Differences in wage rates Explain & evaluate wage differentials within and between occupations. Explain and evaluate advantages & disadvantages of National Minimum wage.

Differences in wage rates. Key term. P43 Reasons for differences in amounts people earn. The more inelastic the supply of labour, the higher the wage. If supply is elastic it can increase quickly If inelastic it cant be increased quickly. If supply is elastic, if you want more people you can find them quickly. If supply of labour is inelastic (skilled job, footballer) and the demand for the product is high (watching football) then that is the perfect scenario for high wages. If discuss a nurse v footballer. One job is more important then the other but the other gets paid more. More people could be a nurse then a footballer.

Other reasons: Difference in productivity Trade Union Power Differences in demand for product Government pay policy Compensating Regional costs Employer discrimination.

Minimum wage Arguments for and against . If min wage increases is it a good thing? Look at graph what can you decipher from it?

So may not be able to afford new min wage. Sack people of pay illegally. Pay beneath old wage but cash in hand Issue for Government – no tax, social money coming in. Issue for employee – No social, pension etc Issue for employer – if discovered, fine.