L. Issues

What is the difference between real pay and nominal pay?

Evaluate responses using AI:

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Answer explanation

Real wages take into account the inflation rate and the purchasing power of the amount paid as compensation

Nominal wages are the wages (the literal dollar amount) an employee gets for their labor

What is the current unemployment rate in the US?

(use the Bureau of Labor Statistics and FRED to find data)

• 3.6%

• 5.7%

• 9.8%

What are the recommendations of the Federal Reserve regarding current inflation and wage increases? What problem does it create for employers?

• Since consumer prices have risen 7% in the last 12 months, then employers should match their employees’ real wages with a 7% rise for a steady economic growth and to avoid wage-price spirals

• Since consumer prices have risen 7% in the last 12 months, then employers should not match their employee’s real wages with a 7% rise for a steady economic growth and to avoid wage-price spirals

• Since consumer prices have risen 7% in the last 12 months, then employers should do what they want with their employee’s real wages for a steady economic growth and to avoid wage-price spirals

Why was there a correlation between the decline in union membership and the decline in real minimum wage in the 1980s?

• Because of a decline in labor unions in the 1980s

• Because Reagan fired 11,000 air traffic controllers in 1981

• Because of the deregulation of the market

• All of the above

The percentage of unionized workers in the US has increased since 2021

• Yes

• No

Factors in union decline:

• Inflation

• Hostile policies, legislation & practices

• Globalization

• Tight labor market

• Predominance of the service sector

How has the shift from a manufacturing-based to a service-based economy impacted unionization and workers?

Evaluate responses using AI:

OFF

Answer explanation

Harder to organize the service industry because:

-workers are more isolated

-labor costs is the biggest expanse for employers so they try to reduce those at all costs ('just-in-time' scheduling)

-high turnover (not necessarily "skilled workers")

-don't have as much power to stop the economy (v. transport, manufacturing, energy sector...)