Deck 14: Poverty and Economic Inequality

Question 1

If an economist were to disregard unionized government employees, then current U.S. labor market statistics would show that

A) 10% of the workers employed by private firms work for a union.
B) 98% of the workers employed by private firms aren't unionized.
C) 8% of the workers employed by private firms work for a union.
D) 80% of the workers employed by private firms aren't unionized.

Answer 1

8% of the workers employed by private firms work for a union.

Question 2

A labor union seeks to _______
Between employers and workers.

A) change the balance of negotiations
B) change the economic balance
C) force employers to deal with individual workers
D) lobby government for changes

Answer 2

change the balance of negotiations

Question 3

The town of Bookville has a massive public library system. Bookville's municipal government faces a trade off between retaining the current number of library workers and replacing some of its workers with computers. The four options available to the government are given in table below.

Computers and software cost $5,000 each and must be replaced each year. In a non-unionized labor market, workers are paid $20,000 per year. In these circumstances, the optimal choice from a cost perspective for the city government is

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Answer 3

Choice A

Question 4

Say the average increase in pay for non-union workers in 2011 is 2% across the U.S. If a workers' union successfully negotiates a 3 year collective agreement that provides a 4.5% raise in 2011, and a 4.3% raise in 2013, then the for-profit employer will typically

A) begin to fire its older union workers.
B) replace union workers with non-union workers.
C) curtail expansion of labor as a trade-off.
D) replace union workers with foreign workers.

Question 5

With regard to labor unions, which of the following is an accurate statement?

A) percentage of members is higher for women than men
B) membership is lower for agriculture or service-oriented jobs
C) membership is lower in government and manufacturing
D) membership is higher for blacks or Hispanics than for whites

Question 6

Members of labor unions are able to use their _______ to achieve better economic outcomes.

A) cooperative nature
B) bargaining power
C) secret ballot votes
D) excess supply of labor

Question 7

From a competitive firms' point of view, the key question regarding the higher wages paid to
Union workers is whether the higher wage level

A) is matched by non-union producers.
B) can be passed on to its costumers.
C) leads to workers with more experience.
D) is matched with higher productivity.

Question 8

The existence of labor unions forces employers to deal with workers _______.

A) individually, rather than as a collective
B) cooperatively, rather than uncooperatively
C) equitably, rather than inequitably
D) collectively, rather than as individuals

Question 9

Labor unions can:

A) be a primary line of defense against suppressed wage levels.
B) be controversial in a for-profit market driven economy.
C) bring better economic gains for their memberships.
D) protect workers' pensions and all of the above.

Question 10

The presence of organized labor in the U.S. labor market creates a situation that resembles a

A) government acting as a negotiator between workers and employers.
B) union official acting like lawyers negotiating legal agreements.
C) for profit-firm acting cooperatively to reduce unequal wealth distribution.
D) union acting as a monopoly in selling labor to firms.

Question 11

Which of the following industries is the least likely to employ a unionized labor force?

A) finance, insurance and real estate
B) transportation and public utilities
C) government
D) precision, production, and repair

Question 12

The percentage of workers belonging to a union is higher in the

A) 45-64 age range.
B) 25-45 age range.
C) 40 -65 age range.
D) 30-50 age range.

Question 13

Which of the following arguments would most likely be presented by a critic of labor unions?

A) unions oppose suppression of wages by profit-seeking firms
B) unions have a tendency to gain as much as possible in the long-term
C) unions can prohibit economic growth if new technology is blocked
D) unions have a higher percentage of women members than men

Question 14

In the United States, the share of wage and salary for workers who belong to unions

A) declined sharply in the 1930s and 1940s.
B) rose sharply in the 1930s and 1940s.
C) rose sharply in the 1950s and 1960s.
D) declined sharply in the 1940s and 1950s.

Question 15

A _______ is an organization of workers that negotiates with employers as a group over wages and working conditions.

A) affirmative union
B) collective union
C) labor union
D) cooperative union

Question 16

Negotiations between unions and a firm or firms is called _______.

A) collective bargaining
B) cooperative bargaining
C) united bargaining
D) organized bargaining

Question 17

There is sufficient evidence showing that union workers in the manufacturing sector generally

A) tend to hold those jobs for less time than non-union workers.
B) have higher productivity than non-union workers.
C) have fewer years of experience than non-union workers,
D) have lower productivity than non-union workers

Question 18

If a for-profit firm that has paid out record bonuses to its executive every year while underfunding contributions to unionized workers' pensions required under the collective agreement then attempts to reduce workers' pension entitlements, the union members will most likely

A) enter into collective bargaining.
B) be unable to defend against this action.
C) take defensive strike action.
D) receive higher wages instead.

