Students worked on the following:
Name
____________________________________Group______ Date _______________ Period
_____
Supply & Demand &
Cost (Wages and Income) in the Labor Market
This lesson is designed to help you
consider how the supply of, demand for, and value of labor are interrelated.
Supply, demand, and cost are sometimes thought of as levers: changing the
relative position of one, will cause a change in the relative position of
others (e.g. the “whack-a-mole” view of supply-demand-cost).
First consider the following:
There
is a _________ supply of rocks; there is _________ demand for rocks; so rocks
have ________ value. There is a _________ supply of palladium; there is a
_________ demand for palladium; so palladium has a _________ value. If someone figures out how to use rocks to
make computer chips, the demand for rocks will go __________; so ceteris paribus the value of rocks will
go ___________.
When
unemployment is high (as it was during the _____________________________ and
____________________________) there is a _________ supply of labor; during
___________________ and _____________________ there was relatively _________
demand for labor (there were few job openings); so the value of labor (wages)
were ___________. When the economy grew during WW II (and so there was a _________ demand for labor), the value of
labor (wages) went _________.
Unions
are groups of laborers who work together to improve working conditions and wages.
Sometimes unions go on strike. The effect of a strike is to _________ the
supply of labor, this would most likely cause wages to go _________. (Many
unions consider working conditions (e.g. work load, seniority, health care,
safety, etc. to be part of the value of their labor, and so strikes are not
always about increasing the number of dollars given by an employer for each
hour of work.)
You are being assigned one “story” according to your group
letter. Your group needs to study the story, and create a short summary to
share with others in the class. Consider: who, what, where, when, why, and how?
Then for each of the following stories in our economic history consider the
following for the implied economic equation:
What is the supply? What is the demand?
What is the current cost / value? (These need only be determined in general
terms). Then:
Will there be a greater or larger
supply of something?
Will there be a greater or larger
demand for something?
What will the effect on the value
(cost/wage/income) be?
What predictions can you make based on
your understanding of the interrelated aspects of supply, demand, and cost?
What other factors could affect the
relationship among supply, demand, and cost in this story?
Then develop a clear way to explain the
who, what, where, when, why, and how, and the supply-demand-cost considerations
you discovered to the class.
A)Wisconsin Governor To Sign Right-To-Work Bill
Amid Protests
Union leaders
and workers returned to protest today at the Wisconsin State Capitol. Just a
few years ago, Governor Scott Walker all but eliminated bargaining rights for
public employee unions. This time, the issue is a bill that bans mandatory
union dues in the private sector. Walker says he'll sign this one into law,
too. Wisconsin Public Radio's Shawn Johnson reports.
SHAWN JOHNSON,
BYLINE: These protests are a lot smaller than those four years ago when tens of
thousands gathered daily at the Wisconsin Capitol, but they have their fiery
moments.
(SOUNDBITE OF
ARCHIVED RECORDING)
PHILIP GRUBER:
What's disgusting?
UNIDENTIFIED
SPEAKERS: Union busting.
GRUBER: What's
disgusting?
UNIDENTIFIED
SPEAKERS: Union busting.
JOHNSON:
Philip Gruber of the Machinists Union told the crowd of a couple thousand
gathered on the steps of the capitol that the only way to stop the
right-to-work bill was to stand still.
(SOUNDBITE OF
ARCHIVED RECORDING)
GRUBER: That's
right, I said stand still. I think it's about time that we stop the production
in this country. Let's stand still.
JOHNSON: As
Gruber spoke, a handful of people in the crowd chanted, strike, strike, strike.
But for the most part, the atmosphere here is far more reserved in 2015 than in
2011. Republican Senate Majority Leader Scott Fitzgerald matter-of-factly
announced last Friday that he would introduce a right-to-work bill and he
already had the votes to pass it. At a public hearing yesterday, Fitzgerald
said it was time to modernize Wisconsin's labor laws.
(SOUNDBITE OF
ARCHIVED RECORDING)
SCOTT
FITZGERALD: The bottom line is that to move our state forward, Wisconsin needs
a modern economy. The status quo has served us well in the past, but in order
to see our economy continue to compete at a global level, we cannot remain
mired in the antiquated system.
JOHNSON: Greg
Mourad with the National Right to Work Committee says Wisconsin's current labor
laws that let private sector unions collect dues from all workers are akin to
being kidnapped in a taxicab.
GREG MOURAD:
The other passengers don't let you out, they sit on either side and hold you
there - the driver ignores your protests. After a lengthy drive, they pull over
in Green Bay, the car stops, they untie you, and before they let you go, they
demand $300 for your share of the cab fare.
