Class began with a review and short lecture on the Krugman article from last class.
Mr. Zartler then explained the connection between money supply and inflation (the value of money).
Next the class worked in small groups to jigsaw the following articles exploring the links between employment, government spending, and wages.
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)
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.
B) 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 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
C) Fastest Growing
Occupations and Fastest Growing Wages (2 sided)
U.S. Department of Labor
Wage and Hour Division http://www.infoplease.com/ipa/A0931299.html
D) FACT SHEET:
PROPOSED RULEMAKING TO IMPLEMENT EXECUTIVE ORDER 13658,
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
