Theory question 104
Labour MarketSection B (answer four questions only from this section)
Explain the factors which influence the level of wages in your country.
Show the model answer
Model answer
Demand for and supply of labour: scarce skills earn higher wages.
Productivity (marginal productivity) of labour.
Level of education, training and skill required.
Trade union bargaining power.
Government wage policy, e.g. minimum wage legislation.
Ability of the employer/industry to pay (profitability).
Cost of living: higher prices lead to demands for higher wages.
Nature of the job: danger, unpleasantness or responsibility attract higher pay.
Mobility of labour and the location of the job.
Explanation
Explain how each factor raises or lowers wages.