Labor Unions

1
Labor UnionsLabor Market

• Chapter 8 Section 2

2
Indiana Academic Standards for Economics

• Standard 3.3
• Recognize that economic institutions, such as
  labor unions, nonprofit organizations, and
  cooperative, evolve in market economies to help
  individuals accomplish their goals. (Civics and
  Government Individuals, Society, and Culture )

3
Objectives

• How might labor unions affect the demand of and
  supply of union labor?
• What is a union shop?
• What is the purpose of a strike?

4

• LABOR UNION
• An organization that seeks to increase the wage
  improve the working conditions of its members
• What have you heard about labor unions?

5

• What do labor unions attempt to do to the demand
  for labor?
• Increase
• (Shift Demand to the right)
• What do labor unions attempt to do to the supply
  of labor?
• Decrease
• (Shift Supply to the left)

6

• CLOSED SHOP
• An organization that hires only union members
  (NOW)
• UNION SHOP
• An organization that requires employees to join
  the union within a certain period after being
  hired (EVENTUALLY)

7

• Taft-Hartley Act (1947)
• CLOSED SHOPS illegal, but UNION SHOPS
  legal
• Right to Work Law
• UNION SHOPS illegal (depending on each state)

8

• Strike
• A work stoppage called by members of a union to
  place pressure on an employer

9
How do Unions affect UNION WAGES NON-UNION
WAGES?
NON-UNION
UNION
Wage
Wage
S
S
S
Bargain
D
D
Q Workers
Q Workers
10
Assessment

• How might labor unions affect the demand of and
  supply of union labor?
• What is a union shop?
• What is the purpose of a strike?