Factors affecting the labor market – wage determination and trade union activities

Determination of wages

Wages can be determined by the following: The forces of supply and demand in a market economy. Governmental activities, policies and trade union activities. A very comprehensive understanding of these factors gives a clear picture of how wage setting can significantly affect the labor market.

Supply and demand forces in a market economyLabor wages in a market economy can be determined by the forces of supply and demand. In a competitive labor market, there are too many unorganized employers and employees which leads to a situation where neither the employer nor the employee can influence the wage rate either by refusing to hire or hiring. The wage rate in a competitive labor market can be determined in the following way:

1. When the supply of labor exceeds the demand, the wage rate will fall.

2. When the demand for labor exceeds the supply, the wage rate will rise.

When the demand for labor equals the supply, the wage rate will be favorable to both employer and employee.

Government activities and policiesGovernment institutions and wage committees established by the government assist in setting wages, especially for public services. In determining wages, the government agency or wage commission takes the following factors into consideration.

1. Cost of Living: The higher the cost of living, the more wages are likely to go up. If workers are spending too much to acquire the necessities of life, there is a need for higher wages to be paid to workers to enable them to meet. Imagine doing the opposite – how would the job market be affected?

2. Level of Productivity: The higher the level of production in a country, the higher the wage rate. Sure, you don’t expect industry employees to play cool with you when they work an average of 8 hours a 6 day week, making $1 billion in annual revenue, and yet you’re paying them a “summer job” wage. .

3. Occupation type: the wage structure differs from one profession to another. The wage structure for each category of work depends on the degree of scarcity of labour, the risks involved, etc. Therefore different salary levels are fixed for different categories of work in the civil service.

Union activities

A trade union is a trade union formed to enable members to take collective, rather than individual, action against their employers in matters relating to their welfare and working conditions. It is formed by workers who seek to protect and promote their interests. Examples of trade unions

1 – Airline Pilots Association (ALPA)

2. Actors and Artists Associated with America (4As)

3. American Federation of Teachers (AFT)

4. American Federation of Musicians of the United States and Canada (AFM)

5. California Nurses Association/National Nurses Organizing Committee (CAN/NNOC)

6. Farm Work Regulatory Commission (FLOC)

7. The International Association of Bridges, Structures, Ornamental and Steel Reinforcing Workers

8. International Elevator Builders Union (IUEC)

9- International Federation of Police Associations (IUPA)

10. Marine Beneficiary Engineers Association (MEBA)

11. International Sheet Metal Workers Association (SMWIA)

12. United Association of Travelers and Apprentices of the Plumbing, Pipe Fitting, and Sprinkler Installation Industry of the United States and Canada (UA)

13. United Transport Union (UTU)

14. Writers Guild of America East (WGAE)

15. United Food and Trade Workers (UFCW)

16. Aircraft Mechanics Fraternal Association (AMFA)

17. Major League Baseball Players Association (MLBPA)

18. United Electrical, Radio, and Machine Workers of America (UE)

19. Writers Guild of America, West (WGAw)

20. International Federation of Bakery, Confectionery, Tobacco and Grain Millworkers (BCTGM)

These are just a few of the thousands of labor unions in America.

Union goals

to secure good wages for members; to participate in the formulation of policies for their organizations; to secure employment for those members who do not have jobs; Trade unions also make it their responsibility to protect the interests of members and regulate qualifications for joining various professions.

Weapons that trade guilds can use during a trade dispute

Trade unions can insist on achieving their objectives during a trade dispute using the following weapons or methods.

1. Collective Bargaining: In this method, union representatives and employees come together to negotiate or deliberate on issues affecting workers.

2. Work to Judgment: This involves slowing down the rate of work by the worker. They will come to work but the rate of work will be slowed down by the workers.

3. Strike lines: These include workers remaining at the factory entrance and refusing to work.

4. Threatening to strike: The labor union gives an ultimatum to the employer that it will go on strike if its demands are not met on time.

5. Strike: Workers will be completely out of work. This is the ultimate weapon and it will honestly have a huge impact on the labor market and therefore production.

Employers Association

An employers’ association is formed to enable members to adopt a common policy in employment negotiations. Good examples of employers’ associations in the UK are the Confederation of British Industry (CBI) and the Confederation of Small Businesses. Whereas trade unions are usually interested in negotiations about increasing wages and improving working conditions for workers, employers’ associations are usually interested in discussing ways to increase productivity. Through collective bargaining on these matters, mutual agreements are reached by the trade union and the employers’ association.

Weapons used by employers’ unions during a trade dispute

An employers’ association can insist on achieving their objectives in a trade dispute using the following weapons or methods.

1. Collective bargaining: In this case, the employers’ union and union representatives will meet to discuss the workers’ demand.

2. Strike Breakers: In this method, the employer will employ some workers to operate the plant during the strike period

3. Blacklist: All workers who participate in the strike will be dismissed.

4. Closure: This involves closing the plant by the employer until the dispute is resolved.

Do you have any doubts about how the business can be affected or significantly affected by these factors mentioned above?