Wage and non-wage factors
When choosing a job, people weigh wage factors (level of pay, overtime, bonuses, how pay grows) and non-wage factors (job satisfaction, working conditions, hours, holidays, fringe benefits, job security, promotion prospects, location, qualifications needed). A high wage may not attract workers if the conditions are poor or the hours very long — both sets of factors matter.
How wages are determined
A wage is the price of labour, set by the demand for and supply of labour. Demand for labour is a derived demand — firms hire workers for what they produce — so it rises when product demand rises or workers get more productive. Supply rises when more people can do the job. Scarce labour with high demand earns a high wage; plentiful labour with low demand earns little. Trade unions (collective bargaining) and the government (minimum wage) also influence it.
Why earnings differ
Earnings differ between occupations and within one occupation. Reasons: the skills, qualifications and training a job needs (a surgeon earns more than a cleaner because few can do it), experience, the danger of the work, public vs private sector, and bargaining power (e.g. a trade union). Pay gaps between groups such as men and women reflect differences in skills, qualifications, experience and hours worked — and sometimes discrimination.
Drawn from real examiner reports.
Mobility: give influences, not types
A question on the influences on labour mobility wants the factors that make moving between jobs (occupational) or places (geographical) easier or harder — family ties, cost of transport and housing, age, skills, education. It does not want you to write "occupational mobility" and "geographical mobility" — those are the two types, not influences on them.
June 2024 Paper 21 (Structured) Q2(a): many candidates incorrectly gave occupational mobility and geographical mobility as their answer rather than the factors that affected them; the most common correct answers were family ties, transport available, age, skills and level of education.
Pay gap: explain why, not who does what
Asked why one group (e.g. women) is paid less on average, explain the economic reasons: fewer skills, training, qualifications or experience on average, more part-time work from family responsibilities, fewer promotions, and sometimes discrimination. Do not just say which jobs each group does (e.g. "men do dangerous jobs") — that describes the work, not why pay is lower.
June 2024 Paper 21 (Structured) Q2(c): common correct reasons for lower pay than men included lack of skills, training, qualifications and education, less experience and part-time work due to raising a family; weaker answers concentrated on men undertaking dangerous and physical jobs rather than why women were paid less.
Productivity shifts demand, not supply
When workers become more productive, each produces more, so firms want more workers at every wage — this shifts the demand for labour to the right, raising the wage and employment. A productivity rise does not by itself reduce the supply of labour. Move only the curve the question is about.
June 2024 Paper 12 (Multiple Choice) Q5: candidates were shown a labour market and asked how the equilibrium would change if workers became more productive. The correct response shifted the demand for labour to the right. The strongest distractor wrongly also decreased the supply of labour.
Minimum wage: use the new curves
A national minimum wage set above the market wage is analysed on the new demand for and supply of labour, not the old equilibrium. Above the market wage the quantity of labour supplied exceeds the quantity demanded, so a surplus (unemployment) can arise. Read off the effect at the minimum wage, not at the free-market point.
June 2024 Paper 11 (Multiple Choice) Q11: a minimum wage operates on the new demand for and supply of labour, not the original equilibrium point.
A high wage is not everything
Do not judge a job by pay alone. A high wage may fail to attract workers if the hours are antisocial, the work is dangerous, or job security is poor. Equally, a lower-paid job can be popular if it offers satisfaction, good conditions or holidays. Always weigh non-wage factors alongside the wage.
Division of labour cuts both ways
Give both sides of specialisation. Advantages: workers become skilled at one task, so output and quality rise and training is quicker. Disadvantages: the work can become boring (lower motivation), one absence can halt the line, and narrow skills make it harder to find other work. A one-sided answer misses marks.
Structure the 8-mark discuss (d)
Part (d) rewards analysis (AO2) and evaluation (AO3), not lists. Develop a chain — e.g. collective bargaining → more power → wage above market level → firms' costs rise → fewer jobs — argue the other side, then reach a justified judgement.
Frame wage answers with labour D and S
For any wage question, use the demand for and supply of labour. High pay usually means high demand (a valued, productive job) and limited supply (few have the skills or will do the hours); low pay means plentiful supply and easy replacement.
Match depth to the command word
Paper 2 climbs a ladder: (a) define (2) — a precise sentence, (b) explain (4) — reasons developed, (c) analyse (6) — a cause-and-effect chain, (d) discuss (8) — both sides plus a judgement. Match effort to the command word; do not over-write or under-develop.
"Workers" looks at how people choose jobs, how wages are decided, why earnings differ, how easily labour can move between jobs and places, and how splitting work into specialised tasks (the division of labour) affects output.
People weigh up two kinds of factor when choosing a job.
Wage factors (to do with pay):
Non-wage factors (everything else):
| Factor | Example |
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