The cost of using labor is expressed in monetary terms and is called the wage rate. Wages can be monetary, real or nominal. Nominal wages - the amount of funds received per unit of time, real - the number of services or goods that can be bought for a nominal fee. Real wages are the purchasing power of nominal wages.
Instructions
Step 1
The real salary depends on the nominal salary, as well as on the prices of services and goods. The change in real wages for labor can be determined as a percentage by subtracting the percentage change in the price level from the change in nominal wages, also expressed as a percentage. Real and nominal wages do not always change in the same direction, if nominal wages increase, then real wages sometimes decrease due to a faster rise in prices.
Step 2
Wages in different regions and countries differ, in addition, its value also depends on the type of activity, and differentiation - on gender and even racial characteristics.
Step 3
The salary level can be general or average, contains a range of specific rates. The demand for labor or other resource depends on productivity. The higher the productivity, the greater the demand for the resource. The higher the demand, the higher the average level of real wages.
Step 4
There is a close relationship between output per hour of labor and hourly wages. Real income per person is growing at the same rate as the volume of production per worker. The release of a large actual volume in 1 hour means the distribution of real income for each hour.
Step 5
But even with a high demand for labor, an increase in supply can cause a decrease in the general level of wages, for example, due to an increase in the population. The level of wages is determined through the analysis of supply and demand.
Step 6
A competitive labor market is characterized by the number of organizations competing with each other in the recruitment of specific types of labor, the large number of skilled workers, and the lack of control over the market wage rate.
Step 7
To determine the level of wages for a specific semi-skilled or skilled labor, determine the market or total demand for the required type of labor, summing the demand for labor along a horizontal curve.
Step 8
To do this, draw a table. Designate the first column as “Units of labor”, the second “Rate of wages”. Name the third column "Total cost of payment" and the last "Marginal cost of the resource". Fill in each column in accordance with the available data on the type of activity.
Step 9
Now add the data horizontally. The curve will rise smoothly, reflecting the fact that when there is no unemployment, organizations are forced to pay high rates in order to get more workers.
