What are wages?

Wages are the reward to the factor of production – Labour. Wages are also regarded as the Price of labour. Wages are payments made to labour. Price of labour is determined by the market forces i.e. demand and supply.

Demand for labour

The demand for labour is a derived demand. It means that the demand for labour is linked with the products or services they produce. If the demand for those commodities rises the demand for labour also rises.

Factors affecting the demand for labour

Derived demand

The demand for labour is always derived from the demand for the good or service it produces. Thus if the demand for a particular goods or service increase it will lead to a rise in demand for labour used to produce those commodities. Recently there has been an increased demand for software professionals due to the increased demand for IT products.

Wage rates

A fall in wages will cause an extension in the demand for labour while a rise in wages paid to works will cause a contraction in demand.

Technology used

In industries where there is improved technology can be used, the demand for labour will tend to fall as producers will replace labour with sophisticated machinery.

New Youtube Channel - ThinkIGCSE

Hi Everyone, I have launched a new YouTube channel with more than a 100 videos on  Economics and Business Studies, tailored specifically for IGCSE and A Level and IBDP students.

Subscribe now and join us on this learning journey: @thinkIGCSE

Exciting News!

IMPORTANT MESSAGE

Quizzes and worksheets on this website have been developed in Flash format. Flash is no more supported by browsers. Therefore, you might see blank pages on some instances. Install Flash player plugin for Chrome from Chrome Web Store. Click here 

Similarly, for other web browsers you will have to activate the relevant flash player plugins.

JOIN OUR ONLINE COURSES

WHO'S ONLINE

We have 511 guests and no members online

Crosswords

PDF FILE

Download

MindMaps

PDF FILE

Download

Save
Cookies user preferences
We use cookies to ensure you to get the best experience on our website. If you decline the use of cookies, this website may not function as expected.
Accept all
Decline all
Read more
Analytics
Tools used to analyze the data to measure the effectiveness of a website and to understand how it works.
Google Analytics
Our website uses Google Analytics to understand how you interact with our site and improve your browsing experience. These cookies collect information in an anonymous form, including the number of visitors to the site, where visitors have come from, and the pages they visited. The data helps us analyze trends and user behavior to enhance our website's functionality and content.
Accept
Decline
Marketing
Set of techniques which have for object the commercial strategy and in particular the market study.
Marketing
Our website uses Google marketing cookies to deliver personalized ads and measure the effectiveness of our advertising campaigns. These cookies track your online activity to help us show you relevant ads on Google services and partner websites.
Accept
Decline