What is Wages?
Wages are payments/reward for labour services.
There are two types of wages namely;
- NORMINAL WAGE: This is known as wages in terms of money.
- REAL WAGE: Wages in terms of the quality of goods and services.
Determinants of Wages
Wages can be determined through
- The market forces of demand and supply of labour.
- The marginal productivity of labour.
- The trade union collective bargaining of labour.
- The effect of new Inventions.
- Government legislations.
REASONS FOR DIFFERENCES IN WAGES
- The differences in wages perhaps between the skilled and unskilled labour is because the skilled workers usually undergo long period of special training unlike the unskilled.
- The cost of acquiring these special skills are sometimes too exorbitant.
- The skilled workers are always short in supply compared to the unskilled.
- There is high demand for skilled workers to that of unskilled.
- There are jobs that require specialists in the area.