JOHNSON:
Unlike four years ago when he made going after public sector unions his
signature achievement, Wisconsin Governor Scott Walker has been mostly quiet on
right-to-work. That's because he has said again and again that right-to-work
would not happen on his watch. Here he is interviewed by the Milwaukee Journal
Sentinel.
(SOUNDBITE OF
ARCHIVED RECORDING)
GOVERNOR SCOTT
WALKER: Private sector unions are my partner in economic development.
JOHNSON: But
once a right-to-work bill surfaced, Walker wasted little time in announcing his
support.
(SOUNDBITE OF
ARCHIVED RECORDING)
WALKER: I
haven't changed my position on it, it just wasn't a priority for me. But should
they pass it within the next two weeks, which is, I think, their target, I plan
on signing it.
JOHNSON: While
this right-to-work bill would keep collective bargaining intact for private
sector unions, it could result in situations where union members who pay their
dues are working side-by-side with workers who don't. Patrick Veeser is the
union president at a Green Bay company that builds machines for the paper
industry. He says his union has a great relationship with management, and he
worries a Republican-led effort will hurt that.
PATRICK
VEESER: They're reaching in and they're getting into private business. They
always say less government. I'm seeing more government here. How can they rule
on something they've never experienced?
JOHNSON: But
as much as many union members dislike this bill, most don't think they can stop
it. Steamfitter James Piper worries that it will starve his union to death.
JAMES PIPER:
I'm here today as kind of like a funeral for a friend. I'm not the least bit
positive or hopeful that this is going to have any impact on the decisions made
inside the building.
JOHNSON: Piper
says he's worked long enough to see the good that unions do for workers but he
concedes that many younger workers don't want to join.
PIPER: Hell,
we won't even be able to get a newsletter out to say let's all get together
down at the state capitol and have a rally.
JOHNSON: When it
passes, Wisconsin will become the 25th state with right-to-work law - laws that
used to be more common in the South. But Republican governors in Michigan and
Indiana recently signed right-to-work laws, and Wisconsin appears to be
following the same pattern, albeit over the objections of unions that no longer
carry much sway with their state governments. For NPR News, I'm Shawn Johnson
in Madison.
(THE NEXT PAGE
CONTAINS “COMMENTS” POSTED ON THE NPR
WEBSITE)
B) When reading and considering these comments remember that
these are opinions, not journalistic presentation of facts. What is the point
of view of each person? Do they share facts, facts and opinions, or just
opinions?
Your
story today did not explain why employees are required to pay a service fee or
agency fee to the union in their workplace even if they do not want to join the
union. But you did give ample space for the National Right to Work organization
to claim that union fees are like a hijacking. Most Americans don't know why
union fees are required: by law a union that is created by majority vote must
bargain on behalf of all employees, members or not; the contract covers
everyone. Collective bargaining for an employment contract is not free: someone
has to pay for the service of contract negotiation and administration and even
for the costs of a strike if it comes to that. So, because all workers at the
job benefit from the contract, they are required to pay a service fee if they
do not want to join and pay dues. Right-to-work laws are pro-free rider laws:
you can get the benefit of the union without paying for it. But if some
employees can get a pay increase because of the union contract for free, why
should anyone pay? And if no one pays, then the union collapses. The real goal
of such laws is to get rid of the union.
Greg H Stephen Amberg • 12 hours ago
Each individual should get paid their market value, without
unions, the best will get paid more than they are currently, and the worst will
get less or get fired.
Leig Greg H • 12 hours ago
Well, that's not how it's worked out in the Southern states in
which I've lived all my life. Rather, the wages and benefits are pressured to
the lowest possible levels. One particular problem is that it eliminates a
career ladder, so to speak. Once you are in striking distance of a salary level
which just might keep you from constantly worrying about getting by, you are
"let go" (No recourse, unless Human Resources is really stupid and
says something like "get your black/Asian/etc" self out of here.
Right to work means also means right to fire for almost any reason). Everybody
behind you takes one step forward, a new person is hired to bring up the rear,
and the process continues. It's sort of like walking the plank, but instead of
advancing in your career, you jump into the unemployment pool and have to start
at the bottom again.
Greg H Leig • 10 hours ago
You do realize that 90% of workers are already non-union and it
works just fine in most of the country. The reason union participation is
higher in blue collar sections of the economy (South & Midwest) is because
they have less value in a knowledge-based economy, so obviously their wages
would plummet unless artificially propped up by unions.
AKLady Greg H • 9 hours ago
Unions also support equal pay for women. Apparently, regardless
of education, training and experience, women "have less value" in a
knowledge-based economy?
