THE ROLE OF LABOR

What kind of job would you like once you graduate from high school or college? Will you start a business of your own or work for someone else? Does a sales career appeal to you, or are you more attracted to technical work? Perhaps you would rather work with your hands in a factory or car repair shop.

Maybe you are interested in becoming an engineer, doctor, or lawyer.

Whatever your goals, some day you will likely enter the labor force. The labor force consists of all those people 16 years of age or older who are currently employed or looking for work.

In this chapter you will learn how the labor force has been changing, why some jobs pay more than others, and how income is distributed. You will also learn about labor unions and trends in labor-man­agement relations in the United States.

9.1. Trends in the Labor Force: the Last 50 Years

Our labor force has been changing in the 20th centu­ry. Some of the more significant changes include:

• The number of "blue-collar" jobs has declined, and the number of "white-collar" jobs has increased. Blue-collar workers take their name from the denim shirts often worn by

those who perform physical labor. They assemble manufactured goods, unload ships and planes, service motor vehicles, build houses and skyscrap­ers, and perform a thousand other tasks requiring a variety of skills.

White-collar workers take their name from the white shirts traditionally worn by men and women who work in stores and offices. They include individuals who work in sales, clerical, and technical occupa­tions, the professions (law, medicine, and education), and business management.

While these terms are old-fashioned, they are still used as a matter of convenience. Other categories of workers in the labor force include service occupa­tions and farm workers. Service occupations include police officers, fire fighters, waiters and cooks, and those in personal and health services. Farm workers include those who own, manage, or work on farms.

• White-collar and service industry employ­ment has been increasing. The proportion of blue-collar jobs has been on the decline. Techno­logical developments have enabled machines to complete tasks that once could only have been performed by people.

The decline in blue-collar jobs has been offset to an extent by the growth of service industries. Some of the major service industries are the retail trades; transportation, financial, food, hotel and cleaning industries; and such professions as law, education, and medicine.

Increased imports of foreign manufactured goods have slowed the growth of U.S. goods-producing industries. This has also contributed to a decline in the growth of many blue-collar jobs. By contrast, imports of services have not increased as much. Job growth in the service sector should con­tinue to provide a growing percentage ofthe workforce.

• The proportion of women in the labor force has been increasing. Just before World War II, in 1940, only 28 out of every 100 workers were women. By 1947 their numbers had grown to 36 out of every 100 workers, and there are now 46 women for every 100 workers in the labor force.

• Workers have been leaving the farm. Overall employment in the farming industry is expected to decline as small farms are consolidated into large farms, and technology further reduces the need for farm labor. One hundred years ago about half the labor force worked on farms. Now 2.7 per­cent of the labor force are farm workers.

• Labor has been earning higher wages while working comparable hours. In the early 1950s the typical factory worker who put in about 40 hours a week was paid about $60. Due to infla­tion, $60 in the 1950s had the purchasing power of approximately $350 in 1992. But in 1992 the factory worker who put in a 40-hour week was paid $400. Workers today work comparable hours and earn more because they produce more. As you learned in Chapter 7, these productivity gains resulted from advances in technology and the improving quality of our labor force.

• Education has become increasingly impor­tant. Technology has given us the microcomputer, fiber optics and robotics. It has also created a need for a highly trained labor force. Those lacking skills and ade­quate school­ing have far more difficulty earning a living than those who complete their education. Government data tell us that students who finish high school earn approximately 62 percent more than those who drop out, while college graduates earn about 298 percent more than high school dropouts.

Not only are wages for unskilled workers low, com­petition for jobs is intense. Today, unskilled workers, and even those with some technical training, are competing with workers all over the world. One U.S software company, for example, automatically switches calls from its California number to a cus­tomer service office in Ireland. Metropolitan Life has an office in County Cork, Ireland where 150 workers analyze medical insurance claims. Companies like these relocate work to Ireland because operating costs are 30 to 35 percent cheaper than in the U.S. Further, 3M has a plant in Bangalore, India; Hewlett-Packard assembles computers and designs computer memory boards in Guadalajara, Mexico; and General Electric makes advanced compact fluo­rescent bulbs in Nagykanizsa, Hungary. There are many other similar examples, especially in manufac­turing, because employment decisions and wage rates are often determined by the laws of supply and demand.

Date: 2015-02-28; view: 879