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Labor Market Trends

In this lesson, students will be able to identify historical trends affecting the labor market.

Students will be able to identify and/or define the following terms:

Historical Changes Affecting the Labor Market

Women and the Labor Market

Contingent Employment

The Learning Effect

The Screening Effect

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At its founding, the United States was anation of farmers.

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From Farms to Factories

• At the time of the American Revolution, most Americans were farmers.

• However, in the North, agriculture yielded to the Industrial Revolution in the early 1800s.

• Eventually, manufacturing jobs replaced many agricultural jobs.

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With the coming of the Industrial Revolution,many Americans became factory workers.

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From Radio to Computers

• By the mid-twentieth century, the United States experienced a boom in electronics, radio, and television. Many Americans found work in this new arena.

• However, by the 1970s, the personal computer revolution began.

• The labor market is continually changing.

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Computers revolutionized work and theworkplace. The production of serviceshas increased while manufacturing has

decreased.

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Women and Work

• Women have greatly increased their participation in the workforce.

• There are many reasons for the increased participation of women in the workforce.

• Increased education, higher divorce rates, and the need for two salaries has led many women into the workforce.

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Women have greatly increased theirparticipation in the labor force.

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Contingent Employment

• There has also been a rise in contingent employment.

• Contingent employment is a temporary job.

• A worker is hired for a specific project or a specific period of time. Employers typically do not provide fringe benefits.

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Contingent employees do not receive thebenefits of permanent full-time employees.

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Theories Concerning Education

• There are two theories as to why educated workers make more money.

• The Learning effect states that education increases productivity.

• The Screening effect states that completing college indicates intelligence.

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Does completing college increase productivity or reveal intelligence?

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One thing is clear about the labormarket, change is inevitable.

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Questions for Reflection:

• How has the labor market changed over the course of time?

• Why do more women work?• What is an advantage and a disadvantage

of contingent employment?• How does the learning effect differ from

the screening affect?• Why has manufacturing decreased and

the production of services increased?