Labor Economics

Flashcards covering key concepts from labor economics, including definitions related to the labor force, employment classification, labor effects, wage discrimination, trade unions, and collective bargaining.

Civilian Labor Force

All nonmilitary people who are employed and unemployed.

Employed

Individuals 16 and older who have worked at least 1 hour for pay, worked 15 or more hours without pay, or held jobs but did not work due to certain conditions.

Unemployed

Individuals 16 and older who do not have a job, actively looked for work in the prior 4 weeks, and are available for work.

Learning effect

Education increases productivity and results in higher wages.

Screening effect

Completion of college indicates that a job applicant is intelligent and hard-working.

Wages by Educational Attainment

Higher educational attainment generally correlates with higher median usual weekly earnings and lower unemployment rates.

Contingent employment

Temporary or part-time employment.

Benefits for firms

● Flexible working arrangements

● Easy to discharge

● Paid less and fewer benefits than full time

employees

● Some employees prefer temporary employment

Unskilled Labor

Labor that requires no specialized skills, education, or training, ex waiters and janitors.

Semi-Skilled Labor

Labor that requires minimal specialized skills and education, ex forklift operators.

Skilled Labor

Labor that requires specialized skills and training, ex mechanics and plumbers.

Professional Labor

Labor that requires advanced skills and education, ex lawyers and doctors.

Equal Pay Act

Legislation that mandates men and women in the same workplace be given equal pay for equal work.

Union

An organization of workers that aims to improve working conditions, wages, and benefits for its members.

Strikes

Organized work stoppages intended to force employers to address union demands.

strikes can be harmful to both the union and the firm

Mediation

A neutral mediator meets with each side to try and find an acceptable solution that both sides will accept.

Arbitration

A settlement technique wherein a third party reviews a case and imposes a legally binding decision.

“Right to Work” Laws

These laws ban mandatory union

membership at the workplace.These laws ban mandatory union

membership at the workplace.

Economic Trends

● Unions have traditionally been

strongest in the manufacturing

sector

● Blue-collar jobs (Manufacturing)

have been declining

Fulfillment of Union Goals

Collective Bargaining

The process where union and company representatives negotiate a new labor contract.

Collective Bargaining

Unions negotiate wages, working conditions and

benefits.

● Primary goals is to secure its members’ jobs.

● Contracts spells out the conditions under which a

worker may be fired