Earning a Living Wage Determination

1

• Earning a Living Wage Determination

2
Aims Objectives

• To understand the terms wages and salaries
• To understand what determines wage rates and
  salaries
• To examine the link between employees skills and
  qualifications and their incomes from work

3
Types of income

• Consider the pay of these people in the building
  industry (construction industry rates)
• A Bricklayer
• A Plumber (click here for pay rates 2006-7)
• A JCB (digger) driver
• A Site Foreman
• An Architect (designs the building)
• An Accountant (manages the finances of a
  business)
• How would you decide how much to pay them?
• You can use the internet sites to explore pay
  rates for different jobs eg Jobsonline

4
Types of income

• Wages normally paid for the amount of work
  done, by the hour (hourly rate) or by the
  completion of tasks (piece rate)
• Salaries paid for the completion of a range of
  duties within a normal working week normally no
  additional payments for output or hours required
  for completion

5
Markets for a product or service

• Businesses (Suppliers) produce goods or
  services
• Customers (Demanders) consume goods and
  services
• A Market Place is where demanders and suppliers
  come together to trade and prices are agreed for
  the good or service traded

6
Price determination - Demand

• If the price of a good is low demanders
  (consumers) generally buy more
• If the price of a good is high demanders
  (consumers) generally buy less

Price
Demand
Quantity Demanded
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Price determination - Supply

• If the price of a good is low suppliers
  (businesses) generally produce less
• If the price of a good is high suppliers
  (businesses) generally produce more

Supply
Price
Quantity Supplied
8
The Market - Supply Demand -how the price is
determined.
Price
Supply
Market Price
Demand
Quantity Supplied or Demanded at a given price
9
How wages and salaries are linked to the value of
a product

• If goods and services of a business have a high
  market price then the wages and salaries of
  employed staff can be higher e.g. The Price and
  Demand for fuel and Oil exploration workers
• Other factors also influence the incomes of
  employees such as the level of skills and
  training required to complete the task or the
  level of responsibility held (eg Doctor, Engineer
  Manager), or the shortage of the skills

10
Star Quality and Incomes

• World class entertainers eg Singers, Film
  Stars, and Footballers bargain for high salaries
  because there are many rich employers chasing the
  individual.
• World class Doctors, Nurses and Aid workers may
  be paid a low salary because they dedicate their
  skills to serve the poor.
• In the market place you have a choice!

11
Future employment and high income work.

• Businesses producing and selling highly
  technical, high quality goods and services by
  employing employees with high level skills will
  pay high salaries.
• Businesses producing products that only use low
  skilled employees will compete with similar
  producers across the world and move employment to
  the lowest wage area

12
Lifetime earnings

• Lifetime earnings of employees who have
  qualifications beyond level 3 are 30 higher than
  those who have not.
• Lifetime employment choice and security of
  employment is greater for those with higher
  qualifications.
• Self employment is always an alternative to
  being an employee and is increasing in the UK.

13
Aims Objectives

• To understand the terms wages and salaries
• To understand what determines wage rates and
  salaries
• To examine the link between employees skills and
  qualifications and their incomes from work