ECON 200 Lecture Notes - Lecture 34: Absenteeism
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ECON 200 Full Course Notes
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Worse off: unemployed (outsiders) may stay unemployed take jobs in firms that are not unionized. Union workers earn 10-20% more than similar workers who do not belong to unions. Above-equilibrium wages paid by firms to increase worker productivity through worker health. Better paid workers eat a more nutritious diet, healthier and more productive. Reduces worker turnover fewer workers quit their jobs. Worker quality attracts a better pool of workers (workers with high reservation wages) Worker effort gives workers an incentive to put forward their best effort. Henry ford, founder of ford motor company1914, ford: the workday which was twice the going wage it caused long lines of job seekers number of workers willing to work > number of workers ford needed. Ford"s high-wage policy: efficiency wage, profitable for the firm. Production costs were lower despite higher wages, turnover fell absenteeism fell, high worker effort; productivity rose,
