Activities

1. Henry George on Labor and Labor Unions

When workmen in any trade form a trades-union, they gain, by subordinating the individual interests of each to the common interests of all, the power of making better terms with employers. But this power goes only a little way when the combination of the trades-union is met and checked by the pressure for employment of those outside its limits. No combination of workmen can raise their own wages much above the level of ordinary wages. The attempt to do so is like the attempt to bail out a boat without stopping up the seams. For this reason, it is necessary, if workmen would accomplish anything real and permanent for themselves, not merely that each trade should seek the common interests of all trades, but that skilled workmen should address themselves to those general measures which will improve the condition of unskilled workmen. Those who are most to be considered, those for whose help the struggle must be made, if labor is to be enfranchised, and social justice won, are those least able to help or struggle for themselves, those who have no advantage of property or skill or intelligence, -- the men and women who are at the very bottom of the social scale.

Please answer the following questions.

1. According to George, what limits the effectiveness of trade unions?
2. Why should skilled workers be concerned with the condition of workers on the bottom of society?
3. Is George making an appeal to conscience, or self interest? Explain your answer.
4. What does George mean by "the level of ordinary wages"?
5. If large numbers of unskilled workers gained better skills, by getting more education, what effect do you think that would have on wages?

2. Reading the Numbers on Education and Wages

Please answer the following questions:

1. Why are some workers paid more than others?
2. If the economy went into a recession, how would you expect these relationships to change?
3. Why do you think earnings rise more steeply with years of experience for college grads?
4. If the graph showed income levels, rather than wages, for each category, how would the lines be drawn differently?
5. What additional information would you need in order to draw the lines asked for in question #4?

3. Analyzing an Article on the Minimum Wage

Capitol Hill observers predict that any "economic stimulus" package is likely to include a hike in the minimum wage. Republicans are said to favor a $1-an-hour increase, while Democrats are angling for $1.50.
     But in a twist, any increase is likely to increase the number of workers who earn less than the minimum. That's because some workers will not be covered by the law.

• Most employers who do less than half a million dollars worth of business a year are not required to pay the minimum.
• The minimum does not apply to many workers providing casual day labor in construction, farming or gardening.
• Some household workers are theoretically covered by the minimum -- but that is hard to enforce.
• Those who care for homes, gardens, children and the elderly in lower-income areas are paid whatever they can get -- often in cash.

As a result, the last two minimum wage increases in 1997-98 resulted in the percentage of workers earning less than the minimum rising from 2.9 percent in 1996 to 6.2 percent in 1998 -- even as overall unemployment fell from 5.4 percent to 4.5 percent.
     When the minimum was raised from $4.25 to $4.75 in 1996, the share of workers earning less than the minimum jumped from 2.9 percent to 4.3 percent. The proportion of blacks working at subminimum skyrocketed from 6 percent in 1995 to 13.9 percent in late 1997. And the proportion of teens working below the minimum rose from 7.2 percent to 19.8.

Source: National Center for Policy Analysis

1. Why do you think Republicans tend to support minimum wage increases less than Democrats?
2. What are some ways in which sub-minimum wage jobs are similar?
3. What is "casual day labor"? Do you think this kind of labor market should be subject to stricter regulation?
4. Why does an increase in the minimum wage cause an increase in workers who are paid less than the minimum?
5. Why do younger workers often make sub-minimum wages?
6. How do minimum wage laws restrict free competition in the labor market?