Women have less value in America. Equal pay is the law
in Canada.
C) Franklin Delano Roosevelt and the New Deal
The New Deal was a series of domestic programs enacted in
the United States between 1933 and 1938, and a few that came later. They
included both laws passed by Congress as well as presidential executive orders
during the first term (1933–37) of President Franklin D. Roosevelt. The programs were in response to the Great Depression, and focused on what historians call the "3 Rs":
Relief, Recovery, and Reform. That is Relief for the unemployed and poor;
Recovery of the economy to normal levels; and Reform of the financial system to
prevent a repeat depression.[1]
The
New Deal produced a political realignment, making the Democratic Party the majority (as well as the party that held the White House
for seven out of nine Presidential terms from 1933 to 1969), with its base in
liberal ideas, the white South, traditional Democrats, big city machines, and
the newly empowered labor unions and ethnic minorities. The Republicans were split, with conservatives opposing the entire New Deal as
an enemy of business and growth, and liberals accepting some of it and
promising to make it more efficient. The realignment crystallized into the New
Deal Coalition
that dominated most presidential elections into the 1960s, while the opposition
Conservative Coalition largely controlled Congress from 1937 to
1963. By 1936 the term "liberal" typically was used for supporters of the New
Deal, and "conservative" for its opponents.[2]
Many historians distinguish between a "First New Deal"
(1933–34) and a "Second New Deal" (1935–38), with the second one more
liberal and more controversial. The "First New Deal" (1933–34) dealt
with diverse groups, from banking and railroads to industry and farming, all of
which demanded help for economic survival. The Federal Emergency Relief Administration, for instance, provided
$500 million for relief operations by states and cities, while the short-lived
CWA (Civil Works Administration) gave localities money to
operate make-work projects in 1933–34.[3]
The
"Second New Deal" in 1935–38 included the Wagner Act to promote labor unions, the Works Progress Administration (WPA) relief program
(which made the federal government by far the largest single employer in the
nation),[4] the Social Security Act, and new programs to aid tenant farmers and
migrant workers. The final major items of New Deal legislation were the
creation of the United States Housing Authority and Farm Security Administration, both in 1937, and the Fair Labor Standards Act of 1938, which set maximum hours
and minimum wages for most categories of workers.[5]
The economic downturn of 1937–38, and the bitter split
between the AFL and CIO labor unions led to major Republican gains in Congress in 1938.
Conservative Republicans and Democrats in Congress joined in the informal
Conservative Coalition. By 1942–43 they shut down relief programs such as the
WPA and CCC and blocked major liberal proposals. Roosevelt himself turned
his attention to the war effort, and won reelection in 1940 and 1944. The
Supreme Court declared the National Recovery Administration (NRA) and the first
version of the Agricultural Adjustment Act (AAA) unconstitutional,
however the AAA was rewritten and then upheld. As the first Republican
president elected after FDR, Dwight D. Eisenhower (1953–61) left the New Deal largely intact,
even expanding it in some areas.[6] In the 1960s, Lyndon
B. Johnson's
Great Society used the New Deal as inspiration for a dramatic expansion of
liberal programs, which Republican Richard
M. Nixon
generally retained. After 1974, however, the call for deregulation of the
economy gained bipartisan support.[7] The New Deal regulation of banking (Glass–Steagall Act) was suspended in the 1990s. Many New Deal
programs remain active, with some still operating under the original names,
including the Federal Deposit Insurance Corporation (FDIC), the Federal Crop Insurance Corporation (FCIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest
programs still in existence today are the Social Security System and the Securities and Exchange Commission (SEC). http://en.wikipedia.org/wiki/New_Deal
D) Fastest Growing Occupations
D) Fastest Growing Occupations
U.S. Department of Labor
Wage and Hour Division http://www.infoplease.com/ipa/A0931299.html
FACT SHEET: PROPOSED RULEMAKING TO IMPLEMENT EXECUTIVE ORDER
13658,
ESTABLISHING A MINIMUM WAGE FOR CONTRACTORS
ESTABLISHING A MINIMUM WAGE FOR CONTRACTORS
(June 2014)
On
February 12, 2014, President Obama signed Executive Order 13658, “Establishing
a Minimum Wage for Contractors,” to raise the minimum wage to $10.10 for all
workers on Federal construction and service contracts. The President took this
executive action because raising wages will improve the quality and efficiency
of services provided to the government. Boosting wages lowers turnover,
increases morale, and will lead to higher productivity overall on Federal
contracts. The Executive Order directed the Department of Labor to issue
regulations to implement the new Federal contractor minimum wage. The Notice of
Proposed Rulemaking issued by Secretary of Labor Tom Perez is an important
milestone in raising the minimum wage for workers on Federal contracts.
v Key Provisions of the NPRM v
The
NPRM defines key terms used in the Executive Order, including contracts, contract- like instruments, and concessions
contracts. The NPRM makes clear that the Executive Order minimum wage
requirement applies to all contracts for construction covered by the
Davis-Bacon Act; contracts for services covered by the Service Contract Act;
concessions contracts, such as contracts to furnish food, lodging, automobile
fuel, souvenirs, newspaper stands, and/or recreational equipment on Federal
property; and contracts to provide services, such as child care or dry
cleaning, in Federal buildings for Federal employees or the general public.
