Answer to Question #98157 in Macroeconomics for annie

Question

Write a factor that may increase wage level of an occupation.

Answer 1

Wages are the values that workers receive for their labor in the form of salaries, bonuses, royalties, commissions and fringe benefits, such as paid holidays, health insurance, and pensions. The wage rate is the price per unit of labor.

Education

A common source of the difference in wage rates is human capital. More skilled and educated workers make higher wages because the marginal product of their labor becomes higher.

Geographical difference

If a certain part of a country is a particularly attractive region to live in and if labor mobility is perfect, then more and more workers will move to that area, which in turn will increase the supply of labor and suppress wages.

cost of living

Another important factor affecting wages is the cost of living adjustment of wages. This approach is a variation in the wages of money based on the variation in the cost of the living index after the normal price level and the consumer price index rise or fall.

Government law

Legislation passed and government-formed labor policies have a significant impact on salaries and salaries paid by employees. Salary and salary cannot be set below the level set by the government.

Labor Union

Labor unions attempt to work and influence wages mainly by regulating or affecting the supply of labor. Unions extended their influence to higher wages and allowances through collective bargaining with management representatives.

Productivity

A step towards rapid growth is an increase in wages that increases productivity. Productivity is an important factor in a company's operations. Higher wages and lower costs are possible only when productivity increases. The above factors have a general effect on wage rates.