Eco 12/1

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Eco 12/1

• Americans at Work

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The Civilian Labor Force

• Civilian labor force- total number of people 16
  yrs. or older who are employed or seeking work.
• Those not able to work- disabled or in prison-
  are not included
• Military personnel and those not looking for work
  are also not included.

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Categories of Workers

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

4
Categories of Workers

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

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Categories of Workers

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

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Jobs Categorized by Skill Level

• Unskilled workers- jobs need no specialized
  training. (Waiting tables, custodial work.)
• Semiskilled workers- jobs require some training.
  ( Nurses aid)
• Skilled workers- learned trade or craft,
  vocational school, apprenticeship. (Cops, masons)

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Professionals

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

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Supply and Demand in the Labor Market

• Suppliers are the workers who offer their
  services.
• Demand comes from employers who need workers.

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Supply and Demand in the Labor Market

• Three factors affect how supply and demand
  determine prices
• Skill/ initiative/ productivity
• Type of job
• Location

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Skill/ Productivity

• Demand for good workers is high and supply is
  low, creating a shortage. Shortage leads to high
  salaries.
• (Brain surgeons, NBA, etc.)

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Type of Job

• Unpleasant, dangerous jobs pay more, because
  theres less supply- fewer people wholl do them.
  (Coal mining)

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Desirable jobs

• sometimes make little money. Supply is high
  (many people want them.)
• So there is a SURPLUS of workers who want them,
  pushing wages DOWN.

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Location

• If workers are relatively scarce in an area,
  wages will be high.
• Alaska has highest wages per person in country.
  (Shortage)

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Restrictions on Wages

• Labor market is not perfectly competitive.
• The flow of information is imperfect, so workers
  cant know what other employers are willing to
  pay. Employers cant know what workers are
  willing to accept.
• Lack of info- market failure

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Other Restrictions on Wages

• Minimum wage laws- set lowest legal hourly wage
  rate that may be paid.
• They often hurt workers. Some firms hire fewer
  workers. That delays their getting job skills,
  and reduces their value later.

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Restrictions on Wages

• Wage negotiations between labor (unions) and
  management.
• Supply and demand have less influence on wages
  than seniority, length of the contract, and
  companys ability to pay higher wages.