Economics Reflections

Chapter 9: Labor
Labor Market Trends
The labor force consists of all nonmilitary people who are unemployed or employed,
excluding full-time students, retirees, and stay at home parents. People are considered to be
employed if they have worked one hour for pay within the past week, worked for 15 hours or
more without pay in a family business, have held jobs but have not worked for various reasons,
and if they are 16 years or older. Shifts in occupation occur with the changing economy. For
instances, today there are more jobs that require some computer skills and many companies have
decided to move manufacturing jobs to other countries for cheaper labor or replace workers with
machines to avoid labor costs. I think that more jobs are incorporating computer skills as the
technology in this area has made certain actions easier and technology has been integrated into
society more. Additionally, today, many jobs require people to have a college degree as there is a
theory that education increases productivity. Temporary workers have also grown which is also
known as contingent employment. Many people enjoy having the freedom to move to different
jobs and companies enjoy the flexibility contingent employment gives their work force.
However, I would prefer a permanent job as this offers more security.
Labor and Wages
Demand for labor and the skills that are needed for certain professions help companies decide
how much they will pay a worker. Labor is a derived demand as it is set by the demand for what
a worker produces. Higher pay attracts higher more workers, but at the same time higher pay has
less of a demand. This creates an equilibrium wage where there is neither an excess of supply of
workers or an excess demand of workers. Then, many professions earn wages such as categories
that include unskilled labor, semi-skilled labor, and skilled labor. This is because the jobs that are
in these categories do not require as much advanced education and skills. Professional labor,
however, receives salaries. Also, jobs with higher levels of danger will earn higher wages to
compensate workers for the risks they take. Then, many national and state legislators have
passed legislation preventing wage discrimination. Before these laws, many women and minority
groups did not receive the same amount of pay and promotions for the same work. I think that
companies should pay everyone the same amount and should not discriminate against people.
Even in today's society, many people are discriminated against in the workplace. I think that total
eradication of discrimination will take more time to fully leave the workplace and society.
Organized Labor
Labor unions have helped workers gain more rights and better pay. They arose largely in
response to the Industrial Revolution to improve the conditions workers were in and the pay they
received. Many unions used, and still use, strikes to force employers to address union demands
and this organized stoppage of work helped force a company to address their needs especially
when a contract is about to expire. I think that strikes are an effective way for workers to be
heard and can help settle differences between the employer and the union quickly in collective
bargaining. However, the union's power has declined in recent years as some unions began to
abuse their power and involvement in organized crime. Also, Congress passed the Taft-Hartley
Act that allowed states to pass right-to-work laws that banned mandatory union membership.
Manufacturing jobs have also decreased with the increase in technology and they have had little
power in the white-collar work force. I also think that the union's power has declined due to the

relocation of companies to factories outside the U.S. and the decline in employment of
manufacturing workers.