Chapter 11: INTRODUCTION TO LABOR MARKETS Flashcards
In economics, how much employers value one’s labor; also called “human capital”
skill
Price in the labor market
salary or wage
A demand for a commodity which is a consequence of the demand for something else (e.g., the demand for chefs is dependent on the demand for restaurant meals)
derived demand
If a firm wants to maximize profits, it will never pay more (in terms of wages and benefits) for a worker than the value of his or her marginal productivity to the firm.
first rule of labor markets
A firm where firms can hire all the labor they wish at the going market wage
perfectly competitive labor market
The percent that employment is reduced with a 1% lower wage
wage elasticity of labor supply facing the firm
A market structure characterized by a single buyer, buying a product (including labor) in the market; the buyer faces no competition, as they are the sole buyer of goods
monopsony
The additional wages an employer must pay to hire one additional worker
marginal cost of labor
A legally binding wage floor enforced by the government
minimum wage
A wage negotiated by a union on behalf of all workers in a workplace
union wage
A worker organization that represents the interests of a group of workers
union
when non-unionized employers may raise wages to prevent unionization
the threat effect
In a monopsonistic labor market, when unionized employers raise wages, the competitors may need to raise wages to attract workers
wage competition
Negotiations between unions and firms
collective bargaining
Law that specified that workers had a right to organize unions and that management had to give them a fair chance to do so
National Labor-Management Relations Act of 1935
