.

Housing
18 WORKERS
.

Chapter -
18
 Factors
influencing workers and choice of occupation .

*
Limiting factors
Wage
Non-wage
[monetary or
* qualifications
pecuniary] Enon-monetary
Of
skills
*
non-pecuniary]
* experience

* place of residence

the more mobile

*
geographilly
the workers are
they get a

wider choice of option .

Non-wage factors

1. Job satisfaction
.
2 Job security
.
3 Place of work
.
4 Size of firm
benefits additional benefit that has
5
Fringe > a monetary value
-

.
6 Working Hours ↓,
7 .
Holidays ex :
company car
health insurance
8 .
Career Prospects
.
9 Pention schemes
10 .

Type of work
11
Working conditions
- -

Wage factors

Wage
1

Time based , pay

&
-hourly ike employees
-
daily
-
weekly

↑ variable cost

2
Salary
.

paid irrespective of the work done

monthly

Gutte employees
Fixed cos +S
mus
.
3 Piece-rate
Ex
paid per item produced or sold

1
fixed price

Sin workers

4
. Commission

3 sales
% of value of products and services sold
workers

.
5 Bonus

additional payment
given to employees depending on performance factors .

.
6 Profit related pay
firms
based profit made by the
additional payment to workers on

.
7 Share options

workers raise shares 3 public limited company

8 .
Overtime pay

Earnings I
a total
pay received by a worker

Wage rate
I,
that an employer contracts to pay
a
payment
a worker it is the basic wage received by a worker per unit of
,

time unit of
or
output .
 specialisation and division of labour

↓ >
-
workers
specialising
workers concentrating in
particular
on particular products or products.
tasks adv
die-adv
I
2
high

(productivity ~

uptent
efficienc
-

dis-adv of recruiting
-

motivation
specialists unit cost
in higher
-may result
Auct -work may be repititive
and
an
boring
-
too much dependancy onindividual worker
low cost per unit of workers who have specialists
or a
group
-

-
absence of specialist may cause other workers to find
it difficult.

Wage determination and reasons for difference in

earnings

* workers supply labour services to firms

* firms expect labour to produce .

Wage determination

↓ demand and supply of labour

.
2
bargaining power
relative
3. public opinion
4. Government policies
.
5 Discrimination
 Demand of labour

* no of workers

* firm is willing to hire at a

given wage rate .

supply of labour

* people of
-
different ages
who are
ready to work at different wage
rates.
-

S
Y-axis Y-axis
S
Wage WaqC B

S 13
S
X-axis X= axis
Op Ab

(doctors) (waiters)

Doctor Waiters

Wages High Low

Demand High Low

Supply LOW High

↓ ↓
Why ? Why ?

* *
-
educational -
no educational
qualification qualification
training period is
-
training period is -

shorter .
longer .
 W I
W2

&

#z

N, N2
N, Nz

Increase Increase in demand

I
in in Wage
Increase Decrease
in wage demand Decrease
Increase in in way
Decrease in demand
Decrease
in wage demand

supply curve
Backward bending
and
like work for higher wages
people to

fewer hours.

n S
H
, Hz H2

Determinants of demand

Y
productivity
of labour I total demand in the

( demand in
economy
economy
i cost of
put put
of
labour
↓,
worker over causes
time
↓ ↑ demand for workers)
↓ demand for
determines
labour decrease

↓ ↓
demand of
due-o increase
labour .

in automation

ex : CCTV cameras
replace security
guards.
determinants of supply

availability of
level of welfare benefits

* these benefits are available to the

unemployed

may discourage people

from
taking on work

changing social attitudes

-

* more women the workforce delay having

entering causes them to

families.

↓
this inturn causes a fall in the
birth rate of the
country
.

hence there is an

increase in the ageing

population .

da
this causes an increase in
immigrant population .

Labour force participation rate

% of working population

.
2 computes
ex.

no of women working
S also
official
based
retirement
on
age
age
and

based on
mobility

-geographical
occupational
relocating to a different
changesin jobs part of the country or a cliffe
depends rent part of the world
-

on

length of training
Relative bargaining power

Skill

Education

Experience
Age

Government Policies

National Minimum Wage (NMW)

↓
a basic wage received
by a

worker for an hour's work

fixed by the government

Equilibrium wage rate

D

war
S the wage rate at.
which

V demand of labour =
supply of
labour

I
S D

quancly
--

resources .
of
I
wage at which which
wage at

workers are
firms are willi
work ng to work
-

willing to
Case I

&
MW

equilibrium wage Causes

rate
Definitions
Disposable Income
Income —> After -> Income tax deduction + State Benefits Received

Rate of Interest
• Charge for Borrowing Money
• Payment for Lending Money

Consumption
Expenditure by households -> on Consumer Goods and Income

Mortgage
Loan to buy a house

Savings
Putting away part of income for future spending

Dissaving
Spending more than the income earns

Wealth
• Assets - Liabilities
• Stock of Assets which include the following
1. Money held in a bank Account
2. Shares in Companies
3. Govt. Bonds
4. Property
5. Cars

Average Propensity to Consume (APC)

• Proportion of disposable income spent
Consumption or Spend
Disposable Income

Average Propensity to Save (APS) or Savings Ratio

• Proportion of disposable income saved
Savings
Disposable Income

Current Expenditure
Money spent on -> Good and Services -> consumed within a year

Capital Expenditure
Money spent on -> Fixed Assets or Items -> to be owned more than a year
Influences On Spending

Disposable Income

As income rises people spend more in total, but less as a percentage of income.

Wealth