factors influencing the supply of labour Flashcards
what are some monetary factors that influence occupational choices ?
wages - an agreed amount of money/hour and is calculated directly from the number of hours worked
salary - Employment contracts often state the agreed-upon annual salary the employee will receive
This is then divided by 12 and paid monthly (in the USA it is divided by 24 and paid every 2 weeks)
The hours worked monthly may vary but the pay received is always the same
Commision - This can motivate employees to maximise sales
Bonus - Money paid in addition to a salary and is usually single annual payment
Often paid when the company earns high levels of profits, or as a reward for exceptional worker performance
Price rate pay - A fixed amount paid to the employee for each completed item produced e.g. 25 Rupees paid to workers in India for each pair of socks they produce
Performance related pay (PRP) - Payment based on how well the worker performs
Workers doing exactly the same job may receive different compensation based on different outcomes they achieve
Share options- Payment through the issuing of shares in the company the employee works for
This is usually in addition to a monthly salary
The monetary value of the shares provided to the employee can be calculated on any given day as: number of shares x share price
Fringe benefits- Benefits provided in addition to the normal salary
They can be significant in influencing occupational choices
Includes benefits such as such as childcare, free lunches, gym membership, company car
what are non monetary considerations that influence the supply of labour?
length of training or level of education required
Job security
Job satisfaction
career prospects
level of challenge
status
work/life balance
what does the supply curve for labour show ?
hows the relationship between the wage rate and number of workers willing to work in an occupation
The SL shows that more labour supplied as the wage rate increases, which results in an upward sloping supply curve
what are the factors that shift the supply curve for labour?
training period -Long training periods (and their costs) act as a barrier to entry and exclude many households from offering labour in certain markets
wages in other occupations - Comparative wage rates in substitute labour markets strongly influence the supply of labour
changed in migration policy
income tax levels - Comparative wage rates in substitute labour markets strongly influence the supply of labour
working conditions -The working conditions & non-wage benefits can act as strong incentive in certain industries
trade union power - Trade unions can increase the supply of labour to certain industries as workers consider the benefits of belonging to the union e.g higher wages & a safer working environment
