Econ- Labor Trends and Labor & Wages

Soltau Econ

How do we determine how much we make? 

1. Education

2. Type of Job

3. Introduction of AI

4. Gig or Contract Work 

Learning Effect

theory that education increases productivity and results in higher wages

Screening Effect

theory that completing college shows employers a job applicant is intelligent and hard working

Types of jobs

goods creation vs services

shifted away from manufacturing after 1970s

Introduction of AI

caused jobs to be less about what you can accomplish and more about critical thinking, flexibility, and resilience

Gig/Contract Work

pros: flexible pay/hours, more than one job at a time

cons: no benefits, no stable company

Unemployment

Calculated from civilian and non-institutionalized adult population (16+ not in jail) 

ONLY UNEMPLOYED IF YOU DON’T HAVE A JOB AND ARE LOOKING FOR ONE

Labor Force (LF)

total number of civilians either on a payroll (E) or actively seeking work (U)

E+U= LF

Unemployment rate

U/LF unemployed divided by labor force

Discouraged workers

people not working and not looking for work

Wage rate

prevailing pay scale for work performed in an occupation in a certain area

based on skill level and knowledge 

Unskilled 

jobs that do not require special training or skills (mop floors)

Semiskilled

jobs that require enough mechanical skills to operate machines with minimum training (cash register/lawnmower)

Skilled

Investments in education and training (carpenters, electricians)

Professional

highest level of knowledge based education and managerial skills (doctors, lawyers, teachers)

Wage rate based on 

supply & demand for a worker’s skills 

low demand/ high supply of workers= low wage

high demand/low supply of workers= high wage

Collective bargaining 

union and company reps meet to negotiate new labor contracts 

Mediation

companies bring in neutral mediators who find solutions both sides accept (if not strike/ lockout)

Arbitration

3rd party imposes a decision that both sides accept