Labor
When we refer to labor in economics, we're not talking about a woman giving birth. Labor constitutes the actual human workforce. Every person in America who has a civilian (that is, non-military) job is part of the labor force.
It may seem obvious that people go to work and get paid money, but the study of the labor market can provide economics with many clues about the relative health and welfare of the economy. For example, unemployment, which is an indication of how many people are seeking work but unable to find it, tells economists about whether or not people are able to find jobs. If Americans cannot find jobs, they do not get paid. If they don't get paid, they won't buy stuff. If they don't buy stuff, overall demand for stuff will decrease. If demand shifts to the left, prices will drop. If prices drop, employers will lay people off. And thus begins a vicious downward spiral.
It may seem obvious that people go to work and get paid money, but the study of the labor market can provide economics with many clues about the relative health and welfare of the economy. For example, unemployment, which is an indication of how many people are seeking work but unable to find it, tells economists about whether or not people are able to find jobs. If Americans cannot find jobs, they do not get paid. If they don't get paid, they won't buy stuff. If they don't buy stuff, overall demand for stuff will decrease. If demand shifts to the left, prices will drop. If prices drop, employers will lay people off. And thus begins a vicious downward spiral.
The video at right discusses the concept of a minimum wage. You may notice that the video is slanted against the minimum wage. The whole concept of a minimum wage is extremely controversial: on the one hand, it creates a price floor, which in pure economic terms leads to a surplus, in this case of workers.
Then again, without the minimum wage, some people would theoretically be paid less than three dollars an hour to do a given job. It is unlikely that this would be enough money for anyone to survive on, and people might grow desperate. It's a sad reflection on this country that even when we do have a minimum wage, 1 in every 6 Americans is considered "food insecure," meaning that they are only one financial mishap from wondering where their next meal is coming from. |
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The minimum wage is hardly the only controversy in the world of labor. Another is the concept of labor unions. Back during the Industrial Revolution, as the United States was laying the groundwork for the American Century, all sorts of factories sprang up all over the country, but especially in big cities (think Detroit, New York, Chicago). All of these factories required a labor pool. Fortunately for American businesses, the United States was also experiencing the Second Great Wave of Immigration at that point. There were people everywhere that were looking for work.
As might be expected from some of the less-scrupulous "Robber Barons" of the age, some of these newly-arrived immigrants were paid quite poorly, worked long hours, and were working in terrible conditions. It was not uncommon for children as young as eight years old to be working in factories or in other jobs. In particular, child labor was heavily valued in coal mining, because the mine shafts wouldn't have to be dug high: children are smaller than adults and can thus fit into smaller areas. Delightful.
Labor Unions sprang up to try to combat these negative conditions at work. Although employers strongly opposed the rise of labor unionism (along with the tacit backing of the federal government), labor unions eventually began to gain ground. Their popularity decreased somewhat during the boom years of the 1920s, but the Great Depression spurred a renewed growth in union membership. Unions are still quite controversial today: one need only witness the demonstrations that occurred outside of the Wisconsin State Capitol in 2011 after the passage of Act 10, which severely curbed the powers of public labor unions in the state of Wisconsin.
Labor is a highly controversial sector of the public discussion surrounding the economy, especially for the two reasons previously mentioned: minimum wage and labor unions. However, there is a third part of the debate that is also very incendiary: immigration. The United States currently has many people who have immigrated here working in jobs, and some of this immigrants are not legal residents of the United States. There's a lot of debate about how to resolve these issues, and even more blathering on by politicians with no real desire to fix the problem, but for an interesting (and sad) look at things, check out this article.
As might be expected from some of the less-scrupulous "Robber Barons" of the age, some of these newly-arrived immigrants were paid quite poorly, worked long hours, and were working in terrible conditions. It was not uncommon for children as young as eight years old to be working in factories or in other jobs. In particular, child labor was heavily valued in coal mining, because the mine shafts wouldn't have to be dug high: children are smaller than adults and can thus fit into smaller areas. Delightful.
Labor Unions sprang up to try to combat these negative conditions at work. Although employers strongly opposed the rise of labor unionism (along with the tacit backing of the federal government), labor unions eventually began to gain ground. Their popularity decreased somewhat during the boom years of the 1920s, but the Great Depression spurred a renewed growth in union membership. Unions are still quite controversial today: one need only witness the demonstrations that occurred outside of the Wisconsin State Capitol in 2011 after the passage of Act 10, which severely curbed the powers of public labor unions in the state of Wisconsin.
Labor is a highly controversial sector of the public discussion surrounding the economy, especially for the two reasons previously mentioned: minimum wage and labor unions. However, there is a third part of the debate that is also very incendiary: immigration. The United States currently has many people who have immigrated here working in jobs, and some of this immigrants are not legal residents of the United States. There's a lot of debate about how to resolve these issues, and even more blathering on by politicians with no real desire to fix the problem, but for an interesting (and sad) look at things, check out this article.
Another issue in this country, one that is closely tied to the labor market and issues about minimum wage, is the issue of poverty. The button to the right opens up an in-class lesson on contemporary poverty in the United States, with video links and discussions from class.
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