Workers and wages

G3 Economics - syllabus K343, 2027

How people choose jobs, how wages are set and why they differ, labour mobility and division of labour.

• Choosing a job: wage and non-wage factors

  People choose jobs by weighing the pay against non-wage factors such as hours, security and job satisfaction.

• How wages are set by demand and supply

  The wage is the price of labour, set where the demand for labour from firms meets the supply of labour from workers.

• Trade unions and minimum wages

  Trade unions and minimum wage laws can raise pay above the market wage, but may reduce employment.

• Why wages differ

  Wages differ because of demand and supply for different skills, bargaining power, discrimination and government policy.

• Mobility of labour

  Labour mobility is how easily workers can change jobs (occupational) or move to work elsewhere (geographical).

• Division of labour

  Division of labour splits production into tasks so each worker specialises, raising output but making work repetitive.

• Put it together: Raise pay for cleaners

  Cleaners in a city earn low wages. The government wants to raise their pay. Compare three approaches.