Unit 3 Pt. 3

Question 1

Labour Unions

Answer 1

Association of wokrers formed to protect + promote common interests such as wages, benefits, working conditions, + job secuirty.

Question 2

3 Declines in Union Membership

Answer 2

1. Economic Shifts: Tech advancements that move away from manifacturing to more service based jobs.
2. Employer Resistance: Strategies to discourage unions.
3. Changing workforce demographic + perceptions: increase part-time, temporary jobs. Youth doesnt percieve unions as useful + unlikely to join them.

Question 3

3 Types of Union Workers

Answer 3

1. Closed Shop: hiring individuals already part of the union
2. Union Shop: can hire non-union workers but they eventuallyt join
3. Close Shop: employees dont have to join unions.

Question 4

Collective Bargaining

Answer 4

Negotiation for wages, benefits, working conditions, word day/hours, conditons for hiring/firing, etc. w/ a union.

Question 5

Mediation

Answer 5

tries to resolve issues through communicfation + creating an agreement - non-bindingh.

Question 6

Arbitration

Answer 6

makes the decision for the parties + more formal - can be binding.

Question 7

Tools Unions Use During Collective Bargaining Negotiations

Answer 7

• Strikes
• Boycotts
• Picketing
• Slowdowns

Question 8

Tools Employers Use During Collective Bargaining Negotiations

Answer 8

• Lockout
• Offering concessions, incentives
• legal action

Question 9

The Income Lorenz Curve

Answer 9

Graphs the cumulative % of income (y-axis) earned against the cumulative % of household (x-axis).

Question 10

Line of Equality

Answer 10

Everyone has the same income, the lorenz curve is a 45 degree line.

Question 11

Impact of Gov Taxes & Transfers

Answer 11

Gov redistribute income by taxing household in higher income brackets + distributing that money to households in lower brackets.

Question 12

The Distribution of Wealth

Answer 12

• Household’s wealth = all things owned at that time
• Another way of examining degree of economic inequality
• More unequally distributed than income

Question 13

The Gin Coefficient

Answer 13

A measurement of the degree of inequality in the Lorenz curve, divided by the Entire Triangle under the like of equlaity.
0 = complete income equality
1 = complete income inequality
By itself it cannot tell us anything about the income share of a particular quintile.

Question 14

Income Group Behaviour

Answer 14

Low Income: May affect their ability to invest in education + lower health levels
Middle Class:May affect consumption of goods and services.
Rich: May exercise political power to defeat policies that don’t fit their needs (public health + education).

Question 15

Income Group Interactions

Answer 15

Social Capital: The poor are increasingly trapped while the rich may be exclusionary.
Social Unrest: Can be associated w/ social conflict + higher secuirty costs.
Volatility: Hard to reach political consensus + leaders serve the interests of their supporters at the expense of public good.

Question 16

Human Capital

Answer 16

The more a person posses, the more income that person likely earns, other things remaing the same.

Question 17

Human Capital on the Demand Side

Answer 17

High-skilled workers generate a larger marginal revenue product than low-skilled workers. So firms are willing to pay a higher wage rate for high-skilled labour.

Question 18

Human Capital on the Supply Side

Answer 18

High-skilled workers incur a cost of acquiring their skills – money costs + time costs.

Question 19

Sources of Economic Inequality

Answer 19

• Discrimination
• Entrepeneurial ability
• Personal + Family Characteristics

Question 20

Market for high-skilled + low-skilled labour - Equilibrium

Answer 20

The higher demand + lower supply for high-skilled workers relative to low skilled workers creates a higher equilibrium wage rate for those w/ greater human capital.