Chapter 18 Workers
Chapter 18 Workers
Chapter 18 Workers
R 18
WORKERS
Learning objectives |
By the end of this chapter you will be able to:
• Analyse the wage and non-wage factors that influence an
individual’s choice of occupation.
• Analyse how wages are determined.
• Discuss the influences on wage determination.
• Draw demand and supply diagrams to analyse labour markets.
• Discuss the reasons for differences in earnings.
• Discuss the advantages and disadvantages of division of
labour/specialisation for workers, firms and the economy.
Introduction |
What career would you like to follow? What influences your choice? One
factor, although it is unlikely to be the only one, is the wages you might
expect. Why do you think some careers get paid more than others? Do you 2
Time wages
Job satisfaction
Type of work
Working conditions
Commission
Working hours
Piece rate wages
Holidays
Pensions
Bonuses
Fringe benefits
Job security
Overtime pay
Career prospectus
Size of firms
Location
18.1 Factors that influence an individual’s
choice of occupation
Wage factors
Wages (time rate / piece rate)
Overtime pay
Bonuses
Commission
Non-wage factors
Job satisfaction Type of work
Working conditions Working hours
Holidays Pensions
Fringe benefits Job security
Career prospectus Size of firms
Location 4
18.1 Factors that influence an individual’s
choice of occupation
• Limiting factors
• Qualifications
• Skills
• Experience
• Location
• Occupationally and
Geographically
mobile workers.
5
Demand and supply
High demand / lower demand.
More supply / less supply.
Cleaners?
Unskilled or skilled? (Amount & quality)
Dangerous jobs? Steeplejacks
Agriculture vs Manufacturing?
Public vs private?
18.2 Wage determination and the reasons for differences in earnings
Public opinion
Considers long periods of
study and training.
Doctors / nurses /
engineers.
League table of wage rates
Pressure government.
Discrimination
Government policies Employment, wage rate,
Influence directly (public) and indirectly trainings, promotions.
(private). Discriminations are
Policies: illegal.
Economic growth - increases demand. Eg: Female workers
National Minimum Wage. Women tend get low
Relative bargaining paid (qualification, low-
More workers in trade union. paid occupations, trade
7
Changes in Demand and supply What can cause demand for labour to
What if higher demand for increase?
labour? Increased demand for the product.
Wage rates, bonuses & A rise in labour productivity.
overtime rate. A rise in the price of capital.
Wage rate
S
Demand for pilots are increasing in
W1 recent years. More people are
W travelling.
Wages of agricultural workers have
D D1 been falling relative to the wages of
Q Q1 Quantity of other workers. Partly because it has
labour become easier to replace it with
capital.
8
18.3 Why earnings of occupations change over time
Changes in Demand and supply Factors that can cause fall in supply
What change in supply would of workers:
increase wage rates, bonuses & A fall in the labour force.
overtime rates? A rise in qualifications or length of
training required.
Wage rate S1 A reduction in non-wage benefits of
S a job.
A rise in the wage or non-wage
W1
W
benefits in other jobs.
D
Q1 Q Quantity of
labour
9
18.3 Why earnings of occupations change over time
Judges
Surgeons
18.3 Why earnings of occupations change over time
Changes in public opinion
Overtime, how occupations and those who
undertake them are viewed can change
Eg: Journalists
Pay and job opportunities for women in Saudi
Arabia.
W1
W W1 S
W D1
D
D D1
Q Q1 Quantity of Q Q1 Quantity of
labour labour
(a) Inelastic demand and supply (b) Elastic demand and supply
labour is usually more elastic in the The time period: Over time, supply
long run. tends to be elastic.
18.5 Specialisation and division of labour.