chapter1 introductory notes- winthrop（chapter1入门笔记-温斯洛普）.docVIP

Labor Economics Dr. Pantuosco Economics 345 Chapter 1 Introductory Notes Where does labor economics fit into micro and macro? Micro = the marginal cost curve is effected by the cost of labor. Labor tends to be a variable cost, therefore, a change in the cost of labor will change the total cost of producing a good. The average cost curve will change, as will the marginal cost curve. Holding the demand constant, changes in the marginal cost and average cost curve will cause changes in the number of goods (and services) produced. Depending on the market, and the time frame, there will most likely be a change in the price of the good. Macro = labor is a cost that all businesses must face. Unionization, international trade, immigration, and wage bargaining power follow national trends. Currently, outsourcing is on the rise while unions and bargaining (in the private sector) are on the decline. Labor market pressure affects all workers and all firms. Currently, there is an oversupply of labor. This glut of workers puts downward pressure on wages. A decrease in wages pushes the aggregate supply curve to the right. Holding everything else constant, a decrease in wages causes the amount of goods and services produced (GDP) to increase, and inflation to fall. Factors to consider are Say’s Law – supply creates its own demand, and the international implications of American workers accepting lower wages. Regardless of the approach, micro or macro, labor is a supply side variable. The difference is whether the individual is analyzing a firm, an industry, a state, or a country. Labor market topics Labor productivity Executive salaries Athlete salaries The decision to attend college Welfare Benefits Divorce Immigration Stimulus Packages – Infrastructure versus tax rebates Discrimination Strikes Old Approach to Labor Trends and patterns New Approach Statistical Applications Labor economics is the study of wage determination and employment for the la