Labor Economics

A minimum wage is a legal price floor on wages, the lowest amount employers may legally pay workers.

A labor union is an organized group of workers that bargains collectively with employers over wages, benefits, and conditions.

Collective bargaining is the process where a union negotiates wages and working conditions with an employer on behalf of all workers.

The gig economy is a labor market based on short-term, flexible, independent work rather than permanent jobs.

An efficiency wage is a wage set above the market level to boost worker productivity, loyalty, and retention.

Unemployment insurance is a government program that pays temporary benefits to workers who lose their jobs.

A living wage is the income a worker needs to afford basic necessities like housing, food, and healthcare in their area.

A compensating differential is the extra pay needed to attract workers to undesirable, dangerous, or unpleasant jobs.

Labor mobility is the ease with which workers can move between jobs, occupations, or geographic regions.

The backward-bending labor supply curve shows hours worked rising with wages at first, then falling once the income effect of higher wages outweighs the substitution effect.

The labor demand curve shows how many workers a firm hires at each wage, and for a single firm it is simply its marginal revenue product curve.

On-the-job training is skill building that happens while a person works, raising their productivity and the wage they can command without more schooling.

A right-to-work law is a state law that bans requiring workers to join a union or pay union fees as a condition of keeping a job.

Wage discrimination is paying equally productive workers different wages because of a personal characteristic such as race or sex rather than their output.

Occupational segregation is the uneven spread of demographic groups across jobs, so some occupations end up heavily male, heavily female or racially skewed.

The gender pay gap is the average earnings difference between men and women, measured either unadjusted or adjusted for hours, occupation and experience.

The signaling theory of education says schooling raises pay largely by revealing a worker's existing ability to employers, not by adding productive skill.

Search and matching is the framework in which unemployment persists because it takes time and effort for job seekers and vacancies to find each other.

A reservation wage is the lowest wage at which a person will accept a job, so any offer below it is turned down in favor of continued search.

Underemployment is working below your capacity, either part time when you want full time hours or in a job that uses far less skill than you have.

The union wage premium is the percentage by which a unionized worker's pay exceeds that of a comparable non-union worker doing similar work.

Automation and labor describes how machines take over some tasks and complement others, cutting labor demand for tasks they replace and raising it elsewhere.

A dual labor market is split into a primary segment of stable, well paid jobs and a low wage, high turnover secondary segment, with little mobility between.