Chapter 13
Labor
Labor-
swapping dollars for working hours
Supply and Demand in the Marketplace
have a relationship with labor
Derived Demand for labor is dependent
upon production factors and time
Transportation
Eg.
19th Century- Blacksmiths were needed to shod horses and repair wagons and carts.
21st Century- auto mechanics were and still are needed to repair cars, trucks....
Today
- Diagnostic checks find problems that are repaired by individual specialists.
*Labor Productivity
=
output produced
per hour of labor input
Wage Rate
The price paid for each
unit of labor
*Supply of Labor
The
amount of labor that would be available at each wage rate
Labor
can increase
1.
The demand for the output(product or service)may increase
2.
The productivity of labor may increase
Equilibrium Wage
The
wage rate at which the demand for labor equals the supply of labor
Minimum Wage Law
A
law which sets the lowest wage that can be paid for certain kinds of work
Inverse relationship
High Wages / Less Labor(hours)
Historically
the relationship between wages paid and hour worked was not acknowledged in the US until the 1930's.
Carnegie, Rockefeller, Morgan
Lower
wages; Longer hours
Minimum
amount of income to live
(just enough to get by)
History of Labor in the United States
Marty the Merchant
(Middle
Ages)
Domestic System
evolved into the
Factory System
Via
the Industrial Revolution
The
obvious labor source
*Immigrants*
(Handout)
Company Towns
Pullman, Homestead
“16
tons; what do you get;
another
day older and deeper in debt;
St.
Peter don’t expect me knocking at your door;”
“I sold my soul to the Company Store”
High Wages may result in
1) less labor
2) higher costs
3) less demand(high prices)
2000 labor hours =
250 people working 8 hours
per day at $9/hr
8,000
labor hours
lower
the wage to $5/hr
(more working hours)
The Birth of the Union….
American Federation of Labor
Samuel Gompers (1886)
Skilled
workers resembling the Guild System
*Master Mechanic
*Journeyman
*Apprentice
**
The
Million Dollar Lofts of Tribeca the
21st Century were once the Sweat Shops of the 19th Century.
*Triangle Shirt Waist Fire*
***piece work…low wages***
The Birth of the
Industrial Union
WTUL, ILGWU….CIO
(Congress of Industrial Organization)
