chapter 7 Flashcards
is an
organization of wage earners
or salary workers established
for the purpose of protecting
their collective interests when
dealing with employers.
labor union
represents the
broader workforce within a
given economy or labor market.
Labor Force
represents a
subset of the labor force who
have chosen to join together for
collective bargaining and
advocacy purposes
Labor union
RATIONALE OF LABOR UNIONS
caelc
Collective bargaining.
Advocacy and lobbying.
Education and training.
Legal support.
Community involvement.
give importance of labor unions
✓ Unions raise wages of unionized workers
✓ Unions ensure job security
✓ Unions reduce wage inequality because they raise wages more for low- and
middle-wage workers than for higher-wage workers
✓ Unionized workers receive more generous health benefits than nonunionized
workers.
✓ Unions provide democratic representation.
✓ Strong unions set a pay standard that nonunion employers follow
✓ Unionized workers receive better pension plans.
✓ Unionized workers receive 26% more vacation time and 14% more total paid
leave (vacations and holidays).
weapons of workers/labor
p-bac
▪ Collective Bargaining -
▪ Arbitration –
▪ Strike –
▪ Picketing –
▪ Boycott –
disadvantages of labor unions
✓Reduced employment
✓Higher costs
✓Conflicts
✓Strikes
what Revolution led to the growth of factories
and mass production.
Industrial
The first recorded labor union in the United States
was the
Federal Society of Journeymen
Cordwainers
Prior to the __, the public did not
favor unions
Great Depression
contracts stipulated that the worker would not
join a union
Yellow dog
Trade or labor unions in the Philippines are organizations
sanctioned by __of the Philippines as an
acknowledgment of Filipino workers’ freedom to self
organize.
Labor Code
aim to promote enlightenment among Filipino
workers concerning their wages, hour of work, and other
legal rights
trade unions
refers to the number of
people who are interested in or willing to work in a
unionized environment
demand for union jobs
The demand for union jobs depends on the size of
the wage increase, the amount of employment
loss, job security and the costs of union
membership, and economic conditions affecting
employer decisions to hire unionized worker
demand for union jobs
refers to the number of
available union jobs in the market
The supply of union jobs
refers to the impact that Walmart’s
opposition to unions has had on other retailers and the
broader labor market.
“Walmart effect”
This has led to a general decline in unionization in the retail
and service sectors and has contributed to the overall decline
in unionization in the United States.
“Walmart effect”
one that is open to any worker in the
industry or sector that it represents, regardless of
their job title or specific place of employment
open type
is one that is only open to workers
who hold certain job titles or work for specific
employers
closed union
Types of Labor Unions
▪Craft Union
▪Industrial Union
▪Service Sector
▪Public Sector
▪Private sector union
the percent difference between union and
non-union wages. This measure can provide some insight into the
extent to which unionized workers earn higher wages than non
unionized workers
union wage gap
is
an estimate of the percent difference between union and non-union
wages, and it is often used as a measure of the impact of unions on
wages.
union wage gap
refers to the idea that nonunion firms may offer higher wages to
workers in order to reduce the incentive for them to unionize. This can lead to a
downward bias in estimates of the union wage gap, which is the difference in
wages between unionized and non-unionized workers.
threat effect
refers to the idea that workers who are
unemployed in the union sector may enter the nonunion sector, increasing the
supply of labor and potentially decreasing nonunion wages. This can lead to an
upward bias in estimates of the union wage gap
spillover effect
refers to any
organization, union or association of employees in the government
sector which exists in whole or in part for the purpose of collective
negotiations or mutual aid, interest, cooperation and protection.
Public sector union or public employees organization
refers to any union or
association of employees in the private sector which exists in whole or
in part for the purpose of collective bargaining or mutual aid, interest,
cooperation, protection or other lawful purposes
Private sector union or labor organization
labor union membership in the ph are classified into 2
Public sector union or public employees organization
Private sector union or labor organization
Why Has Union Membership Declined?
▪ The structure of the labor market has been changing
since the 1960s.
▪ Blue collar workers are less prevalent.
▪ Jobs have shifted to right-to-work states.
▪ There has been a marked increase in labor force
participation rates of women.
▪ Workers’ demand for union jobs has declined.
▪ Firms have become more resistant to unions.
refers to a company policy that does not
restrict the business’s employee work force to union
members.
Open shop
refers to a company that hires only union
members. Under this latter arrangement, employees are
required to join the existing union within a specified time
after they have been hired
Closed shop
A union that is a sole seller of labor.
monopoly Unions
The union sets the wage, and the firm hires an optimal
amount of labor given that wage.
monopoly Unions
The model suggests some workers lose their jobs
monopoly Unions
The firm and the union could make a deal that makes at
least one of them better off without making the other
worse off.
Efficient Bargaining
t or f
The efficient contract curve lies to the left of the labor
demand curve.
f
The efficient contract curve lies to the right of the labor
demand curve.
imply that unions and employers
bargain over wages and employment.
Efficient contracts
occurs when labor contracts
require overstaffing.
Featherbedding
practices are negotiated to “make
work” for the extra staff
Featherbedding
occurs when neither party is willing to give in
when negotiating
strike
costly due to lost production time,
strikes shrink the amount of rents over which the
parties are negotiating.
strike
The fact that “irrational” strikes occur is known as the
Hicks Paradox.
can be optimal if workers are not well informed
about the firm’s financial status
strikes
D = (ŵU – ŵN) /ŵN
Union wage gap
The existence of a union sector has two side effects on
the nonunion sector.
Threat and Spillover Effects
involve nonunion firms off
Threat effects
leads
the union wage gap to be underestimated.
Threat effects
result when workers unemployed in the union
sector enter the nonunion sector, thus increasing the supply of
labor and decreasing nonunion wages.
leads
the union wage gap to be overestimated
spillover effect
t or f
Unionized firms offer a lower payoff to education
than nonunionized firms.
t
t or f
Unions flatten the age-earnings profile
t
t or f
The dispersion of wages in the unionized sector is 30
percent less than the dispersion of wages in the
nonunionized sector
false
The dispersion of wages in the unionized sector is 25
percent less than the dispersion of wages in the
nonunionized sector
package received by union
workers is generally worth more than the package
received by nonunion workers.
fringe benefits
t or f
The “union compensation gap” may be 2 or 3
percentage points higher than the union wage gap
t
