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Chapter 16
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Demographic change
Technological change
Structural change
Competitive pressures
Reorganization of work
Government intervention
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Demographic Change
Population dynamics slowly but continuously alter
labor forces.
Overall labor force growth is slowing
The number of workers in some demographic
categories is growing faster than in others,
producing incremental but significant changes.
Hispanics and Asians are increasing their
numbers faster than whites and blacks are.
Since the 1970s women have increased their
participation more rapidly than men.
The workforce is aging.
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Technological Change
Technical change has many impacts
on work.
It affects the number and type of jobs
available.
Structural Change
Structural change is caused by processes of job
creation and job destruction that continuously alter
the mix of productive work in every economy.
Three long-term structural trends:
The agricultural sector has declined from predominance
to near insignificance as an occupation.
The percentage of workers employed in the goodsproducing sector is now in long-term decline.
There is explosive growth in the service sector.
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Competitive Pressures
Recent trends have intensified competition for
American companies.
Customer demand
Deregulation of large industries
Global competition
By global standards, American workers are
extremely expensive.
Companies in some industries now contract
to have manufacturing done in a foreign
country.
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Reorganization of Work
Corporations alter business processes as they
adjust to environmental changes, primarily
competition.
As transport costs have fallen, manufacturers more
often separate production from consumption by
sending their manufacturing to low-cost countries,
then shipping products back to customers.
Because of communication technology, service
work can now be sent to low-cost locations.
Trade in services between nations is growing,
creating fears about job loss from outsourcing.
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Reorganization of Work
(continued)
Offshoring has fueled attacks on
corporations for destroying well-paying jobs
in developed nations out of greed.
In a recent one-year period 937,652
workers lost their jobs in mass layoffs,
however only 31,089 were unemployed
because their work left the country.
Outsourcing so far is a minor portion of the
job gains and job losses of American
workers.
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Development of Labor
Regulation in the United States
Historically, a strong laissez-faire
current in American economic
philosophy made governments at all
levels reluctant to interfere with the
employment contract.
Today, government intervention is
extensive and growing, but this is a
twentieth-century trend.
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Liberty of Contract
Before the 1930s, government intervention
on behalf of workers was very limited.
In the late 1800s and early 1900s, strong
majorities on the Supreme Court upheld the
liberty of contract doctrine.
The great flaw in the liberty of contract
doctrine was that it assumed equal
bargaining power for all parties,
whereas employers unquestionably
predominated.
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Waves of Regulation
First wave federal workplace regulation in the
1930s, which established union rights.
Second wave between 1963 and 1974, moved
federal law into new areas, protecting civil rights,
worker health and safety, and pension rights.
Third wave between 1986 and 1996, again
broadened the scope of federal law to address
additional, and somewhat narrower, employment
issues.
State courts and legislatures have created
additional rules.
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The Trade-off in
Labor Regulation
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Labor Regulation
in Perspective
The bare minimum for labor market
regulation is compliance with four core
labor standards set forth in
international labor conventions.
Eliminate all types of forced labor.
Abolish child labor.
Ensure equal opportunity and
nondiscrimination.
Guarantee collective bargaining.
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Concluding Observations
The combined impact of the six forces changing the
workplace creates both uncertainty and opportunity.
Demographic and structural changes are
uncontrollable but also slow and predictable.
Technological change is a disruptive force but it has
always created new jobs to replace the ones it
destroys.
Competition and work reorganization are reshaping
labor markets everywhere.
Experience suggests that workers fortunes will be
mixed.
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