3.4 Workers

Wage & Non-wage factors

What are the wage factors that affect occupation?

1. Wages as workers aim to earn higher wages
2. Overtime pay because the opportunity to earn overtime pay will attract
   workers
3. Bonus extra pay received by workers for achieving higher results, it
   creates an incentive for workers to work harder especially for time rate
   jobs.
4. Commission as with a higher commission workers have greater incentive
   to choose an occupation.

What are the non-wage factors that affect occupation?

1. Job satisfaction
2. Type of work – manual vs non-manual. Dangerous work gets high pay
3. Working conditions
4. Working hours
5. Holidays
6. Pensions
7. Fringe benefits
8. Job security
9. Career prospects
   Size of firm
10. Location
11. Limiting factors

Wage determination

Demand and supply

In a free market, the wages are determined based on the demand and supply of workers, much like the allocation of resources.
The higher the demand for workers and lower the supply of workers, the higher the wages are likely to be.

Relative bargaining powers of employers and workers

Wages are likely to be higher in occupations where workers have higher bargaining power relative to employers.
Factors affecting bargaining power include:

1. Ability to replace labor with capital or other workers
2. The presence of trade unions.
3. Elasticity of Demand and Supply
4. Government policies

Government policies can influence workers’ wages.

Governments can directly affect the wages of the workers working in a the
public sector.

The government can also set national minimum wages(NMW) for certain
occupations.

Public opinion

• Jobs that involve long periods of training and study are highly rewarded.
  
• Wage claims made by workers. Firemen comparing themselves to policemen.
  
• Public opinion can put pressure on the government in different ways. E.g. Nurses should be rewarded more in these times of pandemic.

• Social attitudes. E.g. social attitudes against working women leading to women
  receiving less pay than women.

Discrimination

Due to discrimination, a certain group of workers is treated unfavourably in terms of employment, wage rate, training received or the promotional opportunities. Negative social attitudes towards these groups leads to lack of demand for these workers and therefore a lower wage and other non wage benefits.