Choice Of Occupation Flashcards
Why do firms employ people
to increase production
to increase labour force
what is the labour market?
The market for labour in an economy will consist of all those people willing and able to supply themselves for work and all the people and organizations willing and able to employ them
2 main factors affecting an individual’s choice of job
wage factors and non-wage factors
what are wage factors
Forms of payment that a worker can receive
mention the 5 types of non-wage factors
wage, salary, overtime, bonus, commission
explain wage
wages are time-build, paid hourly, daily or weekly so are a variable cost to firms. piece wage based on the quantity of goods you produce. (for non-professionals)
explain salary
based on a fixed annual amount. they are a fixed rate irrespective of the amount of work done. fixed costs (for professionals)
explain overtime
payment for work in excess of the standard, contracted hours, the company will tell you.
explain commission
payment based on the percentage of sales a worker makes.
mention any 5 non-wage factors
job satisfaction, working hours, working conditions, fringe benefits, career prospects, length of holidays, job security, location of the job, pension scheme
explain job satisfaction
will the job stimulate interest and provide a sense of achievement. if a worker feels satisfied and happy in their work, they may work harder and stay on the job longer.
explain working hours
the number of hours required to work is important, but the timing of the shift is very important. some jobs require night shifts or weekend shifts.
explain working conditions
physical demands of the job and the working environment are often important
explain fringe benefits
additional benefits that have a monetary value eg like housing or a company car
explain carer prospects
as there are opportunities for progression within the firm,. or will a person have to change jobs to get promoted?
explain the location of a job
how close in proximity is it to your house
explain pension scheme
they offer a good pension or retirement plan. pension is a regular payment made by the state to people of or above the official retirement age and to some widows and disabled people
explain wage determination
Wages are determined by the interaction of demand and supply of labour.
what is derived demand
this means that labour (any other factor of production) is not demanded itself but for the goods and services it used to produce.
when the price of labour is high what happens to the employees?
they want less employees
the higher the wage what happens?
the lower the rate of employees would be employed
what is labour demand?
Labour demand is the number of workers demanded by firms at a given wage rate.
another name of labour demand
derived demand
what determines the industry demand for labour
the level of demand for a product
the higher the demand for a product what happens?
the more labour producers will demand to increase the supply of the product.
when the wage increases, what happens?
the demand for labour reduces (and vice versa)
what is labour supply
Labour supply is the number of workers available and ready to work in an industry at a given wage rate.
when the wage rate increases what happens
the supply of labour increases, and vice versa.
demand for labour decreases if what?
if the wage rate increases
supply for labour will increase if what
if the wage rate increases
what is the equilibrium rate
it is when demand and supply meet each other are rather the same.
how wage rate determined
by demand and supply of labour. The wage rate in a particular industry is determined by the market forces i.e. demand and supply.
The point at which the demand and supply of labour will intersect will determine the wage rate for that particular industry.
what does increasing wage rate mean
it means increasing work hours, at a point you will need a break or rather reach a breaking point, you will need to reduce your work hours due to personal reasons.
where will movement along the curve move
it will move up or down. (only wage rate is involved)
where will a shift in curve move
left or right. (left is decrease and right is increase. other factors than the wage rate are involved )
factors that can cause a shift in the labour demand curve
a fall in consumer demand
a fall in labour productivity
a decrease in the cost of equipment
a rise in non-wage employment costs
explain a fall in consumer demand
this means they will fire people due to less demand for labour
explain a fall in labour productivity
the more productive labour is the more the demand in labour. good workers= good worker productivity. If Nigeria has good workers, you would want them (high demand for labour) due to each worker’s productivity. id there is a fall in labour productivity, demand falls.
what is productivity
what each worker can do
explain a decrease in the cost of equipment
high demand for labour if machines are expensive to buy
explain a rise in non-wage employment costs
wages are not the only cost to a firm of employing workers. sometimes, employment tax, welfare insurance for each employee etc. will have to be paid by the firm, if these costs increase, the firm will demand less labour. if they increase the costs too expensive so they will demand less labour.
what are the influences on supply of labour
an increase in the population of working age
an increase in the amount and quality of education and training available in relevant skills
the retirement age
the school leaving age
Fringe Benefits
explain an increase in the population of working age
to increase the amount of people working so supply of labour will increase meaning more people will work.
explain an increase in the amount and quality of education and training available in relevant skills
if more institutions are built they will produce more workers meaning more people will graduate
explain retirement age
if they increase the retirement age from 60-70 meaning more people will still get to work, supply will increase
explain school leaving age
if they increase it that will lead to a decrease in people working meaning no people to work
explain fringe benefits
supply of labour will increase
why do earnings change over time: qualifications
Often jobs pay you more the more qualified you become over time. For example, an accountant may have to sit
a series of qualifications whilst doing the job
why do earnings change over time: trainings and skills
Most jobs will require on-the-job training. As you gain more training and become more skilled you will become more valuable to your company and they may
pay you more.
why do earnings change over time: promotion
Each time you get a promotion to a more senior role you are likely to get a pay rise.
why do earnings change over time: Experience – length of service
The more experience you have the more you may be paid (not always). Teachers have a pay scale whereby their salary goes up over the years
Why do different jobs have different wages: Demand factors
Firms producing goods and services which
are high in demand usually pay better remunerations to
their workers because those workers will also be in high
demand.
Why do different jobs have different wages: Supply factors
Industries, where there is a shortage of workers (commonly skilled workers), will usually pay higher remuneration to attract workers.
Why do different jobs have different wages: Unsociable hours
jobs that require night shifts and work at other unsociable hours are paid more.
