After a recent uptick in the amount of union activity in the store, the corporate office has decided to institute Employee Appreciation Day. Jonah is quick to point out that this particular day always seems to occur whenever they are trying to get people to sign union card. He advocates for the union instead and mentions that joining a union may provide more long-term benefits, but Amy and Dina work to convince the employees that a union is unnecessary.
One way firms respond to increased union efforts is through managerial opposition. Because it’s illegal to fire workers who try to unionize, firms may use alternative tactics to discourage the formation of a union. An employee has been talking about forming a union and the district manager lets Amy know that the corporate office is considering shutting down stores, and a unionized workforce would make it more likely their store could be shut down. Amy, Dina, and Jonah meet in a backroom to discuss ways to stop the unionization from proceeding.
A lot of the employees walked out while on their shift in the hopes of getting Glenn his job back. The regional manager has arrived and is working with Jonah and Amy to see how they can get the employees back to work. Initially, Amy and Jonah ask only for Glenn to have is job back, but they must sign a letter saying that they apologize for walking out. While it seems like a small request, they decide that the employees really deserve more. Part of the goal of unionization is to turn a competitive labor market into a monopoly provider of labor. Through collective bargaining, Amy and Jonah demand more for their group.
The lights are off in the store, but Dina and Glenn are searching for the manual override code to get power back online. While searching, Glenn goes through a series of older memos from the corporate office about how to keep union activity minimized. While stores cannot legally stop employees from unionizing, they have an incentive to keep unionization efforts at a minimum to keep labor costs low. The managerial opposition hypothesis is one explanation for low unionization in the US and primarily focuses on firms taking a proactive role in discouraging unionization.
Tony joins his colleagues for lunch at a local pub to discuss potential leads for their newspaper, but he’s disturbed by a gentleman loudly munching on chips behind him. The man appears to be ignorant of the external costs he’s imposing on those around him and is focused on only his own satisfaction.
When people are unaware of the external costs they are imposing on others, they tend to overconsume, literally. Since there aren’t clear property rights, it’s not clear who should make the determination of appropriate volume. Tony could pay the man to stop eating his chips, but Tony may argue that the man should have to pay for the right to eat his chips so loudly. It’s harder to reach a solution without clearly defined property rights.
In this clip, the main character, played by Ricky Garvais, is taking his nephew out to lunch. They decide to both order the fish sticks meal from the kids’ menu. When Ricky attempts to order this meal, the waitress informs him it is only for children. Although the café is practicing a common form of price discrimination, Ricky’s character is confused and argues he should be able to order the meal and pay a smaller price for a smaller portion. The server argues this is not true, and that the meal is made cheaper for children. The character claims his nephew is hungry and wants to eat two meals… much to the waitress’s chagrin.
This clip is an excellent display of price discrimination, the necessary condition of being able to segment the consumer base (by age- with visual confirmation), and a conversation/confusion around if different prices truly reflect different marginal costs of production.
Thanks to Sheena Murray for the clip submission and summary!
The gang tries to catch a leprechaun for St. Patrick’s Day so that they can get his three wishes. In their quest, Beast Boy uses one of his wishes to become a leprechaun and beings to “live the leprechaun life” which includes a lust gold. Beast boy sells all of his friend’s stuff in exchange for gold. He then announces that his goal is to get the government back on the gold standard and attempt to fix the exchange rate. They go on to explain the rationale behind the gold standard and Nixon’s authorization to end the gold standard.
Thanks to “Mike on Twitter” for posting about the clip!
The Roses are trying to buy a last-minute Christmas tree, but they’ve come to realize their options are limited. The shop owner knows demand has recently been higher because there aren’t a lot of trees available in the store. Raymond finds that the prices are higher than he was expecting and decides to leave.
The shop owner takes a few creative approaches to selling trees, including bundling air fresheners with purchase and offering a discount if people buy two trees. Price discrimination is a popular tool to increase output for a firm and sell products to people across the demand curve.
Thanks to James Tierney for the submission:
Colbert interviews Thomas Piketty regarding his book, Capital. Colbert challenges the notion that income inequality is a concern, but Picketty argues that growth is important. Picketty emphasizes the importance of economic mobility from a growth standpoint. This interview would serve as a good introduction to the topic in a principles course or a quick review of topics for an intermediate course.
John Oliver looks at the wealth gap in the United States following the announcement by President Obama that income inequality was “the defining challenge of our time.” Critics immediately accused the President of class warfare. Oliver discusses popular reasons for growing inequality but also highlights some of the current policies that contribute to its growth. An interesting extension of his coverage on the estate tax is a framing argument that by simply telling people the threshold required to pay those taxes can cause people to switch their support for the tax.