Even in the absence of collective bargaining, workers do have some bargaining power that allows them to receive wages higher than their reservation wage. Each worker's bargaining power depends both on the nature of the job and on the economywide labor market conditions. Let's consider each factor in turn. a. Compare the job of a delivery person and a computer net- work administrator. In which of these jobs does a worker have more bargaining power? Why? b. For any given job, how do labor market conditions affect a worker's bargaining power? Which labor market variable would you look at to assess labor-market conditions? c. Suppose that for given labor market conditions (the vari- able you identifled in part b), worker bargaining power throughout the economy increases. What effect would this have on the real wage in the medium run? in the short run? What determines the real wage in the model described in this chapter?

Even in the absence of collective bargaining, workers do have some bargaining power that allows them to receive wages higher than their reservation wage. Each worker's bargaining power depends both on the nature of the job and on the economywide labor market conditions. Let's consider each factor in turn. a. Compare the job of a delivery person and a computer net- work administrator. In which of these jobs does a worker have more bargaining power? Why? b. For any given job, how do labor market conditions affect a worker's bargaining power? Which labor market variable would you look at to assess labor-market conditions? c. Suppose that for given labor market conditions (the vari- able you identifled in part b), worker bargaining power throughout the economy increases. What effect would this have on the real wage in the medium run? in the short run? What determines the real wage in the model described in this chapter?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter15: Poverty And Economic Inequality

Section: Chapter Questions

Problem 32CTQ: Exercise 15.2 and Exercise 15.3 asked you to describe the labor-leisure tradeoff for Jonathon....

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Imagine that the government reworks the welfare policy that was affecting Jonathan in question 1, so that for each dollar someone like Jonathan earns at work, his government benefits diminish by only 30 cents. Reconstruct the table from question 1 to account for this change in policy. Draw Jonathans labor-leisure opportunity sets, both for before this welfare program is enacted and after it is enacted.
If you an? out of school but working part time, are you considered employed or unemployed in U.S. labor statistics? If you are a full time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is collecting social security and a pension and working as a greater at Wal-Mart are you considered employed or not in the labor force?
Exercise 15.2 and Exercise 15.3 asked you to describe the labor-leisure tradeoff for Jonathon. Since, in the first example, there is no monetary incentive for Jonathon to work, explain why he may choose to work anyway. Explain what the opportunity costs of working and not working might be for Jonathon in each example. Using your tables and graphs from Exercise 15.2 and Exercise 15.3, analyze how the government welfare system affects Jonathans incentive to work.
If immigration is reduced, what is the impact on the wage for low-skilled labor? Explain.
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Consider an individual aged 64 who is eligible to collect full social security (public pension) benefits of $6000 for a year. She has no other income, but can work at a weekly wage rate of $600 for a maximum of 52 weeks. Receipt of benefits from the social security program is retirement-tested. Specif- ically, the individual can earn up to $9000 in annual wage income without a reduction in benefits; how- ever, after $9000 of earnings, benefits are reduced by 50 percent for every dollar earned, until the ben- efits are exhausted. a. Carefully draw and label the budget constraint for this individual. b. Consider an individual whose labour supply decision is such that she receives YA in social security benefits, so that 0 , YA , $6000 (i.e., she receives positive but reduced benefits). On the carefully labelled diagram from part (a), show her labour supply decision. c. “Elimination of the retirement test (i.e., allowing the individual to keep all benefits, irrespective of his or her…