3.3 Workers Flashcards
What wage related factors affect the occupational choices a worker makes?
- Wages (money per hour)
- Salary (annual salary divided by 12 and paid monthly)
- Commission (percentage of each transaction)
- Bonus (addition to salary in special circumstances, e.g high profits or good performance)
- Performance related pay (based on how well the worker performs)
- Share options (issuing of company shares, often in addition to salary)
- Fringe benefits (in addition to salary, e.g free childcare, car)
What non-wage related factors affect the occupational choices a worker makes?
- Level of education/training required
- Job security
- Job satisfaction
- Career prospects
- Level of challenge
- Social status
What factors influence the demand for labour?
- Demand for product being produced (increases –> supply must increase –> labour increases)
- Demand for final product (demand for labour is derived, booming economy means high demand)
- The ability to substitute labour for capital (high –> demand falls)
- Productivity of labour
What factors influence the supply of labour?
- Long training periods (costly - excludes many households)
- Comparative wage rates in other sectors
- Changes in migration policy
- Income tax levels (increases –> labour decreases)
- Working conditions
- Trade union power
- Level of welfare benefits
- Social trends
What effects the PED and PES of labour?
The skill of labour:
- Highly skilled markets are inelastic in both supply and demand
- Unskilled markets are elastic in both supply and demand
What factors influence the bargaining power of individual workers?
- Membership of a trade union
- Age/experience
- Level of education
- Current supply conditions
What reasons are there for differences in wages between workers?
- Gender
- Primary/secondary/tertiary sector
- Private/public sector
- Skilled/unskilled
Why are there wage differentials between men and women?
- Gender pay gap (discrimination)
- Men usually work full time while women usually work part time
- Women more likely to accept a job below their skill level
- Women often have an interrupted career journey
Why are there wage differentials between the primary, secondary and tertiary sectors?
- Primary: unskilled, raw materials fetch low profits –> low wages
- Secondary: value added to materials –> wages higher than primary
- Tertiary: highly skilled, add lots of value, products fetch high profits –> high wages
Why are there wage differentials between the private and public sectors?
- Private sectors has highest and lowest wages (primary/tertiary)
- Public: has wage ceiling that may not be present in private sector
- Public sector has job security
- Public sectors wages don’t fall as low (unions, high bargaining power)
Why are there wage differentials between skilled and unskilled workers?
- High supply of unskilled labour, wages pushed down as someone is always willing to work for less
- Skill takes time/money so limited supply
What are the pros and cons of labour division/specialisation for workers?
Pros:
- Acquire single skill easily/quickly
- Gain recognition/statu
Cons:
- Repetitive/boring
- Limited opportunity to gain more skills
- Difficult to find other employment (limited skill base)
What are the pros and cons of labour division/specialisation for firms?
Pros:
- Short time training new workers
- Increased output (sales/profit)
- Higher labour productivity lowers cost/unit, more competitive
Cons:
- Productivity falls from boredom
- Boredom –> high staff turnover
- Firms unable to compete globally go out of business
- Industries close –> structural unemployment
What are the pros and cons of labour division/specialisation for an economy?
Pros:
- Increased exports, economic growth, higher standard of living
- Income from exports, increased imports, greater variety
Cons:
- Over-dependancy on other countries’ resources (conflict)
- Specialisation in own resources, resource depletion
