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Arguing for collective bargaining

This photograph shows people protesting in response to Wisconsin governor Scott Walker’s collective bargaining laws.
In 2011, thousands of people in Wisconsin protested against a bill that would eliminate the right to collective bargaining over everything except wages. (Credit: modification of work by Fibonacci Blue/Flickr Creative Commons)

Collective bargaining in wisconsin

In 2011, thousands of people crowded into the Wisconsin State Capitol rotunda carrying placards reading “Kill the Bill.” What were they protesting? The newly elected Wisconsin governor, Scott Walker, supported a bill proposed by Republican state legislators that would have effectively eliminated most collective bargaining rights of public sector union employees.

Collective bargaining laws require employers to sit down and negotiate with the representative union of their employees. The governor argued that the state needed to close a multi-billion-dollar deficit, so legislators proposed a Budget Repair Act that would eliminate collective bargaining over everything but wages. The bill passed and was signed into law after a significant level of drama that saw Democratic legislators leaving the state so that there would not be enough legislators in house to continue the debate or bring the bill to a vote. The law proved so unpopular that Governor Walker faced a recall vote in 2012. The recall attempt was defeated, but the law has been subjected to numerous court reviews. The discussion about the role of collective bargaining is not over.

Why was a bill like this proposed? Are collective bargaining rights necessary for public sector employees? How would an economist respond to such a bill? This chapter lays out the changing role of unions in U.S. labor markets.

Introduction to issues in labor markets: unions, discrimination, immigration

In this chapter, you will learn about:

  • Labor Unions
  • Employment Discrimination
  • Immigration

When a job applicant is bargaining with an employer for a position, the applicant is often at a disadvantage—needing the job more than the employer needs that particular applicant. John Bates Clark (1847–1938), often named as the first great American economist, wrote in 1907: “In the making of the wages contract the individual laborer is always at a disadvantage. He has something which he is obliged to sell and which his employer is not obliged to take, since he [that is, the employer] can reject single men with impunity.”

To give workers more power, the U.S. government has passed, in response to years of labor protests, a number of laws to create a more equal balance of power between workers and employers. These laws include some of the following:

  • Setting minimum hourly wages
  • Setting maximum hours of work (at least before employers pay overtime rates)
  • Prohibiting child labor
  • Regulating health and safety conditions in the workplace
  • Preventing discrimination on the basis of race, ethnicity, gender, sexual orientation, and age
  • Requiring employers to provide family leave
  • Requiring employers to give advance notice of layoffs
  • Covering workers with unemployment insurance
  • Setting a limit on the number of immigrant workers from other countries

[link] lists some prominent U.S. workplace protection laws. Many of the laws listed in the table were only the start of labor market regulations in these areas and have been followed, over time, by other related laws, regulations, and court rulings.

Prominent u.s. workplace protection laws
Law Protection
National Labor-Management Relations Act of 1935 (the “Wagner Act”) Establishes procedures for establishing a union that firms are obligated to follow; sets up the National Labor Relations Board for deciding disputes
Social Security Act of 1935 Under Title III, establishes a state-run system of unemployment insurance, in which workers pay into a state fund when they are employed and received benefits for a time when they are unemployed
Fair Labor Standards Act of 1938 Establishes the minimum wage, limits on child labor, and rules requiring payment of overtime pay for those in jobs that are paid by the hour and exceed 40 hours per week
Taft-Hartley Act of 1947 Allows states to decide whether all workers at a firm can be required to join a union as a condition of employment; in the case of a disruptive union strike, permits the president to declare a “cooling-off period” during which workers have to return to work
Civil Rights Act of 1964 Title VII of the Act prohibits discrimination in employment on the basis of race, gender, national origin, religion, or sexual orientation
Occupational Health and Safety Act of 1970 Creates the Occupational Safety and Health Administration (OSHA), which protects workers from physical harm in the workplace
Employee Retirement and Income Security Act of 1974 Regulates employee pension rules and benefits
Pregnancy Discrimination Act of 1978 Prohibits discrimination against women in the workplace who are planning to get pregnant or who are returning to work after pregnancy
Immigration Reform and Control Act of 1986 Prohibits hiring of illegal immigrants; requires employers to ask for proof of citizenship; protects rights of legal immigrants
Worker Adjustment and Retraining Notification Act of 1988 Requires employers with more than 100 employees to provide written notice 60 days before plant closings or large layoffs
Americans with Disabilities Act of 1990 Prohibits discrimination against those with disabilities and requires reasonable accommodations for them on the job
Family and Medical Leave Act of 1993 Allows employees to take up to 12 weeks of unpaid leave per year for family reasons, including birth or family illness
Pension Protection Act of 2006 Penalizes firms for underfunding their pension plans and gives employees more information about their pension accounts
Lilly Ledbetter Fair Pay Act of 2009 Restores protection for pay discrimination claims on the basis of sex, race, national origin, age, religion, or disability

