3.

3 Workers
Factors affecting choice of occupation
Wage factors
1. Wages
2. Salary
3. Commission
4. Bonus
5. Piece rate pay
6. Performance related pay
7. Share options
8. Fringe benefits
Non-wage factors
1. Length of training or level of education required : The longer the time period required to
study / train for a job, the fewer the number of people who seek employment in that occupation
2. Career prospects: Jobs with a defined pathway for promotion & salary increases are often more
desirable
3. Level of challenge
4. Job security
5. Job satisfaction
6. Status
Factors that influence the demand for labour
If demand for goods/services increase, then the demand for labour will
increase, and vice versa
1. The price of the product being produced: if the selling price of the
product increases, then the firm will be incentivised to supply more and the
firm's demand for labour will increase.
2. The demand for the final product: As demand for labour is a
derived demand, when an economy is booming then demand for most
goods/services will be high - & the demand for labour will be high. When an
economy is in a recession, demand for most goods/services will be lower - &
the demand for labour will be lower.
3. The ability to substitute capital for labour: Firms will constantly
evaluate if it will be possible & more cost effective to switch production from using labour to capital. If it
is more cost effective, then demand for labour will fall.
 4. The productivity of labour: If the productivity of labour increases, this will lower avg costs and
firms will likely demand more labour.

Factors influencing the supply of labour

1. Training period: Longer training periods & their cost act as a barrier
to entry and thus, many households refuse to offer labour in certain markets
2. Wages in other occupations
3. Changes in migration policy
4. Income tax levels
5. Working conditions
6. Trade union power: Trade unions can increase the supply of labour
to certain industries as workers consider the benefits of belonging to the union
(eg: higher wages and a safer working environment)
7. Level of welfare benefits:
8. Social trends: Social trends include any major changes within society and can influence the
supply of labour to certain industries

3.4 Trade Union

A trade union is an organization that represents the interests of its workers in negotiations with a firm's
management or owners.
The interests of the workers include
1. Wage and non-wage benefits of employment
2. Health and safety in the working environment
3. The reduction of discrimination and worker exploitation
Functions of a trade union
 Negotiating improvements in non-wage benefits
 Providing recreational activities for its members
 Improving working conditions.
 Supported unfairly dismissed or discriminated against workers.
 Defending employee's rights
 Taking industrial action
 Improving pay and other benefits
 Providing training and education to improve employees' skills