Labor Markets and Their Many Aspects Research Paper

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Labor Markets and Their Many Aspects

The negative aspects of a loosely-regulated labor market:

The dangers of under-regulation

The labor laws of the state of Pennsylvania are still highly influenced by the unionization movement that began in the steel mills of the state. It is said that "no state in America has a richer labor history than Pennsylvania" (Pennsylvania labor history, 2011, IAP). The AFL and CIO were founded in the state. "The 1877 railroad strike, the 1892 battle of Homestead, and the 1919 steel strike" are all nationally famous incidents that were highly influential upon the development of the modern labor movement and remain potent, collective state memories (Pennsylvania labor history, 2011, IAP). However, "the struggle against child labor, sweatshops and oppressive working conditions unfortunately continue today in the global economy. Workers' rights to form unions and collectively bargain, to have a safe and healthful workplace, and to have health care and secure pensions are still contested in this country and around the world" (Pennsylvania labor history, 2011, IAP). While Pennsylvania's laws are more protective of workers than federal labor laws and laws in many states of the union, it is far from exempt from many of the negative workplace trends of the modern era, including outsourcing of critical jobs and a decline in union membership.

Because of its history in the labor rights movement, Pennsylvania has adopted more stringent regulations in many areas of labor law. For example, its child labor laws mandate that 14 and 15-year-olds can only work 3 hours after school and even family businesses are not exempt from child labor laws. "For minors who are 16 and 17, the maximum hours increase to 28 per school week, plus eight hours each on Saturday and Sunday," which is more restrictive than the federal laws governing child labor practices (Nichols 2010). Overtime must be at least 1.5 times the employee's regular pay rate, although most workers can be mandated to work overtime and there are some exemptions, such as workers paid annually rather than by the hour.

Still, unionization has declined overall in the U.S. And Pennsylvania is no exemption to this trend. Right-to-work states have hampered the ability to organize, and unions suffer from public relations problems. "Unions face critical 'free-rider' problems if membership is totally voluntary. For example, I could benefit from the union's effort to improve working conditions at my workplace without paying dues; I could take or keep a job by offering to work at below the union wage; I could keep working through a strike and then cash in on the success of the strike; and so on. If individual workers can act for themselves in these ways, then it becomes nearly impossible to organize and sustain a union" (Fischer 2010). While 'right to work' laws are defended as promoting employee choice, overall wages in these states are lower than states that do not have them. "The average worker in a right-to-work state makes about $5,333 a year less than workers in other states ($35,500 compared with $30,167). Weekly wages are $72 greater in free-bargaining states than in right-to-work states ($621 versus $549)" (Right to work for less pay, 2011, AFL-CIO).

Unions have been criticized for being greedy, particularly in the case of government and professional unions when defending worker benefits when nonunionized private employers are cutting back employment, pensions, and healthcare to cut costs. "The United States' rate of 'union density,' the proportion of employed workers who belong to unions, now about 12%, is far below of that of most western European nations (with the interesting exception of France) which range from about 20% to about 60%." (Fischer 2010). However, there is evidence that the decline in unionization and protective legislation in general has a deleterious effect upon the conditions as well as the wages all workers, particularly low-wage workers. One survey of low-wage workers found that 26% of low-wage workers were paid less than the minimum wage and 76% of those who worked more than 40 hours were not paid overtime, as required by both federal and state laws. Insufficient oversight was cited one of the…

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