Question 19

In the Unites States, worker membership in labor unions has been

A) steadily growing for 50 years.
B) steadily growing in the last decade.
C) steadily growing due to immigration.
D) steadily declining for 50 years.

Question 20

Union members earn _______ than non-union members, even after adjusting for factors such as _______.

A) about 10% more; racial discrimination and immigration.
B) about the same; union dues and cost of lawyers for collective bargaining.
C) about 20% more; years of work experience and education level.
D) about 30% more; healthcare and retirement benefits.

Question 21

The study of unions and their economic effects needs to focus on _______, not on _______.

A) economic benefits; economic harms
B) economic harms; economic benefits
C) specific situations; generalities
D) generalities; specific situations

Question 22

If unions help workers secure pension benefits, so that those workers are less dependent on government social assistance after their retirement, then

A) the for-profit unionized industries will be less productive.
B) the for-profit unionized industries will be harmed.
C) the union is economically harmful.
D) the union is economically beneficial.

Question 23

In the United States, the number of unionized government jobs has _______.

A) increased dramatically
B) increased modestly
C) modestly declined
D) dramatically declined

Question 24

Discrimination in labor markets arises if _______, as measured by education, receive different pay because of their _______.

A) workers with different skill levels; race or gender
B) workers with no experience; race or marital status
C) workers with work experience; race or marital status
D) workers with the same skill levels; race or gender

Question 25

Since 1960, the earnings gap between men and women in the U.S. labor market has

A) steadily risen.
B) been completely eliminated.
C) continued to narrow.
D) increased throughout the 1970s.

Question 26

The town of Bookville has a massive public library system. Bookville's municipal government faces a trade off between retaining its current level of library workers and replacing some of them with computers. The four options available to the government are given in table below.

After the introduction of a strong union, the annual salary for workers increases to $30,000. In these circumstances, the optimal choice from a cost perspective for the city government is

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question 27

Union membership has _______ in the United States because of _______.

A) risen; the shift from service to manufacturing industries
B) risen; increased global trade from U.S. manufacturers
C) fallen; laws enacted making it more difficult to unionize
D) fallen; laws making workplace protection more difficult

Question 28

In the U.S. manufacturing sector, unionized jobs have _______ in recent years.

A) increased modestly
B) have trended up
C) have trended down
D) declined dramatically

Question 29

In recent years, the U.S. labor market has experienced a _______ in the earnings gap between men and women. One of the main factors behind this is _______.

A) big decline; men have steadily been less productive and their wages have fallen
B) decline; women's' career focus and rewards gained with top-level job expertise
C) increase; women are getting married and having children earlier in life
D) big increase; an increase in gender-based discrimination in labor markets

Question 30

In order to provide its workforce with an alternative to forming a union, the U.S. government passed laws about work conditions, namely,

A) minimum wage and employment insurance.
B) regulation of workers' pensions.
C) paid parental leave for workers.
D) overtime and all of the above.

Question 31

What Act was passed to allow American workers to opt out of the union in their workplace?

A) Labor Relations Act of 1947
B) Taft-Hartley Act of 1947
C) National Labor-Management Relations Act of 1935
D) National Workers' Rights Act of 1940

Question 32

The U.S. government strongly encouraged unions to be formed in the early 1940s because they held the view that unions would help to

A) co-ordinate the all-out production efforts needed during World War II.
B) develop uniform procedures for forming unions across the country.
C) raise the standard of living of the American people during World War II.
D) end the racial discrimination that was prevalent in American workplaces.

Question 33

The Taft-Hartley Act made the legal climate _______, and union membership levels _______.

A) more encouraging to women seeking to unionize; increased
B) less encouraging to union movements; soon started declining
C) friendlier to blacks seeking to form unions; increased sharply
D) less friendly for firefighters wanting to unionize; stagnated.

Question 34

Which of the following is most likely to have a large union membership that experiences little import competition?

A) telemarketing
B) lawyers in the legal services sector
C) the real estate industry
D) police services

Question 35

Unions can be perceived as being economically harmful when they

A) strike infrequently
B) successfully negotiate higher wages
C) support modernization and new technology
D) none of the above

Question 36

Once the U.S. government opened its domestic markets to international trade, the competition from imported cars, steel, and other products caused demand for similar U.S. goods to

A) continually increase leading to an overall increase in union membership.
B) fall, leading to lower output, fewer workers, and an overall decline in union membership.
C) decline, causing workers to call upon governments to pass indexed wage protection laws.
D) rise, but laws made it difficult for new workers to become union members.

