Define the term wages.
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Define the term wages.
Wages are an agreed amount of money per hour paid to the worker. The total amount due is calculated directly from the number of hours worked.
What is a salary?
A salary is an agreed-upon annual payment to an employee, divided into monthly instalments.
What does the term commission mean?
A commission is a payment to the employee, usually representing a specified percentage of the sale price of an item. It is often used to motivate sales workers.
Define the term bonus.
A bonus is money paid in addition to a salary, usually as an annual payment for high profits or exceptional performance.
What is piece rate pay?
Piece rate pay is a fixed amount paid to the employee for each completed item produced; e.g. garment workers get paid for each t-shirt produced.
What is performance related pay (PRP)?
Performance related pay is a payment based on how well the worker performs, with different compensation paid to different workers for the same job based on their outcomes.
Define the term share options.
Share options represent a payment to the employee in the form of issuing shares in the company the employee works for. This is in addition to a salary.
What are fringe benefits?
Fringe benefits are often provided in addition to the normal salary, like childcare, free lunches, gym memberships, and company cars.
True or False?
The length of an employment contract can determine how secure a job is.
True.
The length of an employment contract can determine how secure a job is. Jobs with short contracts are less secure.
What does job satisfaction depend on?
Job satisfaction is often dependent on finding fulfilment in a job role and enjoying the work.
Define the term career prospects.
Career prospects represent the opportunities for promotion and development within a specified career. Jobs with a defined pathway for promotion are often more desirable.
What is meant by the phrase labour is a derived demand?
The demand for labour is a derived demand, meaning it depends on the demand for goods and services.
If the selling price of a product increases, what happens to the demand for labour?
If the selling price increases, the firm will be incentivised to supply more products, so the firm's demand for labour will increase.
How does labour productivity affect the demand for labour?
If the productivity of labour increases (possibly through training), this will lower average costs and firms will likely demand more labour.
What impact does the training period for an occupation have on the supply of labour?
Long training periods (and their costs) act as a barrier to entry and exclude many households from offering labour in certain markets.
True or False?
Trade union power can increase the supply of labour in certain industries as workers consider the benefits of belonging to the union, e.g. higher wages
True.
Trade union power can increase the supply of labour in certain industries as workers consider the benefits of belonging to the union e.g. higher wages.
What is the impact of higher wages in other occupations on labour supply?
Comparative wage rates in substitute labour markets strongly influence the supply of labour in certain markets. If nurses are paid a low wage and teachers are paid a high wage, there will be a shortage of nurses as more workers choose to go into teaching.
How does migration policy affect labour supply?
Policies that increase the net migration rate increase the supply of labour to certain industries.
True or False?
Higher welfare benefits decrease labour supply among low-skilled workers.
True.
Higher welfare benefits decrease labour supply among low-skilled workers.
What is equilibrium in the labour market?
Labour market equilibrium occurs when the demand for labour is equal to the supply of labour.
What is meant by the phrase unskilled labour is price elastic in supply?
Unskilled labour is price elastic in supply, which means there is a rapid response in the supply of labour to an increase in national minimum wages (NMW).
Define the term bargaining power.
Bargaining power refers to the ability of workers to negotiate wage increases with employers. It is influenced by factors like union membership, age, education, and labour supply conditions.
What is a gender pay difference?
A gender pay difference is a form of discrimination where a woman is paid less than a man when doing the same job.
Why are primary sector workers often paid low wages?
Primary sector workers are often paid low wages due to the unskilled nature of the job and low profits gained from extracting raw materials.
How do tertiary sector wages compare to those in other sectors?
Tertiary sector workers are usually paid the highest wages due to requiring highly valued skills and providing complex, expensive products and services.
Define the term public sector organisation.
Public sector organisations are those owned and controlled by the government.
What is a private sector organisation?
Private sector organisations are those owned and controlled by private individuals and firms.
True or False?
Public sector wages have no maximum ceiling.
False.
Public sector wages will reach a maximum ceiling that is often below what the private sector may offer.
How do wages for skilled workers compare to those for unskilled workers?
Wages for skilled workers are often higher in recognition of the time and money required to gain specific skillsets.
What impacts do trade unions have on wages?
Trade union members frequently enjoy higher wages than non-union members.
How does age impact the bargaining power of workers?
Young, inexperienced workers have less bargaining power than older, more experienced workers.
What is a national minimum wage?
A national minimum wage (NMW) is a legally imposed wage level that employers must pay their workers, set above the market rate.
True or False?
A minimum wage always increases unemployment.
False.
Studies show a minimum wage does not automatically increase unemployment, as higher wages increase consumption and therefore, the demand for labour.
Define the term division of labour.
The division of labour occurs when one task is divided up into several component tasks.
What is specialisation?
Specialisation occurs when workers focus on one (or a few) of the component tasks in the production process.
True or False?
Specialisation increases worker output.
True.
Specialisation results in higher output per worker and increases productivity.
How does specialisation occur at a business level?
At a business level, one firm may specialise in manufacturing a specific component, e.g. drill bits for concrete work
What does the term regional specialisation mean?
Regional specialisation occurs when a geographical area specialises in a particular industry, e.g. firms in Silicon Valley specialise in the tech industry.
State two advantages of specialisation for workers.
Two advantages of specialisation for workers are:
Workers can acquire the single skill required relatively quickly
Workers can gain recognition and status for their skill
State one disadvantage of specialisation for workers.
One disadvantage of specialisation for workers could be:
The work can be repetitive and boring
There is limited opportunity to gain additional skills
True or False?
Specialisation always benefits the economy.
False.
Specialisation may create over-dependency on other countries' resources and lead to resource depletion.
Define the term structural unemployment.
Structural unemployment occurs when entire industries close and the workers in those industries are made redundant as their skills are no longer required.
State two advantages of global specialisation.
Two advantages of global specialisation are:
Increased exports result in economic growth
A better standard of living for the nation