This chapter covers three issues in the labor markets: labor unions, discrimination against women or minority groups, and immigration and U.S. labor market issues.

Questions & Answers

what is labor
Grace Reply
labor is any physical or mental effort that helps in the production of goods and services
Kwabena
what is profit maximizing level of out put for above hypothetical firm TC = Q3 - 21Q2 + 600 + 1800 P = 600 MC = 3Q2 - 42Q + 600
Sosna Reply
consider two goods X and Y. When the price of Y changes from 10 to 20. The quantity demanded of X changes from 40 to 35. Calculate cross elasticity of demand for X.
Sosna
sorry it the mistake answer it is question
Sosna
consider two goods X and Y. When the price of Y changes from 10 to 20. The quantity demanded of X changes from 40 to 35. Calculate cross elasticity of demand for X.
Sosna
The formula for calculation income elasticity of demand is the percent change in quantity demanded divided by the percent change in income.
Sosna
what is labor productivity
Lizzy Reply
if the demand function is q=25-4p+p² 1.find elasticity of demand at the point p=5?
Puja Reply
what are some of the difference between monopoly and perfect competition market
Obeng Reply
n a perfectly competitive market, price equals marginal cost and firms earn an economic profit of zero. In a monopoly, the price is set above marginal cost and the firm earns a positive economic profit. Perfect competition produces an equilibrium in which the price and quantity of a good is economic
Naima
what are some characteristics of monopoly market
Obeng Reply
explicit cost is seen as a total experiences in the business or the salary (wages) that a firm pay to employee.
Idagu Reply
what is price elasticity
Fosua
...
krishna
it is the degree of responsiveness to a percentage change in the price of the commodity
Obeng
economics is known to be the field
John Reply
what is monopoly
Peter Reply
what is taxation
Peter
why do monopoly make excess profit in both long run and short run
Adeola Reply
because monopoly have no competitor on the market and they are price makers,therefore,they can easily increase the princes and produce small quantity of goods but still consumers will still buy....
Kennedy
how to identify a perfect market graph
Adeola Reply
what is the investment
jimmy
investment is a money u used to the business
Mohamed
investment is the purchase of good that are not consumed today but are used in the future to create wealth.
Amina
investment is the good that are not consumed
Fosua
What is supply
Fosua
 Supply represents how much the market can offer.
Yusif
it is the quantity of commodity producers produces at the market
Obeng
what is the effect of scarce resources on producers
Phindu Reply
explain how government taxes and government producer subsidies affect supply
Chanda
what is economic
Charles Reply
what are the type of economic
Charles
macroeconomics,microeconomics,positive economics and negative economics
Gladys
what are the factors of production
Gladys
process of production
Mutia
Basically factors of production are four (4) namely: 1. Entrepreneur 2. Capital 3. Labour and; 4. Land but there has been a new argument to include an addition one to the the numbers to 5 which is "Technology"
Elisha
what is land as a factor of production
Gladys
what is Economic
Abu
economics is how individuals bussiness and governments make the best decisions to get what they want and how these choices interact in the market
Nandisha
Economics as a social science, which studies human behaviour as a relationship between ends and scarce means, which have alternative uses.
Yhaar
Economics is a science which study human behaviour as a relationship between ends and scarce means
John
Economics is a social sciences which studies human behavior as a relationship between ends and scarce mean, which have alternative uses.....
Pintu
how will a country's population be equal to it's labour force
Hope Reply
what is the meaning of ppf
Obeng Reply
Production Possibility Frontier
Igbekele

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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