Question 37

The earnings gap in the U.S. labor market between black and white workers _______.

A) was completely eliminated by the end of the 1960s
B) has not diminished at all since 1960
C) has diminished since 1960, but a gap still remains
D) existed in the 1960s but was reversed throughout the 1970s

Question 38

The proportion of workers in a number of the world's high-income economies who belong to unions, when compared to unionized workers in the U.S., is

A) very high.
B) very low.
C) about the same, compared to Canada.
D) high, compared to France and Spain.

Question 39

There is little evidence that countries with high union membership _______
, and also very little evidence that the reduction in U.S. union membership over time has brought _______ for the U.S. economy as a whole.

A) tend to suffer economic damage as a result; broad benefits or costs
B) have economically benefited; economics benefits
C) have broader benefits as a result; economic damage
D) tend to enjoy economic benefits as a result; harmful economic costs

Question 40

Although the earnings gap between men and women in the U.S. labor market _______ in the 1970s, it has _______.

A) did not change much; been declining since 1980
B) did not change much; been on the increase since 1980
C) increased, ; been declining since 1980
D) declined, been increasing since 1980

Question 41

Discriminatory impulses in the labor market can emerge at a number of levels:

A) among managers
B) among workers
C) among customers
D) all of the above

Question 42

Factors that contributed to the current level of the earnings gap in the U.S. labor market between black and white workers include:

A) the combination of changes in law and changes in social attitudes
B) changes in production techniques made white workers unproductive
C) a large decline in the average education levels for white workers
D) a vast increase in the number of well-educated black workers and a

Question 43

Briefly explain who discrimination occurs in the U.S. labor market.

Question 44

Describe the public policies that can be used in the United States to reduce earnings gaps in its labor market.

Question 45

Of all the available policies to reduce discrimination by race and gender, the most costly is likely to be:

A) affirmative action outreach
B) affirmative action goals and quotas
C) laws prohibiting discrimination
D) improved educational opportunities

Question 46

Briefly describe the function of a labor union.

Question 47

Briefly explain whether there are overall gains to the U.S. economy from immigration.

Question 48

The earnings gap in the U.S. labor market between black and white workers _______ in the 1960s and 1970s, but, since 1980, the gap _______.

A) rose substantially; has not changed much
B) fell substantially; is pretty well unchanged
C) rose substantially, has declined substantially
D) fell substantially, has substantially increased

Question 49

Briefly compare the wage rates and productivity levels of unionized workers and nonunionized workers in the United States.

Question 50

Briefly discuss the wage gap experienced by women and black workers in the U.S. labor market and note any controversy relating to the extent to which certain factors might explain these circumstances.

Question 51

If U.S. immigration consists of mainly low-skilled workers, then an increase in immigration _______
The wages of low-skilled workers.

A) will increase
B) will reduce
C) may increase or reduce
D) will not affect

Question 52

Measured in absolute numbers, the level of immigration during the 1990s into the United States was _______ compared with the levels of previous decades. When considered as a percentage of the population at the time, the level of immigration into the United States during the 1990s was _______ than the levels experienced during the earlier decades of the twentieth century.

A) lower, higher
B) lower, lower
C) higher, lower
D) higher, higher

Question 53

Contrast recent level of U.S. immigration as measured in absolute numbers and as measured as a share of the population.

Question 54

List four factors that likely contributed to the number of workers in the U.S. labor market belonging to unions declining so dramatically since the early 1950s.

Question 55

Briefly explain how the free market affects discrimination in the U.S. labor market and identify factors that counter these affects.

Question 56

The costs that immigrants impose on governments arise mainly in terms of _______, which are primarily the responsibilities of the _______ government(s).

A) administration, state and local
B) administration, federal
C) public schools and healthcare, state and local
D) public schools and healthcare, federal

Question 57

Of the many available policies to reduce discrimination by race and gender in the U.S. labor market, the most controversial is likely to be

A) laws prohibiting discrimination
B) affirmative action goals and quotas
C) increased access to child care
D) improved educational opportunities

Question 58

Any government policy that provides _______ and _______ deserves to be looked at twice, or even three times.

A) gains to those with higher incomes; imposes costs on those with lower incomes
B) gains to those with lower incomes; imposes costs on those with higher incomes
C) public schooling; welfare benefits
D) local tax revenue; state tax revenue

Question 59

If immigration consists of mainly high-skilled workers, then a(n) _______ in immigration will _______
The wages of high-skilled workers.

A) increase, increase
B) increase, not affect
C) decrease, decrease
D) decrease, increase

Question 60

Briefly explain the advantage employers have over the single employee.