Unit 4 Microeconomics:Business and Labor

Chapters 9.3

EconomicsMr. Biggs

Labor and Labor UnionsHistorically, American workers have tried to gain some control over their working conditions by joining together to bring their concerns to the attention of company management.The primary goal of a labor union is to secure its workers’ jobs.

The Labor MovementThe union movement took shape over the course of more than a century and faced many obstacles.

Organized Labor

Workers in the 1800sLabor unions arose largely in response to changes brought about by the industrial revolution.The hours were long, the work was dangerous, and child labor was common.Workers were often considered no better than machines and were replaced as necessary.

Unions Take HoldA union’s most powerful tool is a strike.Strike - An organized work stoppage intended to force an employer to address union demands.Samuel Gompers started the American labor movement in 1886 and founded the American Federation of Labor (AFL).

Employer ResistanceAttempts to unionize brought swift resistance from employers who viewed them as threats.Some employers forced workers to sign “yellow-dog contracts” which were contracts that did not let workers join a union.Some used court orders, called injunctions, to order striking workers back to work.Some even hired private security guards to harass and intimidate union members.

Congressional ProtectionsCongress took up the labor cause as the nation struggled through the Depression.Unions peaked in the 1940s with as much as 35% of the nation’s workers belonging to a union. The unions amassed billions of dollars from union dues to cover the costs of union activities.

Decline of the Labor MovementThe reputation of unions suffered because some became corrupt and were tied to organized crime, like the Teamsters.

The “Right to Work” Laws  In an effort to curb union power, Congress passed the Taft-Hartley Act of 1947 which allowed right-to-work laws.Right-to-work law - A measure that banned mandatory union membership.   In 2000, union membership dropped to only 13.5% of workers.Unionism in the U.S. does not have its own political party like in Great Britain.

Loss of Traditional Strongholds1. Unions are traditionally strong in the

manufacturing sector among blue-collar workers whose jobs have been declining.

Blue-collar worker - Someone who works in an industrial job, often in manufacturing, and receive wages.Unions are weakest in white-collar professions but are on the rise due mainly to high technology companies.White-collar worker - Someone in a professional or clerical job where the workers receive a salary.

2. Many automobile and steel manufacturing jobs have gone overseas.

3. More women are in the workforce and are less likely to unionized.

4. Some industries have relocated from the east to the south and the south has traditionally

been less unionized.

Labor and ManagementA union gains the right to represent workers at a company when a majority of workers in a particular work unit vote to accept the union.

Collective BargainingCollective bargaining - The process in which union and company representatives meet to negotiate a new labor contract.The union usually comes to the bargaining table to get:

• High wages and benefits• Provide a safe and comfortable

working environment• Clearly define how the company can

fire someone

Strikes and SettlementsA strike occurs when union members, as a group, refuse to work until an acceptable contract or other conditions are met.A strike is a last resort and can be costly to both the company and workers.The two sides might agree to mediation.Mediation - A non-binding settlement technique in which a neutral mediator meets with each side to try to find a solution that both sides will accept.If mediation fails, the union and company may go to arbitration.Arbitration - A settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.

The End