
– Craft unions
• The American Federation of Labor (AFL) is
an example.
Development of Labor Unions (cont.)
– Industrial unions
• The Congress of Industrial Organizations
(CIO) is an example.
– The AFL and CIO merged in 1955, and
are now the AFL-CIO.
Do you feel that labor unions are
necessary today?
A. Yes
B. Sometimes
C. No
0%
A
A. A
B. B
C.0% C
B
0%
C
How Unions are Organized
Labor unions can exist as local unions,
as national or international unions, or
as federations.
How Unions are Organized (cont.)
• Organized labor operates at three levels:
• The local union deals with a company by
negotiating a contract and making sure the
terms of the contract are kept.
– Different types of local unions:
• Closed shop
• Union shop
• Agency shop
How Unions are Organized (cont.)
– Since 1947, many states have passed
right-to-work laws that forbid union
shops.
• The national or international union is the
individual craft or industrial unions that
represent locals nationwide.
– National unions send in organizers to
help employees set up local unions.
How Unions are Organized (cont.)
– The International Brotherhood of
Teamsters, the United Automobile
Workers (UAW), and the United
Steelworkers of America (USW) are
three of the largest national unions.
• The federation—the AFL-CIO is the union
at this level.
– The Change to Win Federation is
proving to be competition for the
AFL-CIO.
Do you feel that right-to-work laws
are necessary?
A. Definitely
B. Sometimes
C. Never
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
Section Preview
In this section, you will learn how unions
and employers determine the conditions of
employment, and about the role of unions
today.
Are you aware of the negotiating that
must take place between unions and
companies?
A. Yes
B. Somewhat
C. No
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
Negotiations
Union contracts are negotiated to
determine a wide range of contract
issues.
Negotiations (cont.)
• Important labor issues need to be agreed
upon by management and workers.
• Collective bargaining is a process by
which this may be accomplished.
• Management and workers negotiate
issues such as working hours, fringe
benefits, and a cost-of-living adjustment
(COLA).
Negotiations (cont.)
• If negotiations do not go smoothly,
mediation might be necessary.
– The Federal Mediation and Conciliation
Service (FMCS) provides a mediator
free of charge upon request of either
side.
• If mediation fails, then arbitration might
be necessary.
Both sides agree in advance to
accept the arbitrator’s decision,
although one or both sides may not
be happy with the outcome.
A. True
B. False
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
0%
Strikes and Management
If labor negotiations break down,
unions may resort to strikes or
boycotts, and management may resort
to lockouts or injunctions.
Strikes and Management (cont.)
• When negotiations between management
and workers fail, a strike results.
• Picketing by workers and boycotts may
be seen when strikes result.
View: Strikes
Strikes and Management (cont.)
• Management deals with strikers using the
following methods:
– Lockouts
– Injunctions
When can the president delay or halt
a strike up to 80 days?
A. If it will endanger the
nation’s safety or health.
0%
D
A
B
C0%
D
C
D. If a boycott fails.
0%
A
C. If mediation and
arbitration fail.
A.
B.
C.
0%
D.
B
B. If “scabs” refuse to
step in.
Decline of Unions
Union membership has declined
steadily over the past several decades.
Decline of Unions (cont.)
• Working conditions have improved
dramatically over the years, so many
nonunion workers often see little gain from
joining a union.
• In addition, blue-collar jobs are decreasing
due to automation.
View: Declining Union Membership
Decline of Unions (cont.)
• Critics of labor unions claim:
– Unions are out of touch with their
members’ needs because they are so
large and bureaucratic.
– Unions increase wages which are
passed on to consumers in the form of
higher prices.
Decline of Unions (cont.)
• In addition, employers argue that union
rules decrease productivity.
• Corruption among some labor leaders has
damaged the reputation of labor unions.
Do you think that in today’s work
world there are other alternatives to
unions?
A. Many alternatives
B. Some alternatives
C. No alternatives
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
In labor markets, a variety of factors that
affect supply and demand for jobs
ultimately determine wages for those jobs.
Labor unions formed in the United States to
try to improve working conditions and wages
for their members.
Because working conditions in general have
improved so much since the mid-1950s,
many nonunion workers see little to gain by
joining a union, and union membership has
declined.
Economic Concepts
Transparencies
Transparency 5
Economic
Institutions &
Incentives
Select a transparency to view.
civilian labor force: total number of
people 16 years old or older who are
either employed or actively seeking
work
blue-collar workers: category of
workers employed in crafts,
manufacturing, and nonfarm labor
white-collar workers: category of
workers employed in offices, sales, or
professional positions
service workers: people who
provide services directly to individuals
unskilled workers: people whose
jobs require no specialized training
semiskilled workers: people whose
jobs require some training, often
using modern technology
skilled workers: people who have
learned a trade or craft either through
a vocational school or as an
apprentice to an experienced worker
professionals: highly educated
individuals with college degrees and
usually additional education or
training
minimum wage law: federal law that
sets the lowest legal hourly wage rate
that may be paid to certain types of
workers
labor union: association of workers
organized to improve wages and
working conditions for its members
strike: deliberate work stoppage by
workers to force an employer to give
in to their demands
craft union: union made up of skilled
workers in a specific trade or industry
industrial union: union made up of
all the workers in an industry
regardless of job or skill level
local union: members of a union in a
particular factory, company, or
geographic area
closed shop: company in which only
union members could be hired
union shop: company that requires
new employees to join a union after a
specific period of time
agency shop: company in which
employees are not required to join the
union, but must pay union dues
right-to-work laws: state laws
forbidding unions from forcing
workers to join and pay union dues
collective bargaining: process by
which unions and employers
negotiate the conditions of
employment
cost-of-living adjustment (COLA):
provision calling for a wage increase
each year if the general level of prices
rises
mediation: a neutral person tries to
get both sides to reach an agreement
during negotiations
arbitration: union and management
submit the issues they cannot agree
on to a third party for a final decision
picketing: action of strikers who walk
in front of a workplace carrying signs
that state their disagreement with the
company
boycott: economic pressure exerted
by unions urging the public not to
purchase the goods or services
produced by a company
lockout: situation that occurs when
management prevents workers from
returning to work until they agree to a
new contract
injunction: court order preventing
some activity
To use this Presentation Plus! product:
Click the Forward button to go to the next slide.
Click the Previous button to return to the previous slide.
Click the Home button to return to the Chapter Menu.
Click the Transparency button from the Chapter Menu or Chapter Introduction
slides to access the Economic Concepts Transparencies that are relevant to this
chapter. From within a section, click on this button to access the relevant Daily
Focus Skills Transparency.
Click the Return button in a feature to return to the main presentation.
Click the Economics Online button to access online textbook features.
Click the Reference Atlas button to access the Interactive Reference Atlas.
Click the Exit button or press the Escape key [Esc] to end the chapter slide show.
Click the Help button to access this screen.
Links to Presentation Plus! features such as Graphs in Motion, Charts in Motion,
and relevant figures from your textbook are located at the bottom of relevant
screens.
This slide is intentionally blank.