The
NPRM provides guidance for contractors on their obligations under the Executive
Order. The NPRM sets forth the
standards that contractors should apply to determine whether their employees
are covered by the Executive Order, recordkeeping requirements, and where to
find the required rate of pay for all workers, including tipped workers and workers
with disabilities.
The
NPRM establishes an enforcement process that should be familiar to most
government contractors and will protect the right of workers to receive the new
$10.10 minimum wage. The Department
of Labor generally proposes to adopt existing mechanisms for enforcing
long-established prevailing wage laws to enforce the provisions of the
Executive Order.
The
NPRM estimates that hundreds of thousands of workers will benefit from the
Executive Order.
The
Department encourages interested parties to submit comments on the NPRM. The full text of the NPRM, as well as information on
the deadline for submitting comments and the procedures for submitting
comments, can be found at www.dol.gov/whd/flsa/nprm-eo13658
President Obama signs minimum wage executive order
President Barack Obama on Wednesday formally signed an
executive order raising the pay for employees of federal contract workers, but
his attention was on a push for Congress to do the same for all Americans.
Obama came armed with an array of statistics and figures
showing how he believes raising the hourly minimum wage from $7.25 to $10.10
would boost the economy, but with few details about the executive order he
signed during the East Room ceremony.
A minimum wage hike would help millions of people, be good
for the economy and has the broad backing from Americans, Obama said. But what
it does not have at the moment is enough support from Republicans in Congress.
“A majority of Americans – not just Democrats, not just
independents, but Republicans too – support raising the minimum wage,” Obama
said. “It’s the right thing to do. So that’s something Congress should keep in
mind this year.”
So Obama encouraged his supporters to press Congress.
“Every American deserves to know where your elected
representative stands on this issue,” he said. “So ask your senator, ask your
representative in the House, do you support raising the federal minimum wage to
$10.10 an hour. If they say yes, tell em good job. … If they say no, be polite,
don’t just yell at them but say, ‘Why not?’ Ask them to reconsider siding with
an overwhelming majority of Americans. Encourage them to say yes, give America
a raise.”
House Speaker John Boehner (R-Ohio) has said he doubts a
minimum wage hike will provide an economic boost.
To prove the benefits of a minimum wage hike, Obama offered
examples of three federal employees: a dishwasher, a fast-food employee and a
laundry worker at federal facilities who will see their hourly pay increased
whenever their employer’s contracts are renewed.
But the White House has been vague about the details of how
many people will be impacted by Obama’s executive action.
Labor Secretary Thomas Perez told reporters at the White
House that Obama’s executive order will boost the pay of “hundreds of thousands
of people directly,” and would also benefit other Americans who would see a
higher level of service.
Perez said the administration does not have exact figure for
the percentage of federal employees who are now paid less than $10.10 per hour.
Obama’s executive order, which will go into effect Jan. 1,
2015, will not cost the federal government money because its contractors will
become have more efficient employees if they are paid more, Perez said.
Government agencies will not increase funds allocated to contracts to absorb
higher wages, he said, because the contractors will see better productivity
from their workers to cover the costs.
“All of this will be implemented within existing budget of
the agencies,” Perez said. “The efficiencies of paying a fair wage is what we
will gain.”
The higher minimum wage for federal contractor employees will
go into effect as new federal contracts are agree to, Perez said, taking “three
to five years” for all federal contracts to be renewed.
The executive order increasing the minimum wage for employees
of federal contractors’ employees served as free advertising for Democrats’
2014 campaign call to raise the overall federal minimum wage. The White House
on Wednesday launched websites advertising 2014 as a “Year of Action” and
calling for Congress to hike the minimum wage.
The minimum wage website
features precise data on how many people in specific demographics would be
impacted by an across-the-board minimum wage hike: 4.6 million married people
with children, 12.4 childless single people and 2.8 million single parents.
http://www.politico.com/story/2014/02/miniumum-wage-executive-order-barack-obama-103450.html
