Melissa has a Masters in Education and a PhD in Educational Psychology. She has worked as an instructional designer at UVA SOM.
The Labor Market
The labor market in the U.S. has made a lot of progress since the 1900s. We no longer have child labor or dangerous working environments, and there are higher wages and more benefits offered. There are, however, still inequalities and issues with today's labor market.
The labor market in the United States can be divided into two segments - the primary and the secondary. Both of these markets offer a set of social mechanisms through which labor is bought and sold, yet there are definite distinctions between the two.
This lesson will differentiate between the primary and secondary labor markets. We will also discuss the role of labor unions in the United States and explore the characteristics of professions.
Labor Market Types
The primary labor market is comprised of highly skilled or well-educated members. Most of the individuals in the primary labor market belong to unions (which we will discuss later in this lesson) or professional societies and organizations.
The individuals in this labor market are employed in large corporations, have relatively high job security, high pay, and generous benefits. Members of this labor market are part of a profession, which generally requires some specialized or higher degree of education and training. A profession is different than a job, and we will discuss these differences a little later in the lesson also.
The secondary labor market tends to include unskilled laborers or those with less education. These members work in smaller firms where employment is less stable, pay is low, and benefits are inadequate.
Primary Market Barriers
Unfortunately, there is a cyclical nature of the labor market that reinforces the divide between primary and secondary markets. There are several barriers to entry into the primary labor market.
1. There are fewer entry-level positions in the primary labor market due to corporate downsizing and plant shutdowns. It is difficult to break into a primary labor market without already possessing skills and education.
2. Workers in the secondary labor market are less connected to networks that could contribute to them finding a job in the primary market. According to the U.S. Bureau of Labor Statistics, 70% of all jobs are found through informal networks. If individuals in the secondary labor market do not have connections, it's unlikely they will break into the primary labor market.
3. Workers in the secondary labor market usually lack the education, training, and/or certifications they need for jobs in the primary labor market, but because of their low pay and lack of free time, education and further training are hard to acquire.
A labor union, as mentioned above, is an organization of employees in a particular field or industry that chooses to join together to achieve common goals. Unions can provide a crucial function in the labor market.
- Help employees work toward improving working conditions, wages and benefits, and hours
- Resolve disagreements between the employer and employee
The premise behind a union is that by working as a collective group, the individual employee gains strength and has a louder voice about what he or she cares about. Unions negotiate contracts and help the employer adapt to the ever-changing workforce.
There are some drawbacks to being involved in a union. Some employees indicate that their relationship with their supervisor or company suffers and there is a lack of trust between the two parties.
Examples of the largest unions in the U.S. include: the Service Employees International Union (with ~1.5 million members), the United Food and Commercial Workers (with 1.3 million members), and the American Federation of Teachers (with ~800 thousand members).
We have spent most of our time in this lesson discussing the labor market. Now we will turn our attention to what it means to be part of a profession.
The term profession means an occupation that generally requires some specialized or higher degree of education and training. A profession is more of a calling than a job, and the term implies that if someone chooses a particular profession, they must have a deep passion for the knowledge of that particular area and a range of skills in that area.
The labor market, a set of social mechanisms through which labor is bought and sold, can be divided into two types - primary and secondary.
- The primary labor market consists of highly skilled or well-educated individuals. Those in this labor market have relatively high paying jobs, high job security, and good benefits. The primary labor market is difficult to break into because there are few entry-level positions.
- Individuals in the secondary labor market tend to be unskilled, have less education, and therefore receive lower wages and benefits. They may have a difficult time breaking into the primary market because they have smaller professional networks, and they typically lack funding and the time needed to further their education and training.
Labor unions can help employees, especially those in the secondary market, improve their working conditions, wages, and benefits by acting as a collective voice. Unions assist in negotiations and resolutions of disagreements.
In the labor market, there are professions. The status of being a member of a profession means that the person has some specialized or higher degree of education and training.
After you have finished with this lesson, you'll be able to:
- Distinguish between primary and secondary labor markets
- Explain the functions of labor unions as well as the pros and cons
- Identify some of the largest labor unions in the U.S.
- Describe what it means to be in a profession
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