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labor-wages-unions Terms

Agency Shop

A shop or business that requires employees to pay union dues even though they may not be actual members of the union.

Blue-Collar Workers

Manufacturing and industrial workers, people engaged in craft production, and non-farm laborers.


Union members and their supporters can refuse to buy a product or do business with a company as a way of pressuring managers to meet union demands. Direct boycotts are permitted, but "secondary" boycotts, against third-party firms to pressure them, are not. César Chávez famous grape boycott of the 1960s and 1970s is an example of the technique's effectiveness.

A tactic used by unions and other organizations to pressure businesses. During a boycott people refuse to patronize a business and/or purchase goods produced by an industry.

Civilian Labor Force

As defined by economists, the civilian labor force includes all persons over sixteen able to work and actively seeking work. Full-time students, prisoners, homemakers, and members of the military are not counted in this measurement.

Closed Shop

The requirement that employees join a union before they could be hired. The closed shop was declared illegal by the Taft-Hartley Act, with limited exceptions made for the hiring halls in the construction and maritime trades.

A shop or business that hires only union members. The closed shop is prohibited under the Taft-Hartley Act of 1947.

Craft Union

A type of labor organization that unites only the members of particular trade or craft. The American Federation of Labor, founded in 1886, increased the strength of independent craft unions by uniting them under one organizational umbrella.

An alliance of workers in a particular trade such as carpenters or masons. Also called a trade union.

Davis-Bacon Act

Passed in 1931 this congressional legislation requires that all private agencies and companies receiving federal funds pay the “prevailing wage.” This means that federal contractors must pay the wage paid “for corresponding classes of laborers and mechanics employed on similar projects in the area." (Source) Contractors may not try to underbid competitors for government contracts by paying low wages.

Equilibrium Wage Rate

Where supply and demand meet in the labor market. According to the Market Theory of Wage Determination, wages—or the price of labor—are determined like all prices by supply and demand. The interplay between the supply and demand for labor will shape the wage agreements between employees (supply) and employers (demand). If employers cannot find enough workers to meet their needs, they will keep raising their wage offers until more workers are attracted. If workers are in abundance, wages will fall until the surplus labor decides to go elsewhere in search of jobs. When supply and demand meet, the equilibrium wage rate is established.

Industrial Union

A type of labor organization that unites all workers within a particular industry, regardless of craft or specific job, within one union. The American Railways Union was an industrial union. It united all workers within the railroad industry, such as firemen, brakemen, laborers in railroad car manufacturing plants, and railroad yard employees in the same union.

An alliance of all workers within an industry regardless of their particular craft or skill level. For example, the American Railways Union, founded in 1893, combined fireman and brakemen, engineers and railroad car manufacturing workers within the same labor alliance.


A court order demanding that an individual or group to stop some action. Employers secured injunctions to prevent workers from striking and picketing prior to the passage of legislation protecting these rights during the 1930s.


A lockout occurs when management temporarily closes a plant or lays off all workers because of a labor dispute. Technically, companies can no longer call a lockout in order to prevent union organizing or to avoid collective bargaining.

A tactic used by employers to force workers to negotiate. During a lockout, management refuses to permit workers to enter the plant until management’s terms are accepted.

Market Theory of Wage Determination

According to this classical theory of wages, wages—or the price of labor—are determined like all prices by supply and demand. When workers sell their labor, the price they can charge is influenced by several factors on the supply side (i.e. the number of workers available, the skills of the workers) and several factors on the demand side (i.e. the number of workers needed, the location of the jobs being offered). When supply and demand meet, the equilibrium wage rate is established.

Minimum Wage

The lowest wage that may be paid to most workers under federal and state law. The federal minimum wage was raised to $7.25 in July 2009. States may set higher minimum wages and employers within those states must pay the higher state-mandated rate.

Modified Union Shop

A shop or business that allows current employees to join or not join unions, but requires all new employees to join a union.

National Labor Relations Act

Also called the Wagner Act, this Congressional act passed in 1935 guaranteed workers the right to form unions and bargain collectively.

Norris-LaGuardia Act

Congressional Act passed in 1932 guaranteeing workers the right to peacefully picket and strike.

Open Shop

A workplace without union representation or one with a union where no worker is required to join.

A shop or business that does not make union membership in any way a condition of employment.


A form of protest, often used by striking workers, in which individuals parade in front of the business, often carrying signs expressing dissatisfaction or articulating grievances.


Usually defined as workers in jobs that require undergraduate or graduate college degrees.

Right to Work Laws

Laws existing in some states that prohibit employers from making union membership in any way a condition of employment.

Semi-skilled Worker

Workers who possess some rudimentary training in a craft or industrial production process.

Service Sector

The fastest growing sector of the American economy. It includes workers engaged in transportation, communications, sales, banking, and entertainment. More broadly, the service sector includes all those employed in the production or delivery of a service rather than a good. It excludes farming, construction, mining, and manufacturing.

Skilled Workers

Workers who have mastered a craft.


A work stoppage, usually coordinated by a union, aimed at forcing concessions from management.

Sweetheart Contract

A contract signed between an employer and a company-sponsored union containing terms more favorable to the employer than those sought by the worker-sponsored union.

Taft-Hartley Act

Passed in 1947, this Congressional act prohibited unions from contributing money to political campaigns and outlawed the closed shop. It did, however, allow the union shop, the modified union shop, and the agency shop. The Taft-Hartley Act also permitted states to ignore all of these provisions by passing right to work laws that prohibit employers from making union membership in any way a condition of employment. Right to work laws forbid closed, union, modified union, and agency shops—instead, they permit only open shops.

Theory of Negotiated Wages

According to this theory, wages are determined not just by the market but by the strength of unions in the bargaining process.

Union Shop

A workplace in which all employees must join a designated union within a specific time after being hired. Some see a union shop as an infringement on an individual employee's freedom. Unions feel that it is unfair that a worker should benefit from union efforts without being a member.

A shop or business that requires workers to join a union after they are hired.

Unskilled Worker

Workers who possess no training in a craft or industrial production process.

White-Collar Workers

Clerical and sales personnel, managers and executives, as well as professionals, such as doctors, lawyers, accountants, engineers, and teachers.

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