Labor Markets in a Globalized World

Labor Markets in a Globalized World - Read for Wednesday...

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Read for Wednesday: Global empl. Trends, pp. 5-14, 21-23 Stiglitz, preface and chapter. 1 Friedman, chapter. 3 Review session: Before class on Wednesday at 6:30. If the room is not available though, the professor will post notices about where to go. Sunday at 4:30, 1 hr. The exam will be 1.25 hrs. Visualizing working people: ILO Website Workers, Salgado Video (on the day of the exam) Stories *remember caused v. correlated Intro: Prof. Fields went to India and visited… Kalavitiben lives in Amadabad, India She was orphaned at age three, married at age nine, taken away from where she lives at thirteen and moved to the South, she is a mother of five and is now 50 and a great-grandmother. She had to take on some debt…money lenders in India charge 10% interest a month. Her job is to handroll cigarettes called bidis. When she has rolled 1000, she takes them to a middle woman who buys them for only 36 rupees ($.80 – for 11 hour days) What do 36 rupees buy? Not even enough for an afternoon meal… She lives a life of “economic precariousness” Questions to consider: What are the determinants of wage employment in factories, etc? Basic Terminology of Labor Economics: Labor Market – place where labor services are bought and sold. It includes paid employment, where you receive a wage or a salary from an employer, and equally, it includes self-employment, where you receive the proceeds from your own small business or your family farm or whatever else it is you do in your own activity. What does it mean to be employed? The ILO says you are employed if you worked one hour or more for pay last week or fifteen hours or more not for pay (The U.S. uses this same definition). What does it mean to be unemployed? Slightly different from what we mean in everyday English. The ILO says you are unemployed if you were not employed last week and you actively looked for work. People who want to work but are not submitting applications or looking or are discouraged are considered passively unemployed. But both of these definitions are different from simply “not having a job.” Unemployment is the place we usually start to talk about ill-being in labor markets. The Labor Force – consists of those who are employed and those who are unemployed. People who are too young or too old or too sick to work are those “out of the labor force” (think about the employment to population ratio). There is another problem with people who are employed, but whose workdays are shorter than they will like, so they end up with low earnings. When developing countries say x% are employed, another y% of those x% are employed by the ILO definition, but are “low earners.” Types of Unemployment (from Ehrenberg and Smith, Modern Labor Economics):
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1. Deficient aggregate demand unemployment – there are not enough jobs in the economy for all who would like to work (e.g. the US right now) 2. Structural unemployment – there is a mismatch that arises because the types of workers that
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Labor Markets in a Globalized World - Read for Wednesday...

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