chapter 18 - workers Flashcards
definition of:
wage factors
refer to financial rewards that workers receive in return for their labour services
methods of payment
wages salary bonus commission piece rate profit-related pay share options fringe benefits (pensions, health insurance, company car)
list the non-wage factors that affect an individual’s choice of occupation
- level of challenge
- length of training
- career prospect
- level of danger involved
- level of education required
- level of experience required
- recognition in job
- personal satisfaction gained from job
wage determined by what?
demand for labour
supply for labour
definition of:
demand for labour
num of workers that firms are willing and able to hire at given wage rate
definition of:
derived demand
labour is not demanded for itself but for the goods and services it used to produce
demand for labour curve
downward sloping curve
wages rate per hour decreases, num of workers demanded increases; firms are more willing and able to hire more workers at a lower wage rate
factors affecting demand for labour
- productivity of labour
- level of total demand in economy
- cost of labour
definition of:
supply of labour
refers to everyone in the economy who is of working age and is both willing and able to work at different wage rate
supply of labour curve
-upward sloping supply curve
wage rate per hour increases, num of workers supplied increases; if wage rate increases, num of workers increases as they’re attracted by higher wages
-backward-bending supply labour curve
wages rate rise to a high enough point to allow people to work less and enjoy more leisure hours
definition of:
labour force participation rate
percentage of working population that is working , rather than unemployed
labour force participate rate influenced by?
num of women in workforce
retirement age
num of full time and part time workers in labour force
age distribution of workforce
factors of supply of labour
- labour force participation rate
- availability and level of welfare benefits
- changing social attitudes (more women enforcing workforce)
- geographical mobility
- occupational mobility
equilibrium wage rate
determined when wage rate workers are willing to work for equals the wage rate firms are prepared to pay for; demand for labour equals supply for labour
relative bargaining power
- trade union
- level of education
- age and experience
definition of:
minimum wage
lowest legal amount any firm can pay its workers and is set by gov
min wage
when min wage is set, quantity of labour supplied increases from x to x as they’re willing and prepared to work for higher wage rate. however, quantity of labour demanded decreases from x to x as firms are less able or willing to pay as ,any workers at higher wage rate
advantages of min wage?
- incentive for people to work
- receive fair wages and not exploited by employers
- low income earners have more money to spend
disadvantages of min wage?
- workers who earn high wages may request for higher wage rate to maintain wage differential between them and those earn low wages
- firms can’t pay wages bill, this reduces demand for labour hence unemployment may increase
reasons for differences in earnings
- skilled and unskilled workers
- male and female workers
- primary, secondary and tertiary workers
- private and public sectors workers
advantages of division of labour and specialisation?
- workers become expert in field, productivity and efficiency increases
- quality of product increases
- workers become skilful and earning potential increases
disadvantages of division of labour and specialisation?
work becomes repetitive and boring
workers become alienated
production process overspecialised; too dependant on an individual worker
workers become deskilled in other areas; lack of flexibility
