Karthikeyan

1. Factors Affecting Choice of Occupation

A. Wage Factors (Financial Rewards)

These are monetary benefits received for work.

• Wages

  • Paid hourly/daily/weekly

  • Example: Shop worker paid per hour

• Salary

  • Fixed monthly payment

  • Example: Teachers, nurses

• Piece Rate

  • Paid per item produced

  • Example: Factory worker per garment

• Commission

  • Percentage of sales

  • Example: Real estate agents

• Bonus

  • Extra payment based on performance

  • Example: Bank manager bonus

• Profit-related Pay

  • Share of company profits

• Share Options

  • Workers get company shares

• Fringe Benefits (Perks)

  • Extra benefits with value

  • Examples:

    • Company car

    • Health insurance

    • Free education

B. Non-Wage Factors (Non-Monetary)

These affect job satisfaction and long-term happiness.

• Level of challenge (interesting vs boring)

• Career growth opportunities

• Risk/danger in the job

• Length of training required

• Education needed

• Recognition and respect

• Personal satisfaction

• Experience required

2. Wage Determination

Wages are decided by Demand and Supply of Labour.

A. Demand for Labour

• Number of workers firms want to hire

• Derived demand → depends on demand for goods/services

Influencing Factors:

• Economic growth (boom = more jobs)

• Productivity of workers

• Cost of labour vs machines

B. Supply of Labour

• People willing and able to work

Influencing Factors:

• Wage levels (higher wages → more workers)

• Education & skills

• Social attitudes

• Welfare benefits

C. Backward-Bending Supply Curve

• At low wages → people work more when wages rise

• At high wages → people work less (prefer leisure)

3. Labour Market Structure Factors

A. Labour Force Participation Rate

• % of working-age people employed

Influenced by:

• Women in workforce

• Retirement age

• Part-time/full-time workers

B. Geographical Mobility

• Ability to move for jobs

Barriers:

• Family commitments

• High cost of living

C. Occupational Mobility

• Ability to switch jobs

Depends on:

• Skills

• Training time

• Qualifications

4. Equilibrium Wage Rate

• Where Demand = Supply

• Determines:

  • Wage level (We)

  • Number of workers employed (Ne)

5. Relative Bargaining Power

Factors affecting ability to negotiate wages:

• Trade unions

• Experience

• Age

• Education level

6. Government Policy: Minimum Wage

What is it?

• Legal lowest wage employers must pay

Advantages

• Prevents worker exploitation

• Encourages people to work

• Increases spending in economy

Disadvantages

• Can increase unemployment

• Raises business costs

• Workers may demand higher wages