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