Chapter 18 Workers Flashcards
Name wage factors (4)
wages
overtime pay
bonuses
commision
Define earnings
total pay received by worker
Define wage rate
wage worker receives per unit of output/time
Define a time rate system
wages based on number of hours worked
Define a piece rate system
wages based on amount workers produce
Define overtime pay
pay to workers that work more than usual working week
Benefits of overtime pay (3)
employers can respond to higher demand without hiring new workers
employees can earn more
Disadvantages of overtime pay (3)
workers may become tired
productivity may decrease
product quality may decrease
Define a bonus
extra payment
Purpose of bonuses (2)
reward workers who contribute to higher profits
provide incentive for workers
Disadvantages of bonuses
can cause resentment for not receiving bonus
Define commision
workers receive proportion of sales value they make
Name non-wage factors (10)
Job satisfaction
Type of work
Working conditions
Holidays
Pensions
Fringe Benefits
Job security
Career prospects
Size of firm
Location
Define fringe benefits
benefits provided to workers by employers
Examples of fringe benefits (3)
meals
healthcare
leisure facilities
Define job security
how easily workers are likely to become obsolete
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Q
Unskilled workers are paid more than skilled workers
True or False?
False
Factors affecting labour Demand (5)
Whether labour can be easily replaced with capital
Demand for the service a firm provides
Trends/events
productivity of workers
Cost of capital
Determinants of wages (5)
demand and supply
Bargaining power of workers
Government Policies
Public opinion
Discrimination
Name government policies/actions that can change wage rates (5)
National Minimum Wage
improved education
immigration policies
anti-discrimination laws
technology
Causes of changes in the supply of labour (4)
change in labour force
change in qualifications to do job
change in non-wage benefits of job
change in (non)wage benefits of other jobs
Causes of changes in the demand of labour
Changed demand for the product (derived demand)
Change in labour productivity
Change in the price of capital
Why may wages change over time? (6)
Change in demand/supply of labour
Changes in stages of production
Changes in bargaining power
Changes in government policy
Changes in public opinion
Changes in individuals earnings over time
Primary sector workers are generally paid less than secondary and tertiary sector workers
True or False?
True
Why are workers paid less in the primary sector
workers have less skills/qualifications
Define the primary sector (2)
extraction/collection of raw materials
first stage of production
Examples of primary sector industries (3)
agriculture
mining
fishing
Define the secondary sector
processing of raw materials into finished/semi-finished goods
Name limiting factors (6)
physical strength
geographical/occupational mobility
level of education
social capital
Age
Discrimination
Define Elasticity of demand of labour
a measure of the responsiveness of demand for labour to a change in the wage rate
Define elasticity of supply of labour
a measure of the responsiveness of the supply of labour to a change in the wage rate.
Determinants of elasticity of demand for labour (4)
The proportion of labour costs in total costs
the ease with which labour can be substituted by capital
the elasticity of demand for the product produced
The time period
explain how the proportion of labour costs in total costs is a determinant of elasticity of demand for labour
If labour cost form large proportion of total cost, change in wage have significant impact on costs so demand = elastic
explain how the ease which labour can be substituted by capital is a determinant of elasticity of demand for labour
If workers easily replaceable by capital —> demand elastic to change in wage rate
explain how the elasticity of demand for the product produced is a determinant of elasticity of demand for labour
rise in wage —> increased cost of production —-> increase price —-> demand contract and demand for labour fall
more elastic the product, the greater change in demand for labour hence demand for labour elastic
explain how the time period is determinant of elasticity of demand for labour
inelastic in short-run because of contracts
elastic in long-run because if wage stay high for long time, firm don’t renew contracts as labour is a cost of production
Determinants of elasticity of supply for labour (6)
The qualificationand skills required
legnth of training period
The level of employment
The mobility of lavour
The degree of vocation
The time period
Explain how the qualification and skills and a long training period required is a determinant of elasticity of supply for labour
High qualification and skill required and long training period —> not many people can join the profession —-> labour supply inelastic (especially in short-run)
Explain how the level of employment is a determinant of elasticity supply for labour
If many workers already employed, supply of labour to any occupation is likely inelastic. Employer have to raise wage significantly to attract workers already in other jobs to switch jobs
Explain how the mobility of labour is determinant of elasticity of supply for labour
if geographically or occupationally mobile, workers more sensitive to wage chhanges as they can easily switch from one job too another. if labour is mobile, supply more elastic
Explain how the degree of vocation is a determinant of elasticity of supply for labour
the stronger attachment of workers to their jobs, more ineslastic the supply incase of a decrease in wage rate
Explain how the time period is a determinant of elasticity of supply for labour
inelastic in short-run because of contracts or haven’t noticed the changes in wage rate
Become elastic over time
Define specialisation
the concetration on particular products or tasks
Define Division of Labour
workers specialising in particular tasks
Advantage of specialisation and division of labour for the firm (2)
lower unit cost per unit produced
(doing same task multiple times, makes workers very good at that task (output per worker increases))
training process is simpler and often easier to manage (employees learn from someone already in the occupation)
Advantages of specialisation and divison of labour for the worker (3)
workers can acquire skills needed for the job faster
If worker skills are in high demand, they can earn high wages
Specialising in less demanding jobs can reduce pressure on workers
Disadvantages of specialisation and divison of labour for the worker (2)
Trouble switching to another job if demand for their service falls
can become bored and not make full use of their talents
disadvantage of specialisation and division of labour for the firm (2)
Employee motivation decreases, resulting in a decrease in productivity and output. (higher unit costs)
difficult to cover up absent people
Workers might get bored
Factors affecting labour supply (6)
level of education/qualifications required
length of training period
degree of risk/working conditions
size of the labour force
non-wage factors affecting how appealing a job is
wage an dnon-wages factors affecting how appealing OTHER occupations are
