Chapter 8: The Case of Labour Economics

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Chapter 8 The Case of Labour Economics
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Concept of Human Capital

• Human Capital the knowledge, skills and talents
  that workers have, either through education or by
  nature. (Experiences)

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Labour Unions

• What is a Labour Union?
• Organization of workers that collectively
  promotes the interests of its members and
  negotiates with their employees.
• Responsible for shaping labour relationships,
  laws and working conditions.

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3 Common Unions

• Trade Union represents workers in a single
  occupation.
• Industrial Union Represents all workers in a
  given industry regardless of the job they
  perform. Ie. CAW Canadian Auto Workers
• Public Sector Workers employed by any levels of
  the Government.

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Collective Bargaining

• History
• 1943 Federal Government passed legislation that
  restricted when unions were allowed to strike in
  exchange for the legal requirements that
  employers must bargain with a union if a majority
  of workers voluntarily agreed to have the union
  represent them.

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Collective Bargaining

• Unions most significant role
• Negotiating wages and work conditions.
• Collective Bargaining
• Process of arriving to an agreement.
• Collective Agreement
• The contracted that is negotiated.
• Usually last for 1-3 years.
• States responsibilities of both parties.

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Collective Bargaining

• Usually bargaining starts before contracts
  expire.
• If expired and no agreement is reached the old
  agreement continues.
• If agreements can not be reached there are
  options.

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Collective Bargaining Options

• Conciliations/Mediation
• 3rd party brought into situation suggests
  possible ways reach agreement.
• Usually first step before work stoppage.
• Voluntary Arbitration
• Both side agree to have 3rd party.
• 3rd party acts as judge, makes decision.
• Both sides must abide to the decision.

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Collective Bargaining Options

• Compulsory Arbitration
• Government forces to parties to submit their
  disputes to an arbitrator.
• This is usually seen when a strike be disruptive
  the general public.

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Strikes Other Job Action

• Strike
• Temporary work stoppage by employees.
• Designed to force employer to meet with union.
• Must be voted in by majority vote.
• Lockout
• Employer shuts down the place of employment in
  order to force workers to accept its contract
  offer.

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Strikes Other Job Action

• Both strikes and lockout cost both parties money
• Wages- Employee, Profit- Employer
• Work-to-Rule
• Employees perform only the duties specifically
  stated in their contracts.
• Boycott
• Peopled asked not to buy products.

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Pros Cons of Unions

• Pros
• Protection
• Hold employers accountable for work conditions
• Invested in Human Capital (through training
  Education)

• Cons
• Do not reward hard workers
• Increase wages, increasing product cost
• Decrease incentive to work