IGCSE Economics

3.2 Occupation and Earnings

 Learning Outcomes
• Identify the factors affecting an individual’s choice
of occupation (wage and non-wage factors)
• Describe the likely changes in earnings over time
for an individual
• Describe the differences in earnings between
different groups of workers

2
 Task
• Put the list of jobs in order of lowest to
highest paid.
• Look at the following article to see the
expected salaries of different
occupations
• Article

3
 Questions:
• What is the best paying occupation?
• Why do you think that this is the case?
• What is the worst paying occupation?
• Why do you think that this is the case?
• What is the average salary of all occupations per
year?
• Find 3 occupations which have had a % pay
increase since 2011. Can you think why this might
be the case for each?
• Find 3 occupations which have had a % pay
decrease since 2011. Can you think why this might
be the case for each?
4
 Task
• In pairs discuss……

• What factors influence how much workers are paid?

5
 Why are some workers paid
more?
Some workers are paid more than others because
of:
• Skills
• Experience
• Level of Responsibility
• Unsociable hours
• Danger
• Productivity
• Supply Vs Demand of Labour
 Given this…..
• How are an individual’s earnings likely to change
over time?

• Draw a sketch like this…..

Label any key

milestones
Earnings

Age
7
 Wage Factors
• Most people will supply their labour to firms to earn an
income.

• pay wages to workers to supply their labour to produce

goods and services.

• Paid employment therefore provides people with money

to buy the goods and services they need and want and
cannot produce themselves.
 How are workers paid??
Payment
Methods

Results
Fringe Time Based
Salaries Based
Benefits Systems
Systems

Wages Piece Rates

Overtime Commission
Bonuses
1. In what sorts of occupations would
these typically be used? Performance Related Pay
2. What benefits or problems can you Profit Sharing
think of for each of these methods of
remuneration?
 What are fringe benefits?
• Any other perks of the job which do not
involve direct payment of money to the
employee

• What kind of Fringe Benefits do companies

offer?
 Fringe Benefits

Any other examples you are aware of?

Ask your parents if they get any fringe benefits
with their job
Why choose this job?
WAGE FACTORS
+
NON-WAGE FACTORS
 You and your job choice

• Think about a job that you fancy doing when you are
older (don’t worry, no-one will hold you to it!!)

• Why have you picked this particular career?

• Lets share to find out why you have chosen your

future careers…..

Write a list of the non-wage factors that influence a worker’s

decision over what job to do…….
13
Non – Wage Factors
THE DIFFERENCES IN
EARNINGS…… WHO EARNS
MORE? …….WHY??
15
16
17
18
19
 And Finally…..

Public Sector Worker or Private Sector Worker?

20
What do these figures show?

21
TRENDS IN PAY…..

22
23
THE LABOUR MARKET ……
SUPPLY AND DEMAND

24
 Task….
• Draw a supply and demand curve for labour
• Make sure you:
• Label the axis
• Label the S and D curve correctly
• Label the Equilibrium price and quantity

25
 Questions…..
In the labour market…
1. Who are the suppliers?
2. Who are the buyers?
3. What does the equilibrium price represent?
4. What does the equilibrium quantity represent

26
Effect of wage rates on
supply and demand
As the wage rate for
a particular
occupation
(teachers) rises.

What will happen to:

a. Supply

b. Demand
 Group Task
• Split into 4 groups.

• Each group are going to discuss some questions

relating to shifts in the supply/demand for labour

• You will then present your findings to the rest of the

group.

28
An increase in demand for
labour???
What causes the demand for
labour to increase?

What happens to the:

• Demand curve
• Equilibrium wage rate
• Equilibrium number
employed
An decrease in demand for
labour???
What causes the demand for
labour to increase?

What happens to the:

• Demand curve
• Equilibrium wage rate
• Equilibrium number
employed
An increase in the supply of
labour???
What causes the supply of
labour to increase?

What happens to the:

• Supply curve
• Equilibrium wage rate
• Equilibrium number
employed
An decrease in the supply of
labour???
What causes the supply of
labour to decrease?

What happens to the:

• Supply curve
• Equilibrium wage rate
• Equilibrium number
employed
MINIMUM WAGE
LEGISLATION

33
 Question…..
• Why does the government deem
minimum wages to be necessary?

34
The effect of minimum wage
levels
• What would
happen if the
minimum wage
rate is set at:

a. W1
b. W2
Your thoughts…..

36
 Homework
• Discuss whether governments should implement
minimum wage rates?

• Top tips for your answer….. Use a SLAP!

» Stakeholders
» Long-term vs short-term
» Advantages and Disadvantages
» Prioritise

Handwrite answers in your exercise books

37
Most people specialize at work
Advantages
• They make best use of their skills
and abilities
• They can improve their skills
further by repeatedly carrying out
the same or similar tasks
• More-experienced and skilled
employees usually earn more than
less-experienced and unskilled
employees because they are more
productive and demand for their
labour by firms is greater
Disadvantages
• They must rely on others to
produce the goods and services
they cannot produce
themselves
• Doing the same job for many
years may become boring
• People can lose their jobs if
their skills or occupations
become unwanted as consumer
demand and/or technology
changes