Labor economics

A firm may place its black workers injobs that require little contact with customers (for example, jobs in the firm's manufacturing division),and transfer many white workers to the service department (where they may be more visible).In fact, the employer divides the workforce in such a way that white workers occupy “sensitive”positions in the field of sales of black workers remain hidden from prying eyes.Customer discrimination can have a negative impact on black wages when a firmcannot easily hide its black employees from the public eye. A firm hiring a black employee fora sales position will have to lower the price of the goods to compensate white buyers for their uselessness. The wages of black workers would then fall because black workerswould have to compensate the employer for the loss of profits.At the end of the chapter, it is concluded that the concept of discrimination by taste helps us understand howdifferences between equally qualified blacks and whites (or men and women) can arise in the labor market. Racial andgender differences can occur even in the absence of prejudice, when belonging to a certain group (for example, belonging to a black woman) carries information abouta person's skills and performanceThe tenth chapter deals with labor unions. It is claimed that unions choose between different options to maximize the welfare of their members. As a result, the influence of trade unions on the labor market depends not only on the political and institutional environment that governs the relationship between the employer and the union, but also on factors that motivate unions to follow certain strategies (for example, to put forward wage demands that may lead to a strike) and ignore others.Employees choose whether to join a union. An employee joins a trade union if the trade union offers him a package of employment services that provides greater utility than the package of employment services offered by an employer who is not a member of the union. In general, workers are more likely to support unionization when the union organizer can promise high wages and a small job loss. Moreover, since joining a union involves additional costs (such as union dues), an employee is more likely to supportunions when these costs are low. These factors form the “demand" for union jobs.In general, employees are more likely to support unionization when the union organizer canpromise high wages and a small job loss. Moreover, sincejoining a union involves additional costs (such as union dues), an employee is more likely to supportunions when these costs are low. These factors form the “demand" for union jobs.The demand for jobs in trade unions is not the only factor determining the degree of unification intrade unions in the labor market. The ability of trade union organizers to perform trade union tasks dependson information about the organization of labor, about the legal environment that permits certain types of trade unionactivities and prohibits others, about the resistance of management to the introduction of collective bargaining and whether the firm receives excessive rent that can be obtained throughmembership in a trade union. These forces, in fact, determine the “supply” of trade union jobs.The level of unionization also depends on the macroeconomic environment. There is a positive relationship between the indicators of unionization with both theunemployment rate and the inflation rate.It seems that the demand for unionization increases wheneconomic conditions worsen, either because of the lack of job security caused by high unemployment, or because of the decline in real wages caused by high inflation.Finally, the legal environment governing the relationship between the employer and the trade union has a great influence oninfluence on the success of trade union initiatives. In states with right-to-work laws, therates of unionization are much lower than in other states.The degree of unionization observed in the labor market is determined by the interaction of these two forces. As a result, the level of unionization will be the higher the more workersshould benefit by joining a union, and the lower the more difficult it is to transfer jobs fromthe status of non-unionized. This cost-benefit approach helps us understand the differences inunionization rates between demographic groups, between industries, and over time.The chapter also discusses the model of a monopoly trade union. The monopoly trade union model implies that some workers will lose their jobs as a resultof the union's demand for wages. Therefore, it is not surprising that trade unions benefit morewhen the labor demand curve is inelastic.Chapter 11 talks about incentive payments. The author dwells on piecework earnings and ratings used to obtain data on employee performance.The author compares two types of salaries: piecework and time-based. The system of piecework remuneration compensates the employee in accordance with some indicator of his productivity. The remuneration of time-based workers depends only on the number of hours that the employee allocates to work, and has nothing to do with the number of units produced by the employee.The author designates an important problem. A firm may not be able to measure an employee's productivity and cannot expect an employee to truthfully report on her productivity. Therefore, if a firm wants to pay an employee piecework, it will have to constantly monitor the employee. These resources couldbe used by the firm in other ways, such as renting additional capital for the productionline. As a result, the firm that monitors employees incurs “monitoring costs".According to the results of research, workers working at a piecework rate distribute efforts in such a way that the marginal income from an additional unit of labor equals the marginal cost of these efforts. In addition, piecework remuneration attracts the most capable employees, requires great efforts from them, directly links wages to work results, minimizes the role of discrimination and nepotism and increases the productivity of the company. Piecework systems work best when an employee's own salary can be directly linked to his ownproductivity.ConclusionThis book has one general idea - to show the effectiveness of the labor economy. The research speaks about the calculations that each person should make. The level of education and external factors greatly influence his position in society, and determine the fate of the next generations. Therefore, it is important to effectively evaluate each of your steps in order to ultimately get more reward.